Out of Control

"Normal Goods', according to economists, are those where demand increases with income and wealth. Inferior goods find that their share of income falls as wealth increases. In my most recent post to the Planetizen.com blog, I argue that transit is an inferior good. Guess what? Planners disagree. The post prompted a rather lifely discussion string.

A historic ruling has just come down from the Supreme Court in favor of the second ammendment. This is the first time in US history that the court has taken a definitive position on the second ammendment. Their 5-4 decision states that Americans have the right to own guns for self-defense and hunting. Washington, DC has always been one of the strictest laws when it comes to gun rights with a 32-year ban on handguns.
Check out Nick Gillespie's recent interview on reason.tv and along with Brian Doherty's coverage and articles here, here and even more here.

Check out Reason.tv host Drew Carey tonight on CNBC’s Conversations with Michael Eisner at 9 p.m. Eastern (re-airs at midnight Eastern). Drew talks about his work with Reason.tv, his breakthrough appearance on The Tonight Show Starring Johnny Carson, and his current gig as host of The Price Is Right.

CNBC has posted a preview video, with Drew talking about his first deal with Disney.

You can find all of Drew's Reason.tv videos here.

On the heels of what some are calling Coburn-Obama 2.0, Bob Barr has joined Senator Obama in signing the Oath of Presidential Transparency. The Oath is being promoted by a diverse transpartisan coalition led by Reason consisting of 36 different organizations nationwide. You can view the members of the coalition and its letter to the candidates here.

Coburn-Obama 2.0, formally known as S. 3077 - the "Strengthening Transparency and Accountability in Federal Spending Act" was introduced by Sens. Obama and Coburn on June 3rd. Coburn-Obama 1.0 mandated the creation of usaspending.gov, a free, easy to use, searchable database including all federal grant and contract funding information on payments over $25,000 (with exceptions on classified information and individuals’ federal assistance). 2.0 is calling for improved accountability of the data reported as well as better accessibility for the greater public.

By signing the Oath of Presidential Transparency, candidates ensure that if they are elected, there will be timely implementation of, and administrative commitment to, the letter and spirit of the Federal Funding Accountability and Transparency Act (Coburn-Obama 1.0). Bravo to those who have made the commitment so far!

You can find additional candidates' signed Oaths and other goodies here Reason Foundation website. Additional blog posts on transparency here.

As the transparency train continues to chug along, I hope to see Sen. McCain get on board by signing the Oath of Presidential Transparency in his pursuit of the presidency.

Lots of articles are being published about how rising gas prices are resulting in "fundamental" shifts in travel behavior and decisions on where to live. One of the more recent articles (an AP story) can be found here.

But consider this: The U.S. Bureau of the Census estimated that the average consumer household spends about 3.4% of its budget on gasoline and motor oil in 2005.

The average price of a gallon of unleaded regulor gasoline at the pump was $2.29 in 2005. That price increased to about $3.44 by April 2008 according to the US Department of Energy, an increase of 54%. Thus, by 2008, the average consumer household was spending $3,000 on gas & motor oil, or 5.1% (assuming household spending also has not changed).

This is hardly enough of a change to generate major shifts in consumer behavior, even though gas prices influence spending on the margin. The costs of moving would swamp any savings in travel for the vast majority of households, let alone the changes in the quality of life the move implies.

Former Bush advisor Karl Rove has an excellent article in the Wall Street Journal on the silly economic populism spouted by both presidential aspirants. Both McCain and Obama are chastizing Big Oil and US energy companies for not sinking even more money into risky and money losing alternative energy technologies.

Instead ask this: Why should we stop with oil companies? They make about 8.3 cents in gross profit per dollar of sales. Why doesn't Mr. Obama slap a windfall profits tax on sectors of the economy that have fatter margins? Electronics make 14.5 cents per dollar and computer equipment makers take in 13.7 cents per dollar, according to the Census Bureau. Microsoft's margin is 27.5 cents per dollar of sales. Call out Mr. Obama's Windfall Profits Police!

McCain is not spared by Mr. Rove either. He writes:

This past Thursday, Mr. McCain came close to advocating a form of industrial policy, saying, "I'm very angry, frankly, at the oil companies not only because of the obscene profits they've made, but their failure to invest in alternate energy."

But oil and gas companies report that they have invested heavily in alternative energy. Out of the $46 billion spent researching alternative energy in North America from 2000 to 2005, $12 billion came from oil and gas companies, making the industry one of the nation's largest backers of wind and solar power, biofuels, lithium-ion batteries and fuel-cell technology.

