Month: December 2011

Control Cometh Before the Fall of Education

The desire to be in charge is as human as pride. It’s easy to see it in others. We scoff at arrogant, controlling dictators. We criticize parents who use guilt to influence their grown-up children. We commiserate about friends who manipulate others to get what they want.

Yet, when it comes to politics, we tend to think our leaders must have some unusually evil intention when they pass laws that conflict with our values. But politicians are just people. The consequences of their human defects, because of their position and power, just reach farther.

People often try to control others because they think they know what’s best. Their intentions feel like love, though they may really be driven by fear or distrust. Similarly, most individuals in power whom I’ve gotten to know genuinely feel that by controlling others they are helping people and making the world better. It’s a proud presumption, as familiar as that feeling of superiority we all experience when passing judgment on others for their choices.

The presumption says: “I can make better choices for you than you can make for yourself.” Whether or not that is true, only the government―not overbearing relatives or unpleasant friends―truly has the power to enforce its choices. And nowhere are issues of government control more contentious―and the consequences far-reaching―than in children’s education.

Education policy affects every child, and all sides of the debate trumpet kids’ interests as the heart behind their cause. And most sides believe it. With parents, the argument tends to orbit around values, that is, whose values should be taught in public schools. This struggle to decide whose values should be taught can be seen in states as different as Texas and California.

Rather than controlling how others’ children should be taught, those decisions should be removed from the political realm and returned where they belong―with the family. Each parent should be able to choose a school that offers the kind of education they want for their kids. That is the beauty of “school choice.”

Arguments for school choice usually focus on how empowering parents through education scholarships or vouchers, tax credits, and digital learning programs create scientifically proven gains in math, science, and reading. But its most virtuous effect is on human dignity.

School choice is the only means by which society can respect parents’ rights to raise their children. Parents have a natural right to raise their kids according to their values and to shelter them from an overwhelming barrage of bureaucratic mandates and politically sanctioned value systems. Likewise, school choice is the only means of reform which gives harbor to teachers and school administrators from that same hurricane of red tape that keeps so many of them from fully channeling their talents and passions to prepare kids for life.

The argument I most consistently hear from opponents of school choice is that many parents are unable to make good decisions for their kids. Thus, the most vulnerable children will suffer. However, this argument has been proven wrong in empirical studies that show regular public schools improve with vouchers that allow kids to attend private schools. Yet, that is not why we should support school choice. We should support school choice because we respect freedom itself. We should support school choice because we respect the rights of parents to do their best for their kids.

Those who fear that school choice will leave vulnerable children more vulnerable shouldn’t in the name of love or compassion empower the state to curtail parents’ ability to choose. Rather than cater to our natural arrogance and wrongly call it “loving our neighbors,” why not instead practice real love? Real love demands freedom to choose to love and to sacrifice. If you see something wrong, go out and change it through human relationships―by loving your neighbors, not by stealing their liberties. Talk to your neighbor’s kids. Volunteer to tutor a friend of your family. Support parents who are struggling. Change the hearts and minds of those close to you with the sweat of your brow, not with the cold impersonal hand of government regulations.

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Turn out the Lights

Now that the Dear Leader of the Democratic People’s Republic of Korea (aka North Korea) has left this earth, it is up to the Great Successor (aka the Dear Leader’s youngest, inexperienced son) to carry on his legacy.

Rumor has it that the Great Successor’s first command was that all lights in the hermit kingdom be extinguished every evening at sunset for the indefinite future in honor of his dead father.

Don’t believe it? Check out the satellite photos that show South Korea ablaze with progress-shining lights while the North is almost totally dark. But, you say, these photos are years old? Yes, and that just confirms how brilliant the boy leader is. He commanded darkness in honor of his father years before this demigod was no more.

One theory is that the North is not really dark at night; it is just that they can only afford 25-watt bulbs, which are too dim to be seen from space. If this is true, the U.S. Congress might take note. Rather than argue over effectively banning incandescent light bulbs here, it might instead simply mandate no bulbs over 25 watts. Same result, and we get to look dark from space, too. How’s that for saving the planet while punishing the one percent who could afford those wasteful 100 watters? The Dear Leader would be proud of us.

In any case, everyone at Cascade Policy Institute wishes you a Happy, hopefully bright New Year.

Steve Buckstein is Senior Policy Analyst and Founder of Cascade Policy Institute, Oregon’s free market public policy research organization. He is also, occasionally, its Satirist-in-residence.

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Secret Santas Light a Candle at Christmas

Struggling parents with children’s clothing and toys on layaway are finding that anonymous strangers have paid their balances down to a penny at Kmart and other stores across the country. Retailers have known “Secret Santas” for years, but this Christmas season appears to be different.

