Posts tagged ‘unions’

The Staggering Administrative Bloat of Universities

This chart is from a recent state audit report of Janet Napolitano's office at the University of California, an audit I already wrote about here.

Obviously Napolitano's office is particularly bad as compared to peers, but she has 1667 staff and spends over a half billion (billion with a B) just on the office of the President!  This is not in any way shape or form the total administrative size of the system - each university has its own administrative staff, for example.  This is just her central office.  This is a staggering number.  It equates to every student in the system paying over $2500 a year just for the central headquarters staff that they will never see, this is before the first dollar is spent on their individual campus -- or God forbid -- on teaching or academics.  To my mind this is way more of a scandal than her hiding a money reserve in various accounts.

This begins to get at a conflict I keep expecting to happen, but doesn't.  Time and time again, particularly in places like California, we find examples where agencies that are supposed to be serving the public are in fact diverting much of their resources to maintain the staffing levels, salaries, and rich benefits and pensions of their employees.  For years I have expected some sort of civil war on the Left, where Progressives figure out that providing things they care about (e.g. education, parks) is being limited by the huge resources that are being diverted to government employees.  Just look at the chart above -- California Democrats have twisted themselves into knots trying to find an incremental $50 or $100 million of funding for the California public university system, and here it is -- I can see an easy $400 million one could easily pull out of Napolitano's office.  Unfortunately, government employees and their unions are a big force in electing Democrats, and so they are reluctant to challenge these folks.  It is a classic example of "do you care about the things you say you value or do you care about power" and so far in places like California the answer has been "power."

Arizona and the Case For School Choice

From the Arizona Republic:

Five of the nation's top 10 high schools are in Arizona — and they're all branches of the same charter school.

According to U.S. News and World Report, Basis Scottsdale is the nation's top-performing high school, followed by Basis Tucson North and Basis Oro Valley. Basis Peoria and Basis Chandler were ranked fifth and seventh, respectively.

The rankings consider students who exceeded state standards, graduation rates and college preparedness, according to U.S. News.

Two additional Arizona charter schools, along with two "special function" public schools, made the top 100.

Arizona was one of the earliest adopters of charter schools in 1994, and it continues to be at the forefront of school choice. However, the state has some of the lowest school funding and teacher pay in the U.S.

I love that last line.  Makes one question if the obsession on teacher pay and funding for bloated school administrations really is the key to education improvement.  I wonder if when the Arizona Republic writes their inevitable next article on Arizona having lower teacher pay they will add a clause that says "However, the state has five of the nation's 10 top charter schools".

This is a fascinating article and I encourage you to read the whole thing.  The article gives plenty of space to opponents of school choice and charter schools:

[Arizona Education Association President Joe] Thomas said any public school district in Arizona could replicate the Basis model if they were also allowed to work only with a small number of high-achieving students and "force the rest out of your school."

This inference that Basis gets its results by carefully cherry-picking students is undermined by facts from the same article:

There are no entry requirements or exams to get into a Basis school — just a game of luck. An annual lottery determines which new students are accepted.

Already, Basis schools have received 15,000 applications for 1,000 open spots for next school year, Bezanson said.

To be fair, since Basis does not participate in the free school lunch program and the city school bus program won't deliver kids to Basis, there are kids that probably are not able to apply, but again, this is far from a case of cherry-picking.  It is a case of setting very high expectations and expecting kids to achieve that.  Thomas's comment on this reflects the different philosophy of teachers unions vs. school choice folks:

Thomas said Basis schools are great for the small minority of kids who can succeed in the high-pressure environment. But most students don't — and public schools have the expectation to teach all students.

This is partially true, the Basis approach is not right for all kids, but given they have 15 applications for every 1 open lottery spot, it is right for a lot apparently.  But the difference in philosophy is that public school advocates want to force the Basis kids that are able to achieve at a high level into dumbed-down, plodding schools, moving no faster than the lowest common denominator.  School choice advocates, on the other hand, also acknowledge this difference, but rather than enforcing a one-size-fits-all public solution, advocate for a thousand flowers to bloom with many different school solutions.

There are many other charter schools in town that do a great job with kids of different needs.  My wife and I support a Teach for America teacher at a charter school in South Phoenix.  The kids in her class are mostly all Hispanic, many have parents that do not speak English and a high percentage are on the school lunch program.  These kids may not be quite at the Basis level, but they out-achieve most of the Phoenix public school system and are well beyond what kids from similar demographics are doing in local government schools.

Trade and Consumer Advocacy, Part 2

Yesterday, I suggested we needed a new, real consumer advocacy organization to replace the economically ignorant Nader-led PIRG organizations.  The reason is that it is time that consumers banded together and resisted Trump's protectionism, since such protection generally protects a few politically favored unions and corporations while raising prices and reducing choice for all consumers.

A couple of hours after I posted that, the absolutely indispensable Mark Perry brings us a great post on academic research about how protectionist actions nearly always cost consumers more than they help producers.

The empirical evidence above helps us to understand a very important economic lesson about international trade, call it “protectionist math” — and that mathematical reality is that the costs of protectionism imposed on American consumers in the form of higher prices and a reduction in trade will always be greater than the benefits generated for the protected industries and the workers in those industries. And here’s another part of that “protectionist math” that helps us answer the question: Sure, we can save US jobs with protectionist trade policies, but how much does it cost consumers for every job saved with protectionist trade policy, and is that cost worth it? Economic analysis and the empirical evidence presented above suggest that it’s very, very expensive to save US jobs with protectionism — more than half-a-million dollars on average per year per job in 2016 dollars (see chart above). If Trump enacts protectionist policies that save $50,000 per year US factory jobs but at a cost to consumer of $500,000 annually for each job saved, that’s a surefire formula to “Make America Expensive and Poor Again,” not “great again.”

I won't reprint his chart, but he has detailed results form a number of academic studies in different industries that back this statement up.

My point about needing a new consumer advocacy group was a little tongue in cheek, but here is Perry quoting from a study at the Federal Reserve Bank of St Louis a number of years ago (back during the last wave of protectionism, which was based on Japan rather than China bashing).