All this bodes terribly poorly for private enterprise after this November's election.

This just came in from our friends at FreedomWorks:

Apparently a buried clause in the Congressional housing bailout bill calls on the nation's payment systems to report the details of all electronic transactions to the federal government. The clause seems especially targeted at online transactions. The goal, naturally, seems to be more tax revenue, even though current law requires merchants to report income from all sales. Of course, a certain amount of tax dollars get away, but so do the cash proceeds of your average garage sale.

So in order to satiate its appetite for tax revenue, and its curiousity about what private citizens are doing with their money, the U.S. government wants America's credit card companies and small businesses to bear the cost of assembling a giant database of sales transactions complete with names, addresses, credit card numbers and social security numbers. That distant whirring you hear are the Russian mafia's PCs gearing up for a hack to end all hacks.

Here's a statement from FreedomWorks Chairman Dick Armey

"This is a provision with astonishing reach, and it was slipped into the bill just this week. Not only does it affect nearly every credit card transaction in America, such as Visa, MasterCard, Discover, and American Express, but the bill specifically targets payment systems like eBay's PayPal, Amazon, and Google Checkout that are used by many small online businesses. The privacy implications for America's small businesses are breathtaking."

"Privacy groups like the Center for Democracy and Technology and small business organizations like the NFIB sharply criticized this idea when it first appeared earlier this year. What is the federal government's purpose with this kind of detailed data? How will this database be secured, and who will have access? Many small proprietors use their Social Security number as their tax ID. How will their privacy be protected? What compliance costs will this impose on businesses? Why is Sen. Chris Dodd putting this provision in a housing bailout bill? The bill also includes the creation of a new national fingerprint registry for mortgage brokers.

"At a time when concerns about both identity theft and government spying are paramount, Congress wants to create a new honey pot of private data that includes Social Security numbers. This bill reduces privacy across America's payment processing systems and treats every American small business or eBay power seller like a criminal on parole by requiring an unprecedented level of reporting to the federal government. This outrageous idea is another reason to delay the housing bailout legislation so that Senators and the public at large have time to examine its full implications."

Everyone seems to be searching for someone to blame for the so-called "gas crisis". So, I'm going to look at some of the culprits in a series of posts over the next week. Let's start with the most obvious: those evil, greedy, short sighted corporations that can't seem to get their act together. Their transgressions are so great, Congress wants to levy a windfall profits tax on them in order to do the "right thing"--have the government invest in appropriate alternative technologies (e.g. ethanol or wind).

But, how short-sighted are the oil & gas companies? In truth, it's Congress that is short-sighted and opportunistic, not the oil companies. Oil companies have simply learned a few economic lessons--the hard way.

The oil industry has experienced more ups and downs over the last 30 years than the world's longest roller coaster (which, btw, is the Beast at Kings Island in Ohio). Let's take a look at the price of gas. Here's the price of unleaded regular gas at key benchmark dates according to the Energy Information Administration at the US Dept of Energy:

1976: $0.61
1980: $1.24
1985: $1.20
1990: $1.16
1995: $1.15
2000: $1.51
2005: $2.29
2008: $3.44 (April)

These are nominal dollars. Factoring in inflation, the real price of gasoline at the pump fell until the middle part of this decade. Note that the nominal value of gasoline also fell in the 1990s.

Throughout this period, the spot price of crude oil remained steady, ranged from $13 to $20 per barrel. The spot price didn't increase to over $20 per barrel consistently until after September 1999. Even during this period, the price dipped below $20 during late 2001 and early 2002. Crude oil prices didn't jump to more than $30 per barrel until after March 2004.

Why did prices tank? Because we were getting plenty of oil to meet our needs from the rest of the world--most notably Saudi Arabia and other Middle Eastern countires--and the BRIC countries (Brazil, Russia, India, and China) had not yet taken off.

This is hardly a robust economic environment for the gas companies. The idea that companies should be investing in new capacity is simply unsupportable based on history and the data.

We can see the industry's fortunes flag in domestic employment. I like to use Wyoming as a benchmark for the health of the domestic oil industry because this is a small state that depends on natural resources for a good chunk of its economy. Moreover, it reflects the change in the marginal value of extracting oil from more difficult sources. Here's Wyoming's record for employment in "oil & gas extraction" over the last few decades:

1975: 10,300
1981: 22,700 (peak)
1990: 8,900
2000: 9,400
2005: 3,800
2007: 4,300

Not surprisingly, employment tanked in the 1980s and 1990s, reflecting the declining fortunes (and prices) of the industry itself. Employment hasn't ticked up by much, but given the declines and uncertainties of the previous decades, it's not hard to figure out why. Only sustained increases in prices over several years would justify a substantial increase in capacity. Given that US oil companies control only 1.6% of the world's reserves and about 7% of world production, the real capacity to meet rising world demand is going to have to come from elsewhere.

