6 October 2009
Today’s Tabbloid
PERSONAL NEWS FOR lgn@limitedgovernmentnetwork.com
FISCALLY CONSERVATIVE BLOG FEEDS
Throwdown with Charles
Murray [Cato at Liberty]
OCT 05, 2009 05:20P.M.
In a response to my post this morning, Charles Murray remains
unconvinced that changes to our school system could result in dramatic
improvements in educational outcomes.
He asks to see the scholarly study showing that a school has miraculously
boosted achievement above the norm. In one way, this hurdle is too low,
and in another it’s too high.
If we could only point to a single study of a single school, it wouldn’t
instill much confidence in the generalizability of the phenomenon. A
consistent pattern of scholarly results is necessary for that. On the other
hand, asking for “miraculous” improvement is a needlessly high
standard. My disagreement is with Murray’s earlier, lower threshold
claim that: ”reforms of the schools can never do more than produce score
improvements at the margin.”
Let’s call a marginal improvement an increase of less than .15 standard
deviations above the current mean (typically considered a “small” effect
in the social sciences). Taking that as our litmus test, is there a consistent
pattern of scholarly evidence that better school system design can boost
achievement by more than .15 standard deviations? Yes.
That pattern is presented in the figure above, drawn from my recent
review of the global econometric literature comparing educational
outcomes across different types of school systems. The figure relates the
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number of statistically significant findings favoring free education
markets over state school monopolies (in white), significant findings of
the reverse (in light grey), and insignificant findings (in dark grey).
Markets beat monopolies by a ratio of 15 significant findings to 1, across
the seven educational measures for which data are available.
While a few of these findings have small effect sizes, many are above .15
standard deviations — some of them well above it. A paper by Tooley,
Dixon, Bao, and Merrifield (under consideration by the journal
Economics of Education Review), for instance, finds that in Nigeria
private schools outscore public schools by double that amount, after
controls, while ”in Delhi and Hyderabad private unrecognized schools
top state-run schools in math instruction by about 2/3 of a standard
deviation.” A recent randomized assignment study of the DC voucher
program finds that voucher students who’ve been in the program for
three years are reading two grade levels ahead of their public school
peers (.42 std deviations), though the average voucher is worth only a
quarter of what DC spends per pupil on public k-12 education.
These are more than marginal improvements, and they are part of a
consistent pattern. That pattern strongly suggests that moving from our
current monopoly school system to a free and competitive education
marketplace would shift the bell curve of academic achievement
significantly to the right, raising the mean achievement substantially
above its current level.
No one should be surprised by that. Imagine how far the bell curve for
median income across modern nations would shift to the left if all free
markets were supplanted with centrally planned monopolies such as
have ruined the economies of Cuba, North Korea, and until recently
many other nations.
Today’s Tabbloid PERSONAL NEWS FOR lgn@limitedgovernmentnetwork.com
FISCALLY CONSERVATIVE BLOG FEEDS
Why Is For-Profit Education So
Difficult in the U.S.? [Cato at
Liberty]
OCT 05, 2009 05:17P.M.
Matt Yglesias has a post up looking at the PISA scores, and he seems to
imply that for-profit schooling has been tried and found wanting in
Sweden and the U.S.:
The big difference is that many Swedish charters are run by
for-profit firms. We’ve had some experiments with that in the
U.S. and it hasn’t worked very well. Nobody’s really found a
great way of making consistent profits running K-12 schools
in America.
Of course even he notes that Sweden’s schools are highly regulated by
the state.
And in the U.S., the difficulty of succeeding in for-profit education just
might have something to do with that government monopoly on k-12
education and the $560 billion or so in tax revenues that fund it.
Maybe.
FISCALLY CONSERVATIVE BLOG FEEDS
Political Prisoners in Venezuela:
Where Is the Organization of
American States? [Cato at
Liberty]
OCT 05, 2009 04:19P.M.
The Washington Post has a great story today on the swelling number of
political prisoners in Venezuela. As the story points out, the government
of Hugo Chávez is increasingly targeting university students who have
been active in the opposition movement. They are jailed under bogus
charges of “destabilizing the government,” or “inciting civil war.”
Unfortunately, despite stories and numerous reports from international
media outlets and human rights groups, the Organization of American
States—which has been very active in trying to reinstall Manuel Zelaya to
the Honduran presidency—has remained silent on this issue. Last week,
dozens of students went on a hunger strike in front of the OAS
