Sunday, April 30, 2017

Norway Video

Nifty video of Norway.

Bret Stephens: Climate of Complete Certainty

Bret Stephens in the New York Times with some common sense.
When someone is honestly 55 percent right, that’s very good and there’s no use wrangling. And if someone is 60 percent right, it’s wonderful, it’s great luck, and let him thank God.  

But what’s to be said about 75 percent right? Wise people say this is suspicious. Well, and what about 100 percent right? Whoever says he’s 100 percent right is a fanatic, a thug, and the worst kind of rascal.
— An old Jew of Galicia
In the final stretch of last year’s presidential race, Hillary Clinton and her team thought they were, if not 100 percent right, then very close.

Right on the merits. Confident in their methods. Sure of their chances. When Bill Clinton suggested to his wife’s advisers that, considering Brexit, they might be underestimating the strength of the populist tide, the campaign manager, Robby Mook, had a bulletproof answer: The data run counter to your anecdotes.

That detail comes from “Shattered,” Jonathan Allen and Amie Parnes’s compulsively readable account of Clinton’s 2016 train wreck. Mook belonged to a new breed of political technologists with little time for retail campaigning and limitless faith in the power of models and algorithms to minimize uncertainty and all but predict the future.

“Mook and his ‘Moneyball’ approach to politics rankled the old order of political operatives and consultants because it made some of their work obsolete,” Allen and Parnes write about the campaign’s final days. “The memo that one Hillary adviser had sent months earlier warning that they should add three or four points to Trump’s poll position was a distant memory.”

There’s a lesson here. We live in a world in which data convey authority. But authority has a way of descending to certitude, and certitude begets hubris. From Robert McNamara to Lehman Brothers to Stronger Together, cautionary tales abound.

We ought to know this by now, but we don’t. Instead, we respond to the inherent uncertainties of data by adding more data without revisiting our assumptions, creating an impression of certainty that can be lulling, misleading and often dangerous. Ask Clinton.

With me so far? Good. Let’s turn to climate change.

Last October, the Pew Research Center published a survey on the politics of climate change. Among its findings: Just 36 percent of Americans care “a great deal” about the subject. Despite 30 years of efforts by scientists, politicians and activists to raise the alarm, nearly two-thirds of Americans are either indifferent to or only somewhat bothered by the prospect of planetary calamity.

Why? The science is settled. The threat is clear. Isn’t this one instance, at least, where 100 percent of the truth resides on one side of the argument?

Well, not entirely. As Andrew Revkin wrote last year about his storied career as an environmental reporter at The Times, “I saw a widening gap between what scientists had been learning about global warming and what advocates were claiming as they pushed ever harder to pass climate legislation.” The science was generally scrupulous. The boosters who claimed its authority weren’t.

Anyone who has read the 2014 report of the Intergovernmental Panel on Climate Change knows that, while the modest (0.85 degrees Celsius, or about 1.5 degrees Fahrenheit) warming of the Northern Hemisphere since 1880 is indisputable, as is the human influence on that warming, much else that passes as accepted fact is really a matter of probabilities. That’s especially true of the sophisticated but fallible models and simulations by which scientists attempt to peer into the climate future. To say this isn’t to deny science. It’s to acknowledge it honestly.

By now I can almost hear the heads exploding. They shouldn’t, because there’s another lesson here — this one for anyone who wants to advance the cause of good climate policy. As Revkin wisely noted, hyperbole about climate “not only didn’t fit the science at the time but could even be counterproductive if the hope was to engage a distracted public.”

Let me put it another way. Claiming total certainty about the science traduces the spirit of science and creates openings for doubt whenever a climate claim proves wrong. Demanding abrupt and expensive changes in public policy raises fair questions about ideological intentions. Censoriously asserting one’s moral superiority and treating skeptics as imbeciles and deplorables wins few converts.
None of this is to deny climate change or the possible severity of its consequences. But ordinary citizens also have a right to be skeptical of an overweening scientism. They know — as all environmentalists should — that history is littered with the human wreckage of scientific errors married to political power.

I’ve taken the epigraph for this column from the Polish poet Czeslaw Milosz, who knew something about the evils of certitude. Perhaps if there had been less certitude and more second-guessing in Clinton’s campaign, she’d be president. Perhaps if there were less certitude about our climate future, more Americans would be interested in having a reasoned conversation about it.

Tuesday, April 25, 2017

H. L. Mencken Quotes

On some great and glorious day the plain folks of the land will reach their heart's desire at last, and the White House will be adorned by a downright moron.

Whenever you hear a man speak of his love for his country, it is a sign that he expects to be paid for it.

The theory seems to be that as long as a man is a failure he is one of God's children, but that as soon as he succeeds he is taken over by the Devil.

A man may be a fool and not know it, but not if he is married.

Democracy is a pathetic belief in the collective wisdom of individual ignorance.

Conscience is the inner voice that warns us that someone might be looking.

A judge is a law student who marks his own examination papers.

For every complex problem there is an answer that is clear, simple, and wrong.

The urge to save humanity is almost always a false front for the urge to rule.

We must respect the other fellow's religion, but only in the sense and to the extent that we respect his theory that his wife is beautiful and his children smart.

What men value in this world is not rights but privileges.

Before a man speaks it is always safe to assume that he is a fool. After he speaks, it is seldom necessary to assume it.

The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.

Every election is a sort of advance auction sale of stolen goods.

Love is the triumph of imagination over intelligence.

Saturday, April 22, 2017

Greg Mankiw: How Best to Tax Business

Here is GM's New York Times Op-Ed.  GM is on target.


