Coming Soon to California: Teachers’ Right to Work?

indexBig changes could be in the works for the California Teachers Association (CTA), the state affiliate of the country’s largest teachers union, the National Education Association (NEA).

The CTA claims it has 325,000 members. How many of them are voluntary dues-paying members is anybody’s guess. In the past the CTA has demolished “paycheck protection” initiatives in California—most recently Proposition 32 in 2012—through its sheer spending power, paid for in large part by compulsory dues from members.

That strategy doesn’t work so well in the courtroom, though.

The Harris V. Quinn Supreme Court ruling against compulsory dues collections from Illinois health care workers this summer doesn’t bode well for the CTA. Currently, it is also embroiled in its own legal challenge from the Center for Individual Rights (CIR), which is representing 10 California teachers and the Christian Educators Association International who are fighting against “agency shop” laws that require union membership as a condition of employment.

Should CIR prevail in the Ninth Circuit Court case Friedrichs v. CTA the practice of compulsory union dues imposed on any government employee could come to a screeching halt in the near future.

Larry Sand, a retired teacher and president of the California Teachers Empowerment Network, explains in his recent City Journal article that the CTA is prepping for the likely death of “fair share” and life ever after in a paycheck-protection world:

The worst union in America is contemplating its worst nightmare—a time when state law no longer compels California’s teachers to pay it for the privilege of working at a public school. According to a 23-page PowerPoint presentation unearthed by union watchdog Mike Antonucci, California Teachers Association officials are taking seriously the idea that a raft of pending litigation could put an end to mandatory union dues in the Golden State, and they’re exhorting local union leaders to rise to the challenge. The presentation’s title is fitting: “Not if, but when: Living in a world without Fair Share.”

“Fair share” in this context refers to the union’s current legal right to collect dues from every public school teacher in the state, whether they join the union or don’t. ...

The CTA is evidently resigned to the inevitability of losing the state’s protection. The last part of the union’s PowerPoint outlines an action plan suggesting different techniques to attract new members.

“Right-to-work” fever is catching on, and Sand notes that leaders of other unions are also resigning themselves to life in a free world and consoling themselves with the fact that two of the country’s most successful membership organizations, the AARP and the NRA, don’t rely on compulsory dues.

Sand also cites recent national public opinion polls that found that 83 percent of Americans believe workers should be free to choose whether or not to join a union, and that 29 percent of union members would leave their unions if they could. He rightly concludes:

Perhaps unions are on the verge of conforming to what Alexis de Tocqueville called the characteristic institutions of American life—voluntary associations. It’s about time.

It sure is, and the implications for California students are also immense.

It remains to be seen how many teachers, given the chance, would actually choose to stay or become dues-paying CTA members. Until that’s all sorted out, certainly in the short-term the CTA’s political power in Sacramento would be a glimmer of what it has been. That power void would be a tremendous opportunity to advance parental choice in education throughout California—including ending the practice of assigned schools based on parents’ income and address.

Even more, California policymakers could be advancing one of the most promising K-12 reforms already operating in Arizona and Florida: educational savings accounts (ESAs). Under these programs, students whose parents don’t prefer a public school simply inform their state education agency, and 90 percent of what the state would have spent to educate them in public schools is deposited into that child’s ESA instead. With those funds parents can pay for private school tuition, tutoring, online courses, and other education-related expenses. What’s more, any unused funds remain in ESAs for future education expenses such as college.

Arizona teachers and other unions sued to end the ESA program there—and lost. Florida’s ESA is under a similar legal challenge now.

In an ideal world, taxpayer dollars wouldn’t flow through Sacramento or Washington, D.C., in the first place. ESAs are a step in the right direction because they put parents—not politicians and their special-interest allies—back in charge of education dollars that are supposed to be for their children’s education.

A CTA that’s brought back down to size—based on voluntary membership—will have enough troubles of its own and would have a tough time fighting parental choice, teacher tenure, and voluntary membership in the courts.

The time couldn’t be better for California students, parents, teachers, and taxpayers interested in the restoration of constitutional and sensible education policy.

