Monday, June 29, 2009

Scratches and Dents

In the first four parts of this series (part 1, part 2, part 3, part 4) I presented the concept that our current employer provided health care system is accidentally designed to reduce liberty, increase costs, and reduce satisfaction. I also explained the paradox that our competing private and public health care subsidy systems raise costs more than would having a single system one way or the other. I briefly mentioned what a more ideal system would look like. In this final segment I will explore this in a bit more detail.

David Miller’s 6/19/09 Pursuit of Liberty post highlighted a Downsize DC post that simplifies the health care issue down to two questions:
  • For whom does your doctor work?
  • Do you pay for your health insurance directly?
These questions are important because they drive to the incentives of the people involved in the health care system. Each of us responds to the incentives in the systems in which we operate. This is true on the road, in the home, workplace, supermarket, city council chamber, church, clinic, etc.

I once knew a family that lived in an area where it was determined that the properties in the area had been required to install private septic systems due to an error by the municipality. To bring the city into compliance with state requirements, the city agreed to pay to hook these few homes to the sewage system. The contractors hired by the city did the job per the city’s specifications. But the families were unexpectedly left without water for several days and their yards were left a mess. Every interaction between the families and the contractors turned into problems because the contractors were working for the city, not for the families.

The Downsize DC post aptly states, “If your doctor tailors his or her care to the policies of your insurance company, or some government program, then you don’t really have a doctor who works for you….” While your health care providers may be sympathetic to you, they respond to the incentives offered by their paymasters in the insurance companies and in the government. This limits innovation, cost cutting, and customer service incentives.

How often do you make claims to your homeowner insurance? Quite rarely, I’ll wager. Shouldn’t it be that way with health insurance? Wouldn’t it be better to be free of the oppressive rules that require you to carry a heavy health insurance burden so that you can buy the coverage that suits you best? Wouldn’t it be better to deal directly with health care providers instead of every interaction occurring through a bureaucratic screen? Downsize DC says:
“It’s really that simple. As long as insurance policies and/or government programs fund most of your health care, doctors will work for them and not for you.

“The same holds true for health insurance. As long as our health care coverage comes mostly from employer controlled insurance or the government, we won’t have a competitive health insurance market, and the cost of both insurance and health care will grow constantly.

“When Americans care about the impact that their use of health care has on their insurance premiums in the same way that they care about the impact that speeding tickets and minor scrapes have on their car insurance, you’ll know that our health care system has really been reformed.”
Since we are in charge of most of our home and auto maintenance issues, we are incentivized to take care to reduce the chance of making an insurance claim. We take steps to keep the kids from breaking windows with baseballs, for example. We try to avoid getting dents and scrapes. Shouldn’t our approach to our own health be like that?

But isn’t it true that people’s physical bodies are not created equal? Some have health problems due to no fault of their own. As far as I know, nothing I did contributed to the fact that I have Multiple Sclerosis. Wouldn’t the healthy bear much lower expenses than those with problems? And what about the elderly? Don’t we all generally have more health problems as we age, regardless of how well we care for ourselves? What about the poor or sick that can’t find affordable insurance?

There are parallels to this in housing. Even poor people somehow manage to carry homeowner insurance policies, even if it occurs through paying rent. In a freer system we could develop myriad ways of helping the poor and dealing with those with greater health care needs without hamstringing an entire industry. Greater liberty does not necessarily translate into fewer people having their needs met and meeting people’s needs does not require coercive policies.

The U.S. today seems intent on creating a health care system that is even worse than what we currently have. Instead of continuing to shackle themselves to coercive systems that promise security, Americans should instead consider how to increase individual liberty for all parts of our health care system.

Saturday, June 27, 2009

Mixed Costs

In the previous three segments of this series (part 1, part 2, part 3) I put forward the argument that employer provided health care has some bad features that are inherent in the very structure of the program. I alluded to what some of these problems are. Now I will discuss them in greater detail.

Celebrated economist Milton Friedman explains in this 2001 article that employer provided health care has two cost-increasing effects.
“First, it leads employees to rely on their employer, rather than themselves, to make arrangements for medical care. Yet employees are likely to do a better job of monitoring medical care providers—because it is in their own interest—than is the employer or the insurance company or companies designated by the employer. Second, it leads employees to take a larger fraction of their total remuneration in the form of medical care than they would if spending on medical care had the same tax status as other expenditures.”
Friedman’s research shows that fully one-third of the increase in medical costs during the last half of the 20th Century are attributable to publicly subsidized employer provided health care. Another one-quarter of the rise is attributable to Medicare. That leaves about 42% of cost increases unaccounted for.

Friedman says in the 2001 article that while his research is incomplete, he is led to believe that much of this unaccounted cost increase is attributable to a mixed system. That is, overall health care would cost less if we had a fully private third-party subsidized system or a fully government provided system. Having two systems, he thinks, causes significant cost increases. This is an inconvenient theory for those that want to continue with both systems. The proponents of solely government paid (run) care are correct that it would lower costs somewhat.

Of course, there is a tradeoff. Access to services and products is currently greater than it would be under a single system either way. While the competition between the two rival health care subsidy systems has the perverse effect of driving costs up instead of driving costs down as competition does in the regular market, it has the effect of increasing access.

Experience from other countries shows that once a single system is selected; focus shifts from better quality and access to cutting costs, since the people are captive and no longer need to be sold on a ‘single payer’ system. At this point rationing of health care by the bureaucracy increases and becomes inescapable (see here for a sampling of what to expect).

So what would Friedman suggest? He writes:
“If the tax exemption were removed, employees could bargain with their employers for higher take-home pay in lieu of medical care and provide for their own medical care either by dealing directly with medical care providers or by purchasing medical insurance. Removal of the tax exemption would enable governments to reduce the tax rate on income while raising the same total revenue. This hidden subsidy for medical care, currently more than $100 billion a year, is not included in reported figures on government health spending.”
So Friedman is not advocating a tax increase. Rather, he’s advocating taxing the current employer provided health care benefit and lowering general tax rates to achieve revenue neutrality. The salutary effects would be increased liberty, decreased medical costs, and higher satisfaction.

You may ask why we don’t simply extend the same tax benefit to individuals that is currently available only through employers. For one thing, it would only help those that actually pay federal income taxes. Since nearly half of all ‘taxpayers’ pay no federal income tax, they would not be helped much. But isn’t it true that they are already not helped much if they have employer provided health insurance? So perhaps that is a red herring. Friedman says:
“Extending the tax exemption to all medical care—as in the current limited provision for medical savings accounts and the proposals to make such accounts more widely available—would reduce reliance on third-party payment. But, by extending the hidden subsidy to all medical care expenditures, it would increase the tendency of employees to take a larger portion of their remuneration in the form of medical care.”
Hearkening back to my last post, subsidized systems to help pay for home maintenance or food would have similar effects. People would be incentivized to spend more of their household income on these things than they do today, leaving them less for other things like charitable donations, furniture, clothing, and family vacations. The subsidy road always misallocates resources and produces higher costs in the long run.

It should be abundantly clear that almost every argument that applies against the employer provided third-party health care system applies at least equally to any system provided by the government. Hold on, we’re not quite done yet.

Next time: Scratches and Dents

Friday, June 26, 2009

The Cost of Shackles

Does it really make sense to hold tenaciously to our current system of employer provided health care?

In the first segment of this series I introduced the concept of the company store and offered some explanation as to what was bad about it. In the second segment I explained how employer provided health insurance has become today’s version of the company store and I suggested that it would be good to explore whether its continuance was merited. In this segment, I will investigate this question.

