Monday, August 31, 2009

Will Your State Taxes Go Up?

Utah Rep. Craig Frank and Utah Sen. Steve Urquhart have interesting posts addressing the question of how Utah should deal with its budget shortfall during the next legislative session. Both are opposed to broad tax increases. Frank opposes any targeted tax, but Urquhart says that an increased tobacco tax “is a fait accompli.” He suggests that alcohol taxes could also be raised.

Rep. Frank writes, “A fixed tax burden shared among a larger taxable population lowers the tax burden for everyone. Logical. “Target taxing” doesn’t accomplish this principle.”

Sen. Urquhart explains that tobacco and alcohol “correlate with significant costs to the State (e.g., Medicaid costs to treat cancer and people who have been injured by drunk drivers).” Rep. John Dougall (or someone posing as him) posts the following response:
“Regarding Medicaid, DOH staff report that the state spends approximately $20M on any and all health treatments that might have any likely relationship with smoking. Also, the state collects over $50M in tobacco taxes, which more that (sic) covers the $20M and then some.”
The implication is that increasing the tobacco tax is simply gouging a politically disadvantaged (and addicted) group. (Only about 11% of Utahans smoke, while a large number of citizens oppose smoking on religious grounds.) In response to another comment, Sen. Urquhart writes, “The Legislature does not believe that alcohol or cigarette taxes equal the societal costs (as Rep. Dougall points out); that's why I used the word "correlate".”

In other words, Sen. Urquhart asserts that Medicare expenditures are only the tip of the iceberg when it comes to the costs tobacco and alcohol usage imposes on the state. Hmmm… I’d sure like to see some valid figures on that.

I don’t doubt that alcohol and tobacco use cost the state. It is possible that taxes on these products are analogous to a usage fee. But I’d like to see something more empirical than a belief by the state legislature. Besides, don’t people engage in lots of activities that ultimately impose costs on the state, but for which no special taxes are imposed?

Sen. Urquhart says that Gov. Gary Herbert appears to be gearing up to oppose general tax increases and may be signaling “that he is willing to take a hard look at state expenditures.” I don’t know if Sen. Urquhart is engaging in wishful thinking or not, but it would make political sense for Gov. Herbert to oppose broad tax increases.

The voters don’t know Gov. Herbert very well yet. The 2010 legislative session will be his best chance to audition for the job he now holds. To keep the job, he will need to prevail in a special election in November 2010. Then he will need to keep the voters happy if he wishes to win again just two years later in the 2012 general election.

Utah voters tend not to like tax increases beyond the Word of Wisdom sin taxes and targeted fees. Bear in mind that it’s not just Utah voters in general that Gov. Herbert will need to impress. He first needs to woo the grass roots folks at the state GOP convention. This group really dislikes tax increases. Gov. Herbert can expect a tough challenge if his response to his first budget shortfall is to raise taxes.

If I were inclined to wager, I’d bet that Utah won’t see serious tax increases in the 2010 legislative session. Given that such increases would harm Gov. Herbert’s chances in the 2010 election, and given the legislative vote dynamic explained by Sen. Urquhart, the more likely approach will be the tightening of the expenditure side of the budget.

I very much appreciate this observation by Sen. Urquhart:
“A reality of government – sad but very true – is that expenditures aren’t watched closely enough during “up” years. (Utah does better than most states, but we still have room to improve). If expenditures then aren’t reined in during “down” years, the government-as-servant/citizen-as-master relationship is turned on its head. The “needs” of government become a significant burden on the people (e.g., California and the federal government).”
I was among the few lonely voices that echoed this sentiment back during the heyday of Utah’s billion dollar budget surpluses. Rather than anticipating the need for austerity, our politicians happily ‘invested’ (that’s a term of politician-speak that translates to ‘increased government spending’ in English) the repeated surpluses.

I have complete confidence that if the economy were to once again bubble, our state politicians would climb all over each other to ‘invest’ whatever they could get their hands on. And the ‘conservative’ citizens of this state would be mostly pleased to watch them do it. Why waste a good bubble?

"Dad, Why Do People Get Divorced?"

“Dad, why do people get divorced?” my fourth grader recently asked me after he became aware of the impending divorce of the parents of some friends. Hoo-boy, that’s a tough one. I wondered to myself why he couldn’t just ask me about something simple, like where babies come from.

How do you put something like divorce into terms that a child that age can comprehend without being too simplistic? It’s particularly a challenge for this child, because he likes to see things in absolutes.

I could have given a glib answer, such as, “One or both of the parents is a jerk.” But that would instill (perhaps lifelong) incorrect ideas. Besides, I’ve known too many people that divorced where both partners seemed to be at least somewhat decent people (even if they spewed venom about each other).

“Well, son” I finally said, “making a marriage work well takes a lot of hard work. And both partners have to be committed to doing that hard work. If one or both partners slack off, the relationship deteriorates. When the relationship gets bad, it becomes very difficult for people to continue living together.”

My wife chimed in that people sometimes get married without properly examining their long term goals. They marry because they have a lot in common at a specific point in time and space, but they fail to consider the fact that their long term trajectories are headed in quite different directions. People in this situation stay close at first, but they soon begin to grow apart as they pursue goals that are too different from their partner’s goals.

“If a marriage gets bad” my son asked, “isn’t it better for the partners to get divorced?” I thought of the scripture where Jesus Christ speaks of marriage, saying, “What therefore God hath joined together, let no man put asunder.”

“Well, no,” I answered. “In the first place, people ought to make sure that they are marrying someone with common goals and with whom they are compatible. Even then, every marriage will have problems and hard times. That’s when the partners ought to work to make it better. Most people that describe their marriage as bad describe it as happy or very happy five years later if they stay together. So the bad times don’t have to last.”

“Except for when there is abuse by one or both partners” my wife added. “If someone is hurting the other partner or the children, it’s important to get the victims to safety. And that may mean breaking up the marriage, at least temporarily until the abuser can get the help or discipline they need.” She also noted that sometimes a partner experiences mental issues that present extreme challenges. Sometimes they can be helped, but not always.

My son seemed to be satisfied for the time being. I thought of how blessed I am to have a wife that is deeply committed to our marriage, despite my many faults. Beyond this, each of us grew up in a family where our respective parents were devoted to each other. That is an increasingly rare blessing. We saw demonstrations of true love as each of us watched a mother care for her terminally ill spouse.

I hope that we can likewise continue to set an example of successful marriage for our children, regardless of what challenges come along. I suppose that no matter what we say, our children will eventually form their own opinions of matters like divorce. They are touched by stuff like this far more than we were during our tender years. I only hope that they will aspire to success in their relationships and will do as much as possible to encourage it.

Wednesday, August 26, 2009

We Need More Liberty In Health Care

Our current health care system is “an edifice that is fundamentally unsound,” yet most approaches for ‘fixing’ the system “will put yet more patches on the walls” of the edifice “and then build that edifice higher.” So writes business executive David Goldhill, a self described Democrat, in this Atlantic Monthly article.

The article is provocatively titled How American Health Care Killed My Father. Goldhill describes how his still working 83-year-old father went into “a well-regarded nonprofit hospital in New York City” with a case of simple pneumonia, only to become infected in the hospital with sepsis. Goldhill watched over the next five weeks as “a wave of secondary infections, also acquired in the hospital,” killed his father.

“My survivor’s grief” writes Goldhill, “has taken the form of an obsession with our health-care system.” Although not a health care professional, he has done loads of research and interviewed people from various facets of the industry. This has led him to the conclusion that the system is deeply structurally and unnecessarily flawed in ways that are completely unacceptable.

It is commonly claimed that we have the best medical system in the world. That may be correct in some ways, but it ignores extremely serious failings. After noting that our American hospitals manage to cause about 300,000 entirely preventable deaths every year, Goldhill asks, “How did Americans learn to accept hundreds of thousands of deaths from minor medical mistakes as an inevitability?”

Goldhill is amazed that no one is focusing on the root causes of our health care system woes and that most efforts to improve matters will invariably make matters worse. We are continually spending “more money just to keep the system from collapsing” — to simply give us more of what we have, including flaws. The root causes Goldhill cites include:
  • A wasteful insurance system.
  • Distorted incentives.
  • A bias toward treatment.
  • Moral hazard.
  • Hidden costs and a lack of transparency.
  • Curbed competition.
  • Service to the wrong customer.
The article is one of the best descriptions I’ve ever seen of what ails our health care system. Although the article is very long — nearly 11,000 words long — Goldhill doesn’t waste words. It is worth reading it at a rate that permits deep absorption, since nearly every sentence is packed with value.

Throughout the article, Goldhill explores the various “structural distortions” of our “heavily regulated, massively subsidized [health care] industry.” He repeatedly calls for more power being transferred to the patient by returning the patient to the status of consumer for most health care transactions. He anticipates and takes on most arguments against such a model.

