The Unbroken Window

The Rochester City School District Graduates 47% of its students.

When Progressives talk about education, they argue that it needs to be publicly subsidized and controlled AND that the schools need adequate funding. OK, so:

1. But, if the school system was funded publicly and controlled by the government that wouldn’t … ahem … happen?
2. But, if the school systems weren’t suffering from the starve the beast strategy, then they would have … ahem … enough … money? Well, they have 32,132 students and have a budget of $710 million. That means they are spending over $22,000 per student.

By the way, the district spends $95 million on direct administrative expenses alone (i.e. this ignores the numbers games they play to classify non-instructional expenditures as instructional expenditures and it also ignores the amount of unfunded liabilities (pensions and promised health benefits) that they have. Despite reports to the contrary, I don’t expect the RCSD do be solvent in these accounts when virtually every other municipality in the country is not solvent.

Please please please let’s make sure everyone has access to public health care too!

UPDATE: Chris M.’s Links are Too Priceless to Leave in the Comments

Our Vision

Every child is a work of art. Create a masterpiece (I added that link).

Our Mission

The mission of the Rochester City School District is to provide a quality education that ensures our students graduate with the skills to be successful in the global economy.

RCSD Core Values

Our three core values are based on the belief that every child can succeed. Every child can become a masterpiece.

• Achievement – Improving student achievement through a laser-like focus on teaching and learning (see above).

• Equity – Distributing resources equitably based on the needs of schools and students.
  
• Accountability – Using data to ensure that we hold adults accountable for the success of all students.

Milk is pouring out of my nostrils.

• Per capita GDP in the United States is roughly $47,000.
• Per capita personal income is about $39,880.

Let’s think about the kind of tax system we have in the U.S.

What kind of effective marginal tax rates do you think a family faces that has per capita income below half of per capita GDP in the country or per capita income that is only 56% of the per capita personal income rates?

10%? No. Try again.

15%? No. Try again.

20%? No. Try again.

30%? No. Try again.

40%? No. Try again.

How about 42.38%? Bingo!

I was just awarded $10,000 more per year in salary for teaching additional classes and taking on additional responsibilities at school. I only get to keep $5,762 of it. Each semester is 14 weeks, so that is like me teaching classes for pay the first 8 weeks of the semester, and then working for free for the remaining 6 weeks. I love teaching, so I guess that is a measure of how much. But working for 43% of the time for free? Wasn’t that slavery? Who is doing the exploitation in the world? The employers that are paying me the $10,000, or the looters that are taking the $4,238 from me?

That 42.38% might be a slight overstatement – I try to get my witholdings right so that I don’t let Uncle Sam get any more of my money than he already intends to steal – so maybe the right number is 40% or so. Think about that, our family has a per capita income well below the average in America, and the next dollar of our income is taxed at 42.38%. That does not include the 8.25% in sales taxes that I’ll have to pay when I purchase something with it and that does not include the taxes I would have to pay on it if I invested it an saved it.

I might be less appalled if the taxes were used to fund anything that I approved of – but that is not the case. Even so, here is a little perspective for you. We have two kids, and we send them each to Catholic school. They are tiny, so they are only in pre-school. When they are of regular school age, their combined tuition will exceed $8,000 per year. The extra income I get from working extra hours here at U of R would have been enough to send each of them to school for a year. Of course, the taxes are enough to send one of my kids to school for a year.

Without the extra income, it would be a real stretch for our family to send our kids to the school of our choice. I still pay nearly $6,500 in property taxes to largely fund the schools that I do not wish to send my children to. These are excellent schools, no doubt – but I do not wish to send my children to school on the dimes of someone else, nor do I wish to have them further indoctrinated in the religion of the state by an unaccountable teachers’ union.  Is it any wonder Catholic schools are closing down faster than Obama’s job approval numbers?

So, there’s a little transparency for you. I’ll share my 2009 tax return with you in a few weeks.

so long as the same thing that happened in Massachusetts does not happen for the country as a whole. Notice again, that Cutler and the current health plan neither say nor do a single thing about the most important drivers of cost – guaranteed issue, community rating, bans on inter-state trading, the medical practitioners cartel, the use of premium medicine, the prevalence of third-party payments …

I wished he could have laid out for us exactly how the proposed plan will save $600 billion over 10 years. That amounts to $60 billion per year – but does cost-saving mean “bending the curve” down? Furthermore, we spend $500 billion on Medicare alone, and over $2.25 trillion as a “nation” on health care each year. While 2.7 percent is nothing to scoff at, it is only 2.7 percent. And a 2.7 percent that many people believe has no chance at all of materializing.