Thus, blaming the domestic US oil industry for not investing in reserves simply ignores the uncertainty and economic reality of the global energy market. Taxing their profits now also ignores the hard times of previous decades where oil companies were struggling to make money as crude oil prices languished and, and time, seemed to be in a free fall. To argue that the oil companies should have foreseen the spike in crude oil prices we've experienced over the past few years simply belies the hard, cold experience of the past several decades.
Moreover, it's not at all clear that oil prices won't fall dramatically again, just as they did after the OPEC oil market interventions of the 1970s.

Personally, I doubt they will fall to those levels. Moreover, innovation in the energy sector may have finally brought the costs of using alternative technologies far enough to create a broad-based market that will make the energy sector even more competitive. Toyota, afterall, sold its one millionth Prius this year, and production is approaching (if not exceeding) mass market levels. Honda has also launched a zero emissions plug in 4-door sedan, the FCX Clarity. So, times they are a changing, and the trends don't bode well for domestic oil companies over the long run.

Wall Street Journal columnist Jason Fry today embarks on a meditation (subscription required) on the disappearance of phone directories—once omnipresent in American households. Part of the reason, of course, is the substitution of wireless for wireline as the phone service of choice. This trend skews heavily toward younger Americans, about 34.5 percent of adults aged 25-29 live in wireless-only households, Fry reports. Interestingly, these numbers come from a survey commissioned by the Center for Disease Control, not the FCC.

The migration to wireless has been matched by a marked lack of enthusiasm for traditional “White Pages” directories.

“Why not? Because in a number of important ways, the cellphone is more of a break with traditional telephone service than it is an evolution of it. And those differences will only become more apparent in the coming years.

The biggest reason wireless-only adults don’t need a directory is that they're reachable in other ways -- through their homepages, blogs, MySpace and Facebook outposts and of course through their email. Twenty years ago, the telephone was the only practical way of reaching someone -- and in that situation, a directory of telephone users was obviously crucial. Now, the phone is just one method in a range of communications options, and often it's not the best one. It seems like having a phone in our pocket would make it a more important device, but the rise of other ways of communicating have made that phone far less important.”

Okay, I'm getting a bit tired of the constant headlines on national newstands and on tv about the so-called gas crisis. There isn't a crisis. There is an imbalance between supply and demand, which is contributing to higher gas prices, but there is no way we can credibly claim that an increase of a $1 per gallon constitutes a crisis.

I ran a few back of the envelope numbers just to illustrate the point. Our family, like most in the US, has 2 vehicles--a minivan (2003 Dodge Caravan) for hauling lacrosse, soccer, and vollyball players, as well as assorted skiing & snowboarding gear, and a 4 door sedan (2001 Toyota Prius). One gets lousy gas mileage, averaging 18 mpg, and the other does pretty darn good, averaging 47 mpg. (You can figure out which of the vehicles is more fuel efficient, if not family efficient.) So, what has the "crisis" of gas prices going from $3 to $4 meant in real terms?

Let's assume that we put 15,000 miles on each vehicle, according to AAA estimates (even though we don't because one of us is a telecommuter and the other works part-time close to home). That means the Caravan burns through 833 gallons each year and the Prius burns through a miserly 319 gallons. At $3 per gallon, we would shell out $2,500 in gas for the van and just $957 for the Prius, for a total gas budget of $3,457 annually.

Now, gas goes up to $4 per gallon. Our van is now gobbling up $833 more a year in our hard earned cash. Our Prius is now eating up another $319. That's not really chump change for a family getting by on a nonprofit salary, but it doesn't put us in the poor house either. We might have to rethink a vacation or two to bring spending in line with income. (Guess what? Las Vegas is reporting an economic slow down.)

But that's not the really important point. The important and highly relevant point is that if we wouldn't have to give up any of our lifestyle or mobility if we simply switched out the van for the Prius. By getting rid of the van (or SUV or luxury car) and opting for a prius, our gas budget at $4 per gallon is just $2,554 per year (compared to $3,457 at $3 per gallon gas). In fact, even if gas prices are goosed to $5 per gallon, our two Prius family still would be shelling out less money than at $3 per gallon gas with the van and one Prius.

