The Weekly Standard on Why They Hate Us

Andrew and Adam have been fileting the Weekly Standard already today, but while I’ll happily defer to them on education policy, the Standard’s blog is advancing some honest-to-goodness foreign policy nonsense that shouldn’t go unremarked.

Here they are grousing about Obama’s claim that “the continuation of a presence in Iraq as Sen. McCain has suggested is exactly what, I think, will fan the flames of anti-American sentiment and make it more difficult for us to create a long-term and sustainable peace in the world.” Now, this is so painfully obvious as to be banal, but here’s the Standard’s response:

Never mind that farm subsidies–as in the policy Obama defended vociferously while pandering to Iowans a few months back–leave the poorest people in the world starving and without jobs.

Now, farm subsidies are truly a terrible idea. But if the Standard somehow believes that we’re hated in the Islamic world because of sugar subsidies, I’ve got a bridge I’d like to sell them. The list of evidence to the contrary is too long for this forum, but here’s just a start:

“American direct intervention in the Muslim World has paradoxically elevated the stature of and support for radical Islamists, while diminishing support for the United States to single-digits in some Arab societies…Muslims do not ‘hate our freedom,’ but rather, they hate our policies.”

-Defense Science Board, Report on Strategic Communication, 2004.

“All of our panelists agreed that U.S. foreign policy is the major root cause behind anti-American sentiments among Muslim populations and that this point needs to be better researched, absorbed, and acted upon by government officials.”

-Government Accountability Office, “U.S. PUBLIC DIPLOMACY: State Department Efforts to Engage Muslim Audiences Lack Certain Communication Elements and Face Significant Challenges,” May 2006.

“[Deputy Defense Secretary Paul] Wolfowitz also estimated the U.S. cost of Iraqi ‘containment’ during 12 years of U.N. sanctions, weapons inspections and continued U.S. air patrols over the country at ‘slightly over $ 30 billion,’ but he said the price had been ‘far more than money.’ Sustained U.S. bombing of Iraq over those years, and the stationing of U.S. forces ‘in the holy land of Saudi Arabia,’ were ‘part of the containment policy that has been Osama bin Laden’s principal recruiting device, even more than the other grievances he cites,’ Wolfowitz said.

Implying that a takeover in Iraq would eliminate the need for U.S. forces in Saudi Arabia, and thus reduce the appeal of terrorist groups for new members, Wolfowitz said: ‘I can’t imagine anyone here wanting to spend another $ 30 billion to be there for another 12 years to continue helping recruit terrorists.’

-Washington Post, March 2, 2003

We could go on like this for days. Farm subsidies are dumb enough on their own, we don’t need to delude ourselves into thinking they’re what’s to blame for 9/11. In fact, if the Standard and its adherents continue with this sort of fantacism, we’re going to continue avoiding the real root of our terrorism problem, which is evident enough that the above sources and anyone else paying attention can see it all too plainly.

Power Corrupts: Elliot Spitzer’s Record as N.Y. Attorney General

In 2002-2005 I documented in some detail what today’s Wall Street Journal editorial referred to as Eliot Spitzer’s “consistent excesses as Attorney General.”

A January 2003 piece on “Spitzer’s Shakedown” revealed the fatuous nature of his inquisition against Wall Street.

In 2004, there was Spitzer’s ridiculous “Mutual Fund Fee Fantasy.” In 2005, in “Trial by Press Release,” I unraveled Spitzer’s flimsy case against the insurance brokerage arm of Marsh & McClellan.

Shortly after one of these articles appeared I received a phone call at home from an investigative reporter with one of the largest New York newspapers. He prodded me for quite a while to find out if I had been influenced or bribed by one of the companies Spitzer had attacked. Did I know anyone at, say, Merrill Lynch? (Nope). Do I own stock in the company? (Not then, and I’m currently shorting financials.)

I explained that nobody has accused me of any breach of integrity since I began writing in 1971. Besides, it would be very expensive to bribe me, I joked, because I had accumulated more money through investing than I know how to spend. I asked the reporter where he had gotten this very bad tip. He told me he had been contacted by Mr. Spitzer’s office. Hardball was their favorite game.

What follows is an unpublished February 2005 speech I gave to some small group in D.C. (which paid me less than half what Gov. Spitzer apparently spent for far less entertainment). Excerpts later appeared in my “Trial by Press Release.”

