Monthly Archives: April 2014

Hotel Maryland

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You can check in, but you can’t check out.

Netflix’ show, House of Cards, is about cut-throat politics at its worst, it’s hugely successful, and it’s filmed in Maryland.  And therein lies the rub.

The show’s producers, Media Rights Capital, now want a larger set of tax credits, given that success.  If they can’t get an increase, MRC says it’ll move its filming location to another state where it can get a better deal for its proven product.  Fair enough.  The filming produces income for the state’s economy and for the state, even with the current credit structure, and that success is expected to continue.

The state demurs.  That government wants to keep the credit levels where they are.  Also fair enough.  Those credits are their cost (regardless of what we might think about whose money those credits really is), and the state would like to minimize the cost of its own business-doing.

Such matters should be the stuff of negotiation between the two parties, and if they can’t agree on terms, the two parties should be able simple to part ways.

But the State of Maryland now has gone off the rails.

The House of Delegates now is threatening to seize MRC’s production studios under government’s eminent domain powers if they attempt to go somewhere else.  Never mind that there’s no public use—or even public purpose—to such a seizure; the taking would be nothing more than government-sanctioned theft of private property.

Folks might want to think twice about moving a business to Maryland, or keeping one there.  It’s a short step to a neighboring state, none of which seems inclined to keep businesses prisoner.

Last thing I remember, I was
Running for the door.
I had to find the passage back
To the place I was before.
“Relax,” said the Delegate,
“We are programmed to receive.
“You can check out any time you like,
“But you can never leave.”

 

With apologies to the Eagles.

Another 2nd Amendment Threat from DoJ

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All for the very best of intentions, of course.

This time Attorney General Eric Holder wants to use bracelets that must be worn by lawful gun users as a means of electronically tying the firearm to its lawful owner.

I think that one of the things that we learned when we were trying to get passed those common sense reforms last year, Vice President Biden and I had a meeting with a group of technology people and we talked about how guns can be made more safe.

By making them either through finger print identification, the gun talks to a bracelet or something that you might wear, how guns can be used only by the person who is lawfully in possession of the weapon.

(“Common sense”—they stayed up all night memorizing that phrase a few years ago, and now they’re doing their best to wear it out, including in places where their sense plainly is lacking.)

And he wants to spend $2 million of our hard-earned tax dollars on this…idea.

Such a mechanism is just one more point of failure in an American’s exercise of his fundamental right.  Any such linkage can be hacked, either to enable a criminal to use a stolen weapon or to enable a criminal to disable a weapon in the hands of its lawful owner trying to defend himself.

More importantly, though, such a mechanism is just another tool in the hands of an intrusive government to identify who owns firearms, and thus to get sub rosa registration; to track that owner as he legally uses his firearms; and—that hack—to disable the firearm whenever a legal owner/operator becomes inconvenient to that intrusive government.

In fact, such technology would be highly useful to us legal owner/operators.  It must, however, be a voluntary addition to our weapons, with the choice made solely by us.

Disarming While Our Enemies Grow Stronger and Get More Aggressive

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The Pentagon said Tuesday it would sharply cut the number of US submarine and bomber-launched nuclear weapons, and preserve most of the nation’s land-based intercontinental ballistic missiles to comply with the New START treaty with Russia.

Never mind that the subs and bombers lend an enormous flexibility of response that’s utterly lacking in the missile force.  Never mind, also, that the submarine force is the most survivable (so far) of our nuclear forces.

Never mind that we shouldn’t be disarming unilaterally at all, much less while our enemies are building up their military forces and actively employing them against our friends and allies.  Never mind, also, that Russia is actively supporting Bashar al Assad’s butchery of his own people in Syria and has returned to obstructing efforts to keep Iran from getting nuclear weapons.

Defense officials said the decision on the US nuclear forces needed to be made well in advance of the 2018 deadline set by the New START treaty.