Diane Ravitch writes in tomorrow’s WSJ about her conversion away from national testing standards and charter schools:

What we need is not a marketplace, but a coherent curriculum that prepares all students. And our government should commit to providing a good school in every neighborhood in the nation, just as we strive to provide a good fire company in every community.

You would do well to notice that not once in the article is a single justification for why the government ought to be involved in schooling at all – just a huge massive assumption that we need a public system. I’ll be posting lots in the coming weeks on public schooling, so I won’t address that point here. What I wanted to point out was her use of the fire provision as an analogy.

Fire protection was provided by government because of a classic free-rider problem. You and I are neighbors. If I get my own private fire protection, it probably does not make sense for you to get it. Why? Because if my fire company sees my neighbor’s house on fire, they are very likely to put it out because that fire also poses a threat to their client (me). So long as some people purchase fire protection, then it makes sense for others to free-ride – and if enough people behave this way, then not enough fire protection would be provided privately.

Of course, what this example illustrates is not some fundamental problem with markets, but rather it illustrates a huge transactions cost problem. In fact, almost every economic “problem” is a transactions cost problem. If there were a way to negotiate with non-paying customers on the spot, perhaps the free riding problem would be eliminated. More important, if there were a cost-effective way to prevent non-payers from enjoying my fire protection, the problem would be eliminated. But these transactions costs problems are just technological problems in disguise. At the time we thought up these market failure theories, the best way to quell fires was to have a fire truck come by after having sucked up some water from the river, and then dump a lot of water on your house.

Technology has made this problem far less severe. First of all, there are far more fire retardant and fire resistant building and barrier materials today. Second, there are things called smoke alarms and sprinkler systems which tend to work pretty well. Put those two things together, and it is not at all clear that an individual even needs the protection of a fire suppression company at all. As technology improves, what was once a “public good” subject to all manner of market failures becomes an excludable private good, little different than my canoe, or my steak dinner. So, we do not need to strive to have a great fire company in every community. So long as the benefits of fire protection can be internalized, there is no justification for government taxes and “free” provision of fire services to everyone.

Gosh, you have a huge audience and golden opportunity to make your best case for public schooling, and the best you come up with is, “schools are like fire companies.” Indeed they are.

Almost as a passing point in a long and interesting post, Arnold Kling says:

So, we should spend less on medicine and more on….what? Big-screen TV’s? smart phones? professional sports? My guess is that if Callahan got his wish and medical spending were reduced, he would not be happy with where money is spent, and his desire for socialist control would only increase.

And that my friends is at the root of this whole health care thing. You see it popping up in Environmentalism too. When inexpensive solutions to environmental problems reveal themselves, the green movement quickly turns against them. for example, if climate change was such a massive disaster, why isn’t nuclear much more popular? (I understand it can only power something like 40% to 50% of our needs – but that is still a massive improvement from where we are now). And now you see the greens coming out against solar (it makes the desert landscape ugly, and it uses lots of water to keep the panels clean), against wind (they ruin the view of the Kennedy family in Massachusetts, plus they kill some birds), against clean hydro (it kills fish), and so on. The point is that much of the modern environmental movement is a dressed up version of socialist control and massive market and capitalist hatred that is framed in a more “pragmatic” debate. The true greens will only be happy when our ability to produce and consume and trade are severely inhibited. If we were 100% carbon free right now, I guarantee the greens would still say what we are doing is unsustainable.

The same is true with health care. If politicians were serious about reform, it could be done with the stroke of a pen. But they are not. They are serious about further choking out market forces and they are really serious about imposing their version of top-down control on the rest of us.

Indeed, if health expenditures were halved, what would the elites have us turn our attention to?

Tags: elitism, power

From today’s WSJ:

Everyone knows Democrats are planning to use the budget reconciliation process to get ObamaCare through the Senate. Less well known is that Democrats are plotting add-ons to that bill to get other liberal priorities enacted—programs that could never attract 60 votes.

…

One of these controversial measures rewrites the Higher Education Act to ban private companies from offering federally guaranteed student loans as of this July. Congress has already passed laws in recent years discouraging private lenders from making loans without a federal guarantee. But most college financial-aid departments still want private companies to originate and service the guaranteed loans. That’s because the alternative—a public option run by the Department of Education—has been distinguished by its Soviet-style customer service.