The primary reason for these costly protectionist policies relies on a public choice argument. The desire to influence trade policy arises from the fact that trade policy changes benefit some groups, while harming others. Consumers are harmed by protectionist legislation; however, ignorance, small individual costs, and the high costs of organizing consumers prevent the consumers from being an effective force. On the other hand, workers and other resource owners in an industry are more likely to be effective politically because of their relative ease of organizing and their individually large and easy-to-identify benefits. Politicians interested in re-election will most likely respond to the demands for protectionist legislation of such an interest group.

Accountability for Police and Why Its So Hard

The other day, in writing about how I think Black Lives Matter has lost its way, I said that I supported their goal of increasing accountability of police forces but that goal was going to take a lot of hard, nuts-and-bolts legislative and policy steps that BLM seems uninterested in pursuing.  This article from Reuters (via link from Overlawyered) gives one an idea of some of the issues that exist:

The episode is a telling snapshot of the power police unions flex across the United States, using political might to cement contracts that often provide a shield of protection to officers accused of misdeeds and erect barriers to residents complaining of abuse.

From city to city, union contracts have become just as crucial in governing departments as police manuals and city charters. Yet those contracts are coming under scrutiny amid civil rights protests over alleged police abuses, including shootings of unarmed black subjects.

Reuters, examining the fine print of 82 police union contracts in large cities across the country, found a pattern of protections afforded the men and women in blue:

• A majority of the contracts call for departments to erase disciplinary records, some after just six months, making it difficult to fire officers with a history of abuses. In 18 cities, suspensions are erased in three years or less. In Anchorage, Alaska, suspensions, demotions and disciplinary transfers are removed after two years.

• Nearly half of the contracts allow officers accused of misconduct to access the entire investigative file – including witness statements, GPS readouts, photos, videos and notes from the internal investigation – before being interrogated.

• Twenty cities, including San Antonio, allow officers accused of misconduct to forfeit sick leave or holiday and vacation time rather than serve suspensions.

• Eighteen cities require an officer’s written consent before the department publicly releases documents involving prior discipline or internal investigations.

• Contracts in 17 cities set time limits for citizens to file complaints about police officers – some as short as 30 days. Nine cities restrict anonymous complaints from being investigated.

Police and their supporters will say that Police have a particularly dangerous job and need such extra process protections.  In fact, while there are dangers, it is certainly not among the most dangerous jobs (trash collectors are twice as likely to die on the job than police).  I would argue that we give the police unique powers -- to use violence and to take away a persons liberty -- not possessed by any other citizens and thus we should expect more rather than fewer accountability provisions to go with these special powers.

I will say that I am not particularly optimistic about progress in this area.  The Right tends to fetishize police and are tend to oppose any restrictions on police.  The Left is the natural home for police reform, but most on the Left are loath to take on public employee unions, probably their strongest base of political power, and most of these changes (as seen above) require challenging the police unions.  Black Lives Matter brought a lot of focus to these issues, but they simply can't seem to get past disruption and into policy changes and legislation, and besides the group appears to have been hijacked by the Left to be a vehicle for generic protests of Progressive causes like climate change legislation.

Conflict of Interest In Government

You want to raise a government ethics violation?  Here is one for you with which I absolutely agree:

I am not sure that this is a suitable subject for a blog post, probably more a project for an aspiring PhD student, but with all the discussion of conflicts of interest in the Trump cabinet, it strikes me that the most glaring conflict in the public sector is ignored: The CoI between state and local politicians elected with the support of public sector unions who then participate in compensation negotiations for the members of those unions.  Here the temptation of the politicians to buy the support of the unions with public money is overwhelming.  The impact of this is potentially trillions when public pension liabilities are included.

This is such an obvious conflict that I have looked to see if there are laws preventing this, but my initial research shows nothing.

Three Reasons Why More Money Does Not Translate Into Better Education

  1.  There is absolutely no guarantee that spending more money increases service quality, especially when (as is the case with public schools) there is no competition to discipline spending and ensure that it is funneled to those aspects of the service that are actually important to customers
  2. Over the last 20-30 years, administrative staffing in public schools has grown from a small percentage of the total to about half the headcount in many public school districts, and thus likely more than half the salary budget (since administrators frequently make more than teachers)
  3. Much of the increased funding is going to retired teachers who aren't actually teaching anyone

Per-student spending on K-12 education has risen steadily over the last two decades, but student test scores, and teacher salaries, are stagnant. Why hasn’t this massive increase in investment produced better teachers and better opportunity for students? The short-answer, according to a new Manhattan Institute report by Josh McGee: State and local governments have catastrophically mismanaged their teacher pension systems. The cash infusion to K-12 has been used largely to pay for irresponsible pension promises politicians made to teachers’ unions and justified to the public with shoddy accounting. . . .

In other words, to cover benefits for retirees, states need to dig into education funds that might otherwise be used to attract and retain good teachers or buy better textbooks and build new facilities. So long as state governments are unwilling to reform the blue model pension-for-life civil service system, and so long as teachers unions continue to wield outsized influence in so many state legislatures, this pattern seems likely to continue indefinitely.

Campaigns to increase spending on schools are always popular, and understandably so: Education ought to be a great equalizing force in our society and, in theory, an efficient way to invest in the future. The problem is that in many states, new “K-12 spending” isn’t really an investment so much as a transfer payment to retired employees of the public schools who have been promised untenable lifetime pension benefits.

It Turns Out That Firing Nobody and Giving the Agency More Money is a Really Poor Way to Fix Things

Working in the world of privatization, one objection I get all the time to privately operating in a here-to-for public space is that government officials are somehow more "accountable" to the public than are private companies.

This strikes me as an utter disconnect with reality.  If I screw up, I make less money or even go out of business.  When government agencies or officials screw up, they generally remain unchanged and unpunished forever.  There are no market competitive forces just waiting to shove a government agency aside -- they have a monopoly enforced at the point of government guns.  As I wrote a week ago about a conversation between myself and a government official about my operating public parks:

I understand that my margins are so narrow, if even 5% of those visitors don't come back next year -- because they had a bad time or they saw a bad review online -- I will make no money.  Those 2 million people vote with their feet every year on whether they think I am adequately serving the public, and their votes directly affect how much money I make.

Government agencies have nothing like this sort of accountability for public service.