The details of the tax code may not make your heart sing, but they are enormously important and, at long last, they may be changing. In fact, the next 12 months are shaping up to be a critically important time.

Despite an uneven start, tax reform is on the agenda in Congress. And the ideas being considered, especially regarding business taxation, are not mere tweaks to our ossified system. They would profoundly alter how the government raises money and upend the incentives for private decision makers. This is fascinating to tax policy nerds like me. But it is important for everyone to understand.
The motivating force behind business tax reform is that the statutory corporate tax rate in the United States is one of the highest in the world. The high rate encourages all kinds of perverse behavior, such as leaving money parked in overseas subsidiaries and inverting corporate structures to take advantage of lower rates abroad.

The current corporate tax finds no fan in Kevin A. Hassett, the economist recently nominated by President Trump to lead the Council of Economic Advisers. Some of Mr. Hassett’s research suggests that our high corporate taxes may be so distortional that a cut in the rate might increase tax revenue.

In another paper, Mr. Hassett finds that corporate taxes depress wages for manufacturing workers. In a world where capital is mobile and labor is not, capital escapes from high-tax nations, leaving workers behind to bear the burden of lower productivity and reduced incomes.

The debate in Congress, however, has gone beyond a simple discussion of tax rates. The Better Way plan, championed by House Speaker Paul D. Ryan and Representative Kevin Brady, the Republican chairman of the Ways and Means Committee, promises fundamental changes in the nature of business taxation, most of which would, in my view, be steps in the right direction. There are four key issues.
WORLDWIDE VS. TERRITORIAL Most nations aim to impose taxes on economic activity that takes place within their borders. Such a system is called territorial. By contrast, the United States has a worldwide corporate tax. If a company based in the United States produces a product abroad and then sells it abroad, our Treasury takes a cut of the profits when they are brought back home.
The House tax bill would move our system toward international norms. American companies would be able to compete abroad on a level playing field with companies based in other nations. The tax incentive for corporate inversions would be eliminated.

INCOME VS. CONSUMPTION Many economists have argued that taxes should be levied based on consumption rather than income. Consumption taxes would do less to discourage saving and investment and would thus be more favorable to economic growth. In addition, consumption taxes are arguably fairer: They tax the standard of living people enjoy rather than the value of what they produce.

The House plan moves toward a consumption tax by allowing businesses to deduct their investment spending immediately, rather than depreciating it slowly over time. By exempting the income that businesses reinvest, the government would essentially be taxing consumed profits.

ORIGIN-BASED VS. DESTINATION-BASED TAXATION The corporate tax system is now origin-based. It levies taxes on the profit from goods produced in the United States, regardless of where they end up. An alternative, proposed in the House bill, would be to tax all goods consumed in the United States, regardless of where they are made. This destination-based approach would tax imports and exempt exports, which is sometimes called a border adjustment. In this way, the business tax would resemble many of the value-added taxes used in Europe.

Some advocates have argued that the switch to destination-based taxes would make American goods more competitive and reduce our trade deficits. Some critics have suggested that it would unduly hurt firms that rely on imports and their customers. Both arguments are probably wrong.

To be sure, the immediate impact of the change would be to discourage imports and encourage exports. But that in turn would mean Americans would supply fewer dollars in foreign-exchange markets, and foreigners would demand more dollars. As a result, the dollar would appreciate, making foreign goods cheaper for Americans, and American goods more expensive for foreigners. The movement in the exchange rate would offset the initial impact on imports and exports.

The main advantage of destination-based taxation is that it is easier to determine where a good is consumed than where it is produced. In a world where multinationals produce goods using parts from around the world, origin-based taxes invite firms to game the system with transfer pricing schemes. Destination-based taxation is less easily gamed.

DEBT VS. EQUITY Now, firms can deduct interest payments to bondholders, but they cannot deduct dividend payments to equity holders. This treatment encourages firms to rely on debt rather than equity, making them more financially fragile than they would otherwise be.
The House plan fixes this asymmetric treatment of debt and equity by no longer allowing firms to deduct interest payments. A business’s taxes would be based on its cash flow: revenue minus wage payments and investment spending. How this cash flow is then paid out to equity and debt holders would be irrelevant.

While I like the policy choices proposed by the House bill, not all economists agree. Some view the bill as too radical, risking too many unintended consequences. Others worry that transitioning from the old system to a new one is not worth the cost, even if the new one is better.
Without a doubt, the coming debate will involve immense politicking. Any large tax change creates winners and losers, and the losers are sure to make their voices heard. But what matters most is whether the changes are better for the United States over all, not for special-interest groups. The more voters understand, the better off we all will be.

Wednesday, April 19, 2017

33 Minutes 2016

A Heritage Foundation video with the raw truth.

Too often, we are unwilling to pay a large price now to avoid a catastrophic price later.

David Brooks: The Cuomo College Fiasco

Here is David Brooks's New York Times Op-Ed.

Donald Trump sets the bar very high, but the award for the worst public policy idea of the year goes to New York Gov. Andrew Cuomo.

Cuomo presides over a state with a rich diversity of educational institutions. But he also presides over a state, like all states, where many students don’t complete college and where many are unprepared for the information economy. For example, fewer than half of the African-American and Hispanic students in New York public colleges graduate within six years.

Cuomo could have done many things to improve New York’s higher ed system. He could have poured all available money into the Tuition Assistance Program, which is directed at poorer students. He could have spent more to help students become academically ready for college, which is the biggest barrier to graduation. He could have done more to help students pay room and board expenses. He could have massively improved overstretched mental health services. He could have massively improved career counseling.

