The man who was denied admission to the bar because of his unpaid student loans has once again been told he can’t get a law license.

When I blogged about Michigan’s bill to exempt babysitters from daycare regulations, I didn’t know it imposed a $600 limit. The bill has been signed into law, and babysitters are free to watch kids in peace — as long as they earn less than that amount in a year.

A teenager who watches kids one night a week for $50 would exceed that limit, so I’d say Michigan’s daycare regulations still apply to way too many people.

When I last blogged about the BASIS charter schools, I hadn’t had a chance to watch Two Million Minutes: The Twenty-First Century Solution, which is the fourth in the Two Million Minutes series. Now that I’ve seen the full documentary, I can revisit the question: “Is BASIS the 21st century education solution?”

I’m impressed by the dedication of BASIS schools’ founders, and by their commitment to bring students to a high level academically. However, it’s still unclear to me that BASIS could be replicated on the scale that would be necessary to change American education.

BASIS schools are not large. One of the students says, “This is such a small school,” and several describe it as a close-knit, caring community. The family-like environment allows the teachers to get to know individual students and help them catch up. One student recounts how she worked through several extra textbook chapters each week after she first enrolled in BASIS. It might be difficult to motivate kids to do that if they didn’t have a personal connection with their teachers. And, because of its size, BASIS is not directly comparable to the big suburban high schools shown in the first Two Million Minutes documentary.

The mention of distributing fliers on a university parking lot makes me suspect that BASIS students are above average in educational background, as do some of the students’ hobbies and interests — such as opera. And, while BASIS now runs schools in two cities with different demographics, it’s hard to tell whether the student bodies are representative of their respective communities, because in both cases, BASIS has encountered a lot of opposition from neighbors and drawn students from beyond its immediate surroundings. BASIS doesn’t report how many of its students are eligible for free- or reduced-price lunch, making it impossible for an outsider to judge whether its claims of economic diversity are accurate.

The schools’ founders are aware of criticisms of BASIS, and they respond briefly in the documentary. In particular, I appreciated Olga Block’s comments on the challenges of integrating students into BASIS midway through the program. I agree that she’s in a catch-22. If her schools don’t improve student achievement, she’s not doing her job; but when the students outperform their peers, she faces the charge of running an elite school.

Although we’ll have to wait to learn if BASIS can scale up, it’s already a good example of a charter that serves its students well. What matters for American education is not whether a specific school like BASIS is able to expand, but whether equally ambitious schools will be permitted to open and compete.

Olga Block says it best in this essay:

The curriculum and policies specific to BASIS are not formulaic. They cannot simply be applied, like fertilizer, to any system and ‘watch the students learn.’ The formula that makes this sort of success possible is the freedom to innovate and reform at the school level.

Combest linked today to a Missourinet article about a decline in the state’s transportation funding:

State Transportation Director Pete Rahn has warned lawmakers that transportation funding will soon drop from $1.5 billion dollars to $421 million, which would end the ramped up construction the past few years which has vastly improved Missouri roads and bridges.

The article talks about proposals to address the decreased budget with more taxes, specifically targeting Missouri’s gas tax, which is lower than in all of our neighboring states — except for Oklahoma, which has the same 17-cent tax. A reliance on gas tax increases can only do so much, however. After all, as the article mentions, new cars are becoming more fuel efficient, and raising the gas tax only accelerates a switch to more fuel-efficient cars, decreasing the budget further.

Instead of taxes, what about tolls? The Show-Me Institute published a policy study last year about privately funding roads. It’s a model that has worked in Europe, and in other parts of the United States. The Skyway in Chicago is a good example of a public highway being successfully transferred to private ownership. A 99-year lease shifted a large cost from the government to a private company, and the people are paying directly for their travel on that road, rather than having to pay a flat fee regardless of their usage.

Maintenance of roads is expensive, but also potentially lucrative for a private company. The profit motive incentivizes companies to attract customers by maintaining the roads and keeping road closures to a minimum; so, a private company almost certainly wouldn’t entirely shut down a highway for two years to do roadwork. Rather than increasing taxes, Missouri should be transferring its expensive public roads to private companies that have a a financial stake in keeping the traffic flowing.

