Here are five market-oriented resolutions for a more prosperous 2014:

1. Privatize the United States Postal Service (USPS). The United States should follow the lead of other Western nations, including Finland, Sweden, the Netherlands and Britain, in deregulating and privatizing mail service. It is a form of economic insanity, which can only be explained by the power of the postal union and its political friends, to require daily delivery of mountains of mostly junk mail to U.S. households. The USPS should have to compete with FedEx, UPS and other private concerns in the delivery of first-class mail.

2. Follow suit with other public services. Look for other ways to benefit consumers and taxpayers by deregulating or privatizing other public services, with airports, roads and public utilities at the top of the list. There is a reason vacation travel is much cheaper and more convenient within European and Mediterranean countries than it is in North America and the Caribbean. Europe has widespread airport privatization and greater reliance on market forces to allocate scarce resources. As travel writer Rick Steves says on his website, “Ryanair routinely flies from London to any one of dozens of European cities for less than $20” (through its most heavily discounted fares paid weeks or months in advance).

3. Do not buy the “living wage” rhetoric. Recognize the folly of calls to increase the minimum wage — now $7.25 nationally — to $10 or more at a time of sky-high youth and minority unemployment. Why would a fast-food restaurant — or any other business — want to hire someone for $10 an hour who adds, say, only $6 an hour in additional profit, before counting the cost of his or her wages? To do so would be to accept a $4-an-hour loss. Raising the minimum wage thus has the perverse effect of causing unemployment. It artificially reduces the demand for labor and makes the first rung on the job ladder higher than it ought to be for young and unskilled workers.

4. Break the health insurance oligopoly. The next stage in the seemingly never-ending debate about health care, now entering its sixth year, might be between full-scale nationalization — as one way of rescuing the Affordable Care Act from going into a full-scale “death spiral” in 2014 — and the creation of a much more market-oriented system than the status quo ante. The starting point for a market-oriented approach should be in freeing — and, indeed, forcing — insurers to compete across state lines on both price and range of product offerings, without a great assortment of government dictates or mandates at either the state or federal level.

That would give individual consumers the right to buy low-cost, low-price health insurance — from a far larger universe of sellers. And it would cause big insurers to lose the monopolistic or oligopolistic positions they have built up over the years through assiduous lobbying at statehouses around the country. Their cozy arrangements with state regulatory offices have resulted in mandates to cover everything from hair pieces and contraceptives to acupuncture and marriage counseling. Opening the insurance market to open-ended interstate commerce will cause all producers — both insurers and health care providers — to reduce costs and look for more and better ways to satisfy the health care customer.

5. Choose growth over class warfare. Be prepared for the proponents of big government to try to turn every debate — whether it is about health care, privatization, the minimum wage, entitlement reform, curbing the power and privileges of public sector unions or any other issue — into another rant on what President Obama has called “the defining issue of our time”: namely, income inequality. However, the president and others greatly exaggerate income disparities between different quintiles in the distribution of income by ignoring the effects of high taxes on high earners and, for lower earners, the effects of income tax rebates, food stamps and other welfare. One study finds that income inequality actually declined between 1993 and 2007, after adjusting for taxes and transfer payments.

But the real takeaway here is what the poor and the middle class really need to achieve a better life for themselves and their children. That is faster growth, not more income redistribution. It is the opportunity for self-improvement, not the fallback of welfare dependency.

Andrew B. Wilson is resident fellow and senior writer at the Show-Me Institute, which promotes market solutions for Missouri public policy.

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Two different groups want to build outlet malls (or something close to it) in Chesterfield. Both want a tax subsidy; one in the form of a Community Improvement District (CID) and one in the form of a Transportation Development District (TDD). Both allow the developer to install an additional sales tax with the shopping area. Whatever the initials, the subsidies are not necessary.

Chesterfield should act like the girl being courted instead of the wallflower. I am not one for recommending that city councils reject projects – I question whether city councils should have a right to do that in the first place. But as long as the two entities are asking for tax subsidies, and as long as the Chesterfield City Council needs to consider these projects in the first place (for zoning reasons, etc.), Chesterfield’s elected officials should refuse both of them until they agree to move forward without a CID or TDD.

The subsidies are a total joke. If there is a market for more shopping in West County, taxpayers do not need to support it. The Chesterfield City Council should hold off until one, or both, of these proposals moves forward without taxpayer assistance.

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These schools are not perfect — far from it, in some cases — but, for most of these students and parents, the system works relatively well. There is a well-known correlation between academic achievement and socioeconomic status, and students from higher-income families outperform lower-income students on practically every measure. This disparity is also reflected in the achievement gap between white and minority students. Tino Sanandaji, a Ph.D. student in public policy at the University of Chicago, recently compared the scores of non-Hispanic white American students with those of non-immigrant Europeans on the Programme for International Student Assessment (PISA) test, and found that the American students performed admirably. White Americans scored seventh out of 28 countries, beating students from Denmark, Sweden, and France, as well as an average of 15 European Union countries.

On the other hand, our educational system routinely fails poor and minority students — those least able to choose a different school by moving to another district. Although the racial achievement gap has narrowed somewhat in recent years, at age 17, black and Hispanic students still score about 10 percent worse on average than white students on the reading portion of the National Assessment of Educational Progress (NAEP). There a number of proven ways we can expand choice and improve academic achievement for those students.