We have lived in our current home for a number of years. During those years we have cut the lawn and cleared the snow many times. We have built a cedar fence, poured concrete pads and borders, finished our basement, added rooms onto the home, replaced shingles, replaced roof sheathing, replaced part of the driveway, fixed leaks, planted trees and ornamentals, had trees removed, done some rewiring, replaced floor coverings, repainted, had major renovations done to the exterior walls, installed new windows, built permanent shelving, and done numerous other maintenance and upgrade projects.

Shelter is one of life’s essentials. Why isn’t it possible for my employer to offer a tax free plan that would cover the costs of home repair and upkeep — in exchange for a lower taxable salary, of course? Just think how wonderful it would be if I could just make a $25 co-payment and have a preferred roofing provider come in and replace the shingles every 15 or 20 years? Wouldn’t that save potentially larger future costs, since I might be so remiss as to let the roof go completely to pot before doing something about it?

The faucet in my main shower has been giving me fits. Despite my attempts to fix it, the thing continues to leak. I’m going to have to call in a plumber. Wouldn’t it be great if I could just make a $25 co-payment and have a plan approved plumber come and fix my leaky shower? We haven’t had a professional tree trimming service in for a long time. Wouldn’t it be wonderful if that could be done with a $25 co-pay?

What kind of incentives would such a system engender? How would people respond to those incentives? How would the plan’s administrative bureaucracy turn a profit? Where would the money come from? What would your local Home Depot look like once it jumped through the hoops that allowed it to become a preferred provider of the various plans out there? Since it would then owe much of its existence to tax subsidies, it would be subject to all kinds of new regulations developed by ever inventive politicians and bureaucrats. What do you think your shopping experience would be like once two levels of bureaucrats are inserted between you and every handyman, contractor, and hardware store? What would happen to the cost of plumbers, roofers, tree trimmers, etc? Does this look like a good picture to you?

Even more essential to life than shelter is food. Maybe we should just go back to the days of the company store. We could authorize employers to provide tax free grocery buying plans. Your taxable wages would be reduced accordingly. But you could go to any store — any approved store, that is — and get whatever you want for a $25 co-pay, as long as the product is covered by the plan. Don’t expect the plan to cover that glitzy shampoo you use. Ice cream and snack chips are definitely out of the question. You’re going to have to hit the black market for stuff like that.

Now picture what the supermarket is going to look like under this plan. Which products will be on the shelf and which will be locked away and accessible only after pre-approval. Make sure you don’t try to buy food for a gathering with friends until you get the larger-than-usual expenditure pre-approved by a bureaucrat. What will the costs of the latest foods on the market be? Will you even be able to get them before they go generic? What would happen to the prices of groceries in general? Have you ever had a claim disputed by your health insurance? Perhaps you’d like that same experience when it comes to groceries?

It would seem obvious that the downsides of programs such as I have mentioned would outweigh the benefits. Any such system would serve to further bind you to your employer and limit your freedom. Besides, why would anyone think that some bureaucrat somewhere is better able to manage your home maintenance and food purchases than you? Who would assume that the layers of plan bureaucracy would come free of charge?

If this kind of plan is a bad idea for housing and food, as it proved to be during the era of the company store, what is different about health care that makes this a good system for dealing with your health issues? You can argue all you want that health care decisions are simply too complex for the average individual but I absolutely reject such ridiculous claims. We constantly make decisions about very complex matters. Health care is not in some magically special class, except for how we have come to treat it.

Am I arguing for higher taxes or for government run medicine? Well, that’s getting the cart ahead of the horse. This story isn’t done yet.

Next time: Mixed Costs

Today’s Company Store

In my previous post I discussed the ‘truck system’ that offered workers employment, food, and housing, but that kept them bound to a poorer way of life. An infamous element of this system was the company store. I said that a similar feature is at work today and is at the center of one of today’s hottest issues. Let’s take another history trip.

During WWII the U.S. economy was turned into a command economy, where the government took control of as many resources as possible to focus on defeating the Axis. This functioned well and accomplished the goal because most Americans were fully on board with the goal. The myriad war policies included wage controls.

While wage controls seek to hold down costs, they cannot repeal the laws of supply and demand. In order to attract workers, some employers began offering health insurance. It took a while for the federal government to figure out what was going on. When it did, the IRS sought to tax this benefit, as it is obviously just a substitution for actual wages. But the practice had become so widespread that there was a huge outcry that resulted in Congress exempting employer provided health insurance from taxation.

In the space of a few years, government planners, employers, employees, and politicians had participated in creating a ‘company store’ for health insurance, even while the evils of the old company store were dissipating throughout the U.S. This system amounts to a subsidy that ‘costs’ taxpayers somewhere north of $100 billion annually.

During the recent presidential campaign, Sen. John McCain (R-AZ) suggested taxing this benefit. He was strongly taken to task by Sen. Barack Obama (D-IL), who said that this should not be an option. Of course, once he was President, Obama signaled as early as last March that it is an option. (No, he’s not the first politician to do an about face once in office. They all do it to one degree or another.)

Democrats that want to push through a heavily government centric health insurance system need a lot of money to pay for it. Although they know that taxing employer provided health insurance is highly unpopular, there is simply no other bucket from which they can quickly pull the amount of money that this tax would provide. Besides, taxing this benefit as income while offering a tax free government supplied option would rapidly entice employees (or more accurately, employers) into the government system and away from employer chosen private plans.

Republicans are fighting this tooth and nail. A number of Democrats are also skittish. Not to mention the fact that the health insurance companies that owe much of their livelihood to the entrenched subsidy are lobbying up a storm on this front. This tax might make it through the House, but I’d be surprised to see it survive the Senate (this year, at lest).

While the Republicans are fighting to keep the popular status quo and Democrats are simply looking for a way to finance their plan to further their championed cause of socialized medicine, few on either side seem to be stopping to ask whether the employer provided health insurance subsidy is a good idea in and of itself.

Next time: The Cost of Shackles

Thursday, June 25, 2009

Sixteen Tons

In 1955 Tennessee Ernie Ford’s recording of the song Sixteen Tons hit the top of the charts. Even two generations later this song continues to be included in popular media, so even my children are somewhat familiar with it. I always knew the song was about coal mining, but for years I didn’t understand what was meant by the phrase, “I owe my soul to the company store.”

It turns out that the company store was part of an oppressive system of bondage. Men with fewer prospects (such as new immigrants and people living in chronically poor regions) were enticed into going to work for a large employer who would offer them food and shelter. This system spread through many industries during the industrial age.

Bill Bennett explains in his books America the Last Best Hope Vol. 1 and Vol. 2 that many of the wealthy men at the head of these companies earnestly thought they were part of God’s plan to help the less fortunate. Some even felt they had a divine right to control the lives of others, although, they seemingly were oblivious to the parallels with the European aristocracy that they so disdained. Is it any wonder that this “businessman’s gospel” had a dark side?

Rent was automatically deducted from the workers’ salary. The homes provided for them and their families were often little more than shanties. Men were usually paid in scrip that was only redeemable at the company store. Of course, the store offered only those products permitted by the bosses at prices set by the bosses. This hardscrabble life left workers with no surplus and often perpetually in debt to the company store.

Workers felt trapped. If they were caught looking for other employment, they were fired and they immediately lost their homes and nearly all of their belongings (which were considered company property). With a captive work force that seemed to self perpetuate as workers’ sons came of age, companies had little incentive to ensure worker safety and could compete (for a while) with other firms that implemented newer labor saving technologies. Sufficiently subservient workers were guaranteed a job, food, and a place to live. But at what cost?

