Ethanol on My Mind

Posted on by David Stokes

I have been thinking about ethanol lately because the hotel with which our office building shares a parking garage seems to be hosting some type of conference that has brought down some people from Iowa. Our garage contains several cars marked as belonging to “Iowa State” or “Iowa Department of Transportation,” and they all sport large bumper stickers proclaiming that they run on ethanol fuel. Good for them. I am glad they are visiting Missouri, where they get ethanol in their gas whether they like it or not. (I am pretty sure they like it.)

This is topical because just the other day the Government Accountability Office released a report recommending that we do away with the ethanol tax credit. The Post-Dispatch‘s “Political Fix” has the story here. Now, the bad part is that the tax credit is no longer needed because another government mandate is forcing ethanol on us:

But the GAO said the tax break is no longer needed now that the industry has prospered under a government mandate for ethanol use, called the Renewable Fuel Standard.

So, the ethanol industry “prospers” because of a federal mandate, a federal subsidy, and an additional state mandate. But I guess getting rid of one of them amounts to some progress, at least.

Here is some of the work we have done at the Show-Me Institute about ethanol.

Starting a Charter School in Wyoming

Posted on by Sarah Brodsky

Lest anyone think I’m trying to pick on Oregon when I write about its nonsensical charter school application process, let me point out that Oregon is not the only state whose charter school regulations should be updated. An article linked to by Edspresso explains the drawbacks of Wyoming’s policy.

The current system in Wyoming is a headache for any district superintendent, who must first help charter sponsors create an application, then turn around and make a recommendation about the charter to the school board. These are the superintendent and board of the same district that’s going to be competing with whatever new charters are approved.

The Wyoming Department of Education is considering changes to the process. The new rules would direct sponsors to work more closely with the Department when writing proposals; superintendents would continue to report on the application to the school boards.

These changes could be a step toward simplifying things, but I hope Wyoming will institute broader reforms in the future. Traditional districts and charters compete for a limited number of students. The state shouldn’t ask them to work together or depend on each other for approval, because their interests are at odds with one another.

High Time for a Change in Higher Education

Posted on by Josh Smith

Aristotle said that “Education is the best provision for old age,” and I believe that this insight applies to both of the common purposes for pursuing a college degree: investment in human capital and personal enrichment.

This piece in the Post-Dispatch discusses the gap in higher education completion between St. Louis and other metropolitan areas, as well as what is to be done about it. The St. Louis area is well below average, apparently, and this is unquestioningly seen in the article as a problem not of individual motivation, but of institutional provision for the disadvantaged. I will propose a third option not discussed by the author or likely considered by most readers of the piece: too many people are going to college with the intention of getting a bachelor’s degree.

This unpopular sounding idea consists of three insights, all of which are championed by Charles Murray, so I’ve embedded a video of him explaining his stance at the end of this post. The first insight is that you don’t need four years of coursework for any occupation — even doctors spend much of medical school in an internship. The second is that the one-size-fits-all approach of the four-year B.A. is remarkably inefficient in terms of adding value to individuals who are looking to invest in their employability by adding skills/knowledge that will signal to future employers their capabilities. The third is that the two common purposes for pursuing a B.A. should be, but typically are not, treated separately. Personal enrichment is a luxury that many — if not most — high school graduates cannot afford. On the other hand, investing in their own future productivity is great for virtually every high school graduate — so an option other than the four-year degree is called for.

Again, Charles Murray is the main proponent, in terms of visibility, of the idea I am putting forth here. However, I have not read or heard him discuss one major problem with the present scenario: It will be difficult to implement change, given that the B.A. at present is an established signal from applicants to employers, and a systematic change would be required to eliminate this well-socialized practice as the standard signaling mechanism and instead move toward a more efficient alternative. The best news on this front comes from the high-tech sector: For many years, there has existed a plurality of independent certifications — in networking, programming, and other tech-related fields — that are recognized by employers as acceptable signals, in lieu of a degree. If something like this could catch on in other fields, it would be a boon to anyone trying to get into those fields who is not well-suited — financially or otherwise — to pursue a B.A.

I agree with the Post-Dispatch piece that a change is needed. I strongly disagree that the change needs to entail sending more kids into B.A. programs that many or most of them simply can’t reasonably complete.

For a cogent summary of the problems with the pervasiveness of the B.A., here’s author and public policy advocate Charles Murray:

People We Can’t Do Without in an Emergency

Posted on by Sarah Brodsky

Midwives, breastfeeding mothers, and now school nurses: They are all claimed to be indispensable when disaster strikes. Nurses are in the news because the St. Louis Public Schools laid off a fraction of its nursing staff. The Grade has the story. A warning of dire consequences can be found in the commentary quoted in the body of the post, and it’s repeated with no less alarm in the comments. Look at this comment from someone who writes under the name “a school nurse”:

The Individuals with Disabilities Act, No Child Left Behind, and the mainstreaming of students with severe physical, emotional and medical problems has drastically changed the face of school nursing. We are not the school nurses of your childhood anymore. We are highly specialized professional health care practitioners who make independent decisions that can mean life or death for some students.

