Saturday, November 04, 2006

Guest Post: Illinois Pension Nightmare

A "Nightmare" Indeed

from illinoisreview

Yesterday's Tribune headline blared "Illinois' pension nightmare." Here are some excerpts, with thoughts attached.

Illinois, with an estimated $45.8 billion pension shortfall, has among the worst funding records in the country. From Connecticut to Oklahoma, pension obligations are threatening to overwhelm budgets, pinching states' ability to pay for pressing priorities such as education, transportation and health care.

From a political perspective, this offers the best opportunity in a generation to create real political reform. The culture has always been able to digest a little corruption, but the politicians here have a) created a huge patronage army of government workers (yes Virgina, teachers are government workers), and b) showered them with unsustainable benefits, which sadly, are Constitutionally protected once vested.

What few people understand is that there isn't enough future tax revenue to pay off these promises. Taxation will only yield economic decline that destroys the ability to pay the promises. Reform is no longer an "option," it's now a force of nature.

The parsite no longer lives in harmony with it's host.

Then came the 2001 recession and stock market collapse, which reduced pension funds' value and triggered a budget crisis during Gov. George Ryan's administration. At the same time, a costly early-retirement program increased the pension obligations.

The "recession" had barely any impact. Stock values are back above where they were in 2001, and this should be reflected in the article. The fact is that our politicians, bought and paid for by the patronage army they created, showered unsustainable benefits on their funders.

The mediocre Tribune, strategically running this article 1-2 years too late, (but clearly designed to benefit Topinka) is as responsible for the shortfall as any entity in the state. They probably endorsed 80-90% of the politicians that voted for this obscene largess, all while promoting the myth that "more money = better education."

At an HB 750 "Dog and Pony" show, I pointed out to the crowd that IL spending on education increased 153% from 1985 to 2003, while enrollment had only increased 13.1%. The Honorable John Frichey's response was refreshingly honest. He said, "Yeah, but that all went to pensions.

Though not covered in the article, Illinois Review readers should know 2 things about the recent "roll back" in the piggish "Early Retirment Option." First, your legislator's paymasters (teacher's unions, BIg Ed) are busy working to restore the full obscenity through large exceptions. Second, the obscenity of the ERO can and will continue at the local level, provided the district has the money.

Did you ever wonder why so many districts are crying poor? They are loading up for providing locally funded EROs. Go ahead and FOIA your latest teacher's contract. Look at the goodies. If you don't have the time, at least have the decency to vote down all referenda.

But unless it's solved, Msall and others warn, taxpayers will be the losers. The state constitution requires that retirement benefits be paid at the level they were promised. While lawmakers can decide to cut school funding, they can't get out from under the pension obligations.

"Pension funding will trump all other contributions over time," Msall said. "It should be at the front of anybody's mind who cares about education, about transportation, because if you don't get the system fixed you're not going to have any money for those in the future."

Nothing would be more deliciously ironic than watching 'real' education spending being cut to fund the piggishness of the generation that came before it. Whether the vehicle is a
"fake" tax swap, another give away to retired government workers, or an argument over funding an increasingly failing education system, the ground may well shift under Illinois political status quo . . .

Thursday, November 02, 2006

Guest Post: My Libertarian Propositions

A Dialogue With A Liberal
By Arnold Kling, October 13, 2006

"Consider this an invitation. Are these propositions meaningful? Are they helpful? Are they simply wrong? As a liberal, how would you change them or modify the list? As a conservative, how would you draft a similar list for conservatives?"

-- Geoffrey R. Stone, What it Means to be a Liberal

I will take up this invitation University of Chicago law professor Geoffrey Stone, speaking not for conservatism, but for my own brand of libertarianism. First, let me comment on a couple of his propositions.

Stone writes,

Liberals believe individuals should doubt their own truths and consider fairly and open-mindedly the truths of others...Liberals are skeptical of censorship and celebrate free and open debate.

I agree that this is the liberal ideal. In my experience, liberals are not as open-minded as I would like, but open-mindedness is a difficult ideal to uphold. I am pleased to see open-mindedness listed first.

Later, he writes,

Liberals believe government has a fundamental responsibility to help those who are less fortunate. It is liberals who have supported and continue to support government programs to improve health care, education, social security, job training and welfare for the neediest members of society. It is liberals who maintain that a national community is like a family and that government exists in part to "promote the general welfare."