According to the Frederick News Post in Maryland, a local manager said, “I’ve been in management here nine years, and we had one or two each year. This year we had 16 or 17 in just the past few days. The need is really there and people are helping out.”

A Maryland Secret Santa said a clerk told her people had been coming in all day. “It was a great feeling to see it wasn’t just me,” she said.

Some parents who were told their balances had been paid cried tears of joy and gratitude.

People who make others’ lives a little better know how the first Santa Claus must have felt. Saint Nicholas was a fourth-century bishop who used his inheritance to anonymously help children and families in need. This reputation led to his being associated with surprise gifts at Christmas.

“With all the bad news we see,” said the Frederick Kmart manager, “it is great to see something good happening.”

At Christmas and every other time of year, let’s each find our own way to light one candle rather than to curse the darkness.

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Night of a Thousand Laughs

Come laugh; it’s for the children!

Join State Representative Matt Wingard and three Northwest comedians for “A Night of a Thousand Laughs,” Saturday, February 4, 2012 at 7 p.m. at the Wilsonville Holiday Inn.

Proceeds from the dinner and comedy show support the Liberi Foundation, dedicated to helping vulnerable children by identifying and supporting charities that directly serve them.

The Liberi Foundation has identified three outstanding metropolitan-area charities that provide opportunities to children in foster care, those with incarcerated parents, and low-income children who wish to attend a private school. Through scholarships, mentoring and love, these charities work to improve the lives of our most disadvantaged children. All the foundations operate at little or no administrative cost.

Cascade’s Children’s Scholarship Fund-Portland is one of the charities to benefit from the comedy evening, so come have a laugh!

Visit the Liberi Foundation online for more information or click on the PayPal link below to purchase tickets.


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Taking Work Personally: How Individual Accounts Reward Personal Responsibility

Recently, I had a long conversation with an owner of a bakery near Medford, Oregon. He told me of the problems his company faced due to the disincentives inherent in Oregon’s unemployment insurance system. Two years ago, in the middle of the recession, this entrepreneur offered a job to a man who promptly responded that he would not be able to start work for another month. Why? Because his unemployment benefits did not run out until then.

This example is one of the more troubling stories I’ve heard about the problems created by unemployment insurance. Most are less dramatic. A friend of mine only applied for highly competitive jobs she knew she had little chance of getting. She really preferred to stay on benefits. She was expecting her child to be born soon, and it didn’t make sense to start a new job, particularly since her husband was gainfully employed.

Peer reviewed research shows that people receiving unemployment benefits commonly take longer to find a job. Unemployed workers who receive benefits take more than twice the time to find a job than those who do not. The instances of recipients finding a job increase strikingly just before UI benefits are exhausted (see graph below). That doesn’t mean individuals who use unemployment benefits are dishonest, lazy, or bad. It does mean that incentives and logic play roles in their job searches. A new job is not only work, but it is full of risks and uncertainty. In some cases, a new job may pay less than unemployment benefits.

Unemployment benefits come with certain requirements precisely because of these incentive issues. Workers must actively search for work and accept appropriate full-time employment. However, requirements are frequently ignored or misunderstood. A U.S. Department of Labor report showed overpayments in unemployment benefits across the nation amount to almost $19 billion in waste. Beating the national average of 11%, Oregon overpaid an estimated $392 million over the last three years―about 12.2% of all state unemployment benefits paid during that period, according to the Labor Department. About one third of overpayments involved workers receiving benefits when ineligible because they were not available for work or because they failed their work search requirements.

The Labor Department’s report only examined the improper payments within state programs, which usually last up to 26 weeks. These figures do not include federal unemployment benefit extensions that currently allow many workers to claim up to 99 weeks (almost two years) of benefits.

So what’s the solution?

Chile’s unemployment insurance savings accounts have cut back on the disincentives that slow the job search for many who receive unemployment benefits. Chile’s workers and employers pay a portion of wages into Unemployment Insurance Savings Accounts. Each worker has his or her own account. When a worker becomes unemployed for any reason (even if it is voluntary), he or she may draw 30-50% of the previous wage for up to five months from the personal unemployment account. Workers who are laid off with small account balances receive help from a more traditional unemployment insurance safety net. At the end of their careers, workers may keep any balance in their unemployment accounts for use in retirement.

