Archive for April, 2010

The Cartel

Where does all the money we spend on schools go? And why do we continue to sink tens of thousands of dollars per student into a district school system that is clearly failing our kids?

Those are the questions that Bob Bowden, in the new tour through the house of horrors that is public school funding the US, The Cartel, opening Friday at the Chez Artiste here in Denver.  I was lucky enough to attend the press screening, courtesy of the Colorado League of Charter Schools, and there’s a reason they sponsored the screening.  The film is a powerful indictment of how our schools are funded, and the politics of how those funds are allocated.

The public schools and public school teachers in this country have unfathomable reservoirs of goodwill. I myself spent all but one year of my primary and secondary education in the northern Virginia public schools, and think they did a pretty good job. Up until recently, public schools routinely got capital building bonds they requested, and when polled, most Americans still don’t think we spend enough on schools. In large part, that’s because the teachers’ unions have done such a good job of equating teacher salary with overall school spending, when fact, it’s only a fraction of classroom spending.

But there are signs that some of that goodwill needs to be written down. The so-far successful campaign of New Jersey Governor Chris Christie to put a spotlight on the NJEA, the popularity of charter schools here in Colorado, as well as the progress of tenure reform through the state legislature, are all evidence that dissatisfaction is turning into action.

The reason for this is the administrative overhead and waste, high-paying jobs-for-the-boys attitude that pervades so much of public education. That money translates into highly politically-motivated teachers. Their influence in off-schedule, lightly-attended school board elections often means that they get to pick the people with whom they negotiate. (It’s that dynamic that the Democrats’ current financial reform efforts seek to replicate on national scale in private industry.)

Bowden also takes us through a number of thought experiments about keeping our children trapped in failing schools, comparing that modus operandi with some of the alternatives: vouchers, charter schools, and magnet schools. I don’t want to spoil the effect, but the charter school examination features a lottery that is truly heartbreaking, even as it’s hopeful.  Parents, whose kids are trapped in truly awful schools are forced to attend these lotteries because the demand for decent schools far outstrips the supply.  They react as though they believe that their children’s futures hang in the balance.

The reaction, obfuscations, and evasions of the head of the New Jersey Education Associate to all of this are both infuriating, and jaw-dropping in their condescension.

This isn’t to say the movie is flawless. There are a couple of occasions where the filmmakers put their thumb on the scales, asking us to assume that a firing or a failure to renew is a result solely or primarily of pressure from the teachers’ union. It’s not that that isn’t believable, it’s that when stories like that are believable that the greatest scrutiny is called for.

Bowdon also skirts the issue of teacher pay. One of the first misconceptions he takes on is the proportion of school spending that goes to teacher pay, and the widespread belief that more spending equals higher pay. Most citizens take it on faith that teachers are underpaid, but an increasing number of studies show teacher pay competitive with comparable private sector careers. Without a true market in teachers, and without effective means of evaluating them, fair pay remains an elusive concept.

From a technical level, the digital recording stutters enough to be distracting. Either digital still isn’t on the level of film, or this headache-inducing editing technique needs to stop.

But these are details.

While Colorado probably doesn’t have the worst excesses of New Jersey, that doesn’t mean the underlying dynamic doesn’t exist. This is, after all, a national problem. Towards the end of the film. Joe Williams of Democrats for Education Reform says, “I used to wonder not why parents weren’t protesting, but why they weren’t lighting fires and breaking windows.”

After you see The Cartel, you’ll wonder that, too. Especially if you’re a parent.

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Rich Sokol for South Metro Fire Board

A friend of mine, Rich Sokol, is running for the South Metro Denver Fire Board.  He’s a good man, a solid conservative, and deserves election in this non-partisan race.  Rich is an LPR grad, and came in to lecture our class about the inverse relationship between government spending and economic growth.  For most of the folks sitting there, it was an easy sell, but he presented the material so well that I think even skeptics would have given him a fair hearing.  Rich later repeated the performance for the Republican Small Business Association.

Turnout in these races is generally very low, meaning that a few hundred votes one way or the other can make the difference.  So if you happen to live in the district, you’d be doing a service to help Rich get elected.

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First, They Came For the Salt…

According to the Wall Street Journal, the Obama Administration wants to do for potato chips what the Bush Administration did for the incandescent light bulb:

Packaged food and restaurant meals may face federal limits on sodium, following a report Tuesday from the Institute of Medicine that said high-salt diets are putting Americans at risk of high blood pressure and heart disease.