The Warrensburg Daily Star-Journal weighed in with its position on truck-only lanes for Missouri. Its editorial view is really that truck-only lanes are worth considering and could be good for Missouri, but the paper didn’t stake out a strong view either way. The editorial is mildly disappointing, because although it mentions how the Kansas City Star has called for the use of toll roads (as have I), it then says that toll roads “aren’t perfect,” but never tells us what it views as the problems or weaknesses of toll roads. But the good news is that the paper is at least writing in positive terms about truck-only lanes, provided a fair financing system can be found.

Of course, a great financing system could pretty obviously be enacted simply by making the trucks that use the roads pay the tolls to finance the roads. For that matter, the entire highway should be tolled so that we all pay for whichever system we choose to use. I have no problem with gas taxes, and raising the gas tax to pay for highways is far preferable to raising the general sales tax. But using the gas tax as a financing system for truck-only lanes would make the people who drive only on local roads pay just as much for the highway as truckers and long-distance commuters would.

I won’t go into the extreme detail of how we fund transportation in Missouri, but we pay for our roads in many different ways. The people who primarily use local roads pay for them through gas, sales, and property taxes. Tolling the highway would be the fairest and most efficient way to make sure that the people who use the highway — especially people and truckers from out of state — pay for their use of the asset. Passenger cars and, I presume, trucks with enormous gas tanks can quite easily make it across Missouri without filling up and thereby paying gax taxes within Missouri. Currently, many people and trucks driving across the state intentionally stop and fill up while in Missouri because of the low gas taxes here. However, if we pay for a new I-70 and a new I-44 with increased gas taxes (which, again, isn’t the worst idea), we can expect some of the current fill-ups to be redirected across state lines.

Tolling the highway, and eliminating gas taxes for the drivers who pay the tolls, is the best way to fund the changes. Fears of diverting trucks to lesser highways are overblown, especially if trucks are allowed to double-rig in the truck-only lanes, and the toll itself isn’t set too high. The goal is to bring in enough funding to build and maintain the road, not earn a profit.

Thanks to Combest for the link.

As we have written previously, one of the great evils of tax increment financing (TIF) is that it offers special advantages to the beneficiaries selected by elected officials, forcing everyone else in the market to compete at a disadvantage. Sadly, there’s a new example of how destructive this sort of policy can be.

Months ago, the city of Rock Port, Mo., decided to approve a TIF project worth $175,000 in order to bring a new grocery store to town. The long-time owners of Rock Port Market (up to that time the only local grocery store serving the town’s residents) said they didn’t mind fair competition from a new store, but objected that the TIF would give the new store a gigantic financial advantage not offered to the existing business. Sadly, just six months later, the family that has operated Rock Port Market for nearly 80 years has decided to close the market’s doors.

True economic development happens best when governments allow businesses to compete on a field that offers no special advantages to any of the players. The government does a grave disservice to its citizens when it assumes the responsibility for picking winners and losers in the market, rather than letting businesses succeed or fail on their own merit.

While they waited in line this morning, I wonder if any Black Friday shoppers read George Will’s op-ed, “The Gift of Not Giving,” in the Washington Post. He explains that holiday-related shopping activities destroy wealth and aggregate utility.

Gifts that people buy for other people are usually poorly matched to the recipients’ preferences. What the recipients would willingly pay for the gifts is usually less than the givers paid. The measure of the inefficiency of allocating value by gift-giving is the difference between the yield of satisfaction per dollar spent on gifts and the yield per dollar spent on the recipients’ own purchases. [...]

Were it not for sentimentality about sentiments, which are highly overrated, we would behave rationally, giving cash, thereby avoiding value subtraction.

For our Easter baskets, beginning a couple of years ago, my sisters and I convinced our parents to give us cash instead of candy. Our reasoning wasn’t as well-worded as Will’s, but the principle was the same. If we really wanted candy, we could use the money to buy it. Mom and Dad agreed because it saves them a trip to the store. Plus, they’re not wasting money on plastic eggs and baskets every year. Cash is better because it doesn’t expire, unlike candy and gift cards. The Harbin family destroys no wealth on Easter.

The University of Missouri Extension runs a program called the Kindergarten Farm Food Initiative. A newsletter to parents from the beginning of the school year states (emphasis in the original):

your child will enjoy locally grown fruit and vegetable snacks three times a week.

It also characterizes locally grown food as “fresh” and “delicious,” and admonishes parents:

If your child asks you for a tasty fruit or vegetable snack at home, we hope that you will encourage this healthy habit.