Chile’s experience demonstrates that these accounts offer an improved safety net that also improves some of the disincentives within the U.S. system. The personal accounts system motivates workers to return to work faster so they can have more money upon retirement. Chile’s system also broadens the pool of eligible recipients, since workers own their personal accounts. That means workers who cannot accept full-time employment (like a working mother or student) and workers who quit their jobs for personal or professional reasons (who are not covered under our system) would have some limited coverage under Chile’s system. This system may not solve all overpayment problems, but it would prevent a significant portion of overpayments, since ultimately workers are first paid from their own accounts.

One recent state-specific study (commissioned by Cascade Policy Institute) by economists Stéphane Pallage and Christian Zimmerman showed that switching to a system similar to Chile’s unemployment accounts system would benefit 97% of Oregonians. Even those who are most likely to be unemployed or most likely to have empty personal accounts would benefit from the switch. According to the economic model used, such a system would decrease the unemployment component of payroll taxes while improving outcomes for nearly everyone.

Oregon’s unemployment insurance system is rife with waste because it promotes longer unemployment and has inordinately high overpayment rates. Unemployment accounts would be a huge step in the right direction, improving incentives and rewarding hard work and personal responsibility while still maintaining the safety net that most Americans have grown accustomed to.

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Save the Mail! – Delivery to Slow as Debt Crisis Looms

I read with a tinge of dismay that the U.S. Postal Service is proposing to slow first-class mail delivery to avert impending bankruptcy. A letter-writer who enjoys reading periodicals I get in the mail, I don’t believe the age of hard copy is ended. Delivery of printed materials likely will continue to be a valued service.

But the Postal Service is a classic case of problems with monopoly service providers. The Postal Service has struggled for years to deal with decreasing mail volume and a growing debt that has reached $14 billion this year.

This―even though no other service provider is allowed to compete with the Postal Service for regular first-class or standard mail delivery. No private entity is permitted to offer faster delivery or mail on Saturdays.

Congress’s power “to establish post offices and post roads” is granted by the Constitution (Article 1, Section 8), but the implementation of that power has gradually expanded. Until the late 1800s, independent local companies and letter carriers were involved in delivering mail. It wasn’t until 1872 that local carriers were banned and the federal Post Office gained a complete monopoly over every aspect of what we now call first-class and standard mail delivery.

In the age of electronic technology, protectionism can’t save a monopoly. Government-run mail delivery needs a viable business model just like private industries. Otherwise, it will continue to lose market share and to suffer from its own inefficiencies and union workforce issues. The lesson to take away is that even the Post Office has to compete to succeed. If it doesn’t innovate, cut costs, cover its costs, and expand its business, it will lose out to alternative electronic options. The losers will be its remaining customers who still want their mail on time.

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To Save the Library, Don’t Leave Good Ideas on the Shelf

Sometime in the next three months, the Multnomah County commissioners will decide whether to place on the May ballot a measure creating a new taxing district for the county library system. If approved, this would become the chief source of tax support for the district, replacing the five-year operating levies that have been the norm since 1990.

However, before commissioners spend too much time debating the measure, they should back up and ask how much money the library system really needs. There are several indications that the costs of operation are too high.

The most troubling sign is the comparison with other medium-sized urban libraries. The Multnomah County system includes 18 branches, and we spent $62 million to operate it in fiscal year 2010-11. Denver has 22 branches and spent only $30.9 million. How does Denver operate more branches at half the cost?

Seattle has 27 branches that the city operates on a $50 million budget, while Minneapolis has 40 branches with a $69 million budget.

Not only are Multnomah County costs high in comparison, they are rising at a rate much faster than inflation. For example, in 1993-94 the annual library operating budget was $19.5 million, which supported 325 full-time equivalent (FTE) positions (roughly $60,000 per FTE). In today’s dollars, that would equate to $92,000 per FTE, all else being equal. Yet in 2010-11 we spent $127,000 per FTE.

There has to be some fiscal restraint even for services we love. But in traditional public sector collective bargaining, restraint is virtually impossible. Management represents a government monopoly, and across the table is a labor cartel (otherwise known as a union). A monopoly negotiating with a cartel is unlikely to result in a low-cost outcome.

The solution is to shop around and take multiple bids. Jackson County, Oregon shut down its library system in 2006 due to financial strain. As soon as officials were in a position to consider reopening, the county took competitive bids for operations. A private firm in Maryland, Library Systems and Services, offered a bid several million dollars lower than the public employee union. That bid was accepted and allowed the county to open the library system again.

LSSI operates library systems in 17 locations around the United States. By specializing, it is able to offer a better user experience at a lower cost.

Library purists may be hesitant to embrace this model, but it’s commonplace in other sectors of the economy. Timberline Lodge, Crater Lake Lodge and the Oregon Garden are all operated by private concessionaires. Central Park in New York and Portland’s Pioneer Courthouse Square are both managed by private non-profits.

