“No Man’s life liberty or property is safe while the legislature is in session”.

- attributed to NY State Judge Gideon Tucker

Friday, August 26, 2011

Rick Perry's Leap In The Polls

Rick Perry's surge past Mitt Romney in last week's GOP voter polls of presidential candidates stunned many observers. If I recall correctly, the former now leads the latter by nearly double digits.

By moving into the lead, Perry returns a spotlight to Texas, home of three former presidents. And, incidentally, a state which teaches creationism, rather than evolution.

I remember being similarly embarrassed when Mike Hickabee was leading GOP polls four years ago, and Arkansas, the state he governed, became known for the same weird educational doctrine.

How in the world, in this century, can any US state really be officially sanctioning the teaching of creationism? How is this possible?

It makes our country a laughingstock when we have serious presidential contenders who were the executives of states with this position on mankind's history. Not to mention makes you question the intellect and attitudes of people who were governors of such states.

Thursday, August 25, 2011

Teacher Evaluation Trouble in New York State

One of the benefits of our federalist system is that states with wacky policies can actually lose residents, business, etc., to more sane, neighboring states.

Take, for example, the case of New York's recent teach evaluation law. A state supreme court judge ruled against a provision of the law allowing schools to fire teachers "whose students persistently get poor marks on standardized tests and other assessments." In other words, teachers who can't exhibit adequate performance on the one thing we actually expect from our schools- children who demonstrate learning.

Today's Wall Street Journal reported that New York Justice Michael C. Lynch,

"specifically rejected the section allowing schools to give teachers the lowest rating if they fail the student performance part of their evaluation, even if they score higher on other measures."

The law which went into effect last year made "40% of a teacher's review" based on their students' achievements.

Essentially, the teachers' union in New York sued the state, claiming the new process relies too heavily on test scores. It appears they won.

For now.

There are, according to the Journal piece, various aspects of the new process which are still subject to collective bargaining. The state will appeal the ruling.

Looking beyond the problem with the teachers' union, one has to feel sorry for New Yorkers living under such idiotic state supreme court judges.

Can you imagine some of the poorer state residents learning that their own state's court system overturned a basic, sensible notion that teachers who can't manage to educate the children under their care to perform well on standardized tests get a pass to continue harming other children, too?

Maybe the New York teachers won this round. But if the ruling holds up, I'd suspect it's one more reason people will flee New York, as the value of even "free" public education declines.

Wednesday, August 24, 2011

Luddite Economics

As a person with a substantial academic background in economics and business, it always pains me to hear politicians- of any partisan stripe- talk about jobs as if they are simply created out of thin air. Or to hear officeholders, especially presidents and governors, say 'I created' so many jobs.

Right now, as Republican governor of Texas Rick Perry campaigns, he, and the media, are full of the 'I created' speak. But real conservatives don't believe government creates private sector jobs, per se. Unless, of course, they nationalize something or give money to a company specifically for job creation.

But, mostly, the best one can say about a government executive is,

'S/he orchestrated ab environment of regulatory restraint, moderate taxes and generally favorable conditions for business, thus attracting new companies and facilitating higher employment.'

Further, hearing politicians negatively remark on technology's impact on employment, like Wonderboy did recently, also pains me greatly.

To vilify ATMs, the internet and/or other capital-equipment based productivity increasing tools is to be an economic Luddite.

These inventions either improve existing products and services for customers, lower prices of goods and services, or provide new capabilities, such as online search for and purchase of goods or services. All good things. Things which improve living standards, when measured by consumption and satisfaction per dollar.

That many of these technological improvements or facilitators also result in the elimination of jobs and businesses is simply part of the advance of human civilization.

As a corollary, I think it represents a serious mistake for government officials, e.g., presidents, senators, representatives, governors, to speak of government institutions focusing on 'job creation,' per se.

Since governments don't, and shouldn't, directly create jobs, it would be better to know that those elected officials are working to create environments which are favorable to the growth of existing businesses and the birth of appropriate new ones. Both of which may create jobs.

Yes, ideally one thinks of full employment as a good thing which stimulates economic growth. But that doesn't mean that, say, by borrowing or taxing to raise money, a government entity can then just pay that money to people for "jobs," whatever they may be, and magically create sustained, healthy and productive economic growth.

As I noted in this recent post on my companion business blog,

""All economic problems are about removing impediments to supply, not demand," Arthur Laffer reminds us.

