Tag Archives: Cato Institute

Louisiana governor Bobby Jindal unveils education reform plan

Here are the details on Bobby Jindal’s new education plan, from New Orleans Online Access.

Excerpt:

 Gov. Bobby Jindal on Tuesday outlined a far-reaching set of proposals aimed at improving education in Louisiana, including a state-wide voucher program for low-income students, an expansion of autonomous charter schools and steps to link a teachers’ classroom performance to their job protections and their compensation. The governor has been promising for months now to make education reform the centerpiece of his second-term agenda.

[…]The voucher program may prove the most controversial aspect of the plan. Jindal is proposing to help pay tuition at private and parochial schools for any child of a low-income family who attends a school that receives a letter grade of C, D or F.

More than 70 percent of Louisiana’s public schools would fall into that category, opening up districts across the state to competition for public funding from private institutions. Parents who opt out of those public schools would be able to take the public funding set aside for their child with them to pay for tuition.

Voucher opponents argue that offering private school tuition siphons money away from public education, but the governor is framing the idea as a way to put decision-making in the hands of parents.

Also toward that end, Jindal is proposing to fast-track the approval of new charter schools for proven charter operators. Charters are publicly funded but privately managed and typically overseen by nonprofit boards. They compete with traditional public schools in their area for students.

Jindal is also proposing to end regular annual pay increases for teachers based on years in the classroom, ban the use of seniority in all personnel decisions and weaken the power that local school boards have in hiring and firing decisions in favor of superintendents.

Teachers coming into the classroom for the first time would also see major changes under Jindal’s plan: districts would have greater flexibility to establish their own pay scales for new teachers and tenure would be set aside only for those who earn high ratings on evaluations five years in a row.

I thought it might be helpful to also post this quick introduction to the issue of school choice, from the Cato Institute.

I don’t agree with the Cato Institute on everything, but they’re right on this issue. The Heritage Foundation also has 3 small videos explaining school choice – with cartoons!

There’s an even longer video narrated by John Stossel that you can watch, that really explains the why school reform matters – and why it’s a conservative issue. Like the sex-selection abortion issue that I blogged about here before, this is an issue that conservatives need to seize on. Here, we can really let our compassionate side show by helping the poorest students, especially those in visible minorities, who simply cannot get a quality education in a public school monopoly that is not responsive to the needs of parents, or their children. This is an issue where we can win – the only losers are the educational bureaucrats and the teacher unions. But the kids are more important.

John Stossel’s documentary about public schools and school choice

Awesome: (41 minutes)

The documentary features Jay Greene, and his book “Education Myths”, which I recommend.

Here’s an article from Jay P. Greene in National Review.

Excerpt:

This year, when you hear President Obama and congressional Democrats talk about increasing government spending to create jobs, you should understand that it isn’t really about jobs. It’s about paying off powerful interest groups that helped these Democrats gain power — a fact that’s clear from the billions they’ve directed to education.

Last month, President Obama held a jobs summit, after which he urged Congress to spend some of the money being repaid by bailed-out banks on programs to address unemployment. The House of Representatives responded by drafting legislation that, according to the Washington Post, “provides $23 billion to help states pay teacher salaries.” The curious thing is that education has actually seen an expansion in payrolls over the last two years, while every other major sector of the economy (save health care) has seen huge job losses.

According to the Bureau of Labor Statistics, the number of people employed peaked in November 2007. Over the next two years, the private sector lost more than 7 million jobs. The construction industry lost more than 1.5 million jobs. Manufacturing lost more than 2 million jobs. The education-and-health-services category, however, added more than 900,000 jobs.

My previous post on education featured a video on school choice from the Cato Institute.

MUST-SEE: Cato Institute lady explains why competition is better than monopoly

Look at this fun video of a young lady from the libertarian Cato Institute explaining why choice and competition are better for consumers than monopolies! (H/T Hot Air)

She is especially interested in education and has lots of wonderful statistics.

