Today brought sad news for Laura Dekker: The Dutch court has forbidden her to set sail and extended state guardianship until July. This despite the fact that she passed every test they set for her:

The court said that while Dekker’s sailing skills were adequate and a psychological report concluded that the voyage would not harm her social or emotional development, there were questions about safety and her ability to continue her schooling while at sea.

It turns out that the psychological assessments were given simply for the purpose of digging up a reason to stop Dekker. She wouldn’t have been allowed to sail had she failed them, and she’s not allowed to sail now that she’s passed.

I’m appalled that Dekker’s inability to attend school while sailing is given as a reason for the state to detain her on land. By this reasoning, a court could prevent kids from going on extended vacations with their families or participating in any competitive sports.

I think not, but that’s what a poster from the New York City Health Department does. The poster, which is intended for a religious Jewish audience and is also available in Yiddish, reminds people to wash their hands for at least 20 seconds. It also shows several hand washing steps that you would expect on a poster in the bathroom, such as “scrub” and “rinse.” The unusual thing is, the instructions incorporate a Jewish hand washing ritual and the prayer said after using the bathroom. The last instruction on the poster is “Pray,” underneath a picture of a scroll containing the first two words of this particular prayer.

I would find it cute and informative if a Jewish organization published this poster in an effort to educate people simultaneously about hygiene and Jewish religious practices. But the state shouldn’t tell people how to practice Judaism, or any other religion.

I’m not against translating government documents into foreign languages, and translating a poster into Yiddish could be reasonable in a city with a large Jewish population. However, the translation should present the same content as the original — it shouldn’t add religious instructions.

Our Policy Pulse site has a good story with some detailed links to the recent budget cuts announced by the governor. I hope and plan to have more thorough work on these proposals released soon, but I don’t want to rush anything — and many of us will be out most of next week at a conference. So, I just want to quickly take the opportunity to commend Gov. Jay Nixon for his willingness to make the hard fiscal decisions that are necessary, including laying off state employees and cutting budgets, rather than trying to raise taxes. He deserves a good deal of credit for that.

You may well have noticed that we’re rapidly reaching the end of 2009, and yet we had not yet released our annual report for last year. I’m happy to announce that this is no longer the case. The Show-Me Institute’s 2008 annual report is now available on our website.

Releasing the annual report so late in the year has become something of an unintended tradition — albeit one that we firmly intend to break for 2009’s report. Here’s what I wrote two years ago:

Most non-profit organizations release their annual reports much earlier in the year than this. Ours would have been out sooner, too, but we decided to commission a thorough independent audit — to make sure everything was fully on track and accounted for during our first full year of operations. We had most of the report ready to go several weeks ago, but we didn’t want to issue an incomplete profile. Some things are worth the wait.

And here’s what I wrote last year:

We had hoped to release this a few months ago, but a string of delays kept pushing it back in our schedule. We’re planning to begin working on the 2008 annual report in the next month or two, so that we can have most of the content ready by year’s end, then add the financials and other finishing touches in early 2009. That should allow for a much earlier release date next year.

So, what was the problem this year? Any guesses? Yes, once again, the audit took much longer than anybody expected, and after we finally got the numbers back we ended up making several changes to the work we had already completed on the annual report. I think that the end result is pretty great, though, if I do say so myself. And I’m particularly happy we managed to include a nice feature on our intern program and our free-market book club — including an excellent group photo on the cover that includes a collage of many of the books that the club read during 2008.

The Show-Me Institute had some outstanding accomplishments during 2008, and a large part of that success can be attributed directly to the people reading this blog, who are engaged by our ideas and research. We hope you’ll continue to help us finish up 2009 in style, and next year, I hope we won’t have to wait this long to tell you all about it!

I blogged yesterday about how tax policy distributes people and businesses. A recent article in the Wall Street Journal illustrates an example of this: Tax credits distribute film production activities.