——

Regulation by Litigation
By Alan Reynolds

“I was asked to say a few kind words about Eliot Spitzer. But that would be such a difficult chore I would be compelled to charge an exorbitant fee for an extremely short talk. In the interest of frugality, I’ve decided to tell you what I really think.

Conflict of interest might be a good place to start.

When travelers use a travel agent, the agent is apt to be paid a commission only by certain hotels, tours and cruises. If customers view that as “a conflict of interest,” they might worry about being steered to an overpriced vacation at some place they don’t really want to visit.

When jobseekers use an employment agency to find a job, the commission is likely to be paid by the employer. If customers view that as a “conflict of interest,” they might worry about being steered to the wrong job at the wrong salary.

When consumers go to a State Farm office to inquire about home or car insurance, the agent they talk to is paid by State Farm. If customers view that as a “conflict of interest,” they may worry about being steered to the wrong policy at an inflated price.

When homebuyers buy a house, the realtor is usually paid a commission by the seller. If customers view that as a “conflict of interest,” they might worry about being steered to the wrong house and paying an inflated price.

In fact, consumers are neither naïve or gullible, so they don’t share Mr. Spitzer’s paranoia about conflicts of interest. On the contrary, the fact that many sorts of brokers and agents are often paid by sellers rather than buyers suggests this is a method of compensation all parties must find mutually satisfactory, otherwise it would not have survived in the competitive marketplace.

“Conflict of interest” does not depend on whether brokers are paid by sellers or buyers, because any broker who did not continually earn a good reputation by taking care of customers would soon lose clients to those who do. Insurance companies have no incentive to pay contingent fees to brokers who cannot attract and retain moderate-risk corporate customers for their policies, for example.

PRESUMPTION OF GUILT

Moving on to Eliot Spitzer’s lucrative backroom deals with financial firms, mutual funds and insurance brokers, we have to start with a big question: Why do companies like Merrill Lynch or Marsh & McLellan rush to settle if they’re not guilty?

Answer: The Martin Act. The 1921 Martin Act gives New York’s AG unique power to smear a company, industry or profession in the press, and to threaten to unleash interminable class action suits unless the target companies write a big check to Albany. Power corrupts and Mr. Spitzer has too much of it. From his point of view, power is delightful and absolute power is absolutely delightful.

The Martin Act has been called “the legal equivalent of a weapon of mass destruction.” Writing in Legal Affairs last June, Nicholas Thompson explained that the Martin Act empowers the New York attorney general “to subpoena any document he wants from anyone doing business in the state… People called in for questioning during Martin Act investigations do not have a right to counsel or a right against self-incrimination… . To win a case, the AG doesn’t have to prove that the defendant intended to defraud anyone, that a transaction took place, or that anyone actually was defrauded. Plus, when the prosecution is over, trial lawyers can gain access to the hordes of documents that the act has churned up and use them as the basis for civil suits.”

That last feature – the fact that Spitzer’s e-mail collections are irresistible bait for class action lawyers– makes it suicidal for any company to challenge a Martin Act accusation. The vagaries of the law make it too easy to be found guilty of fraud for simply being careless or unclear. And any admission or finding of guilt would soon bring an unbearable flood of class actions suits.

In the ULR complaint, for example, the company stands accused of not making “appropriate” disclosure, and of misrepresenting “the reasonableness of their compensation.” Since “appropriate” and “reasonableness” are matters of opinion, so too is the alleged criminality.

Don’t be too surprised if Mr. Spitzer’s run for governor turns out to be largely bankrolled by trial lawyers. Eliot Spitzer is the best gift to trial lawyers since the invention of asbestos.

There is no way to know beforehand if you have committed fraud under the Martin Act. The only sure way to find out is to read the papers and see if Mr. Spitzer has put out a press release about your company.

TRIAL BY PRESS RELEASE

Trial by press release has certain predictable effects:

1. First, the accused company’s stock will lose half its value in a few days, largely because of the threatened expense of endless litigation.

Daniel Gross, writing in Slate last October, noted that “Spitzer doesn’t like taking cases to trial. Instead, he has developed a more powerful tactic: He exploits the threat of stock declines and business losses to force industries to change… .He didn’t simply indict. He issued press releases.”

In the first Spitzer assault by press release, Merrill Lynch’s stock fell by $10 billion, making it look like a relative bargain to pay $100 million in ransom.

Marsh & McLellan’s stock likewise lost half its value, for a while, and the firm laid off 3000 people.

“A Spitzer blitz,” wrote Henry Manne, “with its inevitable stock price decline, calls for a fast triage response in order to stave off a calamity on the scale of Arthur Anderson or Enron.”

