Big Government is touted frequently as a solution to lift stagnant economies out of recession. But a new report shows that “little government” regions may avoid recession in the first place.
Kalese Hammonds will be a guest on "The Lynn Woolley Show" at 10:15 a.m. on Friday, May 9. Lynn and Kalese will talk about the new push to further extend government-paid health care into the Texas middle class. The program can be heard live on:
* KTEM AM 1400 in Temple/Killeen;
* KWBC AM 1550 in Bryan/College Station;
* KCRS AM 550 in Midland/Odessa;
* KBRA FM 95.9 in Freer; and
* Woolley's website.
The interview can also be heard on a tape delay at 10:15 p.m. on KVCE AM 1160 in Dallas/Fort Worth.
I recently watched the TV show “Are You Smarter Than a 5th Grader?” and was disturbed by the idea that comparing the education level of adults to 5th graders was “entertainment.” The episode featured a pre-law college student trying to answer questions that are supposedly taught in elementary school classrooms. She answered several questions correctly and then struggled with a basic grammar question to identify the part of speech of a word (given in the context of a sentence). Unfortunately, she did not know that the word was an adverb and dropped out of the running for the $1 million jackpot.
This college student’s mistake exemplifies the larger problem that many high school graduates and college students struggle with grammar. Our research finds that large numbers of Texas high school graduates need remedial education in writing just to be able to do college-level work.
Some courageous Texas reformers are trying to buck this trend by increasing the rigor of Texas’ K-12 English/Language Arts curriculum. The proposed curriculum emphasizes the teaching of grammar by giving it its own section within the curriculum. We hope the State Board of Education in Texas understands the need for change and chooses to adopt these more rigorous standards.
Kathleen Hartnett White will be a guest on "The Lynn Woolley Show" at 10:15 a.m. on Thursday, May 8. Lynn and Kathleen will talk about her recent Fort Worth Star-Telegram column on federal ethanol policy. The program can be heard live on:
* KTEM AM 1400 in Temple/Killeen;
* KWBC AM 1550 in Bryan/College Station;
* KCRS AM 550 in Midland/Odessa;
* KBRA FM 95.9 in Freer; and
* Woolley's website.
The interview can also be heard on a tape delay at 10:15 p.m. on KVCE AM 1160 in Dallas/Fort Worth.
The U.S. Senate rejected an amendment yesterday to add wind coverage to the National Flood Insurance Program. Good for them, especially for Senate Banking Committee Chairman Chris Dodd (D-CT), who urged members to vote against it. However, challenges for bringing rationality to both federal flood insurance and state-based windstorm insurance remain, with Sen. Dodd telling members, “Wind is an issue we have to grapple with, but the last thing we want to do is destroy a flood program which we very well could by overwhelming it.”
The problem with both flood and windstorm insurance is that both are largely controlled by government. We don’t see the problems with flood insurance because the costs are buried deep within the federal budget. Windstorm costs, however, are on the backs of state taxpayers and much harder to hide. In Texas, taxpayers and homeowners’ insurance policyholders could be on the hook for more than $5 billion if a major hurricane hit the upper Texas coast. The situation is much worse in Florida.
That is why states like Florida and Mississippi are trying to get Congress to add windstorm coverage to the flood insurance program. Spreading the cost of windstorm insurance to all U.S. taxpayers would allow them to continue subsidizing coastal insurance premiums.
Of course, it is just not insurance we are subsidizing, but coastal development. With greatly reduced premiums, homeowners and businesses do not have to take into consideration the actual costs of protecting themselves against the risk of hurricanes. As a result, coastal development is exploding, along with the exposure of taxpayers and policyholders elsewhere.
It will take a while to fix this mess, but the first step is to increase the prices of government flood and windstorm insurance so that they better reflect the actual risk being insured. As this occurs, the exposure of government programs will begin to decline to a level that we adequately address the issue. Until then, all we can do is hope the big one doesn’t come our way.
We missed celebrating the arrival of Tax Freedom Day—the day that you stop working to pay your taxes and start working for yourself. The Tax Foundation marked the day by releasing a short video with a catchy tune.
According to the Tax Foundation’s report, April 23 marked the average day that Americans started earning their paycheck — three days earlier than the last two years. Of course, the burden of federal, state, and local taxes varies by state, so the actual Tax Freedom Day can also vary by state.
In Texas, April 12 marked the day that Texans stopped working to earn the money to pay taxes, putting Texas just outside the 10 states with the earliest Tax Freedom Days. Connecticut has the dubious honor of being #1 in the Tax Foundation rankings with the latest Tax Freedom Day of all the states—May 8. Alaskans celebrate Tax Freedom Day on March 29, which is the earliest of all the states.
The San Antonio Express-News led this morning with this gem:
“The decisions we make today will determine whether summer temperatures rise in Texas by as much as 12 degrees by the end of the century or as little as 5 to 6 degrees, according to Texas Tech University atmospheric scientist Katharine Hayhoe.”
Today’s Austin American Statesman ran an article drawing attention to the record high price of health insurance in Texas. The article points out that the price of health insurance premiums rose 40% from 2001-2005, the third highest rate in the country. And as if that weren’t troubling enough, the article goes on to explain that over that same five-year span, the state’s median income increased by a mere 4%, meaning that the cost of health insurance is climbing 10 times faster than the state’s average income.
The Statesman attributes the skyrocketing health insurance premiums to expensive medical technology, unhealthy lifestyles, and an aging population. It also adds that there isn’t enough outreach for government programs. In actuality, the fault lies with government policies that restrict innovation in health care, mandates that inflate the price of health insurance, and broad government programs that encourage people drop private coverage.
"Lone Star Lesson" is a daily radio commentary on today's most important issues. Foundation Vice President Mary Katherine Stout will be temporarily filling in as the guest host for these segments. The segments air on KVCE 1160 AM (Dallas/Fort Worth) each weekday at 6:18 a.m., 8:15 a.m., 10:20 a.m., 3:15 p.m., and 5:15 p.m.
