Was the subject assigned to me for my “Tea Lecture” to congressional staffers last week. The lecture is one of a series being sponsored by Ron Paul’s office. The true story of the Fed’s origins needs to be more widely known, so please do pass it on!
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A Soft Surrender to Low Expectations
There is a problem in the school choice community … let’s call it a soft surrender to low expectations.
We are witnessing a race to the bottom on education policy, and the latest case comes from my own state of Virginia. The legislature passed an education tax credit program this week, soon to be signed by the Governor, which means I should be celebrating. Unfortunately, the Virginia tax credit program is a mockery of education reform.
I will lay out my basic list of criticisms, which include some of the program’s inadequacies along with its grave debilitations. Read more here.
- It is a 65% credit, which is terrible policy and will cripple the program (see more on this issue).
- It places the program administration and control, including approval of SOs and schools under the state DOE rather than the proper authority for administering a tax credit program, the Dpt. of Revenue.
- It exempts the DOE from the Administrative Process Act, which provides for appeal and review of decisions, and explicitly states that all decisions by the DOE and Superintendent are “final and not subject to review or appeal.” In other words, they have been given a blank check of regulatory authority over the program and schools.
- The bill will force schools to collect and report detailed student information to the DOE.
- The cap is only $25 million, and has no growth provision.
- No personal-use credits so that families can use their own money for their own children … they must beg for charity if they are eligible.
- No homeschooling or non-traditional education.
- And the kicker … the whole thing sunsets in 2018, five years from now (see section 58.1–439.26 A, “beginning on or after January 1, 2013, but before January 1, 2018 …”).
I would celebrate the last provision, a sunset clause, as a chance for Virginia to get it right the second time, if not for the much greater probability that the looming demise of the program will enable choice opponents to make the program even worse in trade for a stay of execution.
If we will accept this, we will accept anything. It will not do what we expect or need in terms of expanding choice and freedom, and the hope that it will be appreciably improved in the next five years is slim at best.
Often, when I insist on higher standards in school choice policy, I am told that we must voice support because it will help some children now. Few seem to consider the hundreds of thousands of children who will not be helped in decades to come, indeed may well be harmed, because of this inadequate policy. Opportunity costs must be considered. All the children yet to be born must play into our utilitarian calculus if that is the measure we use to judge public policy.
And we should not pretend that obviously inadequate programs are bold reforms; it only serves to encourage yet more inadequate policy. We should push the conversation and educate leaders and citizens about real reform. Instead, the issue of school choice will be set aside for at least four years, as politicians point to their “accomplishment” that will help so few and provide no foundation for future reform. A roadblock to real education reform has just been passed in Virginia, and it is labeled SB 131.
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New at Libertarianism.org
From the ongoing new and interesting stuff appearing at Libertarianism.org:
- The philosopher J. C. Lester joined us as a guest blogger. He’s put up four posts so far, all explaining his theory of “critical-rationalist libertarianism,” which draws on the thinking of Karl Popper to argue that it is epistemologically impossible to justify theories. “One can only admit that libertarianism is a conjecture and deal with criticisms of it,” Lester writes. Lester’s writing brought responses from the Libertarianism.org bloggers: John Samples, Jason Kuznicki, and me.
- David Boaz wrote his first blog post at Libertarianism.org, arguing for the reality–and recognition–of moral progress.
- George H. Smith posted a new Excursions essay, part of his series on the intellectual roots of state education. This time, Smith turned to the views of Plato’s most famous student.
- Jonathan Blanks published a controversial essay, “Why ‘Libertarian’ Defenses of the Confederacy and ‘States’ Rights’ are Incoherent,” as well as a lengthy response to his critics.
We also released two new videos this week, featuring Gene Burns on the nature and role of government and Gerald O’Driscoll on order and organization in society.
As always, you can stay up to date with everything going on at Libertarianism.org by following us on Twitter or Facebook.