I highlighted Art Laffer's comment because it seems useful to me to focus on the true fundamental nature of man's economic problem: scarcity. Economics has always been, at root, about how to allocate scarce resources for the production of goods and services to satisfy a population's demands, at prices which satisfy both producer and consumer. "

Thus, productivity is a good thing. Producing more goods or services with fewer inputs results in the freeing up of more resources. Perhaps lower prices.

And without productivity growth, there can't  be non-inflationary wage growth for workers. Nor, for that matter, non-inflationary growth at all, absent simply adding more resources, such as people or materials.
Productivity increases allow healthy, sustainable and non-inflationary economic growth by releasing resources for other uses, instead of just requiring more resources for a society's economic growth.

Higher productivity is a good and necessary aspect of an economy, not a phenomenon to be lamented or denigrated, as some politicians are in the habit of doing.

Tuesday, August 23, 2011

Paul Ryan's Formal Refusal To Run for President

I was busy ferrying a friend from his car's dealership to his home last night, for which he bought me dinner. So I missed seeing any Fox News programs and, thus, also missed coverage of Wisconsin Congressman's official declaration that he won't be entering the GOP presidential race for 2012.

It wasn't until I read this morning's Wall Street Journal editorials that I learned of this recent development. In concert with that editorial's sentiments, I'm happy that Ryan plans to remain in the House, assuming he wins his district again next year (for the eighth time).

Much has been made of Ryan's articulate manner of explaining the necessity of entitlement and tax reforms. But, as we've seen from Wonderboy, there can be an actual loss of force in the Oval Office, whereas being a powerful committee chairman in the House or Senate can be a force multiplier, for good or bad.

In Ryan's case, were the Senate and/or Oval Office to be won by the GOP in 2012, he would definitely be able to extend his influence from his House position.

It's an irony of the American system that a Representative like Ryan has only to win a single district in order to be returned to the House and, if in the majority, have great effect on national policy. Even being a Senator means, for many states, a much more challenging and expensive campaign just to, again, be one of many in a legislature with not really a tremendously larger influence than a Representative, unless the Senate is split closely enough to make every Senator the potential 60th or 41st vote.

When I was growing up in central Illinois, both GOP Congressional leaders lived within 20 miles of me. Bob Michel was the ineffectual House GOP Minority leader, while Everett Dirksen had the same position in the Senate. Neither ever ran for president, but both had surprising influence as a result of holding fairly safe seats for decades in a then solidly-GOP downstate Illinois.

But running for and winning the White House is an entirely different matter. Especially when there is an incumbent, no matter how inept and unpopular. The requirements of running a national campaign is probably not where you want said candidate to get his/her executive experience. And that could well be what happens to Paul Ryan, were he to have acceded to the requests of the GOP fundraisers who tried to recruit him into the race.

As I wrote in an earlier post, I'm reminded of Texas Senator Phill Gramm's run for president in the post-Reagan era. Though he led in money raised, Gramm never escaped the so-called 'green eyeshade' image and a sense he was, as the Wall Street Journal put it, 'running for chief accountant, rather than president.'

Ryan infuses his fiscal messages with more moral and lifestyle content, but, down deep, it's still mostly about wonkish policy details that don't actually play well in presidential campaigns.

Perhaps a different power distribution post-2012 will provide more options for Congressman Ryan. More success in his efforts to actually reverse the growth of entitlement spending. Perhaps a VP slot or a return to Madison to follow Scott Walker as governor. Or perhaps Ryan will depart the political scene, once he's successfully accomplished his work on entitlements.

But the Journal editorial was, I think, correct to congratulate him on knowing his limits and choosing to avoid the temptation of a presidential campaign, no matter how much others wish he'd have agreed.

Monday, August 22, 2011

The Tea Party's Next Challenge

Yuval Levin and Peter Wehner wrote a useful editorial in Friday's edition of the Wall Street Journal entitled The Tea Party's Achilles' Heel.

They argue, correctly, I believe, that the Tea Party movement will have shown itself to be a one-hit wonder if its constituents don't follow their focus on current federal spending with equally serious attention to reforming and reducing the immense promised, but unaffordable social program benefits in Social Security, Medicare and Medicaid.

The authors note how quickly Michele Bachmann backpedaled on Paul Ryan's sensible budget which included entitlement reforms. That her fellow GOP presidential candidates have also remained largely silent on details of entitlement cuts.

Theirs is, I believe, the only really insightful critique of the Tea Party movement which I've read. Ironically, it comes from the right, not the left, and suggests that movement might not go far enough, instead of branding it a domestically-based group of fiscal terrorists, as the administration and some Democratic Congress members have done.