Incidentally, finance and insurance are (or were) important industries in New York City. By some strange coincidence, the unemployment rate in New York City has been remarkably high ever since the Spitzer blitz began – 7.9 percent in 2002, 8.4 percent in 2003, and still 6.1 percent at the end of 2004 (compared with 5.3 percent for the State). This raises another big question: Can New York City afford Eliot Spitzer?

2. Second, unproven accusations about misdeeds by a few individuals are invariably described as proof of and industry-wide “scandal” or “corruption.” Spitzer’s press release about Marsh was titled “Investigation Reveals Widespread Corruption in Insurance Industry.” But smear words such as corruption and scandal have no legal meaning.

In his testimony before a Senate subcommittee, Spitzer complained that “favoritism, secrecy and conflicts” rule the insurance industry. But favoritism, secrecy and conflicts are purely imaginary crimes. Mr. Spitzer might actually hope to criminalize such open-ended sins, along with corruption and greed. But that would replace the rule of law with the rule of lawyers.

3. Third, it’s all about money. Eliot Spitzer has become a tax farmer for Albany, raising close to $4 billion in hush money with only the vaguest hints about disgorging any of it alleged victims. Spitzer deals are always settled in cash without formal charges, due process or even admission of guilt. I hesitate to call this a shakedown or extortion – because neither term seems quite strong enough.

Write a big enough check, or get into bed with Spitzer’s teammates, and the most dramatic threats and accusations will magically disappear.

Marsh & McClellan quickly fired CEO Jeffrey Greenberg because Spitzer asked for his head. And their new CEO, Michael Cherkasky, just happens to be an old friend and former colleague of Spitzer’s. On the same day Mr. Chekasky was hired, Spitzer stopped threatening criminal charges against the company and quietly dropped the complaint’s explicit demand for punitive damages. Did someone speak of corruption?

To invest in similar anti-Spitzer insurance, Morgan Stanley prudently hired one of Spitzer’s top lawyers, Eric Dinallo. Bear Stearns hired another, Beth Golden who, the Washington Post explained, “can help explain the Martin Act.” As if anyone could.

4. Fourth, Spitzer has apparently appointed himself the nation’s wage and price control czar – three decades after Richard Nixon abandoned that policy. Has involved himself in tinkering with mutual fund fees, Dick Grasso’s employment contract, Marsh & McClellan’s commission structure, and (I’m not making this up) the fact that New York City washroom attendants worked for tips rather than wages.

THE MARSH COMPLAINT

Spitzer’s charges have never been tested in a court of law, for good reason. Trial by press release does not have to let any court making findings of fact, or let the accused face their accusers (usually competitors), or prove anything beyond reasonable doubt. Spitzer’s complaints merely have to dig up a few seemingly juicy e-mail tidbits to be echoed uncritically by the gullible media.

In the Marsh & McLellan and ULR (Universal Life Resources) complaints, Spitzer tries to depict a world in which professional buyers of insurance at the world’s largest corporations are mindless sheep and insurance brokers are their evil shepherds. He told a Senate panel, “the ordinary purchaser of insurance has no idea that the broker he selects is receiving hidden payments from insurance companies, that the advice he receives from the broker may be compromised.” In ULR’s case, these supposedly clueless purchasers include Intel, Colgate-Palmolive, Eastman Kodak, Marriott, United Parcel and Dell. Nearly all of Marsh’s clients are also Fortune 100 firms. These are scarcely innocent babes in the woods. They can and do switch brokers or deal directly with insurance companies.

Mr. Spitzer’s belief that such sophisticated corporate buyers could be routinely overcharged for insurance by one or two insurance brokers without anyone catching on or shopping around is literally unbelievable.

Fortunately, Spitzer’s office eventually put the exhibits online for the Marsh case. That lets us check to see if quotations used in the Complaint against Marsh were ripped out of context. It turns out they often were.

Paragraph 55 of the Complaint claims “Marsh asked ACE to refrain from submitting a competitive bid because Marsh wanted the incumbent, AIG, to keep the business.” This is followed by a quote that seems to suggest that ACE “could get to $850,000 if needed” – the same bid as AIG. But the next sentence of that quote is suspiciously omitted. What is said was, “Apparently both Marsh Atlanta and Client are extremely unhappy with AIG and if we can put offer on table at $800,000 we’ll get it.”

