Wednesday, December 27, 2006

A new tactic for the "Think Globally, Act Locally" crowd

Latest blog post by Jim Fedako.

The Chicago Tribune and The Columbus Dispatch are reporting a Washington Post story on the federal push to make the polar bear the first mammal to be listed as in-risk of extinction due to global warming. According to the reports, "The Bush administration has decided to propose listing the polar bear as threatened under the Endangered Species Act, putting the U.S. government on record as saying that global warming could drive one of the world's most recognizable animals out of existence."

OK, now that the feds are willing to consider the global impact of a supposed warming Earth on the polar bear population, it's time to work out the local implications. No longer is some local forest or stream the habitat of legal restraint as "putting polar bears on the endangered species list raises the legal question of whether the government would be required to compel U.S. industries to curb their carbon-dioxide output."

According to this logic, cars made in the US contribute to global warming, which in turn affects the greater habitat of the polar bear. It's a beautiful strategy, extend the habitat of an animal to encompass the whole Earth in order to control the actions of all acting humans.

The snail darter and spotted owl were amateur attempts at Green socialism compared to the polar bear.

Proud to pay taxes?

Here's the legal gift for those who like to puff their chests and declare, "I proudly pay my taxes." Simply ask your state legislators to sponsor a Tax Me More Fund bill in your statehouse. This will allow anyone who is so disposed to pay extra on their returns. Americans for Tax Reform has sample legislation available on their website.

See how many self-declared, tax-flagellating fools really opt to tax themselves at a higher rate. You know who I'm talking about: Those who claim that since it is all for the public good, they should be taxed more.

Let them give to their heart's content if they so wish, but leave me out of their deluded world of tax benefits. I am much happier in the reality of coerced taxes wasted on unconstitutional interventions and transfers. At least I can fight and argue against additional taxes, the deluded salivate like a Pavlovian dog at the sound of proposed additional tax legislation. Classical conditioning indeed!

But, hurry up! Six states already have similar legislation, and you don't want to have your state behind the curve on this issue.

Friday, December 22, 2006

Value-added or value-maybe

I have a variation on an old saying that reads, "If you have to join 'em, beat 'em."

Ohio is currently rolling out its value-added system. For years, many in education feared the concept of value-added. They feared a system that purported to be able to analyze test results and see if teachers and schools were able to add value during the previous school year. The standard for added value is the oft-used phrase, a year for a year: Did the student gain a year of knowledge during the most recent school year?

The year for a year has its own set of issues; such as, what is a year of growth in absolute terms, not defined by historical gains from similarly-situated students? For this discussion, I am going to ignore such issues and concentrate solely on the whitewash being used to spin lagging results into congratulatory press releases.

In logic, something is either A or not-A; there is no gray separating the two. In addition, saying something is not-not-A implies that the thing is A; the nots cancel. But in statistics, the nots don't cancel. So, not-not-A does not imply A.

A closer look: My district uses the standard value-added definition for not achieving a year of growth; performance two or more standard deviations [1] below the expected result. The reason for this range is that the statistics used in value-added analysis cannot provide exact figures. No one can state with certainty that a child achieved growth of, say, 1.23 standard deviations from the expected growth.

We can state with great confidence that the child who achieved at 2.24 standard deviations below expectations did not grow an academic year. Because of the inexactness of the statistics used in value-added analysis, it would not be fair to designate a teacher, school, or district as a poor performer unless the students achieved below the level of confidence; two standard deviations below expectation.

I can accept that. Statistics - an inexact science subject to noise - has to allow for a range of gray before making a positive statement. But the range covered by possible outcomes above the two-standard-deviations-below-expectation mark accounts for over 97% of all possible outcomes. Or, put differently, a score in the 3rd percentile is considered as not-not-A; the level which is now defined as A, the expected result of a year for a year.

