When did economic growth, and the standard of living of average people, really begin to take off? What caused it? There are many theories, but as Andrew Coulson discusses in the School Inc. clip below, there is good reason to believe not when banking was invented, or factories, or some technological change, but when earning a living through free enterprise—profitable commerce—stopped being seen as, well, kind of tawdry. It is a feeling we continue to struggle with when it comes to education. 

There is, of course, profit made throughout public schooling, if that’s defined as taking in more revenue from providing a good or service than is spent to produce it. Whiteboard manufacturers, construction companies, publishers—all are typically for-profit. Indeed, while absent a free market we don’t know what the “right” amount is to pay educators, and many public school teachers may well be underpaid, few likely lose money on their jobs. In other words, they make profits. Which is not to say they are “in it for the money.” No doubt they care about and enjoy working with kids, but they do need money to live. And it turns out the primary motivation of successful entrepreneurs and business people is not raking it in, but producing something they care about. Does anyone think Steve Jobs was actually indifferent towards computers and just wanted to get rich?

More important than who is making a profit are the overall incentives if profit is matched with funding through students. While the first-blush reaction to profit is understandable—shouldn’t children trump mammon?—thinking it through reveals why profit and paying customers are beneficial to all. They incentivize schools to respond directly to parents, who control the money and best know their children, while also making schools compete for teachers’ services. In addition, they encourage schools to compete with each other, incentivizing them to try new ways of educating to attract more families. And when schools find better ways to educate and are more profitable, it incentivizes others to copy the innovations, taking them to scale. Freedom also allows educators to specialize in the needs of unique subsets of kids and, of course, is crucial to achieving social harmony and equality in our diverse society.

As School Choice Week 2019 nears an end, perhaps no message is more important than, simply, “embrace freedom.” It is the key to so much that we need in education.

Following the deaths of two children in Border Patrol custody, President Trump made his pitch on how to solve the humanitarian crisis at the U.S.-Mexico border. He spoke about “the dangerous trek up through Mexico” and pledged to end “the cycle of human suffering” at the border. His solutions were a border wall and ending the chance to apply for asylum, which he called a “loophole.” Yet the evidence indicates that border fences have made the journey far more dangerous—even deadly—and that asylum made the border safer.

In fact, asylum and other humanitarian relief programs appear to have already saved about 1,300 lives along the border since 2013. By contrast, increased enforcement—including the fence—appears to have resulted in about 4,600 more deaths from 1999 to 2019.

The Rise of Border Deaths

Border Patrol reports the number of dead bodies and other deaths of migrants that it finds along the border. Overall, Border Patrol has recorded 7,529 deaths from FY 1998 to FY 2019. This death count excludes hundreds of people who local authorities discover, according to separate investigations by CNN and the Arizona Republic. This means that overall Border Patrol figures are undercounts, but the general trends up or down from year to year are still useful to determine whether more migrants are dying in the harsh conditions along the border.

Figure 1 shows the official number of deaths identified by Border Patrol each year. The grey bars show total deaths, and the black line shows the number of deaths per 100,000 apprehensions—a proxy measure for how likely any particular crosser was to die crossing the border in that year. The absolute number of deaths increased from 263 to a peak of 492 in 2005, and it remained at about that level until 2013, after which it fell back to the lowest levels since the 1990s. The rate of death per 100,000 apprehensions, however, underwent an even greater eight-fold increase from 17.3 in 1998 to 132 in 2012 before dropping back to just 25.5 so far in FY 2019—the lowest level since 2000.

So what made the journey so much more dangerous and what reversed the situation? First, increased enforcement at the border, including the construction of nearly 600 miles of fences, caused migrants to cross in more remote areas. The length of the border fence predicted about 75 percent of the variance in the death rate from 1998 to 2012. From 1998 to 2006, the length of the fence grew 210 percent, and the rate of deaths grew 144 percent. Then, the cycle repeated. From 2006 to 2012, the death rate grew 212 percent, and the fence length grew 218 percent.

