A Weak Defense of Disclosure
In an earlier post, I wrote about the problems with the Obama administration’s executive order to force government contractors to reveal their political activity.
The administration defends the mandate by arguing “taxpayers deserve to know how contractors are spending money they’ve earned from the government.”
For the first (and perhaps last) time, I rise to the defense of government contractors. The President apparently believes that anyone who sells a good or service to the government must account for the uses of the money received in the transaction in perpetuity? Obama’s press secretary said the President’s “goal is transparency and accountability. That’s the responsible thing to do when you’re handling taxpayer dollars.”
I do not understand this. The government extracts taxes and spends the money. Indeed, government officials should be accountable for that spending. But once the exchange is made, the money belongs to a private firm. It is no longer the property of the taxpayers. Perhaps the use of a firm’s money should be disclosed, but you need a different argument to justify that mandate. The President seems to be proposing that anyone who does business with the government may have to account for the money they earn in those transactions. That assertion strikes me as a real expansion of government power.
The most troubling part of all this remains the President’s view that he can enact this mandate through an executive order. Americans should be wondering why a rule rejected by Congress can simply be enacted by fiat by the President. The President does not enjoy the power of a king, does he?
The President’s gambit may be in trouble. Sen. Susan Collins, a Republican from Maine, is questioning the content of the decree. I am glad she is concerned about the First Amendment. I would be happier if she questioned the Obama-Bush conception of executive power that informs this effort.
Let’s Not Lose Sight of a Real Education Market
Over the last few days Jay Greene, the Fordham Institute’s Kathleen Porter-Magee, and several other edu-thinkers have been arguing about whether national curriculum standards would destroy a competitive market in education, and a market that already provides the uniform standards Fordham wants Washington to impose. But let’s be very clear: We haven’t had a real market — a free market — in education for a long time.
Sadly, I’m afraid Jay started this whole mess, though he certainly knows what a free market in education would look like and I don’t think he intended to confuse the issue. Indeed, he doesn’t use the term “free market,” but mainly writes about the “competitive market between communities.” His argument is that Americans over time picked standardized curricula and schools by moving to districts that provided such things. He is no doubt at least partially right, though the case is hardly open and shut. Indeed, there is strong historical evidence that district consolidation and uniformity was often pushed on small districts from outside, especially in urban areas. It is also quite possible that many people moved to districts with uniform offerings not in search of such offerings, but in search of something else that happened to coincide with them. Most notably, industrialization brought many people to cities in search of employment, and school uniformity often came with that. Finally, the economist whose work inspired Jay’s post notes that while he believes small rural districts died largely due to residents abandoning them, he concedes that there is a “lack of direct evidence connecting rural property values with local decisions about consolidation.”
Those caveats aside, Jay’s point is a still good one that I have made before, most notably when discussing schooling and social cohesion: People will tend to have their children learn many ”common” things because that is the key to personal success. People will learn what they need to in order to work effectively and successfully in society. Moreover, people will simply tend to gravitate toward things that work.
So the main problem in the Greene-Fordham debate is not that Jay’s points are necessarily wrong, it’s that “competitive market between communities” is too easily misconstrued as “free market,” and it fails to acknowledge the gigantic inefficiencies that come from government monopolies, whether controlled at the district, state, or federal level. Those include the massive, expensive waste that fills the pockets of special interests employed by the system; constant conflict over what the schools will teach; and at-best very ponderous competition — if you want a better school you have to buy a new house — that quashes crucial innovation and specialization. Worse yet, it leads to the following kind of crucial, damaging misunderstanding by Porter-Magee:
For more than a decade we have been conducting a natural experiment where we let market forces drive standards setting at the state level. The result? A swift and sure race to the bottom. A majority of states had failed to set rigorous standards for their students—and had failed to create effective assessments that could be used to track student mastery of that content. In fact, the whole impetus behind the Common Core State Standards Initiative was to address what was essentially a market failure in education.
This is wrong, as they say, on so many levels!
Accountability in the New Congress
Just over a week ago, Politico ran a story noting that Justin Amash, a newly-elected House member from Michigan, had already voted “present” more often than his predecessor had in eight years. The story suggested that Amash was trying to avoid electoral responsibility for tough votes by voting present. In general, the story suggested that his “present” votes were a failure in some way to meet his responsibilities as a representative.