Last weekend, Bill Peacock was the guest on "Our Times," the weekend public affairs program that airs on the Cumulus Broadcasting stations in Dallas/Fort Worth. The program focused on the Foundation's "Texas Electric Meter" report. To listen to the audio, please click the following links: part one and part two.
Travis County has announced it is eliminating the criminal conviction box from employment applications for county jobs; the question will be asked later in the process based on the sensitivity of the work involved. Meanwhile, the U.S. military says the number of felons joining has doubled to more than 500.
Our research indicates that these are positive developments. Ex-offenders who are employed are at least three times less likely to re-offend, and are much more likely to pay whatever restitution and child support they owe.
Yes, this movement can be taken too far. A recent proposal by D.C. Councilman and former Mayor Marion Berry overreaches by banning private employers from considering criminal convictions. Employers should be free to consider an applicant’s past conduct, but government entities -- both in their own employment decisions and occupational licensing -- should ensure that all barriers are limited to where the nature of the work would make it more likely that the same type of offense would be repeated or have greater impact. Examples include a child sex predator working in a day care center or an embezzler managing funds.
With the growing number of retirees and the crackdown on illegal immigration, there is a growing need to lower government barriers to employment so that more ex-offenders can punch the clock after serving their time.
"Lone Star Lesson" is a daily radio commentary on today's most important issues. Foundation Vice President Mary Katherine Stout will be temporarily filling in as the guest host for these segments. The segments air on KVCE 1160 AM (Dallas/Fort Worth) each weekday at 6:18 a.m., 8:15 a.m., 10:20 a.m., 3:15 p.m., and 5:15 p.m.
Amid newly released Labor Department figures showing unemployment increases for the third straight month and growing concerns that the economy is headed for a recession, government advocacy groups can be heard sounding the alarm. Almost on cue, doomsayers can already be heard calling for expanded government programs and initiatives as a means to create jobs.
But government’s role in the economy is not to create jobs; that’s a primary function of the private sector. If the federal government feels the overwhelming desire to tackle the unemployment issue, they can do so by reducing taxes on corporations – as they have now become the highest in the world.
A recent study conducted by the Tax Foundation reveals that the U.S. currently has the world’s highest federal corporate income tax rate. Not only is this tax forcing America’s corporations to cope with smaller profit margins and inhibiting their competitive edge, but the dubious nature of the tax means that employers are implementing hiring freezes and layoffs.
Rather than contriving a short-sighted tax rebate scheme to curry favor with voters, Congress should focus on restoring America’s long-term economic competitiveness through permanent tax cuts.
My recent work on electricity deregulation (the Texas Electric Meter and related commentary) has generated quite a bit of criticism. One (friendly) critic sent me an article by Scott Hempling, executive director of the National Regulatory Research Institute, with the following quote, “Competition and regulation share a common purpose to align private behavior with the public interest.”
Of course, competition and regulation are not aligned toward the same end—regulation is by its very nature intended to change the outcome of what would have otherwise happened through competition, i.e., the voluntary actions of buyers and sellers, in the market.
For instance, in a particular electricity market, 100 MW of power is sold by 5 generators through 10 retailers to 100,000 people at an average price of 12 cents per kWh. This is the market result. However, perhaps someone thinks 12 cents is too high. Or that some of the retailers or generators made too much profit. Or that the generators and retailers communicated/cooperated too much (some would call it collusion). Or that too much pollution was generated in the process.
Whatever the objection, the only reason to impose regulations on this—or any other—market would be that someone for some reason is dissatisfied with the results that the market produced. So the article—which is intended to support the imposition of regulations on markets—gets it wrong from the beginning.
It is important to understand the implications of this: the sole raison d’être of regulations is to allow a relatively few regulators to forcibly change the behavior of the relatively numerous producers and consumers in the marketplace. Or, in other words, to limit the ability of people to use their own private property and labor as they think best.
Now we can certainly have a debate about under what circumstances the “public interest” is served by imposing regulations on a marketplace. But the coercive nature inherent in regulations ought to give everyone pause as they ponder what benefits might ensue from imposing restrictions on the actions and property of others.
Proponents of a complete government takeover of health care have been hostile to consumer-driven health care and Health Savings Accounts. Now they are no longer content to merely argue their case against market-based reforms and individual ownership and control of health insurance and health care; they also seek to erect barriers that would introduce unnecessary red tape and regulation to these transactions, and tamp out any enthusiasm for HSAs and health care flexibility.
Last week, the U.S. House approved new regulations on HSAs in legislation touted as protecting taxpayers. If passed, the law would require HSA withdrawals to be substantiated—that is, to require a determination as to whether the withdrawal is for a qualified medical expense, effectively restricting the uses for an HSA and slowing the transactions with red tape.
HSA substantiation’s fans in Congress claim that the same process occurs with both Health Reimbursement Arrangements (HRAs) and Flexible Spending Accounts (FSAs). But HRAs and FSAs are fundamentally different. The funds in an HRA are employer-only funds and employers have an understandable interest in making sure that HRA funds are used for medical expenses. FSAs are individually funded, but the funds are restricted for paying medical expenses with that dreaded use-it-or-lose-it feature that kicks in and reclaims any unused funds at the end of the year.
HSAs, however, are individually owned and managed; and the funds belong to the individual and may be used for any purpose, but are only tax-free when withdrawn for qualified medical expenses. HSA owners must keep records of their withdrawals and purchases and know they must supply them to the IRS if needed to substantiate HSA uses for qualified medical expenses. The account holder is responsible for the account and its uses, just as they are with IRAs and other savings vehicles with similar tax benefits.