Instead of leaving filmmaking to states that specialize in it, like California, and then realizing gains from interstate trade, star-stuck states are competing with each other (and with other countries) to attract cash-strapped filmmakers. And, just like any other business would, filmmakers move to the state that offers the most tax incentives and subsidies. They even rewrite their scripts to accommodate the setting changes. According to the WSJ article:

Michigan offers credits for as much as 42% of a film’s in-state budget, and Utah and North Carolina have both recently increased their incentives to stay competitive. France recently enacted a new law that creates a 20% rebate for foreign productions shot in the country that have ties with French culture.

Missouri offers a film production tax credit for up to 35 percent of the amount spent in Missouri for activities related to film production.

As a fiscal conservative, I am in favor of reducing tax burdens in general. However, I believe that filmmaker tax credits are bad policy for several reasons.

First, states lose money on them. Filmmakers can frequently claim more than they paid in taxes because refundable tax credits function like grants. My home state, Wisconsin, offers a refundable tax credit of 25 percent for all production-related activities, as well as the use of state-owned buildings and locations free of charge. When Johnny Depp and Christian Bale filmed Public Enemies in the state capitol building in Madison, the state lost money. According to an article in the Wisconsin State Journal:

The state paid $4.6 million to the makers of Public Enemies through the credits, even though the film generated an estimated $270,000 in state taxes.

Second, there are more cost-effective ways to create jobs. In March, the Wisconsin Department of Commerce published a cost-benefit analysis of the state’s film tax credit program, which reported that it costs 20 times more to create a job using the state’s movie tax incentive program than it does using other state job creation programs.

The state subsidy going to films such as “Public Enemies,” starring Johnny Depp, cost $128,000 per each year-long job created, the Department of Commerce study found. In contrast, the agency’s other programs cost about $6,200 for creating a job for the first year and that position might, unlike some film jobs, last much longer than that, the study found.

This quotation introduces a third important point: This economic activity is short-lived. As soon as they complete shooting, the filmmakers pack up their sets and leave the state. Under other job-creation programs, the jobs are more permanent.

Commerce officials said that since taxpayer money for creating jobs is limited, it makes sense to compare how much it costs to create a job with the film program compared to others targeting manufacturers and high-tech businesses.

If the pukka focus of these subsidies were job creation, then they could be directed better elsewhere. I think that the real focus of film tax credits, however, is attracting celebrities to Midwest states. If it weren’t for the subsidies, why would Johnny Depp ever set foot in Wisconsin?

An op-ed in the Birmingham Weekly contains an error that’s familiar to anyone following school lunch policy. It conflates “healthy” food with “local” food:

Currently each of these “funded” meals are allotted $2.57, which means that after you strip away labor, energy and overhead costs, schools have $1 per meal to spend on ingredients. This leaves schools and cafeteria managers challenged to find good, fresh, local ingredients to serve their students.

I might give local food advocates a pass on this if money were no object. If, for example, George Soros got the idea to donate $10 lunches to school students and he wanted to buy local, that would be his prerogative. In the real world, however, school lunches are subsidized by taxpayers. And, as the op-ed states, districts have limited resources with which to pay for food.

Districts need to put together the healthiest meals possible within budget constraints. If healthy, cheap produce comes from California, districts should buy produce from California — not from someone in Missouri who will charge more. When districts bring location into the equation and give local food preference over the healthiest, cheapest food from somewhere else, they’re sacrificing either food quality or economy. They’re shortchanging students or taxpayers — or both.

And the problems with schools choosing local food over other food go beyond finances. Some products can be obtained locally for a premium, but some can’t be grown nearby at any price. Should Missouri children give up oranges and bananas because they’re never local? What about fresh produce in the winter? Finding these items locally is indeed a challenge, and a challenge that districts won’t be able to overcome without changing the world’s geography or the nature of plant life.

The Michigan House passed a bill that would exempt babysitters like the woman who watched neighbors’ kids at a bus stop from daycare regulations. If the bill becomes law, Michigan won’t require you to get a license just to look out a window at some kids for 20 minutes. This is why I always say to take laws at face value and not to assume the government will allow for reasonable exceptions in practice — because it won’t. (Hat tip: John LaPlante.)