You can read Amash’s take on all this at his Facebook page. Although I have never met Amash, I have followed his political career over the past year or so. In Michigan, he emphasized transparency and accountability. He reported and explained his votes on his Facebook page. He is continuing to do that here in Washington. Does that sound like a politician trying to avoid accountability?
Politico also reported some of Amash’s reasons for voting “present”: when he does not have “reasonable” time to review the legislation, when called upon to choose “between programs he hasn’t been given time to study,” when he has “procedural or constitutional concerns about a piece of legislation that has desirable ends,” and when he has a “substantial conflict of interest” — a situation that has not yet happened.
Amash sounds like a representative trying to take his obligations seriously. Apparently he feels he owes his constituents his best judgment about bills before the House and, absent enough time, he refuses to delegate his judgment to party elders or to mere caprice. It says something about the culture of the capital that Amash’s sense of fidelity to those who elected him occasions complaint.
The latest from Politico on Justin Amash confirms this impression. Among House GOP freshmen, he is the least likely to vote for the position taken by a majority of his class. That might be cause for concern since the GOP freshmen seem intent on cutting government spending. But I really doubt that Amash has gone native in DC. He is voting with the other GOP freshmen 70 percent of the time. It is possible that the other 30 percent of his votes reflect a concern for liberty or what he sees as the good of his constituents. Sometimes there is a great difference between being a party man and being a friend of liberty and a faithful representative.
More than a few Washington insiders are probably saying Amash is off to a rough start in his congressional career. I disagree. What I have seen so far, including these criticisms of him, confirm what I have thought for some time: Justin Amash is one of the most interesting and potentially important representatives to come to DC in a long time.
Is Congress Above the Law?
The first item on this election campaign’s Contract with America was that, if elected (as they have been), the House Republicans would require that all laws that apply to the rest of the country also apply to Congress. We’ll see if that and the other promised reforms materialize, but it does raise yet another issue in the context of Obamacare.
As my colleague Michael Cannon pointed out to me, the new health care law kicks congressmen out of the Federal Employees Health Benefits Program. (The current FEHB is no different from the health coverage provided by any private employer -– federal employees choose from a series of private plan options (none of which is run by the government), and receive a subsidy from the federal government acting in its role as an employer.)
My first reaction to hearing this was: Good — if the rest of us lose our health care freedom, so should those who forced this new atrocity on us. But apparently this result was not intended, so the Obama administration has decided to ignore that part of the law.
No joke. Here is the Congressional Research Service report on the provisions that oust members of Congress from their health insurance. And here is the letter in which an Obama appointee announces that the administration will ignore the law. These two articles also provide important information.
Now, assuming that something constitutionally problematic is going on here, what can anyone do about it? To put it in legal terms, who has standing to sue for this apparent constitutional violation? It’s a tough row to hoe — taxpayers cannot bring suit based on generalized grievances — but off the top of my head, I can think of two possibilities: (1) members of Congress suing the president or the Department of Health and Human Services for essentially passing new law and therefore infringing on congressional prerogatives (thereby violating the separation of powers); or (2) an insurance broker or carrier who would otherwise be signing up new clients.
And there are two additional related questions:
1. Why did Congress expand Medicaid while refusing to participate in it themselves? Obamacare expanded Medicaid to an estimated 18 million new Americans, none of whom will have a choice of private plans, instead being dumped into Medicaid, a program notorious for access problems (and which in Arizona now doesn’t cover organ transplants). Yet all Senate Democrats voted against an amendment enrolling members of Congress in the new Medicaid program (all Republicans voted for it, except one who was absent).
2. Will members of Congress use their own salaries to pay any fines assessed because their employees have “unaffordable” health coverage? Obamacare includes a $2,000 per worker penalty for any employer that does not provide “affordable” coverage, beginning in 2014. Many junior staffers have incomes below 400 percent of the federal poverty level ($43,320 for a single person, or $88,200 for a family of four), and thus could be subject to the new statutory test of whether their health insurance options are “affordable.” While it’s unclear how this particular provision will be implemented for Hill staff – due to the “significant unintended consequences” of sloppy drafting — it’s entirely possible that member offices could be assessed a $2,000 penalty for every worker needing insurance subsidies because they have no “affordable” alternative. If that scenario happens, will the members of Congress who voted for the law pay the penalty out of their own salaries or will they rely on taxpayer funds to finance an obligation they imposed on themselves?
