"There seems to be a high likelihood that future generations will have to bear the substantial burden of making up pension benefits for previous generations of state employees. While citizens of states that are particularly hard-hit by the pension crisis may be able to escape to other states, an acceleration of this demographic phenomenon would leave a dwindling taxpayer base behind in the states facing the largest liabilities. This would increase the likelihood of a federal taxpayer bailout in which taxpayers in all states would bear the burden of the states in default. The problem of state and local pension liabilities is therefore a problem for all U.S. taxpayers, not just those in the states with the largest deficits." -- Joshua Rauh
More here. Scroll all the way to the bottom to see your state's ranking. The lower your state's ranking, the better.
It's not pretty if you live in Illinois, Connecticut, Indiana, or New Jersey.
It's much better if you live in North Carolina, New York, or Nevada.
"And if an epitaph be my story, I'd have a short one ready for my own: I had a lover's quarrel with the world." -- Robert Frost
Tuesday, October 19, 2010
Monday, October 18, 2010
How to Help Poor People
The best thing anyone can do is make a poor person self-sufficient and/or independent.
Welfare and charity do not make a poor person self-sufficient because they regard the poor person as a passive recipient of benefits rather than someone with under-utilized skills.
A job allows a person to become self-sufficient.
To give someone a job, corporations and small businesses must grow and make higher profits so they can afford to expand.
For businesses to grow and make higher profits, they must sell more products.
Therefore, the goals of any fiscal policy ought to be 1) increase public demand for products by ensuring a fluid money supply; and 2) maintain the purchasing power of the currency.
The Federal Reserve's monetary policy seeks to promote "maximum" sustainable output and employment and to promote "stable" prices. More here.
Welfare and charity do not make a poor person self-sufficient because they regard the poor person as a passive recipient of benefits rather than someone with under-utilized skills.
A job allows a person to become self-sufficient.
To give someone a job, corporations and small businesses must grow and make higher profits so they can afford to expand.
For businesses to grow and make higher profits, they must sell more products.
Therefore, the goals of any fiscal policy ought to be 1) increase public demand for products by ensuring a fluid money supply; and 2) maintain the purchasing power of the currency.
The Federal Reserve's monetary policy seeks to promote "maximum" sustainable output and employment and to promote "stable" prices. More here.
Friday, October 15, 2010
Thought of the Day
California's public K-12 schools: billion dollar babysitting boondoggles?
Sounds like a harsh question until you realize we currently have no objective way of measuring teacher performance. Consider this paragraph--about another topic but also relevant here--from David Walker's book, Comeback America (hardcover, page 164):
Without any standards of measurement, all definitions of "success" and "failure" devolve to the political arena. If your party enacted the new housing stimulus program, then you can make a dozen claims to support its success. But your opponents, at the same time, can point out as many claims of its failure. We ordinary taxpayers who footed the bill can only hope something good came out of the exercise--but we can't tell either. This is simply unacceptable and must change.
Our schools have no real standards to measure the effectiveness of teachers. Unions resist testing and making teacher evaluations public. Meanwhile, kids move along within the system, and it's hard to tell whether they succeed based primarily on the school they attend or their parents' involvement.
Sounds like a harsh question until you realize we currently have no objective way of measuring teacher performance. Consider this paragraph--about another topic but also relevant here--from David Walker's book, Comeback America (hardcover, page 164):
Without any standards of measurement, all definitions of "success" and "failure" devolve to the political arena. If your party enacted the new housing stimulus program, then you can make a dozen claims to support its success. But your opponents, at the same time, can point out as many claims of its failure. We ordinary taxpayers who footed the bill can only hope something good came out of the exercise--but we can't tell either. This is simply unacceptable and must change.
Our schools have no real standards to measure the effectiveness of teachers. Unions resist testing and making teacher evaluations public. Meanwhile, kids move along within the system, and it's hard to tell whether they succeed based primarily on the school they attend or their parents' involvement.