Voters in Saint Louis County and Jackson County have some tax and smoking proposals on the ballot Tuesday. Most of the Show-Me Institute staff will be at a conference next week, so I’m posting some thoughts on the issues now. For the Jackson County voters, you get to choose whether to renew a sales tax focused on fighting drugs / crime / bad stuff everywhere. I highly recommend this column on the COMBAT tax by Patrick Tuohey for the details about the proposal.

The proposed smoking ban is on the ballot in Saint Louis County. Also, given that the city appears poised to do whatever the county does on this issue, the vote will in some ways determine whether there will be a smoking ban in the city, too. I recommend this testimony by Show-Me Institute policy analyst Dave Roland about the smoking ban issue.

Finally, there is a Saint Louis County sales tax increase on the ballot that is supposed to fund improvements to the county’s emergency communications equipment. I wish the proposal had a sunset date, like the above-mentioned COMBAT tax in Kansas City, but I’ll probably still vote in favor of it. I’ll probably also vote in favor of the smoking ban, which will definitely put me in the minority here at the Show-Me Institute.

Finally, it is disturbing — but not surprising — to see all the tiny villages in St. Louis County trying to pass new business taxes through the ballot. The village of Uplands Park has 460 people, and the entire village is about the size of a golf tournament check. Who do they think will pay the 8-percent franchise tax on telephones? This would just dramatically raise the phone bill of every person in the city. I hope the voters realize that.

The headline for this AP article on rail subsidies says it all. Shockingly, a government agency has overstated its efficiency and understated its subsidies. This report covered by the article documents the enormous subsidies required to operate Amtrak. It is notable that the totals used in this new study come very close to the totals used by Randal O’Toole in his work for us on high-speed rail. Compare this excerpt from the AP article (emphasis added):

The Northeast corridor has the highest passenger volume of any Amtrak route, greatly enhancing efficiency. The corridor’s high-speed Acela Express made a profit of about $41 per passenger. The more heavily utilized Northeast Regional lost almost $5 per passenger.

With this excerpt from Randal’s paper:

If trains in the most heavily populated corridor in the United States cannot cover their costs, no other trains will come close.

According to the bipartisan Amtrak Reform Council, Amtrak’s trains between Boston and Washington lost nearly $2.30 per passenger in 2001.

They are almost certainly considering different years, so the fact that the estimates are so close is good evidence for the accuracy of O’Toole’s work (not that more evidence was needed). The study claims (and I’ll accept the claim as true) that the northeast high-speed rail system makes money. Before anyone jumps to the conclusion offered in the article:

Rail planners may decide that spending the funds on high-speed rail makes more sense than slower intercity rail, which the Amtrak numbers show need higher subsidies.

You must read the history of high-speed rail in Japan, which O’Toole thoroughly documents in his paper on high-speed rail for the Show-Me Institute. In Japan, the first high-speed rail system was successful because it connected three cities in one of the most densely populated parts of the world. However, for reasons of politics and more, Japan started building high-speed rail all over the place. None of the other routes were anywhere near as successful as the Tokyo–Osaka–Nagoya route, and the national railroad eventually went into serious financial difficulties. The moral of the story is that just because high-speed rail might work in by far the most densely populated part of the United States does not mean it will work elsewhere.

Hat tip to the Beacon for the original link.

George Soros believes that the free market is “a dogma whose time has passed,” and according to an article in the Financial Times, he has devised a plan of action for eradicating free market think tanks like the Show-Me Institute.

First, he will throw money at the problem: $50 million over five years. (He made that money as a hedge fund manager in a capitalist society, by the way.)

Second, he will use that money to buy conflate economists who agree with him:

[Soros' new] group, to be called the Institute of New Economic Thinking, will gather luminaries in the field of economics to reflect on the ideas that allowed the latest economic crisis to transpire and to bring new ideas to a profession that some argue has become too deeply entrenched in free-market ideology.

Third, he will rely on market mechanisms when they are convenient to his cause:

He hopes, however, to inspire a groundswell of support from students that will “shift demand” at universities to include economic ideas that are more reality based and less focused on rigid mathematical models.