The sleight of hand: The Olentangy School District has reported to our community that its students are gaining a year for a year simply because they are achieving above the 3rd percentile. The statement that district students saw a year of growth simply means that the students did not see the not a year of growth. But that does not mean that district students saw a year of growth. Yet the not-not-A has becomes A due to a sleight of hand. What is true in logic is not true in statistics, but is good PR nonetheless.

As a recent board member (resigned three months ago), I saw the data from two years ago - poor performance - but was never able to get copies of last year's data (the latest reported data) since the administration was concerned about the results. Don't know for certain, but in my experience possible good results were easy to obtain while possible poor results were always a struggle, unless the results were bound for public release through the state or local press.

Now when I say that two years ago the district showed poor performance, I really mean that most combinations of school, grade-level, and subject, revealed achievement below expectations, but few below the two standard error mark of failure.

The system that feared value-added has simply spun its value into that which tells a story worthy of congratulations. The 3rd percentile, a very low standard indeed. But the new standard nonetheless.

"If you have to join 'em, beat 'em". They won!


[1] It's actually two standard errors, but, for a population of one, the standard error is the same as the standard deviation. Remember, the district is stating that all students will grow one academic year per school year. That means that the focus is on individual students, not some aggregate class, school, etc.

That said, the district may be using two standard errors of measurement as stated at the board meeting. If that is indeed the case, the district has created its own system, one different from the now-standard Sanders value-added analysis. Sanders uses two standard errors not standard errors of measurement.

The district's system would mean that they are at the 25th percentile, give or take, depending on the test. Still a very low standard of achievement.

Thursday, December 21, 2006

Is High School Football a Public Good?

My latest article

Is High School Football a Public Good?
By Jim Fedako
Posted on 12/21/2006

Most of us would never think of asking our neighbors to foot a personal bill. We accept responsibility for car and roof repairs as ours alone. In addition, we don't bang on the door across the street in order to demand a contribution towards our children's figure skating lessons, taekwondo classes, etc. That which is consumed or used by our families is to be paid from our pockets — the definition of personal responsibility..

Now let's change the situation slightly. Instead of a figure skating lesson — the realm of the private good, consider the local public high school football team — the realm of the supposed public good.[1] The technical definition of a public good — a good that is nonexcludable, nonrivalrous, subject to free riders, and hence will only be provided by government through coerced tax dollars — has been corrupted in the modern lexicon to mean anything that is perceived to benefit society in general, no matter how specious the benefit argument.

Based on the technical definition, football is not a public good as teams are excludable and rivalrous since each team is limited to 11 players on the field without penalty. But no one really applies the technical definition to derive public goods. For if they did, the concept of public goods would disappear from economic textbooks and from debates over the need for government interventions in the market.

Instead, the collectivist definition — the vacuous, yet now standard, definition — applies the general welfare argument to elevate football from a private activity to that of a public good. The argument goes something along these lines: football is beneficial because it prepares boys for adulthood, keeps them off the streets after school, and provides them with a place where they can excel.

continue reading ...

Sunday, December 17, 2006

The market: The solution

Listserve response to a gentleman who likes to make the following statement:

Was Churchill off base when he declared that the best argument AGAINST democracy is a 3-minute "conversation" with the average voter? [1]

You have a tendency to include this quote in your emails. Exactly what are you implying by it?

The Public Choice school of thought has explained why it is not an economizing behavior for voters to understand all that is debated and decided in DC, state capitals, county seats, townhalls, school boardrooms, etc., since the time spent understanding issues completely is never rewarded by having the deciding vote on the issue(s) at hand.

Don't ever expect the average voter to grasp every issue, just as I don't expect you to understand the finer points of the current trade negotiations between the US and China. Frankly, you'd be wasting your scarce time delving into this and most other issues.

So, the rational choice for individual action is to ignore most of what is debated and decided by governing authorities. But, as you imply, that solution is unsatisfying to you, and, as I would argue, ill advised. The better solution is always the same: Reduced government and the free market.