It was in these circumstances that the organized labor movement began to develop in order to demand rights for workers. But employers weren’t about to give up their supposedly cheap labor easily. Some labor strikes turned into literal battle zones and some strikes seriously impacted the economy. It was an evolutionary process that took some time. I’ve long appreciated the sidelight view offered of one point along this road that is depicted in the movie October Sky. Within my lifetime the ‘truck system’ and its company store have largely become relics of history.

Strangely, even as the company store was going by the wayside in the U.S., our nation chose to implement a similar feature that finds itself at the center of one of today’s most hotly debated issues. It happened by fluke as the result of government meddling in the economy. It has had a dramatic impact on our nation that I believe is more negative than positive. And yet many workers and politicians are determined to keep this shackle firmly in place until you pry it off of their cold dead bodies.

Next time: Today’s Company Store

Monday, June 22, 2009

Channeling Reagan

Ramesh Ponnuru says that the GOP has a Reagan problem. Not that Reagan is a problem for the GOP. But that many members of the party seem to have derived the wrong lessons from Reagan’s political life.

Ponnuru notes that some Republicans that want to be done with the memory of Reagan, others hail him as some sort of saint, and various stripes of Republicans that all paint a picture of Reagan as supporting their particular world view. Ponnuru notes that most GOP presidential contenders in the recent round tried to paint themselves as the reincarnation of Ronald Reagan.

Perhaps somewhat due to Reagan’s relative success, certain conservative policies become orthodoxy in the GOP. The accepted understanding among those seeking national office appears to be that garnering GOP votes requires paying homage to these conventions. But this, asserts Ponnuru, is the opposite of Reagan’s approach.

Reagan, says Ponnuru, “did not advertise his conformity to a school of thought even when he did, in fact, conform. He did not, that is, sell his policies on the basis of their conservatism. Rather the reverse: He used attractive policies to get people to give his conservatism a look.” This is how he cobbled together a supportive coalition and “managed to lead both parties simultaneously.”

Another useful lesson, per Ponnuru, is Reagan’s sincere respect for constitutionalism and for “our political inheritance from the Founders.” This “provided a connective thread, a coherence, a seriousness, and even a nobility to his politics that it might otherwise have lacked.”

Finally, Reagan was pragmatic about his conservative principles. “Reaganism succeeded as statecraft” says Ponnuru, “because it applied characteristically conservative insights to the challenges of his time.” Rather than being stuck on specific policies, Reagan focused his attention on the things that were most important at the time. Instead of trying to continually repeat the policies of the Reagan administration, the GOP should apply conservative principles to the challenges facing the nation today, focusing on those points that will garner the most bang for the buck.

Bill Bennett, who served as Education Secretary under Reagan, is fond of reminding people that the Ronald Reagan of the 1980s was not the Ronald Reagan of earlier decades. The Reagan of 1980 was not even the same Reagan as that of 1976. Reagan continued to develop during his presidency. Thus, suggests Bennett, casting about today for another Ronald Reagan of 1988 to break on the scene is a fool’s errand.

Both Ponnuru and Bennett remind that the Reagan years were fractious for the GOP. There were many Republicans of assorted inclinations that thought Reagan was too far from their ideological preferences. Bennett also notes in his book, America, the Last Best Hope, Vol. 2 that Reagan’s successes didn’t necessarily help many Republicans win political office during his terms.

It is natural that Republicans would want to emulate, as Ponnuru says, “the most successful Republican president of the last century, and the president most associated with the conservative movement.” But in doing is, it is important to understand which lessons to emulate and how to apply those lessons to the issues of the present day.

It is possible to respect and even revere Reagan without holding fast to the same policies he successfully championed. I suppose that if he were still around today the policies he’d be promoting would likely be different than the ones he promoted back in his day. He’d still be advocating a conservative and constitutional approach, but I assume he’d be a lot more flexible than many of those that invoke his memory suggest. Of course, since I just did the same thing, I could be wrong.

Friday, June 19, 2009

Note to Conservatives: Obama Is a Natural Born Citizen

A contention continues to be expressed among some conservatives that President Obama is not a “natural born citizen” of the United States as required by Article II Section 1 of the Constitution, and is therefore ineligible to serve as President. They note that the President’s father was not an American citizen. They conjure up tales of Obama being born outside of the U.S. and assert that he has no actual U.S. birth certificate.

The claims of nonexistent or falsified birth certificate continue despite the fact that they have been debunked by reliable sources (as explained here) and courts have thrown out as groundless challenges based on these claims. But even if you assume that these people are right and that Obama was born outside of the U.S., it still would not mean he fails the “natural born citizen” test.

No one seriously (or at least effectively) disputes the fact that Obama’s mother was a U.S. citizen at the time of his birth. Wikipedia makes it clear that case law is unsettled about the term “natural born citizen,” but it has long been the practice of the U.S. government to recognize as natural born citizens the natural children of any U.S. citizen regardless of where in the world those children are born.

When I lived in Norway, I knew two families where the wife was a U.S. citizen and the husband was Norwegian. The children born to these families in Norway were recognized as U.S. citizens. They had Social Security numbers and citizenship papers. The sons had to register with Selective Service at age 18. If any of these children ended up living at least 14 years in the U.S. and reached at least 35 years of age, they would not be barred from running for the office of President or Vice President, despite the facts that their father was not a U.S. citizen and they were born in a foreign country.

The weight of evidence is against those that believe that Obama is rendered ineligible to serve as President due to the natural born citizen clause. There are only two ways for these people to achieve their goal of ousting the President from office on this basis. Since the courts have refused (and will likely continue to refuse) such challenges, that leaves only the avenue of impeachment.

Impeachment requires that the House of Representatives create a case and vote to impeach the President. Then representatives selected by the House present the case to the Senate, which must then vote to convict the President. How likely is this to happen, given the current formulation of Congress? Besides, even this method is questionable, because this issue may not rise to the level of “Treason, Bribery, or other high Crimes and Misdemeanors” codified in Article II Section 4 of the Constitution.

Those that claim that the election of President Obama flouts the Constitution’s natural born citizen clause are not on a firm legal footing. They frequently claim that they are trying to save the Constitution when they are simply trying to narrowly interpret the document in a way that pleases them but is not reflected in actual law.

It would be difficult if not impossible for anyone to prove in a way that settles U.S. law that President Obama is not a natural born citizen of the U.S. Those that buy the line that Obama is ineligible because of this and those that go around trying to sell this message off to others are wasting their time and talents, which could and should be used on something actually worthwhile.

Why do I care whether the anti-Obama-ites continue to rage about this non-issue? Because pretty much all of them are identified as conservatives and their rhetoric on this matter serves to discredit the cause for which they purport to stand. They are distracting from real conservative issues. They are giving conservatism a worse name and driving people away when they should be working to attract people to conservative principles. So, please lay off the Obama citizenship thing. It serves no good purpose.

Thursday, June 18, 2009

How Should the U.S. Deal With North Korea?

Analysts think that North Korea will fire a ballistic missile toward Hawaii in a couple of weeks, reports the AP. Although the missile wouldn’t be able to reach Hawaii’s main islands and the firing is labeled a test, this would clearly be an act of international aggression, aimed at poking Japan, the U.S., and their allies in the eye.

