Texas Pummeling of California Begins to Resemble Child Abuse

May 8, 2014

(Guest Post by Matthew Ladner)

So you’ve probably all heard that Toyota is moving their HQ from California to Texas (their moving trucks will be driving right through **ahem** Arizona and New Mexico btw) but that is old news.  Now comes word that Houston has outdone the entire state of California for new housing starts.

 

 


Brilliant Health Care Solution Discovered!

April 3, 2014

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(Guest post by Greg Forster)

Shorter Yuval Levin: The Feds couldn’t make the Obamacare website in three years, then they outsourced the job to the private sector, which did it in six weeks, and are now bragging this proves Big Government can do the big jobs after all. So the obvious thing to do is outsource the actual provision of the health care to the private sector, declare victory and go home. The Gordian Knot of Big Government, cut at last!


Refuting Rauch and EPI on the Economics of Productivity

December 12, 2012

Hard Work U 3

(Guest post by Greg Forster)

Many readers of JPGB will be familiar with the hard-left, union-friendly Economic Policy Institute. A recent article by Jonthan Rauch uses some EPI graphs to argue that the U.S. economy no longer rewards working-class employees for productivity. Over on Hang Together, I say the graphs are deceptive. The problem is a decline in productivity in the workers, caused by – JPGB readers will be shocked – lousy K-12 schools (and also a loss of the older religious work ethic).

If you’re familiar with EPI’s work, you won’t be surprised – Jay, Marcus and I took on some very shoddy work they did on teacher pay back in Education Myths.


Jordan Increased Income Inequality on the Bulls while Making All the Players Wealthier

July 11, 2012

(Guest Post by Matthew Ladner)

Fun piece by Matthew Schonfield in the Journal today. Strangely the guys riding the pine on the Bulls in 1998 making four times as much as their equivalents in 1984 did not feel the need to bang on drums to protest income inequality. Also read Iowahawk’s particle physics/health care mashup.


Excellence in Failure

October 18, 2011

It’s long been a goal of mine to be so awful at a job that they have to pay me to leave.  Unfortunately, excellence in failure is something that has escaped me — even though I normally seek excellence in all things.

But you’ll be happy to know that football coaches, superintendents, CEOs, and even large corporations have all too often perfected the art of sucking so bad that people pay them for that failure.

These large severance packages are generally a problem when the people offering the package are doing so with OPM — Other People’s Money.  Athletic directors, school boards, boards of directors, and the government find it so much easier to be generous when the money they are offering to their failed coaches, superintendents, CEOs, and large corporations is not their own money.

The Occupy Wall Street folks have (rightly) highlighted the sweet deals offered to failed CEOs and corporations from tax funds, but they tend not to mention the frequency with which superintendents are given large severance packages with OPM.  Yes, the average size of the superintendent packages tends to be much smaller, but there are so many more of them that it adds up to real money.

A Chicago Tribune analysis last summer found:

The newspaper’s review of more than 100 superintendent contracts, financial records and severance agreements over a decade revealed that boards have handed out six-figure separation checks; district-paid health care; cash or retirement credit for hundreds of sick days; and, in one case, a Mercedes — all to be rid of superintendents….

“Boards have not been held responsible because they do not care about taxpayers, period. … They do not care about how much money they spend,” said Kenneth Williams, board president in Thornton Township High School District 205, which recently approved a $350,000-plus severance package for J. Kamala Buckner, a veteran superintendent. Williams tried unsuccessfully to rescind the package in May….

Using available state data, the Tribune tracked the number of superintendents in Illinois school districts from 2000 to 2010, finding nearly half had gone through three or more superintendents.  That turnover not only fuels buyout deals but can take a toll on issues ranging from policy to student achievement….

Changeover also means some superintendents get multiple severance payouts.

Rosemary Hendricks got a $132,000 settlement in 2009 after filing a lawsuit against Hoover-Schrum District 157, where she had served as superintendent about a year. Earlier, she had gotten a $75,000 settlement in Bellwood District 88, where she had a short stint as superintendent, records show. She is back as Bellwood superintendent.

Of course, sometimes these generous severance packages are the fault of boards, not the departing executive.  Boards sometimes choose to get rid of someone on a whim or simply because the majority composition of the board changes.  These reckless changes by boards to get rid of someone under contract or who could justly sue for wrongful termination, force boards to fork over large sums of OPM to avoid litigation.

My point is the irresponsibility that OPM encourages.  OPM encourages organizations to write contracts that are excessively long and generous and then require large severance packages to get out of them.  OPM encourages changing leadership without cause and at great cost.  OPM makes it so much easier to justify the bailout to avoid “systemic risk” or to promote “stability.”  And of course OPM facilitates coaches, superintendents, CEOs, and corporations to make unreasonable demands, take unreasonable risks, and fail catastrophically.

OPM encourages excellence in failure.


Classic: Milton Friedman Versus…”Michael Moore”

August 3, 2011

(Guest post by Greg Forster)

Do not, I beg you, do not go another day without watching this:

The young man asking the question, and persistently coming back time and again for more punishment, is Michael Moore someone who reminded the original YouTube poster of a young Michael Moore. This is circa 1977-78.

[Update: Below, commenter Alsadius reports this isn't Michael Moore after all. Sure enough, the original YouTube poster has changed the video description to clarify: "I thought the metaphor would be obvious, seeing as how the kid is a skinny redhead, while Michael Moore... well, isn't a skinny redhead. I apologize for the confusion." It was too good to check! ;) I've amended the post title. FWIW, the video's worth your time even if only one of the interlocutors is an intellectual titan of the 20th century.]