Moving the decision-making from a centralized body back to the individual will satisfy the concern about the unknowledgeable voter, and put the power in the hands of those who truly benefit from the decisions; the consumer. Why have bureaucrats decide trade rules with China when it is the individual consumers who benefit from such trade?

We tend to believe that a government official can create an agreement that will satisfy all 300 million Americans involved in some form of trade with China. Let those agreements be resolved by the individual, not the official who serves his own purpose.

The same with education, let the consumer choose the product and either benefit or suffer from the result. The present structure of government-run schools leads to decisions being made by those who never quite seem to suffer the consequences - other than when their decisions are outside of the current political fashion.

We have a habit of falling on the sword of collectivism, even when we cheer the latest pronouncements of the successful businessman or businesswoman. Every CEO and manager has grand ideas, ideas that are not so different from those of the life-long bureaucrat, or you and me for that matter. The difference is that those in business are forced to listen to the consumer and the financial market.

Produce products that no one wants and your days are numbered. Conceive of plans that have cannot garner financial backing and retirement and days golfing are your future.

Yet, once freed of such realities, the CEO-turned-government-official has no problem advocating for the products and plans that the market wouldn't allow.

In addition, why trust the captains of industry to use government for benign purposes? They are simply looking out for their own interests. Does that make them evil? No, but it shows the inherent evil of a system of blue-ribbon commissions leading to government mandates. Once again, advocate for the free market, and the requisite reduction in government interventions.

Erich asks, "What is a good vocational educational model?" The answer: Whatever suite of models the market produces. Looking for the correct approach is similar to looking for correct way to run a business. Each business runs on a different model, some only slightly different than others, yet different nonetheless. An imposed model would sink the US economy to something equivalent to that of the Soviet Union.

An aside: My local Career Center spends over $30,000 per pupil per year. $30,000! That's certainly one model worth ignoring.

So John, what does Churchill's statement mean to you? To me it says that we need to reduce government to its intended role: The protector of Life, Liberty, and the Pursuit of Happiness; in education, and in everything. Otherwise you will be fighting against the rational voter who, if we are true to ourselves, does not need to be able to recite the names of US Supreme Court justices and cabinet officials, or to quote NAFTA, chapter and verse.

Though along with a reduced level of interventions, citizens would need to understand the Declaration, Constitution, and Bill of Rights - solely to understand when government has exceeded its constitutionally-imposed limits. With a reduced government, there would be so much less to memorize, as citizens would only have to remember the names of the heads of the four original cabinet departments. The added benefit is that the talking-heads would be back on AM radio discussing the latest baseball scores and UFO sightings.

There exists a lifecycle of thought regarding government adoption of activities previously supported by the market. First there is disbelief that government can produce the same quality outcome. This disbelief is replaced over time with the belief that only government can provide the activity, as the past is forgotten by subsequent generations.

Education is such an activity. The market can produce education as easily as it can produce peanut butter. Alternatively, we spiral downward as each blue-ribbon commission imposes the next supposed solution; a solution that is, of course, doomed to fail.

Finally: There was a time when being a Patriot meant risking everything to fight against government intrusions into Life, Liberty, and the Pursuit of Happiness. Through generations of government-run schools, the term Patriot has been perverted to mean someone who advocates for a government solution. Times certainly have changed.


[1]The actual quote attributed to Winston Churchill is: The best argument against democracy is a five-minute conversation with the average voter.

Thursday, December 14, 2006

Saving "the taxpayer"

Olentangy Superintendent Davis believes that new operating millage is needed in November 2007 even though the district's own documents filed with the Ohio Department of Education show otherwise. The latest ploy is for Davis to imply that waiting to until 2008 may "be more costly to the taxpayers."

More costly than what? Than the Davis solution of increasing the tax burden of the average taxpayer a year or two early by an additional $700 per year? I'm not following any of the logic behind this supposed tax savings.

