Archive for September, 2011
Yes, the Department of Education Is Unconstitutional
Tina Korbe at HotAir had a mostly-great post on Michele Bachmann’s completely correct observation that the federal government is not authorized by the Constitution to muck about in education.
Specifically, Bachmann said, “[T]he Constitution does not specifically enumerate nor does it give to the federal government the role and duty to superintend over education that historically has been held by the parents and by local communities and by state governments.” Kudos to Bachmann for that. My colleague Neal McCluskey is the go-to guy on all of this, and explains it very succinctly in many places.
Korbe notes that Bachmann is right about the Constitution, but in an “update” at the end of her post, inexplicably adds:
Just wanted to clarify that Bachmann is “right about the Constitution” insofar as she says that the Constitution does not explicitly enumerate education as among the responsibilities of the federal government. I do not think the Ed Department is unconstitutional — but neither is it constitutionally mandated, leaving the people with the option of determining whether education is best directed at the federal or state level.
The Department of Education, along with so much else the federal government does, is unconstitutional. The only things that are constitutional for it to do are those things enumerated in the Constitution. Hence, if something is not listed there, it cannot do that something, period. That’s the whole point of enumerated powers.
Tina, I think a second “update” is in order!
Oh, and the feds have manifestly failed to achieve anything with their involvement over the decades.
Olbermann Mocks Obama ‘Jobs’ Plan; Try Blenders, Not More School Spending
Information about President Obama’s forthcoming “jobs” plan is so disappointing that even Keith Olbermann is mocking him.
And the saddest part has to be more spending on school infrastructure. As I pointed out last week, per-student spending on facilities has increased 150 percent over the last two decades, even after adjusting for inflation. And Andrew Coulson explained how public schools can spend so much and still have infrastructure problems: waste and incompetence.
But the president’s school construction plans are such a spectacularly sorry response to our Great Recession, Little Depression, malaise, what-have-you, that it deserves to be revisited with a pitch-perfect intro by Mr. Olbermann:
Are Tax Havens Moral or Immoral?
Being the world’s self-appointed defender of so-called tax havens has led to some rather bizarre episodes.
For instance, the bureaucrats at the Organization for Economic Cooperation and Development threatened to have me thrown in a Mexican jail for the horrible crime of standing in the public lobby of a hotel and giving advice to low-tax jurisdictions.
On a more amusing note, my efforts to defend tax havens made me the beneficiary of grade inflation and I was listed as the 244th most important person in the world of global finance — even higher than George Soros and Paul Krugman.
But if that makes it seem as if the battle is full of drama and (exaggerated) glory, that would be a gross exaggeration. More than 99 percent of my time on this issue is consumed by the difficult task of trying to convince policymakers that tax competition, fiscal sovereignty, and financial privacy should be celebrated rather than persecuted.
Sort of like convincing thieves that it’s a good idea for houses to have alarm systems.
And it means I’m also condemned to the never-ending chore of debunking left-wing attacks on tax havens. The big-government crowd viscerally despises these jurisdictions because tax competition threatens the ability of politicians to engage in class warfare/redistribution policies.
Here’s a typical example. Paul Vallely has a column, entitled “There is no moral case for tax havens,” in the UK-based Independent.
To determine whether tax havens are immoral, let’s peruse Mr. Vallely’s column. It begins with an attack on Ugland House in the Cayman Islands.
There is a building in the Cayman Islands that is home to 12,000 corporations. It must be a very big building. Or a very big tax scam.
As I’ve already explained in a post about a certain senator from North Dakota, a company’s home is merely the place where it is chartered for legal purposes. A firm’s legal domicile has nothing to do with where it does business or where it is headquartered.
Jury Rights Day
Today’s date, Sept. 5, marks an important historical event in the development of the right to trial by jury. On this day in 1670, William Penn and William Mead were prosecuted in England for “unlawful assembly,” “disturbing the peace,” and “riot.” These “crimes” arose from Penn having preached near Grace Church to a meeting of several hundred Quakers.
It was a peculiar trial in many respects. The court, for example, denied Penn’s request to simply read the indictment. But the trial was most notable for the way in which the court tried to bully the jury. When the jury did not come back with guilty verdicts, but a verdict that simply said “guilty of speaking to an assembly,” the court refused to accept that outcome and ordered the jury to return to their deliberations. When the jury returned with a verdict that acquitted Mead of all charges, the court ordered the jury to prison! Next, the jurors filed a writ of habeas corpus challenging the legality of their imprisonment.