The institute, an arm of the National Academy of Sciences whose findings have significant influence on health policy decisions, said the Food and Drug Administration should set mandatory national standards for sodium content.

But changing the formula of well-loved food products is a risk for manufacturers: Consumers could be put-off by a low-salt version that doesn’t taste the same as the original. The White House and the institute are encouraging the industry to cut sodium collectively, so no one maker is at a competitive disadvantage.

It’s good to know, I suppose, that the President has enough time in-between golfing outings, to worry about this sort of thing.  By the way, how’s that whole quitting smoking thing going?

But at another, it’s deeply disturbing, although increasingly typical, that the government feels the need to protect me from myself much of the time.  This isn’t fluoride in the water, or even iodine in the salt, both of which are tasteless ways of improving a product already out there.  I couldn’t add fluoride or iodine myself, even if I wanted to.  This is about making it illegal for me to buy Lay’s potato chips as they are currently made.  Because I can’t be trusted with them.

A friend of mine wanted to claim that it was Lay’s that couldn’t be trusted, but this is nonsense on stilts.  Otherwise, there wouldn’t be a need to go after the whole industry, “so no one maker is at a competitive disadvantage.”  Why would they be at a disadvantage?  They could make – and do make – low-salt snacks.  I suppose there’s a market segment there, and they make some money at it.  But people, given a choice, and they are given a choice, prefer higher-salt snacks.  So they must be protected from themselves.

Now, what’s the harm with wanting people to be healthier?  Nothing, I suppose, except that the history of the Food Pyramid, and now the inverted Food Pyramid, and what tomorrow will probably be the Food Hourglass, show that the government really has only the vaguest idea of what diet makes us healthier as individuals, and probably worse than none at all about what will make us healthier as a whole population, where one man’s salt is another man’s poison.

But look at the difference between the logic here, and the logic that was used to pass “health” “care” , excuse me, “insurance” “reform.”  In that case, we were (not) told, the government would have to make treatment decisions based on things like quality of life-adjusted years left to an individual.  No point in giving that care to someone who wouldn’t suffer as much, and certainly no point in extending one’s suffering, even if the alternative was feeling nothing at all.

In this case, we’re told, quality of life, i.e, the ability to eat tasty food, is at odds with merely living longer.  You’ll learn to enjoy eating food the way you’re told, but even if you don’t, at least you’ll be around to eat more of it.

What do they have in common?  It’s that you need someone – older and wiser – telling you what to do.  You’ll depend on them.

It may be a small thing, less salty potato chips, but it won’t end there.  They’ll be after Coke not merely to offer Diet Coke, which I prefer, but to alter Coke Classic’s formula altogether.  Only they’ll have to get Pepsi to go along so Coke isn’t at a competitive disadvantage.  They’ll start regulating the sugar content in sugary foods.  The fat content in those chips will have to come down, too, since that’s the real villain here.  Battalions of regulators will have to be hired to descend on restaurants to test their menus’ contents.

It’s not that healthier choices will be available where none were before.  It’s that the food that people prefer will simply disappear from shelves, like the corn chips on Super Bowl Sunday, in the picture.

Your life will be marginally poorer, but odds are, you won’t be any healthier for it.

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Yom Ha’Atzmaut

So, after a full day of remembrance of victims of actual war, fake war breaks out, the weapons being these little plastic squeaky hammers and silly string.  Someone’s going to suggest Judah Maccabee for the former, which leaves one searching in vain for one of his brothers, “The String.”  Other than leaving cities full of empty cans of the stuff, and the fact that the songs are all sung right-to-left, the holiday would be pretty familiar to Americans.

While the holiday is celebrated full-throated, time and a couple of decades of lefty propaganda have taken their toll, and one senses that the steely-eyed willingness to do whatever it took to assert a rightful claim to an ancestral homeland has been somewhat eroded.  So rather than Hatikvah, which you can find all over the place, I’ll post HaPalmach, the anthem of one of the militias that fought first the British, and then the Arabs, to help secure the country in 1948:

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Yom HaZikaron

This evening marks Israeli Memorial Day, or Yom HaZikaron.  It comes immediately before Israeli Independence Day, Yom HaAtzmaut, more about which tomorrow.  The two are essentially two sides of the same holiday, one of solemn remembrance of those who died to make the other possible.