Serving healthy snacks to a class doesn’t endorse any particular ideology. And, by itself, a visit to a farm isn’t indoctrination. (I applauded when this school took kindergartners to a farm to learn about agriculture.) Where this program crosses the line is in its newsletters, which are based on the assumption that locally grown food is inherently good. I would guess the same attitude toward local food is conveyed to students during class time.

To explain my objection with an analogy, suppose a school, in connection with a unit on China, announced to parents that students would play with fun, high-quality toys from China three times a week. Suppose it sent home newsletters about the toys emphasizing the fact that they are from China. Wouldn’t that be seen as an unfair endorsement? Everyone agrees that kids need to play, but whether toys from China are the best choice is debatable. Even if the school didn’t explicitly tell the kids that toys made in China are better than other toys, a kindergartner could easily form that conclusion if the school made no mention of toys from other places.

It’s fine for a school to tell kids where food comes from, but it shouldn’t focus on one food source to the exclusion of others. Parents can always tell their children that local food is preferable, if that is something that their family values.

When online schools in Oregon used technology to compete with traditional districts, legislators responded that the virtual schools shouldn’t accept new students until the state can study the matter further. Yet when an Oregon district uses the Internet for crisis management, it’s celebrated as innovative. No one calls for the district to suspend the program and subject it to scrutiny.

In Missouri, the virtual school teaching academic subjects to a couple thousand students is cut from the budget because it’s seen as an unnecessary cost, but the state plans to distribute more than 24,000 vouchers for an online program that teaches people to use Microsoft Excel. The governor explains why:

“I’m proud that the state of Missouri is teaming up with Microsoft to provide cutting-edge, in-demand training that will help our citizens compete in the 21st-century economy,” Gov. Nixon said.  “The world has gone digital, and it’s vital that Missourians have the knowledge and skills to land and keep the jobs of tomorrow. For folks seeking a new job, or looking to brush up their skills, Elevate America will be a tremendous resource.”

Abby Sunderland, a 16-year-old American, is another sailor who hopes to become the youngest to sail around the world. In a few weeks, she plans to depart for a nonstop six-month voyage.

I haven’t heard about any government criticism of her or any attempts to put her in state custody. That could change before the middle of December, but it seems likely that she’ll set sail without any state interference.

Abby Sunderland, Laura Dekker, and Jessica Watson are three teenagers with similar goals but divergent experiences — and those differences are a result of the actions of their respective countries’ governments. They’re a reminder that policies can change the course of people’s lives.

To learn more about Sunderland, check out her blog.

By way of Edspresso, I see that Pittsburgh is dealing with the same issue that St. Louis did not long ago: Its public school district won’t sell a building to a charter school.

I’m optimistic that this will turn out well for Pittsburgh charters. Districts can dig in their heels and try to hold on to real estate, but when enough people prefer charters, political pressure will force districts to give up the empty buildings.

Do U.S. high school students score poorly on math and science tests because of too many commercials and not enough encouragement from Big Bird? If so, a new federal campaign will remedy that. It’s a hodgepodge of initiatives, ranging from science-themed video games in public libraries to commercial-free science television shows. Scientists will volunteer to help teachers, and “Sesame Street” is getting in on the action.

One thing is clear:

“It has nothing to do with the day-to-day teaching,” said Dr. Schneider, who was the commissioner of education statistics at the Department of Education from 2005 to 2008.

None of the new programs would transform science class. Few would affect schools at all, instead giving children opportunities to learn about science through after school activities. Their success would depend on whether anyone wants to participate in these particular initiatives, and whether the science video games teach as much as they’re supposed to. And there’s a disconnect between the programs and the campaign’s stated goals: high schoolers are too old to care about many of the “hooks” (like Big Bird), yet the campaign seeks to improve high school science scores.

Here are some policies that would have a greater effect on science in school:

• Alternative teacher certification. If you like the idea of scientists volunteering to work with students for the duration of a single project, just imagine what students would learn if  scientists stayed on as full-time teachers.
• Science-themed charter schools. Allow the students who are most interested in science to choose specialized schools and devote more time to studying it.
• No national standards. Schools should strive to offer the best science instruction possible, not conform to a single standard. No matter how good the standard is, it will always be possible to improve on it. We don’t want schools to stop once they reach whatever level that the government finds acceptable — but that’s exactly what standards legislation prompts them to do.