If that weren’t enough, the proposal is rent-seeking at its worst. A Connecticut company with a significant share of the HRA and FSA substantiation market has decided to ask Congress to open a new market for their business by requiring HSA substantiation. Congressional leaders otherwise unable to kill HSAs outright have embraced the substantiation requirement, no doubt hoping to quietly kill HSAs with red tape.
If it passes, the winners are the company looking for new business and congressional leaders hoping to suck the lifeblood from HSAs. It would be a loss for the HSA account holders enjoying new flexibility in health care purchasing, and for greater consumer-control in health care.
This morning, the TODAY Show highlighted two competitive forces evolving in the health care industry: one, a familiar throw back to America’s golden years; the second, an innovative use of today’s technology.
Dr. Jordan Schlain, a general physician in San Francisco, has responded to patients that are “sick and tired of the run around at the doctor’s office. I think that what America’s ready for is value. They’re looking for their doctor back.”
With that in mind, Dr. Schlain has returned to consulting with patients at their homes. Rather than rushing them through his office in 10 minutes, he often spends more than 30 minutes with each patient and is available 24 hours a day, seven days a week.
Similarly, Dr. Howard Stark has met his patients’ demands for convenience and flexibility by taking his practice online. “With just the click of a mouse, patients can communicate with Dr. Stark about what ails them, seeking his advice on just about everything.” Dr. Stark requires an annual office visit, but the online consultations are free of charge to all of his patients.
Despite government regulations that have attempted to snuff out innovative developments in health care delivery, the competitive nature of providers and the market continue to shape the industry to better meet the needs of consumers. Here’s hoping that the government doesn’t come along and implement new regulations that will derail the convenience driven health care that has evolved from consumer demands and provider competition.
America has not reached the point where the government tells you what you can or cannot eat. But New York City seems to be greasing that slippery slope.
Earlier this week, a federal judge upheld a New York City food labeling regulation. Effective Monday, any food-service establishment with 15 or more locations in the United States is required to include calorie counts on its menus.
The availability of dietary information about the food you consume is not a bad thing. Many large chains already promote that information on their websites, in brochures available at their restaurants, and in-store kiosks. But mandating the information and format as this regulation does is a separate issue.
First, it will increase the operating costs of chains doing business in New York City. Those businesses that already publish that information will have to redesign and republish their menus and/or retrofit their signs between now and June 3rd, when the city will begin to fine non-compliant restaurants.
Then consider the 15-location threshold. If your brand has 14 locations, you don’t have to worry about caloric content. But as soon as you open location #15, you have to get all your food tested for calories and publish that on your menus. Those extra costs may factor into the decision whether a New York City restaurant brand expands into new markets, or a restaurant brand from another part of the country enters New York City.
Why should it matter to you what happens in New York City? Because according to the National Restaurant Association, similar regulations have passed in King County, WA, and New York City’s lead will give momentum to measures pending in several large cities and at least five states.
What you eat should be a matter of individual conscience, not of government omniscience.
California’s prison misfortunes bring into sharp relief the progress being made in Texas. On April 12, the Los Angeles Times reported that California will spend an additional $7 billion on prison health care. This is on top of $7.7 billion in new prison construction. Both changes were triggered by federal court rulings.
It shouldn’t be the role of federal judges to dictate that prison facilities and inmate health care include all the bells and whistles. Texas has been there before when Judge William Wayne Justice micromanaged the state’s prison system for two decades.
State policymakers cannot control the federal courts, but they can continue Texas’ successful initiatives to avoid a California-style crisis. At the beginning of the 2007 legislative session, the state was projected to need 17,000 new prison beds by 2012, which would cost $1.5 billion to build and operate. Fortunately, taxpayers got off the hook as the Legislature adopted smart solutions such as emphasizing community corrections work and treatment initiatives for nonviolent offenders, and converting two TYC facilities into 1,200 adult prison beds.
Inmate health care costs can also be controlled through medical parole. A few years ago, one Texas geriatric inmate racked up $1 million in health care costs. The current medical parole rules are so narrow that very few inmates qualify - even among the several hundred paraplegics.
While California taxpayers are taking some tough medicine, Texas must continue following a new prescription for criminal justice.
"Lone Star Lesson" is a daily radio commentary on today's most important issues. Foundation Vice President Mary Katherine Stout will be temporarily filling in as the guest host for these segments. The segments air on KVCE 1160 AM (Dallas/Fort Worth) each weekday at 6:18 a.m., 8:15 a.m., 10:20 a.m., 3:15 p.m., and 5:15 p.m.
The Texas Public Policy Foundation has recommended that expenditures at all levels of government be more readily available to the general public. Widespread Internet access and advances in information retrieval technology have made this a low-cost proposition.
Government budgets tend to be massive and confusing documents that often yield little information, combining several programs into a single line item or dividing spending on programs across multiple agencies. As a result, it is difficult to get an accurate picture on government spending and the use of taxpayer dollars.
Texas has demonstrated both the possibilities and benefits from making government spending more transparent. Last year, the Texas Legislature passed HB 3430, which created an online database of state agency expenditures. Comptroller Susan Combs went live with the “Where the Money Goes” website last fall, and then used that database to conduct a complete examination of her office’s processes. Among the $2.3 million in savings her office has realized:
* $73,000 from combining multiple printer toner contracts;
* $250,000 from not printing a duplicate study conducted by another agency;
* $130,000 from posting publications online rather than printing and mailing;
* $457,319 from eliminating information technology contracts;
* $100,000 from eliminating microfilm no longer needed; and
* $14,600 from disconnecting pagers.
Until last fall, Texas relied on its governor and 181 state legislators to be the watchdog against wasteful spending. But thanks to the “Where the Money Goes” website that Combs has created, those watchdogs just got 23 million potential reinforcements. It’s great that Sen. Cornyn wants to enlist that kind of help for our U.S. Congress.