Obamacare Will Devour Your Pay Raise

Mercer’s latest National Survey of Employer Sponsored Health Plans finds that the cost of employer-based benefits will jump significantly in 2015. Employee-benefits writer Stephen Miller, CEBS, reports:

Employers in the U.S. are predicting that health benefit cost per employee will rise by 3.9 percent on average in 2015, preliminary results from a new survey by Mercer reveal. Cost growth slowed to 2.1 percent in 2013, a 15-year low, but appears to be edging back up. Moreover, a higher percentage of employees signing up for coverage through the worksite could be a wildcard driving costs higher.

The projected increase for 2015 reflects actions employers plan to take to manage cost. If they make no changes to their plans for 2015, they predict that costs will rise by 5.9 percent on average. However, only 32 percent of respondents are simply renewing their existing plans without making changes.

One important change that employers are making is moving towards consumer-driven health plans (CDHPs), coupled with Health Savings Accounts or Health Reimbursement Arrangements. Currently, 6 percent of large employers offer only CDHPs. Within three years, 20 percent of employers anticipate that they will have fully replaced their traditional health insurance with CDHPs.

Some believe that Obamacare is driving this switch. To be sure, we should be grateful that CDHPs are surviving Obamacare, but they have been growing in the employer-based market for years. The real effect of Obamacare is shown in Figure 1: It is eliminating pay raises. Recall that we entered the Great Recession in December 2007, but even then we got pay raises (according to Figure 1). That is ending. All of our increased compensation will be in the form of health benefits, which will not be better, but merely Obamacare-compliant. Isn’t it time American workers took home more of their compensation as wages, instead of paying it to health insurers?


Common Core Called the “Obamacare of Education”

ObamaClassroomUS Senator Mike Lee (R-UT) makes a compelling case for abolishing Common Core in a recent letter. As Newsmax reports:

“As a U.S. Senator, I’ve seen the federal government make a mess of everything it touches,” the Utah Republican wrote in the email sent out Monday morning. “And if they’re allowed to stay, Common Core standards will be the ObamaCare of education,” he wrote. “Common Core is the D.C. takeover of our school system. It will dumb down standards and cheapen the education our children receive.”

All kids in America “deserve the best education in the world. The only way we can make that happen is to repeal Common Core across America,” Lee wrote.

“When it comes to education, the future of our country is on the line,” the senator said in the email. “The next generation of Americans doesn’t need to be force-fed big government propaganda in the classroom.

Sen. Lee is right. Common Core is not a set of rigorous standards. It’s a set of political agendas masquerading as academics “voluntarily” adopted by the states (see here, here, and here).

Competition, not Common Core, is what American schools and students need.

Today, more than 6 million schoolchildren are benefiting from education options their parents — not politicians — think are best. These options include 51 private parental choice programs in 25 states, online education providers, homeschooling, and public charter schools.

Parental choice programs educate students to high standards, without limiting education options. And, unlike accountability initiatives involving rigid federal mandates, all chosen education providers face immediate rewards for success or consequences for failure because parents are empowered to enroll or transfer their children as they see fit.

Ultimately, Common Core rests on the faulty premise that a single, centralized entity knows what’s best for all 55 million students nationwide. Raising the education bar starts with putting the real experts in charge: students’ parents.

Gaming Gainful Employment

collegegraduatesIt looks like the U.S. Department of Education is fudging the numbers...again.

The Obama administration is taking another run at imposing onerous gainful-employment regulations on private, for-profit career colleges.

Under the new proposed regulations unveiled earlier this year, for students to qualify for federal aid for-profit career colleges must prove the estimated annual loan payments of graduates do not exceed 20 percent of their discretionary earnings, or 8 percent of their total earnings, and the default rate for former students does not exceed 30 percent.

Education Secretary Arne Duncan insisted that 72 percent of career college graduates earn less than high school dropouts. That figure was soundly discredited, but it seems the department hasn’t learned its lesson about fudging the numbers. As’s Bre Payton reports:

The U.S. Department of Education doesn’t know for sure how many comments the public submitted to it nearly four months ago about the controversial “gainful employment” rule.

Experts say the “witch-hunt” like rule ought to be able to stand up to feedback from those affected by it, but while the public comment period closed May 27, the department still hasn’t “counted up an exact figure” of comments received.

The department is instead “spending our time having conversations and crafting a rule that will best serve students,” a spokesman from the department said on background in an email to ...

The department spokesman confirmed staff received “less than 100,000 comments this go-around.”