headquarters in Caracas, but no official from that organization came out
to meet them. After several days some students were allowed to talk with
the OAS ambassador in Caracas, who put them in touch with the director
of the Inter-American Commission on Human Rights (IACHR). Jose
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6 October 2009
Manuel Insulza, secretary general of the OAS, then asked the Venezuelan
government to authorize the visit of a delegation of the IACHR, a request
that hasn’t been granted. Judging by the lack of follow up efforts, the
OAS, made up of a majority of countries that receive Venezuelan largesse
of some form, seems mostly uninterested in pressing this issue.
The OAS seems ready to help deposed would-be autocrats in Latin
America. Where is it when it comes to defending the rights of political
prisoners in Venezuela?
FISCALLY CONSERVATIVE BLOG FEEDS
The Czar Will Rule [Cato at
Liberty]
OCT 05, 2009 03:57P.M.
President Obama’s real czar, “pay czar” Ken Feinberg, who has real
power, brushes aside such claims even as he prepares to issue his
Gosplan-style edicts on future and even past pay agreements:
The Obama administration’s pay czar says negotiations over
executive compensation with the seven companies that
received the biggest federal bailouts have been “a consensual
process’’ – not a matter of forcing decisions on them.
“I’m hoping I won’t be required to simply make a
determination over company objections,’’ veteran
Washington attorney Kenneth Feinberg told the Chicago Bar
Association in a speech.
But note: he’s “hoping” he won’t have to impose his own view. He’s
hoping the companies will accede to his power without complaining. But
the fact remains, he doesn’t have to get their consent. He “has sole
discretion to set compensation for the top 25 employees of each of those
companies,” and his decisions “won’t be subject to appeal.” Or, as
Feinberg himself puts it,
The statute provides these guideposts, but the statute
ultimately says I have discretion to decide what it is that these
people should make and that my determination will be final.
The officials can’t run to the Secretary of Treasury. The
officials can’t run to the court house or a local court. My
decision is final on those individuals.
That’s power. So where is Doonesbury? We need him to update his
classic 1970s “energy czar” strips.
Today’s Tabbloid PERSONAL NEWS FOR lgn@limitedgovernmentnetwork.com
FISCALLY CONSERVATIVE BLOG FEEDS
Cato Launches New Web Site
Exposing Wasteful Government
Spending [Cato at Liberty]
OCT 05, 2009 02:59P.M.
Did you know that the average American family spends $1,000 each year
on the U.S. Department of Agriculture, whether or not it consumes that
agency’s services? Or that the federal government annually spends
$1,500 per household on net interest costs alone?
In an ongoing effort to shed light on runaway government spending and
expose wasteful government programs, Cato launched a new Web site
today that examines the federal budget department-by-department to
see which agencies can be reformed or terminated.
DownsizingGovernment.org describes which programs are wasteful,
damaging and obsolete in an era of trillion-dollar deficits.
The research exposes that many public outlays—though vigorously
defended by the politicians who created them and the constituencies
they purport to help—are remarkably ineffective at achieving their core
aims.
Here are just a few examples:
• Though the Department of Education’s annual budget has more
than tripled in real dollars since 1970, that period has not been
marked by any tangible improvement in student performance.
• The Department of Housing and Urban Development operates a
rural subsidies program even though hundreds of other federal
programs benefiting rural constituencies already exist.
• HUD has been characterized by scandalous graft and cronyism
under both Republican and Democratic presidents for three
decades. The rate at which senior HUD officials have been
investigated or prosecuted is chilling, and government watchdogs
have found dozens of instances where officials’ private-sector
contacts were showered with public money for projects.
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6 October 2009
Appearing on CNBC Monday, DownsizingGovernment.com editor Chris
Edwards explained more about the site:
Plus, keep track of where your tax dollars are going by following
DownsizingGovernment.com on Twitter (@DownsizeTheFeds) and
Facebook.
FISCALLY CONSERVATIVE BLOG FEEDS
NYT Columnist, Meet NYT
Reporter [Cato at Liberty]
OCT 05, 2009 02:26P.M.
In the New York Times this weekend, columnist Thomas Friedman
wrote, “[W]e may be tired of this ‘war on terrorism,’ but the bad guys are
not. They are getting even more ‘creative.’”
On September 26th, the New York Times reported in a story by Scott
Shane:
Many students of terrorism believe that in important ways, Al
Qaeda and its ideology of global jihad are in a pronounced
decline — with its central leadership thrown off balance as
operatives are increasingly picked off by missiles and
manhunts and, more important, with its tactics discredited in
public opinion across the Muslim world.
Who’s right? Should we be more concerned or less?