Last session, the Texas Legislature eliminated the obsolete Telecommunications Infrastructure Fund (TIF) tax that had been taking about $210 million a year from the pocketbooks of telephone customers. Originally enacted to fund Internet infrastructure in public schools and libraries, the TIF tax had been going to general revenue for several years.
Now the Texas Public Utilities Commission is poised to reduce phone bills even further by addressing another out-of-date fee.
The Austin American-Statesman reports that an agreement between telephone companies and cable companies to reduce payments from the Universal Service Fund (USF) will lower phone bills by $144 million a year if the Public Utility Commission adopts the agreement.
While the USF helps to keep phone service in rural Texas at reasonable levels, deregulation of the market and the increasing urbanization of our state have decreased the need for subsidies.
Over the past three years, the Foundation’s research has shown that Texans’ telephone taxes are among the highest in the nation. With this reduction, along with the repeal of the TIF tax, Texas consumers will see their tax bill reduced by about $350 million per year. We still have much room for improvement, but this is a great second step.
If you live in Austin and are thinking about selling your house, you might want to accelerate those plans. The Austin City Council plans to pass housing mandates, in an effort to cut energy use and reduce carbon dioxide emissions.
“Imagine having to pay thousands of dollars to upgrade your home before you even put it on the market,” according to KXAN.com. “Socar Chatmon-Thomas, chairman of the realtors board, says, ‘This could mean upwards of $7,000, $8,000, $10,000, changing out their A.C. unit, changing out their hot water heater, going to tankless, making sure that all of their insulation is updated, weather stripping, possibly new windows.’"
Since most of these are beneficial repairs, what’s wrong with making them mandatory? For starters, people often sell their homes because their lives or financial circumstances have changed. Many are not sitting on a pile of ready cash. Forcing them to spend several thousand dollars to comply with housing mandates will, at best, reduce the equity they’ll have after the sale. This means a smaller down payment available for the next house, which means they either lower their aspirations or decide to stay in a house they’d rather sell.
The new housing mandates will also drive up the cost of Austin housing – both old and new. Austin already has the second highest average home price of any Texas MLS region, and neighborhood activists are pushing city leaders for more “affordable housing.” What does that mean? A small number of high-end units made available to low-income families, subsidized through higher prices paid by the remaining purchasers. Meanwhile, the middle class gets squeezed to the suburbs.
"Lone Star Lesson" is a daily radio commentary on today's most important issues. Foundation Vice President Mary Katherine Stout will be temporarily filling in as the guest host for these segments. The segments air on KVCE 1160 AM (Dallas/Fort Worth) each weekday at 6:18 a.m., 8:15 a.m., 10:20 a.m., 3:15 p.m., and 5:15 p.m.
Marc Levin will be interviewed on the KTRH Morning News at approximately 6:05 a.m. on Monday, April 7. He will discuss the current legislative discussions to dramatically restructure Texas' juvenile justice system, including the abolition of the Texas Youth Commission. To listen live, click here.
At a time when the state of Texas is trying to reduce alarmingly high dropout rates, can you imagine limiting the number of good, innovative public schools? Yet that is about to happen. State law restricts the number of charters the State Board of Education may grant to 215. All but four of those charters have been issued.
The Houston Chronicle wrote about the intense competition between the 39 contestants for this “final four.” But it shouldn’t be like this. Instead, state lawmakers should remove the cap on open-enrollment charters so that more innovative schools can open and provide greater choice within the public school system.
The charter school movement in Texas has improved student learning, increased parental choice, and encouraged innovation. Today, charter schools are helping more than 75,000 Texas students. Imagine how many more Texas children could be helped without this arbitrary ceiling.
I am more and more convinced that the “problem of the uninsured” is less about the actual price of health insurance and more about the perceived value of having coverage.
In an article from the Washington Times, Sally Pipes, president and chief executive officer of the Pacific Research Institute, confirms this theory as she explains “the five myths of health care,” starting with the “myth” of the 47 million uninsured Americans. Pipes offers a telling breakdown of the uninsured that should ease concerns about the alarming number of people without health insurance.
For those used to hearing about the 47 million desperate Americans who do not have health insurance, the demographics in the article present quite a different situation. For instance, 14 million of the uninsured are eligible for Medicaid or SCHIP (they just haven’t enrolled), and another 10 million earn over $75,000 a year (meaning they have chosen not to buy health insurance).
The scenario is similar here in Texas. In recent testimony to the Senate State Affairs Committee, the Texas Department of Insurance reported that one quarter of the uninsured in Texas make more than 250% of the federal poverty level. Apparently, the number of uninsured is not as much about affordability or access to coverage as it is about making health insurance a valuable investment of people’s time and money.
The Houston-area Metropolitan Transit Authority’s plan to build light rail east of downtown has come up short. As the Houston Chronicle reports: “Metro board chairman David Wolff … said Metro had considered crossing [Union Pacific’s] double tracks at street level. ‘But it doesn't seem the railroad is too enthusiastic about that.’” So they are going to have to reduce the length of the line.
Courtesy of federal law, railroads get to decide how to best use their private property—even if the local government decides it has the perfect “public use” in mind. Such is not the case for the rest of us.
El Paso is a prime example. In January, its city council defeated a proposed ordinance to limit its power to use eminent domain as part of its downtown redevelopment plan. Starting in November, the city will be able to use eminent domain to take private property from its owner and sell it to a developer, who will then replace the existing residence or office building on the property with one that will produce more tax revenue for the city’s coffers.
Texas still hasn’t fixed the problems with its eminent domain laws exposed by the 2005 Kelo decision. After debate on this issue in both a special and regular session, the path to restoring Texan’s property rights are clear. Texas should to act decisively in 2009 to address this assault on this most fundamental of all rights.
Over the last several months, we’ve had the privilege to work with Dr. Arthur Laffer, one of this generation’s top economic minds. He is terrific at helping his audiences – including that of this year’s Policy Orientation – understand that economics is fundamentally about human behavior, not calculus equations or X-Y graphs.
