The Quiz
It seems now that almost everyone, from journalists to academics to clergy, relies unthinkingly on Marxian doctrines. Their deterministic ideas seem impervious to any argument. Of course, they’ve never read Ludwig von Mises.
I hate it when I’m right, mostly because my predictions are invariably dark. We’re lost, doomed, the end is near. It’s always something. And while it may be in bad taste to say “I told you so,” I did indeed tell you so back in March of 2003, when the invasion of Iraq was nigh: [...]
At the ASI, we like the Government’s free schools policy. However, we agree with the outgoing chief of Ofsted’s comments that it would be more effective were private firms allowed to establish and run publically funded schools at a profit.
Here are two good reasons why:
- Adding the profit-motive to the mix would bring a host of new providers into the free schools fold. From entrepreneurs to private schools, many people and organisations currently lack the incentive to establish or run free schools. Allowing them to make a profit will change this, directing new talent at the provision of state-education. The rationale for free schools policies is the truth that greater competition for pupils lifts standards. Permitting more (and more diverse) providers to compete, as in Sweden, lifts standards to greater heights. Whilst having third sector groups competing with the state is good, having the third sector, profit makers and the state all competing with each other is better.
- Private firms are better placed than most parent, teacher and charitable groups to finance capital expenditures on new school buildings, etc. Encouraging them to provide this finance, by, shock-horror, allowing them to make a return on it, will improve the policy in two ways. First, it’ll ease its impact on the taxpayer, allowing more new schools to be established at less cost. Second, it will accelerate the creation of such schools. If their construction can be paid for privately, The Department for Education will not need to limit their number in line with its capital budget.
Despite these reasons, opposition to introducing the profit motive into state-education remains strong. It’s worth scrutinising two of the more common objections.
- ‘Having firms profit from children’s education is wrong!’ Really? Let’s go back to basics for a second and consider why we have an education policy at all. A sensible answer is, unsurprisingly, in the name: to educate. It thus seems off the point to quibble about means; if we accept that private involvement with free schools will raise standards, it should not matter whether profits are made.
- ‘Having firms take a slice of public funding as profit means that less money is spent educating the child than would be with state provision’ So far so true. If the state provides, say, £3000 per annum for a child’s education, the firm can only make a profit if it spends less than £3000 educating the child. However, we must be careful not to make the (rather New Labour) mistake of confusing money-in with education-out. Whilst profit-making firms may spend less per head than the state or voluntary groups educating the child, their expertise and greater incentive to minimise costs likely enable them to achieve better educational outcomes whilst spending less per child.
We have, then, a slight policy adjustment that would yield better results and isn’t all that objectionable. Come on Gove, let’s really set schools free.
Reports that the Department of Transport is kick-starting a ports privatisation programme should be welcomed. There are currently over 50 Trust Ports, all steeped in history. Most are subject to legal complexity: a similar situation applied to the many former Statutory Water Companies prior to water privatisation in 1989.
Dover, a leading Trust Port, is effectively up for sale, with a tentative £300 million price tag. Obvious bidders include the French ports sector – given the heavy freight volumes between Dover and Calais – and other UK ports companies. In fact, apart from the publicly-quoted Forth Ports, which – though Scottish-based – owns Tilbury, most major ports are owned by private equity, whose shareholders place a high premium on their solid earnings. Indeed, the UK’s leading privatised ports group, ABP, was bought out by private equity in 2006 for an impressive £2.8 billion, partly due to its property assets.
At Dover, a local consortium is to the fore; whether it can prevail against the larger funds wielded by both French ports groups and private equity is doubtful. Other Trust Ports may be up for sale, including Blyth, Harwich, Milford Haven, Poole, Shoreham and Tyne. More generally, it is encouraging that the Coalition is pursing privatisation, both through the sale of High Speed 1 and by launching into the complexity of Trust Ports – experienced lawyers in this arcane area should expect heavy bonuses.
In the ASI’s recent publication, The Party is Over, it was estimated that £16 billion could be raised from privatisation sales – prior to any disposals of the Government’s bank shareholdings. The £1 billion earmarked from the sale of Trust Ports may need upgrading.