Tyler Cowen is blogging about a study that found No Child Left Behind to have improved student math scores but not reading scores. Cowen comments:

Math skills are more the result of drill, whereas you have to learn how to love to read and much of that happens within the family, not at school. Math is therefore easier to “teach by central planning,” so to speak.

I do think that children can learn to love reading in school, but I agree with Cowen that skills like reading are not amenable to state control. Math at the K–12 level entails learning a limited number of facts and procedures, in a set order. Although there are different ways to write out the algorithms and explain the concepts, nobody goes very far in trigonometry or calculus without first learning arithmetic and algebra. The government can say, “Teach x, y, and z in math class,” and then give a test to see whether schools complied.

Students’ reading ability does not develop in a linear fashion like math skills. People learn to read by reading widely and building up reading experience over time. There’s no obvious, direct route to a high level of reading comprehension, so it’s harder to legislate improvements in reading skills.

The Wall Street Journal reports on a bakery that experiences a large increase in demand for pies around Thanksgiving.

Although there is nothing she can do to prevent the occasional customer from scalping her treats in the parking lot — a $12 pie can go for more than $20 — she hopes her extra counter help will keep the line moving briskly.

Imagine how different laws might be if bakers sold their wares in large stadiums, and if entertainers performed on a first-come first-served basis in corner shops.

One of the things I like best about production in a free economy is that consumers don’t have to think about it. If each of us had to pay attention to the details of how all our things are made — where the materials come from, what knowledge is needed to change or combine materials, how they’re transported to us — we wouldn’t have a moment to devote to our own lives. It would take all day to examine the intricate processes behind even the most ordinary household items. A caveman, on the other hand, had to know where his things came from, because he had to procure them all himself. The fact that we don’t think much about the production of the material goods we use is a sign of economic progress.

A Rhodes Scholarship recipient who plans to study food policy disagrees:

“I think the biggest problem with the U.S. food policy is that we don’t think about it,” Barmeier said. “We don’t have a single food policy strategy. We don’t think about how the food system from the farm to the table is all related [...]“

It’s no coincidence that he also wants a single policy to direct food production. The alternative to the price system — in which all the relevant information for consumers is captured in a product’s price — is central planning.

We can’t all think deeply about food policy and coordinate our thoughts, so we’d have to designate one person to do the thinking for us. This economic system is vulnerable to the foibles and mistakes of the central planner. And it’s disastrous for individuals, because the planner’s errors are amplified throughout the economy and cause shortages and waiting lists. If an individual, not thinking particularly hard about where food comes from, goes to the store and buys too few pecans for a pie, he can always go back to the store for more. No one else loses out. But if a thoughtful planner underestimates how much food people in general need, everyone goes hungry.

When this student takes a break from writing Farm to School proposals (yes, he’s really done that) I hope he’ll read “The Use of Knowledge in Society,” or maybe “I, Pencil,” for a different perspective.

The trial for the man charged with terrorism because of a conversation he had with a telemarketer was originally scheduled to take place this month, but it’s been postponed until Jan. 4 (search case no. 0922-CR03091-01).

Getting angry on the phone is only one of many behaviors that can prompt suspicion of terrorism. According to the public service announcement embedded in this post by Jim Harper, anyone who asks for directions or writes in a little notepad is a possible terrorist.

I hope the justice system will turn its attention to real threats and dangers, and go easier on the people who lose their cool over phone solicitations. Put them on the Do Not Call list; don’t put them in jail.

A small Oregon school district has found a way to gain new students. It’s converted to a charter specializing in natural resources. In the upper grades, the curriculum includes public service experience:

High school students are working with the Forest Service to help clean up campgrounds and do other activities that give them a glimpse of what working for the federal agency might be like.

I hope these kids don’t get in trouble with any unions, like the Boy Scout in Pennsylvania who cleared a walkway in a park. In that case, a union protested that only government employees were allowed to work in the parks — no volunteers. (The union president resigned soon afterward.)

Hopefully, the editorial board of the Post-Dispatch will read the AP story they are running today, titled “Rising unemployment taxes could hinder hiring.” But we are supposed to look at taxes as an “investment,” according to the Post, rather than as a compulsory taking (a term I don’t automatically regard as a bad thing, but it’s a priori what taxes are), so the fact that higher taxes are actually a detriment to economic growth will no doubt be ignored. From the story:

Bruce Meyer, a University of Chicago economics professor, said his studies show that higher unemployment taxes usually lead to lower pay for employees.