In the March Thinking Economically lesson, Laffer identifies the institutions required for a prosperous society. What jumped out to me was his justification for the free market (which he champions) over socialism.
“In a free market, anyone is free to start a business and risk his own (or borrowed) capital, and let the consumers be the ultimate arbiters,” he wrote. “This provides the best mechanism to harness the bits of knowledge and expertise that are dispersed throughout the economy.”
With socialism, “no group of planners – no matter how smart – can possibly amass all the information possessed by the whole of society,” he noted. “Consequently, the decisions of a socialist central board will always be more arbitrary and ignorant, even if the board is composed of the best and brightest (which, judging from history, seems highly unlikely).”
In short, when everyone holds a little bit of information and is empowered to act (and interact) freely with others holding their own little bits of information, the market naturally adjusts and generally produces optimal results. When one person tries to compile and analyze everything, the socialist system produces merchandise no one wants. And food shortages.
Hopefully that makes sense to you...because it often seems like an alien concept around Austin. Politicians and bureaucrats see a situation that they individually don’t like, pronounce that they know what is best for “the people,” and substitute their personal judgments for the rational decisions of the masses. In almost every public policy issue, government arrogance has led to government intervention, which has produced serious policy distortions – with real, negative effects on the people of Texas.
Our research always has one goal: advancing freedom. But putting this state on a more positive course is going to require more people to “think economically.”
Last week, the Reason Foundation released a video advocating for the repeal of legislation that makes it a crime to sell organs. In the video, Drew Carey sums it all up when he says, “I know it sounds really ghoulish, really icky, but they’re your kidneys and it really helps people in need, so if you want to sell one...why not?”
USA Today reports that patients needing a transplant are more likely to die on the waiting list than to ever receive the much-needed organ and despite national campaigns encouraging individuals to become organ donors, over 6,000 people die every year waiting for an organ transplant.
That boils down to 18 people that die everyday waiting for a transplant; the time has long passed to try something new. So, even though the notion of organ sales is “really icky”, the simple fact is, it’s your organ to do with as you please and with over 90,000 patients waiting on a life saving transplant, there should be plenty of demand.
So, if you want to save a life, and maybe make a little money too, why should the government stop you?
The Wall Street Journal’s Evening Wrap, writing about the subprime mortgage lending meltdown, reported that “Sen. [John] McCain has sworn off using government money for bailouts [and] doesn't approve lowering the down-payment requirements for Federal Housing Authority-backed loans as a way to help low-income homeowners.” McCain’s plan for dealing with the situation was criticized as amounting “to little more than watching this crisis happen.”
This is always the criticism that free market supporters face in times of “crisis.” Whenever anything goes wrong, there is always a hue and cry about market failure and the very obvious need for the government to step in to rescue the people and regulate the problem out of existence. Those who suggest the government do nothing—or even reduce regulation—are not seen as being helpful.
Yet a closer look at such issues generally reveals that some combination of government regulations and human nature is to be blamed. Case in point—the debate over Texas electricity deregulation in 2007. Prices were high so deregulation was too blame—it didn’t matter that Texas prices were already high before deregulation. Or that the Texas Legislature mandated the use of natural gas in at least 50 percent of all new generation of electricity—right about the time that gas prices started to rise. Or that environmental activists and regulations have made it next to impossible to build new lower-cost nuclear and coal-fired generation.
Electricity prices are on their way up—they always rise during the summer due to increased demand. How high they go will largely depend on natural gas prices. If this becomes a “crisis” this summer, those concerned about electricity prices ought to remember that government mandates and environmental regulations are the cause—rather than the solution—to this problem.
The Montgomery County district attorney has spent thousands of dollars in assets seized from criminals on items that have little to do with official prosecutorial duties, including liquor for parties. Meanwhile, Rockwall County D.A. Ray Sumrow was sentenced to four years in prison earlier this month for embezzling public funds, including using fees paid by convicted hot-check writers for an airline ticket for his girlfriend and other personal expenses.
Texas law enforcement officers seize millions of dollars in contraband and cash from drug dealers and other criminals. Half goes to law enforcement to cover expenses like police cars, while the other half goes to the district attorney in the county where the assets were recovered. Most district attorneys are honest and use some of this money to supplement prosecutors’ salaries.
Current state law gives wide discretion to district attorneys in how to spend these funds. Fortunately, the Senate Criminal Justice Committee will hold a hearing this spring on whether (and how) to strengthen the law.
Policymakers should demand a full accounting of how these forfeiture funds are spent. They should also consider allocating some of that money to the State Crime Victims Compensation Fund, which pays restitution to violent crime victims when offenders do not and is rapidly becoming insolvent. The illegal proceeds of criminal activity should be used for law enforcement, actual prosecutorial costs, and making crime victims whole, not as a slush fund for entertainment and self-aggrandizement.
"Lone Star Lesson" is a daily radio commentary on today's most important issues. Foundation Vice President Mary Katherine Stout will be temporarily filling in as the guest host for these segments. The segments air on KVCE 1160 AM (Dallas/Fort Worth) each weekday at 6:18 a.m., 8:15 a.m., 10:20 a.m., 3:15 p.m., and 5:15 p.m.
With Congress about to impose major economic hardships in the form of pending federal legislation mandating carbon dioxide emissions, the American public must be concerned about climate change. But a recent Gallup poll on national priorities indicates otherwise.
Thirty-five percent of those polled said they were most concerned about the economy. The Iraq war was next at 21%. No other issue cracked single digits. “Environment/pollution” registered at 1%. Climate change/”global warming” didn’t make the list.