South Korean President Lee Myung-bak is quoted as saying something that comes across as rather ridiculous. “If we acknowledge North Korea possessing nuclear programs, other non-nuclear countries in Northeast Asia would be tempted to possess nuclear weapons and this would not be helpful for stability in Northeast Asia,” said Lee.

So, if South Korea officially admits what everybody in the world already knows to be true — that North Korea has nuclear weapon capacities — every other country in the region will also want nuclear weapons. But presumably, as long as South Korea refuses to officially acknowledge NK’s nuclear capabilities other countries in the region will refrain from pursuing nuclear weapons. It is difficult to see how this makes much sense.

It seems to me that few Americans are itching for war with the testy North Korean communists. Any war with NK would end up being either direct or indirect war with China and Russia. Nobody wants that. Besides, the last Korean War killed 36,940 Americans and wounded 92,134 more, while more than 15,000 went missing or ended up as POWs. Internationally, the war left hundreds of thousands dead and millions wounded. Nobody wants a repeat of that. But the question arises as to how the U.S. should deal with NK’s hostile actions.

Despite what some suggest, simply minding our own business would not make the threat go away. Most Americans seem at least somewhat favorable (even if uncomfortably so) to diplomacy efforts that involve China and Russia. It is no secret that NK is a vassal state of China and also of Russia to a certain degree.

China alone could bring North Korea to heel at the snap of its fingers, so to speak. China obviously has its reasons for not doing so. The game of gaining concessions from the West and distracting the West from China’s own ambitions can probably be played for a long time before it becomes too dangerous. Russia is not as tightly tied into the situation as is China, but it has enough skin in the game to play along as well.

We have a long history of providing direct aid to North Korea in exchange for less hostile activity. We have provided the aid, but NK has done little to actually comply with the provisions of the agreements, although, they’ve occasionally made a show of doing so. This begs the question of why we should bother to pursue additional worthless agreements.

Although the missile NK plans to fire next month would not reach the main Hawaiian Islands, it would apparently reach the outer islands. Americans could perhaps be excused for calling to mind the Dec. 7, 1941 attack on Pearl Harbor. The AP article also states that “Gen. James Cartwright, vice chairman of the Joint Chiefs of Staff, said it would take at least three to five years for North Korea to pose a real threat to the U.S. west coast.” The Korean War never actually threatened the U.S. homeland, so NK’s current aggression is qualitatively different.

Should the U.S. sit idly by while a rogue nation demonstrates its ability to drop missiles on the U.S. and prepares missiles that could strike the U.S. mainland? Defense Secretary Robert Gates says that missile defense systems are in place in Hawaii. Using our anti-ballistic missiles would not be without risk. There are concerns that the program is not quite ready for prime time. National and international regard for the program would diminish if we missed. But a successful strike would provide critical program information to NK, China, Russia, and others, allowing them to work on developing weapons that could outmaneuver our anti-missile missiles.

NK’s missile firing would only be the latest in a recent spate of aggressive actions by the communist nation that routinely has difficulty feeding its people. Some analysts think the purpose of this activity is to bolster the image of NK’s 68-year-old dictator, Kim Jong-il, who has appeared somewhat weak recently due to illness. Others suggest that it is a setup to bolster the dictator’s son and heir apparent Kim Jong-un, who supposedly oversees these programs. Using this latter angle, some have suggested that this is a temporary flare up that will subside once the leadership transition is cemented, so that the U.S. should take a somewhat passive position until it all blows over.

It seems clear that taking a live and let live posture in relation to NK will not achieve acceptable national or international security. Diplomatic efforts seem to be very nearly worthless. Limited military anti-missile involvement has its risks. Direct war with NK is unthinkable for most Americans. Are there other options that would be feasible, morally acceptable, and have some prospect of being effective?

Tuesday, June 16, 2009

Re-Thinking Utah's Government Four-Day Work Week

“No, you can’t go down there today,” I recently heard my wife tell my mother. “Remember, Utah government offices aren’t open on Fridays anymore.”

Last summer, Utah Governor Jon M. Huntsman, Jr. forced most state employees to adopt a four-day work week, working 10 hours per day. One of the chief arguments for doing so was that closing down state facilities one additional day per week would result in significant savings. So now most state buildings are closed on Fridays.

Regardless of what proponents think of this measure, it is exactly the opposite of good customer service. Yes, offices are open later Monday through Thursday so that people have more availability outside of many people’s standard working hours, but being closed for business three days in a row is not a good way to serve customers.

When you’ve got a monopoly, you have little incentive to satisfy customers. Your main goal is to erect barriers high enough that competition is prevented. You may notice, for example, that most serious battles in the public education industry involve thwarting competition. Making the federal government a competitor in the health insurance market (the so-called public option) would quickly force private insurers out of the market and would result in a de facto monopoly that would have even less incentive to serve its customers than does today’s odd health insurance model.

Utah Policy’s LaVarr Webb says in this editorial that his hunch is that the four-day work week isn’t even achieving its energy and money saving goals. At any rate, he thinks soon-to-be-Governor Gary Herbert and the legislature “ought to conduct a good study” that “should take a good, hard look at the four-day work week and see if it's fulfilling the intent of Gov. Huntsman who implemented it.” Webb notes:
“The four-day work week was instituted hastily, with little study or analysis. Since then, no really good examination has been done regarding how much energy is actually being saved, and whether state productivity and customer service have suffered.”
Usually when government decides and implements something “hastily,” it creates more problems than it solves. As I have often said, our Founders created a system of government that is supposed to get plenty of input, and then debate and deliberate in order to adopt the most broadly acceptable course of action. This process is not intended to occur rapidly. It can be a rather ponderous and lethargic course. But when we circumvent this process we usually cause long term problems. Webb opines:
“Currently, many state buildings are sitting empty three of seven days each week (while still consuming a certain amount of energy even when empty). By contrast, private industry attempts to make more efficient and productive use of facilities and infrastructure, not less. That's why a manufacturing company, for example, adds a graveyard shift and runs its facilities around-the-clock, getting more efficient use from its facilities. We certainly ought not to be constructing new state buildings when many of them are sitting empty three days a week.”
Private business stifles competition either by providing superior service to customers or by conniving to keep competitors from entering their market. This latter course usually requires the collusion of government. Government stymies competition by fiat — by force. It can use its considerable muscle to pass laws and to implement newly minted executive powers to take control of entire market segments at the drop of a hat, as we have recently discovered. Customer service doesn’t even enter the equation here.

In the absence of competition, it is important for elected officials to make sure that their constituents — who happen to be both the source and the customers of government — are being well served. I suspect that in the case of the four-day work week, Webb is correct in his hunch that Utah’s citizens are ill served, both as providers and consumers of government. Will any of our elected officials do anything about this?

Monday, June 15, 2009

Pay Phones

As a recovering IRS tax auditor, I have some comprehension of the nature of the tax collection beast. Most of the people I worked with at the IRS had no greater love for taxes than does the average American. But they were interested in making sure that everyone fulfilled their legal tax obligations.

There were some IRS employees, however, that had rather insidious views about taxation. I can only assume that a recent trial balloon floated by the IRS as a way to get more money from Americans comes from those quarters. The WSJ reports that the IRS is proposing a stricter interpretation of “a 1989 law requiring workers using company phones for personal use to include the value of those calls as income.”

How much stricter? Do you have a company supplied cell phone? You can plan on reporting as income subject to federal and state tax 25% of the company’s cost of your phone usage. (For the record, I do not have a company provided cell phone.)