My wife and I pay unemployment taxes on our children’s nanny, so I have some knowledge about this issue. Nationally, according to the article, unemployment taxes on businesses are rising dramatically. I don’t know what the average is in Missouri, but I just received my 2010 tax rate statement, and — if I recall correctly — the rate decreased slightly, as it is supposed to when you don’t fire anyone. What did rise for everyone, though, whether they have one employee or 10,000, was the taxable wage base. So, every employer in Missouri will owe unemployment taxes on the first $13,000 of wages next year, when last year it applied only to the first $12,500, and the year before to the first $12,000. That is a tax increase by another name. Now, is it so large that it will have a significant effect on hiring in Missouri? I don’t know, but probably not. The total tax increase on a $500 base hike is roughly $16, assuming the rate remains the same and basing it on our rate.

Just because I didn’t see a rate increase, though (with our family’s one employee and history of never firing anyone), does not mean that other companies that have been forced to lay off workers are not seeing a rate increase. If that is the case, the combination of a higher rate and a higher base could clearly influence hiring decisions statewide. But I need a little more research before I know the answer to that. As it is, I am just happy that the Post carried a story about the detrimental effects of taxation.

Fulton’s public kindergarten screenings are nothing compared to what New York City kids have to go through to get into a public gifted program. Kids in New York have to sit still for a whole hour and answer questions about analogies. Needless to say, few preschoolers can accomplish such a feat without preparation. A plethora of tutoring centers and workbooks have sprung up in response to parents’ demand.

A mother explains why she pays for tutoring:

“It’s quite pricey, but compared to private school, which averages about $20,000 for kindergarten, the price is right,” she said of the tutoring. “I just want the opportunity to have a choice.”

Parents will go to great lengths to have choices, even if it means subjecting their children to SAT-style practice tests at age three. Anyone who’s opposed to drilling preschoolers should support policies that would build more choices into the system. Little kids could relax if the gates to choice schools weren’t so heavily guarded.

(For more about kindergarten, see Matthew Kahn’s post applying mechanism design to the admissions process.)

Kansas City’s city manager, Wayne Cauthen, is out of a job after a majority of the KC City Council surprisingly voted to remove him from office yesterday. We don’t talk about city managers too much on the eastern side of the state. St. Louis city does not use one at all, and many of the largest suburbs in St. Louis County either don’t have one (Florissant) or use a city administrator form (Chesterfield, Kirkwood, Wildwood), an arrangement very similar to a city manager, but one that gives more power to the elected officials. Add in the unincorporated population of the county, and my guess is that only about 1/5 of the county’s residents live under a city manager form of government. (A couple of the largest suburbs, like University City and Webster Groves, do use a city manager.) It is my understanding that the city administrator form is used more often by cities in St. Charles County, too, but I am not certain of that.

Kansas City, however, is one of the largest cities in the country to make full use of the city manager system. The job comes with a great deal of power, and in many ways the most important role of the council is the choice of the city manager. But city manager’s have short life spans. I could compare it to prime ministers in parliamentary systems of government. One day you are the most powerful person in the country, then something goes wrong, you lose a no-confidence vote, and you are out just like that. Margaret Thatcher sort of went out in that way. The analogy might work better if Wayne Cauthen had access to nukes.

I have no idea whether he was a good city manager. My guess is that he was, but the nature of the job is unstable. You get hired by one group of politicians and then, when power changes, who knows whether you are still wanted? I wish him well, and I think we can all agree that being escorted out of city hall by security was a bit much.

This article in the Fulton Sun details all the things the Fulton Public Schools expect entering kindergartners to be able to do:

Social and emotional skills screeners look for include children being able to go to the bathroom by themselves, sharing toys, sitting and listening, showing independence and learning how to tie their own shoes. Fine motor skills include cutting paper with scissors, coloring and the ability to hold a pencil. Academic skills include being able to say the alphabet, count to 20, recognize letters and numbers up to 10, knowing their name and birthday and identifying basic colors.

I don’t think I could do half of these things when I entered kindergarten.

The Fulton Public Schools defend this laundry list with the assertion that kindergarten is more advanced than it used to be, and children are expected to learn to read by the end of the year. I’m all for kindergartners learning to read. My problem with the list is that most of the tasks bear no relation to reading.