Past Gallup surveys have asked, “What do you think is the most important problem facing this country today?” Here is how “environment/pollution” has polled:
December 2006: 2%
January 2007: 2%
February 2007: 5%
March 2007: 2%
April 2007: 3%
May 2007: 2%
June 2007: 2%
So the United States is poised to handicap its economy and drastically raise its energy prices over an issue regarded as the greatest threat facing mankind by many politicians, activists, journalists…and almost nobody else. Something just doesn’t add up.
Anyone associated with a school -- students, parents, teachers, and principals -- can identify the good teachers. While this seems common-sensical, education associations argue that it is impossible to measure teacher effectiveness fairly; therefore all teachers, regardless of skill, should get paid the same.
This is absurd. Performance and results are commonly rewarded in the private sector with annual reviews, raises, and bonuses. Why can’t they work in education?
The Fort Worth Star-Telegram agrees. It recently endorsed merit pay and chastised Arlington ISD for its unwillingness to participate in Texas’ merit pay grant program.
"Lone Star Lesson" is a daily radio commentary on today's most important issues. Foundation Vice President Mary Katherine Stout will be temporarily filling in as the guest host for these segments. The segments air on KVCE 1160 AM (Dallas/Fort Worth) each weekday at 6:18 a.m., 8:15 a.m., 10:20 a.m., 3:15 p.m., and 5:15 p.m.
Bill Peacock, Director of the Foundation's Center for Economic Freedom, will be a guest on two radio shows this Friday, March 28th to talk about the Foundation's new "Texas Electric Meter" project.
The U.S. Environmental Protection Administration's (EPA) recent announcement of a new ozone standard of 75 parts-per-billion (ppb) raises many questions about federal-state responsibilities. Through promulgation and enforcement of federal ozone standards, EPA holds enormous power over the state, but the federal process makes it impossible for the state to succeed, wastes billions of state dollars, and frustrates efficient air quality improvement.
First promulgated in 1997, EPA did not begin legal implementation of the then “new” 85-ppb standard until 2004. Less than a month after the state, in May 2007, finalized its regulatory plan to meet this new 85-ppb standard, EPA proposed another ‘new’ and far more stringent standard. Now, before EPA even has even approved the state’s current plans, it finalized this new 75-ppb standard.
The EPA rules of the game constantly change, the standard continually ratchets upward, and the time frames are totally unrealistic. EPA imposed state deadlines on the 85-ppb standard before they finalized the rules states must follow to comply. It’s like a due date on a bill which is earlier than the date the invoice is mailed.
Texas has made far more progress in improving ozone levels than most other states. And onerous, costly regulations – for which all Texans have paid, one way or another – have played a major role in our success. At this point, emissions from mobile sources like cars and trucks produce the majority of ozone emissions. In the D/FW area, mobile sources account for more than 75% of relevant emissions. Even in the industrial Houston/Galveston area, mobile sources account for the majority. EPA, not the state, has regulatory jurisdiction over these mobile sources.
EPA must not merely impose authority and threaten sanctions on Texas. Rather, it must assume its responsibility to address mobile sources and establish a realistic process for states.
The Texas Department of Insurance recently released home insurers’ 2007 loss ratios (the amounts of premiums insurers paid for claims). The 2007 industry average was 36.5%.
Consumers groups cry foul, saying insurers reap profits by overcharging policyholders, but loss ratios do not include the amounts insurers paid out in expense. Adding expenses gives you the combined loss ratio (70.6% for 2007). Also, today’s profits equip insurers for tomorrow’s losses. Insurers must maintain a long-term focus if they want to be able to cover the large losses that hit policyholders from time to time.
If insurers cannot charge enough to cover the risk they insure, the industry is left overexposed and underfunded. The Texas Windstorm Insurance Association is a prime example: Because of inadequate rates, TWIA policyholders increased from 68,756 in 2001 to 217,374 at the end of January 2008; TWIA’s total exposure to potential claims is currently $64.9 billion. However, TWIA member assessments and the Catastrophe Reserve Trust Fund can only cover about $1.7 billion of losses, much less than the potential losses from major hurricanes. Taxpayers are on the hook for the rest.
Insurer profits versus taxpayer losses…which would you choose?
Bill Peacock will be a guest on "The Lynn Woolley Show" at 9:06 a.m. on Thursday, March 27. Lynn and Bill will talk about the "Texas Electric Meter," the Foundation's new project to monitor the status of Texas' competitive electricity market. The program can be heard live on:
* KTEM AM 1400 in Temple/Killeen;
* KWBC AM 1550 in Bryan/College Station;
* KCRS AM 550 in Midland/Odessa;
* KBRA FM 95.9 in Freer; and
* Woolley's website.
The interview can also be heard on a tape delay at 9:06 p.m. on KVCE AM 1160 in Dallas/Fort Worth.
The Honorable Talmadge Heflin, Director of the Foundation's Center for Fiscal Policy, will appear on the "Pratt on Texas" program (KFYO 790 AM - Lubbock) at 6:10 p.m. on Monday, March 24. To listen live, click here.
"Lone Star Lesson" is a daily radio commentary on today's most important issues. Foundation Vice President Mary Katherine Stout will be temporarily filling in as the guest host for these segments. The segments air on KVCE 1160 AM (Dallas/Fort Worth) each weekday at 6:18 a.m., 8:15 a.m., 10:20 a.m., 3:15 p.m., and 5:15 p.m.
As the newest addition at the Texas Public Policy Foundation, I have the dubious honor of being the “rookie” on the team. Thankfully, the intra-office hazing hasn’t been nearly as bad as I’d imagined. And despite being a recent college graduate saddled with enough student loan debt to make a small child weep, I’m ecstatic to start a new career with an organization second to none.
Fortunately, the excitement of beginning a new career isn’t lost on me alone. The January 2008 job data indicates the addition of more than 28,000 new jobs in Texas. In fact, Texas leads the nation in job creation and Texas’ unemployment rate shows a year-over-year drop.
