Uneven Playing Fields

Posted on by Dave Roland

As we have written previously, one of the great evils of tax increment financing (TIF) is that it offers special advantages to the beneficiaries selected by elected officials, forcing everyone else in the market to compete at a disadvantage. Sadly, there’s a new example of how destructive this sort of policy can be.

Months ago, the city of Rock Port, Mo., decided to approve a TIF project worth $175,000 in order to bring a new grocery store to town. The long-time owners of Rock Port Market (up to that time the only local grocery store serving the town’s residents) said they didn’t mind fair competition from a new store, but objected that the TIF would give the new store a gigantic financial advantage not offered to the existing business. Sadly, just six months later, the family that has operated Rock Port Market for nearly 80 years has decided to close the market’s doors.

True economic development happens best when governments allow businesses to compete on a field that offers no special advantages to any of the players. The government does a grave disservice to its citizens when it assumes the responsibility for picking winners and losers in the market, rather than letting businesses succeed or fail on their own merit.

Another Look at the BASIS Charter Schools

Posted on by Sarah Brodsky

When I last blogged about the BASIS charter schools, I hadn’t had a chance to watch Two Million Minutes: The Twenty-First Century Solution, which is the fourth in the Two Million Minutes series. Now that I’ve seen the full documentary, I can revisit the question: “Is BASIS the 21st century education solution?”

I’m impressed by the dedication of BASIS schools’ founders, and by their commitment to bring students to a high level academically. However, it’s still unclear to me that BASIS could be replicated on the scale that would be necessary to change American education.

BASIS schools are not large. One of the students says, “This is such a small school,” and several describe it as a close-knit, caring community. The family-like environment allows the teachers to get to know individual students and help them catch up. One student recounts how she worked through several extra textbook chapters each week after she first enrolled in BASIS. It might be difficult to motivate kids to do that if they didn’t have a personal connection with their teachers. And, because of its size, BASIS is not directly comparable to the big suburban high schools shown in the first Two Million Minutes documentary.

The mention of distributing fliers on a university parking lot makes me suspect that BASIS students are above average in educational background, as do some of the students’ hobbies and interests — such as opera. And, while BASIS now runs schools in two cities with different demographics, it’s hard to tell whether the student bodies are representative of their respective communities, because in both cases, BASIS has encountered a lot of opposition from neighbors and drawn students from beyond its immediate surroundings. BASIS doesn’t report how many of its students are eligible for free- or reduced-price lunch, making it impossible for an outsider to judge whether its claims of economic diversity are accurate.

The schools’ founders are aware of criticisms of BASIS, and they respond briefly in the documentary. In particular, I appreciated Olga Block’s comments on the challenges of integrating students into BASIS midway through the program. I agree that she’s in a catch-22. If her schools don’t improve student achievement, she’s not doing her job; but when the students outperform their peers, she faces the charge of running an elite school.

Although we’ll have to wait to learn if BASIS can scale up, it’s already a good example of a charter that serves its students well. What matters for American education is not whether a specific school like BASIS is able to expand, but whether equally ambitious schools will be permitted to open and compete.

Olga Block says it best in this essay:

The curriculum and policies specific to BASIS are not formulaic. They cannot simply be applied, like fertilizer, to any system and ‘watch the students learn.’ The formula that makes this sort of success possible is the freedom to innovate and reform at the school level.

Yuletide Economics 101

Posted on by Christine Harbin

While they waited in line this morning, I wonder if any Black Friday shoppers read George Will’s op-ed, “The Gift of Not Giving,” in the Washington Post. He explains that holiday-related shopping activities destroy wealth and aggregate utility.

Gifts that people buy for other people are usually poorly matched to the recipients’ preferences. What the recipients would willingly pay for the gifts is usually less than the givers paid. The measure of the inefficiency of allocating value by gift-giving is the difference between the yield of satisfaction per dollar spent on gifts and the yield per dollar spent on the recipients’ own purchases. […]

Were it not for sentimentality about sentiments, which are highly overrated, we would behave rationally, giving cash, thereby avoiding value subtraction.

For our Easter baskets, beginning a couple of years ago, my sisters and I convinced our parents to give us cash instead of candy. Our reasoning wasn’t as well-worded as Will’s, but the principle was the same. If we really wanted candy, we could use the money to buy it. Mom and Dad agreed because it saves them a trip to the store. Plus, they’re not wasting money on plastic eggs and baskets every year. Cash is better because it doesn’t expire, unlike candy and gift cards. The Harbin family destroys no wealth on Easter.

Missouri Promotes Locavorism in Kindergarten

Posted on by Sarah Brodsky

The University of Missouri Extension runs a program called the Kindergarten Farm Food Initiative. A newsletter to parents from the beginning of the school year states (emphasis in the original):

your child will enjoy locally grown fruit and vegetable snacks three times a week.

It also characterizes locally grown food as “fresh” and “delicious,” and admonishes parents:

If your child asks you for a tasty fruit or vegetable snack at home, we hope that you will encourage this healthy habit.