But in 2016 Bernie Sanders made a big splash on the campaign trail with a plan to make college “free.” So Cuomo proposed and on Wednesday signed legislation to make tuition free at New York public colleges for anybody coming from a family making no more than $100,000 a year, with the cap rising to $125,000 in 2019.

If he runs for president, this will be an outstanding talking point. Unfortunately, the law will hurt actual New Yorkers.

Second, it doesn’t make a dent in reducing the nontuition fees, like living expenses, textbooks and travel, which for many students are far more onerous than tuition.

Third, it doesn’t cover students who don’t go to school full time and don’t complete in four years. In 2017 this is the vast, vast majority of all students, especially poorer students.

Fourth, it demotivates students. Research has shown that students who have to work to pay some college costs, even if only small expenses, are more spurred to work hard and graduate. As Northwestern researcher Chenny Ng put it in a Washington Post essay, “as the cost of attending college drops to zero, so does the perceived cost of dropping out.”

Fifth, Cuomo’s law threatens to destroy some of New York’s private colleges. Cuomo could have championed a Pell-like program that subsidizes attendance at any accredited school. Instead, he pays for tuition only at state schools.

This means that suddenly the state’s 150 private colleges have to compete with “free.” Many of these schools are already struggling to survive. If upper-middle-class students are drawn away to public colleges, private ones may close. That hurts the state’s educational diversity, it destroys jobs and it hurts the state.

These private colleges tend to have smaller classes, they tend to do a better job of graduating their students and they tend to spend heavily to subsidize poorer students.

Sixth, the law may widen the gap between rich and poor. When state schools are “free,” more people will apply. As more apply, selectivity will increase, as administrators chase higher U.S. News & World Report rankings. That will exclude students with lower credentials, who tend to be from more disadvantaged homes. Even Georgia’s successful Hope Scholarship program had this unintended consequence, widening the college attendance gap between white and black and rich and poor.

Seventh, over the long term the law could hurt the quality of New York’s state system. Right now those schools rely on tuition to help fund programs. If New York moves more toward a purely publicly funded model, it may suffer from the slow decay that has hurt many state systems. State budgets are perpetually challenged by rising entitlement spending. Education gets squeezed. The universities will try to claw back the private money with dorm fees, activities fees and other charges that don’t officially count as tuition, but still quality suffers.

Even in Germany, where a generous welfare state is valued, per-pupil spending has dropped by 10 percent since universities became free. Germany is an extremely successful country, but lecture classes are huge and the country’s universities are not generally ranked among the world’s best.
Finally, the law will hurt its recipients’ future earnings. Students who receive free tuition for four years have to remain in New York State for four years after graduating, or pay the money back. This means they won’t be able to seize out-of-state opportunities during the crucial years when their career track is being formed. They’ll be trapped in a state with one really expensive city, and other regions where good jobs are scarce.

This is a really counterproductive law. We’re all focused on Trump, but one of the reasons Trump was elected was that many of the people who try to use government to do good just haven’t thought things through.

Friday, April 14, 2017

Your Government at Work

Here is an article by Fred Barbash published in the Jewish World Review.

Government is not your friend.


Agents of the U.S. government are entitled to immunity from lawsuits for what they do in the line of duty, as long as they do it right, in accord with the Constitution.

But what one NASA investigator did to Joann Davis, a financially distressed widow of an engineer on the Apollo program who was trying to raise a little money, was too much for a federal court of appeals to stomach. And on Thursday, the judges let her suit against him go forward.

Here's what happened, as described in an opinion issued by a panel of the Ninth Circuit U.S. Court of Appeals in Pasadena.

Robert Davis was, by all accounts, a brilliant engineer, employed by North American Rockwell as manager of NASA's Apollo 11 program.

When he left, he took with him two mementos: One, "contained a rice-grain-sized fragment of lunar material, or 'moonrock;' the other contained a small piece of the Apollo 11 heat shield."

According to "family lore," Neil Armstrong gave the paperweights to Davis in recognition of his service to NASA.

Robert Davis died 1986. His widow, Joann, who later remarried, fell on hard times in 2011. Her son had fallen ill, requiring over 20 surgeries. Her youngest daughter died, and she found herself raising several grandchildren in her 70s.

In dire need of money, she thought of selling the paperweights, only to find that auction houses were uninterested.

She then contacted NASA for help in finding a buyer for what she described as "2 rare Apollo 11 space artifacts."

Her innocent email inquiry produced a wholly unanticipated result when it arrived in the NASA bureaucracy. It wound up not in the hands of some kindly space veteran but in the office of NASA's Inspector General at the Kennedy Space Center in Florida.
There, an agent smelled a crime. Perhaps, he thought, she was trying to unload purloined government property, a crime.

The IG's office launched an investigation, getting a "confidential source" to call Davis pretending to be broker. He called himself "Jeff."

Jeff pretended to have previously worked at NASA and promised to help her sell the paperweights.
The two exchanged seven phone calls, during which Davis expressed concern that NASA would confiscate the paperweights unless she could prove they were a gift. She explained, according to court documents, that she wanted "to do things legally" because she was "just not an illegal person."
Jeff said he was a legal person too, but reminded her that the sale of a moon rock "can't be done publicly."

After the phone calls, Norman Conley, a criminal investigator in the IG's office, obtained a warrant stating that she was "in possession of contraband."

They then planned a sting operation on the 74-year-old woman.

Jeff arranged to meet with Davis on May 19, 2011, at a Denny's Restaurant in Lake Elsinore, Calif. for purposes, she was led to believe, of finalizing the sale of the paperweights.

Davis went with her second husband, Paul Cilley.