The rapid rise in the death rate reflects the rapid construction of the border fence and the doubling of the Border Patrol. The number of Border Patrol agents predicted about 85 percent of the death rate from 1998 to 2013. The agency’s manpower grew along the southwest border from 7,357 in 1998 to 18,611 in 2013.

The result of increased enforcement was inevitable. As the Government Accountability Office found in 2001:

INS’ phased approach to implementing its strategy has included several operations in which INS allocated additional Border Patrol agents and other resources—such as fencing, lighting, night vision scopes, sensors, cameras, vehicles, and aircraft—to targeted locations along the Southwest border… The strategy assumed that as the urban areas were controlled, the traffic would shift to more remote areas where the Border Patrol would be able to more easily detect and apprehend aliens entering illegally.

The strategy also assumed that natural barriers such as rivers, mountains, and the harsh terrain of the desert would act as deterrents to illegal entry. However, INS officials told us that as the traffic shifted, they did not anticipate the sizable number that would still attempt to enter through these harsh environments. A study of migrant deaths along the Southwest border concluded that while migrants have always faced danger crossing the border and many died before INS began its strategy, the strategy has resulted in an increase in deaths from exposure to either heat or cold.

The GAO repeated its conclusion in 2006, just as Congress voted on the Secure Fence Act—which mandated the construction of 700 miles of fences. It should have surprised no one that the rate of deaths increased as enforcement grew in urban areas.

The Fall of Border Deaths

If the increase in border security caused an increase in deaths, why did the death rate suddenly reverse course and ultimately plummet back down? The answer is that the flow shifted away from Mexico to Central America, and the immigrants who came applied for asylum or other humanitarian relief. Asylum provided an alternative to sneaking into the country.

Because the Trump administration turns asylum seekers away at ports of entry, most asylum seekers end up crossing illegally by going around the fence, but rather than trying to hide, crossers in recent years have immediately sought out Border Patrol agents to turn themselves into. As Figure 4 shows, the likelihood of dying while crossing started to decline in 2013, as the number of asylum claims suddenly jumped by nearly threefold. Central American families and unaccompanied children who receive similar processing by Border Patrol also shot up during this time period.

The death rate briefly ticked back up in 2017—possibly fueled by the unfounded impression that President Trump would end asylum—but once the reality sank in that Trump did not end humanitarian relief, the death rate continued its downward plunge in 2018. In Fiscal Year 2019—beginning in October 2018—there were 32 recorded deaths along the border as of early December, on pace for just 167 for the year. Though it is based on only two months, it would be the lowest figure on record. It also amounts to a death rate of just 25.5, the lowest rate since 2000.

Some people believe that people sneak into the United States illegally and only request asylum as a backup if they are caught. But a fascinating recent report by the Institute for Defense Analyses (IDA)—which was commissioned by the Department of Homeland Security (DHS)—demonstrates that this is not the case. It used nonpublic DHS data of apprehensions of asylum applicants (as well as unaccompanied children or parents with children who are subject to similar processing) at interior checkpoints versus elsewhere. The IDA authors explain:

The large majority of Northern Triangle migrants (including asylum seekers) enter the United States in southern Texas, and specifically in the USBP’s Rio Grande Valley sector. This sector has a network of interior traffic checkpoints that are major chokepoints in the road network north of the immediate border region. Migrants who are intent on evasion and succeed in making it through the immediate border area will sometimes be apprehended at or near the interior traffic checkpoints. Those who present to law enforcement, however, will do this near the border and not travel many miles north to present at a traffic checkpoint.

We can thus evaluate whether there are systematic differences in the ratio of interior (checkpoint) apprehensions to total apprehensions for asylum-seeking groups and a control group of those believed to be evaders (adults who do not claim credible fear). If the ratios of interior to total apprehensions of the asylum-seeking group and the “traditional” evader group are similar, the two groups are likely choosing to evade versus self-present at similar rates. If, however, the ratio of interior to total apprehensions of the asylum- seeking group is much less than the other group, the asylum-seeking group is likely choosing to evade at a much lower rate.