Thursday, October 14, 2010
On California Education
Three must-read links on education:
Grand Theft Education [Warning: PDF] (Hat tip to Jon.)
Reason.com: "The two largest teachers unions, The American Federation of Teachers and the National Education Association, overwhelmingly supported Obama with their votes and their contributions. Some 95 percent of the groups' campaign contributions go to Democratic candidates and the NEA, spends more money on elections that Microsoft, ExxonMobil, Walmart, and the AFL-CIO combined. No wonder Obama's big talking point is that he wants to add 10,000 more teachers to public payrolls despite the fact that there are already more teachers per student than ever.
Reforming education may not be politically easy, but the solution is pretty simple: Give parents and students more ability to choose - and exit - schools. This works for every other sort of business and it works for higher education, too. There's no reason to think it wouldn't work for K-12 education."
Economist blog: "America's public-sector unions...have an extraordinary power to force the state to dance to their tune, squashing innovation, reducing productivity and undermining competitiveness."
"With poor prospects in the ultra-competitive private sector, government work is increasingly desirable for those with limited skills; at the opposite end of the spectrum, the wage compression imposed by unions and civil-service rules makes government employment less attractive to those whose abilities are in high demand..."
Bonus: more facts here.
Grand Theft Education [Warning: PDF] (Hat tip to Jon.)
Reason.com: "The two largest teachers unions, The American Federation of Teachers and the National Education Association, overwhelmingly supported Obama with their votes and their contributions. Some 95 percent of the groups' campaign contributions go to Democratic candidates and the NEA, spends more money on elections that Microsoft, ExxonMobil, Walmart, and the AFL-CIO combined. No wonder Obama's big talking point is that he wants to add 10,000 more teachers to public payrolls despite the fact that there are already more teachers per student than ever.
Reforming education may not be politically easy, but the solution is pretty simple: Give parents and students more ability to choose - and exit - schools. This works for every other sort of business and it works for higher education, too. There's no reason to think it wouldn't work for K-12 education."
Economist blog: "America's public-sector unions...have an extraordinary power to force the state to dance to their tune, squashing innovation, reducing productivity and undermining competitiveness."
"With poor prospects in the ultra-competitive private sector, government work is increasingly desirable for those with limited skills; at the opposite end of the spectrum, the wage compression imposed by unions and civil-service rules makes government employment less attractive to those whose abilities are in high demand..."
Bonus: more facts here.
Wednesday, October 13, 2010
Leon Panetta Speaks at SCU
Leon Panetta, Director of the CIA, spoke at Santa Clara University last week (October 8, 2010). He was entertaining and clearly proud of his Italian heritage. In one of his best moments of the night, he told a story about the necessity of fighting for your beliefs:
A priest and a rabbi want to learn more about each other's beliefs, so they attend a boxing match. One of the boxers goes to the corner and makes the sign of the cross. The rabbi sees this and asks the priest, “What does that mean?” The priest responds, “Not a damn thing, if he can’t fight.” (It’s much funnier when spoken.)
Overall, Panetta said all the right things. He is against “enhanced interrogation techniques” aka torture (he said the CIA uses the Army Field Manual on interrogations). He thinks the media is doing Americans a disservice through its soundbite-style reporting (and even took a jab at Fox news, saying that the media panders to the lowest common denominator because they don’t want to be “outfoxed.”) In any case, here are the highlights of Panetta's speech as I saw them:
In D.C., “gridlock is the order of the day.”
Panetta singled out Yemen, Somalia, Afghanistan, Iraq, and Pakistan as hotbeds of terrorism. He said that Pakistan had nuclear weapons and Al-Qaeda leaders.
He said India was an emerging power but will have to deal with its poverty problem [which may limit its ascendancy].
He said, “My job is to tell the truth,” whether they [the White House and Congress] like to hear it or not.
The CIA has four basic missions: counter-terrorism (CT); counter-proliferation; cyber-security; and minimizing the risk of surprise.
One interesting quote: “We are conducting a war within Pakistan.”
“Security and stability are our top priorities.”