Given that the venerable Dame Vera Lynn of ‘the white cliffs of Dover fame’ has already set out her views about the planned Dover sale, is the process now underway?
One can only wonder what might have happened had the federal government spent no money at all. We never will know, but I suspect that the Crescent City very well might have been much better off.
End of Combat in Iraq? :: Failed Construction Projects in Iraq :: The Onion – Man Already Knows Everything He Needs To Know About Muslims :: Anti-FIJA? :: FIJA Racist? :: Burning Man Police Crackdown :: Differing Cultures and Kids
Here is an article from the San Bernardino County Sun that examines a lesser analyzed aspect of rising public employee pension costs. The article looks at the high incidence of government public-safety workers receiving disability pensions, also known as “medical retirements.” According to the article, “between 1975 and 2006, about 89 percent of retiring Redlands police officers took medical retirements.” Other local jurisdictions in San Bernardino County had high medical retirement rates as well. For example,
In San Bernardino, about 46 percent of police and firefighters who retired since 2000 received a medical retirement. Councilman Fred Shorett said it’s not necessarily a sign of malfeasance, but he also said he’d like the city to look into the number of medical retirements granted.
“I think when it’s around 50 percent, there’s something that doesn’t look exactly right,” he said. “You wouldn’t find that in the private sector.”
Disability pension rates varied widely across the county, however, and some local governments had rather low rates. Pomona, Ontario, and Montclair, for example, all had public-safety employee medical retirement rates of less than 20%.
High disability pension rates are significant because these benefits are more generous than regular public-safety pensions, which are typically already rather generous (public-safety workers oftentimes can retire with maximum benefits of 90% of their final salaries after 30 years of work as early as age 50 or 55). Unlike regular pensions, half the amount of the disability pension is tax free, retirees receive fully paid medical care for the rest of their lives, and 100 percent of the disability pension can be inherited by a spouse upon the retiree’s death, compared to the 65 percent limit offered to spouses under regular pensions.
Curiously, according to Redlands councilman Mike Gallagher, in virtually every medical retirement case he has seen in the five years he has been on the City Council, officers seeking disability pensions have either retired already or reached typical retirement age. As I told reporter James Koren, author of the Sun story, the high rate of disability pensions and the fact that they tend to come at the very end (or after the end) of careers suggests that there is some gaming of the system going on.
This brought to mind some investigations of “chief’s disease” arrangements that came to light a little over five years ago when I was researching public pension issues for my first pension study, The Gathering Pension Storm: How Government Pensions Are Breaking the Bank and Strategies for Reform (see pages 60-62). As I wrote in that study,
Here’s how the scheme works. Fire and sheriff’s employees file a workers’ compensation claim under California Labor Code 4850 a year before their retirement dates. They are then allowed to take a one-year leave of absence while collecting their full salaries tax free. Since taxes are not taken out of their pay, their salaries effectively increase. Since pension benefits are calculated based, in part, on final (or highest) salary rates, this increases their pensions as well. Moreover, the leave of absence means they get credit for an extra year of work without actually having to work. Since length of service also figures into pension benefits calculations, this boosts their pensions even further. For many, this is only the first step. Next, the employee may file for a job-related disability pension.
Generous rules about what ailments make one eligible for disability benefits contribute to the high medical retirement rates.
But fighting a medical retirement application can be difficult, especially because state labor law says if a police officer or firefighter has certain conditions—including heart disease, pneumonia and lower-back ailments—the maladies are presumed to have been caused by their jobs.”
Heart disease, hypertension, cancer—some of these are common diseases, and in many cases, we don’t have a choice” but to approve medical retirements, said Redlands Councilman Jerry Bean. “There are many other reasons for hypertension and heart problems than stress on the job.”
He said the state should look at changing some of those so-called presumptions as a way to curtail medical retirements.
There have even been cases like the one in which a four-pack-a-day smoker in Ventura County received a disability pension because his cancer was deemed to be a job-related disease.
Some argue that because the main benefit of a disability pension is better tax treatment, it doesn’t really cost a local government anything to approve the more generous medical retirements. But San Bernardino City Attorney James F. Penman and San Bernardino councilman Shorett note that there is no such thing as a free lunch.
