The Transition Away from Socialist K-12 Education

I have recently reached the conclusion that public schools are a failed experiment. Aside from the less important and ultimately silly questions like prayers in school, socialized K-12 education gives rise the immoral property tax, heinous teachers' unions and mediocre to poor educational outcomes, with no free market incentives involved. K-12 Education is a commodity no different than food, housing and health care. Our society has become warped with the perversion of what is an inborn right and what is a choice.

Okay let's say we can convince and persuade voters to roll back federal and state mandates for so-called public education. (Yes this is a tall order, but only possible with a transition plan, like the one I will outline here.) How do we get from state-run, state-financed education to one where freedom, superior outcomes and lower costs are the rule?

The short answer is to replace the school district charters given by each state with a cooperative model. The state would simply assign the assets of the district to the cooperative, with a service area coincident to the current boundaries. Over time, competitive services would spring up and parents would have choices based on cost, location and outcomes! There are of course some details to be worked out, but this plan seems feasible.

In a truly free society, parents would be able to choose the educational products they think best for their children. No need to enforce compulsory attendance laws and no more "public policy" debates over government resources. The best thing would be that immoral government taxes, like income and property taxes would be ended!

Auto insurance is NOT like Obamacare

Many make a false analogy between health insurance and auto insurance. Here are some differences between auto coverage and health coverage routinely glossed over or unacknowledged:
1) With auto insurance, the states are making the mandates not the feds. The states have that authority and the feds do not.
2) Government provides us roads to enable driving, but it does not provide us our health to enable living.
3) Using roads requires interaction, requiring some of those government protections for us from other drivers;
while someone else's poor diet, lack of exercise, bad genes or poor luck simply are not be anyone else' problem health-wise, nor should it be financially. (Let's leave public health issues aside for now.)

Group health insurance model provides the same risk pooling benefits that are often cited by Obamacare defenders. It does and addresses adverse selection, but THAT model is a big part of the reason for escalating costs. Consumers of the coverage are removed from the provider selection process and providers are encouraged to form provider networks (cartels). Both of these facts mean that providers do not have to compete on price. THAT is the main source of the cost problem.

Risk pooling does have its issues, but in and of itself it is not socialism UNTIL the government mandates or operates its own health coverage networks. Of course the federal government has done just THAT with Medicare, Medicaid and VA hospitals for at least the last 45 years, which is again part of the current cost problem. There is no free market in health care, so there is no cost containment.

Health care for the indigent should be reassigned back to the fine faith-based hospital systems like Baylor, Presbyterian and Methodist so the "public" is not stuck with the bill. Every one else should buy individual policies for major medical issues and leave everything else as fee for service.

End Federal Drug Prohibition

Recently John Stossel used his program on Fox Business to renew the debate over drug prohibition. While I personally believe that Mr. Stossel has this totally right, I would like to focus on the notion of drug prohibition by the national government. (N.B., using the term "federal" when our national government is so centralized is an abuse of the term "federal".) You see, I believe that national drug prohibition is unconstitutional.

Consider that legislation and enforcement of nearly all criminal behavior is done by the states. (The major exceptions are treason and counterfeiting, and patent infringement.) By criminal behavior, I mean actual crimes by any selfish enough to use violence or treachery or mistreat the (tangible) property of others: murder, assault, rape, armed robbery, theft, vandalism, and so on. Even non-criminal behavior, that is a crime against a state, so-called victim-less crime like prostitution or unlicensed vending, are all managed by the state, its subdivisions, and its chartered cities and districts, not the supposedly federal government. So for what reason can the central authority in Washington impose or intrude upon what the citizens of each state choose?

This time our journey into federal over-reach starts with the Pure Food and Drug Act from 1906. As laws goes, it is certainly a reasonable one for a state to pass because it discouraged fraud in sales of tonics and syrups and encouraged meat inspection. But it set up the scenario for the national government to start the bloated and unnecessary FDA and set precedent for interventionism by the feds in drug use. What should have happened is competitive private laboratories should be used to test truth-in-labeling and food safety in accordance to the standards for each state. This law was superseded the Food, Drug, and Cosmetic Act of 1938.