Greeting Davis, who was 4′ 11" tall, were three armed federal agents, with three Riverside County Sherriff's officials present but not visible, apparently as backup.

The court opinion described what happened next:

"Davis placed the paperweights on the table. Jeff said he thought the heat shield was worth about $2,000. Shortly thereafter, Conley announced himself as a 'special agent,' and another officer's hand reached over Davis, grabbed her hand, and took the moon rock paperweight. Simultaneously, a different officer grabbed Cilley by the back of the neck and restrained him by holding his arm behind his back in a bent-over position. Then, an officer grabbed Davis by the arm, pulling her from the booth. At this time, Davis claims that she felt like she was beginning to lose control of her bladder. One of the officers took her purse … Four officers escorted them to the restaurant parking lot for questioning after patting them down to ensure that neither was armed."

She kept telling the officers she needed to use the bathroom. Undeterred, they continued walking her to the parking lot for interrogation, however, the court said. She then "urinated in her clothing."
She was soaked in urine, visibly, the court said. Still, they continued interrogating her in the restaurant parking lot for between an hour and a half and two hours. They read her Miranda rights, ultimately allowed her to leave and referred the case to the U.S. attorney in Orlando.

There never was a crime, of course. She didn't steal the artifacts. Ultimately, the investigation was closed when the prosecutor in Orlando declined to bring a case.

In 2013, Davis and Cilley sued the government and Conley, seeking damages for a violation of their constitutional rights. Conley claimed "qualified immunity" from the suit, legally available to federal agents unless they violate "clearly established" constitutional rights, in this case, Davis' Fourth Amendment right against unreasonable search and seizure. A district court rejected the claim and he appealed.

On Thursday, the appeals court ruled against him. He might be entitled to qualified immunity, had his actions been reasonable, wrote Chief Judge Sidney Thomas for the panel. But they weren't.

"Conley knew that Davis was a slight, elderly woman . . . less than five feet tall," Thomas wrote. He knew she lost control of her bladder and "was wearing visibly wet pants." He knew she was unarmed and he knew she had "not concealed possession of the paperweights, but rather had reached out to NASA for help in selling" them. And he knew from the phone conversations that she wanted to sell the paperweights "in a legal manner.""

"Despite all of this knowledge, Conley did not inform Davis that her possession of the paperweights was illegal or ask her to surrender them to NASA. Instead, he organized a sting operation involving six armed officers to forcibly seize a lucite paperweight containing a moon rock the size of a rice grain from an elderly grandmother.

Monday, April 10, 2017

Climate Change

Here is a link to a website that presents the case against the degree of climate change you so often hear about.

A snippet.

Upper Bound for 21st Century Warming: The Right Climate Stuff Team (TRCS) is a group of retired and highly experienced engineers and scientists from the Apollo, Skylab, Space Shuttle and International Space Station eras. They have volunteered their time and effort to conduct an objective, independent assessment of the carbon dioxide (CO2)-caused global warming to assess the reality of the actual threat, and separate that from unnecessary alarm. They have applied the techniques they learned for space missions to this task. A rough engineering analogy is how can they be confident that an astronaut will not cook or freeze in a space station or a space suit.

To do this, the TRCS created an energy flow model (energy balance or energy conservation model) that accurately correlates with empirical global surface temperature data, using HadCRUT surface temperature data since 1850. HadCRUT is a dataset of monthly instrumental temperature records formed by combining the sea surface temperature records compiled by the Hadley Centre of the UK Met Office and the land surface air temperature records compiled by the Climatic Research Unit (CRU) of the University of East Anglia. (Note: atmospheric temperature data from satellites only dates to 1979.)

The TRCS model even includes the heat flow from the molten core of the earth. It shows that global temperature is not significantly affected by increases in atmospheric CO2. An increase of CO2 to 570 parts per million (ppm) will result in a maximum increase in global temperatures of about 1.8K – far less than the general estimates by the UN Intergovernmental Panel on Climate Change (IPCC) and its followers in the US Global Change Research Program (USGCRP), NOAA, EPA, etc. From ice cores, the estimated concentration of CO2 in 1850 was 285 ppm. So, the upper bound estimate in the TRCS model is at the low end of the 1979 estimate in the Charney Report of 1.5C with a doubling of CO2. The TRCS estimate is a maximum, and the actual result may be far less.

In a video, Harold Doiron, a principle modeler of the lunar lander, presents the TRCS team’s simple, rigorous earth surface model using principles established in Conservation of Energy. He shows how the model is validated using 165 years of atmospheric greenhouse gas data and HadCRUT surface temperature data.

As Doiron points out, at the last ice age maximum about 20,000 years ago, the CO2 concentration was about 180 ppm, near the 150ppm level that would result in the death of many green plants. Further, the safe limits for US submarines is 8,000ppm. (There are reports that concentrations in WW I & WW II submarines approached 40,000 ppm.)

Doiron discusses the widely accepted Kiehl – Trenberth general model stating that following it requires understanding of complex fluid dynamics and complex simulations of processes, which may or may not be correct. However, the estimates of the unknowns must be accurate within 2.5% to provide a useful result, an accuracy that is not attainable at this time. In his view as an Apollo engineer, Doiron states the approach is futile, and may never solve the problem. (As discussed in last week’s TWTW, there has been no progress made by this approach since 1979.)

Another problem with the IPCC approach is that it uses basically untestable concepts, such as equilibrium climate sensitivity (ECS), which may take hundreds of years to be tested, and demonstrated to be false. Another problem with the IPCC approach is the free use of aerosols, previously discussed in TWTW, where the values (usually a cooling effect) may be adjusted to produce an acceptable result in the climate models, tuning them to past observations.