Figure 5 shows the share of apprehensions in the Rio Grande Valley that occur at checkpoints by type of apprehension from FY 2011 to FY 2018. As it shows, the share of asylum seekers caught in the interior plummeted from 14 percent in 2010 to 2 percent in 2018. Non-Mexican children and parents saw similar declines. Even the share of single adults apprehended in the interior declined from 14 percent to 10 percent. This may reflect the fact that many single adults move with groups of families, asylum seekers, or children who present themselves to Border Patrol.

IDA concludes, “The rate of evasion by asylum seekers fell dramatically after 2012, and the rate at which they presented to border enforcement authorities rose to a very high level at the same time.” Either the new arrivals never tried to evade when they started arriving in 2013 or they discovered that they did not need to evade in order to enter the country around that time.

The result is that journeys into the country shortened considerably across all Border Patrol sectors. Unfortunately, Border Patrol doesn’t regularly publish data on where apprehensions occur, but a 2017 Government Accountability Office (GAO) report provides numbers through FY 2016. Figure 6 shows that from 2012 to 2016, the share of apprehensions that occurred within a mile of the border almost doubled from 33 percent to 58 percent, while those occurring more than 20 miles from the border fell by nearly half from 27 percent to 15 percent. While the GAO doesn’t provide the exact figure, it appears that the average crossing declined from 11 miles to 6 miles from 2012 to 2016. It likely continued to fall after 2016.

Far too many people are dying at the border still, but it is clear that the availability of asylum has saved the lives of many border crossers. If the number of deaths per 100,000 apprehensions had not come down from FY 2012 to December 2018, about 1,336 more migrants would have died at the border—an increase from about 1,961 to 3,297. On the other hand, if the number of deaths per 100,000 apprehensions had not increased since 1998—when the fence and agents started rapidly growing—4,601 fewer deaths would have occurred at the border through December 2018.

President Trump has repeatedly called asylum and similar programs that provide legal channels for immigrants “loopholes” and has blamed them for the “humanitarian crisis” at the border. But the evidence demonstrates that in fact, the border fence caused the humanitarian crisis and led to numerous deaths along the border, while asylum has made the border safer and more secure. From a security perspective, immigrants turning themselves in to agents is certainly better than them trying to evade capture. In other words, the humanitarian procedures are a win-win for security and immigrants.

When people lack the means to hold their government accountable, tyranny flourishes. The First Amendment secures the public’s right to access public information, acting as one of many safeguards against government officials’ abusing their authority. James Madison famously quipped that “Popular Government, without popular information, or the means of acquiring it, is but a Prologue to a Farce or a Tragedy; or, perhaps both.” Court records are one such form of information, and the right to acquire them serves as an important check on the judiciary.

The Administrative Office of the U.S. Courts (AO) runs the Public Access to Court Electronic Records (PACER), charging fees for people to access court records online. In the 1990s, PACER fees were much higher than the cost of providing the service; the AO overcharged and used the fees to subsidize other aspects of judicial administration. As a solution, Congress passed the E‑Government Act, which authorizes fees only “as a charge for services rendered” and “only to the extent necessary” to “reimburse expenses” incurred. Despite that law, the AO still runs a large surplus from PACER and spends it on different projects.

The National Veterans Legal Services Program challenged the validity of those fees. The case is now before the specialized U.S. Court of Appeals for the Federal Circuit, where Cato has joined the ACLU and several other organizations on an amicus brief.

The Supreme Court uses a two-pronged “experience and logic” test to determine whether a right to access specific types of records is protected under the First Amendment. The experience prong asks if the public has traditionally had access to a type of record, while the logic prong asks whether such access plays a “significant positive role” in a governmental process. Since there is a long history of public access to court records, and this access acts as a check on the courts, it seems clear that a government action that impedes public access to judicial records, like PACER fees, must be narrowly tailored to meet a compelling interest. Here, the government has not met that burden of proof. Instead, the AO claims that it has congressional authority to impose unnecessary costs—an idea that even the author of the statute has refuted.