One reason government agencies seldom change is that the typical response to even overt malfeasance is 1) to give the agency more money, as the agency will blame all incompetence on lack of budget (just think "public schools" and teachers unions) and 2) the agency will fire nobody.

Take the Phoenix VA.  Congress eventually rewarded the VA with more money, almost no one was fired, and the one of the worst managers in the VA system, a serial failure in multiple VA offices who would have been fired from any private company I can think of, was put in charge of the struggling Phoenix VA.

Well, it turns out that firing nobody and giving the agency more money is really a poor way to fix things.

Patients in the Phoenix VA Health Care System are still unable to get timely specialist appointments after massive reform efforts, and delayed care may be to blame for at least one more veteran's death, according to a new Office of the Inspector General probe.

The VA watchdog's latest report, issued Tuesday, says more than two years after Phoenix became the hub of a nationwide VA scandal, inspectors identified 215 deceased patients who were awaiting specialist consultations on the date of death. That included one veteran who "never received an appointment for a cardiology exam that could have prompted further definitive testing and interventions that could have forestalled his death."

The report portrays Phoenix VA clerks, clinicians and administrators as confused and in conflict about scheduling policies despite more than two years of reform and retraining.

"Unexpectedly" as a famous blogger would say.

 

 

Why BLM and the Campus "Rape Culture" Movement Are A Lot Alike

Both BLM and the campus rape culture movement have a starting point in real problems.

On campus, and even in a few police precincts, women complaining about sexual assault would get patted on the head and sent on their way, their charges going largely investigated.  In part, oddly enough, I think the problem stems from the war on drugs -- for literally decades, campus police have helped to shelter their students from drug investigations and harassment from their local community police force.  I know they did so at Princeton when I was there.  So campus police forces really had a mission to keep their students out of jail and out of trouble.  This is A-OK with me on drugs, but it obviously leads to terrible results when we get to sexual assault.  So something needed to be done to have police forces, particularly ones on campus, take sexual assault charges seriously.

With police, officers have been sheltered from any real accountability for years.  We give the police the ability to use force and other powers that ordinary citizens don't possess, but instead of giving them more scrutiny and accountability to offset these powers, we give them less.  This has really been a bipartisan problem -- Conservatives tend to fetishize the police and want to assume by default that all police actions are justified.  The Left is more willing to be skeptical of police behavior, but they refuse to take on any public sector union and police unions have generally locked in their contracts any number of accountability-avoidance mechanisms.  So something needed to be done to bring accountability to police forces.

And with these quite justifiable and reasonable goals around which many of us could have coalesced into some sort of consensus, both protest efforts immediately overreached into crazy zones.

On campus, the reasonable demand for serious action in response to a sexual assault charge was abandoned in favor of the demand for immediate conviction without due process based on any sexual assault charge.  Oddly mirroring the conservative attitude towards police, activists said that alleged victims had to always believed, and demanded that universities punish anyone accused of sexual transgressions.  The result has become a toxic mess, and in some ways is a setback for justice, as activists have made it easier to get a rapist thrown out of school but perhaps harder to actually get thrown in jail.

With police, activists immediately eschewed the reasonable need for more police accountability and jumped to the contention that all police officers are racist and systematically abuse black citizens.  Their focus seems to be on police shootings, though I find the pattern of petty police harassment (through the war on drugs and programs like New York's stop and frisk) to be more problematic.  Just as in the campus rape debate, a reasonable need for more accountability and investigation of police shootings has morphed into a demand that police officers be treated as guilty by default in all shootings.

Each of these movements have made the problems more visible while simultaneously making these problems less likely to be solved.

I will add that I stick by my evaluation of BLM I wrote a while back.  I actually sort of liked a lot of their proposed plan, but I wrote (see particularly part in bold):

There is much that progressive and conservative groups could learn from each other.  Conservative groups (outside of anti-abortion folks) are loath to pursue the public demonstration and disruption tactics that can sometimes be helpful in getting one's issues on the public agenda.  The flip side is that public disruption seems to be all BLM knows how to do.  It can't seem to get beyond disruption, including the unfathomable recent threat to disrupt an upcoming marathon in the Twin Cities.   It could learn a lot from Conservative and libertarian groups like ALEC, that focus on creating model legislation and local success stories that can be copied in other places.  Many of the steps in BLM's plan cry out of model legislation and successful pilots/examples.

 

Why Folks Like Me Are Ticked Off About Police Misconduct

It's not that I think that all police officers are somehow evil and out to kill black people, or whatever.   The issue is that we give police special and unique powers, and those special and unique powers should require special and unique accountability.  Unfortunately, we tend to do exactly the opposite -- give police less accountability than the average citizen for his or her actions (this lack of accountability can be blamed both on the Left and Right -- the Right tends to fetishize and hero-worship police, seeing them as the last bastion against creeping barbarism, and the Left refuses to take on the powerful public unions that represent police).

This is a great example of exactly why I get angry.  It causes us to wonder how many of those police stories from the past were just as full of sh*t as this officer's, but we lacked the ability through modern video to find out.  The police officer's actions in trying to cover up his misconduct (e.g. by screwing with the timeline in his dispatcher calls) turns out not to be unique (the most common variation of this is the now-ubiquitous officer yelling drop the gun about five seconds after he has already shot the citizen).  In fact, it seems to happen so often that one wonders if there is not an informal grapevine among police that train new officers in these cover-up techniques.

People often ask me in the comments why I don't respect officers for the job they do.  Sure I do -- policing is one of the few clear-cut government roles all but the most extreme anarcho-capitalist libertarians support.  But I am angry that my and others' respect for officers has been used historically against the public as a tool for evading accountability.

Update:  Making this proposed legislation in AZ to outlaw recording of police in public a really bad idea.

Black Lives Matter Has a Pretty Decent Plan. Too Bad they Don't Seem to Know What to Do With It

There is much to criticize in how the BLM movement operates, but I can get behind much of the plan they introduced last month.  I don't agree with all of it, but I seldom agree with all of any plan I see proposed from any side of the aisle.