Next we have the Harrison Narcotics Tax Act which is "An Act to provide for the registration of, with collectors of internal revenue, and to impose a special tax on all persons who produce, import, manufacture, compound, deal in, dispense, sell, distribute, or give away opium or coca leaves, their salts, derivatives, or preparations, and for other purposes." The courts initially interpreted this to mean that physicians could prescribe narcotics to patients in the course of normal treatment, but not for the treatment of addiction. This was later overturned and now federal law has no authority over treatments in medical practices. Although technically illegal for purposes of distribution and use, the distribution, sale and use of cocaine was still legal for registered companies and individuals. But the biggest problem here is that for the first time individuals had to register with the national government to possess something. This is totally unacceptable.

The 1937 Marihuana Tax Act was a significant bill on the path that led to the criminalization of cannabis. The bill was passed in order to destroy the hemp industry, largely as an effort of businessmen Andrew Mellon, William Randolph Hearst, and the Du Pont family. This alone makes it clear abuse of power by Congress. In 1969 in Leary v. United States, part of the Act was ruled to be unconstitutional as a violation of the Fifth Amendment, since a person seeking the tax stamp would have to incriminate him/herself. In response the Congress passed the Controlled Substances Act as Title II of the Comprehensive Drug Abuse Prevention and Control Act of 1970. The 1937 Act was repealed by the 1970 Act.

The Anti-Drug Abuse Act of 1988 created the Office of National Drug Control Policy, headed up by the "drug czar". Today that office (mis-) employs over 100 people alone!

All of these laws have one thing in common: they violate the principle of federalism which is the bedrock of the US Constitution. In doing so they increase the power of the federal government at the expense of the states and what's worse, legitimatize the use of government resources against the very individuals it is designed to keep free!

All of these silly laws should be repealed as soon as possible.

Limits of Interventionism

By questioning some of the unconstitutional meddling of the federal government in modern American society, including the Civil Rights Act of 1964 and the Fair Housing Act, Rand Paul has performed a useful service for the liberal media elitists who love to empower our elected officials. Outlets like the New York Times have helped to illuminate their blind love for the authoritarian state, despite the limits of the US constitution.

Many Americans are sputtering mad, believing that government has let them down in abetting a ruinous recession, bailing out bankers and spending wildly. Rand Paul is just one part of the remedy they have in mind. His views and those of other Tea Party candidates are reminders of the truth that there is no such thing as "enlightened government".

In a handful of remarkably candid interviews since winning Kentucky’s Republican Senate primary this week, Mr. Paul made it clear that not only he does understand the nature of racial progress in this country, he sees interventionist policy of government itself as racist.

As a longtime libertarian, he espouses the view that personal freedom should supersede all government intervention. Neighborhood associations should be allowed to discriminate on the basis of race, he has written, and private businesses ought to be able to refuse service to anyone they wish. Under this philosophy, the punishment for a lunch counter that refuses to seat black customers would be public shunning, not a court order.

It is a theory of liberty with roots in America’s creation, and the succeeding centuries have yet to give it a chance to show how effective it can be. Even if "promoting a civil society" was somehow spelled out as a constitutional goal (and it isn't), the arrogance of the Times' editors to think that they know what that means is astonishing. The views of a few people empowered by government to discriminate meant generations of less freedom for large groups of others, since the government could now routinely overstep its boundaries and play favorites.

It was only government power that instituted and maintained slavery and enacted Jim Crow, neither of which would have been in place in a purely free society. It was government that brought on and extended the Depression and created the union/EEOC counterculture in the workplace, all through the best of intentions.