Although society and technology develop over time, rights—such as the right to access court records—are unchanging. The Federal Circuit should reject the government’s interpretation of the E‑Government Act because it would raise a substantial constitutional question about congressional authority to intrude on the First Amendment, and should instead affirm the idea that people have the right to access court records without having to pay prohibitive costs.

As President Trump delivered a weekend salvo in the ongoing shutdown battle, White House aides reminded reporters that the president remains convinced of his “legal authority to declare a national emergency at the border, which could allow him to redirect Pentagon funding to a build a border wall.” The flacks’ messaging was clear: If congressional Democrats turn a deaf ear to Trump’s latest proposal, then the president retains recourse to his emergency powers.

In a thoughtful post earlier this month, my colleague Gene Healy explained that Trump’s threats are far from idle, and that the Congress bears much of the blame for this bizarre scenario whereby the president can win domestic policy priorities by declaring an ad hoc emergency. Gene pointed to “at least two provisions of the U.S. Code passed during the 1980s, 33 USC § 2293  and 10 USC § 2808,” that plausibly empower Trump to fund a border wall if he declares a national emergency.

Disconcertingly, these were only two out of more than a hundred delegations of emergency powers to the president! Returning to Gene’s post: 

[T]he U.S. Code today [is] honeycombed with overbroad delegations of emergency power to the executive branch. A Brennan Center report released last month identifies 136 statutory powers the president can invoke in a declared national emergency. Few of these provisions require anything more than the president’s signature on the emergency declaration to trigger his new powers—“stroke of the pen, law of the land—kinda cool,” in the Clinton-era phrase. 

Worse yet, the president’s statutory powers aren’t limited to putative national emergencies; instead, there are many and diverse congressional delegations of law-making power directly to the president. For example, through the Antiquities Act, the president can regulate millions of acres of public lands with a brief proclamation. Under trade statutes, the president can impose tariffs backed by little more reasoning than his signature. Prof. Kevin Stack provides other examples in this excellent article.

Gene’s post spotlighted Congress’s complicity to the dangerous accumulation of direct statutory authority in the president’s hands. But Congress isn’t the only branch of government to blame; the judiciary is a co-enabler of executive excess.

Out of undue solicitude for the office of the presidency, the Supreme Court has abandoned substantive review of presidential decision-making pursuant to overbroad delegations of congressional authority. The upshot is that courts won’t scrutinize the president’s decision that a “national emergency” exists. Nor will courts perform a meaningful inquiry of the relationship between the putative national emergency and the border wall. That is, they won’t question if the wall is a reasonable policy to mitigate the supposed national emergency.

Instead, courts would perform a superficial “facial” review of the president’s declaration pursuant to Congress’s broad delegation of “emergency” powers, bending over backwards to accommodate the executive. It’s deference squared.

This ultra-permissive judicial review stands in stark contrast to how Article III courts review exercises of congressional delegations by all other actors in the Executive Branch. Under the Administrative Procedure Act (APA) 5 U.S.C. § 706, all “agency action” is subject to judicial review to ensure that the agency’s lawmaking is not “arbitrary or capricious.” As interpreted by the Supreme Court, this provision requires courts to take a “hard look” at the reasonableness of an agency’s reasoning and decision-making.

In a seminal 1992 case, Franklin v. Massachusetts, the Supreme Court held that the president is not an “agency” under the APA. Unfortunately, the Franklin Court did not explain its reasoning, other than citing “respect for the separation of powers and the unique constitutional position of the President.” As observed by Prof. Kathryn Kovacs, this crucial question was neither briefed nor broached during oral argument. 

This absence of consideration is reflected by the weakness of Franklin’s legal reasoning.