I’ve only been in Israel once for those days, in 1996.  Israel under some bombardments from Katyushas in the north.  At that time, they couldn’t reach the Golan, so the hiking tour I had scheduled went on more or less as planned.  There would be periodic booms, the warm, friendly sound of outgoing artillery, and more sporadic booms with a little “crack” in them, the far less congenial sound of incoming.

At one point, the tour stopped at Castle Nimrod, a medieval fort on the Golan overlooking the whole of the Hula Valley.  (Formerly the Hula Swamp.)  It was a clear day, and we had a great view of Kiryat Shemona, Hezbollah’s prime target.  The residents were quite safe, underground or having fled, and I have to admit, the group spent as much time looking at the city for a rocket impact as looking at the castle.  I later confessed this to an Israeli friend of mine, who, realizing that I wasn’t actually firing the missiles, smiled and said something like, “Well, if it was going to hit anyway, you may as well see.”

The afternoon before Yom HaZikaron itself, I took the train down the coast from Haifa to Tel Aviv to stay with an American friend of mine and his girlfriend, now wife.  That evening, from their apartment, I heard a concert for the troops at the base in the middle of the city, in particular this song:

HaMilchama HaAchrona (Lyrics)

It’s the consummate Yom HaZikaron song, written just after the 1973 War, for which Israel bore the responsibility of unpreparedness, not of aggression or provocation, a father promising his daughter that this will be the Last War.  Of course, it was untrue in 1996, and is even more untrue now, making it all the more powerful as time passes.

The next day, I took the tourist train from Tel Aviv to Jerusalem.  The tradition on Yom HaZikaron is for air raid sirens to sound, and for pretty much all activity to come to a stop.  People stop in their tracks on the sidewalks.  Cars pull over and the drivers get out and stand.  Highway traffic stops.  If you’re buying lunch and haven’t gotten your change yet, too bad, you’ll have to wait a minute.  In my case, the train stopped, and everyone stood in the aisle.

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Inflation and Gold

Gold fanatics are of the opinion that the gold markets are predicting a massive run-up in inflation.  Their policy responses run from abandoning the Fed, to establishing competing currencies, to establishing gold as legal tender for debts, and are not mutually exclusive.  The problem is, the debt markets tell another story.

Since 2003, the US Treasury has offered 10-year TIPS, Treasury Inflation-Protected Securities, bills whose coupons is linked to inflation.  At a fairly simplistic level, but an internally consistent one, you can subtract the TIPS rate from the nominal 10-year Treasury rate to see how the markets are pricing 10-year inflation:

TIPS Inflation - Bavk to Normal

As you can see, from mid 2003 until late 2008, the market pretty consistently priced inflation at about 2.5%, and that’s about where it was most of the time.  Then, in late 2008, the world came to and end, and with the 2nd Great Contraction, the TIPS rate jumped up to the nominal rate, indicating that inflation was the least of anyone’s concern.  The last 16 months have seen a gradual return to historical averages for inflation.  But even as nominal rates have risen, the TIPS rates have kept pace, and the current implied inflation, 2.33% is at or slightly below historical averages.

Compare this to gold over the last few decades.  Here’s just over 40 years’ worth of gold price info: the current price, the CPI-adjusted price, and the CPI (1982=100):

Gold Gone Wild!  Sort of.

So much for gold as an infallible inflation hedge.  From 1983, prices march inexorably upwards, but I’ll wait until 2010 for the real price of gold to come back.  The quadrupling of gold’s real price from 1970 to 1975 doesn’t seem justified by the CPI, and while there’s a definite bump in the CPI in 1980, again, it doesn’t seem to justify gold’s move from $200 to $800.  Then, even as there’s another little bump in 1990, gold prices continue down.

Gold is a commodity, with its own price dynamic.  Fear can drive up the price, and people move to safety.  But gold can also be its own bubble, with inflation being the justification rather than the cause.  Like any other commodity, there’s supply and demand.  Gold bugs tend to focus on demand.  But…

I Owe, I Owe, so off to work I go

This is the world production of gold according to the USGS.  Now, we’ve seen declines in the production of gold before, so perhaps this isn’t “Peak Gold.”  In the early 1970s, coinciding with the run-up in prices from ’72-’75.   After 1980, production picks up in response to the bubble, and continues to rise until 1990 or so.  And then, from 1996 until 2010, production and price are almost inverse to each other.

If this is Peak Gold, if new veins aren’t as productive, and worldwide production will continue to fall, then that goes a long way towards explaining the recent run-up.