Paragraph 66 lists assorted complaints with the New York office solicited from Marsh regional managers. One is quoted asking, “What are the rules on pricing – are we to quote our numbers or what MGB (Marsh Global Booking) wants us to quote?” The next sentence, however, is curiously omitted. What it said was, “We get more price-driven deals from them [MGB] than anyone. The local offices don’t push us for price the way they do!” This regional manager’s anxiety about pricing was obviously not about being pushed too hard to raise prices (as Spitzer implied) but to lower prices – to make price-driven deals.

Paragraph 63 claims Munich-American Risk Partners disclosed to a client “contingent commissions that were being passed on to the client.” But that is not what the cited letter says. What it actually complains about is that the commissions cannot be passed on, and are therefore burdensome to Munich. The letter said Munich and Marsh should “find a way to share in the financial impact rather than having Risk Partners share the entire burden.”

Paragraphs 64 to 66 echo other self-interested gripes from Munich about not getting much business from Marsh, so why should they even bother to show up at client meetings. Yet the undisclosed part of this same letter admits Marsh wasn’t recommending Munich because Munich’s bids were too high. The business was instead going to Zurich, which did not pay contingent commissions to Marsh. The Munich executive wrote, “Zurich is currently very aggressively pricing umbrella business … We currently stand almost no chance of competing with Zurich … Their pricing approach seems to be just what MGB is looking for… . Pricing still drives that operation [namely, MGB].” The undisclosed complaint from Munich was not that Marsh was charging clients too much, but that Munich’s competitors were charging too little.

Many of the most serious assertions are just unverifiable hearsay, supported by no evidence at all. A key complaint, for example, asserts that, “Typically, Hartford’s underwriters were told to price the quote or indication 25% above a particular number, and that by doing so Hartford need not worry that it would get the business” (59,60). Why would Hartford worry about getting the business? Don’t they want to sell insurance? If Hartford typically quotes too high a price, then Hartford need not ever worry about selling any insurance. Why would they go along with a deal like that?

The complaint says, “A cast of the world’s largest insurance companies … have paid hundreds of millions of dollars for Marsh to steer business their way.” Yet Marsh cannot steer business to one without steering it away from another, so why don’t the others complain?

The only alleged evidence of “steering” is in the final paragraphs 70 through 74, concerning the Greenville South Carolina School District. The choice among four bids came down to ACE and Zurich. ACE paid contingent commissions to Marsh but Zurich did not. Zurich won the bid. If that was steering, Marsh needs driving lessons.

Spitzer does not claim the highest bid won in this case or any other, yet the antitrust portion of the case nonetheless asserts (without a shred of evidence) that “clients purchased insurance at prices higher than they would have paid.” Where’s the proof?

Paragraph 42 asserts that “insurance carriers pass the cost of contingent commissions directly on to the clients in the form of higher premiums” If it that were true then carriers like Zurich who refused to pay such commissions could charge lower premiums and win the bid, as Zurich did against ACE and Munich. No carrier can pass on any cost if another carrier wins the bid.

CONCLUSION

In short, to make his case, Mr. Spitzer had to rely on what the Martin Act refers to as deception, concealment, suppression and false pretense.

The cash pay-off in the Marsh case doesn’t matter much – a capricious Spitzer tax has become price of doing business in New York, at least for finance and related middlemen. But the resulting unlegislated change in the way brokers are compensated, on the other hand, is likely to injure clients and insurers alike – if it spreads and sticks.

Methods of compensating people for their services evolve for good reasons and should not be meddled with lightly.

Contingent fees in the insurance business are often based on the profitability of the business, so that brokers who keep bringing high-risk clients to insurers will not be rewarded for doing so. This solves what economists call an “agency problem” – just as CEOs need incentives to act in the stockholders’ interest rather than their own, independent brokers need some incentive to act in the carrier’s interest rather than their own. Contingent fees for renewing policies likewise provide a clear incentive for brokers to keep clients satisfied, to minimize needless churning, and to communicate special client needs to insurers. It is not at all clear that any alternative incentive system would work as well.

Yet Mr. Spitzer’s myopic vision of “conflict” demands that insurance brokers stop collecting such fees from carriers, so Marsh and some insurers have capitulated. If all brokers and carriers did the same, however, that would leave only two alternatives. One possible alternative would be to virtually eliminate independent brokerage, reverting to captive single-company agents and direct negotiations between insurance companies and clients. Another alternative might be to charge higher brokerage fees to clients, but high client fees would also tend to eliminate a lot of independent brokerage. So would underpaying brokers.

