Congressman George Miller (D‑CA) is at it again, publishing a letter in the New York Times Saturday implying that the Student Aid and Fiscal Responsibility Act — which is, thankfully, languishing in the Senate right now — would save taxpayers $87 billion over ten years. 

Quite the opposite: The bill would almost certainly cost taxpayers additional tens-of-billions, not save money. But that doesn’t seem to deter Miller. Unfortunately, neither does the galactic national debt, nor that people appear to have had it with seemingly incessant expansion of federal power.

Having fisked Newt Gingrich’s and John Goodman’s “best” health care reform ideas, I probably should do the same for Minnesota Gov. Tim Pawlenty’s similar oped in the Washington Post. Pawlenty makes five recommendations:

1. “Incentivize patients to be smart consumers.” Setting aside his use of the grating word incentivize (down with suffix creep!), Pawlenty is on the right track. But he’s so vague as to leave (himself?) room for mischief. “Make quality and costs more transparent”? “Incentivize smarter health-care decisions”? A pol could claim to be doing those things while falling far short of what he should be doing: letting Americans — rather than employers or government — control their health care dollars and choose their own health plan. If that’s what Pawlenty means, heck, say it.
2. “Congress should pass reforms that allow people to stop paying for procedures and start paying for results.” Pawlenty appears to think government should find the “right” payment system, rather than allow for competition between different ways of paying health care providers — between fee-for-service, capitation, and everything in between. Such competition promotes all dimensions of quality. Government isn’t equipped to define and pay for performance, and bad things happen when it tries.
3. “Liability reform.” To recap: federal limits on med mal liability unconstitutional; Republicans unprincipled.
4. “Interstate health-care insurance.” Pawlenty doesn’t seem to get that the point of letting individuals and employers purchase health insurance across state lines is to force regulators to compete. His “interstate purchasing pool with strict standards” idea makes it sound like he doesn’t get it.
5. “Modernize health insurance.” Again, with the vagueness. If Pawlenty means he wants to let individuals control their health care dollars and choose their own health insurance — see here for how — then terrific. But when he recommends that we should “make health insurance transferable so employees can keep their coverage if they switch jobs” and “prohibit insurance companies from discriminating against individuals whose preexisting conditions were covered under insurance they lost through no fault of their own,” it sounds like he thinks regulation is the solution.

The U.S. remains stuck in Iraq, as the country moves toward a potentially messy and not so democratic (lots of disqualified parliamentary candidates, etc.) election. Iran’s refusal to back away from its nuclear program has intensified calls for an American military strike — which, Sarah Palin assures, would even help the president politically. North Korea unsurprisingly is showing reluctance to rejoin international talks over its nuclear program: renewed proposals for a U.S. military build-up in South Korea and even war against the North are likely to follow. And then there is Afghanistan.

Even though President Barack Obama talks about deadlines and drawdowns, there is little in present policy to suggest that the U.S. will be able to leave Afghanistan in even the mid-term. Afghan President Hamid Karzai certainly doesn’t think so. He figures on U.S. military support for at least another decade, with continuing international financial support for years after that.

Reports the Associated Press:

Afghan President Hamid Karzai warned Thursday that foreign troops must stay in his country for another decade, as world powers agreed on an exit map including a plan to persuade Taliban fighters to disarm in exchange for jobs and homes.Divisions emerged between the U.S. and its partners over Kabul’s willingness to offer peace to Taliban leaders who once harbored al-Qaida, instead of the more limited deal for lower-ranking fighters emphasized by the Americans.

All agree that reconciliation means bringing on board what Mark Sedwill, NATO’s newly appointed civilian chief in Afghanistan, called “some pretty unsavory characters.”

The conference was called to help the U.S. and its allies find a way out of the grinding Afghan war amid rising U.S. and NATO casualties and falling public support. NATO has agreed to accelerate the training of Afghan security forces and gradually transfer more combat responsibility to them.

“With regard to training and equipping the Afghan security forces, five to 10 years will be enough,” Karzai told the BBC. “With regard to sustaining them until Afghanistan is financially able to provide for our forces, the time will be extended to 10 to 15 years.”