This doesn’t mean that inflation won’t happen, or that all’s right with the world.  The massive pile-up in federal debt is the sort of thing monetary catastrophe is made of.  And once a loss of confidence occurs, it usually happens more swiftly than imagined, even by most who expect it.  The credit markets can, and do, miss signals.  Perhaps they’re pricing in a higher likelihood of either default or punitive tax rates to make up for the unbearable entitlements we’ve loaded onto ourselves.  Or perhaps, more ominously,  they’re just not looking beyond the next couple of years, and since we can’t predict when the bottom falls out, there’s no point in trying.

But gold bugs can’t pick and choose signals, and right now, the credit markets just aren’t signaling, “Weimar 1923.”  A comprehensive theory has to encompass all the data.  The simplest answer is that the run-up in gold isn’t very much about inflation, but about simple supply and demand, with supply falling as much as demand picking up.

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The Power to Tax…

… is the power to attract Fortune 500 companies.  At least according to State Senator Chris Romer (click for Audio).

I don’t think you’ll get any more Fortune 500 companies until we lean to solve the Gordian Knot.  So sir, we are not gonna get what you want, until we learn to raise our taxes.  Bottom line.

At some level, it’s refreshing to hear Sen. Romer defending corporate welfare so vigorously.  But of course, that’s not really what he’s doing.  The Gordian Knot he refers to is the logjam of Amendment 23, the Gallagher Amendment (which apportions personal and corporate property taxes) and TABOR, which limits how much money the state can take in.  Amendment 23 requires increased spending on K-12, a sacrament for the left.

So next time, when you hear someone (read, Rep. Lois Court) referring to solving the Gordian Knot, you’ll know the code.  Having added dozens of programs, hundreds of employees, and hundreds of millions of dollars to the state budget over the last 6 years, they’ll talk about “solving the Gordian Knot” in order to avoid “sucking the marrow” out of the state government.

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Anything Goes

That, apparently, is the philosophy behind the Democrats’ bill, HB-1408,  for eviscerating the rules concerning Congressional redistricting.  Next year, after the 2010 Census and elections, Colorado will, like every other state, draw new congressional district boundaries.  In the past, with one notable exception I’ll discuss below, there have been certain statutory rules governing the drawing of those boundaries, describing what criteria the courts may or may not take into consideration. The Democrats’ bill would seek to repeal all of these statutory guidelines and replace them with..nothing.

In general courts could not use “non-neutral” factors such as “political party registration, political party election performance, and other factors that invite the court to speculate about the outcome of an election.”

Here are the “neutral” factors that courts could use, according to the relevant statute:

(I)             First, a good faith effort to achieve precise mathematical population equality between districts, justifying each variance, no matter how small, as required by the constitution of the United States. Each district shall consist of contiguous whole general election precincts.  Districts shall not overlap.

(II)            Second, compliance with the federal “Voting Rights Act of 1965”, in particular 42 U.S.C. sec. 1973;

(III)         Third, except when necessary to comply with subparagraph (I) or (II) of this paragraph (b), political subdivisions such as counties, cities, and towns shall be preserved intact and shall not be fragmented or dispersed across district lines. When applying this criterion, preservation of the most populous counties, cities, and towns shall take precedence. When county, city, or town boundaries are changed, adjustments, if any, in districts shall be as prescribed by law.

(IV)        Fourth, communities of interest, including ethnic, cultural, economic, trade area, geographic, and demographic factors, shall be preserved within a single district whenever possible. Traditional communities of interest in Colorado include the western slope and the eastern plains.

(V)          Fifth, each congressional district shall be as compact in area as possible, and the aggregate linear distance of all district boundaries shall be as short as possible; and

(VI)        Sixth, disruption of prior district lines shall be minimized.

Presumably, the Voting Rights Act would continue to apply, and despite the failure to capitalize “Constitution,” one assumes that the Democrats don’t want to introduce wild disparities in district populations. The courts will still be bound by federal law in drawing federal districts.  Those details aside, there are good, longstanding reasons for all of these exclusions and inclusions.

The absence of the additional restrictions would open the door to the sort of gerrymandering that characterizes Illinois:

It also makes intuitive sense that cities and towns should have the same Congressional representation, where possible.  In fact, they are merely a subset of (IV): communities of interest.  It makes sense that interests, rather than parties, should be represented is legislatures.  Citizens have interests.  They may be economic, ethnic, cultural, or social, but citizens are far more likely to think about them on a daily basis than they are to think about their party affiliation, if any.  Political parties may or may not be an expression of those interests, but are, at best, a secondary overlay on top of them.  If this weren’t true, “Unaffiliated” wouldn’t be our largest party non-identification in Colorado.