So, what's all the fuss? Two reasons: 1) People don't like to change their lifestyles, even when its a minor change, and 2) we're slow to adjust our expectations. For some reason, most of us weren't following oil futures markets and really didn't think $4 per gallon (or $5 per gallon) gas prices were really that close (or inevitable).

Of course, people are changing their behavior. Vehicle Miles Traveled (VMT) are down by 2.3 percent over the last year, and the SUV and truck marekts have tanked, threatening the profitability and long term viability of automotive giants like GM and Ford. As US consumers, we have both the technology and wealth necessary to make the adjustments we want to maintain our mobility and our lifestyle.

Dashed expectations don't constitute a crisis. They simply require adjustments. And that's the normal stuff of life.

Last week, a train on Washington, DC Metro's very busy Orange Line derailed in Northern Virginia. On Sunday, the Washington Post published a soberingly humorous article from one of the "survivors". In addition to its humour, the author provides some insight into the everyday social interactions of metro riders (ones I can verify from personal experience). For example:

Our first face-to-face contact with a Metro employee came when a nice man came through the door at the end of the car to check on us. "Everyone okay?" he asked sincerely. "Anyone blind, crippled or crazy?" I saw none of the first or second categories but had suspicions regarding the third, including the guy who BlackBerried his way onto this train [the author].

Soon we were informed that a "rescue train" would come for us. It would be five minutes, we were told at 3:20 p.m. By that time, bizarre behavior had broken out in our car: People were talking to each other. I checked the sign in the car to make sure this was not on Metro's list of verbotens, like eating, drinking and smiling.

It's well worth a read.

I grew up in the corn belt, along the Mississippi River. So, watching the reporting on the midwestern floods, I've been waiting for these stories to surface.

Over the next week, the flooding will move downriver, throwing more corn acreage into doubt. If you think commodity and gas prices are high now, wait until next week, when traders realize that a significant percentage of crop yields have been washed away.

We're all dependent on the price of corn now. Because of government folly. The first silliness was the sugar subsidy. Government action lifted the price of sugar in this country to at least double the world price. (Usually three times the world price.) As a result, food processors shifted to High Fructose Corn Syrup, consuming ever larger shares of the corn crop. (And, probably actually sparking the "obesity crisis".)

This distortion was compounded by ethanol mandates. Already, 30% of our corn harvest goes to make ethanol. Under current US law, this will likely increase. In the richest of all ironies, it turns out our rush to ethanol may actually exacerbate global warming.

Okay, by my count, that's at least five unintended consequences from our folly. (I wish this were satire.) We've gone all-in on corn. It was always a fragile bet. Much of it has just been swept away by the rising flood waters. Unfortunately, it seems things will have to get much worse before rational policy can sneak through.

More from reason on ethanol. See here for our take on the ridiculous sugar subsidies.

Addressing an issue I think we can all agree is long over-due, New York Congressman--and bachelor--Anthony Weiner has introduced legislation creating a special visa for super models. Under his proposal, 1,000 exceptionally attractive foreigners would be eligible to enter the country each year. (Okay, why are we limiting this category?)

Under the Rube Goldberg scheme that passes for our current immigration policy, super models have to compete with computer nerds for the coveted H1-B visas, forcing us to choose between the highly-skilled and highly-attractive. Some choices are simply beyond us.

hat tip: the always interesting Silicon Alley Insider

Should companies or countries that have contributed to global warming be required to compensate individuals directly impacted by climate change? Is global warming a threat to private property? The latest Reason Roundtable examines these questions from a couple of perspectives.

Reason Foundation's Shikha Dalmia says libertarians "cannot treat the earth's thermostat as an enemy of freedom. Indeed, regardless of whether climate change eventually turns out to be real or not, the libertarian goal ought to be to ensure the protection and advancement of freedom - and all its attendant institutions: free markets, limited government and property rights.

Jonathan Adler, professor of law at Case Western Reserve University School of Law, writes, "The whole point of protecting property rights is to ensure that property owners control exercise of their own rights. If a property owner wishes to accept another's waste in return for compensation, that should be her choice. If not, then her right to refuse ought to be protected. Individual property rights should not be put up for a community vote or sacrificed as part of some utilitarian calculus. Libertarians readily accept this principle when government planners violate property rights in the name of economic development (think of the Supreme Court's landmark eminent domain decision, Kelo v. New London). Yet they seem to abandon their commitment to property rights when it comes to global warming...Given the potential impact of climate change on property rights, we ought to at least start thinking about policy measures that compensate affected parties without themselves posing a risk to individual liberty."