As part of its due diligence, Multnomah County’s Board of Commissioners should compare the cost of our library system with the cost of libraries in other similar cities, then seek competitive bids for operation. The bidding process will provide valuable information that can never be gained by mere study. That information is essential for sound management decisions.

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New Oregon Law Okays Pocketing Other People’s Money

Even the most casual football-watcher has to have noticed the eye-catching ads run by a Fortune 100 company featuring small, courteous things done for others. The commercials portray people making split-second decisions to help someone or to fix a problem they didn’t cause. The ads end with: “Every day, millions of people choose to do the right thing,” and the tag line, “Responsibility―what’s your policy?”

The ads’ impact lies in an appeal to the obvious. You know what’s right, and you do it! Most people in America do what’s right every day.

It makes you happy to think about, doesn’t it?

What if people stopped doing the right thing, or it ceased to be socially and/or legally expected that most people do the right thing?

Things like returning what doesn’t belong to you―bills that flew out of someone’s wallet in front of you at a coffee counter, a package left on your porch that belongs three doors up, items for which you mistakenly weren’t charged at the store―or the state of Oregon’s overpayment on an unemployment check.

According to a November 8 article by Richard Read in The Oregonian, an Oregon state law passed in 2011 exempts some people who have received overpayments on their unemployment compensation from having to return the money.

In Oregon, state unemployment payment errors in the last three years alone add up to $392 million in lost unemployment insurance funds. This is $392 million paid to Oregonians who were not qualified to receive it, that could have been available today to pay other, qualified jobless Oregonians.

The unemployment insurance (UI) system is currently designed to pay new claimants as fast as possible, sometimes before having full information about their eligibility. The new overpayment waiver is meant for people who did not intend to claim benefits they were in fact not entitled to, rather than for those who commit fraud. But waiving the expectation that people return money that isn’t theirs (through deductions from their future benefits) undercuts a culture of responsibility and adds―however incrementally―to a culture of doing whatever you can get away with and pocketing the change.

From tracking down the owner of a wallet full of credit cards to teaching a younger person the importance of honesty, choices we make every day create the society we live in. The Oregon Employment Department should be held accountable for the hundreds of millions of dollars it has lost―money entrusted to it by employers and employees who pay for the UI safety net for qualified jobless Oregonians. The legislature should repeal the new UI overpayment law in the 2012 special session and focus on fixing an Employment Department missing almost $400 million in wrongly paid UI funds. Oregon needs both a more responsible Employment Department and citizens who still choose to do the right thing.

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Blended Learning: Making Technology Work for Students

In the Nation’s Digital Learning Report Card, Oregon received great marks for our state’s full-time online programs and access to blended learning in Oregon’s public charter schools. Oregon received low marks in the national Report Card for failing to make online classes available to public school students on a course-by-course basis. Oregon has also failed to incorporate blended (or hybrid) learning on any notable scale.

In a blended learning environment, “[S]tudents can learn in an online or computer-based environment part of the day and in traditional classroom, even one-on-one tutoring, for part of the day – essentially the best of both worlds combined into one education.” There are many exciting examples of how this is working in classes around our nation.

This video shows the incredible opportunity that most of Oregon’s students are missing out on. Hopefully, such opportunities soon will be coming to a classroom near you:

The Fundamentals of Blended Learning from Education Elements on Vimeo.

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The Postman Winked and Chirped

No more next-day first class mail delivery? This is just the latest sign of an American institution that is quickly outliving its usefulness.

People within and outside the U.S. Postal Service saw the changes coming back in the mid-1990s. In 1995, then Postmaster General Marvin Runyon foresaw the future but didn’t get it quite right. He penned a column for Insight Magazine entitled “Postal Future Is in the E-mail” (Sept. 25). Trying to justify the post office’s existence in the year 2010, he simply confirmed how out of touch government bureaucrats can be. His scenario had a future business person “opening his computer” which “winked and chirped,” showing him “how to get his message into the postal system.” It would be delivered quickly to the post office near the recipient, then printed out and delivered by a postman the next day. The next day, rather than the next minute. Mr. Runyon apparently didn’t understand that the computer was invented in part to get our messages out of the slow postal system and onto the fast Internet, all the way from sender to recipient.

After eight paragraphs trying to convince us that his government agency had a future, he inadvertently stated the obvious. The greatest innovation by the year 2010 in his view: “Post office lines will be a thing of the past.” While there are still long lines in 2011, especially during the holiday season, he eventually will be proven right since you can’t have lines forming in front of counters in an agency that has been replaced by competitive, Internet-based alternatives.

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