To avoid these issues, Doiron introduces the concept of Transient Climate Sensitivity (TCS) which is an empirically verifiable measurement for all greenhouse gases, as well as CO2 alone. TCS can be defined as the sum of CO2 and other greenhouse gases, feedbacks (water vapor and other positive and negative feedbacks) and aerosols. Doiron recognizes that his TCS may be too high, but it sets an upper bound. This upper bound is not scary.

The Right Climate Stuff Team has written to President Trump, the EPA, and others stating that models need to be validated by data, and the entire issue of the influence of CO2 on temperatures needs independent, objective review. In the past, such as after the Challenger disaster, NASA conducted such reviews, called non-advocacy reviews. No doubt, many entrenched alarmist government entities will bitterly oppose such a review. See links under Challenging the Orthodoxy.

The Rice Controversy: Is The Media Proving Trump Correct?

Here is an article by Jonathan Turley, the Shapiro Professor of Public Interest Law at George Washington University.

JT is on target.


Below is my recent column in The Hill Newspaper on the Rice controversy. Media spins for Rice continue including MSNBC “AM Joy” host Joy Reid describing the softball interview with Andrea Mitchell as “She was on with our own Andrea Mitchell yesterday trying to explain how government works, for those that don’t know.” Of course, unmasking political opponents (if the allegations are proven to be true), would not be how the government is supposed work. Nor is alleging lying about knowing nothing about the unmasking in prior interviews — a curious conflict with Reid’s take that Rice was trying to explain government. This was Rice’s second or third explanation. It appears that Trump is the temptation that many journalists simply cannot resist. It is a Faustian bargain: media is so intent on pursuing Trump that they have lost any sense of their own navigational beacons of objectivity and neutrality.

Thursday, April 06, 2017

Undermining Academic Achievement

Here is a column by Walter Williams, professor of economics at George Mason University.

WW is on target.  The teaching establishment is the enemy of the poor and the politicians that support it are its accomplices.


U.S. Senate Minority Leader Chuck Schumer said in a statement, “The president’s decision to ask Betsy DeVos to run the Department of Education should offend every single American man, woman, and child who has benefitted from the public education system in this country.” Expressing similar sentiments, Congressional Black Caucus Chairman Cedric Richmond said, “I expect that Mrs. DeVos will have an incredibly harmful impact on public education and on black communities nationwide.” Those and many other criticisms of Department of Education Secretary Betsy DeVos could be dismissed as simply political posturing if we did not have an educational system that is mostly mediocre and is in advanced decay for most black students.

According to The Nation’s Report Card, only 37 percent of 12th-graders were proficient in reading in 2015, and just 25 percent were proficient in math ( For black students, achievement levels were a disgrace. Nationally, 17 percent of black students scored proficient in reading, and 7 percent scored proficient in math. In some cities, such as Detroit, black academic proficiency is worse; among eighth-graders, only 4 percent were proficient in math, and only 7 percent were proficient in reading.

The nation’s high-school graduation rate rose again in the 2014-15 school year, reaching a record high as more than 83 percent of students earned a diploma on time. Educators see this as some kind of achievement and congratulate themselves. The tragedy is that high-school graduation has little relevance to achievement.

In 2014-15, graduation rates at District of Columbia Public Schools, just as they did nationally, climbed to an all-time high. At H.D. Woodson High School, 76 percent of students graduated on time; however, just 1 percent met math standards on national standardized tests linked to the Common Core academic standards. Just 4 percent met the reading standards.

The low black academic achievement is not restricted to high-school graduates of D.C. schools. The average black high-school graduate has the academic achievement level of a white seventh- or eighth-grader. As such, it stands as unambiguous evidence that high schools confer diplomas attesting that students can read, write and compute at a 12th-grade level when in fact they cannot. That means they have received fraudulent high-school diplomas. There are many factors that affect education that educators cannot control. But they have total control over the issuance of a diploma.

Educators often complain that there’s not enough money. Census Bureau data show that as early as 2009-10, Washington, D.C., spent $29,409 per pupil ( Starker proof that there’s little relationship between spending and academic proficiency is in the case of Detroit’s public schools. In 2009-10, the nation’s elementary and secondary public school systems spent an average of $10,615 per pupil. According to the Census Bureau, Detroit schools spent $12,801 per pupil. The Mackinac Center for Public Policy claims that Detroit actually spent $15,570 per pupil that year. There’s not much payoff for education dollars. The National Institute for Literacy found that 47 percent of the city’s adults are “functionally illiterate.” The Nation’s Report Card reports that Detroit students score the lowest among the nation’s big-city schools, and Washington is not far behind.

I’d ask Sen. Schumer how it would be possible for Secretary of Education DeVos to make education any worse than it is for many Americans. I’d suggest to Rep. Richmond that if the grand wizard of the Ku Klux Klan were the secretary of education and wanted to sabotage black academic achievement, he couldn’t find a better method for doing so than keeping our public school system as it is. Many black politicians and educators would never have their own children attend the rotten, dangerous schools that are so much a part of our big cities. Many black parents, captured by these schools, would like to get their children out. But that’s not in the interest of the education establishment, which wants a monopoly on education. Black politicians and academics are the establishment’s facilitators. That explains their hostility to Betsy DeVos. She would like to give more parents a choice.

Educational Sabotage

Here is a column by Walter Williams, a professor of economics at George Mason University.

WW is on target.  Once again, Government works to hurt the disadvantaged.