Well, the statements are not inconsistent. But unlike the analysts cited in
the news story, columnist Friedman uses loaded terms and broad
generalizations like “war on terror”, “bad guys”, and “creative” to
misconstrue the nature of the terrorist threat.
Friedman says “war” a dizzying seventeen times in his short column,
misdescribing the many different efforts that go into suppressing
terrorism, dissuading terrorist recruits, and capturing or killing
terrorists.
He lumps all terrorists together as “bad guys” despite expert counsel
against assuming they have similar aims and motives, or that they
collaborate.
And “creative”?—well, putting a bomb in your keister is creative, but it is
not an effective way to harm anyone other than yourself.
But don’t jump to the wrong conclusion. The point is not to dismiss
terrorism as a threat. It’s to know that terrorists are fallible, al Qaeda
is on the wane, and law enforcement is on the case. In terrorism, we are
not confronted by anything close to an existential threat.
Friedman’s column is a reach, and it does a distinctly bad job of working
Today’s Tabbloid PERSONAL NEWS FOR lgn@limitedgovernmentnetwork.com
with any of these subtleties. (The only reason I feel compelled to call
them “subtleties,” I suppose, is because they seem to remain beyond the
grasp of an otherwise intelligent and thoughtful New York Times
columnist.)
FISCALLY CONSERVATIVE BLOG FEEDS
Revenge of the Laffer Curve,
Part II [Cato at Liberty]
OCT 05, 2009 12:39P.M.
An earlier post revealed that higher tax rates in Maryland were
backfiring, leading to less revenue from upper-income taxpayers. It
seems New York politicians are running into a similar problem.
According to an AP report, the state’s 100 richest taxpayers have paid $1
billion less than expected following a big tax hike. The story notes that
several rich people have left the state, and all three examples are about
people who have redomiciled in Florida, which has no state income tax.
For more background information on why higher taxes on the rich do
not necessarily raise revenue, see this three-part Laffer Curve video
series (here, here, and here):
Early data from New York show the higher tax rates for the
wealthy have yielded lower-than-expected state wealth.
…[New York Governor David] Paterson said last week that
revenues from the income tax increases and other taxes
enacted in April are running about 20 percent less than
anticipated.
…So far this year, half of about $1 billion in expected revenue
from New York’s 100 richest taxpayers is missing.
…State officials say they don’t know how much of the missing
revenue is because any wealthy New Yorkers simply left. But
at least two high-profile defectors have sounded off on the tax
changes: Buffalo Sabres owner Tom Golisano, the billionaire
who ran for governor three times and who was paying
$13,000 a day in New York income taxes, and radio talk-
show host Rush Limbaugh.
…Donald Trump told Fox News earlier this year that several
of his millionaire friends were talking about leaving the state
over the latest taxes.
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6 October 2009
FISCALLY CONSERVATIVE BLOG FEEDS
Carper: We Trust Our Staff So
You Can Trust Us [Cato at
Liberty]
OCT 05, 2009 12:09P.M.
A deep fissure between federal lawmaking practices and the Internet-
fueled expectations of the people is just starting to open.
Here’s a fascinating interview with Senator Tom Carper (D-DE), in
which he justifies not reading the legislation that he votes on.
He’s right that the bills Congress passes are almost incomprehensible,
but he draws the wrong conclusion from it. It’s not OK to pass bills that
you can’t read and literally don’t understand.
Congress and the bureaucracy will come to learn a lesson that other parts
of our society have learned: The Internet changes things.
Because it is now possible to see legislation before Congress passes it,
Americans now expect to see legislation before it passes. And they will
come to expect that their representative understand it—in detail.
A machine has grown up in Washington over the past two hundred years
where representatives rely on colleagues who rely on staff to write bills.
This has not produced a desirable body of federal law, and it is not a
process that the public will accept for much longer.
FISCALLY CONSERVATIVE BLOG FEEDS
A New Court Term: Big Cases,
Questions About the New
Justice [Cato at Liberty]
OCT 05, 2009 11:59A.M.
Today is the first Monday in October, and so is First Monday, the
traditional start of the Supreme Court term. The Court already heard one
argument – in the Citizens United campaign finance case — but it had
been carried over from last year, so it doesn’t really count.
In any event, continuing its trend from last term, the Court has further
front-loaded its caseload — with nearly 60 arguments on its docket
already. Fortunately, unlike last year, we’ll see many blockbuster cases,
including:
• the application of the Second Amendment to state gun regulations;
• First Amendment challenges to national park monuments and a
Today’s Tabbloid PERSONAL NEWS FOR lgn@limitedgovernmentnetwork.com 6 October 2009

