Voice For Liberty

Tag: Free markets

  • Private enterprise does it better

    While some believe that government is the best provider of services, John Stossel, in the following article, shows us that this is not always the case. In fact, it is rare that government is able to do a better job at lower cost than the private sector.

    One motivating factor that private business has that government does not is profit. Liberals view profit as an extra expense that must be paid to private sector businesses. They say that profit is a cost that can be avoided if government — which has no need for profit — provides a service.

    But as Stossel explains, profit is a powerful motivating factor. It makes private businesses provide products and services that people want, and efficiently, too: “Because if private companies don’t do things efficiently, they lose money and die. Unlike government, they cannot compel payment through the power to tax.”

    We hear, as we do in Wichita now, that government should be operated more like a business. Our city manager speaks of a business model he is developing. But it is folly to speak of operating government like a business. The goal of business is profit — the signal that the business is providing things that customers value.

    But government, as Mises and others have shown, has no ability to calculate profit. It can’t be guided by the same signals that guide the private sector.

    Even streets and highways could be provided in a better way than government does, as Stossel explains.

    Private Enterprise Does It Better

    Why freedom and responsibility triumph over regulation and central planning
    By John Stossel

    In Myths, Lies and Downright Stupidity, I bet my readers $1,000 that they couldn’t name one thing that government does better than the private sector.

    I am yet to pay.

    Free enterprise does everything better.

    Why? Because if private companies don’t do things efficiently, they lose money and die. Unlike government, they cannot compel payment through the power to tax.

    Even when a private company operates a public facility under contract to government, it must perform. If it doesn’t, it will be “fired”—its contract won’t be renewed. Government is never fired.

    Continue reading at Reason Magazine

  • Wichita event: The future of innovation and investment in broadband

    The FCC has proposed reclassifying the Internet as a public utility to get total regulatory control. How can you help stop the FCC Internet takeover?

    Learn about the efforts to keep the Internet in the free market during a free lunch seminar, “The Future of Innovation & Investment in Broadband” next Thursday at the Wichita Petroleum Club. Hear from Bruce Mehlman, co-chair of the Internet Innovation Alliance and former Assistant Secretary of Commerce for Technology Policy in the George W. Bush administration, on efforts to expand broadband access and how to keep the Internet in the free market.

    Registration is free when you RSVP, but seating is limited. Register by 5 p.m. Friday, Aug. 6, for a chance to win a $500 Apple Store gift card!

    The event is from 11:30 am to 1:00 pm on Thursday August 12, at the Wichita Petroleum Club, on the ninth floor of the Bank of America Building at 100 N. Broadway (north side of Douglas between Topeka and Broadway) in Wichita, Kansas (click for a map and directions)

    This luncheon is sponsored by Americans for Prosperity-Kansas, Mid-American Communications Alliance, Wichita Independent Business Association, and Kansas Policy Institute.

    Registration is free when you RSVP by clicking on action.mocomm.org/rsvp. Learn more by calling Susan Estes of AFP at 316-681-4415, or by email at sestes@afphq.org.

  • Teacher tenure reform starts

    The system of teacher tenure has suffered a blow that could spread to other parts of the country.

    Washington D.C. schools chancellor Michelle Rhee has fired 241 teachers for poor performance, are more are on notice. This is in a school system where, according to Wall Street Journal reporting, “Ms. Rhee said Friday she took over a system in 2007 where 95% of teachers were rated excellent and none terminated for poor performance. Yet, students posted dismal test scores.”

    The system of teacher tenure in K through 12 education deserves examination, and if we believe that schools exist for the benefit of schoolchildren, it should be eliminated.

    Defenders of tenure say it doesn’t prevent lousy teachers from being fired. Instead, tenure simply guarantees them due process rights. But the problem is that the process is so difficult for school administrators to pursue that some school districts — New York City, famously — create “rubber rooms.” These are rooms where the truly bad teachers report every workday to sit and while away the several years that their cases can take to work their way through the system. In 2007 the New York Times reported that 760 New York City schoolteachers were doing this in 12 “reassignment centers.”

    (By the way, the “work hours” for the rubber rooms was 8:00 am to 2:50 pm. Teachers could leave for lunch.)