Nationally, black junior high and high school students are suspended at a rate more than three times as often as their white peers, twice as often as their Latino peers and more than 10 times as often as their Asian peers. According to former Department of Education Secretary Arne Duncan, the “huge disparity is not caused by differences in children; it’s caused by differences in training, professional development, and discipline policies. It is adult behavior that needs to change.” In other words, the Education Department sees no difference between the behavior of black students and white, Latino and Asian students. It’s just that black students are singled out for discriminatory discipline. Driven by Obama administration pressures, school districts revised their discipline procedures by cutting the number of black student suspensions.

Max Eden, senior fellow at the Manhattan Institute, has written a report, “School Discipline Reform and Disorder: Evidence from New York City Public Schools, 2012-16.” The new discipline imposed on public schools is called restorative justice. Rather than punish a student through exclusion (suspension), restorative justice encourages the student who has misbehaved to reflect on his behavior, take responsibility and resolve to behave better in the future. The results of this new policy are: increased violence, drug use and gang activity. Max Eden examines the NYC School Survey of teachers and students and finds that violence increased in 50 percent of schools and decreased in 14 percent. Gang activity increased in 39 percent of schools and decreased in 11 percent. For drug and alcohol use, there was a 37 percent increase while only 7 percent of schools improved.

It’s not just New York City where discipline is worse under the Obama administration’s policy. Max Eden reports: “One Chicago teacher told the Chicago Tribune that her district’s new discipline policy led to ‘a totally lawless few months’ at her school. One Denver teacher told Chalkbeat that, under the new discipline policy, students had threatened to harm or kill teachers, ‘with no meaningful consequences.’ … After Oklahoma City Public Schools revised its discipline policies in response to federal pressure, one teacher told the Oklahoman that ‘[w]e were told that referrals would not require suspension unless there was blood.’”

Max Eden reports that in Oklahoma City a teacher said that: “Students are yelling, cursing, hitting and screaming at teachers and nothing is being done but teachers are being told to teach and ignore the behaviors. These students know there is nothing a teacher can do. Good students are now suffering because of the abuse and issues plaguing these classrooms.” In Buffalo, a teacher who was kicked in the head by a student said: “We have fights here almost every day. The kids walk around and say, ‘We can’t get suspended — we don’t care what you say.’” Ramsey County attorney John Choi of St. Paul, Minnesota, described how the number of assaults against teachers doubled from 2014 to 2015 and called the situation a “public health crisis.” Testifying before the U.S. Commission on Civil Rights, a former Philadelphia teacher said that a student told him, “I’m going to torture you. I’m doing this because I can’t be removed.” Eden’s report cites similar school horror stories in other cities.

Since most of the school violence and discipline problems rest with black students, there are a few questions that black parents, politicians, academics and civil rights advocates should ponder. Is academic achievement among blacks so high that black people can afford to allow miscreants and thugs to sabotage the education process? For those pushing the Obama administration’s harebrained restorative justice policy, can blacks afford for anything to interfere with the acquisition of academic excellence? Finally, how does the Obama restorative justice policy differ from a Ku Klux Klan policy that would seek to sabotage black education by making it impossible for schools to rid themselves of students who make education impossible for everyone else?

Is Profiling OK?

Here is a column by Walter Williams, a professor of economics at George Mason University.

WW is on target.  Profiling is not only ok, it is rational behavior that reduces errors and injustices.


Profiling is needlessly a misunderstood concept. What’s called profiling is part of the optimal stock of human behavior and something we all do. Let’s begin by describing behavior that might come under the heading of profiling.

Prior to making decisions, people seek to gain information. To obtain information is costly, requiring the expenditure of time and/or money. Therefore, people seek to find ways to economize on information costs. Let’s try simple examples.

You are a manager of a furniture moving company and seek to hire 10 people to load and unload furniture onto and off trucks. Twenty people show up for the job, and they all appear to be equal except by sex. Ten are men, and 10 are women. Whom would you hire? You might give them all tests to determine how much weight they could carry under various conditions, such as inclines and declines, and the speed at which they could carry. To conduct such tests might be costly. Such costs could be avoided through profiling — that is, using an easily observable physical attribute, such as a person’s sex, as a proxy for unobserved attributes, such as endurance and strength. Though sex is not a perfect predictor of strength and endurance, it’s pretty reliable.

Imagine that you’re a chief of police. There has been a rash of auto break-ins by which electronic equipment has been stolen. You’re trying to capture the culprits. Would you have your officers stake out and investigate residents of senior citizen homes? What about spending resources investigating men and women 50 years of age or older? I’m guessing there would be greater success capturing the culprits by focusing police resources on younger people — and particularly young men. The reason is that breaking in to autos is mostly a young man’s game. Should charges be brought against you because, as police chief, you used the physical attributes of age and sex as a crime tool? Would it be fair for people to accuse you of playing favorites by not using investigative resources on seniors and middle-aged adults of either sex even though there is a non-zero chance that they are among the culprits?

Physicians routinely screen women for breast cancer and do not routinely screen men. The American Cancer Society says that the lifetime risk of men getting breast cancer is about 0.1 percent. Should doctors and medical insurance companies be prosecuted for the discriminatory practice of prescribing routine breast cancer screening for women but not for men?

Some racial and ethnic groups have higher incidence and mortality from various diseases than the national average. The rates of death from cardiovascular diseases are about 30 percent higher among black adults than among white adults. Cervical cancer rates are five times greater among Vietnamese women in the U.S. than among white women. Pima Indians of Arizona have the world’s highest known diabetes rates. Prostate cancer is nearly twice as common among black men as it is among white men. Using a cheap-to-observe attribute, such as race, as a proxy for a costly-to-observe attribute, such as the probability of some disease, can assist medical providers in the delivery of more effective medical services. For example, just knowing that a patient is a black man causes a physician to be alert to the prospect of prostate cancer. The unintelligent might call this racial profiling, but it’s really prostate cancer profiling.

