Page 674 – Show-Me Institute

An Opportunity for SLPS

Posted on March 28, 2010May 5, 2026 by Sarah Brodsky

Now that the Missouri Virtual Instruction Program has lost state funding and is charging tuition, it’s an opportune time for the St. Louis Public School District to expand its Virtual School.

Enrollment in the SLPS Virtual School is constrained by the district’s rule that online students spend one or more days a week in a classroom, working with Virtual School teachers in person. This policy is unusual for an online school; most such schools allow children to talk to teachers through video conferencing or by telephone, and require less frequent meetings. If SLPS made weekly in-person meetings optional, it could open enrollment to students who live far from St. Louis.

Another factor that has limited the Virtual School’s growth is its policy that elementary students must be enrolled full-time. Permitting young students to enroll in individual classes would give more children the ability to participate.

Medicaid Cuts: As Scary as They Look?

Posted on March 27, 2010May 5, 2026 by Caitlin Hartsell

Gov. Jay Nixon has proposed $120 million in cuts for the state’s Medicaid program. There has been a lot of talk on both sides of the partisan aisle about whether this was a good move, so I decided it would be useful to try putting that number into perspective.

These numbers, though, may not matter for too long. The federal health legislation, set to go into effect in 2014, is expected to expand the Medicaid pool drastically and add at least $1.34 billion total cost over 10 years.

The Kaiser Family State Health Facts website has data on Medicaid spending per enrollee, as well as on total state expenditures. Unfortunately, the site did not have both Medicaid spending data and total state expenditure data available for the same ranges of years, so my comparisons are not perfect. They do, however, serve to illuminate the spirit of the argument. The figures for Medicaid spending per enrollee are from 2006, the state expenditure figures are from 2004, and total Medicaid spending is from 2007.

Here are some spending facts for Missouri:

Year	Type of spending:	Amount	Rank
2006	Missouri Medicaid spending per enrollee	$4,387.48	35/51
2007	Total Missouri Medicaid spending	$31,316,577,800	16/51
2004	Total health care spending in Missouri (all sources)	$6,592,655,741	37/51

According to American Academy of Pediatrics in Missouri in 2007, the state will lose $1.60 in federal matching funds for every $1 it cuts from its state Medicaid budget. The governor proposed a $120 million cut from the Medicaid budget, so assuming that proportion does not change, we can extrapolate that to be about $312 million total from the Medicaid budget. As of September 2009, MO HealthNet had 865,477 enrollees, and $312 million averages to around $360.49 in cuts per enrollee. This means that the cut amounts to approximately 8 percent of the 2006 amount per enrollee.

So, even without a close analysis of which services are being cut, it is clear that this amount is not as alarming as might be expected. (It would place Missouri 43rd in the country on per-capita expenditure, based on the numbers from 2006.)

Frankly, I believe the real issue is how these cuts are made. Medicaid and Medicare are large black holes for resources that have the potential to swallow the state and federal budgets. It is not sustainable for them to grow continuously, and would be better if they could be shifted into the private sector via vouchers or well-designed cuts. Spending large amounts of money on Medicaid, if not spent in the right manner, can be even more detrimental than a smaller amount because it can distort the market and incentive structures. A closer analysis of how these cuts are being done is necessary to come to any distinct conclusions, but the numbers by themselves are not as frightening as some may believe.

As ofSptember 2009, MO HealthNet had 865,477So,Sofdnkfnsjdk enrollees.

Advancing Saint Louis through Bad Economics

Posted on March 26, 2010May 5, 2026 by John Payne

This morning at the office, David Stokes brought in a mailer he received from Advance Saint Louis urging him to vote in favor of Proposition A, which would institute a half-cent tax in Saint Louis County dedicated to funding Metro. The top fact used to support the mailer’s headline, “Our Economy Depends on Metro,” reads “Transit generates JOBS. To date, $15 billion in new development has occurred within a 10 minute walk of MetroLink.” Strictly speaking, I don’t think this statement is false, but it definitely misleads by omission.