On nuclear proliferation, “all we need is a nuclear arms race in the Middle East,” he said with an exasperated tone.
He singled out North Korea as an active proliferator that shares nuclear technology with other countries. He also mentioned Iran's nuclear program, but didn't provide much detail other than mentioning it as a potential catalyst for a nuclear arms race.
On cyber-security, Panetta singled out China and Russia as potential threats. He said the “next Pearl Harbor could be a cyberattack” that shuts down our power grid or financial system. He said we experience hundreds of thousands of cyberattacks each year.
Panetta also went on several tangents, mentioning the Mexican drug cartels, which have killed 15,000 people, and the rising power of Brazil and India.
He told us that “we do not have to choose between law and security,” but “at the same time, we cannot be free unless we are secure.”
Panetta said the CIA’s budget has “tripled” since 9/11, which was cause for concern. He said such growth and unchecked expenditures “frankly scared the hell out of” him. (Prior to becoming Director, Panetta spent years on the House Budget Committee trying to balance the federal budget.)
Panetta has reduced the CIA’s reliance on outside contractors (I believe he said the CIA has reduced its reliance on contractors by around "20%," but I couldn't quite make out the specific context, and I'm sure there are many different kinds of contractors, so the 20% number may not be very helpful to anyone).
Panetta has made knowledge of a foreign language a requirement to advance within the CIA. His goal is to “be diverse,” and he wants to increase the CIA’s overall diversity from 23% overall to 30%.
Panetta said the CIA’s basic goal is “convincing people to risk their lives to give us information–that is what it is all about.” If we can’t protect them [the assets], he said, no one will want to work with us (later, he criticized WikiLeaks because some of the documents released contained names).
Panetta also said the President of the United States signs off on all covert operations, and the CIA's decisions are also reviewed by the Attorney General as well as overseen by Congress [see Senate Select Committee on Intelligence and the House Permanent Select Committee on Intelligence]. He went out of his way to say that the CIA keeps the President and Congress apprised of all operations.
He said that over half of the CIA’s workforce was hired post-9/11.
During the short Q&A session, Panetta criticized the media, saying its quality has declined because of soundbites and increased competition (this is where he made the comment about the general media not wanting to be “outfoxed”).
Panetta said the CIA had no excuse for not having oversight over [outside] contractors. He also said that certain security details were outsourced because certain agencies don't have designated security personnel. (I think he mentioned protection for certain Afghan politicians and State Department personnel, but don't quote me on this.)
Panetta lamented the state of modern politics, indicating that the goal ought to be consensus, but now politicians care more about surviving in office. Panetta said we can “govern by leadership or [by] crisis,” and right now, we are governing by crisis.
As I left the speech, I realized I had listened to a series of bromides. For example, Panetta left out the CIA’s role in extraordinary renditions. While Panetta said we should not look backwards to the Bush administration’s mistakes, he also didn’t say anything about how the CIA sought to avoid similar debacles. My own personal experience regarding FOIA requests was markedly different with the CIA than it was with the FBI–even though both were providing me information pursuant to the exact same federal law.
At the end of the day, Mr. Panetta is just one individual, just like President Obama is just one individual. My feeling is that Americans keep looking for one person to change things, but our form of government is anti-royalty and therefore one person’s power–though vast–is still limited. We need to move away from a "single individual" mentality and try to elect people who are comfortable delegating power and who will create changes from the bottom up. If this decade is any indication, it appears that one person can make a difference on the negative side, but not so much on the positive side.
A priest and a rabbi want to learn more about each other's beliefs, so they attend a boxing match. One of the boxers goes to the corner and makes the sign of the cross. The rabbi sees this and asks the priest, “What does that mean?” The priest responds, “Not a damn thing, if he can’t fight.” (It’s much funnier when spoken.)