Missouri has already experienced some success with charter schools. According to a 2009 study by the Center for Research on Education Outcomes at Stanford University, students attending charter schools in Missouri show more improvement in both mathematics and reading than similar students in traditional public schools, and this remains true when looking only at black and Hispanic students. Unfortunately, state statute limits the existence of charter schools to the cities of Saint Louis and Kansas City. If that restriction were removed, the gains of charter schools could be expanded to students in other struggling districts.

Furthermore, we could provide parents and students with more options in existing public school districts simply by restructuring how the schools are funded. Under a weighted-student-formula program (also known as “backpack funding”), students can attend any school within the district, and the schools are funded based upon the number of students they attract — with more dollars devoted to students who typically require more resources to educate (e.g., those with disabilities). Schools are then allowed more autonomy to experiment and compete for students — and for the money attached to them. In California, the cities of San Francisco and Oakland both implemented backpack funding and saw large gains in student achievement across ethnic and socioeconomic lines. San Francisco is now the top performing large urban school district in California. There is no reason, outside of political intransigence, that the Saint Louis and Kansas City school districts could not enact the same reforms.

It would be difficult to design an educational system worse for the disadvantaged than one that assigns students to schools based on the housing that their parents can afford. Although our best schools, public and private, are the product of parental choice, poor and minority students are frequently stuck in monopolistic urban school districts. School choice is not a panacea for this problem, but giving parents the power to choose is a necessary step toward ensuring a quality education for all of Missouri’s students.

John Payne is a research assistant for the Show-Me Institute, an independent think tank promoting free-market solutions for Missouri public policy.

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“In too many places, including Illinois, we are lying to children now. [When] we tell a child they are meeting the state standards, the logical implication is that child’s on track to be successful. In too many places, including Illinois, if you are meeting state standards you are barely qualified to graduate from high school and you are totally unqualified to go to a university and graduate,” he said.

I agree that the standards are low and don’t reflect what students need to know for college or life. Many parents are happy when their children do fine on state tests, not realizing that in a few years, their children will be competing with people from China, Singapore, Sweden, and other countries with more rigorous school systems. Another drawback is that school use the low standards as an excuse, saying they can’t teach anything more advanced because they have to prepare students for the (easy) state tests.

I disagree with Duncan’s proposed solution. He wants the federal government to tell the states what to do — imposing his favorite ideas, like a longer school year, with threats like this:

“Illinois has a chance to compete for hundreds of millions of dollars. I would love to see Illinois compete,” Duncan said. “But Illinois has to change its behavior.”

Rather than bringing in the federal government to pick winners, mediocre public schools should get out of the way and let parents act as consumers. Parents with the opportunity have been choosing schools with longer school years, like KIPP schools, long before Duncan decided to impose that reform from above.

You can read my thoughts on Duncan’s charter school remarks here.

Feel free to make more blogging requests in the comments, or to email me with requests at sarah.brodsky@showmeinstitute.org.

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Coulson’s right: It’s sloppy reporting to assume America’s education system is normal while calling Sweden’s “socialist.” That’s not to say that we should drop everything and try to be just like Sweden. There are some aspects of the Swedish system that we don’t need to emulate. For example, Swedish schools aren’t allowed to charge tuition, so all schools are limited by the amount of the state voucher. They are also required to teach a national curriculum, although they have some leeway to experiment with teaching methods and to make other changes.

The good news is that we already have some of the positive aspects of Sweden’s system in place here. Parents can choose charter schools or the Missouri Virtual Instruction Program as alternatives to their assigned public schools. Unfortunately, these options are limited — charter schools operate in only two cities of Missouri, and the online instruction program is a monolithic virtual academy rather than competing programs. Sweden is impressive because it has made educational choices available to all Swedish families, and the number of independent schools there has soared since they reformed the system. We don’t need to be just like Sweden, but we should learn from them and offer a wider array of choices to everybody.

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Voucher schemes are running in several different countries without ill-effects for social cohesion; those that use a lottery to hand out vouchers offer proof that recipients get a better education than those that do not.

The article cites studies of choice-based programs in Sweden, Colombia, and the U.S.

One argument that has been raised against tuition tax credits in MIssouri is that choice leaves disadvantaged children behind or doesn’t work for everyone. These studies of voucher programs prove this wrong. Choice works in different places and different circumstances. Public schools, on the other hand, often work well for children who live in affluent neighborhoods but fail children in inner cities–like in Saint Louis. 

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There are two well-established nationwide school voucher programs, one in the Netherlands, the other in Chile. The first was created in 1917, the second in 1982. In both cases, the supply of private schools rose dramatically to meet demand. Roughly three quarters of Dutch students are now enrolled in private schools. In Chile, private sector enrollment doubled within the first decade and passed the 50 percent mark in December of 2005.

Sweden and Denmark enacted voucher programs more recently, and both are seeing the creation of new private schools as a result. Swedish private sector enrollment rose from 1 percent to 10 percent of the student population in a decade, and continues to rise. I discuss this issue at greater length in my chapter in the Cato book: What America Can Learn from School Choice in other Countries.

Turning to Mr. Rotherham’s assertion, I pointed out at our forum that there are vibrant, unregulated, rapidly growing education markets all over the world. In some areas, such as the U.S., Japan, and South Korea, these are niche markets ? mainly after-school tutoring. In other parts of the globe, particularly South Asia and Africa, they are mainstream elementary and secondary schools.

It’s frustrating that special interest groups in Missouri spend so much money opposing a school reform strategy that worked so well around the world.

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