If Spitzer succeeds in regulating and legislating insurance commissions arbitrarily by the threat of bad publicity and endless litigation, Henry Manne predicted in the Wall Street Journal that “we may witness the demise of specialized insurance-brokerage firms … [with] a decrease in market specialization … [and] economic efficiency.”

In a CNN interview, Spitzer once referred to himself as a “prosecutor-slash-regulator.” He’s become a guerilla regulator, operating with no legitimate authority, rewriting laws and regulations through public threats and private deals. He has appointed himself the nation’s regulatory czar, price controller, legislator and judge.

I am told that Eliot Spitzer is running for Governor of New York. He cannot count on my unqualified support.”

It’s Hard, Let’s Give Up

Now’s no time to go wobbly on school choice. As I point out, again, in my earlier post, school choice programs have proliferated in the last ten years. And, as Andrew Coulson (among many others) points out, they work.

This is a time for hope, not for preemptive surrender.

In the 1990’s, a structured movement for choice was built and some foundational battles were won, for vouchers in Milwaukee and Cleveland, and for tax credits and deductions in Arizona and Illinois, Iowa and Minnesota. In the last seven years, we’ve seen the majority of current choice programs passed. In addition, the policies have been getting better; more expansive and powerful.

Daniel Casse repeats another unwarranted conclusion made by Sol Stern in his poorly argued City Journal essay:

His article “School Choice Isn’t Enough” makes the case that after more than a decade of conservative and libertarian agitating, the school choice and voucher movements have been a colossal failure.

Who ever said that breaking the stranglehold of the largest and most powerful government monopoly in American history was going to be quick and easy?

Ten years, and out? How can anyone justify giving up on a policy movement that has been more successful in the last ten years than in the first ten, that has been most successful in the last five years?

I guess we should kick Social Security reform to the curb, too. And tax reform; ha, what a pipe dream! Spending control? Pah, don’t make me laugh.

While we’re giving up preemptively, why not throw in the towel and just support government-controlled universal health-care. Sure seems hard to stop that one, and we already have that big, popular SCHIP thing anyway.

And people seem pretty cool with the government expanding its education monopoly back to age 3 in pre-K. No sense fighting a losing battle.

Let’s roll up the whole conservative movement … what a colossal failure that’s been!

I can’t for the life of me understand why Reagan didn’t just yell, “Uncle!” instead of “Tear down this wall.” I mean, how long did the Cold War take, and how much did we spend on that whole freedom vs. Soviet Empire waste of time …

Handicapped Kids Don’t Count

Following up on Andrew’s comments

I wish Sol Stern would have the professional integrity to finally correct himself in writing, because others seem to trust him and keep repeating his confusions and inaccuracies.

The latest is from Daniel Casse, who writes a review of Sol Stern’s badly researched and poorly argued City Journal article, “School Choice Isn’t Enough.” In fact, the essay is not about the effectiveness of school choice in improving education, but about a few voucher programs that didn’t measure up to Stern’s wildly unrealistic expectations of how they would transform public schools.

Unfortunately, Casse repeats an erroneous implication from the piece that Stern refuses to correct; “[Stern] points out that today there are only three tiny voucher programs supported by public funds, one in Cleveland, one in Milwaukee, and another in Washington, D.C…” (emphasis added).

In fact, there are twenty-one choice programs in 13 states that allow students to choose private schools with the support of vouchers or tax incentives. Most of these were passed in the last ten years. Just counting recently passed state programs, close to $700,000,000 is used to help more than 700,000 children attend a school of choice.

Eleven of these programs, in eight states, use vouchers. Not three … eleven voucher programs. Most of the ones he missed help 20,000 disabled children attend a school that meets their needs when the public school fails them.

But apparently, handicapped children don’t count for Stern.

Counting only modern state programs, vouchers help around 47,000 children attend schools of their choice with over $275 million.

Across seven states, there are ten education tax credits or deductions, and Stern ignores them entirely. These benefit more than 650,000 children with more than $400 million; five of those programs target low-income families and help 93,000 children attend schools of their choice.

It’s easy to see how someone like Casse, who isn’t in the thick of school choice policy would be misled by Stern’s article; the essay is misleading, in addition to confusing, feather-light on research and evidence, and poorly argued.

It would be nice to have an official correction in print by Stern. But the least he should do is directly address the most important evidence and critiques levied against his argument. Stern’s imprecise and irresponsible article is misleading readers.

