What is seen and what is unseen.
Consumers in Portland, Oregon, don’t have to be worried about some business ripping them off, they need to worry about how their elected officals are ready to rip them off. Take a look at this article. Special discounts with Groupon are being trumped with special favors (rent seeking) in the Pacific Northwest.
-MC
I am not going to comment on this article by Hope Yen with the Associated Press. Don’t get too depressed.
-MC
In this April 7th post, I pointed out that school boards like to have tax increases in special elections, where there is not much else on the ballot, so that the beneficiaries of those tax dollars, mostly school employees, will show up to vote while those who are likely to oppose the tax may not have sufficient incentive to either know about the election or to go out of their way to vote.
This past weekend, the St. Charles school tax election was held. Of course, we received special reminders using the school’s tax-paid email and phone system. In that election, while the bond proposal passed by about 2500 votes, only about 13% of the registered voters bothered to vote, as you can see in the statistics from the Louisiana Secretary of State’s website. In a general election, such as the November Presidential race, the tourout would be about 5 or 6 times that level.
In Lafourche Parish, we had a similar school bond and tax referenda on the ballot. The school tax item, a 2 mill property tax increase, passed by just 201 votes with only 6.7% of the registered voters turning out. Think about how many of those 1983 voters who voted for the tax were school employees voting to transfer funds from the house values of others to their workplace. I bet Lafourche Parish School Board also used tax-paid communication systems to remind their employees to vote.
The problem is that the school boards get to place their tax increases on special ballots, when nothing much else is on the ballot, increasing the chance that their proposal passes.
What is wrong with that, you may ask? Imagine a school that gets to choose their homefield for games they play, so that it is easier to get their supporters into the stands and harder for the oppositions’ supporters to get there. Choosing a time to your advantage is really just like choosing the place.
When the fact that an election is being held is hardly publicized and then held on days when people only have one low-interest item to vote for, the opposition hardly has a fair chance against an a public body that has a tax-payer funded advantage in getting out the vote.
-MC
Today, President Obama offered up a legislative approach to dealing with high oil prices that he blames on speculators. Here is a story from NECN.com (New England Cable News) on Obama’s suggested approach. Ed Rogers at the Washington Post has this comment on Obama’s “let’s do something, anything” about high oil prices by handcuffing speculators, calling Obama’s action “smart.” O’Reilly at Fox News even seems to be supporting Obama’s action against oil speculators, a good indicator that Obama is probably wrong.
Looking back through my archives here at Bastiat’s Bastions, I ran across my take on then Senator Obama’s suggestion that specualtion in the oil market was the cause for high oil prices the summer of 2008. What was the case in 2008 seems to still be the case, and Obama’s opposition to speculators in the oil market still seems to point the finger in the wrong direction. Speculators, if allowed to freely make trades in the oil market, help preserve oil for future generations. Speculators save oil now for future generations, making it hard for us to run out of oil.
Read the NECN article and my 2008 post on high prices for oil, speculators and Iran threatening war in the Middle East. The problem of high oil prices lies more with Tehran than with Wall Street speculators. Then Senator Obama believed could be dealt with using diplomacy. After almost 4 years of diplomacy, we seem to be no closer now to getting the Iranians to give up their nuclear ambitions than we were in the previous administration.
Comment, but read the linked articles first, especially my previous post.
-MC
Here is another interesting article, Measuring Prosperity: Maryland’s Genuine Progress Indicator by Sean McGuire, Stephen Posner, and Hans Haake, from the same issue of Solutions Journal. This is about how Maryland has implemented a measure called the General Prosperity Index as a step away from the commonly used Gross Domestic Product (GDP) or Gross State Product measures of economic wellbeing. Of course, I should add that economists have long argued that GDP is not a very good mearsure of economic well being.