Soon after, an important legal precedent was set for jury independence: jurors cannot be punished for voting their conscience. That’s the story behind “Jury Rights Day.”
Alas, the jury trial has been in a steady decline here in the United States.
We started out strong. Our Constitution says, “the Trial of all Crimes, except in Cases of Impeachment; shall by by Jury.” And our second president, John Adams, said, “It is not only [the juror's] right, but his duty … to find the verdict according to his own best understanding, judgment, and conscience, though in direct opposition to the direction of the court.”
But these days, the government pressures many defendants to enter into plea bargains so fewer and fewer cases go to trial. And the government no longer wants jurors to vote their conscience. Indeed, it goes so far as to arrest people for distributing pamphlets that discuss these matters.
We need policies that will once again honor the role that juries play in securing justice.
The Curious Case of Lloyd Chapman
Last week, I flayed the American Small Business League’s Lloyd Chapman for his absurd claim that legislation introduced by Sen. Richard Burr (R-NC) would close the Small Business Administration (see here). As I expected, Chapman’s response is equally absurd.
In an ASBL press release, Chapman actually threatens to take me to court over my calling him a “conspiracy theorist”:
The next time you call me a conspiracy theorist, be ready to back it up with facts. You just might find yourself in court.
Good luck with that, Lloyd. In the meantime, let’s allow the court of public opinion to decide if the following claim you recently made is the stuff of a conspiracy theorist:
Clearly Republicans like Senator Burr, his supporters and groups such as the CATO Institute are directed like puppets by the defense and aerospace industry.
I can’t speak for Sen. Burr, but Chapman’s assertion that the Cato Institute is being “directed like puppets by the defense and aerospace industry” is ridiculous. Cato’s Downsizing Government website, which I co-edit, lays out the case for cutting the Department of Defense.
My Cato colleagues past and present have consistently advocated for a limited U.S. presence abroad:
Cato’s foreign policy vision is guided by the idea of our national defense and security strategy being appropriate for a constitutional republic, not an empire. Cato’s foreign policy scholars question the presumption that an interventionist foreign policy enhances the security of Americans in the post-Cold War world, and maintain instead that interventionism has consequences, including the formation of countervailing alliances, the proliferation of weapons of mass destruction, and even terrorism. The use of U.S. military force should be limited to those occasions when the territorial integrity, national sovereignty, or liberty of the United States is at risk.
Does that strike the reader as anything the defense and aerospace industry would direct Cato to advocate? Clearly, Chapman is hopelessly lost in a fantasy world of his own creation.
This Week in Government Failure
Over at Downsizing the Federal Government, we focused on the following issues this past week:
- Over the last decade, annual average military wages rose 6.6 percent, federal civilian wages rose 5.0 percent, and private sector wages rose 3.0 percent.
- A rule-of-thumb to remember is that total federal spending is 3 to 4 percentage points of GDP larger than usually reported by officials.
- Imagining that more federal infrastructure spending will be a panacea for the economy is a liberal fairy tale, detached from the actual experience of most federal agencies over the last century.
- We’ve nearly tripled the cost of sending a child all the way through the K-12 system, while performance near the end of high school has been stagnant (reading and math) or even declining (science).
- Small Business Administration to close? Unfortunately, no.
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Why Congressional Budget Office Estimates and Policy Options Are Taken Much Too Seriously
Coercive redistribution and diversity in the interests of its constituent groups are essential features of the modern welfare state. Disagreement over perceived consequences of social policy creates the demand for publicly justified “objective” evaluations. If there were no coercion, redistribution and intervention would be voluntary activities and there would be no need for public justification for voluntary trades.
−James J. Heckman (winner of the 2000 Nobel Prize in Economics), “Accounting for Heterogeneity, Diversity and General Equilibrium in Evaluating Social Programs,” National Bureau of Economic Research Working Paper No. 7230, July 1999.
Why More Money Hasn’t, and Won’t, Fix the Nation’s Public School Buildings
Adam Schaeffer has just blogged about the massive increase in public school facilities spending of the past two decades, and about President Obama’s likely call to throw even more money at the problem of decrepit schools (in his address on the economy, next week).
Adam argues that money hasn’t fixed the problem, but it isn’t hard to imagine that a true believer in the status quo (paging Matt Damon…) might conclude that we simply haven’t increased facilities spending enough.