…

Taxpayers have even more reason than academics to fear the impact, in part because the public may not learn the details before this plan becomes law. Democrats aim to bring their education revolution to the floor without a committee vote or even a hearing in the Senate.

…

Mr. Obama’s budget also calls for making Pell Grants a mandatory entitlement. At least now they are subject to annual appropriation and their growth can be slowed when tax revenues fall or other priorities rate higher. Mr. Obama would prefer spending that is quite literally out of control.

“Various changes that the President proposes to the Pell Grant program would add another $0.2 trillion to the deficit between 2011 and 2020,” CBO said Friday. That could turn out to be a very optimistic estimate if unemployment remains high and more people seize the educational opportunity to which they have just become entitled. Still another taxpayer trap will be sprung if the President’s proposal to forgive some debt incurred by “overburdened” borrowers is included in the bill.

Over time, Congress increasingly forbids private loan companies from making loans to students that do NOT have a federal guarantee (yeah, because guaranteeing other types of loans worked out real well). And then, under cover of darkness, “passes” a new Higher Education Act that says private loan companies cannot offer guaranteed loans. This is like public schools teaching their kids that they should only have sex using adequate protection such as condoms, and then imposing a policy suggesting that any student found in possession of a condom gets kicked out of school.

In fact, this is far worse. Congress does this under cover of darkness, and then plays budget tricks to make it appear that these things are fiscally appropriate. Let me ask one more time, do any of you so called “Progressives” have any understanding of what a tradeoff is? Do you really think we can have free higher education, free health care, subsidized energy, no carbon emissions, job security, retirement spending, food stamps, etc. all at the same time, with no adverse consequences? I tell you what, I’ll sign up for your top 2 favorite policy priorities on the condition that you rank all of them by both preference and expected net benefit, and on the condition that all of the policies that are not at the top of the list are dropped in their entirety. I suspect no one would sign up for that, or even a modified (i.e. more generous) version of that.

Who exactly is the wide-eyed ideologue?

Tags: democracy is a joke

When Seth Andrew, a founder of Democracy Prep, set up his charter middle school in 2006, it occupied the same building as a traditional public middle school that opened the same year. “We both opened with sixth grade and about 100 kids, though we had more special-ed children and English language learners,” he says. “After two years in the same building with the same kids on the same floor, this school was the lowest-performing school in Harlem, and we were the highest-performing school in Harlem.

More on the performance of Harlem’s Charter Schools.

Look at what has happened to the scarcity of arsenic over the past 100 years. (aside: arsenic is normally thought of as a poison, but even poisons have use. Arsenic is commonly used in pesticides, insecticides, plumbing, and a host of other uses. If you view arsenic as pure evil, then should be hoping that it has become more scarce, no?).

The top chart adjusts nominal arsenic prices to account for the general rise in prices since 1900 using a measure of the CPI’s broad inflation index. The bottom chart takes a different approach to adjust the arsenic data. It looks at the hourly wage of a typical manufacturing worker and asks how many hours would a typical worker need to work in order to secure a unit of arsenic (note that the 2009 data is my estimate based on monthly average spot prices for arsenic)

(note, I imputed the hourly wages for 1915-1918). Arsenic data from USGS, CPI data from BLS and wage data from Historical Statistics of the United States and BLS.

By any metric, the scarcity of arsenic is no higher today (in fact, it is much lower) than it was over 100 years ago, even as human consumption of tin has rocketed with economic growth and population growth. In real terms, arsenic prices have fallen by only 73.1% since 1900 from $3,340 per metric ton to roughly $900 per metric ton today. In 1900, it took a typical manufacturing worker 606 work hours to secure himself a ton of arsenic. Today, a similar worker would only have to work 45 hours to get it – a decrease of over 92 percent over the course of the century. And as I will show you, these are lower bounds for just how scarce arsenic really has become. Arsenic prices would have to rise to $12,109 per metric ton to make it just as hard for a typical worker to get it today as it was in 1900 (i.e. an increase of twelve times). Alternately, if arsenic prices remain unchanged, the typical worker would have his pay slashed to $1.48 per hour in order to be in a position that his 1900 counterpart was in. That’s a serious pay slash, even for greedy exploiting capitalists.

But this is just arsenic, right? Here is the previous entry in the series.

The candidates for Mayor in last year’s election in North Adams, MA spent a record amount to secure their position. Here are some questions and thoughts for y’all.