Indur M. Goklany, author of the book The Improving State of the World: Why We're Living Longer, Healthier, More Comfortable Lives on a Cleaner Planet, writes, "Not only is there no proven harm that can be specifically attributed to the warming, but, more importantly, even if there were such harm, a proper respect for property rights might preclude compensation...If only some countries had contributed to global warming and benefited from causing it while others had neither contributed nor benefited from it, there might have been an argument for compensation from one to the other. But that's far from the case. That every country is both a contributor and a beneficiary not only makes it infinitely more difficult to calculate who owes whom how much, it also vitiates anyone's moral standing for compensation - a normative commitment to property rights notwithstanding."

Comment on the Reason Roundtable here.

Reason Roundtable: Climate Change and Property Rights
Previous Reason Roundtables
Reason magazine's Climate Change Archive

Tonight, more good school choice news for New Orleans.

In a major legislative success for Gov. Bobby Jindal, the Louisiana Senate voted 25-12 Wednesday for a bill that would let up to 1,500 low- to middle-income students in New Orleans attend private schools at taxpayer expense.

Already approved by the House, the school voucher bill by Rep. Austin Badon, D-New Orleans, needs one more routine vote in that body on Senate language changes before it goes to Jindal for his signature.

It looks like New Orleans is shaping up to fit Myron Lieberman's conception in Public Education: An Autopsy of a three-sector education industry, where the K-12 education market consists of public schools, nonprofit schools, and schools for profit.

From Education WeeK:

Nearly 60 percent of the city’s 33,000 public school children attend 40 charter schools now, the highest percentage in any district. The number is likely to rise as several more charters open in the fall. Paul G. Vallas, the superintendent of the state-run Recovery School District, talks of giving the 33 schools he manages “charter-like” independence, with principals who will choose their own faculty members and manage their own budgets, and school-based committees that will help select principals. Only five schools still answer directly to the elected Orleans Parish school board that ran the district before the storm struck in August 2005.

In the near future New Orleans will continue to see a decentralized system with students using vouchers for private schools, even more charters, and public schools that are also autonomous and decentralized where principals control their budgets and personnel.

Paul Brooks made the following telling observation worth broadcasting more broadly on the Preserving the Amercian Dream list serve (yahoo! groups) the other day:

Amazing to consider that the cost of gasoline is still so cheap that an 88 mile trip has only increase in cost from $13.24 to $17.86, or at $4.62 less than I frequently see people's bill for coffee and a roll at Starbucks. Or less than a typical economy lunch at a burrito stand here in Berkeley Ca. And far less than the subsidy for most train trips of this length. No wonder most of us drive.

"I will veto every single beer, um, bill with earmarks."

-- Presumptive GOP presidential nominee Sen. John McCain, presumably misreading a teleprompter at an event June 10 in Washington. The Arizona senator's wife, Cindy, is an heiress to a vast beer distributor fortune.

Education Week released their latest study on graduation rates. They aren't alarmists, but reading between the lines is pretty freakin scary. Nationally, only around 70% of 9th graders will actually graduate high school. That's the good news.

In Nevada, only 45% of 9th graders will get their high school diploma. So, the majority of 9th graders in the Silver State won't graduate high school. Again, High School.

In...the...United...States...of...America.

When I speak on immigration, I often hear that "they won't assimuate into our culture". Of course they do, but reading this report makes me hope they won't.

My friend John Palatiello, a long-time leader on federal privatization issues, sent this around, and it is worth sharing.

This article speaks volumes on so many levels about what’s wrong with Washington today.

Clearly, the Senate Democrats place special interests (labor) ahead of national interests (taxpayers). The fact that they were so reluctant to make this “change” shows how much their “change” mantra is just rhetoric. It is unfathomable that Senator Feinstein would actually admit to a reporter that saving the taxpayers money and making government operations more cost effective and more efficient is “not the sort of thing that I ran for the Senate to do.

With 850,000 Federal employees occupying “commercial” positions, this points to the need for an aggressive, comprehensive program that goes beyond the President’s Competitive Sourcing program (which Congressional Democrats have essentially neutered if not killed).

Overstock.com has become the second online retailer to challenge New York State’s overstretch of a sales tax law, filing a lawsuit this week in an attempt to have the overturned as unconstitutional because it violates both the commerce clause and equal protection provisions.

