New School Politics

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Here is the most recent cover story from Time. It questions the present allocation of educational funding, wondering whether enough is invested in the brightest of students. Here is a taste:

American schools spend more than $8 billion a year educating the mentally retarded. Spending on the gifted isn’t even tabulated in some states, but by the most generous calculation, we spend no more than $800 million on gifted programs. But it can’t make sense to spend 10 times as much to try to bring low-achieving students to mere proficiency as we do to nurture those with the greatest potential.

That is really a jaw-dropping statistic, but it shouldn’t surprise anyone who has been in a public school more than once in the past year. And of course it makes me sound heartless, but allocating so much more funding to the mentally retarded than to the mentally gifted is just…retarded. It is simply a bad investment. When it comes down to it, all of us, especially the disabled, have the greatest interest in the geniuses of the world.

The brightest among us are the ones who invent the technologies that make our lives earlier, who pick the most productive of companies to invest in, and who find ways to deliver products at cheap prices to billions of customers across the globe at once. Much of the wealth around us can be attributed to the ideas that originated from very innovative men and women, and were shared and capitalized upon with others.

Without the vast resources produced by the world’s geniuses, we would never be able to support the disabled to the extent we do. As I see it, we owe it to the mentally retarded among us to invest more in our most gifted of children as they will be the most productive in the future.

Popularity: 45% [?]

Here is a cool article on Senator Tom Coburn from Oklahoma who is the most steadfast of small government advocates in the Senate. I dont agree with him on many issues due to his Christian Conservative proclivity, however you’ve gotta love his conviction, his refusal to compromise, and especially the fact that he drives most of his colleagues nuts.  

Popularity: 44% [?]

In last night’s Democratic Presidential debate, Hillary provided one of those lines that’s enough to make any reasonable economist cringe:

CLINTON: … But this issue of energy and global warming has the promise of creating millions of new jobs in America … So it can be a win-win, if we do it right.

Things not seen:

1. The fact that there is only a limited amount of resources in an economy at any given point in time and these “new” jobs would only be coming at the expense of diverting economic resources from other industries to “alternative energies”. Hence these new jobs would be coming at the expense of (a) other jobs that would necessarily be lost in other sectors as well as (b) productivity–because this investment is not warranted by the incentives of the private market but rather from politically manufactured incentives.

2. Intelligent economic commentary from Sen. Clinton.

Popularity: 54% [?]

Ht: Barry Day for his comment on “Is Ron Paul Worthy?”

Ron Paul took the liberty to defend his earmarking binge thusly:

Because earmarks are funded from spending levels that have been determined before a single earmark is agreed to, with or without earmarks the spending levels remain the same. Eliminating earmarks designated by Members of Congress would simply transfer the funding decision process to federal bureaucrats rather then elected representatives.

…

The real problem, and one that was unfortunately not addressed in last week’s earmark dispute, is the size of the federal government and the amount of money we are spending in these appropriations bills. Even cutting a few thousand or even a million dollars from a multi-hundred billion dollar appropriation bill will not really shrink the size of government.

Dr. Paul is correct on his second point. The bigger problem is the size of the total budget–mainly entitlements–of which earmarks are a relatively small portion.

His first point, however, is wrong. While it is correct that funding is appropriated before they are earmarked, it is incorrect to suppose that more requests for funds does not contribute to the growth of government.

If fewer congressmen (like Dr. Paul) requested earmarks, and less money, on the whole, was spent on earmarks than was appropriated for them, that money would go idle. Consequently, it would go towards financing other parts of the federal budget, over $200 billion of which is unfunded this year. Therefore, by reducing earmarks we could reduce the federal deficit, which reduces the size of government by reducing the amount of money the government needs to borrow from the private sector.

Also, if fewer congressmen requested earmarks, that would lower the demand for discretionary spending. If that happened, the next year’s amount of funds appropriated for earmarks would be reduced because of the fall in demand. When basic supply and demand is applied to the earmarking process it shows that if Congressmen would restrain their corrupt urges to appease special interests through pork barreling, it would reduce the impetus for earmarking in the future.

Popularity: 60% [?]

Two opinion pieces today, one in the Wall Street Journal and one in the Dallas Morning News, shed some negative light on the libertarian Congressman.

First, a revelation from the WSJ editorial entitled “Ron Paul’s Earmarks” (just the title could strike fear into the heart of any Ron Paul admirer):

After reporters started asking questions, the Congressman disclosed his requests this year for about $400 million worth of federal funding for no fewer than 65 earmarks. They include such national wartime priorities as an $8 million request for the marketing of wild American shrimp and $2.3 to fund shrimp-fishing.

When we called Mr. Paul’s office for an explanation, his spokesperson offered up something worthy of pork legends Tom Delay or Senator Robert C. Byrd: “Reducing earmarks does not reduce government spending, and it does not prohibit spending upon those things that are earmarked,” the spokesperson said. “What people who push earmark reform are doing is they are particularly misleading the public–and I have to presume it’s not by accident.”