OK, just the facts. Based on the current rate of increasing expenses, the district will have to take a short-term loan in FY09 in order to meet a cash-flow shortfall during that year. The loan is required since the first payment on a 2008 levy would not be received by the district until April of 2009. [1]

Hypothetically, taking a loan could have an adverse effect on the district's bond rating. But, the district took a $10 million dollar loan in FY05 and saw no reduction in its bond rating. Yes, it is true, a bond rating reduction may occur, but history shows otherwise.

That said, we know that a new levy will raise taxes; there is no hypothetical may here.

Once again, Davis is not discussing cost savings he claims to have found. The administration commissioned a study - which I mentioned in a previous post - that found close to $20 million per year in possible reductions if the district were to reduce costs by only offering the state minimum requirements. Now, I am not suggesting that the district make such drastic cuts, though some of the identified reductions in expenditures could be implemented without reducing opportunities for students. But first, the study needs to be reported to the board and community, and discussed publicly. [2]

The report is intriguing because it does not glaze over areas where the district is spending higher than peer districts. It plainly shows those areas where Olentangy needs to reduce costs.

My fear is that the administration will withhold the report long enough that they can claim it has lost relevance due to age. A great strategy for the district, but not for the taxpayer.

Back to levies, loans, and dollars. Should Davis implement his supposedly identified reductions, the district would not face a cash-crunch in FY09 as they would not need a levy until Spring 2009. So, this spin of loans and hypothetical costs appears to be nothing less than hogwash.


[1] A very similar situation occurred in FY05, where the loan also allowed for a reduction in millage.

[2] I will be uploading pages from a draft version of the report from time-to-time; it's big. You can request a copy from the district through a simple public records request. Keep in mind that current law allows anyone to obtain a copy of public documents without signing a form or presenting ID. Simply pay the per sheet cost and the report is yours. Or, read it here.

Tuesday, December 12, 2006

Daily quote from

FFF, The Future of Freedom Foundation, has established the following as its mission: The mission of The Future of Freedom Foundation is to advance freedom by providing an uncompromising moral and economic case for individual liberty, free markets, private property, and limited government.

The quote below came from their fantastic Daily Update:

Remember, FDA employees are serious about fear. We pay these people to panic about an iota of rodent hair in our chili, even when the recipe calls for it. FDA employees are first-class agonizers, world champions at losing sleep. When Meryl Streep got hysterical about Alar, they actually checked the apples instead of Meryl's head.

— P.J. O'Rourke, All the Trouble in the World [1994] is a great resource for Libertarian thought. Subscribe to their Daily update and enjoy.

Monday, December 11, 2006

The value of an experienced teacher

I have previously written about the concept of a fair wage for teachers. After comparing public school teacher salaries with those for teachers working at private schools it becomes quite obvious that public school teachers are overpaid. But it goes beyond even that since there is no market for experienced teachers within the public school system. You will not find local school districts recruiting experienced teachers from other districts. You will find that occurring in private industry. Why?

In private industry, many experienced workers produce more than inexperienced ones. So businesses are willing to pay a premium for such expertise. In public schools, teachers typically reach peak performance somewhere between years 5 and 10. Afterwards, they add no additional productivity. And, as class sizes do not vary with experience, the teacher at the top of the salary scale teaches the same size class - 20 students - as the new teacher straight out of college. Both the experienced teacher and the one with a 5+ years under his belt produce the same product; one year of education for 20 students.

There is no demand from other districts for teachers making $86,000 a year or more, yet we are told that these teachers are worth that salary. You will hear district employees and board members speak of the market wage for experienced teachers. Strange, both the private and public sides of education don't act as if they agree.

One other interesting observation. Students are told to behave during class time, respect others, etc. Wait until the next teacher negotiations to see if such behaviors are requisite for the unionized teacher looking for a tax-funded raise.

Sunday, December 10, 2006

Painting an average statistical picture

There are always a number of ways to slice data in order to obtain the statistics that paint the picture you want to sell. The Olentangy District announced with pride that its latest Third Grade Reading Achievement Test scores indicate growth. Based on what? Based on the district beating the average score of its state-selected group of similar districts. Thanks goodness for the few very poor performing districts in that group - it kept the average down for once.