Goldhill notes, for example, that a typical 22-year-old starting a career can expect to put out nearly $2 million over the rest of his life in total health care expenditures, including insurance premiums, co-pays, Medicare and Medicaid, and non-covered expenses. When someone asks how people are supposed to be able to afford to pay for most of their medical care out of their own pocket, he asks, “Well, what if I gave you $1.77 million?”

Since Goldhill does address most concerns about a more free market in health care, please don’t even think about posting criticisms of such a plan until you have read and completely digested every single word of Goldhill’s article.

Being a Democrat, Goldhill would like to see the Obama health care proposals do some good. But he knows they won’t. Rather, he suggests that government centric health care reform will end up creating such an untenable situation that Americans (and their politicians and industries) may finally cry uncle and consider real health care form. He writes:
“The most important single step we can take toward truly reforming our system is to move away from comprehensive health insurance as the single model for financing care. And a guiding principle of any reform should be to put the consumer, not the insurer or the government, at the center of the system. I believe if the government took on the goal of better supporting consumers—by bringing greater transparency and competition to the health-care industry, and by directly subsidizing those who can’t afford care—we’d find that consumers could buy much more of their care directly than we might initially think, and that over time we’d see better care and better service, at lower cost, as a result.”
Something commonly said at meetings where I work is that it’s fine to air complaints, but that doing so carries with it an imperative to offer ideas for solutions. Goldhill doesn’t fail in this regard. He suggests a system that is very close to Kevin Delaney’s Medical Savings and Loan concept. He even describes the role of the Healthcare Advocate. But, as one might expect from a self-described Democrat, Goldhill expects a lot more government involvement than does Delaney. It is possible, however, that Goldhill’s plan might be more politically feasible. He says:
“A more consumer-centered health-care system would not rely on a single form of financing for health-care purchases; it would make use of different sorts of financing for different elements of care—with routine care funded largely out of our incomes; major, predictable expenses (including much end-of-life care) funded by savings and credit; and massive, unpredictable expenses funded by insurance.”
Like the Medical Savings and Loan, Goldhill’s plan would provide three tiers of funding:
  • Catastrophic insurance that all Americans would have to get. This would have to be truly catastrophic insurance with such a high threshold that “only a minority of us should ever be beneficiaries,” kind of like fire insurance.
  • Post-tax health savings accounts (HSA) with mandatory minimum balances adjusted by age. Most of our health care expenses, including end-of-life expenses, would be paid from these funds.
  • Automatic credit for ‘gap’ expenses that exceed savings up to the catastrophic minimum. Such credit would essentially be borrowing against future HSA savings.
While Delaney would have the catastrophic insurance privately provided, Goldhill thinks that it would have to be provided by the government. He also seems to suggest that HSAs would have to be provided by the government rather than being privately provided.

But what about those with chronic health problems and the poor? Goldhill’s plan would add a lower catastrophic minimum for those with expensive chronic health issues and would mandate automatic direct government funding for lower-income Americans who can’t fund all of their catastrophic premiums or minimum HSA contributions.” It’s not that Goldhill can’t see the moral hazards involved in this kind of welfare; he just thinks that it is the most feasible way to make the best of a bad situation.

Goldhill admits that, being a human designed plan, his system isn’t perfect and would not solve all of our health care system ills. And he says it would take a generation to gradually but fully implement such a plan. But, he asserts:
“I believe my proposed approach passes two meaningful tests. It will do a better job than our current system of controlling prices, allocating resources, expanding access, and safeguarding quality. And it will do a better job than a more government-driven approach of harnessing medicine’s dynamism to develop and spread the new knowledge, technologies, and techniques that improve the quality of life. We won’t be perfect consumers, but we’re more likely than large bureaucracies to encourage better medicine over time.”
While I can see inherent value in many facets of the outlined plan, it seems to me that Goldhill glosses over the inevitable lobbying that would ensue, seeking to continually expand the catastrophic coverage to include all kinds of issues and expenses. I have problems with required minimum HSA balances, but perhaps this might be a price to pay in exchange for a freer system.

One thing that is for certain is that the current medical industrial complex would pull out all the stops to kill this type of proposal. These folks are the real “defenders of the status quo.” And they’ve got a heck of a lot of lobbying power. Just check to see who is funding most of the current government-driven health care campaign. They’re not even trying to keep quiet about it.

In the current political climate, I doubt that anyone with any amount of clout in either major party would even bother to give Goldhill’s proposal the least cursory glance. But perhaps Goldhill is right in thinking that after we have managed to utterly devastate our health care system, Americans will finally become willing to consider a market model similar to that which has brought us efficiencies, innovation, and reduced costs in so many other facets of our lives. I hope I live that long.

Tuesday, August 25, 2009

The Realities of Seeking Elected Office

In a recent post, Connor Boyack admonished people to become politically involved. He noted that just privately disagreeing with the way things are going is insufficient. He suggested that each of us has a moral duty to do what we can within the scope of our capabilities and opportunities to effect positive change.

In recent years I have been asked several times by people in positions of power in my community to consider running for city council. Each time I have demurred. I believe that my capabilities lie elsewhere than in an elected position.

Anyone that even casually peruses the astute political tips regularly posted on the Utah Policy website will realize that running for elected office is serious business. Viable candidates must have drive and passion. They must be able to effectively articulate to voters and potential supporters why they are running for office.

These reasons must be clear and must speak to others in a way that resonates with them. Moreover, these statements must come across as genuine. This is especially true for non-incumbents and incumbents facing tough challengers.

Candidates for office — even for my city’s council — need to put up a fair amount of cash to get their message out to voters. Some can self finance, but most end up soliciting funds from others. It takes a very high degree of self confidence and nerve to go to people you don’t know (or even people you do know) and unabashedly ask them for campaign money while essentially promising them nothing in return other than to be fair-minded.

This is also true when requesting volunteer support. If you want to win, you’re going to need a lot of people to donate their time to your campaign. And, of course, you have to personally put in lots and lots of time. Your family will unavoidably pay a price as well. They may even become a campaign issue.

Your team has to figure out who is most likely to vote and then you have to personally contact as many of these people as possible and ask them to vote for you. Ditto for movers and shakers in the community. You have to ask people to ask their friends to vote for you.

You have to come across as competent. You need the right kinds of social connections. You have to be able to respectfully listen to voters’ concerns and even personal criticisms without seeming like a jerk when you refuse to back down from your own positions. You’ve got to have the ability to understand the current political lay of the land and tailor your message and image to those conditions.

It is also important to weigh the feasibility of being elected. For example, two years ago three of my city’s council seats were up for election. But everyone knew that two of the incumbents were planning to run. A total of 10 people filed and ran in the primary election. In the end, only one of the eight non-incumbents won a seat.

The winner was a friend of mine. In chatting with him about his campaign, he explained that he pretty much counted on the incumbents winning, since neither one had people angry with them. That meant that eight were vying for one spot. He figured that the one of those eight that achieved the greatest name recognition would win, since most voters would have little else on which to base a decision. So he dedicated himself to getting his name out there and he won.

Everything I have mentioned above is just to have a chance at being elected. If you are fortunate enough to win an election, you have to actually do the job. For my city’s council, that means accepting and fulfilling specific assignments, attending the regular meetings, appearing competent during discussions and debates, attending numerous social events, and refraining from angering constituents too much.

Once in office you will find yourself in a new culture where tremendous overt and subvert pressure is applied to get you to function within the cultural norms of the organization. Failure to quickly adopt these customs will cause friction and may very well reduce your chances of being re-elected.

You will be faced with many pieces of business that will challenge your understanding of the principles in which you believe and will befuddle your thinking about how to apply such principles. You may find yourself among those that wonder whether you are principled or just hard headed.

You will be accosted by those that have special interests in various issues. Their approaches, whether abrasive or flattering, will tempt you to believe that their views are somewhat broadly shared by your constituents, when this may not be the case at all. The most noisome of these will tempt you to appease them, regardless of the desires of your broader constituency.

Anything you say or do in both public and private situations will be open for public scrutiny. This will extend to a certain degree to your family members and friends. Even the actions you take in good faith will be questioned by some. You may find untruths and distortions spread about you throughout the community.

These are just some of the harsh realities involved in running for and holding public office. There are real reasons that public office tends to attract a certain type of person. The common admonition about getting out of the kitchen if you can’t stand the heat applies here. Most people that are intent on doing their civic duty have valid reasons for refusing to consider running for public office. They prefer to fulfill their obligations in other ways.

As for me, I know that those that have asked me to run for city council don’t really comprehend my political leanings. They believe me to be a trustworthy, concerned, and thoughtful person. If they were more aware of my political thinking, they would likely want to keep me as far away from elected office as possible.

Nor do I think that my political stances would be very popular with the general public. People like to talk about liberty, but they tend not to really want the consequences of liberty. They prefer steady control with little rocking of the boat. Often when you try to talk to even intelligent people about liberty, they start looking at you like you’ve got a third arm growing out of your forehead.

