Tuesday, April 14, 2009

Libertarian: Federal President's Preschool Emphasis Is Misdirected

President's Preschool Emphasis Is Misdirected. By Andrew J. Coulson
This article appeared on cato.org on April 13, 2009

"When it comes to our children's future," writes president Obama in his first budget, "we cannot waste dollars on methods, programs, and initiatives that are not effective and efficient." He's right, but his budget fails to heed his own dictum.

The president is proposing education policies that are neither the most effective nor the most efficient means of achieving his laudable goals. He plans to expand Head Start and double funding for Early Head Start — federal programs aimed at preschool children. Though the president appears convinced that such programs can save many times what is spent on them, the evidence for that view is weak.

Even economist James Heckman, whose work has influenced President Obama's thinking on the subject, is far more guarded. In 2007, Heckman identified three small preschool programs from the 1960s and 1970s that studies suggest have more than paid for themselves in lower subsequent welfare and criminal justice costs incurred by their participants. But Heckman cautioned that "a much more careful analysis of the effects of scaling up the model programs... has to be undertaken before these estimates can be considered definitive."

His caveat is well justified. The "Perry preschool" study which yielded the highest estimated return enrolled just 123 children. There is good reason to doubt that it can be replicated by the federal government nationwide. A large body of research on other Head Start programs finds that while they sometimes offer short term academic benefits, these generally disappear by the elementary school grades. The largest review of this literature, published by the Department of Health and Human Services, looked at more than 200 studies and concluded that there was no lasting academic advantage to participation in Head Start.

If spending on Head Start and other federal education programs had produced widespread, significant benefits since their inception in the mid 1960s, overall student achievement and graduation rates should have risen over time. The achievement gap between children of high-school dropouts and those of college graduates should have narrowed as well, because most federal education programs are targeted at disadvantaged students. None of these things occurred.

According to the National Assessment of Education Progress, the best available measure of academic trends, U.S. seventeen-year-olds score no better in math or reading today than they did nearly forty years ago. In science they perform slightly worse. The gap between children of dropouts and children of college graduates is unchanged in reading and science, and has decreased by only one percent in math. According to Heckman himself, the high school graduation rate peaked a few years after Head Start was passed and has declined by four or five points since then.

For these disappointing results, the federal government has spent roughly $1.85 trillion dollars on education programs since 1965. So while some small local preschool programs may have generated lasting, significant effects, the federal government cannot be counted on to reproduce those effects on a national scale.

If the president really wants effective, efficient programs, he should look at Florida's scholarship donation tax credit. Under this program, businesses can contribute to non-profit scholarship organizations that subsidize private k-12 tuition for needy families. For each dollar they donate, the businesses owe one fewer dollar in taxes. Last December, Florida's own government accountability office found that this education tax credit saves $1.49 for every dollar it reduces tax revenue. That is three times the largest return on investment for the preschool programs cited by Heckman —and it comes from a policy that is already serving 23,000 students statewide.

Giving at-risk children access to private schooling has been repeatedly shown to improve their educational attainment. Economist Derek Neal has found that Catholic schools raise the graduation rate of urban African Americans by 26 percentage points, and more than double their chances of graduating from college – even after controlling for differences in student background between the sectors. Half a dozen other scientific studies echo Neal's findings. Researchers from the U.S. and abroad also point to higher test scores for students when they attend private rather than public schools, after controlling for student and family background, as I report in a forthcoming global literature review in the Journal of School Choice.

While it would not be constitutional for the president to pursue a national school choice program, he could greatly accelerate the growth and adoption of such programs around the country by throwing his support behind them. He would not be the first Democrat to do so. Florida's scholarship tax credit was expanded last year with the support of one third of the state's Democratic caucus.

Government's Mistakes Have Deepened This Recession

Government's Mistakes Have Deepened This Recession. By Fred L. Smith, Jr.
Letter to the Editor in The Wall Street Journal
CEI, Apr 09, 2009

Steven Gjerstad and Vernon Smith suggest one unexplored aspect of our financial crisis: the role of egalitarian policies. To see this, note their distinction between the impacts of the $10 trillion loss in the 2000 stock market collapse and the $3 trillion loss of the recent housing collapse.

A driving force behind all this has been radical egalitarianism -- the idea that something that can be afforded by some should be made available to everyone. Our universal housing-ownership passion transformed the housing market. Under the egalitarian promotional housing policies of the last few decades (the Democrat's "affordable" housing goals; the Republican's "ownership society" obsession), banks became institutions that would loan you money even if you were unlikely to be able repay it. The moral hazard problems created by our bipartisan egalitarians (the Community Reinvestment Act, the mandates on Fannie Mae and Freddie Mac) enticed far too many Americans into purchasing homes priced beyond their means. There is a critical distinction between the democratizing tendency of the market and the coercive egalitarian policies of politics.