Last month, Amazon.com challenged the new tax law on similar grounds.

Braden Cox, policy council at the Association for Competitive Technology write at Technology Liberation Front that,

Overstock’s complaint highlights the disconnect that regulators have with how technology creates new ways to drive business and enhance revenues. Overstock has affiliates, which are websites that contain a link to Overstock.com in exchange for the possibility of earning a commission from purchases made by those visitors who access the Overstock website form the affiliate’s website. New York says these websites, if in New York, are soliciting business sufficient to create a legal nexus for sales tax purposes. Overstock says it’s just advertising.
Here’s where technology makes it interesting. Overstock says:
-- It can’t determine whether affiliates are actual legal residents of NY
-- It doesn’t control the affiliate websites, and can’t determine whether a specific ad is a direct or indirect solicitation for business.
-- Websites aren’t location specific. Are New York websites even soliciting New York consumers?

However, there are exceptions. For example, if the online merchant simply pays the partner web site a flat fee that is not tied to sales generation, the online merchant does not have a nexus in the state. Second, and here’s where things get hinky, even if a commission is paid, if the parent web site does nothing to promote its relationship with the out-of-state online merchant, then the out-of-state merchant does not have a nexus. The bulletin uses an example of a ski club whose web site links to a retailer of skiing equipment. If the ski club, through flyers, brochures and emails, actively urges its members to link to the retailer through the ski club web site, and collects a commission on sales it generates, then the online retailer is liable for collecting sales taxes. If, however, the ski club does nothing that could be construed as “referring” members to the retailer, and simply sets up a link so its members can link, as if serendipitously, to the retailer, the retailer is not liable for sales tax. Yeah, I don’t get it either. But it seems that the state determined retailer compliance on the actions and decisions of the third party in the state (whether or not that third party promotes the retailer beyond its web site), not the retailer itself.

As this would force online retailer to monitor the actions of every website partner, down to the laser printed flyers they might print off their PCs, it certainly can fit within the complexity that the U.S. Supreme Court wrote of in Quill Corp. vs.North Dakota, which essentially barred efforts by states to collect sales taxes from out-of-state merchants.

In today's Reason Foundation column, I examine Senator Obama's early education plan. I decided to look at how the one state that has been the model for universal preschool for over a decade, Oklahoma, was performing on the National Assessment of Education Progress. Curiously, in the twelve states that are scolded by preschool advocacy groups for failing to offer any state-funded preschool program, eight of the states score higher than Oklahoma on the NAEP's fourth grade reading assessment and unlike Oklahoma all twelve have made measurable gains in fourth grade reading over the last decade. In the column below I argue that universal preschool is not the silver bullet Senator Obama is looking for.

Oklahoma is considered the current U.S. leader on the universal preschool front. The state has received rave reviews for its program and is the model that many states aspire to become. Oklahoma enrolls more than 70 percent of four-year-olds in preschool and is considered a "high quality" program by the National Institute for Early Education at Rutgers University and national preschool advocacy groups such as Preschool Now. Oklahoma's program has strong curriculum, public school provision, and utilizes teachers with teaching credentials.

Yet, the picture is not so rosy when one considers overall academic achievement in Oklahoma. After a decade of universal preschool, Oklahoma has not made gains on the National Assessment of Education Progress (NAEP) fourth grade reading test.

The NAEP is the most objective test of academic performance for Oklahoma students because it serves as a quality benchmark for proficiency in reading and math. And it is a test against which all states can be evenly compared. The American Institutes for Research recently showed that the NAEP's definition of proficiency was also very similar to the standard used in international tests, giving the NAEP a "world class" standing. As long as the NAEP standard is employed, proficiency in the United States has roughly the same meaning as in Europe and Asia.
In reading,

Oklahoma students remain below the national average and have actually lost ground since universal preschool was implemented. Today, Oklahoma students have lower reading scores than they did when universal preschool was enacted in 1998. In 1992, Oklahoma's fourth graders had an average scale score of 220, on a 0-to-500 scale, on the fourth grade reading test. By 2007, after years of universal preschool, that reading score had fallen slightly to 217.

In 1998, 19 percent of disadvantaged kids were proficient in reading on the NAEP. In 2007, after years off giving low-income children access to preschool, still only 19 percent were proficient in reading. For non-disadvantaged kids the news is worse. In 1998, 42 percent were proficient in reading, but in 2007 only 36 percent were.

In addition, I take on the long term economic benefits of universal preschool in Linda Jacobson's article in today's Education Week.