On the other hand, good libertarians should want to start cutting somewhere. The problem with earmarking is that each year the habit grows by leaps and bounds so that it now represents real money. It is also a gateway to political corruption–a la Duke Cunningham, and other Congressmen currently under investigation for trading favors for earmarks.

Mr. Paul is one of Congress’ better fiscal conservatives. So the fact that even he feel obliged to grab multiple earmarks is all the more reason to keep fighting for transparency in the earmark process, as well as for the line-item veto, which would give Presidents a chance to impose some spending discipline from outside Congress.

Mr. Paul’s defense is in vain. This does not change the fact that Mr. Paul’s request increases the demand for government appropriation of private funds. The $400 million in frivolous projects proposed by the Texas Congressman is money that is taken from private producers and out of the private market and does nothing more than further erode the private citizens’ economic liberty. 

While Congressman Paul still stands as most in favor of individual liberty on the domestic front among presidential candidates, this development is, at least, troubling. Keep in mind that $400 million is a lot of money, and the day that we all start saying that it is not a large sum, we know that the size of our government has gotten out of hand. If all 535 congressmen got $400 in earmarks for their own constituencies–like Dr. Paul desired–that would amount to a total of over $200 billion in earmarks. I wonder if the Congressman would be in favor of that?

The second editorial mention of Ron Paul was by Mark Davis of the Dallas Morning News:  

File all that under disturbing quirkiness. But it is the Ron Paul take on fighting terror that makes him unfit for even the briefest consideration for the presidency.

In the now-famous May 15 GOP debate in South Carolina, he stood out among the crowded field by blaming America for 9/11. “We’ve been over there,” he lectured. “We’ve been bombing Iraq for 10 years. … What would we say here if China was doing this in our country?”

That phony equivalency rises to the level of sheer moral idiocy, and it doesn’t stop there. Dr. Paul’s longstanding unfortunate tendency is to rope Jesus into his war objections. Today, the notion of going to war to actually prevent additional terrorism strikes him as antithetical to the concept of a “Prince of Peace.”

We should expect sixth-graders to recognize that peace is not the mere cessation of hostilities. Peace is what you get when the good guys win.

Joined by a host of Democrats who clearly do not view America as “the good guys,” Ron Paul has shown he is one of many otherwise respectable Americans wholly unworthy of the White House.

As I have said many times, I have plenty of problems with Dr. Paul’s foreign policy and I think that Davis lists some of them here in an entertaining manner. For one, the origin of hatred for America in the Islamic world is ideological and it goes far deeper than something as nominal as American foreign policy in the post-Cold War era. Try the fact that Islamist believe that God–through his prophet Mohammed–wants Muslims to wage a jihad against all cultures and peoples that do not conform all aspects of their lives to Islam.

The second troubling fact is that he uses–as Davis says–Jesus to justify his foreign policy. My question is, what major war in America’s history could General Christ have won?

Popularity: 75% [?]

Reason’s latest issue cites a study done by economist Gary Schilling:

More than half of all Americans–53 percent–now depend on government for their income. In 1950 the figure was just 28 percent…Shilling totaled up federal, state, and local government workers, plus private-sector workers who owe their jobs to government, plus recipients of Social Security, other transfer payments, and benefits such as food stamps. He also tacked on dependents…adjusting his figures to avoid double-counting…

Those on the left are often quick to rebuttal economic growth with the fact that it often comes more rapidly to the wealthy than the poor, and while I do not dispute the fact that the free market creates income inequality I do not think that it is (a) necessarily a bad thing nor that it (b) overrides the fact that growth in a free economy improves economic opportunity and standard of living in general.

However, this study may prove that government is contributing to the gap between rich and poor by retarding potential growth in incomes for those 53% of Americans.

Here are my assumptions:

-Those 53% of Americans are generally less wealthy–ranging from the bottom to middle quintiles of income earners

-Government related employment has less potential for upward mobility in income

-Government related employment provides greater job security

-A government provided income corresponds to productivity levels less than an income from the private sector does (and likewise, that government dependants can count on a relatively stable income regardless of inconsistencies in–or lack of–productivity)

-A government provided income reduces the incentive to be hard working, productive, self-sufficient, and resourceful.

Thus, I am led to conclude that the government is contributing to the inconsistency in income growth because while productivity grows due to the private sector–and the incomes of those with ownership in the private sector accord–the public sector necessarily lag behind because (a) they are not responsible for any growth in productivity and (b) the income they do incur is completely dependant on that of the private sector (i.e. from taxes).

It is a story of nature and incentives: the nature of the private sector is such that income is directly tied to productivity and thus there is a greater incentive to produce; the nature of the public sector is that it is dependant on the productivity of the private sector and thus those who are dependant on the public sector have an income tied to the productivity–not of themselves–but to the productive others.

Popularity: 25% [?]