Many factors contributed to our financial crisis but as Messrs. Gjerstad and Smith suggest, we should add radical egalitarian policies to the list. As they note, these programs transformed the American Dream into the American Nightmare.

Fred L. Smith Jr. President Competitive Enterprise Institute Washington

Getting Real: The Oil Majors Move Away from Political Energy (Government-dependent wind, solar are not ready for prime time)

Getting Real: The Oil Majors Move Away from Political Energy (Government-dependent wind, solar are not ready for prime time). By Robert Bradley
Master Resource, April 9, 2009

A recent article in the New York Times, “Not So Green After All: Alternative Fuel Still a Dalliance for Oil Giants,” chronicled the move away from politically correct (but economically incorrect) wind and solar energy by the oil majors.

Royal Dutch Shell and BP, in particular, recognize wind and solar as what they are: dilute, intermittent energies that are not consumer friendly or economic. And their investment returns in the same have been lackluster. Shell and BP have found out what Exxon Mobil learned in the 1970s.

“Oil giants worldwide are skeptical that President Barack Obama’s plans to move the economy away from petroleum will be successful,” Jad Mouawad wrote in the Times. “Many of the oil companies are sticking to their hydrocarbon business model and some are backing away from commitments to renewable power.”

Mouawad summarizes the thinking from these three majors:

Royal Dutch Shell last month said it would freeze research in wind, hydrogen and solar power to devote all its renewable energy efforts to biofuels. The company had already sold much of its solar business and last year pulled out of a project to build the largest offshore wind farm near London.

BP has been trimming its renewables program, and U.S. oil companies, which have traditionally been more lukewarm to renewables than their European peers, are not budging either.

“In my view, nothing has really changed,” Rex W. Tillerson, the chief executive of Exxon Mobil, said after the election of President Obama. “We don’t oppose alternative energy sources and the development of those. But to hang the future of the country’s energy on those alternatives alone belies [the] reality of their size and scale.”

Indeed, the article goes on to note, the majors are focused on frontier hydrocarbons, such as tar sands and natural gas from shale. Such emphasis will warm the hearts of those who favor free-market capitalism over political capitalism.

Core Competency: “We Don’t Do it All”

The pullback from wind and solar is back-to-the-basics. As Shell’s CEO Jeroen van der Veer stated, “We don’t do it all.” Whatever the advantage of investing in wind and solar for public relations reasons, in the current economic climate such PR is no longer affordable. Perhaps these companies are also asking whether technologies that are forever dependent on government policy are really sustainable.

There is also the problem of scale, which Daniel Yergin spoke to in the Times article mentioned above. It is the same point that the former CEO ExxonMobil, Lee Raymond made so well back in 2004:

One of the difficulties people have, even some who work in this business, is understanding the scale and size of the energy industry. This is important to understand in order to put in perspective what some of the alternatives are and to judge if they are significant in the context of the whole.

There are many alternative forms of energy that people talk about that may be interesting. But they are not consequential on the scale that will be needed, and they may never have a significant impact on the energy balance. To the extent that people focus too much on that—for example, on solar or wind, even though they are not economic—what they are doing is diverting attention from the real issues.

And 25 years from now, even with double-digit growth rates, they will still be less than 1 percent of the energy supplied to meet worldwide demand. I am more interested in staying focused on the 99 percent than the 1 percent.

Wind and Solar: Failed Expectations

Wind and solar in almost all applications are a bust. Not even very generous government tax incentives (production tax credit, accelerated depreciation) have worked. As Texas proves, mandatory renewable-energy quotas are required. In 1999, that state enacted the Enron provision of an electricity restructuring bill that made Texas the nation’s leader in new windpower capacity and production. (Enron Wind Corporation, now part of General Electric, was the intended beneficiary of the deal made by Enron’s Ken Lay and then-governor George W. Bush.)

Consider the long history of failed competitiveness of wind and solar as shown by these quotations.

Worldwatch Institute in 1984:

“Tax credits have been essential to the economic viability of wind farms so far, but will not be needed within a few years.”[1]

American Wind Energy Association in 1986:

“The U.S. wind industry has … demonstrated reliability and performance levels that make them very competitive. It has come to the point that the California Energy Commission has predicted windpower will be that State’s lowest cost source of energy in the 1990s, beating out even large-scale hydro.“[2]

Barry Commoner in 1976:

“Mixed solar/conventional installations could become the most economical alternative in most parts of the United States within the next few years.”[3]

Solar Energy Industries Association in 1987:

“I think frankly, the—the consensus as far as I can see is after the year 2000, somewhere between 10 and 20 percent of our energy could come from solar technologies, quite easily.”[4]

Worldwatch Institute in 1987:

“In future decades, [photovoltaic technologies] may become standard equipment on new buildings, using the sunlight streaming through windows to generate electricity.”[5]

Lee Raymond, a rare energy realist in political times, was right.