James Q. Wilson on Crime and Drugs
James Q. Wilson, the prominent scholar on political science and crime, has died. His most well-known work was an essay that he co-published with George Kelling in the Atlantic, “Broken Windows” (which is not to be confused with the broken windows fallacy that is so well known in libertarian circles). The gist of that article was that our social order can be pretty fragile. If a broken window is not promptly repaired/replaced, the other windows of that building will soon be intentionally broken–and if nothing is done about that, the neighborhood might well spiral downward and will soon be regarded as a lousy area. The article is now a classic. In my opinion, it was his best work.
Dr. Wilson wrote on a wide range of subjects, but I am most familiar with his writings in the criminal law field. He was a neoconservative — so it will not surprise anyone that I found his record to be mixed. He skewered the liberal ideas that (1) poverty “causes” crime and (2) that prisons are passé. And he cautioned policymakers bent on more gun control laws, pointing to the growing body of evidence that armed citizens thwart a lot of criminal mayhem.
But then there was his approach to drug policy. When Bill Bennett needed academic support or intellectual guidance, he seemed to turn to James Q. Wilson, who, before the creation of the drug czar’s office, called for the creation of the Drug Enforcement Agency in the Nixon period. Like many of the zealots who pushed for alcohol prohibition, he saw the police effort against drug use as a moral crusade: “[D]rug use is wrong because it is immoral and it is immoral because it enslaves the mind and destroys the soul.” For years and years, he championed the conservative program of more police, more prosecutors, more prisons, stiffer penalties. Despite the escalation, drugs remain readily available. And the gang violence–especially in Mexico–is getting worse.
Dr. Wilson was also a big proponent of police “stop and frisk” tactics–the idea that cops should stop pedestrians in the city and frisk them for weapons. For white, middle-class Americans, think about having to endure a TSA airport search on your trips to the grocery store or on your commute to work! (For background, go here and here.)
I never met Dr. Wilson in person, but we spoke several times on the phone after he accepted my invitation to prepare an essay for my book, In the Name of Justice (2009). He was a gentleman-scholar who influenced many.
Why Do People Detest Jury Duty? (Hint: It’s Compulsory)
Several bloggers have been kicking around the question of why people so often dislike serving on juries even though it’s educational, a potentially valuable civic contribution, a break from routine, a chance to get reading done, and so forth. Matt Yglesias got the ball rolling at Slate by wondering why others don’t share his happiness at being called and Josh Barro, Stephen Bainbridge, Glenn Reynolds, and many Andrew Sullivan readers have been glad to enlighten him. (Hint: the process is compulsory.)
I wrote about the question some time back at Reason:
When they move from room to room, they go as a group, escorted by men in uniform,” writes Stephen Adler of his subjects. “They are supposed to follow directions, ask no questions, make no demands.” In cases where their captivity is prolonged, some suffer serious financial losses, while others are unable to nurse an ailing spouse or fly to a loved one’s deathbed. “It was the closest I’ve ever been to being in jail,” one woman said.
Such can be the experience of those called to serve on that reputedly all-powerful body, the jury. For many of us, no doubt, the potential excitement of acting a part in a real courtroom drama outweighs any indignation at the compulsory aspect of the adventure. Still, jury duty helps point up one of our legal system’s less endearing features: its penchant for casually inflicting the kind of harms for which it would demand the most stringent punishment were they to be inflicted by anyone else.
Whole thing here.
Tim Geithner’s Amnesia
In case you missed Treasury Secretary Tim Geithner’s revisionist fiction in today’s Wall Street Journal, he takes the critics of Dodd-Frank to task for forgetting about the financial crisis and how it came about. Sadly it is Geithner who forgets (or willfully ignores) the causes of the crisis. Just a few highlights:
Geithner reminds us of the AIG bailout. He forgets that it was the NY Fed’s approval of using credit default swaps to lower bank capital that lead to so much bank counter-party risk being concentrated in AIG (see Gillian Tett’s Fool’s Gold), as well as increasing bank leverage. But then who was heading the NY Fed at this time? Tim Geithner.
Mr. Geithner goes on to complain about the growth of the shadow banking sector. Who was it that approved banks’ exemption from the Sarbanes-Oxley rules on off-budget entities, which lead to the growth of various bank off-budget, hidden liabilities? Again, Geithner’s NY Fed gave that approval.