In the real world, there are many attributes correlated with race and sex. Jews are 3 percent of the U.S. population but 35 percent of our Nobel Prize winners. Blacks are 13 percent of our population but about 74 percent of professional basketball players and about 69 percent of professional football players. Male geniuses outnumber female geniuses 7-to-1. Women have wider peripheral vision than men. Men have better distance vision than women.

The bottom line is that people differ significantly by race and sex. Just knowing the race or sex of an individual may on occasion allow us to guess about something not readily observed.

The second original sin of healthcare regulation

A blog entry from John Cochrane.  JR is on target.


Whenever I advance one or another view of how a relatively free health care and insurance market could work a lot better than the mess we have now, the obvious question comes up: Well, what about the homeless person with a heart attack? You won't let him die in the gutter will you?

No. Of course not. We are a compassionate society. We will provide for poor people, very sick people, those with diminished mental capacity, the unfortunate, the incompetent, or the merely improvident. People don't die in the gutter.  Any half-reasonable health care reform proposal, including mine, provides some system of charity care; whether via medicaid, government run hospitals (VA for everyone, county hospitals), premium subsidies or vouchers, support for charity hospitals, and so forth; and in our society the government will have a big part in this; I do not appeal to private charity alone.  Such systems will also always be a thorn in our public side; as the tension between cost, effectiveness, quality, moral hazard will not magically disappear no matter how nice the promises of their architects, and the fraud, inefficiency, and bureaucracy of anything run by governments will not disappear as well.

But the great puzzle of health care policy: Just why is it, to accommodate this worthy goal, must your and my health care and insurance be so deeply regulated and so thoroughly dysfunctional? As one small example, why does a 20 minute skin check with the resident of my dermatologist generate a phoney baloney bill for over $1000, meaning a cash and carry market for such a simple, elastically demanded, and perfectly predictable service is impossible?

Why, in order to provide for the unfortunate, do we not simply levy taxes, and pay for charity care, and leave the rest of us alone?

Regular Americans  have jobs, buy houses, buy TVs, cars, and smartphones, negotiate the complexities of 401(k) and IRA plans, cell phone contracts, frequent flyer programs; hire the complex professional services of contractors, car mechanics, lawyers and accountants, and deal with the insane complexity of our tax system.

Why do we not leave such Americans (you and me) to a largely free market (as much as anything is a free market anymore) in dealing with their health care and health insurance? Dealing with a free-market health insurance, offered by companies competing hard for your dollar,  is surely no more complex than dealing with Obamacare exchanges with their constantly shifting plans and networks, and the impossibility of finding out actually what doctor takes what.

I think the answer is relatively simple. Our political system is allergic to the word "tax." Instead of straightforwardly raising taxes in a non-distortionary way (a VAT, say), and providing charity care or subsidies -- on budget, please, where we can see it -- our political system prefers to fund things by forcing cross subsidies.

Medicare and medicaid don't pay what the service costs, because we don't want to admit just how expensive that service is. So, large hospitals make up the difference by overcharging you and me instead. The poster child (though not really a cost driver) is emergency room care. The government passed a law saying hospitals must provide emergency room care for free. But money does not grow on trees, so again you and me (via private insurance) must get overcharged to cross-subsidize. The ACA tried to force young healthy wealthy (not getting subsidies) to vastly overpay for insurance, to cross subsidize the poorer and sicker.

This might seem like a wash. OK, if instead of paying taxes, it makes you feel good to pay business class prices for health insurance, what the heck. Economically, a cross-subsidy works the same as a tax. In fact, we do have Europe-size taxes and subsidies, we just hide them.

But it's not a wash. Cross-subsidies are dramatically less efficient than taxes. Choosing cross-subsidies over taxes is indeed the second original sin of health care and insurance regulation. Cross-subsidies cannot stand competition. 

If as now you and I are grossly overpaying for health care and insurance, to cross-subsidize others, a competitive market would come along and peel us off. A local skin-check clinic could offer that service for $50.

Low prices, efficiency, and innovation in the provision of services like health care come centrally from competition, and especially disruptive competition.  With no competition -- especially no entry by new doctors, hospitals, clinics, insurance companies -- costs spiral up. As  costs spiral up, the cost of the charity care spirals up. As that spirals up, the size of the cross-subsidies spirals up. As that spirals up, the need to restrict competition spirals up.

In a sensible world, government assistance lives beside a free market, where innovation and price discovery happen. That keeps the cost of government assistance somewhat in check. But when we choose assistance by cross-subsidy, then kill off competition and force us all in the regulated system, that check disappears.

We do not force you and me into government housing in order to cross-subsidize housing assistance for the poor. (Well, "affordable housing" mandates are going that direction, with predictable results.) We don't force you and me into buses to cross-subsidize public transit for the poor. (Well,... And I don't want to defend the rather atrocious public housing and public transit systems.) We don't force you and me into government-regulated grocery stores and restaurants to provide food stamps and other nutrition assistance. And housing, transportation, and food remain functional markets.

Bottom line: Much of the pathology of health care and health insurance comes from this second original sin, choosing cross-subsidies rather than straightforward taxes. Cross-subsidies require the government to stop competition, so an initially clever way of hiding taxes eventually builds into a monstrously inefficient system.  (That's a key point. Initially, it is about the same. But the cross subsidy system gets more and more inefficient over time.)