I addressed this counterargument a few years ago, using federal government data on the condition of U.S. public schools and data from a survey of Arizona private schools. What I found is that public schools were four times more likely than AZ private schools to have a building in “less than adequate” condition, despite the fact that public schools spent one-and-a-half times as much per pupil. [And, yes, I'm talking total spending here, not just tuition].
So if private schools can and do maintain their buildings in far better shape than public schools, at far less cost, what exactly are public schools doing wrong? The answer comes from one of the federal government’s own assessments of school facilities nationwide. According to that report,
a decisive cause of the deterioration of public school buildings was public school districts’ decisions to defer maintenance and repair expenditures from year to year. However, maintenance can only be deferred for a short period of time before school facilities begin to deteriorate in noticeable ways. Without regular maintenance, equipment begins to break down, indoor air problems multiply, and buildings fall into greater disrepair… Additionally, deferred maintenance increases the cost of maintaining school facilities; it speeds up the deterioration of buildings and the need to replace equipment.
This routine deferral of necessary maintenance is not, as the spending data show, the result of a funding shortage; it is the result of mismanagement. Allowing a public school to decay has no inevitable consequences for management because public schools have a monopoly on k-12 funding. Private schools, by contrast, would lose students if their facilities crumbled, and so they make a greater (and more effective) effort to maintain them.
The solution to America’s public school repair problems is not to spend more, it is to unleash the freedoms and incentives of the free enterprise system on our creaking, calcified, government school monopoly.
California’s Water-Liu
Over the last year and a half, I’ve blogged many times about Berkeley law professor Goodwin Liu, the controversial nominee to the Ninth Circuit, the federal appellate court with jurisdiction over the western states and territories. Here’s an op-ed I published in the wake of that nomination — which happened to coincide with Obamacare’s enactment. And here’s a taste of what I wrote when Republicans filibustered Liu, which ultimately led him to withdraw:
I’m not going to weigh in here on the issue of whether judicial nominees ought to be filibustered in general . . . but if ever there were an “extraordinary circumstance” fitting into the Gang of 14 agreement that broke the judicial logjam under President Bush, this is it.
As I blogged last year, Liu is, without exaggeration, the most radical nominee to any position that President Obama has made. He believes in constitutional positive rights — not that the welfare state and all its accompanying entitlements (and then some) are a good idea, but that they are constitutionally required.
Well, today Liu finally reached the bench, being confirmed to the California Supreme Court. This is an unfortunate development for the citizens of California, to be sure, but, as I tweeted earlier today, at least Liu’s damage will be limited to that irredeemable state.
Of course, a state supreme court justice may be an attractive choice for appointment to the U.S. Supreme Court, particularly given that we haven’t had a state jurist appointed since President Reagan tapped Sandra Day O’Connor in 1981. And Liu would be the first Asian-American on the highest court in the land, which could further tempt Barack Obama or a future Democratic president to select him. Such are the stakes for every presidential election until the 40-year-old Liu is deemed too old for elevation.
K-12 Facilities Spending Up 150 Percent in Two Decades – Apparently Not Enough for Obama
USA Today reports that part of President Obama’s much-anticipated plan for the economy, 3.0, might involve sending billions more in construction funding to our government school system:
A plan to boost construction jobs nationwide by providing federal money to repair public schools is picking up support among unions, economists and liberal advocates with direct ties to the White House.
Brilliant! Just the thing to fix our education system, economy and massive deficit . . . more lavish spending piled up high upon our already-lavishly-funded government schools.
Andrew Coulson already reviewed the dismal record of our total K-12 education “investment” over the last few decades. The short story; the cost per student has nearly tripled while test scores at the end of high school are flat.
But maybe, despite $500 million-dollar debacles like LA’s RFK high school and countless other examples of stupendously overbuilt government school facilities, just maybe we’ve neglected to spend “enough” on school buildings overall.
Here is the truth, in all of its depressing visual simplicity:
Three Strikes and You’re Out
When the Wall Street Journal, the Financial Times and the New York Times agree on the merits of a policy, readers will understandably be confused.
At the annual rendezvous of central bankers in Jackson Hole, Wyoming this past weekend, the IMF’s new managing director Christine Lagarde asserted that Europe’s banks should be recapitalized. This, she claimed, would make the banks “safer” and improve the chances for European growth.
On August 29th, I wrote that Ms. Lagarde had misdiagnosed Europe’s banking problems and is confused. Indeed, her prescription would be deflationary and put more stress on Europe’s fragile economies.