Advocates worry the department’s opaque treatment of these comments is not only a transparency issue, but a disservice to the rule-making process.

If gainful-employment regulations go through, they’ll also inflict more hardships and less opportunities for students and taxpayers.

Jameis Winston . . . Again?

jameisIf you’re even a little bit of a sports fan, you probably know that Florida State University’s quarterback, Jameis Winston, has been suspended from the first half of the FSU-Clemson game for standing on a table in the student union and shouting out obscenities. As good as he’s been on the field, Jameis has been in the news a lot over the past year, receiving negative publicity for his off-the-field activities.

I’m on the faculty at Florida State, and when I heard the news, I questioned whether his offensive behavior really warranted that punishment. He offended some people (most of them, people who weren’t there at the time but just heard about what he did on the news), but he didn’t hurt anybody, and he apparently had no malicious intent. But, I thought, maybe because this isn’t the first time he’s done something questionable, the suspension is warranted as a warning in light of all he’s done before. (I’m not talking about a rape accusation, which is a matter for law enforcement.)

But now I’ve been told by a student who was there when the incident happened that Jameis was only one of about 15 individuals who were standing on tables and shouting the same obscene phrase. I’ve never seen this in any of the news stories about the event. I’m hearing this second-hand and taking the student’s word that Jameis was just one of more than a dozen engaging in the same acts. I wasn’t there . . . but neither were members of the news media who are now reporting the story.

If it is true that Jameis was just one of many, then I’m thinking his suspension is unfair. None of the others have even been mentioned, let alone punished. While at first it appears that there is some parallel here with the NFL sanctions for players who have behaved badly off-field, the parallel breaks down because the NFL is a private organization (albeit with monopoly powers protected by the government) whereas Florida State University is most definitely a government institution. Private organizations can make their own rules. Governments should follow rule of law.

If the student’s eye-witness account is accurate, Jameis was just trying to be one of the guys, although admittedly, one of the guys engaging in offensive and rude behavior. But he meant no harm, and rudeness is normally not a punishable offense. (Increasingly, offending people is.)

Should a government organization really be punishing people for behaving crudely in public? That, in itself, is questionable, but if it is the case that Jameis was just a part of a larger rude group with no malicious intent, and he’s the only one who was punished, that’s another issue.

If Florida State University were a private organization, I’d say that they can do what they want (even if I disagree). But as a government organization, FSU should be obligated to follow the rule of law and to treat everyone equally. After hearing a student’s account of the event (no media was present to witness it), I question whether FSU’s bad boy was treated fairly in this case.

The Giver’s Dystopia: Total Equality and No Humanity

tg-180x300Submitting to censorship is to enter the seductive world of The Giver: the world where there are no bad words and no bad deeds. But it is also the world where choice has been taken away and reality distorted. And that is the most dangerous world of all.” —Lois Lowry

Last month, I had the pleasure of reading The Giver and seeing its recent film adaptation. After hearing many of my friends rave about the book, I decided to read it myself (for some reason, I was never assigned this book during my grade school years). I was not disappointed. Despite being a children’s novel, The Giver deals with many mature themes and offers a deep, thought-provoking commentary on politics and society.

The Giver presents us with a world where war, poverty, crime, suffering, and bigotry have been completely eliminated. In this utopian Community, people strive to maintain “Sameness” where everyone and everything is equal and same. But the reader quickly perceives something is wrong with this supposedly perfect society. Memories of basic human emotions such love, hate, and empathy have been completely suppressed in the populace; and defining cultural features including art, music, literature, and even color, have also been completely erased. Both the best and the worst aspects of humanity are instead stored within the mind of the titular character, the Giver. As the Giver explains to the protagonist Jonas in the novel: “Our people made that choice, the choice to go to Sameness. Before my time, before the previous time, back and back and back. We relinquished color when we relinquished sunshine and did away with difference. We gained control of many things. But we had to let go of others.”

Despite taking liberties with the novel, the film adaptation made graceful use of black-and-white cinematography to showcase a colorless dystopian world and slowly transitioned to full color as Jonas gradually learns the truth about his society and its past. Most of all, the main theme of the inspiring individual struggling against the all-powerful State was not lost in the film. After Jonas was selected to be the new Receiver, he realized the vast social cost that had to be paid for his Community to achieve perfection and “Sameness.” READ MORE

Smarter Forest Management Could Yield Water for California’s Population Growth

30839009_MThere is mounting evidence that poor policies are creating California’s water troubles. California has a policy problem disguised as a water problem. The poor policies create massive misallocation of water and water waste throughout the state.