Also, I know myself. I am not the type of person that will walk up to someone and ask them to vote for me simply because I want them to. To say nothing of asking people to donate money to a campaign, put up a sign in their yard, or spend their free time working on a campaign. That kind of thing just isn’t in my genes, although, I know people that are naturals at it.

Moreover, I’m not necessarily convinced that I would do a better job at an elected office than anyone I might end up running against. I don’t think I have all of the answers. I’m just a guy trying to muddle my way through the situations life throws at me. I know my own tendency to be a pleaser. Although I can be a stubborn man — just ask my wife — I tend to grow silent or compromise too quickly in social situations. Sometimes I pay too high a price for ‘peace’ and congeniality. Elected office is no place for a person like that.

As Americans, each of us should do our civic duty to implement and defend eternal principles of liberty and justice. To do that, it is important to know ourselves well enough to understand where we can work best in this effort. For some that will be in pursuit of elected office. But as I have noted here, elected office isn’t for everyone.

Monday, August 24, 2009

Another Hike to Willard and Ben Lomond Peaks

It has been three years since I hiked up to Willard Peak and Ben Lomond Peak (see 8/21/06 post). Given my schedule, I knew this past weekend would be my best chance to get back up there this season. Although I had invited my teenagers, their late Friday night activities prevented them from being sufficiently vigorous to get up early on a Saturday morning to go hiking. So I ended up with only my 12-year-old for company.

You can get to these peaks from several different trailheads. The question is whether you want a serious hike or a moderately short hike. If you start from the top of the North Ogden Divide, you’ve got 9.5 miles to get to Ben Lomond Peak and another nearly two miles to get to Willard Peak. If you want to make the round trip, you need to start early and plan on taking all day.

Different trailheads in Ogden Valley lead to Ben Lomond Peak (Cutler Trail: steep 5mi one-way, Ben Lomond Trail (3): 7.6mi one-way), and you can hike from there to Willard Peak.

Wanting a shorter hike and having heard that the Willard Peak Road Scenic Backway (map) was getting a major overhaul this season, I opted to drive to the Willard Basin trailhead. (The road is currently closed for construction from Monday morning through Thursday afternoon, and is open on the weekends.) We first drove up Sardine Canyon to Mantua. We drove through Mantua and soon found ourselves on Willard Peak Road.

Even with the improvements, you really don’t want to do this road unless you’ve got a serious 4WD vehicle or an ATV. The first couple of miles are very good, even as the road rises — something it does a lot of for the first nine miles. The further you go on this road, the worse the conditions get.

Don’t get me wrong. This past weekend the road was substantially better than it was three years ago. The work isn’t done yet, but I can tell that when the work is done, the road is still going to be pretty rugged and very narrow in many spots. The road is mainly used by ATVs. The later in the day you traverse the road, the more ATVs you encounter. If you’re going to use an ATV, be prepared to eat loads of dust (or mud, depending on conditions). If you use an automobile, be prepared to stop frequently to let ATVs pass you safely.

After nearly an hour driving more than 11 miles of rugged road, we parked at the Willard Basin trailhead, where there is very little parking. The road continues another couple of miles to the 9,422-ft-high Willard Mountain (aka Inspiration Point, which is not the same as Willard Peak). But driving all the way up there saves you less than half a mile of hiking each way, and there’s even less parking on Willard Mountain.

(See a mountain biker’s description of a 2008 ride from Mantua to Ben Lomond Peak and back. See another hiker’s description of the hike to Willard and Ben Lomond Peaks from Inspiration Point.)

If you start from Willard Basin (elevation 8,711 ft), you’ve got a pretty significant climb, especially if you want to scale Willard Peak (elevation 9,764 ft), considered the highest peak in Weber County. You climb over 1,000 feet in about a mile and a half of hiking. Most people skip Willard Peak and head straight to Ben Lomond Peak (elevation 9,712 ft) because there is no trail to Willard Peak while there is a good 3½-mile trail that leads right to Ben Lomond Peak.

Willard Peak looks like a whitish rocky prominence that seemingly juts 100+ feet straight up out of the surrounding mountains. You have to pick your way to the top from the trail below, but if you study the peak, you will see that the approach from the northwest face can be managed without any special gear. My 12-year-old handled it just fine, but I would caution against taking younger kids up there.

The top of the peak is broad enough to fit a few dozen people. There are a couple of geocaches up there. Every time I have been up to Willard Peak, I have seen three U.S. Geological Survey markers embedded in the rock, although, I have been told that there are four.

The view from Willard Peak is spectacular, particularly when the air is clear. If you know what you’re looking for (binoculars are useful), you can see three Mormon Temples: Logan, Ogden, and Bountiful. The peak sits very close to the Weber-Box Elder County line.

We had hoped to see mountain goats, as I had three years earlier, but they had already moved down the hill due to the warm weather. After diligently searching, we were able to spot some mountain goats in a canyon below the ridge line where the trail to Ben Lomond Peak runs. You have to know what you’re looking for, because the goats blend in so well with their surroundings.

After relaxing on Willard Peak for a while, we scampered down the south face to the trail below. This can be a pretty harrowing adventure, as there’s plenty of loose rock scattered about the fairly steep 200’+ slope. We then hiked to the rim of the canyon where we could get a better view of the mountain goats. We took some pictures, but my camera isn’t good enough to take high quality distance shots. We counted about 20 goats.

Then we were on our way to Ben Lomond Peak about two miles away. The trail is very good and there isn’t much of a climb until about a quarter of a mile before the peak. At that point you run into switchbacks, but they’re not terribly challenging, rising only about 100 feet in elevation. I’ve seen families with kids as young as seven successfully make the trek from Inspiration Point. If you come from the other trailheads, you have to scale a whole series of switchbacks that rise about 900 feet.

On Ben Lomond Peak there is a stainless steel desk-type box that contains a sign-in pad. I saw that a nine-year-old had signed in earlier in the day. This peak is also on the Weber-Box Elder County line. You can see far into Cache County and south into Davis and Salt Lake Counties. You can see the Logan and Ogden LDS Temples, but the mountain range obscures the Bountiful Temple. There isn’t much room on the peak. If there are a lot of people up there, you can stand or sit on various ledges close to the top.

As we were descending the peak, we saw a group of hikers approaching. As we got closer, I recognized them as a family I knew. I have worked with the father of the family in Scouting for years. He is in his 70s and seemed to be doing quite well on the hike. I was proud of him.

My son wanted to be somewhere else that afternoon, so he insisted that we hightail it back to the truck as quickly as possible. We hiked at a good pace, but we weren’t going terribly fast. We stopped briefly to check on the mountain goats. Many of them were still in the same location as they had been earlier. After passing Willard Peak (we didn’t climb back up there), we descended to Willard Basin quite rapidly.

Our hike from Ben Lomond Peak back to Willard Basin took just under an hour. We’d spent two hours getting to Ben Lomond Peak. The extra time was spent climbing and relaxing on Willard Peak, watching mountain goats, and going uphill as opposed to going downhill on the way back.

We encountered far more ATVs on the way back down the scenic backway than we had on the way up. We passed a few trucks. After traversing that rugged road, we were glad to be on paved road again. We had only driven on the paved road for a quarter of a mile or so when I sensed that something was wrong. I quickly pulled over since I figured I had a flat tire. I was right. I had encountered some object that ripped a big enough hole in the tire that it could not be repaired. We changed the tire and then we were on our way home.

Still, we had enjoyed our hike. It was a nice sunny day that was warm enough that we hiked in shirt sleeves even at high altitudes. If you want to do this hike, please bear in mind that there are no sources of drinking water and no restroom facilities once you get a short distance from Mantua. There are restroom facilities at the other trailheads, but that’s the end of such comforts once you start hiking. So make sure you carry plenty of drinking water and adequate sanitation supplies with you. Apply adequate sunscreen.

Also, make sure to check weather conditions before departing and prepare accordingly. I have watched out my window all day today as the areas that we hiked on Saturday have flitted in and out of lowering clouds. You could hike up there on a day like this, but you’d jeopardize your safety if you weren’t adequately prepared.

I know people that have lived for decades near the foot of Ben Lomond and Willard Peaks, but that have never made the trek up there. For me, it’s well worth the hike.

Friday, August 21, 2009

A Pariah's View of Party Politics

Randy Simmons, the libertarian mayor of the small town of Providence, Utah, opines that “Most elected Utah Republicans are populists, not conservative. They want to run people's economic and private lives.”

Simmons complains that he “once thought the Republican Party believed in individual rights, free markets, and property rights,” but that nowadays “Republicans want a big government (look at the TARP vote in the Senate for example) and Democrats want a bigger one.” He charges that “City Councils are even worse as they are infected with a do-gooder mentality. Instead of asking what the proper role of local government is they assume they can fix things.”