I believe that in reality what has helped the less fortunate is economic growth. Today's elderly are affluent not because of Social Security, but because of all of the wealth created by private sector innovation over their lifetimes. Government involvement in health care and education is an impediment to progress in those fields. Job training and welfare are demonstrable failures. I think that treating a national community like a family is a grave intellectual error. A national unit is an institution that creates a legal framework for a large group of strangers to interact. A family is a small group that interacts on the basis of personal bonds. Strengthening government serves to weaken families and other vital civic institutions. If Professor Stone is truly as open-minded as he says, then he ought to examine what economists have found about the sources of economic growth and the ways that poverty has been alleviated over time.

My Libertarian Propositions

1. Liberty is important for its own sake. People are entitled to make their own choices.

2. There are other values in addition to liberty. However, many noble causes end up infringing on liberty without achieving their desired ends. Government policies should be evaluated on the basis of their consequences, not on the basis of how they make us feel. It may feel good to set a minimum wage, to impose rent control, or to declare a war on drugs, but the evidence is that such policies tend to work to the detriment of their intended beneficiaries.

3. I value relieving the suffering of others. However, compared with liberals, I have considerable humility when it comes to advocating taking other people's money in order to satisfy my urge to alleviate poverty.

4. Corporate power is adequately checked by market forces. Competitors are the main force protecting consumers. Alternative job opportunities are the main force protecting workers. For corporate power to be a threat, it must be allied with government power.

5. We would be better off with much less regulation. I will grant that some forms of deregulation, such as eliminating meat inspection, appear to have risks that outweigh the potential benefits. On the other hand, many forms of deregulation, such as eliminating licensing restrictions for medical practice, have potential benefits that outweigh the risks.

6. Government is just one of many institutions for collective action. There also are trade associations, civic associations, religious groups, charities, and many other organizations that can provide collective goods.

7. Government's unique institutional characteristic is the legal use of coercive force. This creates enormous potential for abuse, and indeed, there are many countries where government abuses its powers constantly, to the severe detriment of the population. The abuses are less evil in the United States, but where liberals look at government expansion and see opportunity, libertarians see threat.

8. Providing for the common defense is a legitimate function of government.

9. There is no such thing as the "international community," only a constantly-changing array of allies and adversaries. The United Nations serves mainly to prop up authoritarian regimes. The European Union is a bureaucratic nightmare. The United States should be proud of our ideal of liberty, especially economic liberty.

10. In a world where small, covert operations (also known as terrorism) are a significant threat, government needs to use the tools of surveillance. However, surveillance power must be subject to checks and balances that are beyond those currently available.

Arnold Kling is author of Learning Economics.

Governments Oppose Things That Work

Courtesy of Coyote, we submit this,
via Neal McCluskey at Cato:

District officials, as well as the president of the teachers union, bristle at assertions by the Charter Schools Association that middle and high school charters are significantly outperforming their district counterparts.

A fairer comparison would be with the district’s magnet schools, which outperform charters, school board member Jon Lauritzen said.

“I think it’s basically unfair to compare an entity that is able to take their entire budget and focus it entirely on their own schools,” he said. “They have some real advantages over our schools in the flexibility of actually providing the type of education that a particular community wants, whereas we are trying to provide a curriculum that works for everyone all across the school district.”

This last paragraph is hilarious on its face. The average parent must wonder what Mr. Lauritzen is doing with the public school funds in contrast to focusing his entire budget at, you know, the schools, like those evil competitors do. And what government official would ever be caught dead providing the type of serves that a particular community actually wants. And this is all in the context that charter schools are, in McCluskey's words, a "pale shade of choice."

So, what does the teachers union and school board members do in the face of competition that they acknowledge works better? Do they demand the same flexibility in spending and rules in their own schools? No! Of course not! They demand that the schools that work better be eliminated:

It’s no wonder that, a few months ago, Mr. Lauritzen proposed a moratorium on charter schools, and that public schooling’s defenders fight even harder against reforms like vouchers and tax credits. After all, who could just sit by and watch parents get schools they want when an old, hopeless system is suffering?

Wednesday, November 01, 2006

Ahh, John Kerry - Ya Gotta Love Him

Senator Kerry stepped in it again and his timing was pretty bad. We think we can accept that he was trying to slam President Bush (although his own university performance was rather lackluster "his own self") and blew the joke. Never the less, it provides an opportunity to examine the myth, promoted by anti-military types, that the poor make up the majority of those that serve.