On August 30th, I criticized the Wall Street Journal‘s editorial which praised Ms. Lagarde’s recapitalization ideas. Strike one.
On August 31st, I commented on the F.T.‘s effusive endorsement of Ms. Lagarde’s recapitalization proposals. Strike two.
With the New York Times, we have strike three. Ms. Lagarde’s recapitalization ideas are out.
Recapitalizing banks in the middle of economic troubles is a dangerous and unwise course. For more on this issue, I recommend Prof. Tim Congdon’s book Money in a Free Society which Encounter Books will release in October. Prof. Congdon’s book is profound and I am pleased that its dust jacket will carry my endorsement:
Prof. Tim Congdon, one of the world’s most eminent monetarists, employs his multiple talents and experience – as a first-rate scholar, market economist and financial journalist – to unravel the mysteries of modern money and banking systems. His most careful and anxious attention to the arguments proffered in the great canonical works and debates of the past is unmatched. This, coupled with his mastery of the tricky intricacies of modern money, will ensure that readers of “Money in a Free Society” are richly rewarded. Among other things, they will learn that Nobelist Paul Krugman and the Chairman of the Federal Reserve Ben S. Bernanke have a tenuous grasp on both economic theory and reality, rendering their analyses of the current crisis wrong and/or irrelevant.
Vouchers ARE Government Money, and That’s the Problem
The recent decision of a Colorado court to halt a first-of-its-kind voucher system instituted by a local school district has, not surprisingly, been subjected to widespread criticism from school choice supporters.
The Heritage Foundation’s Rachel Sheffield, for instance, argues “The judge’s decision is the result of a lawsuit brought by the American Civil Liberties Union that claims that the program violates the law by providing public money to religious organizations. . . . In typical statist fashion, these claims are born from a philosophy that holds that the money you earn is in fact not yours to keep but instead belongs to the state.”
The problem with this argument, and with vouchers generally, is that voucher money DOES belong to the state. The recent U.S. Supreme Court ruling in Arizona Christian School Tuition Organization v. Winn that Rachel cites here concerned an education tax credit program in Arizona, not a voucher program.
Vouchers are grants of government funds, while tax credits are private funds. The court held that money spent and claimed as a credit, which is never collected in taxes in the first place, remains private money, not government spending like school vouchers. Other taxpayers can’t be harmed by the choices of those claiming credits because each taxpayer gets to decide, individually, what happens to their own money.
Under vouchers, as Justice Kennedy explained, “a dissenter whose tax dollars are ‘extracted and spent’ knows that he has in some small measure been made to contribute to an establishment in violation of conscience. … [By contrast,] awarding some citizens a tax credit allows other citizens to retain control over their own funds in accordance with their own consciences.”
The challenge to the AZ education tax credit program failed because only private funds are involved. A taxpayer challenging a voucher program would have standing under this decision.
State constitutions typically include provisions that are much more restrictive of how state funds can be used in education and which pose much greater threats to voucher programs. Colorado’s court ruling, for instance, identified five separate legal problems with the Douglas County voucher program.
Part of the reason Colorado’s program was stopped in its tracks is a state constitutional provision that reads: “No appropriation shall be made for charitable, industrial, educational or benevolent purposes to any person, corporation or community not under the absolute control of the state, nor to any denominational or sectarian institution or association.”
There is certainly room for a different interpretation of this provision, but ruling that vouchers are in violation of it constitutes neither judicial activism nor statist thinking. Indeed, it could be argued that this is the more conservative, originalist interpretation.
There is simply no way around the fact that vouchers are government funds, subject to whatever constitutional and statutory restrictions a state may place on their use. In the case of education, these restrictions are many and serious.
The most recent and bracing conclusion comes, again, from Arizona. In 2009, the Arizona Supreme Court ruled in Caine v. Horne that voucher programs for disabled and foster children violated a state constitutional ban on aid to private schools because it was an expenditure of government funds. That same court previously upheld a state tax credit program on the grounds that the credits did not constitute an expenditure of government funds. The status of vouchers as government funds was key to the decisions overturning Colorado’s earlier voucher program in 2004 and Florida’s in 2006.
Unlike vouchers, education tax credit programs have withstood every state and federal challenge advanced against them over the past two decades. Major credit programs in Indiana, Florida, Georgia and Pennsylvania – to name a few – have yet to be challenged. And for good reason; they are on solid constitutional ground at both the state and federal level.
Using state money to fund private school choice with vouchers opens a world of serious and legitimate risks to which education tax credits are not vulnerable.
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