Instead of picking the average of some arbitrary grouping of schools, look at absolute rank across the state based on the Performance Index(PI). The PI is a state statistic that gives a district credit for advanced and accelerated proficiency test scores, and dings a district for scores less than proficient. The PI is the best way to compare districts, that's why it's printed on the annual state report card of district achievement.

So, what does the PI show? Olentangy is ranked 100th out of the state on this indicator of student outcome. Olentangy is also ranked 15th in its group of 21 similar schools (20 schools plus Olentangy). I have always asked: How do you take a district with top demographics, achieve mediocre results, and still find means to celebrate?

For Olentangy, it's certainly a good thing that there are some really poor performing districts. But how do comparisons against the average maximize learning and prepare students for competitive admissions to colleges and universities? Well, they don't.

Go ahead and celebrate mediocrity, it's all we seem to get from the local school system.

Thursday, December 07, 2006

Random thoughts

Olentangy School District
Olentangy superintendent sees the need for an operating levy in calendar year 2007 while the district's own documents show no such need. He forgets to mention that a November levy has the same effect on the taxpayers and the district as a May levy. Both raise tax collections starting in 2008 and provide the same revenue stream. So, if you don't need a levy in May, you still don't need one in November. Also, the claim that waiting until 2008 will adversely effect district operations is specious. A levy in 2008 along with a loan against future tax revenue will easily satisfy the current, and high, level of operational expenditures. And, if the superintendent finally proposes and enacts the cost reductions he claims to have found, no loan will be needed in 2008 as no levy will be needed until 2009.

In addition, let's not forget the reductions noted in the elusive State Standard Analysis, a report that was prepared for the district at the administration's recommendation, and funded by tax dollars. Though his report was delivered to the district nine months ago, it has never seen the glare of sunshine. A report so revealing that it hasn't been shared with the public, or the even with the board in a public meeting. If the public was able to read the report, they may reach the conclusion that a levy is not needed until 2009.[1]

The New Minimum Wage Amendment
Michael Les Benedict has a letter in this morning's Columbus Dispatch where he supports the new minimum wage in Ohio and claims that the onus for showing that the amendment is harmful falls on us freemarketers. You see, he admits jobs will be lost but makes it our challenge to find out how many jobs are actually lost. Because, as he puts it: The economic question is whether the minimum wage was set so high that a significant number of jobs will be lost. Significant is a value-laded term in this context. I would assume that even one job lost is significant to the recipient of the pink slip. Not so fast, Benedict will decided if the lost job is significant in his eyes. While the newly unemployed are hitting the government lines, they can warm themselves in the fact that it is in their best interest to be unemployed. Go ask Benedict. Quite an omniscient man, this Benedict.

The Statewide Smoking Ban
According to the Columbus Dispatch, we now find that truckers who drive company trucks are violating the new law when they smoke inside the cab. State health department spokesman, Kristopher Weiss, states that it is unlikely that anyone would report a smoking truck driver. Is he crazy? Ten years ago most of us would have thought a statewide amoking ban was unlikely. I'm certain that the do-gooders who sought the smoking ban will have no problem finking on the smoking trucker. Those of this ilk just had Crisco banned in New York City restaurants. These folks will not sleep until they control all behaviors. Sorry, truckers. Their eyes will be on you.

[1] Of course, I do possess a copy of the report, and with a public records request, so can you.

Wednesday, December 06, 2006

Voting with Our Feet? Local Government "Services" and the Supposed Tiebout Effect

This article published earlier in the year by provides some of the background for the forthcoming question: Is high school football a public good?

Voting with Our Feet? Local Government "Services" and the Supposed Tiebout Effect

Since Paul Samuelson defined the term some fifty odd years ago, public goods has entered the popular lexicon and become an established belief. From the simple technical definition as a good that is non-excludable and non-rivalrous, thus subject to free riders, and therefore can only be produced by government or through governmental action, public goods now encompass almost any good that a statist desires, whether neo-con or liberal. To question the concept of public goods is to attack mom and apple pie.