More evidence of this comes from Roger Bales, a hydrologist with the University of California, Merced, and Scott Stephens, a professor of fire science at the University of California, Berkeley. Professor Bales argues that the Sierra Nevada, which is the source of 60 percent of California’s water in a typical year, has twice the number of trees than 100 years ago. Deliberate government policies to limit timber harvesting and suppress naturally caused forest fires have produced overgrowth.

All of these additional trees over millions of acres consume snowpack runoff that in the past would have emptied into California’s streams, rivers, reservoirs, and canals for use throughout California.

The solutions are to allow more naturally caused low-intensity fires to burn and allow timber companies to harvest small trees, especially thirsty pines, to thin the forest. But government policy has generally prevented either solution, often because of opposition by environmental groups. Once again, good intentions have resulted in harmful unintended consequences, this time less water for people and more high-severity forest fires when fires occur.

Thinning the Sierra could provide up to one million acre-feet of water annually, according to Professor Bales—enough water for the yearly needs of two million California households. Incidentally, the San Francisco Bay Area is expected to add two million people by 2040.

A Very Weak Case for Hospital Mergers

One consequence of Obamacare is 18862233_Shich can reduce competition and increase prices. Writing in the Wall Street Journal, Dr. Kenneth L. Davis, MD, CEO and President of Mount Sinai Health System in New York City, puts forward a number of claims in favor of hospital consolidation. Each assertion is weak, making an unconvincing argument overall.

First, Dr. Davis asserts that the new goal of hospitalization is not to make any individual patient well, but rather to improve “population health management.” Dr. Davis’s theory of population health management leads him to conclude that “stand-alone hospitals have neither the number of patients to manage the actuarial risk of population management, nor the geographic coverage to serve a large population. Hence the reason for allowing strategic hospital mergers.”

Wait a minute: Actuarial risk is managed by insurers, not providers. When we talk about insuring buildings, we look to property insurers to take on actuarial risk, not construction companies. The latter have to manage engineering, budgetary, and other risks. Similarly, hospitals already have enough medical risks to manage, without expecting them to take on actuarial risk as well.


Perfecting Tyranny

tir_19_2_210When discussing the costs of foreign intervention, it’s typical for scholars, elected officials, and the general public to focus on the international consequences. As the U.S. prepares for new offenses in Iraq and Syria, for example, many have called into question issues of civilian casualties, the impact on these countries’ political and economic systems, and how these policies will impact international relations.

But foreign interventions do not only impact people “over there.” In the most recent issue of The Independent Review, my co-author Chris Coyne and I examine how foreign interventions undertaken by the U.S. government have long-term domestic consequences. In the article, “Perfecting Tyranny: Foreign Intervention as Experimentation in State Control,” we explain how foreign interventions work to increase the scope of government activities domestically, resulting in a reduction of citizens’ liberties and freedoms.

We argue that foreign interventions serve as a sort of “testing ground” for the U.S. government to experiment with new forms of social control. Domestically, the government faces constraints on what it may and may not do to U.S. citizens. When intervening abroad, however, many of these constraints are either weakened or altogether absent. Without these restrictions, the government is able to develop and hone new methods of social control. We identify the channels through which these new methods are imported back into the U.S. and show how these changes allow the government to become more effective at controlling not only foreign populations, but the domestic population as well.

Through our theory of the “boomerang effect,” we demonstrate how foreign interventions generate changes in technology and professional skills (what economists call “physical” and “human capital”) which lowers the cost of using social control technologies domestically. We illustrate how foreign intervention changes the structure of the larger government, as well as private and public industry. These changes allow for social control methods to be more easily implemented domestically.

We apply our framework to two cases—the origins of national surveillance (NSA) and the creation and rapid increase in the use of police paramilitary units (PPU) or SWAT teams in the U.S.

The idea that foreign interventions have real domestic consequences has important implications. It implies that a government, though technically abiding by domestic laws, may nonetheless erode the liberties and freedom of its own citizens through foreign intervention. It also indicates that it is important to examine the scope of government activities, in addition to the scale. With the notable exception of Robert Higgs’ work, most scholars tend to focus on issues of scale. This work indicates that issues of scope are just as important for those of us concerned about individual liberties.