It sounds a bit like the Afghan equivalent of the Eagles’ Hotel California. Defeat or bribe the Taliban and keep Karzai in power, and we will have “won” — but we still won’t be able to leave. And the Afghan government, assuming it achieves a modicum of honest competence, will still have little incentive to meet even President Karzai’s distant check-out date. Who in Kabul will want to do without abundent Western cash 10 or 15 years from now?

In 2001 the U.S. had a simple, important, and achievable mission in Afghanistan: disrupt al-Qaeda and oust the Taliban. American military forces succeeded. Alas, we’ve spent the succeeding eight years attempting to build a nation state where none exists. It’s time to draw down our forces and again focus on combatting terrorists.

In a rational world, Switzerland would be a role model for other nations. It is quite prosperous thanks largely to a modest burden of government. There is remarkable ethnic and religoius diversity, but virtually no tension because power is decentralized (sort of what America’s Founders envisioned for the United States). Yet despite these — and many other — attractive features, Switzerland is being persecuted because of strong human rights laws that protect financial privacy. Money-hungry politicians from other nations resent Swtizerland’s attractive policies, and they would rather trample Swiss sovereignty rather than fix their own oppressive tax laws. An official from the Swiss Bankers Association provides some background in a New York Times column:

In Switzerland, this tradition of treating a client’s financial affairs in confidence became law in 1934 when it was codified in Article 47 of the country’s first-ever federal banking act as a contemporary reaction to the economic crisis, various domestic political considerations and well-publicized cases of espionage involving France and Germany. …Banking secrecy…reflects the very high degree of trust that exists between the Swiss state and its citizens and it has strong democratic foundations. …The Swiss are proud of their system and they reward it with a high level of taxpayer honesty. It works because the Swiss vote their own taxes, they have a high degree of control over the way tax revenues are spent and over all they believe their tax system to be reasonable, comprehensible, transparent and fair. …Doesn’t Switzerland hear the snapping jaws and cracking whips of foreign finance ministers, tax collectors, O.E.C.D. bureaucrats, cash-dispensing government agents and other denizens of the encroaching real world as they circle round Mother Helvetia intent on biting huge chunks out of her banking secrecy, if not swallowing it whole? …In March last year the Swiss announced they would give up the evasion-fraud distinction for foreign bank clients and adopt the O.E.C.D. standards on information exchange in tax matters. …However, requests for assistance must be made with regard to a specific individual, and “fishing expeditions” — any indiscriminate trawling through bank accounts in the hope of finding something interesting — remain ruled out. …Switzerland demonstrates to the world that it is possible for a state to collect taxes with a high degree of taxpayer honesty and without the authorities being corroded with suspicion about the financial activities of their citizens. Citizens in a democracy would never allow their police force to have an automatic right of forced entry into their homes just on the off-chance of finding some stolen goods, so why on earth should the state have an automatic right of forced entry into citizens’ banks accounts just on the off-chance of discovering some tax evasion? There must be a limit to the extent to which respect for an individual’s privacy is sacrificed on the altar of international cooperation in tax matters.

Sadly, the United States is part of the effort to create a global tax cartel. An “OPEC for politicians” would be terrible news for taxpayers, though, much as a cartel of gas stations would be bad for driviers. So-called tax havens play a valuable role in curtailing the greed of the political class. Ask yourself a simple question: Would politicians be more likely or less likely to raise tax rates if they knew taxpayers had no escape options?

The AP reports:

In a land dispute pitting Madonna against African villagers, Malawi’s government has sided with the pop star who has pumped millions into the impoverished Southern African country and adopted two of its children.

Villagers have been refusing to move from a plot of land near the capital, Lilongwe, where Madonna wants to build a $15-million school for girls. The government, however, says it had originally planned to develop the plot, and only allowed the villagers to live there until a project was identified.

Lilongwe District Commissioner Charles Kalemba, accompanied by other government officials and representatives from Madonna’s Raising Malawi charity, on Thursday met with about 200 villagers and told them they would have to move. The villagers have been offered other government land.