But some experts caution that the children served by the Chicago program and similar efforts were very disadvantaged, and that providing such services to middle-class families in universal preschool programs are unlikely to result in the same return on investment.

“The biggest argument against the Chicago economic data is that it is still largely a ‘boutique’ program that cost more and provided more services than most current universal and preschool programs,” said Lisa Snell, the director of education and child welfare at the Los Angeles-based Reason Foundation, a free-market-oriented think tank. “It is hard to imagine that current programs will have the same kinds of economic payoffs as the Chicago program.”

Mark Cuban, chairman of the HDnet HDTV network and gadfly billionaire, thinks tiered broadband is the only way to assure to P2P users and gamers can co-exist with routine Internet users. Keep in mind this comes from the head of a business that needs high bandwidth connections to thrive.

In his most recent entry on his Blog Maverick blog, he launched a passionate and pointed attack on the main tenet of network neutrality, the so-called “right” to consume as much bandwidth without consideration for consequences on overall network performance.

“I have no sympathy for bandwidth hogs. You all are productivity killers for the rest of us. People who are working, people who are trying to play games, people who are in virtual worlds, people who are networking, people who are just trying to watch a You [T]ube video or their favorite TV show, you all are the reason why we get incredibly annoyed by slowdowns and buffering.

Leave and take your [BitTorrent] client with you.”

Cuban goes on to say that, for just a few more dollars, large bandwidth users can get what they want.

“If downloading TV shows is so important to you, add a DVR [digital video recorder] to your cable or satellite service for 5 bucks a month and download all you want. If you want to watch those shows on your laptop, connect the composite video out in your DVR to the composite in on your laptop. Same with movies.

Can’t download movies illegally, tough.

The internet is a great resource for unlimited quantities of video. Downloading video is an internet given right. Using the internet to fill up your PC turned DVR at the expense of the performance of every user around you is not.

I’m a heavy internet user. I'm online hours per day. To me, the promise of the internet comes not from how many bits I can download, it’s in finding new ways to leverage the utility and stability of the internet as a platform for new applications. The performance of the net is key to new applications working and gathering users. Internet consumers avoid new applications that are slow. Even when they don't realize that the application is slow because the latency on their net segment has skyrocketed because of bandwidth hogs disproportionate consumption of bits.”

A tip of the hat to Adam Thierer at Tech Liberation Front for the pointer.

Now, just about everyone concedes that Sen. Barack Obama has secured the Democratic Party's nomination for president. What may be more interesting in Sen. Hillary Clinton's extensive overtures to "consider an invitation" by Sen. Obama to be his vice presidential running mate.

Many believe this simply doesn't make sense. Even in her overtures, she displayed more of a desire to stay in center stage than graciously concede defeat and begin uniting the party.

Yet, a Clinton VP might make a lot of sense, and it may, in fact, be a pairing that could only be accomplished with someone like Sen. Obama at the top of the ticket.

Ponder the following:

*Sen. Clinton has a reputaton for being a team player in the US Senate, working with disparate individuals includings Sen. Obama to achieve policy change;
*Vice Presidential nominees often serve as campaign trail pit pulls, allowing the top of the ticket to focus on broader leadership issues and strategic policy positions;
*First Lady Hillary Clinton was content to stay at least one notch below President Bill Clinton, even though she had a much stronger and foreceful personality;
*The criticism of Hillary Clinton's attempt to effectively nationalize health care in the mid-1990s was her behind the scenes shenanigans, not her "in your face" politics.

In other words, despite her aggressive campaign tactics, Sen. Clinton has shown she can work outside the limelight and on a team. She can be an effective role player. But, it will take a unique type of political leadership to embrace that with confidence and ensure she sticks to that role.

Moreover, Obama will need Clinton's skills to effectively implement policy if they win in November.

That said, Obama doesn't need Clinton on the ticket (although I think it would make a much stronger one in November). While it's unclear whether Clinton would have been able to bring all of Obama's supporters into the fold, Clinton's supporters have no where else to go, and they are rapid politicos. I don't see many Clinton supporters sitting on the sidelines in November, or bolting to Ralph Nadar or another leftwing candidate, especially since the political agendas of Obama and Clinton are so close.

So, we'll see. If Obama extends an invitation to Clinton, and she accepts, a win in November would likely complete the transition of the Vice President's role into a truly executive position at the federal level. This result would be more than ironic since the transformation began in earnest with Al Gore under President Bill Clinton.