Looking to the text of the APA, there seems to be ample evidence that the statute contemplates searching review of the president’s statutory powers. As I noted above, all “agency action” is subject to a “hard look” under the APA. In 5 U.S.C. § 701(b)(1), the APA defines “agency” as “each authority of the Government of the United States,” but it expressly does not include “the Congress” or “the courts of the United States.” It wouldn’t make sense for the Congress to explicitly exclude two of the three branches of government from judicial review under the APA, but, at the same time, to implicitly exclude the third branch of government.

There’s another textual clue that a president’s statutory powers should be subject to judicial review under the APA. In 5 U.S.C. § 701(a)(2), the APA precludes from hard look review “agency action [that] is committed to agency discretion by law.” In this context, “law” refers to “the common law’ of judicial review of agency action,” and included in this body of jurisprudence are such non-justiciability principles as the “political questions” doctrine. In turn, the political question doctrine allows courts to decline to take on controversies whose solution is better left to the political branches. Simply put, there’s no reason for the APA to account for the political question doctrine if presidents are not considered “agencies” whose actions are subject to “hard look” review under the APA.

There are also policy reasons why the president should be considered an “agency.” In many instances, the president’s statutory powers mirror policymaking authority possessed by administrative agencies. Consider, for example, the Antiquities Act, which authorizes the president to regulate public land to the same ends as can be achieved by the Interior Department pursuant to the Federal Land Policy and Management Act. The difference is that the Interior Department must submit to procedural safeguards and meaningful judicial review before it can regulate millions of acres of public land, while the president can achieve the same results with a stroke of the pen and meaningless judicial oversight.

Regardless whether the Court thought through what it was doing, the Franklin decision added a perverse complement to a president’s statutory powers. On the one hand, the president enjoys vague and therefore sweeping delegations of statutory authority. On the other, he escapes meaningful judicial review when exercising these overbroad delegations. It’s a toxic mix that permits the president to gin up bogus emergencies to achieve major domestic policy priorities. (Imagine President Elizabeth Warren’s Green New Deal in response to a climate-change “emergency.”)

In sum, Gene is absolutely right to endorse calls on Congress to “shore up the guardrails of liberal democracy” with comprehensive reform of the president’s statutory powers. To the same end, it’s also well past time for the Supreme Court to revisit Franklin v. Massachusetts.

This post co-authored with Robert J. Stillman, M.D., FACOG, Medical Director, Emeritus of Shady Grove Fertility, Rockville, MD.

A recent article in the American Economic Review examines externalities—behaviors that impose unpriced costs on third parties—in the context of in vitro fertilization (IVF).[1] Patients often pay for IVF treatment out of pocket while the costs associated with birth are almost always covered by insurance. Because of this difference in who pays, and how patient choices can impact the size of birth costs, externalities are created when patients’ decisions impose increased costs on third parties.

Patients who pay for IVF treatment with their own funds face a tradeoff between the number of embryos transferred, IVF success rate, and the likelihood of more expensive multiple births. While improved IVF laboratory technology has increased the success rates with just a single embryo for many patients, others feel (at times correctly) they may improve the likelihood of a successful birth of at least one infant if they transfer more than one embryo at no additional cost.

That strategy, however, increases the likelihood of twins or triplets with greater medical costs for which the patients do not explicitly pay. IVF patients now account for approximately 50 percent of all higher-order births, “which are generally four (twins) to sixteen (triplets) times more expensive than a singleton birth.”[2] The average cost of a single IVF birth and associated medical care, often more complicated for mothers and infants, is $26,922 while twin and triplet births cost $115,238 and $434,668, respectively.[3]

Thus, patients face trade-offs “between delivery costs (which are large when twins and triplets occur) and IVF treatment costs (which [at $10,000–$15,000 per cycle of treatment] are large when many attempts are needed until success).”[4] But, because the increased delivery costs are owed by insurers, the externalities are not priced into the costs patients face when deciding to transfer multiple embryos.