Of course, there are ominous references to swine flu in some of the other comments, but I don’t want to spread the panic even further by reprinting them all.

I see a few problems with this argument. First, No Child Left Behind does not affect school nursing one way or the other. NCLB is a law that requires standardized tests. It doesn’t put sick kids in classrooms. If school nurses have more work to do because of NCLB, it’s because kids who don’t like taking tests have psychosomatic complaints — and the tests happen only once a year. Yes, I realize that wasn’t the main point of the comment, but I’m answering it because it’s wildly erroneous.

Second, if students are so ill that their lives hang in the balance, they need to be in hospitals under the care of physicians. That’s not just my personal opinion — there are regulations about which tasks that different types of nurses may perform, and how much supervision they must have. (The Missouri Board of Nursing publishes a handy guide, in case you can’t figure out whether a license permits some particular action.) School nurses do routine things like dispensing medicine. If a situation is more serious, they call for help. That was their role when you were a kid, and it’s still their role today.

Third, although schools should be prepared to respond to emergencies, the person who responds doesn’t have to be a nurse. Teachers and staff can get CPR and first aid training — and they should.

Special Laws Get Special Attention

Posted on by David Stokes

I think I have a new candidate for Missouri’s worst law: RSMo 94.270. What makes this law so awful is that it combines two of the things I loathe: government licensure and special laws written in blatant violation of our state Constitution that are somehow allowed anyway, probably because hardly anyone ever challenges them.

The first section of the law lists all the types of businesses cities are allowed to license and tax. A very revealing part of the law adds another word (emphasis added):

and to license, tax, regulate and suppress ordinaries, money brokers, money changers […]

The law then proceeds to get even worse, where it specifically forbids three cities from applying hotel taxes larger than a certain (very small) amount. Now, far be it for me to argue in favor of letting cities tax more, but it is still ridiculous that the legislature allows some cities to enact hotel taxes and forbids others from doing so. This law limits the taxation options of only three cities: St. Peters, Woodson Terrace, and Edmundson. The mayor of St. Peters has recently asked for an investigation, but that is not the point of my post.

Missouri has way too many “special laws” that apply only to certain areas or municipalities. Many of those laws allow for higher taxes or increased government authority. Just because this one limits taxes is not a good reason for it to apply so selectively, although I guess that makes it very slightly better than the others. I hope the cities targeted by the law challenge this and win, and I hope that it leads to fewer specially targeted laws all around. More to come on this from the Show-Me Institute in the future.

Carbon Reduction Treaties Misguided

Posted on by Caitlin Hartsell

Copenhagen is becoming unlucky for the United States. Last Friday, Chicago lost its bid for the the 2016 Olympics there; this December, a summit will be held there to debate an international climate change treaty that, if passed, would critically damage the U.S. economy.

Some are pushing the “Clean Energy Jobs and American Power Act,” better known as “cap and trade,” to set the stage for this international treaty. In short, because of political compromises backroom shenanigans, the bill as it stands does more to raise the cost of energy — thus raising the cost of every product in the economy — than it does to reduce emissions. Missouri and other Midwestern states would be especially hurt by the regulations, given that much of our economy relies on carbon-emitting energy. (Read my previous blog post about cap and trade for more reasons why it is a bad idea.)

The student newspaper at Wash. U. wrote an article in favor of the international treaty, and about an upcoming event: In two weeks, Missourians will be marching in support of this treaty. Although everyone is entitled to their own opinion, this treaty and the support for it are misguided.

International treaties — especially in regard to environmental agreements — are difficult to enforce and are rarely effective. The Kyoto protocol, signed by 183 nations, was intended to reduce carbon emissions worldwide; however, the signatory nations have increased their emissions even faster than the world average and the United States.

This new treaty would only cripple the economies of the United States and other participatory countries. It would add an extra cost to business transactions with arguably negligible environmental benefits. Most of the world’s environmental damage is done by burgeoning industrial economies, like China and India, but they will not be party to the new rules. The United States can try to set a good example through productive and competitive efficiency measures, but cap-and-trade legislation would only hurt American businesses in an already uncertain global economy.

Minimum Wage

Posted on by Caitlin Hartsell

Yesterday, John Combest linked to a KOMU article about minimum wage and its effects on the youth work force. As the minimum wage increases, businesses must make tough decisions about their capital allocations to labor, which disproportionately hurts younger employees. The Show-Me Institute’s executive vice president, Dr. Joseph Haslag, was quoted in the article, explaining the effects of minimum wage on younger workers:

Haslag said the government is manipulating the market by increasing the hourly wage employers [must pay]. This forces employers to hire less people and cut hours. This hurts the younger workforce because they are usually the most inexperienced and least productive.

Minimum wage policies are detrimental to the economy, entailing another cost for employers that increases prices and eliminates both jobs and work hours. Younger and lower-skilled workers bear the brunt of this cost. For further reading about the minimum wage, there are relevant Show-Me Daily blog posts and articles by other Show-Me Institute scholars.

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