Ben Stein Should Stick with Acting

I’ve always enjoyed reading Ben Stein’s descriptions of life in Hollywood in The American Spectator. And his performance in Ferris Bueller’s Day Off is a cult classic. Unfortunately, his writings on economics are somewhat less fulfilling. A recent open letter to John McCain in the New York Times argues for “much higher taxes on the truly rich” and assumes that it is impossible to control government spending:

All politicians campaign on the promise to cut federal spending by identifying hitherto unfound waste, fraud and corruption. None of them ever do so in a meaningful way. …That is the first thing you need to know. The next thing is that the Republican Party (my party and yours) has for the last 30 years or so been operating under a demonstrably false and misleading premise: that tax cuts pay for themselves by generating so much economic growth that they replace the sums lost by tax cutting. …In fact, tax cuts lower federal revenue and generate federal deficits. …What to do? …You can propose still more tax cuts… Or, you can raise taxes. But whom to tax? …The first step toward putting our house in order, once we are past the seemingly looming recession, is much higher taxes on the truly rich and serious enforcement to prevent offshore tax evasion. …we can have some integrity and levy taxes equal to what we spend. 

Stein’s analysis is horribly wrong. First, he asserts that government spending cannot be reduced and that this means either runaway deficits or higher taxes. While it would be nice if government outlays actually were reduced, a more modest measure of success is whether the private economy is growing faster than the government. If that happens, deficits will fall since tax revenues generally increase at least as fast as nominal GDP. This modest level of fiscal discipline is not an impossible task, as former Cato expert Veronique de Rugy has shown (here and here). Before urging Senator McCain to raise taxes, perhaps Stein should be arguing that the presumptive Republican nominee merely hold the growth of government to, say, the rate of inflation.

Stein is equally misguided on tax policy. He correctly notes that many Republicans have wrongly claimed that all “tax cuts pay for themselves.” Indeed, that is the same point I made in the Center for Freedom and Prosperity’s first video on the Laffer Curve. But he fails to realize that there are some tax policies that have very significant Laffer-Curve effects, and the second video in the series specifically shows that Stein’s proposal of ”much higher tax rates” on the rich almost surely would backfire.

Weekly Standard Argues, Weakly, for Standards

In the current issue of the Weekly Standard, speech-writer Daniel Casse opines on the school choice debate sparked last month by Sol Stern. Casse begins by uncritically repeating Stern’s claim that the American school choice movement has stagnated for over a decade. In attempting to defend that claim, Stern failed to mention that five new education tax credit programs have been created over that time, harnessing hundreds of millions of dollars and serving a hundred thousand or so children. These programs have grown significantly since their inception and will likely continue to do so. Stern’s omission had already been corrected by several different scholars weeks ago, and for Casse not to mention this shows either poor judgement or poor research on his part.

Casse goes on to dismiss responses to Stern by Robert Enlow, Neal McCluskey and myself as “doctrinaire” in our support for education markets over government school monopolies. But to be doctrinaire is to be impractical and inflexible. I am neither. There are education policies already enacted in several states that, if simply allowed to grow over time, will eventually have very good prospects for creating market forces in education. One example is Pennsylvania’s Education Improvement Tax Credit, which allows businesses to make donations to private scholarship funds that serve low income children, and get a 90% tax credit in return. There are certainly ways to accelerate the advent of real market forces, Cato’s own Public Education Tax Credit model legislation is one, but even the expansion of existing programs could eventually do the trick. That is a practical solution.

And as for flexibility, I would be quite ready to change my position favoring real market reform over central planning in education if the preponderance of evidence changed accordingly. No such change seems iminent. I maintain a spreadsheet of the international research comparing public and private provision of education across 7 or 8 different outcomes (mostly academic achievement and efficiency). These studies span the past 25 years, and of the 91 statistically significant findings I’ve collected, 82 favor private schooling. If these studies are winnowed down so that we look only at those comparing government schools to markets of minimally regulated private schools paid for at least in part by parents, there are 34 statistically significant findings, 32 of which favor market provision. The less intrusive the state is, and the more market-like the schools are, the better private schools work. The latest version of this literature review has yet to be published, but the detailed original 2004 version is available on-line, as is a brief updated discussion at the end of a paper released last year on the No Child Left Behind act.

If anyone is doctrinaire in this debate, it is the advocates of government mandated curricula and educational standards who seldom present any sort of empirical evidence in support of their views, with the exception of an occasional anecdotal reference to some place that has standards they like.

As I pointed out in the Washington Post on-line last year, it is not government standards that produce excellence, but the competitive pursuit of excellence that drives up standards.