The definition of the term populist is kind of slippery, since it has different or layered meanings. It almost always denotes competition between the elite class and the broader populace. It was once tightly associated with the briefly tenured and fairly radical Populist (or People’s) Party of the late 19th and early 20th Centuries, but it has since obtained a more varied definition.

Simmons’ use of the word populist, however, seems to simply denote the political class employing government power in the name of the people — using a top-down approach to place burdens on some for the benefit (or presumed benefit) of ‘the people.’ Using ‘the people’ to justify political actions is a common trick employed by politicians of almost all persuasions.

Whether the politicians’ belief that they are accomplishing overall public good through government coercion is genuine or not, it does not necessarily follow that their actions are morally correct, the majority agree with the particular policy at hand, the rights of the minority have been properly respected, or the claimed benefits are actually achieved.

The frustration Simmons expresses with the Republican Party seems to be twofold. 1) The GOP is comprised of such a broad conglomeration of viewpoints that it is difficult to define what the party stands for. 2) The general center or prevailing view of the GOP has become less libertarian and more populist in recent years.

On point #1, Simmons is right that the GOP doesn’t currently know what it stands for. Following the spectacular implosion of the GW Bush doctrines that were in many ways a repudiation of the doctrines of the 1994 revolution, there is currently a huge struggle for power and ideology going on within the party. Although the Left has succeeded in uniting the GOP in opposition to leftist policies, there is otherwise little internal coherency as to what direction the party ought to go.

Point #2 also has some validity. Although his actual policies were far less than libertarian, Ronald Reagan succeeded in infusing the GOP with the idea of limited government. The 1994 Republican revolution was ushered in on a promise to actually implement these ideals.

While the GOP congress held the line on government expansion to some degree during the Clinton years, the effort to maintain a ‘sustainable majority’ led the inheritors of the revolution to engage in every type of corruption of which they had accused the Democrats. With the advent of GW Bush’s compassionate conservatism, all pretence of limited government and devotion to liberty went out the window.

Today, not only do the ragtag remnants of the Republican Party have little clue as to what principles the party stands for, the faction that claims to stand for limited government has no legitimacy inside or outside of the party. Any limited government bona fides that ever existed were run through the shredder during the preceding decade and it will take a long time to earn them back.

Although the GOP has suddenly found some backbone to stand up against big government policies (just at the moment when such opposition is completely meaningless on votes where it really matters), is there anyone — anyone — out there that thinks matters would be substantially different if John McCain had won last November, even if he had by some miracle gotten a Republican congress? Maybe some priorities would be slightly different, but populist sentiments and political paybacks would still be the order of the day.

The Utah GOP has a strong ‘conservative’ base. But if you attend the conventions and listen to what these ‘grass roots Republicans’ want, you will have to conclude that Simmons is right. They are mostly populists. And most elected GOP officials in Utah are also mostly populists. The arguments between the ‘conservative’ and ‘moderate’ camps devolve down to which populist policies ought to be pushed.

This leaves the question as to whether it is more profitable for liberty-minded people to work within the GOP to help shape the party’s future or to scrap that approach as futile and work from the outside. I have been told (see comments) that working from the outside is the only way to effect real positive change. As I note in my responses, I remain unconvinced that this is so.

Like Simmons, I am very dissatisfied with the Republican Party. But I find myself even more at odds with the Democratic Party. Are my only choices to be a pariah inside of the GOP or else a pariah completely outside of mainstream party politics?

Of Corruption and Term Limits

David Miller briefly discusses term limits in this post about the 22nd Amendment that instituted term limits for our nation’s chief executive. Should term limits be extended to other offices?

David admits to being somewhat ambivalent on the subject. I too have long been indecisive about broader term limits. On the one hand, incumbency carries with it tremendous advantages for staving off challengers. On the other hand, shouldn’t voters be able to elect whoever they want, even a long-tenured incumbent? Shouldn’t they be allowed to vote their belief that there is value in experience? Shouldn’t voters get the natural consequences of whoever they elect?

In response to David’s post, I asked two questions that I think are quite pertinent.
  • How many really good elected leaders — so good that you wouldn’t want to replace them with ANY of the other people in that jurisdiction — have you seen during your lifetime?

  • How many elected officials that stay in office for a long time do not become part of the problem they originally campaigned to fix?
I don’t mean these as simply rhetorical questions. I ask them in sincerity.

Interestingly, it always seems to be the political class that most strongly opposes term limits. They discount Lord Acton’s axiom that “Power tends to corrupt, and absolute power corrupts absolutely.”

It seems to be the basic nature of just about all politicians that the longer they are in power, toying with control over people’s lives, the more corrupt they become. The system in which they operate is so rife with distortions that they are often incapable of sensing its steady negative influence.

While I agree in principle that people ought to be left to vote for whomever they wish and that they ought to bear the consequences of their votes, we live in a very imperfect world. It is a world where power corruption has resulted in systems that overwhelm attempts by those outside of the power structure to significantly affect our political systems.

Looking back at my two questions, I suggest that the combined number of the objective answers to these two questions is “so incredibly small that the loss of such valuable service after a few years due to term limits would not be too heavy a price to pay for the benefits that could be derived by limiting service terms.”

Are there valid arguments against term limits? Of course. But does permanent incumbency really bring us good government?

Thursday, August 20, 2009

Could the Free Market Address Senior Citizens' Health Care Needs?

GMU Economist Russ Roberts posts an interesting question from a reader named Tom on his CafĂ© Hayek blog. In essence, the reader questions how the free market could possibly service the health care needs of senior citizens, given that pretty much everyone’s health care needs increase dramatically in their senior years.
“So here is my question: which insurer in their right mind would take on my risk?

“I suspect none. Once philanthropy and savings were exhausted, I would surely risk a painful life and preventable death.

“Do I want this? Does anyone? Isn’t “socialized” medicine for older people an unpleasant moral necessity for our wealthy society? Please note I am deeply suspicious of most arguments cast in moral terms in discussions of politics and economics. I ask these questions guardedly.”
Roberts then asks his readers to answer these questions. The response has been pretty prolific. While no one mentions the Medical Savings and Loan concept, plenty of other ideas are offered.

Some readers take exception with Tom’s assumption that no private insurer would accept the risk. They note the success of long term care and cancer care insurances, which anticipate significantly high risk.

Others suggest that Tom’s question shows that he is blinded by the state of our current health care market, which is heavily skewed by government meddling. One respondent says that Tom incorrectly “assumes that greed driven capitalism has no answer to the problems associated with the ravages of time.” In a truly free market (or even a more free market), it is claimed, insurance would look and act far differently than it does today. It would evolve to become far more tailored to people’s needs.

Some mention health savings plans and high deductible insurance. Many discuss long-term contracts where level premiums would be charged, with the premiums being lower the younger the contract is begun.

Some raise the question of how to deal with people that have very high cost (or potentially very high cost) health conditions, especially where those conditions are no fault of their own. Wouldn’t government have to step in to help these people? Not necessarily say some. A mixture of private enterprise and philanthropy may be sufficient.

But not everyone thinks that government has no role to play in health care. One respondent says that “when all else fails the government may be the reliever of last resort,” but that “there is a long road for each of us to reach that stage….” But it is important to note that “during this trip WE CONTROL ALL OUR MEDICAL DECISIONS” instead of having the state control them.

Some that say that government coverage of seniors is the only feasible solution argue for voucherizing the system to enable as much flexibility and market input as possible.

One respondent expresses his faith in the free market to come up with all kinds of solutions that we can’t even conceptualize at present. In response to this, a pessimist writes:
“The problem is that a free market would deliver unequal results. Better results for everyone, but still unequal. And since people would have nothing to compare it to, they'd bemoan the inequality and press for regulation and subsidies and guarantees. …

Schumpeter predicted that democracies would trend towards socialism as basic human needs are met and the people become afraid of creative destruction. How right he was.”
It takes quite a while to read through the entire body of responses to Tom’s questions, but doing so is an informative experience.

The general point is that given the chance, the free market would evolve to satisfactorily handle the health care needs of most of our senior citizens and even those among us that have serious health conditions. Government could play a role in helping those that the market simply couldn’t reach.

But it is also entirely possible that dissatisfaction with diversity of outcomes might engender a desire to once again politicize the system in a vain attempt to enforce equality. We never seem to learn the lessons of the consequences that must be paid when we try to achieve altruism by force.

Wednesday, August 19, 2009

Dealing With Drug Crime

Two former Baltimore City Police officers recently offered their views on enforcing drug laws in this Washington Post op-ed. They make some very valid points.
“Drug users generally aren't violent. Most simply want to be left alone to enjoy their high. It's the corner slinger who terrifies neighbors and invites rivals to attack. Public drug dealing creates an environment where disputes about money or respect are settled with guns.”
The two former officers describe the results of “the ineffectiveness of drug policies,” including “violence, poor community relations, overly aggressive policing and riots,” plus “the drug war's clear and present danger toward men and women in blue.” These horrors, they assert, provide ample reason for them to declare that legalization of drugs is the solution. They claim that doing so would save law enforcement money while also raising tax revenues.