Last year, I posted “Water, water everywhere, nor any drop to drink,” borrowing the famous line from The Rime of the Ancient Mariner. What I wrote about there was how residents of the southwestern Louisiana town of Sulphur had little incentive to economize on their use of water because they paid a flat fee for water use instead of paying according to use, giving them an incentive to waste their water. Paying according to demand creates a situation where water goes to the most valuable uses.
In class, we had an auction for pretend books. We saw how markets work to clear, to avoid shortages and surpluses, using price as a change or adaptation mechanism. Read this article by David Zetland in the on-line Solutions Journal on how auctions and the pricing mechanism might be used to better adapt to the increasing scarcity of water, as droughts become increasingly common.
Think about the problem that Phoenix faces as more and more people move to deserts. While growing pecans, a nut crop that requires heavy irrigation in the desert gets heavily subsidized through U.S. agricultural policy, water to sustain a large human population in the desert becomes increasingly scarce. An auction where various users pay according to their demands would result in a more rational approach to water use.
-MC
It seems that the famous quote attributed to Mark Twain, “The only two certainties in life are death and taxes,” should actually be attributed to Ben Franklin.
Nicole Ostrow, in her Bloomberg.com article, “Death, Taxes Collide as Fatal Crashes Mount on Filing Day,” reports on a study by Donald Redelmeier and Christopher Yarnell, appearing in the Journal of the American Medical Association where they find evidence of a strong connection between death and taxes. What they find is that there are about 6% more deadly crashes on tax deadlines than one week before and one week after on that same day of the week. They attribute this to increased stress from filing taxes.
Not be disappointed in Twain for failing to produce quotable quotes on about every subject, Twain did leave us with this one about taxes and the taxman: “The only difference between a tax man and a taxidermist is that the taxidermist leaves the skin.”
-MC
In this article from Kevin McGill with the Houma Courier, “Jindal voucher bill tweaked to add accountability,” we see that before the legislature finally passed the new voucher program for low-income students who have previously been forced to attend poorly performing public school. This new voucher program will allow these students to escape these schools and opens up what was a state-run monopoly to the competitive pressures of the market.
What we see in the article above is that now the state has added strings to the voucher program for “accountability.” This “accountability” requirement will come in the form of testing of the voucher recipients, using the same required tests that are used in public schools.
This is really unnecessary. Accountability is already built into a voucher program, a much stronger accountability than previously held in public school funding: Parents can now move their students and the funds that go with them, from poor schools. Who has a better incentive to see that students get a good education than their parents? Does anyone really think that the same bureaucrats in Baton Rouge’s BESE board or the local school boards, who have allowed local schools to fail, to give them inadequate schooling, will now, with a few test scores, be able to hold competitive schools to some accountability standard that their own schools have failed to meet?
When private schools fail to attract enough students in a competitive environment to remain viable, they close, unless propped up by government’s coercive powers to tax and spend. Up to now, poorly performing public schools did have the coercive power of government to remain open, and were not forced to provide a competitive education. It is exactly financial viability when customers are able to go elsewhere that provides the real accountability of a voucher system.
-MC
On April 21st, there will be various local tax elections. This is especially the time when school boards, parish sheriffs and parish governments hold elections to raise, extend or rededicate taxes. One question that should be asked is “why would a school board or other taxing authority hold a special election, when it has to pay the full cost of holding the election, when we have a national election that it could just piggyback on?”
Well, if the school board held its election during a nationwide or statewide election, when there is a lot of motivation to vote (for instance, people feel very strongly for and against President Obama, and both of these sides will be out to vote in full force). But what about a school tax election? Especially one to be held on a Saturday (April 21st , the Saturday after Spring Break). Were you even awarethat there was going to be an election then? For most voters, that election is “under the radar.” And that is exactly how the school boards want it.
These elections typically have turnout averaging somewhere around 15 0r 16 percent of voters. However, school boards are very good at rallying their workers, who stand to benefit from the proposals by quite a bit. Below is a copy of an email sent out to all employees of St. Charles Parish Schools urging them and their families to vote to rededicate taxes to pay for bonds to replace temporary classrooms with permanent structures.