Overall, Panetta said all the right things. He is against “enhanced interrogation techniques” aka torture (he said the CIA uses the Army Field Manual on interrogations). He thinks the media is doing Americans a disservice through its soundbite-style reporting (and even took a jab at Fox news, saying that the media panders to the lowest common denominator because they don’t want to be “outfoxed.”) In any case, here are the highlights of Panetta's speech as I saw them:
In D.C., “gridlock is the order of the day.”
Panetta singled out Yemen, Somalia, Afghanistan, Iraq, and Pakistan as hotbeds of terrorism. He said that Pakistan had nuclear weapons and Al-Qaeda leaders.
He said India was an emerging power but will have to deal with its poverty problem [which may limit its ascendancy].
He said, “My job is to tell the truth,” whether they [the White House and Congress] like to hear it or not.
The CIA has four basic missions: counter-terrorism (CT); counter-proliferation; cyber-security; and minimizing the risk of surprise.
One interesting quote: “We are conducting a war within Pakistan.”
“Security and stability are our top priorities.”
On nuclear proliferation, “all we need is a nuclear arms race in the Middle East,” he said with an exasperated tone.
He singled out North Korea as an active proliferator that shares nuclear technology with other countries. He also mentioned Iran's nuclear program, but didn't provide much detail other than mentioning it as a potential catalyst for a nuclear arms race.
On cyber-security, Panetta singled out China and Russia as potential threats. He said the “next Pearl Harbor could be a cyberattack” that shuts down our power grid or financial system. He said we experience hundreds of thousands of cyberattacks each year.
Panetta also went on several tangents, mentioning the Mexican drug cartels, which have killed 15,000 people, and the rising power of Brazil and India.
He told us that “we do not have to choose between law and security,” but “at the same time, we cannot be free unless we are secure.”
Panetta said the CIA’s budget has “tripled” since 9/11, which was cause for concern. He said such growth and unchecked expenditures “frankly scared the hell out of” him. (Prior to becoming Director, Panetta spent years on the House Budget Committee trying to balance the federal budget.)
Panetta has reduced the CIA’s reliance on outside contractors (I believe he said the CIA has reduced its reliance on contractors by around "20%," but I couldn't quite make out the specific context, and I'm sure there are many different kinds of contractors, so the 20% number may not be very helpful to anyone).
Panetta has made knowledge of a foreign language a requirement to advance within the CIA. His goal is to “be diverse,” and he wants to increase the CIA’s overall diversity from 23% overall to 30%.
Panetta said the CIA’s basic goal is “convincing people to risk their lives to give us information–that is what it is all about.” If we can’t protect them [the assets], he said, no one will want to work with us (later, he criticized WikiLeaks because some of the documents released contained names).
Panetta also said the President of the United States signs off on all covert operations, and the CIA's decisions are also reviewed by the Attorney General as well as overseen by Congress [see Senate Select Committee on Intelligence and the House Permanent Select Committee on Intelligence]. He went out of his way to say that the CIA keeps the President and Congress apprised of all operations.
He said that over half of the CIA’s workforce was hired post-9/11.
During the short Q&A session, Panetta criticized the media, saying its quality has declined because of soundbites and increased competition (this is where he made the comment about the general media not wanting to be “outfoxed”).
Panetta said the CIA had no excuse for not having oversight over [outside] contractors. He also said that certain security details were outsourced because certain agencies don't have designated security personnel. (I think he mentioned protection for certain Afghan politicians and State Department personnel, but don't quote me on this.)
Panetta lamented the state of modern politics, indicating that the goal ought to be consensus, but now politicians care more about surviving in office. Panetta said we can “govern by leadership or [by] crisis,” and right now, we are governing by crisis.
As I left the speech, I realized I had listened to a series of bromides. For example, Panetta left out the CIA’s role in extraordinary renditions. While Panetta said we should not look backwards to the Bush administration’s mistakes, he also didn’t say anything about how the CIA sought to avoid similar debacles. My own personal experience regarding FOIA requests was markedly different with the CIA than it was with the FBI–even though both were providing me information pursuant to the exact same federal law.