Only a bureaucracy thinks it needs four years advance notice to start making such drawdowns.  Only this administration thinks we need to honor a treaty that our treaty “partner” has abrogated already, in fact, if not within the letter of the treaty, by attacking our friends and by threatening our allies and other of our friends.

Of course, the People’s Republic of China is watching this timidity closely, as it pushes its territorial designs on Japanese, Philippine, Viet Namese, and Republic of China/Japan (disputed) islands and sea holdings in the East and South China Seas.  The PRC also is watching closely, as it continues its support for northern Korea’s and Iran’s nuclear weapons programs.

What is this administration thinking?  Oh, wait….

Helping the Low Wage Worker

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There are lots of sources for this help; I’m only going to talk about how government can help (yes, we can and should help the least among us, and yes, Conservatives, government does have a role, if limited: there are things government can do, even here, better than the private sector).  The trick here is to prevent government mission creep and an ever-increasing government role—a difficulty that in itself makes a powerful, and not entirely illegitimate, argument against any government role at all.

Who are the low-wage workers in America?  They’re our younger teenagers, just starting out; our college students looking for part-time work while trying to remain full-time students for their longer term benefit; the parent looking for part-time work to flesh out the family income, while also needing to take care of children still at home; the high school graduate, or drop-out, trapped by that level of education in a dead-end job.  In short, they’re far and away low-skilled workers, and they’re workers with jobs whose output has very little value to the employer, even if the employer needs that work done to some degree.

So how do we—how does government—help these folks?  One solution proffered lately is the Earned Income Tax Credit as a supplement to those low wages.  The EITC even is “enjoying” a push to expand its reach.  Glenn Hubbard, writing in The Wall Street Journal, is one of those pushing this idea:

The Earned Income Tax Credit, which supplements the income of low-wage workers as they earn more, is supported by many conservatives and liberals alike.  Expanding this program’s payments for single workers (that is, beyond workers with families)—or using an alternative low-wage subsidy—would create more powerful work incentives.

He also favors means testing this aid, but on a shallower slope in order to “reduc[e] the marginal tax rate on work as the support phases out.”  The problem with this last—means testing—is that it still leaves in place that added tax on work.  I’ve written elsewhere of the doom that means testing spells for any welfare program.

Means testing welfare generally actively discourages, if not work itself, then looking for higher-paying jobs, even when the individual is qualified for that better job and it’s available—that’s the outcome of the welfare cliffs that the Pennsylvania Secretary of Public Welfare was describing in my earlier post.  We can’t means test.  Either the individual is eligible for welfare, or he is not.  Full stop.

The larger problem, though, with an EITC form of aid is that, while it might indeed encourage more folks to look for work rather than welfare, it won’t encourage employers to offer that work, and a wage subsidy actively encourages employers to suppress the wages offered for the work they do have—after all, government will make up the difference with its EITC.  Thus, there’s no help for getting out of the bottom levels.

Rather than means testing or open-endedly subsidizing, we should be applying an upper bound on the amount of subsidy offered.  A couple of examples will illustrate.

During the Clinton years, Temporary Assistance to Needy Families was enacted, replacing Aid to Families with Dependent Children, and this program had both a work requirement for aid eligibility and a maximum lifetime duration of that eligibility.  Under that program, folks went back to work, child poverty rates fell sharply, and income sources for the affected families shifted from a 33% from earned income/40% from AFDC split in 1991 to a split of roughly 60% from earned income/9% from TANF by 2000.

The GI Bill, used to educate our veterans—whether the very generous program under which I got two advanced degrees, or the current still-generous program that provides funding for four years of college at sound (if not very expensive) schools—and which benefit was earned by our military service, offers another example of a limited, finite training subsidy.  It’s overkill for initial training, but it demonstrates in a different venue the efficacy of limiting handouts and providing a hand up instead.

The subsidy also needs to be aimed at helping the low-wage worker—or the wholly unemployed—improve his situation so he can get a better job, or a job at all; it should not be just an unfocused handout of money.