The Private Sector Lacks What?!?
So there I was, checking e-mail this morning on my JooJoo when I came across this editorial about how the private sector lacks accountability unless the government provides it through regulation! This naturally caused me to expectorate New Coke all over over myself and my Apple III, forcing me to toss my Levi’s Type 1 jeans in the wash and hop back in the shower. (You know, that Touch of Yogurt shampoo by Clairol is really… uh… something).
Twenty minutes later I was still so preoccupied about responding to the editorial that I backed over my neighbor’s Segway as I pulled the Edsel out of the garage. Oops. Sorry Dean.
Anyway, once I got into the office I popped a couple of Ben Gay Aspirin to ease my now ferocious headache, but realized as I did so that I’d left my Colgate Kitchen Entree frozen dinner at home. Argh!
You get the idea, yes?
The fact that consumers have demands, and that they can go elsewhere if you fail to meet them, makes producers accountable. We see this in every sector of the economy. Provide a product or service that people don’t want, take away one that they do want, or charge more than they are willing to pay, and they will kick you right in the bottom line.
The result is the same in education as in other fields: the least regulated, most market-like education systems consistently outperform highly regulated state-run school systems such as we have in this country—across every measure people care about.
Regulations are an attempt, crude and usually unsuccessful, to imitate the accountability inherent in competitive markets. So as long as you allow market forces to work in education, and you allow people to allocate their own money rather than taxing it and spending it through the state, regulations are not only unnecessary they are generally counterproductive. (Milton and Rose Friedman had a good chapter on this in Free to Choose.)
Note that this is true under both personal use education tax credits (for parents’ own education costs) and scholarship donation tax credits (in which taxpayers donate to non-profit organizations that subsidize education for the poor). If a scholarship organization becomes corrupt or inefficient, taxpayers can easily redirect their donations to better-run competing organizations. The accountability is built into the system’s design. No other private school choice program has this feature, and certainly public schools do not.
There is no evidence that layering government regulations on top of this market accountability system improves outcomes, and ample evidence that heavily regulated school systems perform badly. Unless those facts change, there is good reason to fight off attempts to regulate private schools under education tax credit programs.
Child Care Subsidies Fraud
The Department of Health and Human Services’ Child Care and Development Fund is a state aid program that subsidizes child care expenses for low-income working families with children. The federal government largely leaves it to the states to provide oversight for the CCDF program, which HHS estimates loses more than 10 percent of its funding in improper payments.
A new report from the Government Accountability Office shows widespread fraud by CCDF recipients in the sampling of states that it investigated:
Our proactive testing revealed that CCDF programs in the 5 states we tested were vulnerable to fraud because states did not adequately verify the information of children, parents, and providers and lacked adequate controls to prevent fraudulent billing. In 7 of 10 cases in four states, our fictitious parents and children were admitted into the CCDF program because states did not verify the personal and employment information provided by the applicants. Three of those states paid $11,702 in childcare subsidies to our fraudulent providers, and two states allowed the providers to over bill for services beyond their approved limit. Only one state successfully prevented our fictitious applicants from being admitted into the program, but officials from that state told us they perform only limited background checks on providers and cannot immediately detect over billing.
The GAO’s findings can be summarized as follows:
- States lack effective controls to verify parent and child information, such as a parent’s income eligibility.
- States do a poor job of checking the backgrounds of providers, which mean subsidized child care could be being provided by sex offenders.
- States have weak controls to prevent fraudulent billing. Nonetheless, the GAO found numerous instances of delays in processing applications.
None of these findings are particularly surprising considering that government bureaucracies have little incentive to make sure funds are appropriately spent. The reason is simple: bureaucracies play with other people’s money and aren’t subject to competitive market forces.
When the government engages in “charitable” activities, it does so with money that it involuntarily obtains from taxpayers. In contrast, those who voluntarily donate to charities have an incentive to make sure their donations are properly used. If a charity does a poor job, donors have the freedom to turn to a different charity.
See this essay for more on the problems with subsidy programs administered by HHS, including the CCDF.
Accountability for ‘Exigent Letter’ Abuse At Last?