Today, medical success with the use of cryopreserved “frozen” embryos allows patients to transfer fewer embryos without the risk of not having non-transferred embryos available for a second separate try (or second or more children) from the same ‘fresh’ IVF cycle. However, a second transfer using frozen embryos brings additional costs, and, while less than the full ‘fresh” IVF cycle, the incremental costs are rarely covered by insurance.

Some countries manage the IVF externality through direct regulation by imposing caps on embryo transfer. “While single embryo transfer is uncommon in the United States (only 10 percent of IVF cycles in 2009 involved a transfer of one embryo), it is widely practiced in Europe. For example, 69 percent of IVF cycles in Sweden transfer a single embryo and in Belgium it is required.”[5] The proportion of single embryo transfers in the United States is increasing as a result of improved success rates for each embryo transferred, but the frequency still does not reach those found when insurance coverage is extensive or there is state-imposed regulation limiting the number of embryos transferred to one.

Other than direct regulation, two other traditions exist in economics to guide the management of externalities. The first is associated with the work of Arthur Pigou and suggests that the government impose a price on the unpriced behavior.[6] The second tradition is associated with Ronald Coase and suggests that in the absence of large negotiating costs, parties can solve externality problems through contract.[7]

The article explores IVF externalities in the tradition of Pigou: charge patients the marginal expected costs of multiple embryo transfer. Given the increased medical costs of extra births described above and the probability of successful birth, the authors calculate that the appropriate marginal expected cost for two embryos is about $12,000 and $19,000 each for three or four embryos.[8] The article is silent on who would receive the extra revenue from the fees. If it were the treating IVF clinic, it would have incentive to recommend transferring more embryos rather than fewer unless it was expected that the clinic had to pay the insurance company for the expected extra pregnancy costs.

A third possibility is guaranteed outcomes, which reduces the incentive for multiple embryo transfer and its higher likely medical costs. The article considers such a possibility but not in great detail. This blog post explores options in the context and experience of the largest IVF practice in the United States, including guaranteed outcomes.[9]

In the tradition of Coase, one would predict that health insurers and IVF practitioners would strike a bargain in which insurers would cover IVF costs for the currently uninsured in return for single embryo transfer until successful pregnancy occurred. This bargain would reduce multiple birth outcomes and save the insurance company more money than it spends on IVF cycles compared to the costs from the complications to mother and infants—some lifelong—from multiple pregnancies. And the insurance company could, in turn, share some of the savings with IVF practitioners who employed single embryo transfer until success occurred.

One insurance company embarked on a trial of incentivizing patients to use single embryo transfer by covering the IVF clinic’s fees of a transfer of a cryopreserved embryo if the couple transferred a single embryo on their first ‘fresh’, but unsuccessful, embryo transfer. This resulted in an increase in the number of the couples utilizing single embryo transfer(s). Unfortunately, other insurance companies did not follow this initiative, and the number of patients who could take advantage of this arrangement remained limited.

Other approaches were initiated by the fertility clinic. One was an offer to insurance companies to share in cost averaging. The offer was that the clinic would receive no payment for otherwise covered services if triplets were conceived, an intermediate payment if twins were conceived, and a premium payment if the pregnancy was a singleton. Unfortunately, insurers, despite understanding the benefit of lowering their own expenses, were stymied by an arrangement outside their traditional payment model and having a contract with this innovation with some clinics and not others. And, while the model was between the clinic and the insurance company, it did not include any incentive to patients to decrease their risk-taking behavior of choosing multiple embryos for transfer.

While there have been attempts like those above to find innovative ways to work with the proportion of patients with IVF insurance coverage and with those insurers, most patients do not have such coverage, and insurers do not seem to appreciate enough advantage in reducing multiple pregnancy by providing coverage but incentivizing single transfers.

Instead of attempting to achieve Coasian bargains with insurance companies, the fertility clinic has introduced several pricing initiatives voluntarily to minimize risk for patients and their pregnancies. The first offered non-insured patients who elected single embryo transfer a 50% reduction in the fee for a subsequent transfer of a frozen embryo. This reduced the incentive for initial multiple embryo transfer to avoid the costs of a second transfer. A number of patients have, and still, utilized this offer, although many more wish to enroll in the clinic’s additional initiative, a 100% refund guarantee program.