In 1956 Charles Tiebout extended the concept of public goods to the local level and created a model of a pseudo market for local government services (police, fire, schools, parks, etc.) whereby individuals sort themselves in such a manner that their preferences for government services match the services provided by the local government where they chose to reside. And just like Samuelson's public goods, Tiebout's local public goods plays a major role in how taxpayers view government expenditures.

The Tiebout Effect, the sorting of services and taxpayers, is supposed to provide a market solution that leads to a Pareto-Optimal equilibrium, guiding local governments toward providing only those services and quality of services that their respective residents want at a price they are willing to pay. Residents who don't like the mix of service, quality, and tax rate, "vote with their feet" and move to areas that better provide a mix that meets their preference rank. As residents either plant "for sale" signs and purchase homes elsewhere, or as prospective residents build new homes or buy existing homes, local governments recognize these activities as signals to either increase or reduce their service levels, depending on the perceived desires of the voting majority of community.

On the surface, the Tiebout model makes for a great justification for devolving a centralized government that can't provide for preference differentiation into many smaller local ones that can market themselves to individuals. Local governments are able to be as lean and mean as any private sector firm, at least according to Tiebout's model. But models are not reality.

Decentralized governments do compete with regard to tax incentives and public financing when trying to entice businesses to move into their area. But governments do not compete with each other by offering services in the same manner as entrepreneurs in the market place.

The easiest way to dispense with Tiebout is to recognize that the Austrian School has demolished the concept of public goods. Public goods simply do not exist. Sorry mom and apple pie. I am not going to address this here since there are many excellent articles and papers on the fallacy of public goods in general available at .

The Rothbardian argument that a majority of voters does not speak for everyone also dispels the belief that the mix of so-called public goods, and local public goods, is a reflection of anyone's preference rank. No market in any sense exists where the majority plus one of those who chose to vote dictate the expenditures - through taxation - of all other. This is not a market, it as a coerced redistribution of wealth. Those in the voting majority simply become the net tax consumers while all others become the net taxpayers.

Despite the Austrian refutation, mainstream economists still cling to the public goods fallacy. In particular, many papers are written that cite the Tiebout Effect, especially in reference to local public schools and property values. Economist use Tiebout models in attempt to show that individuals voting with their feet drive improved school performance and increase property values.

While it may be true that individuals on initial draw seek communities that best match their preference mix of services and tax rate, individual preferences change as does the local government's mix of services and tax rate. Since the taxpayer is unable to simply move without incurring expense and the local government is a area-wide monopoly, local governments are under no pressure to satisfy changing preferences [1]. Entrepreneurs in the market, on the other hand, must quickly respond to any change in preference or suffer financial loss or ruin. Governments as monopolies are immune to such market pressures.

For sake of argument, let's agree that there is such a beast as public goods and that government is the entity most capable of supplying such services. The question I want to address is: Does the concept of local public goods provide a market that is driven to efficiency through the movements and sorting of individuals?

Like the often used example of the frog that blissfully allows itself to be boiled if the water temperature is slowing increased from lukewarm to boiling, taxpayers can also be boiled under rising tax rates simply because the marginal cost of moving exceeds the marginal cost of almost any new property tax. This has a piecemeal effect as taxes are increased every so often but each new step in tax rate does not warrant a move. Slowly the tax rate brings the homeowner to the boiling point, boiling under the collar anyway.

People tend to fall on the sword of collectivism and believe that a community is based on homogenous preferences. Nothing could be farther from the truth. School districts like to create the ideal-type resident and then assign attributes. Districts say that, "Our residents want program x." Does their community -- an aggregation of individual acting residents -- really want program x offered at the local schools? No, some parents want program x offered because they would rather not pay the full cost themselves but favor having their neighbors forced to split the bill. Districts like having program x simply because they now have a dependent constituency that will support additional tax increases.

