News Flash for Ed Reporters: Yes, Vouchers Have Been Proven Effective

The Washington Post today reports on the presidential debate and the DC education reform connection, leading off with the biggest point of disagreement:

“I’ve got to tell you that vouchers, where they are requested and where they are agreed to, are a good and workable system. And it’s been proven,’ McCain said in an exchange with Sen. Barack Obama (D-Ill.), who opposes the idea.”

The WaPo reporters then claim, “But a U.S. Department of Education study released in June showed that students in the program generally scored no higher on reading and math tests after two years than public school peers.”

This is incorrect. The study found that students in the program did generally score higher. The reporters were confused by the fact that the findings for the whole group of students were not statistically significant at the prescribed cut-off. The researchers were only 91 percent certain (statistically) that the better performance of voucher-program students was due to the program rather than chance, and they had to be 95 percent certain. They did find statistically significant positive findings for some subgroups of students.

Compounding this error, the reporters then quote an education researcher saying, “We have no evidence that vouchers work.” This too is incorrect.

There have been ten analyses of random-assignment voucher program experiments (random-assignment being the gold-standard of testing treatment effects). All ten demonstrate positive voucher effects, 9 out of 10 find statistically significant effects for at least some subgroups, and 8 out of 10 find statistically significant effects for the whole voucher group.

And the parents involved are extremely happy with it and think their kids are safer. And the vouchers cost a third or less than what is spent in public schools. Oh, and these programs are all small and some highly regulated, which limits their effectiveness.

There is an embarrassment of solid evidence that vouchers are an effective, popular, and extremely efficient education reform.

The Future of the U.S. Military Presence in Iraq

After months of negotiation, the Bush administration may be nearing an agreement with the Iraqis that would cover the status of U.S. forces in the country after the UN mandate for the occupation expires at the end of the year. Defense Secretary Gates and Secretary of State Rice began briefing lawmakers yesterday.

The news of an impending deal comes as a surprise only because the negotiations have dragged on for so long, and because the most contentious issues seemed so intractable. The key breakthrough appears to be an artful compromise on the question of extraterritoriality. (If you think that is hard to read, try saying it three times.) The Iraqis were demanding that U.S. personnel suspected of crimes be subject to Iraqi justice; American negotiators insisted that they be covered by U.S. laws. The draft agreement, reported the New York Times, “would give Americans immunity from Iraqi law when they were on military operations but would not apply if they were off duty.”

Although Sen. Carl Levin (D-MI) complained that this might give away too much, and therefore expose U.S. personnel to unnecessary risks, the dual-track approach seems to me to represent a more significant concession on the part of the Iraqis. The compromise is generally consistent, meanwhile, with other SOFA agreements, such as those in South Korea and Japan, where U.S. personnel can be, and are, tried by South Korean or Japanese courts when offenses clearly occur while they are off duty, or when the crimes are perpetrated against local citizens, as opposed to other Americans. In terms of the legal protections, “on duty” vs. “off duty” disputes are usually sorted out easily between officials on both sides, but there have been some tough cases along the way. There is also the contentious question of pretrial detention, and where the person, if convicted, serves his or her sentence, or while the case is under appeal.

But, of course, the more serious risks to U.S. personnel, including members of the military, but also private contractors and diplomats working in Iraq, don’t have to do with who gets tried in what courts. For starters, political reconciliation, and the risk of civil war has not abated. If one erupts, say following a particularly horrible terrorist attack that prompts Shia reprisals against the minority Sunnis, then once again our troops would be caught in the middle, as they were in the spring and summer of 2006 following the attack on the Askariya shrine in Samarra in February of that year.

Then there is the ongoing risk that our very presence in Iraq is stirring up hatred and resentment that might ultimately spill over in the form of violence against all Americans, not simply those stationed in Iraq. This violence may not manifest itself for years, but the risks are real. On that question, I always go back to Paul Wolfowitz’s candid testimony in the weeks before the invasion of Iraq.

Anger at American pressure on Iraq, and resentment over the stationing of U.S. forces in Saudi Arabia, Wolfowitz conceded, had “been Osama bin Laden’s principal recruiting device.” Looking ahead to the post-Hussein period, Wolfowitz implied that the removal of Hussein would enable the United States to withdraw troops from the region. “I can’t imagine anyone here wanting to … be there for another 12 years to continue helping recruit terrorists.”

There are other sticking points contained within the draft agreement. The document reportedly calls for the removal of all U.S. forces by the end of 2011, and Iraqi Prime Minister Nouri al-Maliki has previously insisted that such a timeline would be binding. The Bush White House still hasn’t taken the hint; the president continues to refer to troop withdrawals as ”aspirational” goals. Nonetheless, Bush might be willing to seize upon the new SOFA as a signal that progress is being made. The legend of the surge, which President Bush sold as a vehicle for eventually reducing the U.S. presence, will grow still larger if it actually does what it intended. On the other hand, the defenders of the surge – chief among them Sen. McCain – seem never to have bought this argument in the first place.