It’s only 5 minutes long! This woman (Izzy Santa) is way better than Dan Mitchell! His videos were horrible compared to this one. I can actually understand what this lady is saying, and she makes fun gestures when she talks. She says “rotten”! The charts are really helpful, too. This is probably the best thing you could ever watch to learn a little bit about why I find economics so interesting. This is really something that all women should know a lot about to help them to be excellent wives and mothers.

You might want to send this post to your friends and family who may think that the best thing for education is to give public schools more money. It may be that the best way to get better public schools for less money is to make them compete with private, parochial and charter schools.

Moral hazard and the recession

Here’s another video on moral hazards, which explains how we got the recession:

This one is only 4 minutes long. I don’t think it’s quite as good as the first one. The lady who is presenting is from the Independent Women’s Forum. I love that think tank! They have Carrie Lukas on staff. She is the author of “The Politically Incorrect Guide to Women, Sex and Feminism”.

What are the consequences of insuring customers with pre-existing conditions?

Walter Williams

Investors Business Daily

What would happen if Obama succeeds in passing a law to force insurance companies to accept customers with pre-existing conditions at the same price as everyone else who doesn’t have pre-existing conditions?

Read this IBD editorial by George Mason University economist Walter Williams. (my second favorite economist)

Excerpt:

Sen. John Rockefeller, D-W.Va., chairman of the Senate Finance Subcommittee on Health Care, and Rep. Joe Courtney, D-Conn., a member of the House Education and Labor Committee, have introduced the Pre-existing Condition Patient Protection Act, which would eliminate pre-existing condition exclusions in all insurance markets. That’s an Obama administration priority.

I wonder whether President Obama and his congressional supporters would go a step further and protect not just patients, but everyone against pre-existing condition exclusions by insurance companies. Let’s look at the benefits of such a law.

A person might save quite a bit of money on fire insurance. He could wait until his home is ablaze and then walk into Nationwide and say, “Sell me a fire insurance policy so I can have my house repaired.” The Nationwide salesman says, “That’s lunacy!” But the person replies, “Congress says you cannot deny me insurance because of a pre-existing condition.”

This mandate against insurance company discrimination would not only apply to home insurance, but auto insurance and life insurance as well. Instead of a wife wasting money on costly life insurance premiums, she could spend that money on jewelry, cosmetics and massages and then wait until her husband kicked the bucket to buy life insurance on him.

Insurance companies don’t stay in business and prosper by being stupid. If Congress were to enact a law eliminating pre-existing condition exclusions, what might be expected?

Yeah, that’s why Walter Williams is awesome. And you must read the rest to see how it would apply to medical insurance. Everything sounds good to those who do not ask the most important question in economics: “and then what happens?” And that question cannot be answered with “then I feel good about myself and people like me because I care about the poor”. That question needs to be asked for the forgotten man. The nameless man who is hog-tied into supplying the wealth that gets redistributed by demagogues desperately seeking adulation from the covetous masses.

The problem is that people don’t understand how insurance works. If you have to pay guaranteed claims from people with pre-existing conditions, then the premiums of all those people who don’t have pre-existing conditions will be increased to pay for those claims. Think. Beyond. Stage. One.

The Cato Institute

Consider this podcast from the libertarian Cato Institute, which explains a little more from the point of view of the medical insurance company.

The MP3 file is here.

Here a summary of what happens after stage one, to the forgotten man. Medical care costs money to produce. Forcing medical insurance companies to sell care for a pre-existing condition far below the actual cost of providing it will force insurers to drop coverage for those pre-existing conditions. (Or they may drop the doctors who treat those conditions from their network). That is worse for the people with pre-existing conditions. And this is how economic ignorance hurts the very people that the secular leftist do-gooders are trying to help.

Believe me when I tell you that this happens all the time with leftist economic policies. It’s the law of unintended consequences. They think they are helping their preferred victims, they feel better about themselves, but they actually hurt the very people they are trying to help. And by “help” I mean they steal someone else’s money/product/liberty and transfer it to their preferred victims in order to buy votes.

National Review

Now, take a look at this article that ECM sent me from National Review, which talks about Obama’s promise that you will be able to keep the medical coverage you have. Is Obama telling the truth? Can pigs really fly just by sheer belief and pixie dust?