Assume that you are offended by this machination of democracy or recognize yourself to be a net taxpayer for someone else's wants, what do you do? Is moving to another school district that has a better mix of service and tax rate the efficient and rational response. Not usually since the likely closing costs, moving expenses, and other real estate fees, drain about 10% off of the paper value of a house. The cost, real and assumed, to the owner of a $250,000 house is close to $25,000 with each move. It becomes obvious that it make sense to let the tax temperature rise just a few more degrees, even though the boiling point is rapidly approaching.

What about improved efficiency and performance of the local public school system due to the Tiebout Effect? From a market standpoint, the consumer must be able to operate in an free, unhampered market in order to guide the economy. The public school market is neither. Given that my singular vote has no impact on a tax levy and that I can't simply cross district lines without incurring a large cost, I am captured by the school market. If I am a regular at Burger King and the service or price changes in a manner I do not like, I can easily cross the street to McDonald's, Wendy's, etc., without having to bear any additional cost. In fact, the managers of the other restaurants will welcome me with open arms. There is no system of local public goods ready to serve me in the manner of the fast food market since I can't really "vote with my feet." The school system recognizes this and therefore sees no need for improvements in services relative to costs.

Oh, sure there are studies that show the occasional Tiebout Effect in the housing market, but here are also many studies showing no effect whatsoever. Certainly acting individuals sort themselves on any matter in question, but we can never know what the true reason for the sorting is. When econometricians use models that are based on the idea-type community member and then make assumptions about preference rankings, they are operating without a solid epistemology.

The above analysis shows that no free market for supposed public goods exists, local and otherwise. But if you require empirical data, just look around. Have you ever seen school districts, or any other local political entity, embrace improvements in order to capture a better market share? What you will see is school districts spin any change in outcome, whether positive or negative, as improved academic performance, and any additional cost as improved service. You will also see school districts claim that the school market is such that any reduction in funding or salaries will hurt student outcomes even though government expenditures and quality outcomes are inversely related.

School districts do not fear rising costs the same as the local businessman. Districts show no concern when their tax rates begin to exceed neighboring districts, in fact they will sell their need for operating levies on the basis that they spend less then neighboring districts -- cost equal service.

Imagine if McDonalds refused to acknowledge the hamburger price at Wendy's across the street. Imagine if consumers of computers could be led to believe that quality cannot go up even as prices go down. That would make for a strange market, but it is the market for supposed local public goods.

In addition, as Rothbard showed, taxation reduces the value of the item taxed. There you have it, schools don't improve, but taxes rise and potential property values fall.

A Tiebout Effect? Local public goods? No, you have been convinced by the fallacies and captured like the soon-to-be-boiled frog. It's not you choosing the mix of service and tax rate, it's the school system, or other governmental entity, making the choice for you.


[1] Due to government being an area-wide monopoly, school districts, and individual schools for that matter, typically cannot be switched without a move. This creates an issue that is not a concern where area-wide monopolies do not exist, namely the issue of switching suppliers requiring the selling of one's home. I can switch between McDonalds and Burger King as often as I like and not incur moving expenses. If McDonalds was granted an area-wide monopoly which forced me to buy Big Macs based on my current address, I would end up in the same situation as that with public schools. Unlike the standard neoclassical transaction cost, the cost of moving is the result of a government-imposed monopoly. End the area-wide monopoly and the moving cost issue disappears.

Monday, December 04, 2006

How about just teaching math?

Ever wonder why there is so little time in schools for teachers to address the three R's? Read the following article from the latest edition of Teachers College Record, the mouthpiece of Columbia University's esteemed Teachers College:

Rethinking Terrestrial Pedagogy: Nature, Cultures, and Ethics

by Huey-li Li — 2006

In this article, I offer a clarification of the ambiguities surrounding the pivotal concepts that have shaped and will continue to shape environmental education movement in the United States and beyond: nature, conservation, sustainable development, and environmental justice. I point out that dualistic frameworks not only polarize environmental educators' ethical, political, and pedagogical values but also oversimplify complicated ecological issues. It is critical to generate inclusive and collective pedagogical efforts that recognize the interactions between the natural and the cultural, the possibility of integrating ecocentric and technocentric conservation education movements, and the need to foster humility for ongoing dialogues concerning sustainable development and environmental justice.