Barack Obama appears to be on the cusp of winning the Democratic Party nomination. While many will score this as a defeat for Hillary Clinton, in truth it will be a win for her and the Democratic Party.

Clearly, Clinton would have preferred to be the Democractic nominee. But that outcome was unlikely after Super Tuesday and the March primaries. Many have criticized Clinton for staying the race. But, the Democratic Party will be stronger for her tenacity.

First, the hard faught, sometimes nasty primary war will bolster Obama's political credentials in the general election. No one will doubt his ability to persevere in a tough political environment. He will have demonstrated leadership through a dogged commitment to his agenda.

Second, Sen. Clinton will have further secured her credentials as one of the nation's most important and experienced political leaders. She will have successfully revitalized a truly national political career by recasting herself as the stealy, experienced pragmatist. She will have won even in defeat.

Now, the Democratic Party has to think ahead. What ticket would make the most sense against John McCain?

In my view, an Obama-Clinton ticket would likely secure the presidency for the Democrats in November. Both Obama and Clinton have been respectful to each other throughout the campaign, letting campaign staffers lead personal and political attacks on the other. Thus, personal bridges have not been burned.

More importantly, an Obama-Clinton ticket would immediately assuage concerns about Obama's lack of political experience. Although some might think putting Clinton on the ticket might seem paradoxical, even hypocritical, for a candidate running on a platform of change, in fact it would show an extraordinary sense of political maturity. No presidential candidate has been elected on the strength (or weakness) of their vice presidential nominee. In practice, the vice presidential nominee is more sympolic, primarily used to send a message to the broader public. Even when the strategy backfires (remember Dan Quayle?), vice presidential candidates don't sink the general election.

In this case, Obama has the opportunity to follow in the path of the Bill Clinton and George W. Bush presidencies by significantly elevating the vice president's role in policy. Hillary Clinton, like Cheney under Bush, and with Obama's blessing, could become one of the most important policymakers in Washington. Moreover, more than a few pundits have noticed that Clinton and Obama are far closer on their political agenda than they are further apart. So, as a practical matter, their politics and campaign strategies, and personalities are likely close enough (and respectful enough) to forge a team, albeit with one where Obama is (and should be) first among equals.

So, in the end, Clinton's strategy of staying in the race to the end was both smart and politically saavy. Obama's respectful treatment of Clinton on the campaign trail gives him the opportunity to create an unprecdented ticket that balances leadership and experience.

We may not like the policy agenda, but the Democratic Party is now poised to redefine presidential leadership and power. And it all came about because of competition.

Republished in time to coincide with the OECD meeting to discuss climate change policy (and, not unrelated, food prices), an article in the latest issue of Ecological Economics makes the following Singapore-style obesity-and-greenhouse-gas-fighting policy recommendation:

While it is extremely difficult to influence leisure time allocation by policy measures, the following policy would in principle be possible:

• Taxation of TV and domestic internet providers according to connection time of user. Taxing the acquisition of the leisure equipment would not make sense as it would increase the use frequency. [...]

Sedentary leisure activities are usually linked to use of television and computers. According to U.S. Department of Energy, Energy Efficiency and Renewable Energy (2006), the wattage of a typical television set is 120Wwhile a PC with monitor uses 250W. If we now assume that average daily television/PC use is reduced by 1 h per day throughout the OECD, annual greenhouse gas reductions of up to 25 million tCO2 for the OECD can be achieved...

I'm trying to understand how the television tax would work in households with more than one person, or to catch would-be tax evaders who go to a friend's house to watch a sports game. Perhaps a retina scanner could be mounted at the top of each television set, and the aggregate hours of television that each individual watches could be charged to their respective carbon ration cards?

In a more reflective moment, the authors conclude:

Government interference in daily routines is not accepted by most citizens in democratic countries. The Singaporean anti-obesity policy has been commented by many Western observers as strange and unacceptable “micromanagement” of daily lives of individuals. However, anti-smoking policy has shown that tough fiscal and regulatory activities against individual behaviour can be acceptable if a majority feels that the behaviour is generating unacceptable negative societal impacts. Greenhouse gas benefits of anti-obesity policies can accelerate a “tipping point” at which food and sedentary leisure taxation as well as measures to promote non-motorized transport becomes democratically palatable.

Jacob Sullum's classic article, "Lighten Up, America! Do fat people belong in public parks?" should be republished (or at least re-read) every time draconian anti-smoking policies are cited as an example of how to deal with obesity--or greenhouse gas emissions. For an extended rant on obesity-climate-change policy, click below.