[1] Statement of Michael L.S. Bergey, American Wind Energy Association in Renewable Energy Industries, Hearing before the Subcommittee on Energy Conservation and Power of the Committee on Energy and Commerce, House of Representatives, 99th Cong., 2nd sess. (Washington, D.C.: Government Printing Office, 1986), p. 129.
[2] Christopher Flavin, “Electricity’s Future: The Shift to Efficiency and Small-Scale Power,” Worldwatch Paper 61, Worldwatch Institute, November 1984, p. 35.
[3] Barry Commoner, The Poverty of Power (New York: Alfred A. Knopf, 1976), p. 151.
[4] Scott Sklar, Solar Energy Industries Association. Quoted in Solar Power, Hearing before the Subcommittee on Energy and Power of the Committee on Energy and Commerce, House of Representatives, 100th Cong., 1st sess. (Washington, D.C.: Government Printing Office, 1987), p. 12.
[5] Cynthia Shea, “Renewable Energy: Today’s Contribution, Tomorrow’s Promise,” Worldwatch Paper 81, Worldwatch Institute, January 1988, p. 44.

WaPo Editorial: A Solution for Somalia

A Solution for Somalia. WaPo Editorial
What it will take to stop the threats of piracy and terrorism
WaPo, Tuesday, April 14, 2009; Page A16

SKILLFUL SHOOTING by U.S. snipers rescued an American ship captain from Somali pirates Sunday -- along with an Obama administration facing its first foreign emergency. Unfortunately, no silver bullets are available for the growing threat of piracy in the Indian Ocean or the toxic anarchy that has spawned it.

President Obama said in a statement Sunday that "we must continue to work with our partners to prevent future attacks, be prepared to interdict acts of piracy and ensure that those who commit acts of piracy are held accountable for those crimes." Those actions are certainly necessary, and they speak for themselves. But they don't begin to address the underlying problem, which is Somalia's long-standing status as a failed state and the desperation and extremism growing among its Muslim population.

Since the Clinton administration abandoned a U.N. mission in Somalia 15 years ago, the United States has tried ignoring the chaos there, using proxies to subdue it and targeting its worst elements with airstrikes. An international naval task force has been cruising along the coast for months to deter piracy. All along, the country's misery and the threat it poses to the United States and other Western countries have steadily worsened. It's not just the pirates, who have staged at least 66 assaults so far this year and hold more than a dozen ships and 200 foreign crew members hostage. As senior U.S. officials have repeatedly acknowledged, a radical Islamist militia that controls much of Somalia has ties to al-Qaeda, which has used its Somali base to stage attacks on U.S. and Israeli targets in Africa and is believed to be training foreign militants -- including some Somali Americans -- for future operations.

Again and again, mostly for political reasons, U.S. administrations have refused to absorb the lessons Somalia teaches, in tandem with pre-2001 Afghanistan and the tribal territories of present-day Pakistan. Those lessons are that stateless territories, particularly in the Muslim world, can pose a significant threat to U.S. interests and even homeland security, and that the danger can be adequately addressed only by helping a state authority emerge to fill the vacuum.
Last week's crisis offers the Obama administration an opportunity to avoid perpetuating past errors. No, we aren't advocating another massive U.N. intervention in the country backed by U.S. troops. As the Bush administration discovered late last year, there is no appetite among America's European or African allies for such an operation. But what would be possible is a concerted push to strengthen the most recent attempt at a Somali government -- a not-unpromising coalition between moderate Islamists and various clan-based factions. The government needs massive economic aid, training and equipment for an army and coast guard, and help in brokering political deals.

A coordinated international effort to build up a Somali government and security forces would cost many billions of dollars and take many years to pay off. It would consume U.S. diplomatic capital and be domestically controversial -- like the nation-building missions underway, at last, in Afghanistan and Pakistan. It is also the only way to end the threats of piracy and terrorism from the Horn of Africa.

WaPo's Eugene Robinson on being duped by Fidel

Addled by Fidel, by Eugene Robinson
WaPo, Tuesday, April 14, 2009; A17

The Congressional Black Caucus delegation that visited Havana last week was naive not to notice -- or disingenuous not to acknowledge -- that Cuba is hardly the paradise of racial harmony and equality it pretends to be. Still, that's no reason for the United States to continue the illogical, ineffective, hard-line policies that have produced an unbroken 47-year record of failure.

President Obama's action yesterday -- he eased some restrictions on travel, gifts and remittances, but only for Cuban Americans -- is barely a start. He should go so far as to actually base our Cuba policy on reality. After all, we've tried everything else.