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In discussing the plan, Kevin Drum fails to address the elephant in the room for the Left in making progress on this, and that is the enormous reluctance of Democrats to challenge a public employee union.  And you can bet that police unions will likely be the biggest barrier to getting a lot of this done, even perhaps ahead of Conservative law-and-order groups (you can see the token sop thrown to unions in point 10 of the plan, but it ain't going to be enough).

By the way, there is much that progressive and conservative groups could learn from each other.  Conservative groups (outside of anti-abortion folks) are loath to pursue the public demonstration and disruption tactics that can sometimes be helpful in getting one's issues on the public agenda.  The flip side is that public disruption seems to be all BLM knows how to do.  It can't seem to get beyond disruption, including the unfathomable recent threat to disrupt an upcoming marathon in the Twin Cities.   It could learn a lot from Conservative and libertarian groups like ALEC, that focus on creating model legislation and local success stories that can be copied in other places.  Many of the steps in BLM's plan cry out of model legislation and successful pilots/examples.

Your Public Unions at Work, in One Chart

fires

From Mark Perry

If you have ever been at, say, a kids sporting event and had an ambulance or paramedics called for one of the kids, you likely also had a fire truck accompany the ambulance or paramedics.  Did you wonder why they needed a firetruck with a 6 man crew to handle a broken leg in an open field?   Its because most public firefighters unions have gotten local laws passed that require a fire engine to always accompany the paramedics.  Why?  No reason other than they are trying to make firefighters look busy so no one starts to question why we have so many sitting around doing nothing.

Union leaders and fire department chiefs have found new ways to justify their growing budgets and payrolls. In a February 2001 report, the Wall Street Journal noted that 90 percent of firehouse calls in Los Angeles, Chicago and certain other cities were to accompany ambulances to medical emergencies. “Elsewhere, to keep their employees busy, fire departments have expanded into neighborhood beautification, gang intervention, substitute-teaching and other downtime pursuits,” the newspaper added.

Dispatches from the Crony State

From the Daily Beast

For some wealthy donors, it doesn’t matter who takes the White House in 2016—as long as the president’s name is Clinton or Bush.

More than 60 ultra-rich Americans have contributed to both Jeb Bush’s and Hillary Clinton’s federal campaigns, according to an analysis of Federal Election Commission data by Vocativ and The Daily Beast. Seventeen of those contributors have gone one step further and opened their wallets to fund both Bush’s and Clinton’s 2016 ambitions.

After all, why support just Hillary Clinton or just Jeb Bush when you can hedge your bets and donate to both? This seems to be the thinking of a group of powerful men and women—racetrack owners, bankers, media barons, chicken magnates, hedge funders (and their spouses). Some of them have net worths that can eclipse the GDPs of small countries.

Ideology, policy prescriptions, legislative plans -- nothing matters except influence.  This will always happen as long as we give politicians so much power.  Its why the Coke and Pepsi party look so similar today.   At least a few people are noticing:

Is there a single person alive who believes that corporations, trade associations, NGOs, unions, and the like pay the Clintons enormous sums for speeches because they believe their members actually want to hear the Clintons say the same tedious talking points they have been spewing for years? If that were the only value received no profit-minded enterprise would pay the Clintons these vast fees because they would earn, well, a shitty rate of return.

No, the Clintons are not paid to speak. Businesses and other interest groups pay them for the favor of access at a crucial moment or a thumb on the scale in the future, perhaps when it is time to renew the Ex-Im Bank or at a thousand other occasions when a nod might divert millions of dollars from average people in to the pockets of the crony capitalists. The speaking is just a ragged fig leaf, mostly to allow their allies in the media to say they “earned” the money for “speaking,” which is, after all, hard work.

We have such people as the Clintons (and the tens of thousands of smaller bore looters who have turned the counties around Washington, D.C. in to the richest in the country) because they and their ilk in both parties have transformed the federal government of the United States in to a vast favors factory, an invidious place that not only picks winners and losers and decides the economic fates of millions of people, but which has persuaded itself that this is all quite noble. Instead, the opposite is true: This entire class of people, of which the Clintons are a most ugly apotheosis, are destroying the country while claiming it is all in the “public service.” It is disgusting. We need to say that, at least, out loud. . . .

Tear down the aristocracy of pull. This may be our last chance.

The Greek Problem is Not a New Thing

I found this quote from an older Finem Respice article about Greek financial problems in the mid-20th-century to be pretty funny:

So hopeless was the state of Greek finances that, even as [the Nazis] routinely hung with piano wire prominent citizens and officials on the thinnest of provocations, and even given three years to do it, the Nazi's were somehow unable to compel what amounted to a totally subservient collaborator government to put its fiscal house in order.

The Axis administration soon realised it would be a waste of effort to get the Greek government to balance its accounts.

Later, in 1945, it was a British problem.  These problems from the late 1940's should sound really familiar:

Fortunately for Germany, by the time the matter came to a head the Germans had RSVP'd to Scobie and Greece was Britain's problem. It wasn't just partisans the British would end up having to fight....

What followed could only be described as a comic progression of populist pandering, the spread to the national economy of a series of parasitic labor unions and cabals, and a confidence on the part of the Allies in their own fiscal administration abilities that was as enduring as it was inflated.

At first [British Treasury Secretary] Waley sold gold to support the drachma, conditioning the sale on a series of fiscal and monetary reforms the Greeks adopted in principle and promised to implement– at some later date when it was somewhat more convenient. It was around this time Waley quipped:

...the Greek government are in effect paying doles to a large part of the population who spend all day parading in the streets in idleness with political demonstrations as their chief occupation.9

Liberation governments, fearing popular backlash were terrified of taxing the Greeks. Instead they continued to look for sources of wealth to redistribute, and were happy to resort to even the most gamey monetary policies to buy time. After raiding "punitively" the only entities with wealth of any kind (businesses) in 1945 in order to buy popular support with cheap food and wage increases, the Greeks were, again, running out of options.

The whole thing is interesting, and depressing.

Why Greek History Reminds Me of California and Illinois

From the WSJ, an article on how politicians who tried to point out the unsustainability of Greek finances years ago where not only ignored, but villified and marginalized.  Sort of like in places like California and Illinois.

In the past quarter century, Greece has had a handful of reformist politicians who foresaw the problems that are now threatening the nation with bankruptcy.