Milton does not have the world’s most highly polished interpersonal skills, but he cares deeply about ideas and he desperately, desperately wants this highly motivated young man to broaden his horizons and begin to understand the buried assumptions in his thinking and the real stakes involved in these issues. Too bad he didn’t take the opportunity.

HT Outside the Beltway


Build New, Don’t Reform Old

August 2, 2011

When I wrote my two part critique of the Gates Foundation strategy, one of our frequent comment-writers, GGW, asked: “What would you do if asked by Gates how to better donate his (and Warren Buffett’s) billions?”

Here is a brief answer to that question: Philanthropists with billions of dollars to devote to education reform should build new institutions and stop trying to fix old ones.

In general, existing institutions don’t want to be fixed.  There are reasons why current public schools operate as they do and the people who benefit from that will resist any effort to change it.  Those who benefit from status quo arrangements also tend to be better positioned than reformers to repel attempts by outsiders to make significant changes.  The history of education reform is littered with failed efforts by philanthropists.

Instead, private donors have had much better success addressing problems by building new institutions.  And competition from newly built institutions can have a greater positive impact on existing institutions than trying to reform them directly.

Let’s consider one of the greatest accomplishments in American education philanthropy.  In the late 19th century, America’s leading universities (Harvard, Yale, Princeton) were badly in need of reform.  They were still operated primarily as religious seminaries and not as modern, scientific institutions.  Rather than trying to reform them directly, major philanthropists built new universities modeled after German scientific institutions.  John D. Rockefeller and Marshall Field helped found the University of Chicago.  Leland Stanford built Stanford University.  A group of private donors built Johns Hopkins.  Cornelius Vanderbilt founded Vanderbilt.  All of these universities imitated German universities with their emphasis on the scientific method and research and were enormously successful at it.  Eventually Harvard, Yale, and Princeton recognized the competitive threat from these German-modeled upstarts and made their own transition from a seminary-focus to a scientific focus.

The reform of the U.S. higher education system did not come from a government mandate or “incentives.”  It did not happen by philanthropists giving money directly to the leading universities of the time to convince them to change their ways.  It happened by philanthropists building new institutions to compete with the old ones.

The same could be done for K-12 education.  Matt Ladner has written a series of posts on “The Way of the Future.”  He, along with Terry Moe, Clay Christensen, Paul Peterson, and others, envision large numbers of  hybrid virtual schools offering higher quality customized education at dramatically lower costs.  Students would attend school buildings, but the bulk of their instruction would be delivered by interactive software.  The school would need significantly fewer staff, who would concentrate mostly on assisting students with the technology and managing behavior.

Obviously, this kind of school would not be good for everybody.  But it could appeal to large numbers of students and be offered at such a low cost that it could be affordable even to low-income families without needing public subsidy or adoption by the public school system.

Gates or someone else with billions to devote to education could build a national chain of these virtual hybrid schools to compete with existing public and private schools.  It’s true that Gates is already investing in the development and refinement of the virtual hybrid school model, but a complete commitment to building new rather than reforming old would give him the potential to do what Rockefeller, Stanford, and others did to higher education.  Virtual hybrid schools could be the disruptive technology, as Christensen calls it, to produce real reform in education.

Another benefit of the “building new” strategy for philanthropists is that it avoids the Emperor’s New Clothes problem, where philanthropists are encouraged to pursue flawed strategies to reform existing institutions because everyone is afraid to criticize the wealthy donor from whose largess they benefit.  With the “build new” strategy there is ultimately a market test of the wisdom of the strategy.  If the new institutions are not better, people won’t choose them.  If the University of Chicago had been a flawed model, it wouldn’t have attracted enrollment and would have failed to apply competitive pressure to Harvard, Yale, and Princeton.  Similarly, if the virtual hybrid school is a bad model, then it won’t attract students and compete with existing public and private schools.

Edison Schools is an example of a “build new” strategy that failed the market test.  They failed to develop technologies or other efficiencies to bring down the costs of operating private schools.  And their revised strategy of operating public schools under contract with public school districts was flawed by an underestimation of the political resistance they would face and their inability to control costs or quality within the public system.

But we also have successful examples of the “build new” strategy adopted by philanthropists.  In addition to the string of scientific universities built in the latter half of the 19th century, we also have the example of Andrew Carnegie and public libraries.  Carnegie helped promote literacy and cultural knowledge by supporting the construction of hundreds of new libraries around the country.  He didn’t try to reform existing book-sellers, he just built new.  Another example (outside of education) can be seen in John D. Rockefeller’s role in the development of a national park system.  Rockefeller privately acquired large chunks of what are now the Acadia, Grand Teton, Great Smoky Mountains and Yellowstone national parks.  Rockefeller didn’t try to reform the operations of the existing Interior Department.  Instead, he effectively privately built nature reserves and then donated them to the U.S. to become national parks.

Of course, this “build new” strategy has limited potential for smaller-scale philanthropy.  But for the very wealthy, like Gates, the path to making a significant and lasting difference is to build new rather than reform old.  The lasting benefits of what Rockefeller did in higher education and national parks and Carnegie did with libraries are still noticeable today.  If Gates and others with billions to devote to education continue to focus on reforming the old rather than building new, I fear their efforts will soon be forgotten after the Emperor’s New Clothes adulation fades when they stop having large sums to give.


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