Republicans in Washington have foolishly distanced themselves from Dr. Paul’s remarks, afraid that voters will be as ignorant as the Times' editorial staff. But as they properly continue to fight the new health care law and oppose greater financial regulation, claiming the federal government is overstepping its bounds, they should notice that the distance is closing. Maybe the next step is to call out all of the unconstitutional laws as part of the Republican platform. Maybe then the liberal media will understand?

Curtail unions in government agencies

Once, over a hundred years ago, before the Fair Labor Standards Act or the National Labor Relations Board ever existed, there were robber barons. These were hard core wealthy industrialists who leveraged their existing wealth to more wealth, often on the backs on the great unwashed masses.

Well it probably wasn't that bad, but there were serious problems with child labor, working hours, safety and fair compensation. Most of these issues were the result of the transition from an agrarian to a manufacturing-based economy. Also at issue were monopolies that limited employment opportunities within industries. Finally much labor was unskilled, often lacking even the ability to read, let alone write to keep records.

Two major events occurred that began changing all of this: government expansion and unionization. Now usually I am very critical of government growth. There are a few exceptions where sometimes we need a "push" from Congress. I believe the Fair Labor Standards Act was one such example. The eight hour day and forty hour work week for the working person became a national standard and for the first time large employers had to meet an expectation. (Local merchants and specialty shops were much more prevalent before the industrial revolution, with smiths, wainwrights, carpenters and candle-makers all have small family-oriented businesses who might take on apprentices on occasion).

At the same time unions came along. The main union benefit was to give labor a voice and clout against the wealthy employer who might otherwise take advantage of those who would otherwise get taken advantage of. This was mostly fine, as the new dynamic of big employers and large groups of non-specialist employees and candidates. With the advent of corporations it became even more important for the employees to have a collective voice, as a group of owners and manager would almost never consider the employee stakeholder in those early days of industrialization.

But somewhere things went wacko. You see there is a downside to unions.

For one, it become someone's job to advocate and as long as everyone voluntarily donated out of their own wages, freely elected that advocate and that advocate was limited in tenure things were okay. But then came closed shops and large nationally organized unions with expensive lobbies and ties to organized crime.

Another issue with unions is that they often work against management, creating an adversarial relationship where there should be a cooperative one. Rules about layoffs, seniority and callbacks while not arbitrary, made life more difficult for management and increased liability beyond already complex resource management questions.

So unions where once a good, arguably necessary counterbalance to corporatism and collusion on employment; now they are a burden to profitability, bringing a sense of entitlement to the well-connected and well-established few.

And any good they once (or still) brought is restricted to private, for-profit enterprise. It is simply unnecessary for government employees to unionize; things true for steelworkers or mineworkers today are not applicable to government clerks and service agents. Firstly, there is no for-profit over-utilization incentive to counter-balance. Second, the "owners" of the enterprise are ultimately the citizenry! Most are prohibited by law from striking of course

The practical upshot of this is that local jurisdictions and states are going broke! The people cannot reign in government spending because of overly generously compensation beyond wages for these so-called public servants. A few well-connected people can take a generous retirement stipend from one job at say age 50 then get yet another job from a different jurisdiction, earning even more retirement after a few years. These people can make six figures after retirement!

End the SEIU! It is time to return sanity to our public service sector.

End public employee unions

Inertia works against collective action

"Government is not reason; it is not eloquence; it is force. Like fire, it is a dangerous servant and a fearful master." - George Washington.

We commonly hear claims like "Someone should do something!" or "There ought to be a law ...". Before a government agency runs off and tries to save the world, we need to consider something very important: static inertia works against action, especially collective action. What I mean is, it is hard to change the "at rest" state of things. It is also hard to make things different from the way things are now, unless the intent is that we all just let go and let things return to the "at rest" state. Put in more basic terms, it is always harder to effectively do something, than not.