Their reform proposals were fought by their colleagues in parliament and savaged by the media and labor unions. They invariably found themselves sidelined....

Tassos Giannitsis is no stranger to this kind of war: His tenure as labor minister was more short lived, and the battles against him even more visceral. Mr. Giannitsis in 2001, again in the Pasok government led by Mr. Simitis, put forward a comprehensive proposal to reform the pension system.

Trade unions, opposition parties and Pasok itself unleashed menace on Mr. Giannitsis.

“Giannitsis was annihilated after his pension-reform proposals. There are few precedents for this kind of universal attack on a politician,” said Loukas Tsoukalis, a prominent economics professor here.

Mr. Giannitsis’s proposals, which would have reduced the pension levels Greeks receive and made the system overall more sustainable given the country’s demographic and labor-force trends, were never taken to parliament.

“From the fridge to the bin!” said the front page of newspaper To Vima on April 28, 2001, as the frozen pension-reform plan was scrapped for good.

“When I told my colleagues in the cabinet about the reforms I was proposing—which mind you were not the toughest available—the attitude I got was that I was spoiling the party,” Mr. Giannitsis said in an interview.

“They were, like, ‘everything is going great right now, why are you bothering us with a problem that may implode in a decade?’”

There are many other examples.

 

Why It Is Particularly Unseemly That Hillary Clinton Keeps Attacking the Citizens United Decision

I think any opposition to free speech, particularly as exercised in an election, is unseemly, but Hillary Clinton's attacks on the Supreme Court's Citizens United decision are particularly so.

Why?  Well to understand, we have to remember what the Citizens United case actually was.  Over time, the decision has been shorthanded as the one that allows free corporate spending in elections, but this was not actually the situation at hand in the case.   I could probably find a better source, but I am lazy and the Wikipedia summary is fine for my purposes:

In the case, the conservative lobbying group Citizens United wanted to air a film critical of Hillary Clinton and to advertise the film during television broadcasts in apparent violation of the 2002 Bipartisan Campaign Reform Act (commonly known as the McCain–Feingold Act or "BCRA").[2] Section 203 of BCRA defined an "electioneering communication" as a broadcast, cable, or satellite communication that mentioned a candidate within 60 days of a general election or 30 days of a primary, and prohibited such expenditures by corporations and unions.

Yes, the Supreme Court generalized the decision to all corporations and unions (good for them) but the narrow issue in the case was whether an independent non-profit group could air a negative film about Hillary Clinton in the run-up to an election in which she was a candidate.

So when Hillary Clinton derides the Citizens United decision, she is arguing that the government should have used its powers to suppress a film critical of her personally.   She is trying to protect herself from criticism.

Celebrate the Strong Dollar

We are already seeing articles bemoaning the strong dollar as somehow a threat to the American economy.  Don't believe it.  Maintaining a weak dollar is yet another crony government program that benefits a tiny minority of admittedly vocal and politically connected Americans.

First, a bit of an aside.  It is amazing to me that the US dollar can be strong at all right now, given the actions of the Fed.  With its near infinite QE and zero-interest rate programs, one would expect the dollar to be weak (Oversimplifying, driving down the returns on financial assets reduces the overseas demand for them, thus reducing the demand for dollars, driving down the price of dollars).  But it turns out that the rest of the world (esp. Japan and the EU) are actually working twice as hard to trash their own currencies (they are actually heading into negative interest rate territory, not just zero) and thus on a relative basis, the dollar is stronger.

Companies that export or compete a lot with manufacturers in other countries hate the strong dollar.  It makes their domestically produced products more expensive vis a vis products manufactured in other countries.  Many of these companies have powerful political voices, and some have large unions with even more powerful political voices.  They lobby for a weaker dollar.  Part of that lobbying is often to portray other countries as nefariously "manipulating" their currencies to hurt the US.

What these countries that are weakening their own currencies are actually doing is trashing the prosperity of the vast majority of their citizens to protect the earnings of a few politically powerful producers.  Japan is a great example.  Japan is a country in which consumers have been stomped on from decades in order to reduce the price of the country's exports.  Japanese consumers pay far more for everything than we do, all so their exporters can lower their prices in the US.

This is the same in China.  We frequently host visiting Chinese students.  You know what every one of these kids do on their trip to the US?  They bring an empty suitcase that they fill up with electronic and fashion goods they buy here, many of which were actually manufactured in China  (I have never, ever have hosted a Chinese student that did not buy at least one Chinese-manufactured iPhone here).

So, we must oppose this currency "manipulation" that impoverishes Japanese, Chinese, and European citizens in favor of giving much lower prices to Americans -- Why?

We should celebrate the strong dollar.  It makes every one of us richer.  Not just when we buy Chinese electronics, but even when we buy American-made products that now must be less expensive to compete with foreign products and which benefit from cheaper inputs in their own manufacturing.

Years and years ago I wrote a hypothetical post about Chinese interventions to maintain a trade surplus form a Chinese consumer's perspective in a post from our sister publication Panda Blog.  I think it holds up really well.  It said in part:

It is important to note that each and every one of these government interventions subsidizes US citizens and consumers at the expense of Chinese citizens and consumers.  A low yuan makes Chinese products cheap for Americans but makes imports relatively dear for Chinese.  So-called "dumping" represents an even clearer direct subsidy of American consumers over their Chinese counterparts.  And limiting foreign exchange re-investments to low-yield government bonds has acted as a direct subsidy of American taxpayers and the American government, saddling China with extraordinarily low yields on our nearly $1 trillion in foreign exchange.   Every single step China takes to promote exports is in effect a subsidy of American consumers by Chinese citizens.

Why Reform of Police Accountability is Unlikely

It's as simple as this:  Republicans fetishize the police (like they do the military) and will always give them the benefit of the doubt.  They have this gauzy teary-eyed love of the police.  Just watch Megyn Kelly on Fox to get the idea.  Democrats are allied with public unions and will not under any circumstances take on the powerful police unions who fight any attempt at accountability tooth and nail, a behavior Democrats have become habituated to enabling for other unions like the teachers unions.