The former officers say, “Legalization would not create a drug free-for-all. In fact, regulation reins in the mess we already have.” Government could regulate drugs like it does alcohol and tobacco “to control where, when and to whom drugs are sold.” They write:
“Prescription drugs are regulated, and while there is a huge problem with abuse, at least a system of distribution involving doctors and pharmacists works without violence and high-volume incarceration. Regulating drugs would work similarly: not a cure-all, but a vast improvement on the status quo.”
To bolster their argument, they assert:
“Drug manufacturing and distribution is too dangerous to remain in the hands of unregulated criminals. Drug distribution needs to be the combined responsibility of doctors, the government, and a legal and regulated free market. This simple step would quickly eliminate the greatest threat of violence: street-corner drug dealing.”
California’s medical marijuana dispensaries are cited as “a good working example, warts and all, that legalized drug distribution does not cause the sky to fall.”

As far as I can tell, however, the drug legalization model that these guys are prescribing would still fail to address many of the same problems currently being managed via law enforcement. The alcohol market they cite is based entirely on recreational drug use (protestations of health benefits notwithstanding). Ditto with the tobacco market and even California’s ‘medical’ pot market.

But the individual and broader societal impacts of these drugs — whether they are used legally or not — are miniscule when compared to the impacts of many of the harder drugs that are either illegal or are tightly controlled. The general addictive qualities and the general deleterious effects of the misuse of these harder drugs are orders of magnitude greater than those of drugs like alcohol, tobacco, and pot. That’s why no one needs a doctor’s prescription to buy alcohol or tobacco, and that essentially bogus doctor’s prescriptions are acceptable for buying marijuana in California.

The drug distribution system suggested by the two former police officers would not apparently do away with the current prescription based model. Are they suggesting that we should follow the California ‘medical’ pot model for obtaining prescription drugs? We currently arrest doctors that give out bogus prescriptions, and for good reason.

The law expects doctors to prescribe only those drugs that meet a valid medical need. Are we going to rewrite the regulations to include a desire to get high as a valid medical need? That’s highly doubtful. Since the prescription model isn’t going away, and getting high is not a valid medical use, exactly how would the ‘legalized drug’ system deliver recreational drugs?

Yesterday I attended a presentation by a law enforcement drug task force where the current most problematic patterns of drug abuse were described. The most common model is for someone to get a legal prescription for a narcotic drug following an injury or surgery and to become addicted to the drug. When the doctor will no longer prescribe the drug, they begin doctor shopping and even stealing from their friends’ medicine cabinets.

The addict soon becomes aware that we have systems designed to catch doctor shoppers. Some turn to prescription fraud at this point, but we also have systems to detect that behavior. A few turn to pharmacy robbery. Many finally end up turning to the black market for privately produced narcotics. The problem spans almost all age groups from middle school kids to senior citizens.

Anytime a substance is controlled, a black market will develop to deliver that substance to those excluded from getting it. It is difficult to see how any prescription based system would work much differently than our current system. Due to recreational addicts accessing the black market, we would still end up with all of the same nasty law enforcement problems mentioned above.

Perhaps the former officers are deliberately vague because they favor a system where any adult could legally purchase any drug for any purpose without a doctor’s prescription, much the way that alcohol and tobacco purchases are handled. Such a system would essentially destroy the prescription model. There would simply no longer be any use for such a model. Your doctor would just tell you to go to the drug store and buy thus-and-such drug. Or you could decide to self medicate. No prescription would be necessary.

Few Americans are willing to entertain the thought of such a system, but let’s honestly ask the question of whether a system like that would take the “gangsters out of the game,” as they put it. Proponents say that it would, much as happened in the alcohol industry when Prohibition was repealed.

The Netherlands is often cited as a positive model for drug legalization. But the results of that nation’s experiment have been mixed. “Dutch rates of drug use are lower than U.S. rates in every category” and the percent of population that becomes problem drug users is lower than the EU average. But the Netherlands currently has “the second highest drug related public expenditure per capita of all countries in EU.” 75% of that expenditure is for law enforcement. Drug related crime (including violent crime) is a major problem. Last year, parliament voted to strengthen certain drug bans rather than further relaxing drug laws.

It turns out that many of our controlled drugs do not quite follow the alcohol and tobacco model. Many of these drugs have significantly greater addictive properties and much greater potential for harmful side effects. Legalization has not proven to substantially improve drug crime problems, although, some social problems may be reduced to a degree. It is quite unclear that legalization would be “a vast improvement on the status quo.”

I believe it would be foolish to fail to see the problems with our current drug policy. But neither is wholesale drug legalization necessarily the best answer to those problems. Drug abuse is a serious and complex public issue that deserves a serious and thoughtful approach. Simple ideological ‘solutions’ aren’t likely to fill the bill.

Monday, August 17, 2009

A Friend Calls It Quits

A man I counted as a friend took his own life a few days ago. I first met him when he and his family moved into our neighborhood about five years ago. This man and his wife seemed like good people, but from my first interactions with them, I couldn’t help but wonder how they ever paired up. I’ve seen opposites make good mates, but this couple seemed like they were mismatched.

Over the intervening years, the family’s children have spent time in our home. Their oldest child is between the ages of two of my children and struck up a friendship with the younger of those two. My wife became friends with the wife in this family.

I have watched this family struggle over the years. They moved to our area to buy and run a small business. Those years were very harsh for them. The interminable hours, difficulty attracting sufficient customers, and constant difficulty managing the finances and the low wage workforce took its toll. Those of us that knew the family breathed a huge sigh of relief when they finally sold the business.

But then employment challenges became the order of the day, causing additional strains on family relationships. Eventually, the man was working out of state. Location became a point of contention. Although this fellow constantly gave the appearance of having a cool and self-disciplined demeanor, we became aware that during some of his weekends home, he applied a number of coercive and manipulative practices in an attempt to get family members to meet certain demands. This even included threatening his children that he’d commit suicide if they failed to do as he wished.

During this time I became increasingly concerned about some of the communications my wife was having with the wife of this family. It began with this lady reaching out to friends for help, but it soon evolved into building a case against her husband. Some information was shared that I felt amounted to a betrayal of marital confidences. It saddened me to see people that I cared for experiencing such marital strife.

I hoped and prayed that they could get the help they needed and work things out. I knew that research showed that most couples that hold on through difficult situations find their marriages happy or very happy within five years. I was grateful when it was reported that some tremendous changes had taken place. The husband moved back home and found a job locally. He went to Scout camp with his son and became involved in some community efforts.

We had less insight into the family’s internal issues after their kids and our kids ended up attending different schools. The marital difficulties apparently did not get sufficiently resolved. My friend did not come with his son to Scout camp this year. He was ‘out of town.’ I later found out that he and his wife had split up a couple of weeks earlier. That helps explain the son’s despondency at camp.

The older children were unsurprised when they were told of their father’s suicide. They said that they had expected that he would carry out his threats sooner or later. I have no insight into the demons and mental issues with which my friend struggled, and I am not his judge. I’m sure that the pain he was dealing with was very real to him.

But it is difficult for me to imagine the extreme level of abuse my friend meted out to his children. His repeated and excessive attempts to inflict guilt on his children have been crowned by a horrifically demented and selfish act. This is something with which they will have to grapple for the rest of their lives. It’s terribly unfair.

I have found that one of the ways I manage grief is to write about it. In writing this post, I intend no harm to this family, which is already suffering beyond anything I can imagine. I wish them all the best and will demonstrate this by praying for them and working to help them.

Friday, August 14, 2009

Spending Rehab

The town of which I am a resident has just gone through a rather painful process to develop its annual budget. We’re a mostly residential community with a population of about 17,500. One of the reasons that I like living here is that it still has somewhat of a hometown atmosphere.

As reported here, one city councilman claims that they’ve gone through “through everything in every department” and cut everything they could. The city administrator says that this year’s budget is $898,000 smaller than last year’s. That’s pretty significant for a city this size, representing a spending cut of about $51 per resident.

But employees will receive no raises and no additional positions will be filled. That sounds harsh, but when citizens are having to tighten their belts, it is appropriate for government to do the same. This is a departure from last year when, instead of working hard to cut spending, city officials voted for a tax increase over the protestations of upset citizens.

But there’s less mystery here than meets the eye. The mayor and half the council members are up for election this year, while no city officals were on the ballot last year. As Bill Bennett notes in his book, America: the Last Best Hope, Vol. 2 (p. 171), “It’s a good thing for the leaders of this great republic to fear the people.”

Spending is fun!
I found a comment by one of the city council members to be quite telling of how politicians think. Of the spending cut exercise she said, “We now know how much more fun it is to spend money than it is to cut money.”