The facts simply don't bear this out:

The military really doesn't ask how much money your parents make when they sign you up. However, they do ask you what zip code you are from, and this analysis seems to belie the assumption, showing the army is actually made up disproportionately of recruits from the richest rather than the poorest zip codes.

Tuesday, October 31, 2006

Halloween Gets The Ax

Halloween gets the ax:

"School crime was dealt a sharp blow in Pittsburgh, Pennsylvania, when Jordan Locke was suspended for bringing an ax to school. In an open letter to area media, Superintendent Joel Carr and school board President Thomas DeBolt wrote, 'As administrators of schools, with the safety of hundreds of children in mind, it is also our job to protect lives, too!'

"The incident was controversial because: 1) Jordan is five years old; 2) his ax was five inches long and made of plastic; and 3) it was part of his Halloween costume. Jordan dressed as a firefighter. He was suspended for violating a district policy that prohibits weapons - real or toy. Firefighters objected to their tool being labeled a weapon, prompting Carr and DeBolt's open letter apologizing for the incident."

Abentee and Early Votes More & More Important

Early voting has grown in the past 15 years, from around 2% of the national electorate participating to about 20% in 2004. Experts predict this year that 19% to 25% of the electorate will vote early at the polls or by mail-in absentee ballots. That compares with about 14% in 2002, the most recent midterm election.

Fueling the trend toward early voting, 30 states now allow unrestricted absentee voting, with 15 , including Illinois, allowing early voting in person at county-clerk offices and polling areas.

These votes, by definition, cannot be included in media "exit polling", so don't listen to the exit polling data which you'll hear throughout election day. They don't mean squat.

If you didn't vote early (and often, as a friend of ours likes to say), go ahead and get to the polls on election day, November 7th, regardless of whether you think your vote will "make a difference" or not.

We know it will.

The True "October Surprise"?

One week from today the votes will be tabulated and all of the guessing will be over!

The Mike Allen report lays out some interesting last minute information:

Top Republican officials believe the GOP will keep both houses of Congress next Tuesday, and they have five good reasons to think so (in addition to Bush's residual popularity in some crucial states and districts:

1) No Republican is being taken by surprise, unlike many Democrats in 1994. Shortly after Bush's reelection, White House and Republican National Committee officials began working to convince House members that the formidable reelection record for incumbents (since 1996, 97.5 percent) was not something they could take for granted. "What we attempted to do last year," said one of these officials, "was to go out of our way to say to people: 'You face a potential of a race. In order to win as an incumbent, you better have a plan,' " including an intensive focus on voter registration, a message plan that would unfold in phases, and a ground organization that was operating in a measurable, quantifiable way. One official involved in the process said Republican officials deliberately "scared" lawmakers, telling them: "You face a very tough road. You better be ready."

2) Absentee ballot requests and returns, closely tracked by the party, are meeting or exceeding past levels for Republicans in key states and districts. Republican officials say White House Deputy Chief of Staff Karl Rove and party operatives are scrutinizing this data with the same intensity that they followed metrics like voter registration earlier in the cycle. For at least 68 races, they have been getting reports once a week on the number of voters registered, phone calls completed and doors knocked on. Now, they're getting a second report on the number of absentee ballots requested, absentee ballots returned and early votes cast. "We can look at that data flow and make an assumption about what's going on and plotting it out," a Republican official said.

3) When the national parties, national campaign committees, state "victory" committee accounts and competitive campaigns are added up, Republicans maintained a substantial financial advantage over Democrats at the last filing period. "We didn't look on it as one pot," said one official involved in the process. "We looked upon it as four pots, with synergy available through all four."

4) Republicans say the district-by-district playing field favors them in several structural ways not reflected in national polls. Here is their thinking, starting with statistics from the President's 2004 race against John F. Kerry: "There are 41 districts held by a Democrat that Bush carried, and 14 seats held by Republican that Kerry carried, so we're fighting on better turf. You see it in the open seats, where Bush carried 18 of the Republican open seats and Kerry carried two. So we're fighting on better turf."

5) The get-out-the-vote machine designed by Rove and now-Republican National Committee Chairman Ken Mehlman in 2001 was dubbed the "72-hour" program, but officials say that's quite a misnomer and that it's really a 17-week or even two-year program. "In Ohio, we are making more phone calls this year than we made two years ago," said an official involved in the process. "Now, that's not the case necessarily in Virginia, which was not a battleground state. You have to build that. In other places, we built that and built it early."

Don't touch that dial!