The reasoning behind this is that almost everyone that has a company cell phone uses it at least somewhat for non-business personal purposes. That usage, says the IRS, represents income. Since it is difficult to strictly define how much usage is personal, the IRS proposes 25% as a rule of thumb. You could use your records to prove a lower usage, but the IRS knows that few people will actually do that.

The WSJ editors raise the specter of taxing all kinds of other “fringe benefits,” such as “a per-cup tax on office coffee, or targeting furtive visits to ESPN or Hulu on the office PC.” They suggest that this kind of thing is “like charging for the use of the company washroom.”

This kind of taxation, say the WSJ editors, is “precisely the sort of common non-sense that incites tax revolts.” It would impact a lot of people but would pull in only a marginal amount of revenue. It brings to mind the 1773 Tea Act, which was meant not so much as a revenue producer as a reminder to the American colonies that the British Parliament was boss. This was such a non-starter for many Americans that a few of them in Boston responded with the renowned Boston Tea Party.

While I am generally opposed to increased taxation, I think that the WSJ editors might be pushing their argument just a little too far. All of these same arguments were bandied about years ago when IRS decided to tax personal use of company automobiles. There was some consternation, of course, but people settled into the new routine quite rapidly. There could be a difference here, however, because far more American workers have company cell phones than have company cars.

Yet another issue is the prospect of some future administration “nominee [going] down for taking too many personal calls without giving the government its due.” This is a real possibility, considering the fact that so many people that are talented and intelligent enough to rise to the top levels of government already can’t seem to manage to do their personal taxes properly. Do you really think it’s wise to make the tax code even more complex?

UPDATE 06/16/2009: The AP reports that the IRS is quickly backtracking on its cell phone tax trial balloon, claiming now that they really want the tax repealed.

Saturday, June 13, 2009

A Parting Controversy for Ambassador Huntsman

Today’s WSJ online includes this post by John Fund about a kerfuffle surrounding how (soon to be former) Utah Governor Jon M. Huntsman, Jr. has garnered and used funds in his capacity as chairman of the Western Governors Association.
“Jon Huntsman, the Republican governor of Utah, has had one foot out the door since being named Ambassador to China by President Obama. But he will still be chair of the Western Governors Association when it holds its annual meeting in Salt Lake City this weekend.

“Moreover, it looks like his final days in office will be marred by a controversy over just whose tax dollars are being spent on a highly controversial "Western Climate Initiative." Paul Chesser, a global warming skeptic who is a researcher with Climate Strategies Watch, submitted Freedom of Information Act requests and discovered that the initiative -- aimed at supporting dramatic reductions in carbon emissions -- has contracted or partnered with a wide range of liberal climate change groups. A full-time WGA staff member has been detailed to manage the climate project. The subsidies to pay for all this will likely be a topic of discussion at the governors' meeting because a majority of state governors didn't sign on to it. Many of them view draconian reductions in carbon emissions as a serious threat to their states' economies.

“One governor I spoke with points out that the WGA is supposed to operate on a consensus basis. He says the WGA's involvement in planning climate change proposals is serious overreach. "The dues states give WGA come from tax money and I was surprised to learn just how much the WGA seems to be getting ahead of many of the states on carbon regulation," he told me.

“Governor Huntsman is likely to be long gone when real answers about the WGA's runaway climate program are unearthed. He'll be in China, working at the uphill task of convincing the Chinese to undertake carbon reductions promoted by the Obama Administration. This week, talks between the U.S. and China on such curbs ended with little progress -- Beijing's negotiators making clear they aren't willing to sacrifice economic growth for benefits that are unquantifiable and perhaps illusory.”
Another example of your tax dollars at work. It’s fine to promote your agenda. But when you do it in the name of other people and with other people’s money, you’d better make sure that those ‘other people’ are on board.

Friday, June 12, 2009

Emergence vs. Control

I find it interesting that supporters of both Intelligent Design and unplanned evolution use complexity as support for their respective theories. One side claims that many biological structures are so complex that it is statistically impossible for them to have developed randomly. The other side says that many structures are so complex and imperfect that they could only have developed through unguided emergent phenomenon. Besides, some argue, some things are so bizarre that no designer would have planned them.

Putting aside the extreme arrogance of that last remark (the assumption that any nonbeliever can say what a Supreme Designer would think or plan), it is relatively safe to say that neither side of this debate has a demonstrably repeatable scientific test that can prove their theory. Despite their respective statistical models, no one can satisfactorily verify the guidance or lack of guidance of a superior design force in the development of biological structures. Belief in either direction is faith, not science.

There are still plenty of people around that hold to the creationist belief that God literally created the earth and all life on it in six 24-hour periods. Some Latter-Day Saints, extrapolating assumptions from LDS scriptures such as Abraham 3:4 and D&C 77, as well as various statements of church leaders of yore, expand this to six periods of 1,000 years each. Despite some interestingly framed arguments, this is not reflected in actual scientific findings.

Steadily fewer people buy this kind of rigid religious interpretation, accepting instead the idea that the earth is billions of years old. People are increasingly comfortable with the concept of emergent order in biological structures. Many that accept such modern ideas do not find their faith in God challenged by them. They reason that God could not be so limited as to be incapable of working through emergent phenomenon.

I also find it interesting that there are those in our modern world that staunchly stand on either side of the concept of emergent order in human activity. Some seem to claim, as far as I can understand them, that such emergent order does not exist and has never existed. Most seem to accept a degree of emergent order, but also feel that some (maybe much) purposeful design is desirable. Others carry their appreciation of emergent order to the extent that it seems to become a form of worship.

If I understand libertarian thought correctly, the basic concept is that natural order achieved through individual freedom and respect of others’ freedom is always more desirable than designed order that requires infringing on freedoms. Although individual results may vary, goes the claim, the naturally resulting order from such liberty will always be preferable to that produced by any system that involves coercion.

In his book The Price of Everything, GMU economist Russ Roberts describes a scene on a bay near San Francisco where a lot of seemingly disconnected birds are suddenly threatened by a hawk (pp. 20-25). The shore birds suddenly take to the air and act as a single unit to drive the hawk away, wheeling, flitting, diving, climbing, all with no particular bird calling the shots.

A few pages later (pp. 32-34), Roberts discusses what happened with the birds and why it is important. It is noted that even the Blue Angels couldn’t do what the birds did on the spur of the moment.
“You’d think that having someone in charge could outperform the spontaneous dance of the birds. But only if that ‘someone’ could grasp all the knowledge each bird has, find a way to process that information, and communicate the plan to all the participants quickly so they can do their assigned tasks before something else changes. Without that knowledge and without a way to communicate nearly instantaneously, the flock falls apart.”
Each of us possesses little tidbits of information that are particular to the circumstances in which we find ourselves at a given moment. No planner that is not omniscient could possibly direct how you should respond to whatever you will face in the next hour better than you can because only you have the necessary information to do so. Better information can help you make better decisions, but it is the height of arrogance to think that some ‘time use czar’ in a big population center somewhere could design the use of your time better than you can.

Now this thing can be taken way too far. Would it be appropriate to allow children to be entirely self directed? Should we allow criminals to be self directed? Or should we even have criminals? In real life, few libertarians think along those lines. Although many do think along the lines of whether it is appropriate to incarcerate people that have broken no other law than to use drugs we have decided to class as illegal. And some point to studies showing that self directed traffic flow is safer in some places than having rigid traffic rules.

It is also important to point out that libertarians in general do not argue against planning and direction in enterprises that involve the private resources of willing individuals. In fact, this is where planning is appropriate because those involved accept the risks and responsibilities of such involvement without being forced to do so.