It is more than three years since the Office of the Inspector General first brought public attention to the FBI’s systematic misuse of the National Security Letter statutes to issue fictitious “exigent letters” and obtain telecommunications records without due process. Nobody at the Bureau has been fined, or even disciplined, for this systematic lawbreaking and the efforts to conceal it. But the bipartisan outrage expressed at a subcommittee hearing of the House Judiciary Committee this morning hints that Congress may be running out of patience—and looking for some highly-placed heads to roll. Just to refresh, Committee Chairman John Conyers summarized the main abuses in an opening statement:
The IG found that more than 700 times, such information was obtained about more than 2,000 phone numbers by so-called“exigent letters” from FBI personnel. In some cases, the IG concluded, FBI agents sent the letters even though they believed that factual information in the letters was false. For more than 3,500 phone numbers, the call information was extracted without even a letter, but instead by e‐mail, requests on a post‐it note, or “sneak peaks” of telephone company computer screens or other records…. In one case, the FBI actually obtained phone records of Washington Post and New York Times reporters and kept them in a database, leading to an IG conclusion of “serious abuse” of FBI authority and an FBI public apology.
It’s probably actually worse than that: Since these letters often requested a “community of interest” analysis for targeted numbers, the privacy of many people beyond the nominal targets may have been implicated—though it’s hard to be sure, since the IG report redacts almost all details about this CoI mapping.
Obama’s Education Proposal Still a Bottomless Bag
This morning the Obama Administration officially released its proposal for reauthorizing the Elementary and Secondary Education Act (aka, No Child Left Behind). The proposal is a mixed bag, and still one with a gaping hole in the bottom.
Among some generally positive things, the proposal would eliminate NCLB’s ridiculous annual-yearly-progress and “proficiency” requirements, which have driven states to constantly change standards and tests to avoid having to help students achieve real proficiency. It would also end many of the myriad, wasteful categorical programs that infest the ESEA, though it’s a pipedream to think members of Congress will actually give up all of their pet, vote-buying programs.
On the negative side of the register, the proposed reauthorization would force all states to either sign onto national mathematics and language-arts standards, or get a state college to certify their standards as “college and career ready.” It would also set a goal of all students being college and career ready by 2020. But setting a single, national standard makes no logical sense because all kids have different needs and abilities; no one curriculum will ever optimally serve but a tiny minority of students.
Also, on the (VERY) negative side of the register, Obama’s budget proposal would increase ESEA spending by $3 billion from last year — for a total of $28.1 billion — to pay for all of the ESEA reauthorization’s promises of incentives and rewards. That’s $3 billion more that the utterly irresponsible spenders in Washington simply do not have, and that would do nothing to improve outcomes.
Even if this proposal were loaded with nothing but smart, tough ideas, it would ultimately fail for the same reason that top-down control of government schools has failed for decades. Teachers, administrators, and education bureaucrats make their livelihoods from public schooling, and hence spend more time and money on education lobbying and politicking than anyone else. That makes them by far the most powerful forces in public schooling, and what they want for themselves is what we’d all want in their place if we could get it: lots of money and no accountability to anyone.
As long as such asymmetrical power distribution is the case — and it’s inherent to “democratic” control of education — no proposal, no matter how initially tough, is likely to make any long-term improvements. As the matrix below lays out, no matter what combination of standards and accountability you have, politics will eventually lead to poor outcomes. It’s a major reason that the history of government schooling is strewn with “get-tough” laws that ultimately spend lots of money but produce no meaningful improvements, and it’s a powerful argument for the feds complying with the Constitution and getting out of education.
When all is said and done, you can throw all the great things you want into the federal education bag, but as long as politicians are making the decisions you’ll always come up empty.
You Always Lose with Top-Down Standards
Yesterday, Andrew Coulson and I wrote a bit on President Obama’s little talk with the nation’s governors about potential changes to federal education policy. The root of the President’s proposal — and we’ve probably only seen fragments of what will eventually come out – is a requirement that states adopt common “college- and career-readiness standards” to qualify for large chunks of federal money.
This certainly puts in place the “standards” part of “standards and accountability” reform, which has dominated education for roughly the last fifteen years. But where’s the ”accountability” part?
So far, nowhere. Yes, a state would have to adopt common standards — or, interestingly, somehow work with universities to certify its standards as college- and career-ready — but the administration has offered nothing by way of accountabilty for academic outcomes. Indeed, it has emphasized a move away from the “corrective” actions that No Child Left Behind imposes on laggard schools and has instead pushed getting extra resources (of course!) to those institutions.