Excerpt:

Obamacare would forbid insurers from basing rates on the individual health of their customers in any community. It also would force issuers to cover people who refuse to buy insurance until they get sick. These and Obamacare’s other complexities and contradictions would make insurance pricier, as would a $149.1 billion, 40 percent excise tax on high-value “Cadillac plans.” Thus, some employers would save money by paying fines after de-insuring employees. Workers who cherish their health plans then would find themselves dumped into the government-run Health Insurance Exchange.

“Some smaller employers would be inclined to terminate their existing coverage,” explained a December 10 memorandum by Medicare’s chief actuary, Richard S. Foster. He added: “The per-worker penalties assessed on non-participating employers are very low compared to prevailing health insurance costs. As a result, the penalties would not be a significant deterrent to dropping or foregoing coverage. We estimate such actions would collectively reduce the number of people with employer-sponsored health coverage by about 17 million.”

Even more ominously, Obamacare would require employers to provide federally approved coverage. Obama considers “meaningful” plans those at least as generous as the Federal Employees Health Benefits Program.

“Obama’s definition of ‘meaningful’ coverage could eliminate the health plans that now cover as many as half of the 159 million Americans with employer-sponsored insurance, plus more than half of the roughly 18 million Americans in the individual market,” says Cato Institute policy analyst Michael Cannon. “This could compel close to 90 million Americans to switch to more comprehensive health plans with higher premiums, whether they value the added coverage or not.”

It’s not just elective abortions that we’re going to be paying for whether we want them or not. In some countries with socialized health care you can pay for breast enlargements (UK), sex changes (Canada), in vitro fertilization (Canada), etc. And these elective surgeries take up money from the other vital services. Obama can make it such that every plan has to offer those coverages.

So, those who don’t use such elective services end up encouraging them, even if they have moral objections to those services. When the government subsidizes something, more people choose it. Won’t Planned Parenthood be pleased with all that new revenue? I’m sure they’ll think of something to do with all that money. Maybe a nice political donation?

Cato Institute asks whether Sarah Palin was right on death panels

Story here at the libertarian Cato Institute. (H/T Caffeinated Thoughts health care round-up)

Excerpt:

What Palin wrote about death panels clearly had nothing to do with counseling or with any other specifics in seminal House bill. What she wrote was: “Government health care will not reduce the cost; it will simply refuse to pay the cost. And who will suffer the most when they ration care? The sick, the elderly, and the disabled, of course.”

How could anyone believe Palin’s sensible comment about rationing was, in reality, a senseless fear of counseling? To say so was no mistake; it was an oft-repeated big lie.

Rather than even mentioning the House bill, Palin linked to an interesting speech by “Rep. Michele Bachmann [which] highlighted the Orwellian thinking of the president’s health care advisor, Dr. Ezekiel Emanuel, the brother of the White House chief of staff.”

[…]Pending health care bills would make such government-mandated scarcity of health care much worse.  There would be massive shifting of money away from Medicare toward Medicaid.  But the extra Medicaid money would be spread around more thinly.  States would cut benefits to the poor in order to accommodate millions of new, less-poor people lured into Medicaid, at least half of whom (7 or 8  million by my estimate) currently have employer-provided health insurance.

The Senate health bill supposedly intends to slash Medicare payment rates for physicians by 21% next year and more in future years, with permanent reductions in payments to other medical services too.  It would also establish an Independent Payment Advisory Board which would be empowered to make deeper cuts which Congress could reject only with considerable difficulty.   If that’s not quite a “death panel” it would surely not be pro-life in its impact.

The Congressional Budget Office says, “It is unclear whether such a reduction in the growth rate could be achieved, and if so, whether it would . . .  reduce access to care or diminish the quality of care.”

Actually, it’s clear enough that the proposed Medicare cuts won’t be achieved, but that efforts in that direction will nonetheless reduce access to care and diminish its quality.  The government can’t boost demand and cut prices without creating excess demand.  And that, in turn, means rationing by longer waiting lines and by panels (rationing boards) making life-or death decisions for other people.

The Cato Institute says that Sarah Palin is right, and I agree. She is the one who understands the economics of supply and demand – her critics are ignorant of the facts.