Good Morning,
This is Superintendent Rodney Lafon.
As you know the school system has a very important Bond Issue on the April 21st ballot. The purpose of the Bond Issue is to reduce the number of current portables from 74 to 10 and replace them with permanent structures without increasing the current tax rate.
Early voting for the election starts today and will run through April 14th. You can cast your vote at either the Registrar of Voters Office in the Courthouse or at the Arterbury Building in New Sarpy. These locations will be open from 8:30am-6:00pm each day with the exception of Easter Sunday.
If you have or know of college age children who are in for the Easter break, please encourage them to vote before heading back to school.
For more information please visit the district’s website at www.stcharles.k12.la.us/april21bondissue.
What happens with the low turnout but high turnout by those who benefit from the proposal is that the proposal is much more likely to pass. With concentrated benefits from the proposal, but costs spread out widely among the voters and taxpayers, the chance of passage is increased.
It all starts with the rational decisions of the individual voter, a comparison of the expected benefits of voting versus the sure costs of voting. To vote requires the conscious act of going to the voting place and voting. There is a cost of doing this, going out of your normal path, albeit a rather small one. The expected benefits of voting involve a combination of the probability of changing the outcome with the payoff of their favored outcome winning instead of losing. When the costs of the taxes are spread out amongst a large group, the costs to any one voter/taxpayer are not so high, and so the benefits of voting for these are quite low. If the taxes from the many are concentrated on but a few, the expected benefits per person are quite high. The net beneficiaries vote, while the net taxpayers don’t bother to vote.
While not a “special election” think of the recent election of considerably higher fees all concentrated on various student organizations at the university. Those organizations that stood to benefit surely had all of their members out voting, while the very many students who would have benefited more by the failure of the fees tended not to show up.
Here is what the Nicholls Worth had to say: “In fact, we have information that certain organization members involved with the 4 percent referendum said that the reason they objected to our article and why the referendum was not campaigned about was because they wanted it to fly under the radar. They wanted the majority of the students who voted on it to be members of the involved organizations so that it would pass.” The Nicholls Worth also reported that its writers and workers became targets of members of these various student organizations. Hmm. We will see that this is a repeated theme.
And what was the overall turnout like? The Nicholls Worth reports that only 823 out of 6100 students turned out to vote. That is only 13.5% of the students voting. That means that only 412 students needed to vote for the referendum to get it to pass. And while I did not see the wording of the referendum, I bet that it was a bundled, up/down vote on all of the fees together, rather than separate votes on each fee request by each organization, so that all of the student organizations that stood to gain became allies on the vote.
Gary Pecquet of Central Michigan, Steven Yen of the University of Tennessee and I wrote about the manipulation of the election timing back in 1996 in our paper, “Special Versus General Elections and Composition of the Voters: Evidence from Louisiana School Tax Elections” in Public Finance Review. Almost 16 years ago I wrote this column for the Houma Courier, and based on my analysis, a writer for the Daily Comet wrote a column against a tax increase proposed by the Lafourche Parish Sheriff. One of sheriff’s deputies met up with the writer in a Thibodaux bar and punched him out. Who says academics don’t have an effect?
-MC
A little over a week ago, I posted this on the prospects of a voucher system to finance K-12 schools in Louisiana, much the way that Tops money goes where college students choose to go to school, voucher funds follow the student to the school that the student and her parents choose. In the post, I noted that I wrote about vouchers for Louisiana schools over ten years ago. Milton Friedman, one of the top economists in the 20th century, promoted the idea of vouchers in his writings in the 1950s and on till the 1980s.
Well, the news from yesterday is that both houses of the Louisiana Legislature have passed vouchers for the poor students in failing schools, and Governor Jindhal is sure to sign his own initiative.
-MC