First — and this should be pointed out every time a politician talks about creating jobs — it should be pointed out that jobs are a cost, not a benefit. Goods and services are the benefits we get from the cost of working, and if we can create more goods and services with less work, we should. If Metro could transport the same number of people just as efficiently with half as many employees, that would be a clear benefit to the overall economy (Metro might even come close to breaking even if that happened). Furthermore, creating jobs by spending tax dollars ignores the unseen costs of the taxes. If that money had not been taxed away, taxpayers would have spent it on a multitude of goods and services, or saved it to be lent out to entrepreneurs, home buyers, and the like. With the tax in place, those goods, services, and loans (and the wages that depended on them) will never exist, so we will never know the true opportunity costs of spending more tax dollars on Metro.

With regards to the statement’s second sentence, the mailer never claims that the $15 billion in new development near the MetroLink was actually caused by the MetroLink. I take the absence of such a claim to be good evidence that Advance Saint Louis has no good evidence that MetroLink has substantially contributed to this new development. I’m sure MetroLink is at least a marginal factor in some of this development, but I’m sure a much bigger factor is that MetroLink runs through the most desired areas in the Saint Louis area: downtown, the Central West End, Washington University, Brentwood, Clayton, etc. MetroLink follows development, not the other way around.

Finally, the bottom of the mailer informs us that Metro “operates with one of the lowest costs per passenger to the taxpayer,” which ignores two important points: 1) relative comparisons tell us nothing about the absolute costs and benefits of the system and 2) a new tax to support Metro will obviously lower Metro’s ranking on that metric.

Lobbying Through the Census

Posted on March 26, 2010May 5, 2026 by Sarah Brodsky

This is from a Columbia Missourian article about a campaign to identify respondents’ sexual orientation on Census forms:

“The census is the basis of over $400 billion in federal funding,” she said. “The LGBT community is not able to effectively lobby to be recipients of any of that money.”

If advocates believe the Census questions are discriminatory or offensive to any group, they should certainly make that case. However, greater ease in lobbying is not a good reason to add to the list of questions. Census participation is required by law, and it would be an inappropriate invasion of respondents’ privacy to compel them to share their sexual orientation or other personal characteristics that some lobbyists would like statistics on. Similarly, while it would help advocates for funding of medical research if everyone had to reveal their medical histories on the Census, the Census does not gather this information.

Advocates can use other means, like petition drives and rallies, to show lawmakers how many people support their causes.

First Calorie Counts, Next Local Food Labels?

Posted on March 25, 2010May 5, 2026 by Sarah Brodsky

This essay on the Huffington Post sees calorie count mandates as the beginning of a “food revolution”:

[T]his could be seen as a historical turning point in the American consciousness about actually having awareness about where food comes from and what goes into how it gets made.

Most advocates for calorie count mandates emphasize the effect they could have on the population’s health. They say that if people read caloric data whenever they order food, they’ll make healthier choices and put less of a strain on the health care system.

The Huffington Post essay is unusual in that it connects calorie counts to the local food movement. At first glance, this seems puzzling, because a calorie count tells you nothing about where your food comes from. Furthermore, a dish that was served up from scratch in your home town might be high in calories, while produce flown in from hundreds of miles away could contain fewer calories. Supposing consumers pay attention to the calorie counts and consequently reduce the calories they consume — there’s evidence that they don’t, but supposing they do — the effect could be to discourage some people from eating local food. For example, think of people who live next to a cattle farm and have access to local hamburgers, but can’t buy vegetables unless they’re shipped in.

However, the Huffington Post writer may be on to something. Once people are comfortable with calorie counts on the menu board of every major chain restaurant, they’ll be less likely to object new national labeling mandates. They’ll take it for granted that the federal government tells restaurants what to write on menus. Proposals to label food as “local” or “organic” will then meet with less opposition.

Where Do the Home-Schooled Children Play?

Posted on March 25, 2010May 5, 2026 by John Payne

Currently, home-schooled students cannot participate in high school athletics, but a bill before the Missouri Senate would allow them to play sports at their local school. The Columbia Missourian covered a hearing on the bill yesterday:

During the roughly hour-long hearing, Senate Education Committee members heard from Sam Williams, 14, an eighth-grade home school student from Neosho. Williams said he wanted to continue his wrestling career past the club team he had been on for eight years and play for the team that went undefeated to a Class 4 state title but didn’t want to give up his home-school education.