Those who argue for keeping in place the trade embargo and what remains of the travel restrictions -- and even predict that these measures, imposed at a time when the Cold War was getting chillier, will bring the Castro government to its knees any day now -- have been drinking too many mojitos. Claims that the United States would somehow surrender valuable "leverage" by lifting the sanctions are purest fantasy.

People, we have no leverage in Cuba. If we had any, we'd have managed to move the Cuban government an inch or two toward democratic reform in the past five decades.

What we should do is lift the embargo, which Obama hasn't meaningfully disturbed, and end the travel ban for everyone. That would put the onus on the Cubans to somehow keep hordes of American capitalists and tourists from infecting the island with dangerous, counterrevolutionary ideas. But we should take these steps with our eyes open, seeing Cuba as it is, not as we might want it to be.

By now it should be dawning on the seven U.S. legislators who got the red-carpet tour last week -- including six members of the Black Caucus -- that first impressions can be unreliable. Three members of the delegation were granted a rare audience with the ailing Fidel Castro. "He looked directly into my eyes," said Rep. Laura Richardson (D-Calif.), "and then he asked: 'How can we help President Obama?' [Fidel Castro] really wants President Obama to succeed."

No, he really doesn't. As it happened, Castro quickly demonstrated that he didn't even wish the delegation well, let alone the current occupant of the White House. After the meeting, Castro issued a statement claiming that one of his visitors had said the United States should "apologize" to Cuba and that another had said U.S. society is still "racist." Members of the delegation denied that any such exchanges had taken place -- and I believe them.

It is in Castro's interest to sabotage any genuine movement in Washington toward normalized relations, because a lessening of tension would destroy the government's stated rationale for denying Cubans basic political freedoms: that any opening would be exploited by the imperialist enemy to the north. It is also in Castro's interest to portray the United States as irredeemably racist -- unlike Cuba under the tutelage of the revolution.

In 10 reporting trips to the island, I have met Afro-Cubans who told me with conviction that they have had opportunities under the Castro regime -- especially in health and education -- that would have been unimaginable before the revolution. But I've also heard bitter complaints about deep-seated racism that many black Cubans believe is getting worse.

Race is a touchy subject in Cuba, and for many years it went all but unmentioned. Raúl Castro, who knows the island and its people as well as his older brother does, caused a stir in 2000 when he said that if a hotel were to deny entry to a person because he or she is black, that hotel should be shut down -- an acknowledgment that such things happen. Popular rappers in Cuba's hip-hop underground have made racial grievance a major theme of their daring lyrics. I once interviewed a Cuban scholar whose husband, an officer in the military, pooh-poohed her research into racial discrimination -- until he had the experience of being detained and harassed by police for no apparent reason other than his dark skin.

Even without meeting with any of the well-known black dissidents on the island, the visitors from Washington could have observed that the workforce in Cuba's burgeoning tourism industry -- arguably the most privileged class, since waiters and cab drivers receive tips in hard currency, which allows them a standard of living far beyond what is possible with Cuban pesos and government rations -- is disproportionately white.

Members of the Black Caucus are, quite properly, quick to notice such insults and disparities at home. Maybe they were too busy looking into Fidel's eyes.

A competitive marketplace would produce the most innovative medical-records system

A Health Tech Monopoly – II. WSJ Editorial
A competitive marketplace would produce the most innovative medical-records system.
WSJ, Apr 14, 2009

The New England Journal of Medicine is the holy scripture of the medical academic left, so it's worth noting that the magazine has just punched a hole in the many blandishments about electronic medical records.

Recall that the recent stimulus devotes $19 billion to encourage doctors and hospitals to adopt digital recordkeeping in lieu of the paper systems prevalent today -- and penalizes them beyond 2015 if they don't. While the New England Journal grants that more and better clinical information could yield modest benefits, it is also clearly perturbed with the government's new role as the arbiter of health information technology.

In a "perspective" akin to an editorial, Kenneth Mandl and Isaac Kohane, both health-tech specialists at Children's Hospital Boston and Harvard Medical School, write that "flexibility is critical" as Congress promotes electronic medical records. The ideal system would be an open platform for many developers to write applications that are allowed to succeed and fail, much like Apple's iPhone software. They argue that the key is "allowing competition and 'natural selection' for high-value, low-cost products. This approach contrasts sharply with design of a national system by committee."

Drs. Mandl and Kohane's critique is couched in the staid language of a peer-reviewed journal, but the implications are obvious. The stimulus hands the Obama Administration the power to define and approve "certified" records, therefore the power to create a health-tech monopoly. With stimulus money being shoveled out as quickly as possible, doctors and hospitals may end up prematurely investing in the costly systems that happen to have the government seal of approval -- and in the process freezing out an innovative marketplace.