The issue is mostly about giving police accountability that matches the special powers over the use of force we give them.  But it is also about racism.  It just burns me up to have folks in power point to the business world constantly for supposed institutional racism, when in fact I witness very little if any day to day.  The one institution I see that clearly has elements of institutional racism are many police forces, but no one will touch them.

Every year there are hundreds of police shootings and the number that are determined not to be justifiable rounds to zero.  What are the odds there is a process involving humans with this small of a Type I error rate?  We are learning form cell phone cameras that the stories we used to believe from police officers about events are often total bullsh*t.  And yet still police are not held accountable even when there is horrific video evidence showing them out of control.

At the drop of a hat, at the smallest hint of a single example of a bad outcome, the government will not hesitate to impose enormous new restrictions on private individuals.  But even with the most overwhelming evidence the government will not put even the lightest restrictions in itself or its employees.

I have always shied away from my fellow libertarians on the anarcho-capitalist end of things who wanted to privatize the police force.  I always thought use of force to be a unique privilege and one dangerous to hand out to private groups.  But I am starting to see that I was thinking about it wrong.  It is a dangerous power to give to anyone, but at least if you give it to a private party someone might possibly exercise a little accountability over them.

Walter Olson has a good roundup of police and lethal force here.

Postscript:  Here is an example of what I mean:  The Obama Administration has imposed significant rules on universities to bring greater accountability to sexual assailants when it was perceived that the universities did not impose enough accountability on such predators.  I think the Administration has gone overboard in stripping away the accused due process protections and handing justice to people who will not manage the process well, but its the seriousness of this effort I want to point out.  While I don't think the Administration's actions were appropriate to colleges, they would represent an entirely appropriate response to police violence.  Someone needs to step in and enforce some accountability.

 

Kevin Drum's Sensible Thoughts on Ray Rice: Why Doesn't The Same Logic Apply to Universities?

Kevin Drum has some sensible thoughts on Ray Rice, discipline and the NFL -- "Sensible" defined in this case as largely mirroring my own:

Ray Rice committed a crime. We have a system for dealing with crimes: the criminal justice system. Employers are not good candidates to be extrajudicial arms for punishing criminal offenders, and I would be very, very careful about thinking that they should be.

Now, I'll grant up front that the NFL is a special case. It operates on a far, far more public level than most employers. It's a testosterone-filled institution, and stricter rules are often appropriate in environments like that. Kids take cues from what they see their favorite players doing. TV networks and sponsors understandably demand a higher level of good behavior than they do from most employers.

Nevertheless, do we really want employers—even the NFL—reacting in a panic to transient public outrage by essentially barring someone for life from ever practicing their craft? Should FedEx do that? Should IBM do that? Google? Mother Jones? Perhaps for the most serious offenses they should, and it's certainly common to refuse to hire job candidates with felony records of any kind. (Though I'll note that a good many liberals think this is a misguided and unfair policy.) But for what Ray Rice did?

I just don't know about that. Generally speaking, I think we're better off handling crimes through the criminal justice system, not through the capricious judgments of employers—most of whom don't have unions to worry about and can fire employees at a whim. I might be overreacting, but that seems like it could become a dangerous precedent that hurts a lot more people than it helps.

I agree 100%.  The NFL  was simply insane to venture into the role as a shadow legal system to apply punishments based on their investigation and judgement in parallel with those of the legal system.  They would have been much better off simply establishing a schedule of internal penalties that were based on the outcomes of the legal system.

That being said, I wish other writers on the Left would read Drum's column and ask themselves why this same logic wouldn't apply to colleges as well. It is unbelievable to me that Liberals of all people -- who have largely defended due process rights in the legal system for years against Conservative attempts to trim them -- would suddenly wage a campaign to substitute kangaroo courts run by university administrators in the place of normal police and judicial procedures for crimes as serious as rape.  I am historically skeptical of the legal system and the people in it, but all of these problems would only be worse trying to have a bunch of amateurs at universities setting up a parallel system.

There is certainly a problem to be solved -- though the 1 in 5 statistic is completely bogus and exaggerated -- but the diagnosis of the problem has been all wrong.  The problem is that Universities have historically created internal police forces and disciplinary processes for the express purpose of protecting their students from the normal legal system.  This is a practice and tradition that goes all the way back to the Middle Ages.  And it worked fine, at least as far as I am concerned, when the University was protecting students from marijuana or underage drinking busts by town police.

But institutions develop a culture, and the culture of university disciplinary processes has been to 1.  keep the student out of the legal system and 2.  get the student to graduation.  I have friends who have been kicked out of top universities a few times, but the University in the end bent over backwards to take them back and get them over the finish line.

So it is disappointing, but not surprising, that universities approached more heinous crimes with this same culture and mindset.  And some egregious sexual assaults got swept under the rug.  Again, I think some folks are exaggerating these numbers by assuming there are tens or hundreds of these cases for every one we hear about.  But we can agree on the core fact, I think, that the typical college disciplinary culture of protecting students from the legal system has failed some victims of sexual assault.

But this is where everyone seems to be going off track.  The Obama Administration solution for this problem is to demand that universities develop more robust fact-finding and disciplinary processes for such felonies, and remove procedural protections for the accused as a way to offset the historic university culture to go to far in protecting wrongdoers.

This is nuts.  Seriously.  Given the set of facts, a far simpler solution, fairer to both accused and victims, would have been for the Obama Administration simply to demand that Universities hand over evidence of crimes to police and prosecutors trained to know what to do with it.  If the University wants to take special steps to get victims help coping with their recovery using University resources, or help victims and the accused who are University students cope with the rough edges of the legal process, great.

Postscript:  Another problem is that punishments meted out by universities are going to always be wrong, by definition.  Let's say a student is accused of rape and kicked out.  Two possibilities.  If he is innocent of the charge, then he was punished way too much.  If he was guilty, if he really raped someone, he was punished way too little -- and by the University screwing around with it and messing up the chain of evidence and taking statements without following the correct process, they may have killed any chance of a conviction in the legal system.    The current process the Obama Administration is forcing punishes the innocent and protects the truly guilty.

Police and Patents of Nobility

I don't have much to add to all the commentary on the Ferguson killing, except to say that many, many examples of police abuse of power are covered by libertarian blogs --but seldom more widely -- so it is nice to see coverage of such an incident hit the mainstream.