“Government allowed you to occupy this land because there was no project yet. But now that Madonna wants to build you a school you have to give way,” Kalemba told the villagers. “You are lucky that Madonna has compensated you for your houses, gardens and trees.”…

Headman Binson Chinkhota urged residents to move, saying the school would benefit their children. But Amos Mkuyu said the $1 500 in compensation he received from Madonna for mango trees and three homes was not enough. He said his family had been living on his three-hectare plot for three generations.

Susette Kelo vs. Madonna — that would be a great battle. As usual, the government has a beneficent purpose in taking these people’s land. They took Kelo’s home for a development that would yield “new jobs and increased tax revenue.” They’re taking Amos Mkuyu’s home for a school. But stealing land is not beneficent; it is not an act of kindness and charity.

In this case the Malawian government says that the villagers are living on government land. But Mkuyu says his family has been there for three generations. Sounds like they thought it was theirs. For a discussion of collective and traditional property inspired by the movie “Avatar,” click here. Hernando de Soto, author of The Mystery of Capital, has spent a career showing how the lack of well-defined property rights hurts the poorest people in the world.

A new Brookings Institution report suggests ways for the federal government to promote school choice. On the eve of its release, I voiced some practical and constitutional objections to the idea. Now that the report is out, contributing author Jay Greene asks if I’m still apprehensive. The short answer is yes.

Brookings assembled an impressive group of scholars to write the report, and their education policy recommendations deserve serious consideration. Their goal of ensuring more and better access to more and better educational choices is one that I share, and I hope the following comments will help advance that goal.

Good policy, like good science, is grounded in concrete evidence. Only where evidence is lacking is it wise to fall back on theory. The Brookings report relies on theory in a couple of important areas where extensive evidence is available to show us the way. In particular, the authors acknowledge that U.S. experience with alternative school systems is minimal, but (with a single exception — see below) they do not discuss the vast wealth of evidence from other nations that have more extensive and longer-running experience with school choice systems. 

Some have argued that we can learn little about school governance from other nations because cultural and economic factors affect educational outcomes too greatly. This criticism does not apply to within-country comparisons of alternative school systems — and virtually all of the literature comparing alternative school systems is within-country. A comparison of government-run, government-funded private, and parent-funded private schools within India, for instance, is not muddied by cultural or economic differences between India and the United States.

What’s more, if we see the same pattern of inter-sectoral results manifested within many different countries, we can be even more confident that the observed differences are truly systemic than if we had inter-sectoral results for only a single nation. A thorough review of the worldwide within-country comparative school governance research is thus essential to optimal education policy design.

It’s also worth noting that openness to non‑U.S. research is the norm in engineering and in other scientific fields. If an Indian computer programmer develops an improved sorting algorithm, his American counterparts don’t discount it for cultural reasons. Nor do U.S. civil engineers disregard what can be learned from French bridge projects. Nor do physicians ignore the results of high quality genetic or drug research performed in Iceland or England. As long as the methodologies employed control for cultural and other mitigating factors that might affect the results, American scientists and engineers are not, as a rule, parochial. Education seems the sole exception.

The one bit of foreign school choice evidence discussed in the new Brookings report is a paper by Hsieh and Urquiola reporting results from Chile’s highly regulated voucher-like system. More than a dozen studies of Chile’s voucher system have been conducted, the majority finding that private voucher schools significantly outperform public schools after suitable controls, or that the competition engendered by the program has improved overall academic achievement, attainment, or ultimate earnings of graduates.

Seeming to deviate from this pattern, Hsieh and Urquiola found that the regions in which private school enrollment grew most quickly had overall achievement (of public and private students) that was no better or was even worse than in regions where it grew more slowly. Hsieh and Urquiola concluded from this that increased competition did not improve achievement. But their evidence also supports a quite different conclusion: that regions with bad and worsening public schools drove families more quickly into the private sector.

Hsieh and Urquiola looked at the first 16 years of the program, during which time public schools still enrolled the majority of students (though that share was falling continuously and has since dropped below 50 percent). Overall academic performance was thus still chiefly a function of public school performance, and public schools are protected from private sector competition by receiving extra municipal funding that is not tied to enrollment and to which the private voucher-receiving schools do not have access. So it was never reasonable to expect, based on the design of the Chilean system, that public schools would show significant gains from competitive forces, because those forces never really touched them.