At the end of the day, Mr. Panetta is just one individual, just like President Obama is just one individual. My feeling is that Americans keep looking for one person to change things, but our form of government is anti-royalty and therefore one person’s power–though vast–is still limited. We need to move away from a "single individual" mentality and try to elect people who are comfortable delegating power and who will create changes from the bottom up. If this decade is any indication, it appears that one person can make a difference on the negative side, but not so much on the positive side.
Tuesday, October 12, 2010
The DMV: How to Improve It?
I recently had a terrible experience with the DMV. I brought my cousin for his driving test, and the driving testers were rude and unsympathetic to my cousin's ESL situation. One tester had an accent so thick, I had no idea what he was saying. This unattractive, short, and fat male tester clearly reveled in the little power his job provided him. Meanwhile, the top manager told me she had only 2 driving testers for 40+ people that day. When I asked, "Why do you only have two people? Did a bunch of people call in sick?" the manager remarked, "That's not your business. I don't need to explain our procedures to you."
To be fair, the highest-ranking DMV local executive, the Administrative Director, treated us well, but even he managed to foul up--he cited a non-existent Vehicle Code section (VC 4008) when explaining why I had to follow a certain procedure.
Anyway, I was so frustrated with my experience at the DMV, I spent all day and night thinking about how we could improve the DMV's service. Regarding the driving testers, you can't measure performance based on pass rates or complaints for obvious reasons (e.g., all of the rejected applicants will complain, etc.), so you have to have some competition to establish objective benchmarks.
Here's what I came up with: if an applicant fails, he should be given an opportunity to go to a private, non-DMV tester. If he passes the non-DMV, private driving test and has no traffic infractions for one year, the DMV should assign its tester a point. After 25 points, the DMV should re-assign its employee with 10% lower pay. (I chose 25 points, but the appropriate number should reflect our intent to achieve a balance between fairness and competence--you don't want DMV testers being afraid to fail bad drivers.)
At the same time, if the private (non-DMV) tester passes someone, and the driver gets a moving violation (not a parking ticket or other minor infraction), then the private DMV provider should pay a fine into California's general fund. The amount of the fine should be adjusted for inflation and should be significant enough for the private testing agency to evaluate its own testers and testing process after 25 fines. (There must be a built-in incentive to discourage the private competitor from passing everyone or having lax standards.)
[Update: a friend says it's unfair to penalize the private corporation for at-fault accidents or moving violations because too many unpredictable, untestable factors are involved. I explained the private corporation must have some check against passing everyone. Moreover, if the private corporation gets fined enough times, it will fine-tune its testing process (I assume the corporation will have access to the general nature of the violations). Also, the goal is to provide incentives for improving the testing process and checks against exclusive government power--not to create a perfect system, which is impossible.]
Now that we've imposed checks on the DMV and its competitor, we also need a check on the driving applicants themselves. This issue is simple to resolve: if a driving applicant wants a non-DMV test after failing the DMV test, then s/he should pay a small, nonrefundable fee to the DMV. A small fee would discourage bad drivers from wasting people's time and would not prevent good drivers from opting for a second opinion.
The issue of improving government services is complex. It took me the entire day to come up with the idea of an objective secondary evaluation. (Once I thought about FMLA and the employer's option of sending the employee to another doctor for a second opinion, the solution became clear.) I've concluded you must have competition and/or the threat of wage/job loss to promote customer service and performance. Once you realize competition and incentives are linked to superior customer service and performance, ideas flow more easily (and one begins to see why government unions are terrible for everyone but themselves).
In any case, creating a fair system that encourages responsive government employees is certainly possible. It irks me when people say, "The government is different from private industry; therefore, you cannot apply similar standards to both." Really? What's the alternative? Terrible customer service and higher taxes for life?
Note: the major problem with the above scenario is the cost of setting up a competitor. Who is going to pay for the private competitor? If the drivers themselves pay, we have a conflict of interest. Perhaps the public would be willing to divert some of its existing taxes in the form of a grant to private competitors, which would be set up as non-profits.