    Since the rubber rooms are an embarrassment for all involved, the Times has reported that the past school year was the last for the rooms. Now, the worst teachers will perform administrative duties or be sent home.

    Advocates of tenure also argue that it is necessary to protect teachers from the arbitrary decisions of school administrators. There might actually be some validity to this argument, but tenure is the wrong response to the problem.

    It is said that school administrators — in a system without tenure — would practice “crony” hiring and promotion practices. They would reward their friends and family and punish their enemies or those they simply don’t like.

    These things happen in a system insulated from market competition, and institutions don’t suffer when they do. In the private sector, when a manager makes staffing decisions based on cronyism — instead of hiring and retaining the best possible employees — the profitability of the company suffers. If managers’ compensation is tied to profitability, they suffer when making staffing decisions based on cronyism. Even if they don’t suffer pay-wise, these managers will not perform well on their own evaluations.

    A system of market competition, however, forces each institution — schools, too — to be the best they can possibly be. When schools compete for students and funding, principals might learn to like their very best teachers, even if they don’t care for them personally.

    They also might learn how to evaluate and recognize the best teachers. That’s important, as it is becoming apparent that the personal characteristics of teachers are far more important to student success than the things that schools presently use to reward teachers — credentials, additional education, and longevity.

    The characteristics of teachers are also far more important than class size, which is another factor the education establishment focuses on. Eric Hanushek has estimated that students of the worst teachers will learn just one-half a year’s material in a year, while students with the best teachers will learn one and one-half year’s material in a year. This difference is far greater than the weak effect that school class size studies have found, and even those small findings are suspect.

    Presently some states are considering using student test scores as a way to evaluate and reward teachers. Student test scores are viewed as an objective way to evaluate teachers, one that is removed from the subjective evaluations of school administrators who, as shown above, don’t have a very strong incentive to hire and retain the best teachers.

    Any meaningful reform is strongly opposed by the teachers union and the education establishment. This makes Washington D.C. schools chancellor Rhee’s accomplishment all the more remarkable.

    How did Rhee accomplish this breakthrough? Earlier reporting in the Wall Street Journal mentioned the political support of Washington’s mayor, Adrian Fenty, and the fact that the Washington schools were just terrible. Her challenge lies ahead, as the Journal noted: “Ms. Rhee’s challenge now is to use the new rules forcefully enough to drive improvements because the unions will assume they can wait her out.” The union will probably sue over these firings.

    The education bureaucracy and the system is working against Rhee too: “Unfortunately, most school chancellors are careerists who don’t want to upset the unions because they are always looking for their next job. One example: Clifford Janey, whom Ms. Rhee replaced in D.C., went on to become the superintendent in Newark, N.J., whose schools may be worse than D.C.’s. Ms. Rhee, by contrast, came to her job as an outsider willing to endure the considerable abuse that the unions and their political backers threw at her.”

    As seen in Kansas by the example of Kansas School Board Member Walt Chappell, if you’re not a team player, you’re going to suffer abuse from the education bureaucracy.

    Giving Lousy Teachers the Boot

    Michelle Rhee does the once unthinkable in Washington.
    By William McGurn

    Donald Trump is not the only one who knows how to get attention with the words, “You’re fired.” Michelle Rhee, chancellor for the District of Columbia schools, has just done a pretty nifty job of it herself.

    On Friday, Ms. Rhee fired 241 teachers — roughly 6% of the total — mostly for scoring too low on a teacher evaluation that measures their performance against student achievement. Another 737 teachers and other school-based staff were put on notice that they had been rated “minimally effective.” Unless these people improve, they too face the boot.

    The mass dismissals follow a landmark agreement Ms. Rhee negotiated with the Washington Teachers Union (WTU) at the end of June. The quid pro quo was this: Good teachers would get more money (including a 21.6% pay increase through 2012 and opportunities for merit pay). In exchange, bad teachers could be shown the door.

    Continue reading at the Wall Street Journal (subscription required)

  • Herman Cain: Conservatives should dream, be united, informed, inspired

    Herman CainHerman Cain

    At this weekend’s RightOnline conference at The Venetian in Las Vegas, businessman and radio talk show host Herman Cain delivered an inspirational message to the audience of some 1,100 conservative activists from across the country.