Will the draft agreement be ratified? The early signs are mixed, at best.The Iraqi parliament has had difficulty passing far less-contentious legislation. And there are ample grounds for one or more groups to claim that Malikihas conceded too much to the Americans, and block the deal. Moqtada al-Sadr’s supporters have consistently demanded an immediate withdrawal, and the concessions with respect to jurisdiction might strike some Iraqis as a bridge to far. But while Iraqi politicians will debate the merits of the proposed agreement, the parliamentarians in a considerably more mature democracy will not: the Bush administration maintains that the U.S. Congress has no authority on this matter; Gates and Rice’s consultations with congressional leaders, we are told, are largely a courtesy.

Today at Cato

The Madness of King Rod

While Hawaii’s experiment with universal coverage is disrupting health coverage for thousands of children, a similar drama unfolds in Illinois:

Last year, the legislature twice turned down [Gov. Rod Blagojevich’s] plan to expand health care – first for universal coverage, then to expand income-eligibility requirements for state-subsidized care. But Blagojevich began enrolling families anyway, claiming he had sufficient authority…

[Cook County Circuit Judge James] Epstein issued a preliminary injunction in April banning state officials from spending money on the program. That decision was upheld last month by the Illinois Appellate Court.

[Epstein] said he sympathized with low-income families, some of whom have paid insurance premiums under Blagojevich’s expansion and would lose coverage. But he said they “do not have a right to continue to receive coverage under this improperly promulgated program.”

Patients are getting jerked around by their government?  You don’t say.  The Blagojevich administration’s response to this judicial smackdown was something short of penitent.

The Illinois Department of Healthcare and Family Services issued a statement following the judge’s action saying it was “currently reviewing the decision, but the governor is committed to making sure that these families continue to get the insurance they need.” 

Did King Rod miss that day in Civics class when they explained that the legislature writes the laws?

I’ve criticized supporters of universal coverage for practicing what amounts to an unacknowledged religion.  But this has to be the first time I’ve seen religious fervor tempt one of the faithful to assume the powers of a monarch.

Wonderful Study on School Competition, but…

I like a clever two-stage least squares instrumental variable regression as much as the next wonk, and the very clever Martin West and Ludger Woessman have just given us one. In “School Choice International” (an econometric study and not a motivational tune) they show that increased competition from private schools improves overall student achievement – including public school achievement – in 29 OECD countries, while lowering overall per pupil spending.

The design of this study seems intended to address the concern that however wonderful private sector education might be, children remaining in public schools might suffer if the private sector were allowed to expand. Those ideologically or financially attached to the existing public school monopoly often like to raise this concern in arguing against greater parental choice and competition in education. The West & Woessman result suggests that the monopolists need not be concerned, because even students remaining in the monopoly schools benefit from an expansion of the private education sector.

This is all well and good. It is also somewhat beside the point, because the concern itself presupposes behavior on the part of parents that is largely fictional. The monopolists’ presupposition is that, no matter how much worse the public sector is, no matter how easily accessible the private sector becomes, some large number of families will decide to languish in atrocious state schools. This is nonsense.

In what field do significant numbers of people cling to earlier services or technologies that are universally recognized as inferior, when those services or technologies compete on a level playing field (i.e., when neither receives preferential treatment from the state)? Do vast throngs of people still cling to vinyl LPs? Do you often see kids today trucking around portable CD players, now that .mp3 players can hold hundreds or thousands of times more music at a similar cost? Do you see a lot of horse-drawn vehicles in your neighborhood?

The only thing that keeps large numbers of families in bad government schools is the positively fantastic level of government funding discrimination that exists in virtually all nations. Most governments fund their own schools but not private schools. Or, if they fund private schools, they do so at noticeably lower levels than they do government schools. In the rare cases where that funding discrimination is eliminated or even substantially reduced, the government sector shrinks dramatically. And, not surprisingly, the public schools that do survive after many years of such shrinkage tend to be the better performers within that sector.

The Netherlands, which funds public and private schools more or less equally, is a case in point. Today, three quarters of Dutch high school students are enrolled in private schools. And while research does show that private Catholic schools in the Netherlands continue to outperform the public schools in that country, even though the Catholic school students have a weaker average socio-economic background, the remaining public schools really aren’t doing that much worse. If they were greatly inferior to the private schools, they would have already lost their students to the private sector.