Serving healthy snacks to a class doesn’t endorse any particular ideology. And, by itself, a visit to a farm isn’t indoctrination. (I applauded when this school took kindergartners to a farm to learn about agriculture.) Where this program crosses the line is in its newsletters, which are based on the assumption that locally grown food is inherently good. I would guess the same attitude toward local food is conveyed to students during class time.

To explain my objection with an analogy, suppose a school, in connection with a unit on China, announced to parents that students would play with fun, high-quality toys from China three times a week. Suppose it sent home newsletters about the toys emphasizing the fact that they are from China. Wouldn’t that be seen as an unfair endorsement? Everyone agrees that kids need to play, but whether toys from China are the best choice is debatable. Even if the school didn’t explicitly tell the kids that toys made in China are better than other toys, a kindergartner could easily form that conclusion if the school made no mention of toys from other places.

It’s fine for a school to tell kids where food comes from, but it shouldn’t focus on one food source to the exclusion of others. Parents can always tell their children that local food is preferable, if that is something that their family values.

“All I Ask Is a Tall Ship and a Star to Steer Her By”

Posted on by Sarah Brodsky

Abby Sunderland, a 16-year-old American, is another sailor who hopes to become the youngest to sail around the world. In a few weeks, she plans to depart for a nonstop six-month voyage.

I haven’t heard about any government criticism of her or any attempts to put her in state custody. That could change before the middle of December, but it seems likely that she’ll set sail without any state interference.

Abby Sunderland, Laura Dekker, and Jessica Watson are three teenagers with similar goals but divergent experiences — and those differences are a result of the actions of their respective countries’ governments. They’re a reminder that policies can change the course of people’s lives.

To learn more about Sunderland, check out her blog.

History Repeats Itself

Posted on by Sarah Brodsky

By way of Edspresso, I see that Pittsburgh is dealing with the same issue that St. Louis did not long ago: Its public school district won’t sell a building to a charter school.

I’m optimistic that this will turn out well for Pittsburgh charters. Districts can dig in their heels and try to hold on to real estate, but when enough people prefer charters, political pressure will force districts to give up the empty buildings.

Technological Double Standard

Posted on by Sarah Brodsky

When online schools in Oregon used technology to compete with traditional districts, legislators responded that the virtual schools shouldn’t accept new students until the state can study the matter further. Yet when an Oregon district uses the Internet for crisis management, it’s celebrated as innovative. No one calls for the district to suspend the program and subject it to scrutiny.

In Missouri, the virtual school teaching academic subjects to a couple thousand students is cut from the budget because it’s seen as an unnecessary cost, but the state plans to distribute more than 24,000 vouchers for an online program that teaches people to use Microsoft Excel. The governor explains why:

“I’m proud that the state of Missouri is teaming up with Microsoft to provide cutting-edge, in-demand training that will help our citizens compete in the 21st-century economy,” Gov. Nixon said.  “The world has gone digital, and it’s vital that Missourians have the knowledge and skills to land and keep the jobs of tomorrow. For folks seeking a new job, or looking to brush up their skills, Elevate America will be a tremendous resource.”

The Vagaries of Scalping Laws

Posted on by Sarah Brodsky

The Wall Street Journal reports on a bakery that experiences a large increase in demand for pies around Thanksgiving.

Although there is nothing she can do to prevent the occasional customer from scalping her treats in the parking lot — a $12 pie can go for more than $20 — she hopes her extra counter help will keep the line moving briskly.

Imagine how different laws might be if bakers sold their wares in large stadiums, and if entertainers performed on a first-come first-served basis in corner shops.

Consumers’ Ignorance of Production Details a Blessing, Not a Curse

Posted on by Sarah Brodsky

One of the things I like best about production in a free economy is that consumers don’t have to think about it. If each of us had to pay attention to the details of how all our things are made — where the materials come from, what knowledge is needed to change or combine materials, how they’re transported to us — we wouldn’t have a moment to devote to our own lives. It would take all day to examine the intricate processes behind even the most ordinary household items. A caveman, on the other hand, had to know where his things came from, because he had to procure them all himself. The fact that we don’t think much about the production of the material goods we use is a sign of economic progress.

A Rhodes Scholarship recipient who plans to study food policy disagrees:

“I think the biggest problem with the U.S. food policy is that we don’t think about it,” Barmeier said. “We don’t have a single food policy strategy. We don’t think about how the food system from the farm to the table is all related […]”

It’s no coincidence that he also wants a single policy to direct food production. The alternative to the price system — in which all the relevant information for consumers is captured in a product’s price — is central planning.

We can’t all think deeply about food policy and coordinate our thoughts, so we’d have to designate one person to do the thinking for us. This economic system is vulnerable to the foibles and mistakes of the central planner. And it’s disastrous for individuals, because the planner’s errors are amplified throughout the economy and cause shortages and waiting lists. If an individual, not thinking particularly hard about where food comes from, goes to the store and buys too few pecans for a pie, he can always go back to the store for more. No one else loses out. But if a thoughtful planner underestimates how much food people in general need, everyone goes hungry.

When this student takes a break from writing Farm to School proposals (yes, he’s really done that) I hope he’ll read “The Use of Knowledge in Society,” or maybe “I, Pencil,” for a different perspective.

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