Defenders of police will say that police are mostly good people who do a difficult job and they will mostly be right.  But here is the problem:  In part due to our near fetishization of the police (if you think I exaggerate, come live here in Phoenix with our cult of Joe Arpaio), and in part due to the enormous power of public sector unions, we have made the following mistake:

  • We give police more power than the average citizen.  They can manhandle other people, drag them into captivity, search and take their stuff, etc.
  • We give police less accountability than the average citizen when things go wrong.   It is unusual even to get an investigation of their conduct, such investigations are seldom handled by neutral third parties, and they are given numerous breaks in the process no citizen gets.

The combination of these two can be deadly.

Ken White at Popehat writes to some of this

If you are arrested for shooting someone, the police will use everything in their power — lies, false friendship, fear, coercion — to get you to make a statement immediately. That's because they know that the statement is likely to be useful to the prosecution: either it will incriminate you, or it will lock you into one version of events before you've had an opportunity to speak with an adviser or see the evidence against you. You won't have time to make up a story or conform it to the evidence or get your head straight.

But what if a police officer shoots someone? Oh, that's different. Then police unions and officials push for delays and opportunities to review evidence before any interview of the officer. Last December, after a video showed that a cop lied about his shooting of a suspect, the Dallas Police issued a new policy requiring a 72-hour delay after a shooting before an officer can be interviewed, and an opportunity for the officer to review the videos or witness statements about the incident. Has Dallas changed its policy to offer such courtesies to citizens arrested for crimes? Don't be ridiculous. If you or I shoot someone, the police will not delay our interrogation until it is personally convenient. But if the police shoot someone:

New Mexico State Police, which is investigating the shooting, said such interviews hinge on the schedules of investigators and the police officers they are questioning. Sgt. Damyan Brown, a state police spokesman, said the agency has no set timeline for conducting interviews after officer-involved shootings. The Investigations Bureau schedules the interviews at an “agreeable” time for all parties involved, he said.

Cops and other public servants get special treatment because the whole system connives to let them. Take prosecutorial misconduct. If you are accused of breaking the law, your name will be released. If, on appeal, the court finds that you were wrongfully convicted, your name will still be brandished. But if the prosecutor pursuing you breaks the law and violates your rights, will he or she be named? No, usually not. Even if a United States Supreme Court justice is excoriating you for using race-baiting in your closing, she usually won't name you. Even if the Ninth Circuit — the most liberal federal court in the country — overturns your conviction because the prosecutor withheld exculpatory evidence, they usually won't name the prosecutor.

Also see Kevin Williamson.

VA Scandal Proves My Contention: The Only Government Health Care Cost Reduction Ideas are Rationing and Price Controls

I feel like I was way ahead of the pack on May 1 reminding everyone that the Left until recently held up the VA as a model for government health care.  I pointed to articles by Kevin Drum and Phil Longman in 2007, but since then others have highlighted articles by Paul Krugman and Ezra Klein that made the same point.  Klein said:

If you ordered America's different health systems worst-functioning to best, it would look like this: individual insurance market, employer-based insurance market, Medicare, Veterans Health Administration.

Paul Krugman said

Well, I know about a health care system that has been highly successful in containing costs, yet provides excellent care. And the story of this system's success provides a helpful corrective to anti-government ideology. For the government doesn't just pay the bills in this system -- it runs the hospitals and clinics.

No, I'm not talking about some faraway country. The system in question is our very own Veterans Health Administration, whose success story is one of the best-kept secrets in the American policy debate.

Supposedly, the reason for this success according to Drum and Longman was that ever-popular Lefty magic bullets, electronic medical records and preventative care.  On medical records:

"Since its technology-driven transformation in the 1990s...the VA has emerged as the world leader in electronic medical records — and thus in the development of the evidence-based medicine these records make possible." Hospitals that joined Longman's "Vista network" (his name for the VA-like franchise he proposes) would have to install the VA's electronic medical record software and would "also have to shed acute care beds and specialists and invest in more outpatient clinics." By doing this they'd provide better care than any current private network and do it at a lower cost.

On preventative care:

How is a supposedly sclerotic government agency with 198,000 employees from five separate unions outperforming the best the private market has to offer? In a word: incentives. Uniquely among U.S. health care providers, the VA has a near-lifetime relationship with its patients. This, in turn, gives it an institutional interest in preventing its patients from getting sick and in managing their long-term chronic illnesses effectively. If the VA doesn't get its pre-diabetic patients to eat right, exercise, and control their blood sugar, for example, it's on the hook down the road for the cost of their dialysis, amputations, blindness, and even possible long-term nursing home costs....The VA model is that rarest of health care beasts: one with a perfect alignment of interest between patients and providers.

Neither of these have ever proven in real life to actually lower costs in anything but tiny pilot programs, and there is a lot of reason to believe that while preventative care can improve health outcomes, it tends to increase costs.

I have said for years that at the end of the day, the only ideas government planners have for cost control are rationing (which leads to queuing) and cost controls on things it buys from private markets, like doctor time (which leads to shortages and more queuing).  This is why every health care system that offers free care to all comers, whether it be socialist systems in other countries or the VA or even an urban emergency room, has long queues.

In fact, the situation, as I think we will find at the VA, is worse.  Not only is the old pie being allocated differently (shifting from price-sensitivity to queue tolerance) but the pie of available supply is likely getting smaller as resources are consumed by government red tape and price controls drive suppliers out of the market.  The next stories will be about the staggering waste of money on red tape in the VA system, and the stories after that will be about a few VA users jumping the queue because of political connections.

This stuff is so inevitable that it was all addressed years ago in my three part series of Obamacare.  In that series, the issues were not failing exchanges and the mess we have seen so far, but the issues we are more likely to see over the long term.  The VA is merely a preview, but we shouldn't have needed a preview because we could have looked at countries like England.  Of course, if the media had any desire to honestly tell these socialized medical stories we would not get fawning profiles of the horrendous system in Cuba.