Geithner raises the issue of “risky short-term financing” but does so without mentioning that the primary reason for such was the low interest rates and steep yield curve created by… again Geithner’s NY Fed (and the rest of the Federal Reserve System). There’s a reason that MF Global failed in basically the same way that Bear Stearns did, because monetary policy provided both with strong incentives for maturity mismatch. But since Geithner also acts shocked that “household debt rose to an alarming 130% of income” perhaps he needs a few lessons in monetary policy. Did he seriously not think that cheap credit, via the Fed, would result in increased debt?
Perhaps all this amnesia should not be surprising coming from the same guy who told Congress he had never been a bank regulator. He certainly never acted like one, despite the title of NY Fed President. The real amnesia is that despite about two decades of engineering one bank rescue after another, beginning with his role in the peso crisis, Mr. Geithner still does not understand the concept of moral hazard. When he complains about late night calls from “then giants of our financial system” I, for one, wish he had just stayed in bed. Would have saved us all a lot of money and we’d have a much more stable financial system.
I have no sympathy for bankers afraid to lose their subsidies. What our financial system needs is a dose of real market discipline. Mr. Geithner’s rants only serve to distract from the fact that Dodd-Frank will make the next crisis more severe and more likely. It fails to address the actual causes of the crisis while further extending the worst features of our regulatory system. Worst of all it distracts from having a conversation about fixing this system. Repeal and Replace.
Common Core Supporter: Maybe Opposition Not Paranoia
Two years ago Fordham Institute President Chester Finn called people like me, who saw the move toward national curriculum standards as a huge lurch toward federal control, “paranoid.” Well it looks like he might be catching a little of the paranoia, too. Or, at least, while still calling Common Core adoption “voluntary,” he recognizes that the Obama Administration keeps on proving that the paranoiacs aren’t really all that crazy:
Sixth, and closely related to the blurring of national with federal is the expectation that Uncle Sam won’t be able to keep his hands off the Common Core—which means the whole enterprise will be politicized, corrupted and turned from national/voluntary into federal/coercive. This is probably the strongest objection to the Common Core and, alas, it’s probably the most valid, thanks in large measure to our over-zealous Education Secretary and the President he serves.
Let’s face it. Three major actions by the Obama administration have tended to envelop the Common Core in a cozy federal embrace, as have some ill-advised (but probably intentional) remarks by Messrs. Duncan and Obama that imply greater coziness to follow.
There was the fiscal “incentive” in Race to the Top for states to adopt the Common Core as evidence of their seriousness about raising academic standards.
Then there’s today’s “incentive,” built into the NCLB waiver process, for states to adopt the Common Core as exactly the same sort of evidence.
(In both cases, strictly speaking, states could supply other evidence. But there’s a lot of winking going on.)
The third federal entanglement was the Education Department’s grants to two consortia of states to develop new Common Core-aligned assessments, which came with various requirements and strings set by Secretary Duncan’s team.
This trifecta of actual events is problematic in its own right, not because the federal government is evil but because Washington has become so partisan and politicized and because of angst and suspicion that linger from failed efforts during the 1990’s to generate national standards and tests via federal action.
What’s truly energized the Common Core’s enemies, however, has been a series of ex cathedra comments by President Obama and Secretary Duncan. Most recently, the Education Secretary excoriated South Carolina for even contemplating a withdrawal from the Common Core. Previously, the President indicated that state eligibility for Title I dollars, post-ESEA reauthorization, would hinge on adoption of the Common Core. Talking with the governors about NCLB waivers earlier this week, he stated that “if you’re willing to set, higher, more honest standards then we will give you more flexibility to meet those standards.” I don’t know whether he winked. But everybody knew what standards he was talking about.
It will, of course, be ironic as well as unfortunate if the Common Core ends up in the dustbin of history as a result of actions and comments by its supporters. But in March 2012 there can be little doubt that the strongest weapons in the arsenal of its enemies are those that they have supplied.
When what someone predicted actually occurs, it’s a lot harder to assume him delusional. It’s more accurate to call him “right.” And on national standards, even supporters are starting realize that Common Core opponents have been right all along.