My point is that the effect on public schools of easing access to the private sector in education is virtually irrelevant. If the public schools improve, great, they’ll survive. If they don’t, it’ll be because families have left them for private schools that do a better job of serving them. In either case, the public is benefiting. The idea that great masses of humanity will choose to linger in low quality government schools when higher quality schools become available at a comparable or lower cost shows a bizarre lack of understanding of human nature, and a gross detachment from reality.

Hawaii Abandons Universal Coverage for Kids

…and the Church of Universal Coverage has some ‘splaining to do.

According to the Associated Press:

Hawaii is dropping the only state universal child health care program in the country just seven months after it launched.

Gov. Linda Lingle’s administration cited budget shortfalls and other available health care options for eliminating funding for the program. A state official said families were dropping private coverage so their children would be eligible for the subsidized plan.

Here’s why this is bad news for Barack Obama and other Church of Universal Coverage faithful – or for the rest of us if they succeed.

  1. Universal coverage means paying too much.  Hawaii officials realized they were paying too much when families that could obtain health coverage on their own were lining up for subsidies.  The taxpayers’ money was not making much of a dent in the uninsured because it was covering lots of kids who would have had coverage anyway.  The Church of Universal Coverage will protest: “The problem was not that taxpayers were paying too much – only half of this program’s budget came from taxpayers.”  But that’s just it: even half the cost of the program was too much.  The other half came from Hawaii’s Blue Cross Blue Shield plan, which has agreed to keep covering enrolled children through the rest of the year without taxpayer subsidies – even more evidence that taxpayers had been paying too much.
  2. Universal coverage also means getting too little.  Hawaii’s “now you see it, now you don’t” approach is shortchanging thousands of children by disrupting their coverage and care.  Again, the Church of Universal Coverage will protest: “But that’s just because Hawaii has an awful Republican governor.”  But that’s exactly the point.  As I tried to explain to pre-Nobel laureate Paul Krugman: there will always be awful Republican governors.  Putting the government in charge means that the medical care you need to keep yourself or your loved ones alive can disappear with a shift in the political winds.  The resulting harm is not just the work of black-hearted Republicans.  It’s a risk inherent to all universal coverage schemes.

Barack Obama’s health plan promises much of the same.  He would force people to pay more for health coverage, even if they found little value in the added expense.   He would waste taxpayer dollars on people who can already afford coverage on their own.  He would draw millions into government health programs that would threaten their access to care.

And if in 10 years some nasty Republicans yank your family’s health care, we would have Barack Obama to thank.

“Press Release Economics” in New Jersey

My misadventures in state government led me to coin a phrase for what has become the economic growth model of choice for a lot of governors:  “Press Release Economics.”  It comes in many shapes and sizes, but it basically boils down to the orchestrated PEZ-dispensing of taxpayer money on short-term “economic growth” schemes for crass political gain.

The most common form is probably the targeted tax break and/or corporate welfare grant/loan to incite a company to relocate within a state’s borders.  Politicians love these taxpayer-financed giveaways because they come complete with lots of visible media coverage: press releases, newspaper articles, radio and television reports, and best of all…the photo op.  Ah yes, that priceless picture of the governor all dressed up with a hard hat, ceremonial spade in hand, and a big toothy grin.

One would be hard pressed to find justification for these political endeavors in the economic literature, but then again the little Potemkins who run state “economic development” bureaucracies don’t have time to be bothered with trivialities when there are “jobs to create.”

Today I read that Gov. John Corzine has come up with a $150 million package to help the New Jersey economy.  The concoction includes two peculiar items: money for banks to get them to lend and a $3,000 check to small businesses for each employee they hire and employ for a year.  “Create a job and we will send you a $3,000 check,” Gov. Corzine says.

With regard to the first one, the New York Times reports:

James Silkensen, president of the New Jersey League of Community Bankers, said he had not heard complaints from his members about needing more cash. “Our members are telling us that they’ve got money to lend,” Mr. Silkensen said. “They aren’t going to change their underwriting standards. I can’t say every bank has sufficient funds to lend. But most I have talked to are lending, though they’re being careful.”

With regard to the second one, it’s pure press release economics.  Why not $4,000 an employee?  Or $5,000?  Why just “small” businesses?  Do “large” businesses contribute nothing to the New Jersey economy?  How will this initiative be enforced?  How much will it cost taxpayers for New Jersey bureaucrats to make sure each and every new hire was employed not less than 365 days?  How many of the $3,000 check employees would have been hired anyhow?  How many jobs will be lost because of the tax burden needed to pay for this scheme and others?

Here’s a better idea, Governor: propose serious tax and spending cuts.  New Jersey’s general fund is up 40% from just five years ago, which amounts to a $1,000 per New Jersery citizen spending increase.  At the same time, New Jersey’s business tax climate was recently found to be the worst of the fifty states.