I think that Soros needs to restructure his incentives. If he really wanted to eliminate free-market think tanks, he should pay them to stop working. If Soros stopped by the Show-Me Institute and offered me, say, $5 million to walk away from my cubicle, I would take the money and run. I love my job, but I am a self-interested individual, just like everybody else.

A debate on the New York Times website examines the question of regulating twins. Just as many people called for restrictions on in vitro fertilization after Nadya Suleman gave birth to octuplets, some medical experts are outraged by the far more commonplace occurrence of twin births — and they’d like the government to intervene.

The first panelist, Mark I. Evans, correctly points out that twin births have a larger effect on the health care system than do newsworthy events like the birth of octuplets. Twins are more likely to be born prematurely and to experience other complications. Although Evans stops short of recommending policy changes, some of the other panelists suggest regulation to prevent twin births.

I don’t think public opinion sides with the experts who consider any case of twin gestation to involve unacceptable risk. Nor do most casual observers decry Suleman’s actions based on a comparison of the cost of the octuplets’ birth with other burdens on the health care system. Instead, the objection to Suleman seems to arise from rule utilitarianism — the idea that bearing octuplets is morally wrong because it would be disastrous if everyone did so.

Proponents of regulation admit that bans on twins won’t be enacted any time soon. Robert Stillman, another panelist, blames America’s respect for freedom, which he sees as an oddity. I’m amused by the attitude that there’s single-payer health care, and then there’s everything else (emphasis mine):

In our non-single payer health care system and in our national cultural context (with its paramount legacy of individual rights over those of the state), patient autonomy will almost always prevail.

A 2009 study in the October issue of the Journal of Labor Economics finds that teacher unions have no effect on teacher pay.

Shocking! As the author, Michael Lovenheim of Stanford University, notes, these results aren’t expected. Unions negotiate for better work conditions and salary increases, so it’s a general assumption that school district unionization would increase teacher pay. Previous studies have shown unionization to increase teacher pay by as much as 12 percent. A paper by Caroline Hoxby, seen here at the Show-Me Institute talking about the effects of collective bargaining, found that majority teacher union membership results in a 5-percent pay boost for teachers (study available here).

Looking at the source of Lovenheim’s data, I wonder whether his findings are attributable to a lack of available details. He calculated monthly teacher pay by dividing a district’s monthly full-time instructional payroll by the number of full-time instructional staff. That pool includes not only teachers, he writes in the study’s appendix, but also educational support staff, school-level administrators, principals, and guidance counselors.

The things I saw while attending teacher-administration contract negotiations at the Lindbergh School District in Saint Louis lead me to believe that educational support staff, school-level administrators, principals, and guidance counselors don’t necessarily benefit from teacher union negotiations, even if the union purports to represent them. In fact, in the Lindbergh case, they lost out slightly. (Administrators and the teacher union ended up agreeing that counselors and librarians should contribute to the “substitute pool” when absent from school, even though substitutes aren’t hired when either counselors or librarians are absent.)

The average pay Lovenheim calculated could be obscuring teacher gains because of the varying salary trends among non-teacher staff. For an example of this in action, see the Miami-Dade School District. After 16 months of negotiations, the district awarded its teachers an average 1.8-percent raise, while “reducing the number of days support staff will work from 260 to 250.” For the unindoctrinated, school districts generally can’t cut pay; instead, they cut days.

Another issue with analyzing the effects of unionization on teacher compensation is that non-salary benefits, such as health, life, and vision insurance, as well as working conditions, are difficult information to find, and can be very hard to quantify. The lack of availability, Lovenheim writes, forced him to leave those measures of compensation out of his study. Non-salary benefits are not inconsequential, and can add up to thousands of dollars more in compensation. If unionization helps teachers negotiate for more non-salary benefits, that could amount to a large positive effect left unaccounted.

I’m not quite sure whether the following is a non-salary or a salary benefit. In any case, it’s my favorite teacher union contract provision. From the Mehlville School District’s 2009–2010 agreement with its teacher union:

Any savings exceeding $70,000 between now and August 1 resulting from teacher staff changes will be added to the base salary.

That surely is evidence of teacher union negotiating power, especially during a recession when school districts across the state are looking at ways to make cuts.