This must be alarming to reformers who think the only way to fix education is to have government “get tough” on its schools. And the no-accountability approach certainly doesn’t make much intuitive sense. Without potential punishments or rewards for outcomes, what incentives do districts and schools have to meet standards, national or otherwise?
The answer, of course, is none. But don’t fret: Whether there are accountability measures for performance or not, in government-run schooling the outcome will be the same. Unfortunately, ”the same” always means ”poor.”
Why inevitably poor? Because the people employed in education — teachers, school administrators, bureaucrats — have hugely disproportionate power over education politics, and hence a tremendous ability to bend the system to their will. And what do they prefer from the system? The same thing you or I would ideally get from our jobs: as much money as possible with no accountability for what we produce. The impotence of NCLB is exhibit A of this.
With that political reality firmly in mind, the final result for any potential combination of standards and accountability becomes clear: No meaningful improvement. The handy matrix below lays it out:
So let’s give this to President Obama: His move to further federalize education authority is very troubling, but at least he doesn’t see the need for the accountability charade. Or so, anyway, it seems for the moment.
Neither Standards Nor Shame Can Do the Job
Washington Post education columnist Jay Mathews has done it again: lifted my hopes up just to drop them right back down.
In November, you might recall, Mathews called for the elimination of the office of U.S. Secretary of Education. There just isn’t evidence that the Ed Sec has done much good, he wrote.
My reaction to that, of course: “Right on!”
Only sentences later, however, Mathews went on to declare that we should keep the U.S. Department of Education.
Huh?
Today, Mathews is calling for the eradication of something else that has done little demonstrable good — and has likely been a big loss – for American education: the No Child Left Behind Act. Mathews thinks that the law has run its course, and laments that under NCLB state tests — which are crucial to standards-and-accountability-based reforms — “started soft and have gotten softer.”
The reason for this ever-squishier trend, of course, is that under NCLB states and schools are judged by test results, leading state politicians and educrats to do all they can to make good results as easy to get as possible. And no, that has not meant educating kids better — it’s meant making the tests easier to pass.
Unfortunately, despite again seeing its major failures, Mathews still can’t let go of federal education involvement. After calling for NCLB’s end, he declares that we instead need a national, federal test to judge how all states and schools are doing.
To his credit, Mathews does not propose that the feds write in-depth standards in multiple subjects, and he explicitly states that Washington should not be in the business of punishing or rewarding schools for test performance.
“Let’s let the states decide what do to with struggling schools,” he writes.
What’s especially important about this is that when there’s no money attached to test performance there’s little reason for teachers unions, administrators associations, and myriad other education interests to expend political capital gaming the tests, a major problem under NCLB.
National Standardizers Just Can’t Win
I’ve been fretting for some time over the growing push for national curricular standards, standards that would be de facto federal and, whether adopted voluntarily by states or imposed by Washington, end up being worthless mush with yet more billions of dollars sunk into them. The primary thing that has kept me optimistic is that, in the end, few people can ever agree on what standards should include, which has defeated national standards thrusts in the past.
So far, the Common Core State Standards Initiative – a joint National Governors Association/Council of Chief State School Officers venture that is all-but-officially backed by Washington — has avoided being ripped apart by educationists and plain ol’ citizens angry about who’s writing the standards and what they include. But that’s largely because the CCSSI hasn’t actually produced any standards yet. Other, that is, than general, end of K-12, “college and career readiness” standards that say very little.
The Audacity of Hypocrisy
In his ongoing effort to micromanage the U.S. economy President Obama used his Dec. 12 weekly radio address to promote his proposed Consumer Financial Protection Agency. It will be filled with bureaucrats second-guessing entrepreneurs and is sure to improve the performance of our financial institutions — much in the manner of the SEC’s bureaucrats alertly nailing Bernie Madoff just 30 years into his Ponzi scheme. Never mind that the federal government had much more to do with the financial meltdown than the banks did, the real knee-slapper in his address was his claim that the CFPA “would bring new transparency and accountability to the financial markets…” This, from a man demanding passage of a 2000-page health care reform bill that no one, including Mr. Obama, has read. So much for transparency and accountability.
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