Given the evidence just presented and the fact that the bulk of studies of the Chilean program contradict Hsieh and Urquiola’s conclusion, it seems likely that they did indeed misinterpret their findings.

More importantly, Hsieh and Urquiola’s conclusion is not only an aberration within the Chilean research, it is also an aberration within the worldwide literature on the relative merits of market and monopoly provision of education. When I reviewed this research for the Journal of School Choice last year, I found 65 studies reporting 156 separate statistical comparisons of public and private school achievement. When truly market-like programs are compared to monopolistic ones such as U.S. public schooling, the statistically significant results favoring markets outweigh the results favoring monopolies by a margin of 15 to 1 (and they also handily outnumber the insignificant findings).

By offering only the uncharacteristic Hsieh and Urquiola study out of the vast literature just described, the Brookings paper is apt to give readers a mistakenly negative perception of the worldwide evidence. This is particularly true because the authors are avowed supporters of school choice.

In the absence of the international evidence, the Brookings authors are forced to resort to theory on several crucial policy issues, such as the need for and merits of state regulation of the marketplace (e.g., with respect to virtual schools) and state information services to supply a perceived gap in information available to parents. Consulting that evidence leads to the conclusion that government regulatory efforts to improve the quality of educational services are ineffective at best and counterproductive at worst (see the paper linked above for the evidence supporting that pattern, and see James Tooley’s The Beautiful Tree for an explanation of its cause). It shows, furthermore, that even illiterate parents in the poorest slums of the third world are not only capable of making wise educational choices for their children in the absence of government advice, but that they are already doing so in massive numbers.

In addition to the above concern, the practical and constitutional issues I raised in advance of the Brookings report’s publication still apply now that I have read it in full.

That said, this is one of the most benign sorts of disagreements scholars can have, rooted as it is on our having developed our policy recommendations from different data sets. I look forward to hearing how the authors of the Brookings report think the worldwide evidence bears on school choice policy.

I have to thank Ezra Klein. I have for some time been trying, without success, to spark a debate about whether expanding health insurance coverage would actually save any lives. Even my bet with Karen Davenport seemed to go nowhere. But when Klein accused Sen. Joe Lieberman (I‑CT) of being “willing to cause the deaths of hundreds of thousands of people” because Lieberman was jeopardizing passage of legislation that would expand health insurance to 30 million people, Klein made a debate possible.

Following on my first response to Klein that the evidence supporting his claim is remarkably thin, others have joined the discussion. Matt Yglesias of the Center for American Progress rose to Klein’s defense. Megan McArdle (in The Atlantic magazine and her blog) and Tyler Cowen (at Marginal Revolution) both argue that we don’t really know if Klein’s claim is true.

Today, Yglesias poses the following question on his Twitter page:

Do rightwingers really believe that US health insurance has no mortality-curbing impact?

I see two problems. First, there are no right-wingers in this debate. McArdle, Cowen, and I all support gay marriage, for example.

Second, Yglesias sets up a straw man. He asks whether health insurance on average has a positive impact on mortality, when the debate is actually over the effect of health insurance at the margin. In other words, would covering the uninsured save lives?

I don’t know anyone who thinks health insurance has zero effect on mortality overall. Yet it is entirely possible for the average effect to be positive and the marginal effect to be zero. One reason may be that the uninsured do benefit from the human and physical capital that health insurance makes possible. It may also be the case that when the uninsured do obtain health insurance, the additional medical care they receive is more likely to harm them than to help them. The researchers behind the RAND Health Insurance Experiment make essentially the same point.

If the marginal effect of health insurance on health is zero, it raises other interesting questions. Would it also have zero effect on health outcomes if we were to reduce the number of people with health insurance? What is the size of the margin over which health insurance has zero impact? (Robin Hanson suggests it may be very, very large.)

Klein recently declined an invitation to debate these issues at Cato. Too bad. This is worth pursuing.