1. The report indicates that the two candidates, combined, spent $133,468 on the election. This is just the direct money cost. Just think of all the time that each of these candidates and their supporters spent on the election. Think of what productive work they could have been doing were it not for attending rallies, posting flyers, writing Op-Eds, arguing about who is a more effective looter, …
2. The incumbent Mayor lost, having spent almost $77,000. What does he have to show for those expenditures? What does North Adams have to show for those expenditures? The answer is nothing. Compare that to what happens when two competitors in a market process try to attract business. They compete by producing things of value and they compete by figuring out ways to deliver their good or service more efficiently. In either case, someone on the other end of that transaction always wins. Furthermore, even for the producer that “loses” all of the effort that went into competing for my business is not wasted. Someone, somewhere captures it. This is easier to see if we think about a world of barter. In a world of barter, the only way to buy something from someone else is to make sure you produce something of value that you can trade it for. So, if you and your neighbor both covet that wicker basket that the merchant down the street is making, what do you have to do? Each of you would set upon the task you are good at. Your neighbor may make a nice sweater. You might make some dried fruit. Each of you tries to persuade the wicker basket baker to trade you for your product.

   Suppose your neighbor “wins” the competition. In this case, he gets the basket and the basket maker gets the sweater. That trade, itself, is positive sum. Each would not have traded unless each was made better off. Taken by itself, that is a marvelous result of competition and trade. But market processes do one better. What of the person that “loses” the competition for the wicker basket? Is he poorer? No, in fact he (and society) is richer by exactly the amount of value he created by making the dried fruit. Either you can eat that fruit, or exchange it for some other good and service that you value. In other words, market competition is positive sum.

3. Compare this to political competition. In each transaction (independent of the competitive process), there is no guarantee that both parties gain. Who are the parties here? In this case, the voters of North Adams as the “buyer” and the candidates as the “seller.” Do the voters really value the existence of the mayor? Did they have a choice to not have a mayor? I think not. It is a forced transaction which by definition has to be suboptimal.
4. In addition to the political transaction being forced (i.e. not freely chosen), the transaction that people are being asked to participate in is one where there is nothing of economic value being created. Governments cannot produce anything without first extracting resources from somewhere else.
5. But the major issue should be, why so much money spent just to secure a position that supposedly is a “public interest” position? Clearly, the amount spent in the process has to be proportional to the gains to be had from becoming Mayor. Is the salary so good that people are willing to pay to get the position? If that is the case, then it seems to me that the salary should be reduced so that we do not have to waste resources to get people into the position. After all, how many people spend $76,000 just for the chance to hold down a job? I understand all the arguments you might make opposing such an idea, I am merely raising the notion that even if not the salary, there must be some other characteristics about the job that people find SO appealing that they would spend thousands of dollars on just to get.
6. What is that thing? How about power? How about showering gifts and favors and special privileges on your friends? Anyone who lives in Berkshire County knows the worst kept secret in the world that it is the most cronyistic place in America. But think about power and status competition. That is zero sum. And many behavioralists and leftists argue that zero-sum status competition (where I get pleasure not from how rich I am, but only from the fact that I am richer than my neighbor) is justification for taxing the heck out of incomes at the high levels. Then why do these same looters not also run around arguing for us to tax the heck out of people who obtain positions of power and status. After all, the satisfaction Mayor Barrett gets is that he lords his thieving influence over me and everyone else. And since some people are always going to have more influence than others, allowing people to compete to acquire it via the political process is wasteful. So that spending should be taxed. Actually, optimally, the accretion of power should be taxed. Why is it not? Because those in power are looters with no moral backbone. They like to dress up their anti-market biases in the language of market failure and fairness, they like to dress up their pro-power biases in the language of the “public interest” or “the people,” they like to dress up their envy of the productive class and the naturally talented in terms of technocratic efficiency – but at base, what it all really is, is naked thirst for power, and a naked hatred of free people and markets. Let’s finally call it what it is.

If you think I am crazy, ask yourself this question. How many people who have come to hold pro-government, statist, Socialist, Marxist views came to hold them through a deep reading of Marx, and the communitarian socialists who preceded him? I can count them on one hand among the people I know. Then how is it that people come to hold such views? I can only think of envy, hatred, jealousy, and avarice as explanations, despite the pragmatic preachings of those who hold such looting tendencies.

The “USA” (whoever that is) spends more on Medicare each year than Switzerland spends on … well, it spends more than the size of Switzerland.

In fact, the $500 billion that the US spends on Medicare would make it the 21st largest country in the world, just ahead of Sweden. But I guess that is not enough state spending, is it. And don’t say we are a bigger country – the number of Medicare eligible seniors is close to the size of the populations of several of the countries we spend more than.