“I’d rather not have to choose between two things that are good for me,” Williams said.

I would prefer to completely decouple athletics from schools entirely, and turn them over to sports clubs, which would allow schools to focus on education and sports teams to focus on competition, but this bill would certainly be an improvement over the status quo. If a student is allowed to attend a public school and use all the resources that come with it, why shouldn’t he be allowed to use just some of those resources while pursuing his education through an alternative method? Education works best when it is tailored to meet the needs of every individual, so we should be encouraging numerous alternatives to the standard public school model. As long as extra-curricular activities are nearly monopolized by schools, locking out home-schooled and other alternative students only limits the educational options for Missourians.

Language-Specific Charter School to Open in New Jersey

Posted on March 25, 2010May 5, 2026 by Sarah Brodsky

A Hebrew-language charter school is set to open this fall in New Jersey. Unlike the California “Hebrew-language” charter I recently wrote about, the New Jersey school will focus on … Hebrew. That’s right, the school has permission to specialize in one language. Here, its website lists some reasons to study Hebrew, such as gaining an advantage in international business and diplomacy. None of the reasons have anything to do with religion.

I hope the charter school approval process in Missouri will remain friendly to single-language charter schools, so that a school like the New Jersey charter would be welcome here. There are many languages besides Hebrew that could possibly be studied for their religious significance. Religious texts have been composed in Greek, Latin, and Arabic, to name a few — yet all of those languages are taught in public schools. It’s unfair to single out Hebrew or any of those languages as unsuitable for specialization, when students’ reasons for studying them are as varied as the words in a dictionary.

Free Agents and the Free Market

Posted on March 24, 2010May 5, 2026 by Christine Harbin

In an article in the Wall Street Journal today, Reed Albergotti writes that eliminating the salary cap on free agents in the NFL hasn’t caused the season to “become the discombobulated cash volcano everyone was hoping for.” Now, I don’t know very much about football, but I do know enough about economics, and I find the author’s conclusion to be economically nonsensical (emphasis mine):

So with apologies to Messrs. Friedman and Hayek, here’s the likely game summary on the free-agent season that was: The free market ended up making the NFL’s players poorer and its owners richer than ever.

Removing a salary cap would not cause salaries to decrease — it would cause them to either increase or remain unchanged. If the salary cap were ineffective (i.e., above the equilibrium price), then removing it would result in no change in salaries. A football team owner is going to hire q* football players and pay them a salary of p* nevertheless. If the salary cap were effective (i.e., below the equilibrium price), then removing it would cause salaries to increase to the equilibrium level.

From what I can tell from the article, the author is incorrectly assuming that the salary cap for football players was effective (i.e., their past salary was below their market value). On the contrary, the salary cap was probably ineffective (i.e., their salary equals their market value), which would explain why nobody is “throw[ing] irresponsibly large sums of scratch at the sport’s top free agents” upon its repeal. This is evidenced by the fact that, while under the cap, many teams hadn’t used up all the funds they had allocated in salaries. According to a recent article in the Post-Dispatch, this group includes the Saint Louis Rams:

The Rams have only about $76 million committed to salaries so far in 2010, and with projections of $30 million or $35 million in cap space when all is said and done.

University of Michigan Student: Census Participation = Cash

Posted on March 24, 2010May 5, 2026 by Sarah Brodsky

Those of you who become physically ill when you watch ads connecting Census participation and government funding might want to skip this post. Everyone else, prepare to be amazed by the most blatant ad for the Census I have ever seen.

The video was produced by a University of Michigan student for a university-sponsored contest. It won second place. In the clip, students gather numbers representing how many people live in their houses — one takes a big “4,” another a “5,” and so on. The students bring their numbers to a bureaucrat and pile them on his desk. He, in turn, pulls a humongous dollar sign out of a drawer and hands it to them. Words flash across the screen, informing viewers that they can “earn money and recognition” for their communities by participating in the Census.

You have to see it to believe it:

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