This concept is not new. It is common sense that it takes resources and work to keep things organized. In science, the concept is called entropy, which is the tendency for ordered things to become disorganized. In political philosophy, the concept ultimate "at rest" state would be anarchy. I think of the difficulties of public policy related to working against anarchy as overcoming social entropy.

What this means is that for every public policy proposal, we have to think beyond the intended goal. There must be controls for enactment, enforcement, efficacy, and efficiency.

Enactment is about policy become reality, being instantiated. Typically this is begun by legislative action. Zero-based budgeting and funding is generally considered but not always (see the modern US Congress). How do we pay for policy x? Generally public revenues are in the form of taxes or fees or penalties.

Taxes themselves are of course a form of public policy and suffer from the same provisos against government action. I suggest the least obnoxious form of taxation is a consumption tax on complementary goods should be the starting point (and ending point) for all public expenditure. An excellent example would be a gasoline tax dedicated to public highway construction and maintenance.

Enforcement is where things can get really sticky. The two main reasons for this are:
1) unintended consequences - Think of how other things are affected indirectly: will people spend less or save less? Will they become less self-reliant? Will we unwittingly reward immoral or illegal behavior?
2) enforcement as its own end instead of means. Think of the county sheriff who is under pressure to fund local government with traffic and parking ticket quotas. Or the seizure of real property tangential to a crime for the funding of government budgets.

Quality measures like efficacy and efficiency are also important and frequently overlooked. Efficacy is about how well things work as planned and designed. An illustrative example here is mandatory education: do we have more or fewer people with secondary school educations entering the workforce (notice I did not say diplomas) than we might have had otherwise? Unintended consequences come into play here as well. Efficiency is about optimum outlay of resources during the execution of the policy itself. Think of the idea behind competitive bidding.

All four of these ideas are given short shrift in public policy debates. If we critically assess with honesty most congressional acts, state agencies and even local ordinances, we would find they are of questionable value, at best, and many are simply not worth it.

John Mackey on the right path

John Mackey, CEO of Whole Foods Market, recently wrote an OP/ED piece in the Wall Street Journal touting some health insurance reforms. In that piece, he hit upon the major issue with the current administration's approach to health care reform:

"Many promoters of health care reform believe that people have an intrinsic ethical right to health care-to universal and equal access to doctors, medicines, and hospitals. While all of us can empathize with those who are sick, how can we say that all people have any more of an intrinsic right to health care than they have an intrinsic right to food, clothing, owning their own homes, a car or a personal computer? Health care is a service which we all need at some point in our lives, but just like food, clothing, and shelter it is best provided through voluntary and mutually-beneficial market exchanges rather than through government mandates. A careful reading of both The Declaration of Independence and the Constitution will not reveal any intrinsic right to health care, food or shelter, because there isn’t any. This “right” has never existed in America."

Mr. Mackey is right on. The first sentence of the quote frames the issue correctly. And he explains why, to those who believe in the "intrinsic ethical right" of health care, in terms of feasibility and formality this idea should be a non-starter. Of course these truths will not convince most on the left to abandon ideas like single-payer or universal coverage.

The more basic problem with thinking that health care is a right is that this concept is based on a moral or ethical ideal rather than an essential principle of reality. People will tend to operate for self-interest first, then worry about everything else (including cooperative or collective ideals) later. This is a reality many simply ignore, because they really, really want to believe in the ideal, reality aside. This idealism is just as misplaced here, as is it for those who advocate prohibitions against alcohol and other drugs. People will want to do what they will, no matter how bad Ted Kennedy or Richard Nixon wishes it were otherwise.

Economics is the social science of scarcity. Economics and the free market not only accept the reality of human self-interest, they leverage it! Idealism that seeks to impose "rights" beyond this reality are fighting against human nature. Generally speaking, the complexity and cost of laws / regulations, and the corresponding bureaucracy to enforce them, make most social initiatives based in idealism impractical. Until the social reformers accept this reality, we will continue to have these debates about public policy and what is and what should be.

I for one am ready to move on.