Another viewpoint doesn’t necessarily deny emergent social order, but believes that it is always inferior to planned order. Emergent order, it is held, must be honed to achieve the greatest social good. In this view the individual is subordinate to the collective. Private resources don’t exist per se, since no one obtained anything entirely on his own without the work and resources of others. Each person, therefore, bears a lifelong debt to the collective — a debt that must be repaid however the collective decides.

Both of these groups are criticized as believers in a ridiculous utopia. It has been said of each of these ideologies that it could only work if all people were perfect. It is feared that pursuit of the libertarian ideal would produce chaos. Libertarians would counter that it would actually produce a better social order, but that it has sadly never been tried.

Conversely, it is feared that pursuit of the collective model would produce tyranny. Oh wait. It already has! Check out the good old USSR, China, Nazi Germany, etc. But, hey, how important is the murder of a hundred million people in the 20th Century when the good of society is at stake? Collectivists would argue that those experiments were impure. That brings us back to the utopia criticism.

Most Americans are somewhere between these extremes. They believe that each person has a responsibility to society and that government has a role to play in planning and forming society. But they also believe in individual liberty and freedom from oppression. The precise placement of these lines varies dramatically across the social landscape. This forms the basis for most of our political debate.

It’s actually easier to be a purist. Anything that doesn’t comport with the pure viewpoint is simply wrong. Everything is black and white. Being a realist where much is in the gray area and everything is constantly shifting is a much more daunting task. But that is the region in which most American thought resides.

Wednesday, June 10, 2009

LDS Sponsored BSA Units Have More Safety Incidents

Concern was raised in a couple of recent Scouting leadership meetings I attended because BSA units along the Wasatch Front comprise a disproportionately high number of the program’s injuries, health and safety incidents, and other liability related issues. More specifically, such events occur at a statistically significantly high rate in BSA units sponsored by the LDS Church, we were told. Although a few numbers were quoted and concepts were orally presented, I wasn’t able to get specific data.

I noted in my last post that there has been a decades-long push to reduce risk and liability by the BSA. Adventure is an important element of the Scouting program, but safety has become an increasingly important issue. Sometimes these two factors can be at odds with each other. There is a constant struggle to maximize adventure while implementing acceptable safety standards — standards that have become increasingly restrictive throughout society.

It is wise to consider causes when one identifiable group has more problems with safety than other groups. I think that when it comes to LDS sponsored BSA units the main answer is quite simple. It goes hand-in-hand with my Oct. 2007 post on mediocre LDS Scouting.

It can be boiled down to this: Outside of the LDS Church, Scouting is usually an optional program, while it is mandatory in the LDS Church (at least in the USA). I am not saying that there is necessarily anything wrong with the LDS Church’s policy; I am merely saying that there are consequences attached to that policy.

In the USA and in certain other areas of the world, the Scouting program is considered the activity arm that corresponds to the LDS Church’s spiritual programs for boys ages 8 through 18. In this respect, Scouting is adopted as an official part of the church’s program.

But the LDS Church reserves the right to run the program the way it wishes. The church also pulls a lot of weight in determining official BSA policies, since it sponsors more youth and far more units than any other single sponsor (see Wikipedia chart), representing about 17% of all traditional BSA members. (One of the reasons the LDS Church has never sponsored GSA units is that the GSA’s founding principles limit the influence of organizations like the church in determining and carrying out policies.)

Where BSA involvement is optional, those that choose to become involved are usually expected to demonstrate a relatively high level of commitment to the program. Where boys are enrolled in the program simply as a coincidence of their involvement in a sponsoring organization, less dedication to the BSA program is natural.

This difference is reflected in everything, including uniforming, attendance, Scouting method, camping, leadership, adherence to safety principles, etc. The LDS Church actually does a pretty good job at advancement. LDS youth achieve advancement recognition at a much higher rate than the national average. But frankly, LDS units do a pitiful job when it comes to the Scouting method. The church does better at getting boys through Scouting than having Scouting go through the boys. In many cases, Scouts is something the boys and leaders do rather than something they are or are becoming.

Scouting’s founder, Lord Robert Baden-Powell taught that advancement and awards are merely incident to following and implementing the methods of Scouting. These methods include adherence to the patrol method, leadership development, outdoor skills, internalization of Scouting ideals and principles, uniforming, and recognition. LDS sponsored units sometimes do well at some of these things, but it is rare to find an LDS unit that does a good job of implementing all of the Scouting methods.

Default membership in the BSA produces a different kind of Scouting leader on average than does optional membership. Sometimes you have LDS ward bishoprics that believe in a strong Scouting program. More often you’ve got busy ward leaders that are only too happy to get someone — anyone — to accept a scoutmaster, adviser, or assistant position, regardless of the quality of the program. They have a limited pool of men to choose from and they also need dedicated individuals in many other ward (and stake) positions.

Few newly called LDS Scouting leaders bother to get much training in the program, even when training is broadly available. Most consider such training yet another drain on their precious time. Their church leaders rarely require it of them, since they are just happy to have adults that will show up at weekly activity nights most of the time. Many LDS Scouting leaders know nothing about BSA safety policies. Many that know about the policies don’t care about them. The rules simply seem too onerous.

Most adult Scouting leaders in LDS sponsored units look at the job primarily as a church calling that happens to have some kind of incidental affiliation with the BSA. Most of the BSA side of the calling seems optional. This is especially true for leaders of boys ages 14 and older, where the BSA relationship tends to become distant and informal. (Actually sponsorship of Venturing crews is optional, as long as “a more effective activity program functions.”)

Turnover among LDS Scouting leaders is high. Part of the reason for this is the lack of a truly functional unit committee that would normally handle many of the tasks that fall to the already harried unit leader. If I were permitted to apply only a single word to the general state of BSA unit committees in LDS sponsored units, I would have a hard time choosing between nonexistent and dysfunctional. Often when a committee exists it is worse than useless to the point that the unit leader ends up doing it all himself anyway.

When turnover of adult leaders is high and training of adult leaders is low, it naturally follows that adherence to safety standards is likewise low. Violations of longstanding basic safety rules are common. The policies are either unknown or disregarded.

A friend told me of his brother having lunch with an old friend he hadn’t seen for years. This old friend explained how a young man in his LDS ward had been killed on a Scouting activity of which the man had been in charge. The activity had violated several BSA safety principles. Even five years later the man was still dealing with the social, financial, mental, and spiritual consequences of this tragedy. To top it off, he knew that it would have been avoided had they followed the rules. Most get away with safety breaches. Some do not. Those are reflected in a higher rate of safety and liability problems.

As I said, there is not necessarily anything wrong with LDS Church’s policy of mandatory registration with the BSA. But there are consequences relative to the policy. Every course of action involves tradeoffs. I can only assume that it is judged that the value of having a general program with broader involvement exceeds the value of developing a more exclusive higher quality program or of scrapping BSA ties altogether.

LDS Church President Thomas S. Monson has repeatedly emphasized the greater strategic importance of supporting character building organizations with strong moral values. A few years ago he said, “Much has been said in the media of late regarding Scouting. Let me affirm that The Church of Jesus Christ of Latter‑day Saints has not diminished in any way its support of the Scouting movement. . . .” A more complete (2007) guide to the church’s policies regarding Scouting can be found at this link.

As long as the LDS Church continues to sponsor BSA units with mandatory registration of the church’s boys, I suspect that adherence to BSA policies and rules by those units in general will continue to be rather casual. This naturally means that LDS Church sponsored BSA units will continue to experience a higher than average rate of safety and liability problems. It’s a tradeoff that simply can’t be avoided.