My Forbes series:

Conflict of Interest

By the way, there is a reason for this choice (from an article on why unions are worried about the PPACA)

The second problem is that the 40 percent excise tax on especially expensive plans — the so-called Cadillac tax — is going to hit union plans especially hard. Unlike most people negotiating compensation, union negotiators make an explicit trade-off between wages and other benefits, and the benefit that they seem most attached to is generous health plans. Union plans are made more expensive still because union membership is heavily skewed toward older workers. They are thus very likely to get hit by the Cadillac tax, which takes effect in 2018.

The preference for health benefits over cash compensation makes some sense for tax reasons (as it shifts taxable income to nontaxable income).  And at some level it is typical of union thinking, which is often driven by seniority and by benefits for older workers over younger workers.  But there is another reason for this that is almost never stated -- the unions themselves run many of these health plans.  And because it is priced as a monopoly, the unions often earn monopoly rents on these plans, and use management of large health plans to justify much higher compensation levels for union leaders.  In Wisconsin, ending public union strangleholds on health plan management immediately saved the state and various local school districts millions of dollars when they were allowed to competitively bid these functions for the first time.

Another Possible Reason for Obama's Minimum Wage Push

Obama's minimum wage push could be an honest attempt to reduce poverty, but since only a trivial percentage of the American work force earns the minimum wage, and most of those are in starter jobs rather than trying to support a family, it does not make a lot of sense.

On the other hand, it could be another cynical payoff to unions that form the backbone of Obama's political support

Organized labor's instantaneous support for President Obama's recent proposal to hike the minimum wage doesn't make much sense at first glance. The average private-sector union member—at least one who still has a job—earns $22 an hour according to the Bureau of Labor Statistics. That's a far cry from the current $7.25 per hour federal minimum wage, or the $9 per hour the president has proposed. Altruistic solidarity with lower-paid workers isn't the reason for organized labor's cheerleading, either.

The real reason is that some unions and their members directly benefit from minimum wage increases—even when nary a union member actually makes the minimum wage.

The Center for Union Facts analyzed collective-bargaining agreements obtained from the Department of Labor's Office of Labor-Management Standards. The data indicate that a number of unions in the service, retail and hospitality industries peg their base-line wages to the minimum wage.

The Labor Department's collective-bargaining agreements file has a limited number of contracts available, so we were unable to determine how widespread the practice is. But the United Food and Commercial Workers International Union says that pegging its wages to the federal minimum is commonplace. On its website, the UFCW notes that "oftentimes, union contracts are triggered to implement wage hikes in the case of minimum wage increases." Such increases, the UFCW says, are "one of the many advantages of being a union member."

The labor contracts that we examined used a variety of methods to trigger the increases. The two most popular formulas were setting baseline union wages as a percentage above the state or federal minimum wage or mandating a flat wage premium above the minimum wage.

Total Fecklessness

If a city government cannot bring itself to end something so obviously abusive as pension spiking, what hope is there of any real reforms on tougher matters?  Government employees are increasingly running government in their own favor.

After nearly three hours of contentious debate, Phoenix city leaders were so divided over how to tackle pension “spiking” on Tuesday that they ended up doing nothing at all.

They walked into the City Council chambers prepared to make changes, but after splintering into three ideological factions, voted 5-4 against a plan to combat spiking, generally seen as the artificial inflation of a city employee’s income to boost his or her retirement benefit.

Several high-profile cases have come to light, pushing the effort to eliminate pension boosting to the forefront of the council’s agenda.

Former Phoenix City Manager David Cavazos, who retired last week to lead another city, was able to apply unused sick pay and other perks to spike his pension to an estimated $235,863, the second-largest retirement benefit in city history.

Earlier this month, a subcommittee of council members proposed modest reforms that they said would reduce pension spiking and provide transparency. They said the plan treated existing employees fairly and avoided potential litigation.

But the proposal fell apart Tuesday night, when a group of liberal-leaning council members joined the body’s fiscal conservatives in voting against it, though their rationales were vastly different.

After the motion to approve the proposal failed, the meeting ended. The result, greeted by cheers from employee unions in the crowd

Good God, How Does This Help Anyone Except Perhaps Helping Government Officials Feel Powerful

Via Reason

A Paris appeals court this week ordered the French cosmetics chain Sephora to close its flagship boutique on the iconic Champs Élysées boulevard at 9pm, angering salespeople who say they have freely accepted to work until midnight for years and now risk losing their jobs.

Following a trend among other businesses on Paris's most celebrated street, Sephora began extending its opening hours in 1996. Its designer perfumes, makeup and other cosmetics were, until this week, sold until midnight between Monday and Thursday, and as late as 1am on Friday and Saturday.

Citing labour laws that restrict night-time work, France’s largest unions collectively sued the shop. An administrative court sided with Sephora on December 6, 2012, allowing the cosmetics giant to keep its exceptionally late hours on the Champs-Élysées.

However, the appeals court overturned that decision on Sunday, agreeing with unions that the store’s “normal activity” does not “make night-time work a necessarity,” as the law states.

Money for Nothing, Detroit Edition

A huge portion of Detroit's operating costs go to police and fire.  If you include retiree health care and pensions, way over half of Detroit's budget goes to police and fire**.  That is an enormous increase since 1960.

detroit-bankruptcy-spending

So one might expect the schools to suck and the streetlights to be broken (which they do and are), but you would expect great freaking fire and police coverage.  But you would be wrong.  Detroit has one of the highest crime rates in the country.  This is what you get for your money there:

If you're a Detroiter who needs a police officer, it will take 58 minutes to get help -- more than five times what it takes elsewhere in the United States...

Here are some of the other problems outlined in the bankruptcy filing:

-- Response times for Emergency Medical Services and the Detroit Fire Department average 15 minutes, which is more than double the 7-minute averages seen in other cities.

-- The police department closes only 8.7% of its criminal cases, which the filing blames on the department's "lack of a case management system, lack of accountability for detectives, unfavorable work rules imposed by collective bargaining agreements and a high attrition rate in the investigative operations unit."

-- The city's violent crime rate is five times the national average, and the highest of any city with a population exceeding 200,000.

 

** This is in large part due to the power of their unions, and their ability in elections to translate hero worship for police and fire fighters into political power that will allow them to get anything they want.  As a politician, try to stand up for sanity and you will be deluged by union ads arguing that you don't respect our men who are risking their lives for you, etc. etc.