Lastly, this work illustrates another cost of engaging in foreign intervention. I discussed in my last post how the actions of the U.S. government abroad have unintended costs. Before advocating intervening abroad, we should consider that such actions may not only cost us monetarily, but we may pay with our freedoms.

Governments often utilize rhetoric of freedom and liberty to justify foreign interventions. This supposed commitment to higher ideals is indicated by the names the U.S. government has assigned to recent foreign military interventions—Operation Enduring Freedom, Operation Iraqi Freedom, Operation Falcon Freedom, and so on. Despite this rhetoric, it may be the case that foreign interventions do more harm to freedom than good. Foreign interventions change the fundamental structure of the system intended to protect us from government suppression. These changes are likely to erode, not protect, our liberties.

Celebrating Human Action—Ludwig von Mises’s Masterpiece

B976September 14 marked the 65th anniversary of the publication of Ludwig von Mises’s masterpiece Human Action. I have been studying Mises’s classic text very carefully the past two years, as I’ve completed the manuscript for a forthcoming Independent Institute book, Cooperation and Enterprise: The Economics of Choice, that crystallizes the essence of Human Action for an undergraduate reader. Fresh off of this journey, I wanted to summarize two of the main themes in Human Action.

Let’s begin with the title itself, which I remember struck me as an odd choice for a book on economics. Yet Mises explains in the opening of his treatise that the narrow subject matter of technical economics is not a self-contained discipline. Instead, Mises argued that the subjectivist revolution ushered in by Carl Menger (as well as Léon Walras and William Stanley Jevons) required placing the study of market phenomena within the broader context of a study of purposeful human behavior, or what Mises simply called action. Here is how Mises explains this development in the social sciences:

[T]he transition from the classical theory of value to the subjective theory of value was much more than the substitution of a more satisfactory theory of market exchange for a less satisfactory one. The general theory of choice and preference goes far beyond the horizon which encompassed the scope of economic problems as circumscribed by the [classical] economists.... It is much more than merely a theory of the “economic side” of human endeavors.... It is the science of every kind of human action. Choosing determines all human decisions.... The modern theory of value widens the scientific horizon and enlarges the field of economic studies. Out of the political economy of the classical school emerges the general theory of human action, praxeology. [Human Action, p.3]

For the present post, I can’t do justice to Mises’s strategy outlined in the quotation above. Instead, let me summarize one of the arguments I made in defense of Mises’s methodology in my 2013 debate with David Friedman: Most economists would consider themselves very strong proponents of “free trade,” but how did they arrive at this conviction? Was it because they made falsifiable predictions about GDP after a trade deal was signed, then ran regressions after the fact to see if the observed outcome was close enough?

Of course not. Rather, people turn into “free traders” by thinking through the logical consequences of thought experiments. In this respect, Bastiat’s famous satire “Petition of the Candlemakers” is worth a thousand regressions. Notice that my remark doesn’t indicate that economics is really “ideological and not scientific.” Rather, my remark indicates that when it comes to economics, the truly scientific approach differs from what works in the hard natural sciences, like physics or chemistry. Those who criticize Mises’s views as being unscientific, dogmatic, or anti-empirical are clinging to a crude notion of how “science” must operate.

The other theme I want to highlight is the importance Mises placed on economic calculation. Other economists of his day recognized that the use of resources carried opportunity costs, and that decisionmakers—whether entrepreneurs in a market or central planners in a socialist commonwealth—had to reckon with these costs when forming production plans.

Yet Mises described the institutional prerequisites for accurate cost accounting: namely, private property in the means of production, and the use of money. (For this reason, I use the term monetary calculation rather than the shorter term calculation that Mises and his followers often employ.) The mental operations of double-entry bookkeeping are only a useful guide to action when the numbers emerge from a genuine market process. This insight is the starting point for Mises’s pioneering work on the problems with socialism, the function of entrepreneurship, and the driving force of money.

Now in its 65th year, Ludwig von Mises’s classic, Human Action, remains as relevant and insightful as ever. All serious students of economics should read this admittedly lengthy volume for a fuller appreciation of the market economy.