The Texas economy remains strong despite the national slowdown, and recent actions taken by Gov. Rick Perry serve as a reminder why Texas has become America’s economic engine.
Last Friday’s Wall Street Journal heralded Gov. Perry’s decision to cut unemployment taxes. Discontinuing the unemployment insurance “replenishment” tax will save businesses $260 million through the rest of the year. Since the unemployment trust fund is in terrific shape, Gov. Perry’s decision to suspend the tax and return unnecessary surpluses will undoubtedly stimulate further economic expansion.
Pro-growth policies, such as this, not only make Texas an especially attractive place to live, work, and do business; they also create an economic environment where even a recent graduate is fortunate enough to be welcomed into the “real world”.
Most people would consider an apartment complex or store owner who must cope with crime on their premises as a secondary victim. However, the City of Houston regularly threatens to shut down apartment complexes and businesses where it determines too many crimes have occurred. In 2004, Houston shut down a Vietnamese food store on the basis of criminal activity that included traffic stops near the store.
Last year, Houston’s “Forfeiture Abatement Support Team” sent letters to targeted apartment owners on police department letterhead threatening suit if they did not agree to a “nuisance abatement plan,” which involves hiring off-duty police officers. While most owners relented, Gary Gates demanded information on who committed the 55 alleged crimes in and around his complex so he could evict them. (Many were committed by non-residents or were undercover drug stings.)
The City refused, claiming an open records exception, and later sued Gates, seeking to place his complex in receivership, shut it down for a year, and jail him if he did not comply. The City ultimately dropped its suit, but Gates’ countersuit currently awaits a ruling in state district court.
Legislators should examine whether reforms in the state nuisance law are needed, including requiring jurisdictions to notify business owners of criminals’ identities prior to any nuisance proceedings. The nuisance law shouldn’t be used as a weapon against legitimate business owners struggling to survive in high-crime areas.
The Center for Union Facts has launched a nationwide campaign that takes an irreverent and hard-hitting look at teacher unions. So far, it is airing TV ads on major networks and running full page ads in the New York Times, Washington Post, Wall Street Journal and USA Today. Its website, www.TeachersUnionExposed.com, demonstrates how teacher unions help bad teachers stay in the classroom.
Teacher unions show their true priorities through the collective bargaining agreements and tenure policies they negotiated,
the complicated process to fire a bad teacher, and dismissal rates that are absurdly low compared to just about any other occupation. Texas specific data by the Center for Union Facts finds that only 0.85% of tenured teachers were fired, compared to only 1.8% of teachers on a probationary contract and 9.8% of private school teachers.
Through open records requests to large school districts across Texas, we found that districts fired less than 0.40% of teachers over a five-year period. This is less than one out of every 250 teachers. The results are startling especially when compared to the private sector (16%) or state government (12%). It is illogical to think teaching is markedly different in the type of workers they attract. Even in outstanding public schools, any parent can point to at least one bad teacher. The issue is that bad employees in other professions are dismissed while in public schools rather than get fired they get “reassigned.”
Parents want to regard classroom teachers as allies in the pursuit of a quality education for their children. But the energy the unions invest in defending the prerogatives of ineffective teachers makes it appear as though improving education comes secondary to protecting their own jobs.
"Lone Star Lesson" is a daily radio commentary on today's most important issues. Foundation Vice President Mary Katherine Stout will be temporarily filling in as the guest host for these segments. The segments air on KVCE 1160 AM (Dallas/Fort Worth) each weekday at 6:18 a.m., 8:15 a.m., 10:20 a.m., 3:15 p.m., and 5:15 p.m.
Kathleen Hartnett White, Director of the Foundation's Center for Natural Resources will appear on the "Pratt on Texas" program (KFYO 790 AM - Lubbock) at 6:10 p.m. tonight. White and host Robert Pratt will discuss the new 8-hour ozone standard released last night by the Environmental Protection Agency. To listen live, click here.
Teenagers in Finland recently earned the distinction as being the smartest students in the world. Finnish 15-year-olds outpaced 56 other countries, including the United States, on the PISA tests in math, science, and reading.
Naturally, researchers, policymakers, and parents want to know why. A recent article in the Wall Street Journal examines Finland’s school system and reveals some surprising findings:
• Children don’t start school until age seven. There is no school pre-k or kindergarten. This is in strong contrast to the United States, where most states have a publicly funded and growing pre-k and kindergarten program for children ages four and five.
• They spend $1,200 less per student than the U.S. Finnish schools spent $7,500 per student per year compared to the U.S. average of $8,700. Somehow, they manage to do more with less.
• High teacher quality and no teacher shortages. While the U.S. struggles to find enough math and science teachers to fill its classrooms, Finland has more than 40 applicants for each teaching job. All Finnish teachers have master’s degrees. Teachers compete to teach in Finland. Yet, higher teacher salaries doesn’t account for the higher quality because Finland has similar teacher salaries to the United States.
• No sports teams, marching band, or prom. Finland schools focus on teaching, not extracurricular activities. In contrast, many American schools (and parents) get carried away with the success of their athletic or extracurricular programs at the expense of learning.
The American education establishment continually lectures us that the way to improve student learning is by hiring more teachers, paying them larger salaries, and starting children in public school at earlier ages. Finland establishes that everything they tell us is wrong.
Mary Katherine Stout will be a guest on "The Flip Side with Don Crawford" at 1:10 p.m. today. They will discuss her recent commentary on the expanding government control over the American health care system. The program airs on channel 1 on www.RightTalk.com.
Last month, Rush Limbaugh referenced my “Planet Gore” post on the new data showing that 2007 saw the largest one-year temperature drop ever recorded. The researchers quoted in the article attributed the decline to a dramatic decrease in solar activity. They are far from alone in that conclusion.