For a premium, the Shared Risk 100% Refund Guarantee Program offers patients a full refund if they do not deliver a live-born baby. The premium is approximately twice the fee for a single cycle and is held in escrow. In return, the patients get up to six (6) full IVF cycles, including all the fresh and frozen embryo transfers from embryos derived from those 6 cycles. The fee in escrow is ‘earned’ by the fertility clinic only when a baby is born. If a baby is not born, or the couple wishes to discontinue care before the 6 cycles and transfers are completed, they receive a full 100% refund. “The basic principle of Shared Risk 100% Refund Guarantee Program is that it provides patients an insurance against failure.”[10] A number of IVF clinics nationwide have adopted versions of this type of guarantee program.

The criteria for acceptance at the IVF fertility clinic are liberal and based on the clinic’s historical actuarial likelihood of success for each patient who applies. Approximately 90% of applicants are accepted and almost all enthusiastically accept, even those with a very high prognosis for success on the first cycle. They are willing to pay more for insurance against repeated payments or ultimate failure. The fertility clinic is incentivized to maintain high success rates and have patients be successful quickly. And the patient no longer has an incentive to transfer more embryos to avoid the costs of repeated implantation cycles. Thus, importantly, the interests of the clinic and the patients are aligned. “Our patients with insurance coverage or participating in the Shared Risk 100% Refund Guarantee Program chose single embryo transfer at significantly higher rates than patients paying themselves for each cycle, supporting the contention that, freed from the immediate economic pressures, patients will be more likely to choose to avoid the risks of multiple pregnancy. And the more dollars patients paid out of pocket for a cycle the less likely they elected single embryo transfer.”[11]

Externalities in IVF could be controlled by governmentally regulated caps on embryos transferred; by government-imposed costs for more than one embryo transferred (a la Pigou ); or by insurance company coverage of IVF (al la Coase), all of which of can regulate or incentivize safer single embryo transfers. Short of any of those approaches, an individual clinic may play a role with a) continued quality improvement in the laboratories increasing the likelihood of success with a single embryo (mitigating the goal of patients to increase their odds of success and avoid repetitive cycle costs); b) with educational programs to patients about the risks of multiple pregnancy and c) economic initiatives to insurance companies (yet unsuccessful) or direct economic incentives to patients with fee reductions or refund guarantee programs.

---

[1] Barton H. Hamilton, Emily Jungheim, Brian McManus, and Juan Pantano, “Health Care Access, Costs, and Treatment Dynamics: Evidence from In Vitro Fertilization, American Economic Review 108, no. 12 (2018): 3725–3777.

[2] P. 3726.

[3] P. 3730.

[4] P. 3767.

[5] P. 3731.

[6] Arthur Pigou, The Economics of Welfare (London: Macmillan 1920).

[7] Ronald H. Coase, “The Problem of Social Cost,” Journal of Law and Economics 3 (October 1960): 1–44.

[8] Hamilton, p. 3766.

[9] Robert J Stillman, Kevin S. Richter, Nicole K Banks and James R Graham, “Elective single embryo transfer: a 6 year progressive implementation of 784 single blastocyst transfers and the influence of payment method on patient choice,” Fertility and Sterility 92, no. 6 (2009): 1895- 1906.

[10] P. 1898–1899.

[11] P. 1903.

Policymakers often enact programs for the needy but the benefits go mainly to businesses and special interests. The benefits of the low-income housing tax credit are siphoned off by the finance industry. The earned income tax credit pushes down market wages, which subsidizes businesses that hire low-income workers. Farm subsidies benefit wealthy landowners, not so much tenant farmers.