statute criminalizing the depiction of animal cruelty; FISCALLY CONSERVATIVE BLOG FEEDS

• an Eighth Amendment challenge to life sentences for juveniles; a Congratulations to Senator Tom
potential revisiting of Miranda rights;
Harkin [Cato at Liberty]
• federalism concerns over legislation regarding the civil OCT 05, 2009 11:52A.M.
commitment of “sexually dangerous” persons;
. . . for congratulating himself by naming a federal grant program after
• a separation-of-powers dispute concerning the agency enforcing himself. His $10,000,000 earmark request for the program is funded at
Sarbanes-Oxley; $7,000,000 in the Labor/HHS appropriations bill.

• judicial takings of beachfront property; and

• notably in these times of increasing government control over the FISCALLY CONSERVATIVE BLOG FEEDS
economy, the “reasonableness” of mutual fund managers’
compensation. Monday’s Daily News [The Club
Cato has filed amicus briefs in many of these cases, so I will be paying for Growth]
extra-close attention. OCT 05, 2009 11:51A.M.

Perhaps more importantly, we also have a new justice — and, as Justice
White often said, a new justice makes a new Court. While Sonia
Sotomayor’s confirmation was never in any serious doubt, she faced
strong criticism on issues ranging from property rights and the use of
foreign law in constitutional interpretation to the Ricci firefighters case
and the “wise Latina” speeches that led people to question her
commitment to judicial objectivity. Only time will tell what kind of
justice Sotomayor will be now that she is unfettered from higher court
precedent — and the first term is not necessarily indicative.
Key questions for the new Court’s dynamics are whether Sotomayor will
challenge Justice Scalia intellectually and whether she will antagonize
Justice Kennedy and thus push him to the right. We’ve already seen her
make waves at the Citizens United reargument — questioning the scope
of corporations’ constitutional rights — so it could be that she will
decline to follow Justice Alito’s example and jump right into the Court’s
rhetorical battles.
In short, it’s the first day of school and I’m excited.
THE DAILY NEWS More Unemployment Benefits Will Backfire -
Larry Kudlow, Money Politics One of Washington’s All-Time Dumb
Ideas - Wall Street Journal Editorial Stop The Spending And Cut The
Taxes - IBD Editorial Burnt Rubber: Tire Firms Decry New Tariff - Diana
Ransom, WSJ States Resist Medicaid Growth - Shailagh Murray,
Washington Post Schumer Says Centrists ‘Very Open’ to Public Option -
M. O’Brien, The Hill The China Currency Conundrum - Blog Post,
ScottLincicome.com Mikulski Earmarks Go To Top Campaign Donors -
P. West, Baltimore Sun Taxes, Other Bills Drive Families Out of New
Jersey - S. Mullen, APP.com Tiger Woods: The First $1B Athlete - CBS
News Cubs 2, D’Backs 5 - AP (the last game of a disappointing season)
FISCALLY CONSERVATIVE BLOG FEEDS
Cracking the Education
Monopoly [The Club for
Growth]
OCT 05, 2009 11:11A.M.

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Today’s Tabbloid PERSONAL NEWS FOR lgn@limitedgovernmentnetwork.com 6 October 2009

FISCALLY CONSERVATIVE BLOG FEEDS But Chavis — and others before him and alongside him today — have
shown how to do it: instill in the school environment those cultural
We Are not Seeing the Bell characteristics necessary for academic success that are missing in the
home.
Curve’s Toll [Cato at Liberty]
OCT 05, 2009 09:40A.M. In a free enterprise school system that would automatically disseminate
and perpetuate great schools like Ben’s, average test scores would rise
dramatically above their current levels. The Bell Curve would be shifted
dramatically to the right.

Last week, I posted a chart on this blog showing the percent change in
federal education spending and student achievement since 1970
(achievement has been flat while federal education spending has nearly
tripled).

After laughing out loud when he saw it, IQ expert and Bell Curve author
Charles Murray mused that “such a huge proportion of a child’s
educational prospects are determined by things other than school (genes
and the non-school environment) that reforms of the schools can never
do more than produce score improvements at the margin.”

But consider the accomplishments of Ben Chavis, who spoke at Cato last
Friday. When he took over the American Indian Public Charter School in
Oakland in 2001, it was the worst school in the district. Under his
leadership (imagine a hybrid of Socrates and Dirty Harry), the school’s
scores rose dramatically year after year. Within seven years, it had
become the fifth highest-scoring middle school in the state — though
continuing to enroll a student population that is overwhelmingly poor
and minority.

It was not a freak occurrence. Chavis did it again, and again: creating a
second AIPCS middle school as well as a high school, both of which are
also among the top schools in the state, and both of which also enroll
chiefly low income minority students.

Murray has made a compelling case over the years that IQ is real,
strongly tied to academic achievement, and determined in significant
measure by nature and home environment. But academic achievement is
also powerfully determined by schooling. Typical U.S. test score data
camouflage the significance of schooling because so many schools are so
amazingly bad at maximizing academic achievement — especially for
poor minority students.