It’s not quite fair to pin such sentiments solely on politicians. I think it’s pretty much human nature. It’s almost always more fun to spend money than to cut spending. If this were not so we’d never have reached the current volume of personal and business debt in which our nation is drowning. But it’s even more fun when you’re spending other people’s money. And that’s where politicians differ from most of us (except for those of you that took the Cash-for-Clunkers dollars and ran.)

In the current economy, many individuals, businesses, local, and state governments are cutting back. The incentives for spending have been replaced by incentives for more austerity. Some were responsible and are better suited than others to weather leaner times. But even the spendthrifts are being forced to cut back.

The faith based road to prosperity
Note that I did not include national government in the previous paragraph. It is the one entity left that is still convinced that we can spend ourselves into prosperity. It has hired an army of economic prophets that strongly affirm that this is true, and it employs intimidation tactics against any officials that fail to pay adequate obeisance to the approved doctrine.

The current preaching is that the only way to salvation is for the federal government to spend gobs more cash than we have or can ever hope to repay. There is no such thing as overleveraging. It does not exist in the lofty realms of the all powerful centralized directive, say the economic prophets. (Murmur amen.)

Stop me before I spend again!
Back to my home town. The city’s recent austerity exercise would likely have been much less severe had more fiscal discipline been the rule of the day during the fat years. Since we know that it is the nature of nearly all people, including politicians, to be less than thrifty with other’s funds, why were there insufficient safeguards against this in my city during the first eight years of this decade?

When government starts doling out benefits, those with their hands out to government proliferate. The cries to meet this or that worthy ‘need’ soon rise to cacophonous levels. These calls frequently require ongoing commitments, so that once politicians achieve a sense of altruism by obligating taxpayer funds, a permanent constituency makes subsequent reductions in the revenue stream politically painful.

These commitments usually come in such small chunks that they pass under the voting public’s radar. Or they are presented in the rosiest of lights sans any adequate understanding of the negative costs involved so that the public accepts them as an overall good.

Who could possibly be opposed to a municipal swimming pool or to a grand fireworks display on the 4th of July? Ka-ching! Permanent commitment with built-in barriers to cost cutting. But, oh, didn’t that feel good? Gimme another hit.

Pressures to altruistically spend taxpayer dollars + insufficient vigilance by citizens = government overspending that defies cost cutting efforts.

Wednesday, August 12, 2009

Do School Districts Provide Appropriate Value?

Do Utah’s 41 school districts provide value commensurate to their cost? Robyn Bagley of Parents for Choice in Education in this provocative article essentially asks for a cost-benefit analysis of the school district model. The questions posed in the article are purposefully pointed and imply a specific conclusion.
Why do over-bloated, mid-level education bureaucracies exist anyway? What I mean is, why do taxpayers subsidize districts? You're now probably thinking, well how else do we run our local schools? We need districts to administer and execute oversight, don't we? Do we? That's the question I'm posing. Do districts produce high-performing schools? Maybe they actually hinder them with their one-size-fits-all big government approach? Fair questions.”
The recent kerfuffle about tax increases by the Jordan School District is used as a backdrop for the article. Bagley appears to assert that much of the taxes consumed by school districts provide little value. The charter school model is cited to bolster this argument.
“This Fall nearly 80 charter schools will be operational here in Utah. These Utah charters are independent schools, [mostly] autonomous from a district, making their own management, governance, and budgetary decisions. Don't panic. They are subject to legislative and USOE rules and regulations and have general oversight by a State Charter Board. Each charter is governed by a volunteer board and those board members serve with no compensation or benefits. The Board hires their Director/Principal who then takes on the role of CEO of the school. They, not union bosses, determine the contracts and salary schedules for teachers and employees. They set the direction of the school and contract out services to the providers of their choosing. They develop the culture and the emphasis.

“… Most importantly, charters are in high demand. While they now serve roughly 30,000 students, thousands more remain on waiting lists hoping to get into the school of their choice through a lottery process. Another way they differ from traditional schools is that charter enrollment and growth is capped (not a good thing, in my opinion), and most new charters exceed their capacity before their doors even open. The buck stops with them. If they can't operate within their budget, their doors close. If there is mismanagement or their students are performing poorly, parents hold them accountable. They compete for students. If the customer isn't satisfied, they can vote with their feet and leave.”
Are charters cheaper?
Since three of my children attended a charter school last year and will attend again this year, I was intrigued by Bagley’s arguments. I was interested in Bagley’s claim that charter schools essentially cost the taxpayer less.
Here's the clincher - charters receive a set amount of funding per-pupil (which is less than district schools by the way-see here). Remember that nasty fight going on in the Jordan District over a property tax hike? Unlike traditional public schools where per-pupil spending varies district by district, there is no inequity in funding. (see our last blog).”
Looking at the link provided to the Utah School District Comparison, you can see that per-pupil spending varies quite a bit among the 40 school districts listed. It is not surprising that sparsely populated districts tend to have much higher per-student costs.

I understand Bagley’s claim that charter schools all receive the exact same funding per pupil, but I’m not so certain about the assertion that charters receive less per-pupil funding than school districts. The state average per-pupil spending among the school districts for 2007-8 was $8,191, while per-pupil spending among the charters was $8,980. To me it looks like charters spent $789 per student more than the school districts did on average.

Am I missing something here? There is nothing in the figures provided, as far as I can tell, that demonstrates that the standard school district model costs more per student than the charter model. In fact, it seems that the opposite is true. I’d appreciate links to verifiable information that bolster’s Bagley’s assertion. It may be possible to make a case that superior educational outcomes more than compensate for additional charter school funding, but that’s another issue.

One thing that is certain is that the property tax rate column of the funding chart lists the average state rate at 0.005877, with the rate for charter schools being “N/A.” Bagley’s linked post explains that among the school districts “29% of the state's overall K-12 budget comes from property tax.” Not so with charters. As explained in this Utah Charter Schools FAQ, “The legislature appropriates funds each year to replace some of the local property tax revenues that are not available to charter schools.”

Should funding follow the student?
Bagley’s linked blog post argues for backpack funding. As far as I understand it, the proposal is to assess property tax for education at the same level statewide. (If that’s not proposed, implementing the plan would at any rate quickly result in a common statewide education property tax rate.) Those funds would go to the state and would be sent out, along with state and federal funds, in equal amounts per student, regardless of where the student attends school. This would follow the charter funding model and would eliminate disparities in tax rates and per-pupil spending.

It is implied that this would lead to more equal educational outcomes, but that is far from certain, since such outcomes are often deeply impacted by cultural, economic, family, and physical factors. Also, no explanation is provided for dealing with students in sparsely populated areas, where some per-student costs are necessarily higher.

Why are charter teachers so much less expensive?
Another figure that jumps out from the funding chart is that the average teacher compensation among the school districts in 2007-8 was $66,397, while it was only $47,016 among the charters. Despite this massive disparity, charter schools claim to produce better educational outcomes.

While I don’t know all of the reasons for this nearly $20,000 difference in teacher compensation, one factor is that when the state provided a raise exclusively to district personnel in actual teaching positions, the school districts reclassified as teachers many whose jobs are mainly administrative so that these (often higher paid staff) could also reap the benefits of the raise.

Another factor is that most charter school teachers are not members of an educator’s union, so they do not participate in union negotiated compensation packages. This allows the charters broad latitude in hiring and compensation decisions. A poorly performing teacher at a charter school that does not improve will likely soon be looking for another job. Just try to do that in a regular school district.

Interestingly, I found that many of the high quality teachers at my children’s school jumped at the chance to have a much freer hand in plying their trade with much less oppressive bureaucracy. Many took pay cuts to come to the school, while their previous schools were sorry to see them go. (I know this because some had previously taught my older children in district schools.)

School districts vs. more autonomy
Bagley notes that “those in the education establishment whose jobs depend on it could give you 1001 reasons why” allowing “all public schools to operate essentially like charters” (i.e. getting rid of school districts) won’t work. I can list a few of those right here:
  • Districts can take advantage of economies of scale that more autonomous schools can’t.
    • OK, but are those economies of scale actually buying us anything of value?
  • Districts can offer more special programs that charters can’t, such as foreign language and sports.
    • How valuable are those programs? Who do they benefit? Does their value exceed the more personally tailored instruction and programs available through charters? Wouldn’t schools pop up that offer such programs for those that want them?
  • Charters work well for students with highly supportive and involved parents. They would be far less successful if they had to deal with all of the problem students that districts have to deal with.
    • How can we be certain that these problem students would not perform better under a more autonomous school atmosphere? (Empirical facts, not anecdotes, please.)
While Bagley’s article is somewhat confrontational, some valid and highly useful questions are raised. Are school districts worth what we pay for them? Would we be better wiping out this entire level of middle management and moving to a more autonomous structure? Those are some serious questions that merit studied and thoughtful answers.