“Opportunity Zones” also illustrate the phenomenon. The Tax Cuts and Jobs Act of 2017 created capital gains tax breaks for 8,700 supposedly disadvantaged neighborhoods. Capital gains tax rates should be reduced across the board, but O‑Zones split the nation into winner and loser areas, with landowners in the winner areas enjoying a get-rich-quick bonanza as the tax breaks were capitalized in prices. Some landowners have seen their property values jump 50 percent.

Bloomberg reports on downtown Portland, Oregon, which is a big O‑Zone:

On a wet December evening, Mark Goodman steers a black Mercedes SUV into an open-air parking lot, one of dozens of development sites his family owns across downtown Portland, Ore. This one, he says, will be a $206 million tower with ground-floor retail, six floors of offices, and more than 200 luxury apartments. Amenities will include a yoga studio and roof deck. But the centerpiece will be a swimming pool that cantilevers out of the eighth floor. “The one thing I can say absolutely with certainty—it’ll be the finest for-rent product in the city,” Goodman says. It’s also eligible for a U.S. tax break meant to help the poor.

… Oregon did an audacious thing: It selected the entire downtown of its largest city to be eligible for the law’s suite of benefits, as well as neighborhoods such as the Pearl District, where new high-rises loom over old industrial spaces converted into “creative” offices and boutique furniture stores sit near juice bars serving açai bowls. The Central Eastside, an area that Portland’s alt weekly crowned the city’s “best food neighborhood,” is also included.

Oops! That doesn’t sound like a disadvantaged area. The Portland O‑Zone was designated by Oregon Governor Kate Brown, who is a left winger favoring “economic and business equity.” I don’t know how açai bowls fit into the governor’s vision of equity, but I do know that O‑Zones are the opposite of equality and fairness under the tax law.

_______________

Here are other commentaries on O‑Zones:

www​.down​siz​ing​gov​ern​ment​.org/​o​p​p​o​r​t​u​n​i​t​y​-​z​o​n​e​s​-​w​i​l​l​-​h​e​l​p​-​c​o​n​n​e​c​t​e​d​-​d​e​v​e​l​o​p​e​r​s​-​n​o​t​-poor

www​.cato​.org/​b​l​o​g​/​o​p​p​o​r​t​u​n​i​t​y​-​z​o​n​e​s​-whom

www​.cato​.org/​b​l​o​g​/​o​p​p​o​r​t​u​n​i​t​y​-​z​o​n​e​s​-​e​n​r​i​c​h​-​l​u​c​k​y​-​l​a​n​d​o​wners

www​.down​siz​ing​gov​ern​ment​.org/​o​p​p​o​r​t​u​n​i​t​y​-​z​o​n​e​s​-​f​u​e​l​-​c​o​r​r​u​ption

www.downsizinggovernment.org/o‑zones-fragment-america

One of the most common myths in education is that school choice is somehow bad for public school teachers. In fact, teachers started striking against school choice in Los Angeles just last week. However, basic economic theory tells us that school choice is actually good for teachers because it introduces competition for their employers. In a competitive education labor market, employers must compete for talent by offering teachers smaller class sizes, more autonomy, and higher salaries.

In fact, the five studies that exist on the subject all find that charter and private school choice leads to higher salaries for teachers in traditional public schools. For example, a study published in the Journal of Public Economics finds that charter school competition increases teacher salaries by about 3.4 percent in difficult-to-staff public schools. None of the five studies indicate that school choice competition is bad for public school teachers.

But that’s not all. As shown in Andrew Coulson’s School Inc. documentary, teachers in private institutions in South Korea are highly satisfied with their jobs because their students actually want to be there. And, of course, it’s easier for teachers in private educational institutions (“hagwons”) to tailor their lessons to students because the children “are matched with classes based on their performance levels” and interests.

Highly demanded teachers in South Korea are also financially rewarded for a job well done. As shown in the clip below, some of the teachers make well over $1 million each year. Now that’s an incentive structure that’s good for both students and teachers.

Maybe the teachers in Los Angeles should have been striking for more school choice, not less.