Sharing toys and being independent? It takes some kids years to develop those social skills, and they don’t affect reading level. Tying their own shoes? Again, no connection to reading, and lots of kids don’t catch on to this right away. There are Velcro closures for this very reason. Using scissors? Not useful for reading (or almost any other pursuit) and difficult for many little kids. Holding a pencil? Teach that the first week of class.

Now for the “academic” skills: Knowing the arbitrary order of the alphabet and the names of the letters is not a prerequisite for reading, which depends more on the ability to decode sounds and recognize words. Asking kindergartners to know their birthdays is like asking them to know their Social Security numbers: it’s totally irrelevant to their lives 99 percent of the time. And need I add that it’s not necessary for reading?

Of the whole list, being able to use the bathroom, knowing their names, and counting to 20 are the only things that make sense for this age group. Parents could give their kids a huge head start just by reading aloud to them every day — but that isn’t mentioned, perhaps because you can’t easily screen for it.

Screening for worthless indicators of kindergarten readiness is like giving kids bananas on a test day. It’s a distraction from the harder-to-implement practices that would actually improve student achievement.

Uh oh. News media and bloggers have been reporting all week about federal stimulus dollars going to fictitious congressional districts. The website Watchdog.org reported that, nationwide, the fictitious districts are receiving $6.4 billion in stimulus money.

I did some reporting of my own over at Policy Pulse, the Show-Me Institute’s news site, and found that four fake congressional districts had cropped up in Missouri to receive more than $900,000. KMOX picked up on the story here.

Was it fraud? Not really. The Recovery.gov website has a little data integrity problem. Federal grant and contract recipients are responsible for making their own reports of project progress. After a 20-day review period, the self-reported information is posted online. Apparently, federal agency employees can only alert a recipient that reporting errors exist; only recipients can fix them.

The reason we’re seeing so many fake districts is that recipients are required to choose a congressional district from a drop down menu. They can choose between a range from 00 to 99. And it looks like some recipients just guessed.

I looked through the data on Tuesday,which you can download in raw form here (scroll to the bottom of the page), and although fake congressional districts make for good headlines, I think there’s a bigger issue.

Contract and grant recipients aren’t required to report a project name, description, or status. In fact, for Missouri alone, 2,258 grant recipients and 76 contract recipients left all three fields blank. Yet only 18 of those were flagged for correction.

If Recovery.gov is really supposed to promote government transparency and accountability, why not require that federal stimulus recipients report what they’re actually doing with the money?

Financialstability.gov no longer says “Coming Soon.” Now it reads like any other campaign website:

America is back from the brink of the worst financial crisis since the Great Depression. It was helped back by the actions of the U.S. government and the Federal Reserve, and especially the forceful and sustained policies of the Obama Administration. Our plans to spur economic recovery and rescue the financial system were the first phase of a comprehensive cure for the crippling conditions that confronted President Obama as he assumed office.

It’s one of many examples of the huge advantage incumbents enjoy. This is why campaign finance regulations are so disastrous for anyone challenging an incumbent. The incumbent can spend as much money promoting his campaign as he wants to, so long as he writes “.gov” at the end.

I recall several years ago when the Post-Dispatch ran a great series about abuses in fire districts around St. Louis that led to the mayor of Creve Coeur receiving a number of angry phone calls demanding he address those types of issues at the Creve Coeur Fire District. What almost none of the residents of Creve Couer apparently knew was that the city and the fire district were completely and totally separate political entities, and the mayor had no control over the fire district. Which brings us to today’s excellent Post-Dispatch editorial about the Northeast Fire District. I recommend reading it entirely, and I hope that the residents of that area move to abolish the district — which is a too-seldom-used option in Missouri local government. (Yes, I am thinking of you, townships.)

Here is the chart of fire districts and municipal fire departments in St. Louis County. Indeed, it’s pretty confusing. There are cities with their own fire departments, fire districts for the unincorporated areas, cities within fire districts where the city has no involvement with the fire district, and even one small unincorporated area in which the county pays a municipal fire department (Olivette, I think) to provide fire service because many years ago the area was somehow left out when fire districts were drawn up. Since that area (between Olivette and Overland) has long had a primarily African-American population, I have to guess that racism played a role in that oversight.