Tuesday, August 11, 2009

Low Expectations

Peggy Noonan makes this astute comment about what we expect of our federal legislators:
“They hired a man to represent them in Washington. They give him a big office, a huge staff and the power to tell people what to do. They give him a car and a driver, sometimes a security detail, and a special pin showing he’s a congressman. And all they ask in return is that he see to their interests and not terrify them too much. Really, that’s all people ask. Expectations are very low.”
I think Noonan gets this about right. We really do have low expectations of our politicians. Sure, we’d all like to live in a utopia where politicians are actually great and altruistic people. We even sometimes allow ourselves to be beguiled (especially during campaign season) into thinking that this or that person might actually fill such a bill. But we don’t really expect it.

In fact, when a politician uncharacteristically behaves in a manner that seems truly unselfish and benevolent, our first impulse is not to think, “What a wonderful gesture.” Rather, we think that something fishy is going on. We do so because our experience tells us that politicians almost always act in their own self interest in a system where the everyday way of doing business would be considered morally abhorrent to most of us.

When George Washington resigned his military commission following the American Revolution and opted to return to private life, people all over the U.S. and Europe were stunned. He could literally have become king of the United States. Many people thought that Washington had ulterior power based motives. But they were dumbfounded when he really did retire from public life and return to running his Mount Vernon estate.

Years later, it was only at great importuning by James Madison and others that Washington agreed to attend the Philadelphia constitutional convention, a path that ultimately led to Washington becoming the first President of the United States. Many historians believe that the convention would not have succeeded without Washington’s personal influence and stature. But this is only true because of the tremendous trust both politicians and regular citizens could place in him, due to his extraordinary demonstration of his willingness to eschew power.

We may revere such rare examples, but we do not expect them to be repeated in our day. We fully expect politicians to live down to their reputations. In this we are rarely disappointed.

A few years ago I heard a politician express his frustration with the public’s view of him and his colleagues. He wondered how it was that so many people could be so enthused about his candidacy, only to view him as the enemy almost immediately upon taking office. He opined that he and his colleagues were still the same people with the same concerns that they had during the campaign.

Among the reasons for this phenomenon are:
  • Upon taking office, you do in fact be come one of THEM. While people have difficulty voicing it, many seem to innately understand that your incentives change substantially upon taking political office. You may think you are the same, but you’re not. Even erstwhile supporters will turn against you the moment they sense that you are doing something that could impinge on their personal interests.
  • During the campaign, you necessarily surround yourself with supporters. Once the campaign is over, most of these people go back to living their regular lives. The ones that are still hanging around generally want something from you.
  • What you said you’d do on the campaign trail was pie in the sky, and everyone knows it. But once you take office you have the ability to make actual impact on people’s lives. Those that sense no harm in your actions are like satisfied customers. Few of them make any noise about it unless you deliberately seek them out. Those that sense potential harm, however, will constantly be breathing down your neck. So it can seem that your supporters have become your enemies, when this is not necessarily the case. (Although, it could be the case if you ruffle too many feathers.)
Beyond this, I think that there is another interesting bit of wisdom in the Noonan quote above. Politicians can dupe the public into just about anything as long as they move cautiously and don’t “terrify them too much.”

The incremental and back door approaches often accomplish far more of a political agenda in a longer lasting manner than the front door approach. This is why we must always be vigilant in watching for such insidious advances. (Such as the Ginnie MaeFHA partnership that is rapidly becoming a clone of the Fannie MaeFreddie Mac debacle, as explained here.)

But sometimes the political class simply won’t be satisfied with the incremental approach. It seems that our two-party political system often creates the appearance of a mandate for a party to implement much of its ideological agenda, when the electorate is just sending the message that the other party is out of favor. This occurred during the G.W. Bush administration. It’s happening now.

The politicos felt that last year’s election was a mandate for massive change. But as Noonan notes, not only have the changes naturally brought on by the recession produced a significant aversion to change since last autumn, the pace of change since then is terrifying the nation. (See here for an interesting view on the increasing pace of change in our lives.) The current tack of the politicos is to in effect say, “Don’t worry. You can trust us. This will all be for your good.”

The people aren’t buying it. They’ve had enough change for now. They want normalcy and the political class is working in direct opposition to that desire. The politicians can try to ram their ideology based change down the throats of a less-than-willing public, but there will be stark consequences to pay for such forceful arrogance.

Interestingly, I doubt that there is anything to be done about it now. There might have been a point where sensibility could have been restored a few weeks ago, but that did not happen. The forces that have been set in action are now beyond the ability of anyone to control. All we can do now is to watch it the way we’d watch a violent summer storm. Once the storm is over we’ll have to go out and see what kind of damage has been done.

Perhaps the agents of change will achieve some kind of Pyrrhic victory, but my guess is that their cause will suffer many self inflicted wounds from which recovery will prove difficult.

Monday, August 10, 2009

Worse Than Doing Nothing

“When health care is subsidized, no one should be surprised that people demand more of it and that the costs to produce it increase.” —Arthur Laffer

I realize that we are currently in a major economic slump. But over the last four decades the overall economic picture has improved dramatically in dynamic ways. Most life necessities and nonessentials are less expensive in real terms (i.e. number of labor minutes) than they were 40 years ago. Despite the expansive increase in the purchase of luxury and restaurant foods during this time, for example, Americans spend a much smaller chunk of their take home pay on food than in the golden era of the mid-60s.

The resulting increase in discretionary income has expanded our choices by orders of magnitude. The average American today has ready access to literally millions of products and services that simply didn’t exist 40 years ago. Many of the things we buy today could not have been had at any price back then. (Think home computers, iPods, and breathable odor resistant clothing for athletics.)

And many things that were once luxuries have become common as the real costs of these things have decreased. (Think home carpeting, power car windows, air conditioning, and even recreational vehicles like boats and motorcycles.)

Detractors like to say that wages have decreased during this time, but they are using carefully selected data that ignores total compensation, compares newer immigrants with long-term residents, and uses archaic measures for determining economic class. Tellingly, most of this nation’s ‘poor’ have cell phones and enjoy more individual dwelling space than do many members of other nations’ upper classes.

There are, however, some economic pockets that have not enjoyed this kind of reduction in real costs. Health care is one of those fields. While there have been tremendous improvements in health care technologies and services, real costs have increased.

The common explanations of why health care costs have increased while most other costs have decreased simply don’t hold water. Some like to point to expensive new technologies. But in every other field, new technologies have reduced costs over time. Why would it be different in health care? Greedy professionals have been mentioned. But highly compensated professionals exist in other arenas that have seen real costs decline.

Another favorite whipping boy is the health insurance industry, which operates with a profit motive. But casualty insurance also operates with a profit motive, and yet real costs in that field have not increased like in the health care field. Besides, I have previously discussed how there is always a profit motive of some kind in human transactions, except in certain highly personal interactions where individuals willingly sacrifice.

Literally every single reason bandied about in mainstream media and policy circles for the increases in medical care costs do not, upon proper scrutiny, prove to be major contributors to the problem. So what is at the root of this matter? Economist Arthur Laffer suggests in this WSJ article that government subsidies that distort the market are the real troublemakers, because they provide incentives for health care consumers to consume too much.
“Consumers are receiving quality medical care at little direct cost to themselves. This creates runaway costs that have to be addressed. … When health care is subsidized, no one should be surprised that people demand more of it and that the costs to produce it increase.”
This creates a “health-care wedge … that reflects the difference between what health-care costs the specific provider and what the patient actually pays.” Someone else picks up the tab for the difference. That someone is the faceless mass of American taxpayers. (It’s so much easier to justify theft when the victim is a faceless and compliant mass.) Laffer says that the result is “like a negative tax: Costs rise and people demand more than they need.”

The current proposals for expanding the role of government in health care would not only do “nothing to address the gap between the price paid and the price received,” but implementing these “reforms would literally be worse than doing nothing.” Proponents of the government centric plans claim that these initiatives would be better than the status quo, but Laffer cites his own research that demonstrates that such claims “couldn’t be further from the truth.” Laffer’s research found that:
“a $1 trillion increase in federal government health subsidies will accelerate health-care inflation, lead to continued growth in health-care expenditures, and diminish our economic growth even further. Despite these costs, some 30 million people will remain uninsured.”
It is interesting to note that one of the major purposes cited for expanding government control of health care — covering the uninsured — will remain unfulfilled even if these schemes are realized.

One of the favorite rants by supporters of expanding government’s power over the health care industry is that opponents of the plan have no plan of their own. There are some easy comebacks to this.
  • When doing nothing is better than implementing these plans, no alternative plan is necessary.
  • Why is it that progressives are always so concerned with ‘planning’ other people’s lives? Didn’t we learn anything from 20th Century Communists about the follies of centralized economic planning and what happens when you try to plan other people’s lives?
  • Opponents of the plans have presented many plans of their own. Political power brokers hate all of those plans because they diminish government power rather than growing it.
Consider, for example, Kevin Delaney’s medical and savings and loan proposal, which I discussed in this post. Kevin has added some pertinent thoughts on this concept in a series of posts on his y-intercept blog.