To be fair, the highest-ranking DMV local executive, the Administrative Director, treated us well, but even he managed to foul up--he cited a non-existent Vehicle Code section (VC 4008) when explaining why I had to follow a certain procedure.
Anyway, I was so frustrated with my experience at the DMV, I spent all day and night thinking about how we could improve the DMV's service. Regarding the driving testers, you can't measure performance based on pass rates or complaints for obvious reasons (e.g., all of the rejected applicants will complain, etc.), so you have to have some competition to establish objective benchmarks.
Here's what I came up with: if an applicant fails, he should be given an opportunity to go to a private, non-DMV tester. If he passes the non-DMV, private driving test and has no traffic infractions for one year, the DMV should assign its tester a point. After 25 points, the DMV should re-assign its employee with 10% lower pay. (I chose 25 points, but the appropriate number should reflect our intent to achieve a balance between fairness and competence--you don't want DMV testers being afraid to fail bad drivers.)
At the same time, if the private (non-DMV) tester passes someone, and the driver gets a moving violation (not a parking ticket or other minor infraction), then the private DMV provider should pay a fine into California's general fund. The amount of the fine should be adjusted for inflation and should be significant enough for the private testing agency to evaluate its own testers and testing process after 25 fines. (There must be a built-in incentive to discourage the private competitor from passing everyone or having lax standards.)
[Update: a friend says it's unfair to penalize the private corporation for at-fault accidents or moving violations because too many unpredictable, untestable factors are involved. I explained the private corporation must have some check against passing everyone. Moreover, if the private corporation gets fined enough times, it will fine-tune its testing process (I assume the corporation will have access to the general nature of the violations). Also, the goal is to provide incentives for improving the testing process and checks against exclusive government power--not to create a perfect system, which is impossible.]
Now that we've imposed checks on the DMV and its competitor, we also need a check on the driving applicants themselves. This issue is simple to resolve: if a driving applicant wants a non-DMV test after failing the DMV test, then s/he should pay a small, nonrefundable fee to the DMV. A small fee would discourage bad drivers from wasting people's time and would not prevent good drivers from opting for a second opinion.
The issue of improving government services is complex. It took me the entire day to come up with the idea of an objective secondary evaluation. (Once I thought about FMLA and the employer's option of sending the employee to another doctor for a second opinion, the solution became clear.) I've concluded you must have competition and/or the threat of wage/job loss to promote customer service and performance. Once you realize competition and incentives are linked to superior customer service and performance, ideas flow more easily (and one begins to see why government unions are terrible for everyone but themselves).
In any case, creating a fair system that encourages responsive government employees is certainly possible. It irks me when people say, "The government is different from private industry; therefore, you cannot apply similar standards to both." Really? What's the alternative? Terrible customer service and higher taxes for life?
Note: the major problem with the above scenario is the cost of setting up a competitor. Who is going to pay for the private competitor? If the drivers themselves pay, we have a conflict of interest. Perhaps the public would be willing to divert some of its existing taxes in the form of a grant to private competitors, which would be set up as non-profits.
Monday, October 11, 2010
Frederick Douglass on Freedom
"If there is no struggle, there is no progress. Those who profess to favor freedom, and yet depreciate agitation, are men who want crops without plowing up the ground. They want rain without thunder and lightning. They want the ocean without the awful roar of its many waters. This struggle may be a moral one; or it may be a physical one; or it may be both moral and physical; but it must be a struggle.
Power concedes nothing without a demand. It never did and it never will. Find out just what any people will quietly submit to and you have found out the exact measure of injustice and wrong which will be imposed upon them, and these will continue till they are resisted with either words or blows, or with both. The limits of tyrants are prescribed by the endurance of those whom they oppress." -- Frederick Douglass
Power concedes nothing without a demand. It never did and it never will. Find out just what any people will quietly submit to and you have found out the exact measure of injustice and wrong which will be imposed upon them, and these will continue till they are resisted with either words or blows, or with both. The limits of tyrants are prescribed by the endurance of those whom they oppress." -- Frederick Douglass
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