I live in a city with a municipal fire department — University City. At times, people have discussed saving money (?) by switching to a fire district. Needless to say, that would be the worst possible decision the city could ever make. We have a terrific fire department, and I hope we keep it just like it is now, run by the city, its mayor, and the city manager, rather than by three members of a fire district for which nobody has any idea who to hold responsible for taxes, performance, etc.

Nobel laureate James Heckman spoke to the St. Louis Federal Reserve on Monday about human capital investment. A theme of Heckman’s research is that it’s wisest to invest in children when they’re young. Programs that serve preschool-aged children have a high rate of return, in economists’ parlance, while programs that try to make up for deficiencies later in a child’s life are less successful.

I agree that starting early is the best strategy for improving people’s chances in life, with the caveat that not all policies targeted at this age group do equally well. Here are three things to steer clear of in the realm of child policy:

1. Preschools run by the government. Replicating the public school system for preschoolers will bring about the same inefficiencies it currently suffers from, only with younger students.
2. Costly interventions in the lives of middle-class kids who don’t need help. Programs that involve one-on-one interaction, like Parents as Teachers, should be means-tested. Sending professionals out into homes on the taxpayers’ dime may be worth it in a few extreme situations, if there’s no other way to provide services to a child (for example, if the parents have no way to transport their children to a central location). Intensive help for kids who are going to do fine anyway results in a low rate of return. It also skews the results of these initiatives, making mediocre programs appear successful because so many graduates, who were never at risk in the first place, go on to thrive in school.
3. Standardized tests for three-year-olds. A No-Child-Left-Behind-style assessment of alphabet mastery will yield meaningless data on preschool effectiveness. Heckman is right that early childhood education should stress emotional development rather than academic knowledge. It’s tempting for politicians to impose tests, but a better measure of preschool quality is whether parents choose to enroll their children. As a corollary, no one should be forced into preschool, and parents should have more than one option.

CBS’s moneywatch.com site recently released an article by Mark Thoma on the independence of the Federal Reserve, and those very real political conditions that threaten it. This situation is dangerously close to a Catch-22 scenario. Here’s the problem: When politicians get involved with monetary policy, manipulating it in their favor in order to be reelected, inflation usually results, along with a cycle of debt perpetuated in the economy. If the Fed resists such manipulation, asserting their independence, politicians could in turn place legislative restrictions on its independence — penalizing the Fed’s independence by taking it away. If that’s not a Catch-22, I don’t know what is.

Thoma’s article mentions that this very problem is currently becoming manifest in the U.S. Congress. Two pending bills are circulating in Congress, one that seeks to eliminate much of the Fed’s regulatory authority and the other to allow its monetary policy to be audited. These bills were developed as a safeguard against the Fed putting the brakes on the political business cycle, during which monetary policy plays out quicker with regard to output and unemployment than it does with regard to inflation.

So, if an incumbent politician wants to increase his chances of getting reelected, he may want output to peak right around the time of the election. To do this, he increases the money supply months before the election to reap the benefits of increased output; however, the consequent inflation will not hit until months after output peaks. This politician has begun a cycle of manipulation. It would be a wise next step to tighten monetary policy after the election to avoid inflation, but more often than not this step is not taken, because cutting the money supply will decrease output, and output is already in a state of decline after having peaked. So, rather than being perceived as responsible for a decline in output, in order to to avoid inflation, the politician lets inflation take the lead.

In addition to this sort of scenario, there is the added problem of government debt. Of the three ways to finance government purchases — increasing taxes, issuing government debt, and increasing the money supply — the most beneficial choice from a politician’s perspective would be to increase the money supply, because its drawbacks aren’t as easily seen by constituents. This also results in inflation, and can be referred to as monetizing the debt. Luckily for the politician, the blame for this inflation can be readily placed on increased prices for oil and other commodities.

As health care costs rise, and the public debt becomes more of a problem, worried politicians are resorting to the application of pressure to the Fed to act in ways that will make their political skills seem more attractive to their constituents. Consequently, it is a real possibility that the price for Fed independence — which is vital to upholding a healthy economy from the yo-yo effect of political whims — may, in the end, be that very independence.

Today, the Show-Me Institute released a study, written by Texas A&M University economics professors Timothy Gronberg and Dennis Jansen, reviewing research published between 2004 and 2008 about the effectiveness of charter schools. Don’t have time to read the full study? Here’s a link to the four-page briefing paper! Too lazy to read four pages? We’ve also published a short op-ed that hits the high notes!