How about just teaching math instead of this muddled trash?

Sunday, December 03, 2006

Olentangy budgets; at the margin

Marginal analysis is the best way to understand the financial direction an organization is taking. By looking across the organization for changes at the margin as opposed to focusing on changes of averages, policy shifts are easy to note. When the attention is placed on average salaries, staffing ratios, etc., policy shifts can easily get lost in the sea of a big-dollar operating budget. But when the focus is directed at the margin, policy shifts are revealed.

An example: The Olentangy School District has a current operating budget of over $100 million dollars. The budget has been growing, that we all agree upon. The board and administration will claim that additional students and inflation are the main driving forces behind budget increases. Is that true?

Let's look at one item at the margin; the staff to pupil ratio. Looking at staffing practices from fiscal year 2004 to fiscal year 2006 reveals that the district had been hiring one new staff member per additional 10.6 students. Now look at the period covering fiscal year 2007 to fiscal year 2009 (forecasted), the district proposes to hire an additional staff member per additional 7.6 students; an almost 40% increase in this one statistic. Think about it; a 40% increase or an additional $3.5 million per year in expenditures and subsequent tax revenue needs. Incredible!

More incredible is the change in new administrative positions. Instead of the FY04 to FY06 pattern of one new administrator per additional 429 students, the district is projecting one new administrator per additional 159 student from FY07 to FY09; a 260% increase. Incredible ... oh, wait ... I used that already. Scary may be a more apt description.

Looking at changes as a function of the average would also reveal the changing staffing pattern, but the margin reveals what's actually behind that change - it's magnitude, and the effect on the future tax increases.

Keep this in mind as the district talks about budgets and levy millage. See if they address the expenditure train that is about to leave the station, running wild on marginal increases.

Saturday, December 02, 2006

Fads in the public schools and private industry

Listserve response to a comment that private sector managers are unable to provide guidance to public schools.


You are absolutely correct. In addition, the sufferers of the Progressive contagion are not simply public education and schools of education; private industry also suffers from some of those very same ills. Hucksters make hundreds of millions, if not billions, selling the some of the same hash that is flung in classrooms. Witness CEO's and managers embracing the newest, bizarre, and ineffective organizational philosophy concocted by the con man looking for quick bucks.

What separates private industry and public schools is the blind adherence to certain philosophies found within public schools, and the belief that the philosophy is both the means and the end desired.

In private industry, the latest management fad is quickly set aside once profits or market share begins to take a hit. The private industry firm quickly reorganizes itself in a productive manner or the pink slips begin appearing. This reorganization away from the fad will occur even if the fad is still nominally supported by upper levels of management. The name remains but the organization morphs the organizational philosophy into one that actually works.

Why is private industry forced to change? The answer is simple: The heartless consumer cares nothing about organizational fad, he only cares about price and quality, and possibly some subjective intangible.

In the public school system, since the philosophy - pedagogy - is both the means and the end, the organization does not change to correct structural flaws. In addition, because public schools have no real product to sell, other than the standard propaganda and its adopted philosophy, the school system cannot correct their processes in order to improve.

Example: Is your local school selling educational outcomes, athletic/artistic performance, social reengineering, or some sort of Progressive ideal human? Outside of some muddled philosophy such as, fostering a culture of continuous learning, no market equals no product. No product means no rational allocation of resources, and no ability to rationally restructure.

Woodrow Wilson sought the brightest minds in private industry to advise government, an idea expanded by FDR and many presidents thereafter, and look at all the ills caused by all of these brain trusters.