Tag Archives: regulation

Universalized Choices of K-12 Schools

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Our public national education system—an inchoate agglomeration of local public school systems—is badly failing our children and through that badly failing our nation both in our economy and in our national security. Parochial schools, charter schools, voucher schools, homeschooling and pod-schooling (a pooling of homeschooler resources), which I’ll term choice schools—all of these do far better at educating our children than do those public schools, whether run by teacher unions or not. The ability to choose among those options is critical to our children’s education. The competition even produces improvements in the public schools. Hence, ESAs, Education Savings Accounts.

A limitation on ESAs is their funding. Formal funding for ESAs functionally caps their availability for students, with the result that vast numbers of students can’t get into one; the ESA program for their area has expended all of its funds before the enrollment lists got to them. The Wall Street Journal‘s editors propose a solution:

To create truly universal programs, states can remove enrollment caps and fund ESAs outside of annual appropriations…. They can boost scholarship amounts….

More money isn’t necessary. More money would help, even if it is government money, provided it’s allocated and spent wisely—but it would be government money.

More money could be made available for ESAs, if only indirectly, though, not by increasing spending but by allocating existing education dollars to the student rather than to the school district. In this way, when a parent moves his child out of the public school and into a choice school, the money would follow the student to that choice school, defraying the cost of attending that alternative school.

Other mechanisms for supporting school choice also are available. These include State governments removing such barriers to choice as caps on the number of charter or voucher schools allowed to exist in a jurisdiction, forcing homeschooling parents into teacher unions, limiting use of under-used or empty public school facilities by choice schools, onerous licensing and accreditation requirements for choice schools—even caps on the number of students allowed into an ESA program.

Wrong Answer

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House and auto insurers’ profits and the rate increases they charge policy holders are coming under political scrutiny, but politicians’ proposed solutions are badly counterproductive.

New York Governor Kathy Hochul (D) this month became the latest state lawmaker to advocate profits caps on insurers, to tackle escalating home- and “crushingly expensive” auto-insurance rates.
Her plan would require home insurers with “outsized profit margins” to lower or justify their rates, and review the profits threshold at which auto-insurers are required to refund customers.
Also this month, lawmakers in states including Oklahoma proposed profit caps targeting insurance.

No.

Government definitions of “outsized profit margins” have nothing to do with business imperatives or what happens in a free market. Those definitions serve only the personal political ambitions of the politicians doing the defining, and they’ll vary across politicians and their political parties.

Beyond that, all price caps do is limit the availability of the product being capped—whether oil and natural gas and gasoline, rental housing availability and quality…or insurance policies. The limit on supply, too, hurts those on the lower economic rungs of our economy first and hardest.

Requiring insurers to justify their rates and the profit levels at which policy holder refunds are paid is a good idea, but government is the wrong crowd that must be satisfied.

Better simply to require insurers to disclose their profit margins and the basis on which they arrive at their definitions of profit. Their policy rates already are publicly available; making both sides of that process public would let the public more effectively shop for policies that suit their individual needs.

Doing that within an increasingly deregulated (not unregulated) insurance market environment would move the industry closer to a truly competitive market within which insurers would reap fair profits and insurees would pay fair premium amounts for the policies they want. And the Critical Item: “fair” would be defined within that competitive market by those market participants, not by any government.

An Activist Judge Gets It Wrong

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DC District Senior Judge Amy Berman Jackson has ruled that

the Trump administration is legally required to secure funding for the US Consumer Financial Protection Bureau (CFPB), and that failing to do so would violate a prior court order barring the government from dismantling or shutting down the agency[.]

However.

Leave aside the fact that the question of the Trump administration funding of the Consumer Financial Protection Bureau and the question of the Trump administration dismantling or shutting down the agency are distinctly separate questions.

The fact of interest here is Jackson’s mistaken ruling that Trump must fund the CFPB. He cannot. By the statute that created the CFPB, that agency is funded solely by the penalties it exacts via its enforcement actions (pay no attention to the conflict of interest behind the curtain) and from the Federal Reserve Bank, the latter which the CFPB draws from according to CFPB-determined needs (pay no attention to the doings behind this curtain, either).

The Trump administration has no control over and no capacity to produce CFPB funding. This is the sort of shenanigan in which activist judges engage, causing increased cost and delay in cleaning up prior messes.

In the “Go Figure” Category

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New Jersey is one of several States that do not require a photo ID to vote. It’s also one of a number of States that offer reduced fare to some groups—senior citizens, military personnel, the infirm, for instance—on their mass transit systems.

Go figure:

Per Rutherford’s Shore News Network, as quoted by Fox News,

Starting January 1 [last Thursday], photo ID required for NJ Transit reduced fares but not for voting[.]

Hmm….

Who’s In Charge?

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State Financial Officers Foundation CEO OJ Oleka noted in his Wall Street Journal op-ed the foolishness of Minnesota’s decision to eliminate its State Treasurer position with effect ‘way back in 2003. Supporters insisted that the position was purely clerical and so not worth the million dollars a year cost. Instead, the position’s responsibilities were scattered around to other State agencies. Oleka added

When no statewide official is clearly responsible for safeguarding public money, taxpayers pay the price.

Like with the multi-billion dollar Medicaid fraud that’s being uncovered in Minnesota. Only it’s not just the citizens of Minnesota who are paying that price; it’s all of us citizens all across these United States.

Oleka also pointed out the value of having someone in charge of watchdogging a State’s public money.

Across the states, financial officers are proving that vigilance works. Kentucky Auditor Allison Ball uncovered $800 million in wrongful Medicaid payments. North Carolina Treasurer Brad Briner found $170 million in unspent funds, while Iowa’s Roby Smith delivered a record $469 million return on investments that help fund state services.

There’s another factor here, though. Every one of those officials are Republicans.

Hmm….