Some legislators held a hearing the other day on the harms caused by the payday loan industry. Combest has linked toseveral news stories about the hearing. Although payday loan companies may not be popular, and defending them might not be the easiest road to take, but here at the Show-Me Institute, we have written a few pieces in defense of them.

I think one of the commenters in the Columbia Daily Tribune story accidentally made our point when he or she said that payday loan companies are “legalized loan sharks.” Yes, they are, and if you ban them or regulate them out of existence, they will be replaced by illegal loan sharks. Former Show-Me Institute policy analyst Justin Hauke said it very well in his article when he summarized:

At least with a payday lender, default is settled in court. In the black market, it usually involves a crowbar.

I found it somewhat unbelievable that an economics professor advocated that people who loan money at high rates, because of the heavy risk that this market entails, should go to prison:

In a rebuttal, Bill Black an associate professor of economics and law at the University of Missouri-Kansas City and expert on fraud, said the profit earned by payday lenders is equal to a “giant sucking sound” of dollars headed out of the state. The interest paid to the lenders is money not going to buy groceries, pay utilities or cover rent. It’s a financial black hole, he said.

“In any period of human history other than about the last 15 years, it would have been a crime,” Black said of the lending practice. “And people who charged those interest rates would have been in prison, which is where they belong.”

So, let me get this straight. If two adults engage in a voluntary loan transaction, in a free country like ours, one of them should go to prison? I can’t imagine what other areas of our life Professor Black supports regulating. Based on the above statement, I can’t imagine any aspect of our lives the government wouldn’t belong in. Just terrifying.

The Federal Reserve, like a knight in shining armor, is riding forth to protect consumers from a fearsome dragon: gift cards that expire within five years from date of purchase.

If retailers are not informing customers about the terms and expiration dates of the cards, I can understand a regulation like, “Gift cards must state expiration date and applicable fees.” I have no idea where the five-year rule comes from, though, or why retailers should have to conform to it. It sounds like somebody’s fairy tale fantasy of what gift cards should be: No gift card shall turn into a pumpkin before the stroke of midnight.

While the Federal Reserve is granting people’s wishes, I hope they will let Prince Charming know that I can be reached at sarah.brodsky@showmeinstitute.com.

I agree with this quote about urban farming from an article in the Pitch:

“I’m hoping for more availability and enthusiasm for local food in Kansas City — seeing a code that allows growers to sell and connect with potential buyers. Then local food will grow all on its own,” said Rachel Hogan, who recently completed a year-long internship on a series of organic farms in Missouri and is looking to help develop community gardens in Kansas City.

Farmers should be able to sell what they grow, regardless of whether they live on a rural farm or in a residential area or city. Get rid of the barriers to urban farming, and more people will pursue it.

Some people would be content if government just got out of the way, but other activists are asking the city of Kansas City to promote local gardening actively:

Residents suggested that new neighborhood trees planted by the city could be fruit or nut trees; land could be designated for agricultural purposes similar to park land; organic practices could be mandated for urban farms; and changes to the zoning code could provide guidance for would-be farmers.

Let’s look at those suggestions one at a time: I don’t see anything wrong with planting fruit trees, if the city is going to be planting trees anyway. It could be a problem if the fruit trees require more care than the trees Kansas City would normally plant, or if it’s cumbersome to remove the fruit that falls. Community gardening enthusiasts could probably come up with solutions to those issues.

I’m still opposed to designating public land for agriculture. That gives local agriculture an unfair advantage over other activities — cities don’t give out free land for bakeries or pharmacies. As for the argument that agriculture is special because everyone will depend on local food in the case of economic collapse, everyone would depend on local everything in that highly unlikely scenario. We couldn’t bring in bread from other places if disaster struck, so we might as well start subsidizing the bakeries. If you buy that argument for public farmland, you’re agreeing to local subsidies for every business.

Mandating organic practices is another policy that Kansas City would be wise not to pursue. When you want people to feel free to farm in the city, the last thing you should do is put a lot of extra requirements in their way.

And, finally, I don’t know what specific “guidance” activists want to impart through zoning code changes. Whatever it is, there is probably a less coercive way to guide farmers. People who want guidance usually ask for help or advice — not for an order from the city.