In essence, comparing safety outcomes of a group of those mandatorily involved in Scouting against those that are optionally involved is measuring apples to oranges. There are valid reasons for the differences in such rates. If the church’s safety rate is considered too high, there are things that could be done to reduce it somewhat. (Although draconian policies would likely produce other worse problems.) But without restructuring the basic nature of the contract of involvement, a higher level of safety problems is inescapable.

Monday, June 08, 2009

Cutting the Fat From Scouting

Saturday morning found me astride my mountain bike atop Big Rock. Big Rock is a prominent rocky outcropping on a mountainside east of North Ogden, Utah. The summit of Big Rock is a little more than half a mile from the trailhead, but it’s also about 560 feet higher than the trailhead. (That’s about 1 foot climb for every 4.8 feet of distance.) The steep trail is quite rugged in places. With sufficient skill you could get a dirt motorcycle up there, but you’d be hard pressed to get a horse up the trail I took.

I felt exhilarated as I looked out over the valley and prepared for the rest of my ride. Going up was difficult. Going down was harrowing. But before long I was back at the trailhead and on my way to other trails. As I rode, I pondered the prospect that new health rules could prevent me from participating in Boy Scout activities that require a similar level of exertion.

As explained in this SL-Trib article, the BSA is implementing new health policies designed to “preclude Scouts considered overweight according to a standard Body Mass Index chart from participating in high adventure activities that take them more than 30 minutes away from emergency medical help.” You can see the specific guidelines on the new BSA health record form.

Scouts and their adult leaders will still be able to participate in most Scouting activities, even if they exceed BMI restrictions. Local activities like short hikes, car camping, and swimming parties won’t be a problem, say representatives; although, the BSA medical form says that enforcement of “the height/weight limit is strongly encouraged for all … events, but it is [only] mandatory” for “high adventure activities” and “events in which emergency evacuation would take longer than 30 minutes by ground transportation.”

The BSA has been working to reduce risk and to limit liability for decades. I still remember as a Cub Scout being told of a tragedy where 22 members of an LDS sponsored Scout unit were killed when the truck they were riding in slid off a steep dirt road. That resulted in new rules for both BSA and LDS Church activities, requiring no passengers in truck beds. Even today I see this policy routinely violated. A couple of years ago a Utah Scout putting up American flags in his neighborhood was killed when this rule was violated.

Many of the safety guidelines implemented by the BSA over the years have been good. Most of them also increase cost and require additional training for leaders. Proper safety gear is now required for climbing. Leaders receive training for dealing with hazardous weather conditions. No adult should ever be alone with a youth that is not their own child. Many other safety requirements have come into place over my lifetime.

While the BMI restrictions represent just another thread in the ever expanding web of liability inspired limits, they are perhaps the harshest of such rules so far. Let me be blunt. I know a lot — a whole lot of overweight Scouting leaders. I’d say that in my area it’s more common to see a leader that is overweight than one that isn’t. I also know a fair number of obese Scouting leaders.

Years ago when I spent summers working on the staff of a Boy Scout camp, we used to call the fat leaders “Weebles,” because they were shaped a lot like Weebles toys. We’d also refer to them as “long shirts,” because they had to have really long shirts so they could wrap them around their ample bellies and still tuck the shirttails into their pants.

The BSA has to do something. Last year there were more than 50 heart related deaths at Scouting activities. The majority of the victims were overweight, and being overweight is one of the major contributing causes to heart problems.

There is also no shortage of chubby Boy Scouts running around any Scout camp. In fact, I was once one of those chubby little Scouts. Then I became somewhat of a health enthusiast a number of years ago. I have had a strenuous daily exercise program for years. Throughout the week I alternate from strength training to cardio training. I eat a selective healthy diet.

I’m not as slender as I was six years ago, but even at that low weight I carried a residual ring of fat above my waistline. In real life, I’m in pretty good shape, but according to the BSA’s BMI rules I am right on the borderline between “recommended weight” and “allowable exception.” Still, I have much less fat and more lean body mass than the vast majority of people that fit comfortably within the BMI weight recommendations. My 16-year-old, who is a darn fine physical specimen, is also right at the top edge of “recommended weight.”

The BMI weight suggestions work OK for most people that are adult, Caucasian of mainly northern European descent, have a sedentary lifestyle and eat a standard diet. Those are the people that were used to develop the BMI. For people in this category, BMI represents a decent rule of thumb that provides a starting place for determining if you’re a healthy weight. But BMI isn’t necessarily a good guideline for people outside of this category, including blacks, Hispanics, Asians, Native Americans, and people with active lifestyles. Even a number of people in the target group fall outside of the norm.

This is just another example of rigid implementation of a guideline. In general, guidelines cover 60-80 percent of intended cases and are developed to provide a springboard for more detailed handling. The BSA is hardly the first organization to turn a rule of thumb into an inflexible policy. We are killing people every day in our medical facilities by requiring unbending adherence to ‘best practice’ guidelines.

The BSA policy tries to insert some flexibility into its BMI policy with its “allowable exception” category. But in council safety meetings it has been made clear that in the case of a health related event, the BSA’s legal arm will aggressively work to transfer liability to any healthcare professional that certifies an applicant that is over the recommended BMI weight. When physicians recognize the added risk they are accepting, they will stop certifying even healthy people that exceed their recommended BMI.

Don’t think that this kind of thing won’t be coming to a youth program near you, even if you have nothing to do with the BSA. Before long you will see something like it in community and school sports. In their mad drive toward zero risk for each child, the safety Nazis and their friends in the legal industry will stop at nothing until each child is covered in bubble wrap and made to sit in a booster seat until age 21.

I’m sure the BSA’s new policy will achieve its desired goal of reducing the organization’s liability. But I wonder how many youth and leaders this new BSA policy will encourage to get into better shape. Or will anyone stop to count the number of youth and adults driven away from Scouting as the result of this policy?

Friday, June 05, 2009

When the Music No Longer Moves You, You Should Leave

Former Reagan speechwriter Peggy Noonan comments here about the placement of a statue of Ronald Reagan in the rotunda of the U.S. Capitol this week (see AP report). Noonan explains something I didn’t know before.
“Each of the 50 states is allowed two statues in the Capitol, they are sometimes but not frequently changed, and the changing process is complicated: Both chambers of a state legislature must vote, the governor must agree, the federal government is petitioned.”
Noonan describes the ceremony and explains that of all of the statues in the rotunda, Reagan’s is the only one that depicts its subject smiling. For those that remember Reagan, a smile is probably the most appropriate facial expression for his likeness.

These kinds of events happen from time to time. What really caught my attention in Noonan’s article was her description of the kind of ceremony that is relatively routine in Washington DC. What she concludes from this is rather profound.
“The colors were presented. The U.S. Army chorus sang the national anthem so beautifully, with such harmonic precision and depth, that some dry eyes turned moist, including those of the crusty journalist to my right. Congressmen hear choirs sing patriotic songs all the time and grow used to it. The rest of us do not and are stirred. Tourists walk through the Rotunda and think to themselves that they'd die for the signs and symbols of this place. Lawmakers experience the Rotunda as a connecting point between House and Senate that's too often clogged by overweight tourists in shorts from Bayonne. We need term limits. When the music no longer moves you, you should leave. When you cannot leave, you should be pushed.”
I like Ms. Noonan’s suggestion. Some would argue that this kind of measurement is puerile. Indeed, some would claim that being moved by patriotic displays should disqualify one from serving in Washington.