Harvard astrophysicist Dr. Sallie Baliunas suggested last month in Tyler that solar variability is more directly responsible for warming than CO2. Baliunas’ research—performed in conjunction with astronomer Willie Soon of the Harvard-Smithsonian Center for Astrophysics—found historical warm and cool periods resulted from increases and decreases in solar output.
A Hoover Institution study finding “the effects of solar activity and volcanoes are impossible to miss” but that “could not find any relationship between industrial activity, energy consumption and changes in global temperatures;” and
Last September, the Hudson Institute published a
list of more than 500 scientists who have disputed man-made global warming theory. Most had concluded that warming is strongly linked to variations in the sun’s irradiance.
Finally, what to make of the fact that Mars has also warmed? Since Mars has no SUVs or factories, could the sun be a factor?
The North Forest Independent School District in northeast Houston is a disaster, both academically and financially. Last year, five of its 11 schools were rated Academically Unacceptable by the state; today, the district is on the verge of bankruptcy.
As documented by the Houston Chronicle, student enrollment has decreased 40 percent in the past decade and continues to plummet. The district faces a $17.6 million shortfall over the next two years, while North Forest’s school board voted last Friday to fire 45 employees to narrow that shortfall, the board has thrice refused to merge campuses – specifically, two high schools less than half full. If the school district cannot show rapid improvement both financially and academically, the Texas Education Agency will have to step in and close down the school district.
In the meantime, there is hope for many students and parents trapped in a North Forest school. Parents of students attending Elmore Middle School, Forest Brook High School, Hilliard Elementary School, Kirby Middle School, Oak Village Middle School, Shadydale Elementary School, Smiley High School, or Tidwell Elementary School can request a transfer to another school district or a charter school under the Public Education Grant (PEG) program.
Just because a bureaucracy can’t get its act together doesn’t mean the students should be forced to suffer the consequences. PEG grants may be the only short-term option for North Forest parents concerned about the quality of their children’s education.
Today, voters in Texas and Ohio will cast ballots in one of the most consequential presidential primaries in recent memory. While both are large states, an article last week on Politico.com and yesterday’s editorial in The Wall Street Journal reveal that their governing philosophies and future outlooks could not be further apart.
As the Journal put it, “the eyes of America will be on these two states moving in different directions. Ohio has an economy burdened by high taxes and work rules that impose heavy costs on employers. Texas embraces free trade, keeps taxes low, doesn’t impose unions on business and has tooled itself for 21st century global competition.”
What have those differences meant? While Texas has added 1.6 million jobs over the last decade, Ohio has lost jobs. Texas is the nation’s #1 export state – exporting four times as much as Ohio. Our income growth over the last decade is much higher, while our unemployment rate is much lower.
Regardless who wins today’s balloting, I’m going to be interested in hearing from the presidential candidates on their model for the national economy. Will they move America toward Texas, or back to Ohio?
Last week, the California Court of Appeals ruled that two California parents cannot legally home school their children, and that the children must be enrolled in and attend a public school or “appropriate” private school.
In doing so, the Court decided that parents are not capable of fulfilling a “primary purpose of the educational system,” which is “to train school children in good citizenship, patriotism and loyalty to the state and the nation as a means of protecting the public welfare.” Student learning takes a back seat to government indoctrination.
Even worse, the Court gave no value to “the parents’ contention that the education being provided to their children in their home was as good or better than the children would have obtained in a public or private school...” The Court cited a previous case stating that “[h]ome education, regardless of its worth, is not the legal equivalent of attendance in school in the absence of instruction by qualified private tutors.” In other words, never mind if the traditional government education is inferior—that’s not the point.
Finally, the Court cited a previous ruling stating that “the educational program of the State of California was designed to promote the general welfare of all the people and was not designed to accommodate the personal ideas of any individual...”
A parent’s role should be more than just writing a check to the bureaucrats charged with raising their children. The right of a parent to choose the education that is best for their child—whether in a public, private, or home setting—must be vigilantly defended against elitist politicians and activist judges.
"Lone Star Lesson" is a daily radio commentary on today's most important issues. Foundation Vice President Mary Katherine Stout will be temporarily filling in as the guest host for these segments. The segments air on KVCE 1160 AM (Dallas/Fort Worth) each weekday at 6:18 a.m., 8:15 a.m., 10:20 a.m., 3:15 p.m., and 5:15 p.m.
It's no secret Houston has pollution, but it is usually associated with petrochemical plants along the Houston Ship Channel or in nearby Texas City. However, a sweeping new City of Houston
air permit ordinance creates a criminal offense punishable by a fine up to $2,000 per day for even the smallest businesses that fail to register with the City. On February 15, a coalition of businesses filed a lawsuit challenging the ordinance, alleging that it is preempted by state and federal law.
For example, all dry cleaners must now register with the City of Houston. Already, some dry cleaners must obtain both federal and state environmental permits, but state law sensibly exempts dry cleaners with "equipment used exclusively for steam or dry cleaning of fabrics, plastics, rubber, wood or vehicle engines or drive trains" and that emit less than 25 tons of pollutants per year. Federal permits also only cover the largest polluters. In contrast, Houston's new ordinance takes every mom-and-pop shop to the cleaners for a permit fee of up to $250.
The Houston ordinance also covers every used car lot and automotive body repair shop, even if their emissions are nominal. Moreover, leading environmental lawyers say the ordinance requires many restaurants and machine shops to obtain permits because they fall under the ordinance's definition of "facility" if they emit at least one ton of "contaminants" in a year, though "contaminants" is remarkably not defined in the ordinance. The registration fee of up to $3,000 still applies even if the "contaminants" are properly disposed of pursuant to local, state and federal law.
Business owners who fail to pay the fine of up to $2,000 per day for not registering could have a warrant issued for their arrest. What makes this new ordinance especially troubling is that it subjects many businesses to two or even three different levels of government regulation, and it covers thousands of small businesses that comply with environmental laws and do not account for a meaningful share of pollution.