We would be far better off to admit this; raise explicit taxes enough to provide the charity end of our care, and let health insurers and care givers compete for the rest of us, as airlines, computer makers, and everyone else does. The politician's job is to explain to people that what they pay more in taxes they will more than make up in lower health care and insurance costs.

The principle goes more deeply. For example, the government wants to provide free birth control. I think that's a great idea -- given the personal and social costs of unwanted pregnancy, and the political turmoil over abortion, sure, every pharmacy should stock free birth control. It would take a very small tax to cover it, and I would gladly pay. But no, the ACA decreed that insurers must "pay" for it, from a cross-subsidy, that people opposed to birth control objected to. Are annual checkups good for public health? If you think so, tax and spend (on budget!) and send people vouchers. And so forth.

What happens in a free market to people who fail to buy health insurance? Don't we need a mandate? On economic grounds, a mandate for extremely high deductible catastrophic coverage makes some sense. People who don't buy health insurance and get some rare cancer cost a lot of money. However, such people are not really the heart of health care costs (or the government's health care costs). There is no real case for forcing such people to buy insurance with lots of first-dollar services, if they choose to pay for those out of pockets. We mandate car insurance, but not that it covers oil changes (to cross-subsidize oil changes for poor people.)

In a free but compassionate market, people who fail to buy health insurance and get sick suffer the same fate as people to fail to buy home insurance and their house burns down, or people who bet on the stock market and lose. The demands of a compassionate society are to make sure everyone gets reasonable health care. But it is not to protect the wealth of relatively well off people who choose to take risks. So, the average person with a job, house, etc. who fails to buy health insurance and then gets sick receives health care -- but also personal bankruptcy. With that stick in front of us, I'm not persuaded that a mandate is going to be necessary for average Americans like you and me. Any more than a mandate is necessary to get us to buy home insurance.

(This isn't really a new thought; it's in After the ACA, for example. But a bunch of correspondence following my last health post makes it worth punching up,.)

(And the first original sin? The tax deduction for employer provided group insurance, but not for employer contributions to individual, portable, guaranteed renewable, individual insurance. That caused the preexisting conditions problem pretty much by itself.)

Big Government Policies that Hurt the Poor and How to Address Them

Here is a link to a report by the Heritage Foundation.  It provides useful perspective about how Government efforts that are supposed to help the Poor often hurt them.

Here is a snippet.

Concern for the poor is often equated with expanding government programs. In other words, expanding government is frequently seen as good for those in need, and limiting government is often portrayed as hurting them. The reality is that, in many cases, government policy can make it more difficult for those striving to make ends meet. This Special Report identifies nearly two dozen big government policies that particularly hurt the poor. These policies, at the local, state, and federal levels, are just the tip of the iceberg. The report does not address the harms imposed by the distorted incentives of the current welfare system, which discourages work and self-sufficiency, or cover some critical areas, such as education and health care policy. This Special Report covers many other issues, with a particular emphasis on the harmful impact of economic regulation on poorer Americans.

There are some common threads that run throughout most of the identified policies. A significant number are classic examples of cronyism; it is quite illuminating how government policies supposedly designed to protect vulnerable workers or consumers wind up, in reality, helping dominant producers or politically favored special interests. Many of the policies drive up consumer prices, such as for food and energy, which disproportionately hurt the poor. (See Chart 1 analyzing low-income household expenditure patterns.) There are also numerous policies that create artificial and unnecessary obstacles for the poor when it comes to obtaining the jobs that could lift them out of poverty.

All Americans should have the opportunity to get ahead, and opportunities abound in the U.S. market economy when it is allowed to function freely. If the government would just get out of the way by curtailing cronyism, eliminating unnecessary regulations, and eliminating other government interventions that needlessly drive up prices, those in need would have a better chance to succeed.

Equal Pay

Here is a link to an article by Mark Perry of the AEI.  It provides a useful perspective.

A snippet:

Every year the National Committee on Pay Equity (NCPE) publicizes its bogus feminist holiday known as Equal Pay Day to bring public attention to a completely spurious apples-to-oranges comparison of incomes by gender. According to the NCPE, Equal Pay Day will fall on Tuesday, April 4 this year, based on a 20% unadjusted difference in median annual earnings for women and men in 2015 (most recent data available) when absolutely nothing relevant is controlled for that would explain income differences like hours worked, marital status, number of children, education, occupation, and the number of years of continuous uninterrupted job experience.

Therefore, Equal Pay Day on April 4 this year misleadingly represents how far into 2017 a typical woman will allegedly have to continue working to earn the same income that her male counterpart earned last year for doing the exact same job. That’s not only illegal, it’s completely out-of-touch with reality. How many organizations today have a dual pay scale with a different wage for the same position based on gender? Probably none.

Inspired by Equal Pay Day, I introduced Equal Occupational Fatality Day in 2010 to bring public attention to the huge gender disparity in work-related deaths every year in the United States. Equal Occupational Fatality Day tells us how many years into the future women will be able to continue working before they will experience the same number of occupational fatalities that occurred for men during the previous year.

Based on the most recent data on workplace fatalities by gender from the Bureau of Labor Statistics (BLS) for 2015 (and assuming that 2016 data will be comparable) the next Equal Occupational Fatality Day can be calculated. As in previous years, the chart above shows the significant gender disparity in workplace fatalities in 2015: 4,492 men died on the job (92.9% of the total) compared to only 344 women (7.1% of the total). The most recent “gender occupational fatality gap” was again considerable — more than 13 American men died on the job for every woman who died while working.