As for what to do to fix health care, Laffer proposes the following:
“Rather than expanding the role of government in the health-care market, Congress should implement a patient-centered approach to health-care reform. A patient-centered approach focuses on the patient-doctor relationship and empowers the patient and the doctor to make effective and economical choices.

“A patient-centered health-care reform begins with individual ownership of insurance policies and leverages Health Savings Accounts, a low-premium, high-deductible alternative to traditional insurance that includes a tax-advantaged savings account. It allows people to purchase insurance policies across state lines and reduces the number of mandated benefits insurers are required to cover. It reallocates the majority of Medicaid spending into a simple voucher for low-income individuals to purchase their own insurance. And it reduces the cost of medical procedures by reforming tort liability laws.

“By empowering patients and doctors to manage health-care decisions, a patient-centered health-care reform will control costs, improve health outcomes, and improve the overall efficiency of the health-care system.”
I like Laffer’s proposal, but I doubt anything like that will actually happen. When was the last time politicians voted to reduce their own power over the lives of citizens? Let’s be honest. These people don’t actually care one iota about improving health care or decreasing health care costs. This whole thing is entirely about power. Period.

The same was true when the Republicans controlled the levers of government. You never saw them voting to reduce their own political power. They might have gone for centralized government lite, but it was still all about power. If we understand this one principle, it will make it a lot easier to figure out why the political class acts as it does. It will also help us to see through the current government-as-savior health care sales job.

Friday, August 07, 2009

Should Legislators be Required to Read the Bills They Vote On?

“If a bill is too big to read, it's a good sign you shouldn't be passing it. Rule by anonymous technocrats is a form of tyranny, however benign.” —Mark Steyn

Mark Steyn believes that every legislator should be required to read in its entirety any bill upon which he or she votes. One of his readers took issue with this stance (here):
“Every CEO in the country, including Ronald Reagan as President, reads executive summaries of important documents. The idea that any Senator has to read an entire bill is nonsense. He needs staff not only to read it but to relate how items on page 3 relate to provisions on page 1009. Did George Bush read every line of the bills he signed? Bill Clinton signed Welfare reform and I bet he did not read the final bill (though to be fair he is wonky enough to have read a lot of it). What is true is that without time there is no way staff could read it and draft the necessary critiques for Senatorial review but this “He hasn’t read the bill stuff” is stupidity not some great insight.”
Steyn completely disagrees with this line of thought. He replies that a senator “is not a CEO — notwithstanding the vast Gulf Emir-sized retinue to which he has become accustomed.”
“He doesn't run anything. He has no payroll to make, no contracts to fulfill, no deliveries to expedite. A legislator is elected to legislate — so, if he doesn't read the law before he makes it law, he's not doing the only job he has.”
That last comment is worth serious consideration. This raises a couple of questions.
  • What precisely is it that we hire legislators to do?
  • How well do they actually perform these tasks?
Steyn suggests that if the legislator is using other parties to do the only job they are hired to do, the legislator is of little value. Besides, transferring the main tasks of the job to technocrats, as noted in the quote at the top of this post, is a form of tyranny.

Another of Steyn’s readers writes in to remind that “Congress passed the onerous Sarbanes-Oxley on the premise there needed to be a new law requiring CEOs to read their financial statements and personally face legal penalties in case there are errors.” What could be more appropriate than making them take their own medicine?

Steyn drolly notes that Sarbanes-Oxley was “Another hastily drawn piece of must-pass-now legislation that's done wonders for our overseas competitors.”

I fully subscribe to the concept that no legislator should be permitted to vote on any piece of legislation that she or he has not personally read in its entirety. Another philosophy is that no bill should exceed 10 pages in 12-point font with one-inch margins.

The main idea here is to make sure that those we elect to represent us in making laws are fully aware of what they are voting on. The hope is that this would cause more serious deliberation. It would also necessarily slow the pace of legislation. While some see that in a negative light, many think that less legislation coming out of Washington and our state capitals would produce an overall public good.

But the law of unintended consequences applies everywhere. One possible side effect would be to push more policy out of the realm of elected legislators and into the already expansive realm of unelected appointees that enjoy far too much arbitrary power. It would be easy. Bills would simply be filled with statements like, “With specific regulations to be determined by the Department of ….” After all, politicians are nothing if not inventive of ways to avoid taking responsibility.

You could try to draft policy that would take these things into consideration, but it would likely exceed the 10-page length limit mentioned above. There is simply no satisfactory substitute for a culture of individual liberty that regards the aggregation of coercive powers with tremendous suspicion.

Wednesday, August 05, 2009

What Can We Learn From Finland's Top Ranked Education System?

Ellen Gamerman has a fascinating article in the WSJ about education in Finland. Having lived in Norway which shares a common border with Finland, having visited Finland, and having a brother that spent time living in Finland and that can speak Finnish, I was interested.

Finnish 15-year-olds ranked the best in the world on recent standardized tests focused on science, math, and reading. Yet:
  • Finland spends less per student than does Utah, which perpetually ranks 51st among U.S. states in per-pupil spending.
  • Finnish children don’t start school until age seven.
  • Class time is less structured than in most U.S. schools.
  • Finnish students have little homework.
  • Their schools offer few extracurricular activities such as sports and social dances.
  • There are no programs for the gifted or recognition of high performers.
  • Finnish teachers are paid about the same as their American counterparts, although, the country has a higher cost of living.
There are some inconvenient thoughts there for those that perpetually clamor for increased time in school, more money for education, and more top-down educational mandates.

While Gamerman explains that the last three years of high school are split into academic and vocational disciplines, she skips the fact that compulsory attendance stops just prior to those years. This fact perhaps helps explain Finland’s lower high school dropout rate (4% for academic and 10% for vocational schools) when compared to the U.S. rate that is “roughly 25%.”

But that doesn’t explain why students that have yet to enter their final three years of high school outperform their peers around the globe. According to Gamerman, the elements that contribute to this superior performance include:
  • Good basic teaching sans a lot of the fluff and frills to which we have grown accustomed.
  • A great deal of teacher autonomy, including selection of textbooks and development of curriculum designed with the goal of getting students to reach national standards.
  • A high degree of student responsibility. Gamerman suggests that this is rooted in cultural norms.
  • A high level of cultural, social, and economic homogeneity.
  • A culturally based (or maybe need based) love of reading.
My three younger children have been attending a charter school that provides more teacher autonomy and has a less rigid structure but with clearly defined goals. We have seen some successes with this. It’s a very customized approach. I thought of this when I read one official’s comment that “In most countries, education feels like a car factory. In Finland, the teachers are the entrepreneurs.”

The standard U.S. model of recent years has been to trust teachers less and less and to mandate more and more from centralized bureaucracies. It would appear that the U.S. trajectory is going in the wrong direction.

The author credits Finland’s entirely free college education system with allowing “Finnish children to enjoy a less-pressured childhood,” since they don’t have to worry about getting into college or paying for it. OK, but that’s kind of a weird comment to put into an article about educational excellence. Somehow, lack of pressure to perform well is supposed to improve performance? I’m not seeing the connection. Nowhere does Gamerman explain how free college affects degree attainment rates or how it affects the value of a degree.

Gamerman mentions a 15-year-old that she suggests is gifted. When the girl is ahead of her peers in the classroom, “she sometimes doodles in her journal while waiting for others to catch up.” I wonder what the gifted yet active bodied boys do. I have at least two sons that often can’t seem to consistently sit around and quietly doodle in such situations. Although at least one of them is a spectacular doodler, these boys often get up, move around, chatter, and generally bother others. I’d like to see how Finnish teachers handle such cases.

While the Finnish teaching model is probably a great benefit (we know, for example, from research that if a child in American schools can get high quality teachers three years in a row before junior high school, they can exceed all of the other bad teaching put together), I wonder how much of the Finnish excellence is based in cultural factors that are not easily reproduced elsewhere.

By definition (per founding documents), the United States is a pluralistic society. Despite what others claim, the U.S. is the most culturally diverse nation on earth. We’re simply never going to have the kind of homogeneity they have in Finland. Nor do we generally believe such to be a virtue.

Parents can do a lot to increase their children’s responsibility level and to promote reading. But achieving some kind of wholesale cultural change in this direction would be a tall order and would probably include unacceptable levels of coercion.

Studying the Finnish model of education is a worthwhile pursuit. But we would do well to be careful to pull out those worthy elements that can feasibly be emulated and then try them out in pilot programs where they can be refined and improved. We can’t become Finland, nor should we try. But there are things we can learn from Finland that would improve American education without increasing its cost or expanding the power of the educrats.