“The effect on the taxpayer is that the disability retirements for safety (employees) is … 50 percent tax free,” Penman said. “Other taxpayers are subsidizing them.”
Shorett said the tax break costs the state and federal government, which in turn costs everyone.
“If it’s costing the government, it’s costing us,” he said.
Tempted by One Size Fits All
Tibor R. Machan
For
most of human history it used to be standard practice for parents to
insist that their children not only live by principles the parents have
found to be sound but also to adopt all sorts of practices of dress,
play, work, taste and so forth that they approve of. Father was a
barber so son, too, had to be; mother raised four children, so daughter,
too, must bear the same number. Parents liked living by the sea, so
the kids too must follow suite. Indeed, if a child had another idea,
all hell tended to break loose. And those around the family who didn’t
conform were deemed to be weird or inferior or just plain different in
that sort of way that ‘s quite intolerant of such a thing.
In
some cases this was a useful practice but more often it was a matter of
habit, nothing much else. And since there are some matters concerning
which one size does indeed fit all–such as certain ways of dealing with
other people, certain ways to governing one’s life, and certain ways of
setting up a human community, e.g., honestly, prudently, and justly,
respectively–the idea has always been somewhat palatable. In nutrition,
medicine, engineering, farming and so on some ways clearly are better
than others no matter who is doing it.
Yet,
it dawned on many folks in time that not everyone should act the same
way, work on the same tasks, or wear the same kind of clothes or
haircut, if for no other reason than because people faced significantly
different situations in their lives. And, most evidently, they were
themselves rather different, even unique. So a tall son would not fit
well in the kind of clothes worn by a diminutive father. Hat and shoe
and glove sizes aren’t the same for all. And once these and other
differences got noticed and taken more and more seriously–as
individuals were being paid more attention to as individuals–others
managed to surface. In time the notion emerged that individuality is
itself something important in our lives, that one isn’t replaceable by
someone else except in special circumstances–say if one weighs the same
as someone else where weight is what counts for most. So while in team
sports substitutions are routine, they cannot easily be replicated
elsewhere, such as in romantic love or friendship. Once it is clear
that it isn’t just what one is but who one is that matters a lot, the one size fits all mentality comes under serious challenge.
But
not everyone likes it and bad habits die hard. Even in markets it is
very tempting to treat all potential customers as if the same goods and
services were proper for them all. Thus we have mass marketing of stuff
that really can only benefit some people–a certain type of exercise, a
back ache cure, or a headache remedy. The more this is understood, the
more the notion starts to make sense that one person’s way of life
could well be perfectly well suited for that person without this being
an offense to others for whom it is not suitable.
Yet
the idea persists that everyone ought to worship alike or admire the
same artists or fashion designer’s work. Here the temptation isn’t just
a mistake but also a desperate hope since if one size does fit all,
those who make that size will be able to cash in on this big time.
Everyone should love Pepsi, Coca Cola, a Chevy, a Volkswagen, or a
Bentley or take a vow of poverty or love the outdoors. Of course in
some cases qualitative considerations do recommend conforming to what
others prefer and do but more often what is best for Jerry could well
not be best for Harry or, especially, for Sue.
Figuring
out when one size does versus does not fit all–or most–isn’t that
easy but it is usually worth the trouble, at least if it matters how
happy one will be with what one pursues, has, or does in one’s life.
For wearing the hat that doesn’t fit one is clearly uncomfortable, to
say the least; and pursuing a career that will not be fulfilling can be a
major hindrance to living happily.
Taliban Primp, Sing, Snipe U.S. Troops In Rare Video
Failure to consider taxes, of course. This morning I dropped off my car at the shop. The owner and I agreed that as soon as he thought the cost would exceed the estimate of $600, he would call for approval. No call. Later in the day, the owner called to let me know my car was ready. Since I was unable to pick it up before he closed for the evening, we settled over the phone — for $640.50. Huh? I asked about the additional $40.50 and he replied, “Tax.” Ah, yes.Tax. I had considered the estimate to include tax… Continue ReadingRelated posts:
More bad effects from medications for common aliments. Article by Tanith Carey.
For many young people, we need the trades instead, says Camille Paglia.
Recent Comments