Kansas and Wichita quick takes: Monday December 26, 2011


Kansas computer security. This month the Kansas Legislative Division of Post Audit released an audit looking at how well five Kansas state government agencies kept their computers up-to-date. The audit found: “Three of the five agencies had significant vulnerabilities because of inadequate workstation patching processes, and all five could make some minor improvements to their patching process.” Patching refers to the process of keeping software updated. The most important updates, or patches, concern security vulnerabilities that have been discovered and fixed. Some of these vulnerabilities are serious and can lead to computers and networks being compromised. The report is at State Agency Information Systems: Reviewing Selected Systems Operation Controls in State Agencies.

KPERS. Wichita financial planner Richard Stumpf contributes a piece to the Wichita Eagle on the problems with Kansas Public Employee Retirement System (KPERS). He paints a bleak picture of the plan’s finances and proposes a tax increase, writing: “I am recommending that Brownback propose a 25 percent tax increase to fund employees’ retirement plans. The commission wouldn’t cut spending. I refuse to recommend taking more money from classrooms to pay this bill. The only remaining option is a tax increase.” … As bleak as is this picture, it’s not as dark as it should be: Stumpf says the debt in KPERS is “nearly $9 billion.” More realistic analysis puts the figure much higher. Adjusting for unreported investment losses and using a realistic assumed rate of return of six percent, Kansas Policy Institute says the shortfall would be $14.1 billion. More shocking is an evaluation of state pension funds conducted by the American Enterprise Institute which uses market valuation methods. This evaluation puts the shortfall for Kansas at $21.8 billion. … Stumpf notes this: “So far this year, the stock market is up about 1.3 percent. Since KPERS is based upon an 8 percent assumed rate of return, earning 1.3 percent this year is equivalent to losing 6.7 percent.” The full editorial is at Richard Stumpf: Unions, Legislature lack guts to fix KPERS.

Kansas Treasurer makes grand circuit. One of the jobs of Kansas Treasurer Ron Estes is to safeguard unclaimed property and seek to return it to its owners. Estes and his staff have now visited all 105 Kansas counties, holding unclaimed property return events in each. The office says that in 2011, 65,913 claims totaling $14,433,929 have been returned to Kansans. The office is holding $230 million in unclaimed property.

Huelskamp considered objecting. The payroll tax measure passed last week in the U.S. House of Representatives was passed using “unanimous consent.” This means that there was no voice or roll call vote taken, and members did not need to be present. But if even one member had been present and had voiced an objection, the measure would have failed. Appearing on CNN, U.S. Representative Tim Huelskamp, who is in his first term representing the Kansas first district, said he considered making such an objection, but could not get to Washington from Kansas in time: “Actually, I did. Problem was by the time we were notified that the unanimous consent agreement would be offered, where I come from in Kansas, I can’t get to Washington quick enough on this short notice. So that was an option, we did think about that, but there’s no way to fly in on time to make that happen. Back on the pledge to America, we talked about 72 hours where big things like this would give us an opportunity to reel read the deal, actually read the bill. And in this case they decided to not follow that rule as well.” … Huelskamp said he was disappointed with the House leadership team, noting Congress has not cut spending, did not stand up to the president on the budget ceiling debate, and did not pass a balanced budget amendment. Noting the lack of delivery after the election of a conservative majority to the House, Huelskamp wondered “what difference did it make?” He described the payroll tax measure as one of numerous losses this year.

Obama’s regulation. Wall Street Journal Review & Outlook: “To answer the most basic question — has regulation increased? — we’ll focus on what the government defines as ‘economically significant’ regulations. Those are rules that impose more than $100 million in annual costs on the economy, though there are hundreds if not thousands of new rules every year that fall well short of that. According to an analysis of the Federal Register by George Mason University’s Mercatus Center, the Cabinet departments and agencies finalized 84 such regulations annually on average in President Obama’s first two years. The annual average under President Bush was 62 and under President Clinton 56.” The Journal notes the deception used by the Obama Administration as it tries to portray itself as not regulation-hungry: “Cass Sunstein, the director of the White House Office of Information and Regulatory Affairs, has been shopping around lower numbers that selectively compare Mr. Obama’s first two years favorably with Mr. Bush’s last two. Administrations are typically most active on the way out, and in any case the Bush regulatory record is nothing to crow about. But Mr. Sunstein’s numbers are even more misleading because they only include the rules that his office reviews while excluding the prolific ‘independent’ agencies such as the Federal Communications Commission. This means that if Congress tells, say, the Securities and Exchange Commission to write a new rule, it doesn’t enter Mr. Sunstein’s tally. So it omits, for example, some 259 rules mandated by the Dodd-Frank financial reregulation law along with its 188 other rule suggestions. It also presumes that Mr. Obama is a bystander with no influence over his own appointees who now dominate the likes of the National Labor Relations Board.” … After presenting more evidence of the growth of costly regulation under Obama, the Journal concludes: “The evidence is overwhelming that the Obama regulatory surge is one reason the current economic recovery has been so lackluster by historical standards. Rather than nurture an economy trying to rebuild confidence after a financial heart attack, the Administration pushed through its now-famous blitz of liberal policies on health care, financial services, energy, housing, education and student loans, telecom, labor relations, transportation and probably some other industries we’ve forgotten. Anyone who thinks this has only minimal impact on business has never been in business. … Mr. Obama can claim he is the progressive second coming of Teddy Roosevelt as he did in Kansas last week, or he can claim to be a regulatory minimalist, but not both. The facts show he’s the former.” The full article is Regulation for Dummies: The White House says its rule-making isn’t costly or unusual. The evidence shows otherwise.

The failure of American schools. The Atlantac: “Who better to lead an educational revolution than Joel Klein, the prosecutor who took on the software giant Microsoft? But in his eight years as chancellor of New York City’s school system, the nation’s largest, Klein learned a few painful lessons of his own — about feckless politicians, recalcitrant unions, mediocre teachers, and other enduring obstacles to school reform.” Key takeway idea: “As a result, even when making a lifetime tenure commitment, under New York law you could not consider a teacher’s impact on student learning. That Kafkaesque outcome demonstrates precisely the way the system is run: for the adults. The school system doesn’t want to change, because it serves the needs of the adult stakeholders quite well, both politically and financially.” … Also: “Accountability, in most industries or professions, usually takes two forms. First and foremost, markets impose accountability: if people don’t choose the goods or services you’re offering, you go out of business. Second, high-performing companies develop internal accountability requirements keyed to market-based demands. Public education lacks both kinds of accountability. It is essentially a government-run monopoly. Whether a school does well or poorly, it will get the students it needs to stay in business, because most kids have no other choice. And that, in turn, creates no incentive for better performance, greater efficiency, or more innovation — all things as necessary in public education as they are in any other field.” … Overall, an eye-opening indictment of American public schools.

Markets: exploitation or empowerment? Do markets lead to a centralization of political and economic power, or do markets decentralize and disseminate wealth? In an eight-minute video from LearnLiberty.org, a project of Institute for Humane Studies, Antony Davies presents evidence and concludes that markets and free trade empower individuals rather than exploit them.


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