Given the reason for those low wages—low value work and lack of training—the better way to help our low-wage workers (we’re not going to increase the value of work that is inherently low-value) is to facilitate their ability to get initial training either for an entry-level job (so as to potentiate getting that first job) or for moving up from a low value job to higher value one.  This can be done by any combination of subsidizing the worker as he seeks that initial training, or by paying the employer (prospective or current) that subsidy.  Subsequent training then can and should be provided by the employer (consistent with business needs) as he recognizes the value of that now known worker or sought by the worker as he looks to change directions in his working career.

In either event, a training subsidy can’t be open-ended, nor can it be means tested to be effective.  The subsidy must have an upper bound either on the total amount paid out—use it wisely—or on the time available for its use—don’t dither—or it must have both limits, and the clock must start on first use (rather than first eligibility).

Spending on Education

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…and education results turn out to be wholly independent of each other—that is, spending more and more hasn’t produced better and better outcomes for our students—it hasn’t had any effect at all.  It’s been a waste of our tax dollars.  This is clearly indicated by Cato Institute‘s Andrew Coulson’s report State Education Trends: Academic Performance and Spending over the Past 40 Years.  What Coulson found is illustrated by this statement early in the report:

The state-by-state results of this investigation are reported in the subsections that follow, but the overall picture can be summarized in a single value: 0.075. That is the correlation between the spending and academic performance changes of the past 40 years, for all 50 states.

At the risk of lecturing to the choir, correlations run from 0.0 to 1.0 with 1.0 being perfect correlation—every bit of the effect being looked into is, in some sense, “explained” by the correlates.  0.0 means that there is no correlation at all, there is no connection between the two correlates at all.  In this case, 0.0 would mean there is no connection whatsoever between spending on education and educational outcomes.  That correlation of 0.075 isn’t materially different from 0.0.

This graph should drive the point home:

Notice that: spending goes up and up and up, and employment (teachers and administrators) goes up and up.  Enrollment—the number of students reached—stays flat.  The performance of that static number of students…stays flat.  As a nation (keep in mind, this is state-level spending; this study didn’t get to Federal spending, which would only add to the amounts wasted, for reasons that become obvious below), we’re spending more and more per student, we’re spending more and more per unit of student performance, and we’re not impacting that performance.  This failure has been going on for nearly 45 years, too—more than two generations of kids.  Our kids’ kids aren’t even benefitting from this government spending.

What was that about doing the same thing over and over while expecting different results?

Here are a couple of graphs for specific states, one relatively blue and one relatively red, that further illustrate the point:

And

Again, spending is up, and performance, now assessed by SAT scores, is unaffected.

Of course, there are naysayers about these results.  New Mexico Voices for Children, for instance, had this to say:

The Cato report assumes that education money is spent the same way it was in the 1960s and ’70s.  In fact, schools have been mandated to provide many more services—special education, after-school programs, computer sciences, etc—and today’s classrooms require much more technology than they did in the days of the mimeograph.

All true.  And all with no effect on those reading, math, science, or SAT scores.

Others insist that, since the number of students taking the SAT has more than doubled in the last 25-30 years, those scores would, of course, flatten out.  But this beef ignores the fact that Coulson provided such demographic adjustments (and others, based on race, socioeconomic status, and so on), and the results didn’t change.

The bottom line is that, at best, spending money (especially increasing amounts) on technology for tech’s sake, on after-school programs to provide extra time away from home for the kids, etc is a waste.  Spending money on increasing numbers of personnel to run these programs, or to supervise the additional personnel, even on more teachers per “classroom” has no effect.

We need to get back to basics, and focus spending on these subjects: reading, writing, arithmetic—the classic three Rs—and add to the mix, throughout K-12, American history/civics and budgeting/finance/economics, and teach these only.  Full stop.

Anything extra should come at the expense of the local community that wants the extra, not at the expense of other communities in a state, or in the nation.

 

h/t Watchdog.org