This may be a perfectly logical choice, for a party that sees interests as tools of political power, rather than parties as expressions of coalitions of interests, but I doubt that most people think that way.

But aside from the philosophy involved, it’s important not to lose sight of the mechanics.  Redistricting in Colorado is done by a tripartate commission from each of the branches of the government.  Two each (one from each party) from the House and Senate, three appointed by the Governor, and the last four appointed by Supreme Court’s Chief Justice.  If the commission can’t reach agreement, the District Court can impose a solution, as happened in 2002, when it adopted the Democratic plan for Colorado’s new 7th Congressional district.  Interestingly, the court specifically included “competitiveness” in its ruling, despite a specific statutory injunction against using party registration as a criterion. This bill aims to remove even that potential legal obstacle.

HB-1408 is directed to the courts, not the commission, implicitly anticipating gridlock there.  If this weren’t the case, the bill would remove any guidelines from the commission, as well.  I don’t think it goes too far to suggest that the strategy here is to repeat 2002, obstructing a solution and then getting the courts to adopt a partisan plan.

CORRECTION:  I am reminded by Matt Arnold that the reapportionment commission only applies to state legislative districts.  Congressional districts are redrawn by the General Assembly alone, without the governor or the courts.  Of course, this increases the chances for gridlock, but it also means that the composition of the Supreme Court will be less important in this regard, should this pass.  Similarly, it means that the composition of the legislature will be far, far more important.

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More on those Israeli Visas

The following is being cited by administration apologists as proof that Israeli nuclear scientists are not being denied visas:

QUESTION: Can I go back to Israel for a second – non nuclear? Well, actually it’s – actually it’s somewhat nuclear. There’s a report in an Israel newspaper that says that the U.S. is denying visas to Israeli nuclear scientists who want to come to the States. Can you say anything about that?

MR. CROWLEY: Without commenting on individual visa determinations which are governed by the Privacy Act, we continue to issue visas to Israeli scientists, including nuclear scientists, on a regular basis. We’ve actually improved processing times for visas for scientific exchanges with Israel. So there’s been – it has been suggested there’s been a policy change. There has not been a policy change. And we continue to support exchanges with the Israeli scientific and academic communities.

QUESTION: So this report is wrong?

MR. CROWLEY: To the extent the report is that we’ve stopped providing visas to Israeli scientists as a whole, that report is wrong.

This mis-states the problem. It’s not ‘Israeli scientists as a whole,” or even “Israeli nuclear scientists,” it’s Israeli nuclear scientists working at Dimona.  The former would be unmistakably a generalized academic and professional boycott.  The latter would be a specific, unmistakable message about Israel’s nuclear program.

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About That Nuclear Deterrent… (updated)

According to Ma’ariv, the administration is now denying visas to Israeli nuclear scientists associated with the Dimona research facility:

Israel’s Dimona nuclear reactor’s employees have told Israel’s Maariv daily that they have been having problems recently getting visas to the United States where they have for years attended seminars in  Chemistry, Physics and Nuclear Engineering. They also complain of being treated in an ‘insulting manner’ by President Obama’s people. Until recently, employees of the Nuclear Research Center routinely traveled to the United States for seminars and courses.

But reactor employees also complain of an American refusal to sell them reactor components that have routinely been sold to them by the United States.

At the same time, the administration is prepared to allow Turkey and Egypt hijack a conference aimed at nuclear non-proliferation to terrorists with demands that Israel sign the non-proliferation treaty.  Prime Minister Netanyahu has canceled a planned trip to Washington over the decision, apparently in violation of previous administration assurances (expiration date, April 8, 2010), with Deputy Prime Minister Dan Meridor leading the delegation instead.

Some of us have feared that the price of administration action against Iran’s nuclear program would be administration action against Israel’s.  The pretext for such a position would, of course, be garnering Islamic support for moves against Iran, as though the Arabs and Turkey weren’t equally worried about Iran getting a bomb.  Naturally, they see an opportunity to use administration disdain for Israel to score a major diplomatic victory.  Since an Iranian bomb would pose an existential threat to many of these regimes, they would seem to be gambling that 1) the administration will crack, and act against Iran even with Israel signing the NPT, or 2) that Israel will crack, and make its program open to international inspection.

UPDATE: The White House is denying that there has been a change in visa policy.  Value White House denials accordingly.

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