HollyOnTheHill recently posted a video of artist Kurt Bestor playing on piano a patriotic medley that he composed on the fly for his audience.

From what I understand, my political views would be at odds with those of Mr. Bestor in many ways. But I’m not sure how you can watch this video clip and not be moved. I think most Americans would feel similarly.

For this reason, I think Peggy Noonan is right about those that represent us. Although this is not the only gauge for whether a person has been in Washington too long, I think it’s a good one. “When the music no longer moves you, you should leave. When you cannot leave, you should be pushed.”

Wednesday, June 03, 2009

I Was a College Dropout

A young lady in my neighborhood that has been out of high school for a year recently told my wife that she doesn’t know how she will be able to continue her college education, having lost a scholarship that required good grades. Taking chemistry in the same semester as another difficult course proved to be her undoing.

If my neighbor doesn’t make it back to college right away she will have plenty of company. The D-News reports that “fewer than 55 percent of first-time students at the average four-year college graduate within six years, and at many institutions, students have less than a one in three chance of earning a degree.”

My neighbor has been attending Weber State University, which the D-News reports had “a 29 percent graduation rate in 2007.” Ouch. That’s pretty deplorable. More than seven of every ten students that enter WSU will fail to earn a four-year degree within six years.

But wait. Wouldn’t that figure be skewed a bit by the significant number of young men that take two years off to serve a mission for the LDS Church? Well, let’s take a look at graduation rates at other universities around the state that would face the same issue — some of them to a greater degree. BYU: 78%. UofU at 56% and Westminster at 54% are both close to the national average. USU: 45%. SUU: 41%. (No figures for UVU.)

These figures come from a report titled Diplomas and Dropouts from the American Enterprise Institute. While there are certainly significant differences in “student motivation, finances, and ability,” the report finds that “there are vast disparities—even among schools educating similar students—at the less selective institutions that educate the bulk of America’s college students.” Even schools that perform very poorly continue to benefit from millions of dollars of taxpayer subsidies with almost no consideration as to quality and performance.

The D-News cites Utah Commissioner of Higher Education William A. Sederburg as saying that Utah’s overall graduation rate may actually be lower than stated the 50.5 percent in the report “because not all four-year schools are included.” If you cut out the private institutions, Utah’s overall bachelor degree graduation rate is less than 43 percent.

The authors of the report suggest that there are many things that colleges and universities can do to improve their graduation rates without sacrificing quality or even spending more money. The worst way to improve graduation rates is to lower standards. That simply disguises the problem without solving it.

Now for a confession. I was among the vast number of WSU students that have dropped out over the years. I started college when I was still 17. I put in a year, but then took 2½ years off to earn money and then to serve a mission for my church. I then put in another year before figuring that I’d take a term off to work full time and build up my savings.

That hiatus lasted much longer than one term. Eventually I returned to school when I was married, had two children, and was working full time to support my family. That was harsh. Although I had much less disposable time, I was much more focused and was a much better student. After finishing my bachelor degree, I decided to stick it out for two more years and complete a master degree. It was very tough. But I was a straight A student; something that had never been the case during my entire previous formal education.

I do not intend to imply that I was a victim of anything. My choice to drop out of college was my own. Nobody forced me to do it. But we all tend to operate within the cultural limits of organizational behavior. The fact that WSU has such a low graduation rate says something. It says that something is out of whack.

The AEI study’s authors write that “colleges and universities have many goals and serve a wide range of populations. Most students, however, attend college to earn a degree.” By that standard, many of our colleges and universities are in bad shape — some spectacularly so. Perhaps these schools can take some lessons from lowest tier schools that have reasonable graduation rates, such as Kansas State University (58%), University of Wisconsin–Platteville (53%), and Walla Walla University (53%).

The AEI report conveniently lists the top 10 and bottom 10 schools according to graduation rate in each of six tiers. It should be noted that most of the schools on the six top 10 lists (86%) and on the six bottom 10 lists (66%) are privately owned. But there are some important differences. 58 percent of the schools on the top 10 lists are religiously affiliated, while only 17 percent of schools on the bottom 10 lists currently have religious affiliation.

Perhaps the high dropout rates at some schools illustrates the point made in this January 2007 post, where I discussed Charles Murray’s series of WSJ articles (part 1, part 2, part 3) where he makes the claim that, with a few notable exceptions, college is not the best way to credentialize workers for the modern workforce. Murray asserts that the push to graduate an increasing portion of the population from college dilutes the actual value of a university degree. (Murray followed this up with this August 2008 op-ed, where he calls for replacing the BA degree with “evidence of competence” on the apprentice-journeyman-craftsman model for all types of jobs.)

At any rate, colleges and universities should accept the fact that they are in the business of producing competent degree holding graduates. For that to happen, the people that pay money into these schools — students, parents, businesses, and taxpayers (and their representatives) — need to achieve this same vision and then require some accountability. Having information about graduation rates is a nice first step. But don’t expect improvement to happen until the people that control the cash flow into the colleges and universities tie those dollars to degree outcomes.

Monday, June 01, 2009

Summertime and the Livin' Seems Somewhat Easier

The economy is all local, as the saying goes. We often talk about the national economy, but we mostly think about how economic issues impact us personally. A recession, the joke goes, is when your neighbor loses his job; a depression is when you lose yours.

As of Saturday, our neighborhood has no vacant homes for the first time in about two years. A family moved into a very nice home that had been well cared for. Its previous owners (who were the initial owners) moved out last summer when the husband took a better job in Denver.

A real estate management firm hired by the man’s new employer took over the home, which had already been on the market for a couple of months. Even after they dropped the price, I thought they were asking too much. The lovely home remained vacant month after month until Saturday. I have no idea what the new owners ended up paying for the place, but it’s good to see owners in it.

Earlier this year, a home whose previous partying owners had been evicted due to foreclosure was bought by a nice family. They spent many weeks working nights and weekends doing extensive renovations to roll back the toll that partying had exacted on the house before they moved in.

Another home that had been vacant for a year and a half finally sold to a family in early spring. The previous owners had moved to California to take advantage of a job opportunity. The home was in fine shape.

Prior to that, another home had been vacant for months after its owner took a job in the Northwest. He had rented out the home to a couple of different families for a couple of years. Eventually he was unable to find a renter and decided to sell the home. This process left the home vacant for months. We didn’t think much about having one home vacant back then, but when three homes in the neighborhood were simultaneously vacant for many months, it certainly seemed like times were tough.

We currently have two homes for sale in the neighborhood. One went on the market last autumn. The owners want a bigger chunk of real estate to enable the storage of all of the recreational toys they own. It’s a decent property on a quiet street, but it hasn’t attracted a buyer.

The other home that is for sale has literally been on the market for years. The home has been poorly cared for and has seen a number of years of hard living, as the owner has had a nearly continuous stream of his deadbeat adult children living with him along with their offspring. The fact is that the owner has never really been serious about selling the place until quite recently when the last of the deadbeats moved out. The owner does not have a realtor, but he says that he suddenly found some seriously interested parties after listing the home on We’ll have to watch to see how that turns out.

From the perspective of our little neighborhood, the tough times seem to be easing a bit. Everyone still grouses about their 401k balances that evaporated precipitously last year. Gas prices are up from their incredible low earlier this year, but they’re still $2/gallon less than last summer. Nobody is claiming that these are the best of times, but in general, people around here seem to be breathing a bit easier these days.