    Cain has a nightly radio show and is a frequent guest host for the Neal Boortz show, which is heard in Wichita on KNSS radio. Cain has been an executive at several companies, including serving as president of Godfather’s Pizza, a unit of Pillsbury. He appears on Fox News, and WorldNet Daily carries his weekly column.

    He also runs The Hermanator PAC, which seeks to elect economically responsible conservatives to office. His name is mentioned in lists of presidential contenders for 2012, and he may launch a presidential exploratory committee.

    Speaking at Saturday’s general session at RightOnline, Cain told the audience “The tragedy in life does not lie in not reaching your goals; the tragedy lies in having no goals to reach for. It’s not a calamity to die with dreams unfulfilled, but it is a calamity to have no dreams.”

    Cain said that his dream is that we return to the principles that the Founding Fathers envisioned for what turned out to be the greatest country in the world: life, liberty, and the pursuit of happiness. “It didn’t say anything about a Department of Happy!” It is the pursuit of happiness that is mentioned.

    Cain told the audience there are three things the audience must do: First, conservatives and their citizen movements must stay united in their efforts take back our government.

    Second, conservatives must stay informed. “Stupid people are ruining this country,” he said, telling the audience that over half the people can be persuaded by a slick speech or a slick campaign ad.

    Third, conservatives must stay inspired. Telling the audience the story of his recovery from cancer, he said his inspiration for his work comes from God Almighty.

    He also related the story of the bumblebee, and how aerodynamic equations and computer models predict that the bumblebee should not be able to fly. “There’s only one reason the bumblebee flies: He didn’t get the memo that said he couldn’t. The bumblebee believes he can fly.”

    Telling the audience that they have “bumblebee power,” he believes that conservatives can take back the government in November 2010.

    Cain also mentioned what he calls the “SIN” tactics that liberals employ: First, they shift the subject, then they ignore the facts. “Liberals can’t handle the facts,” he told the audience, and that’s why they shift the subject and ignore the facts.

    Finally, liberals resort to name-calling, calling himself and other conservatives racists, a charge he said is ridiculous and has backfired.

    Later that day, I had an interview with Cain in his suite at Encore Las Vegas. Casually dressed and sipping a glass of wine, he was more relaxed than during his energetic speech earlier that day, although eventually his engaging enthusiasm broke out.

    Referring to his optimism for the chances of conservatives in the upcoming elections, I said I’m not so sure, even pessimistic. Why am I wrong, I asked?

    Cain said that callers — both to his Monday through Friday radio show and when he substitutes for Boortz and Sean Hannity — express their frustrations with the direction of the country, the stalled economy, and lack of private sector job creation. That makes him optimistic. Callers say they’ve been duped by the “hope and change” message, and they’re waking up.

    Another factor he cited is the ongoing Gallup poll showing conservatives outnumbering liberals two to one, and independents and moderates outnumbering liberals one-and-a-half to one. He said this tells him that the numbers are on our side.

    I asked Cain about the controversy about the Civil Rights Act of 1964: As a black man, who at age 64, growing up in the south, faced real and actual discrimination: Is our country better off for it?

    “Absolutely we are,” he said, for both the Civil Rights act of 1964 and the Voter Rights Act of 1965, adding that they had historical impact on our country.

    The Great Society programs and the rise of the modern welfare state: Are we better off for that? No, he said. He said that these programs didn’t provide enough incentives for people to help themselves. “That’s what’s wrong with most of the social programs today. That’s why they need to be modernized. When you provide incentives, and you provide help, but you also have requirements in there for people to help themselves: guess what? The programs will work.” But people have figured out how to game the system, and then the programs don’t work.

    “Look at systemic poverty, look at crime, look at the quality of education in our inner cities — it’s all worse than it was.” The welfare reform of the 1990s, which required people to do certain things in order to continue to receive a check, shows that when people have an incentive to help themselves, they will use assistance programs more effectively, he said.

    Since he mentioned education, I explained that in Kansas we have very few charter schools, and no school choice. What are we missing out on in Kansas? Are we behind the curve?

    Yes, he said. “Competition makes everything better.” He told about the success of the Washington DC school choice program, with over 90 percent of the students going on to college. But the Democrat-led Congress and the President would not re-authorize the program. The teachers unions don’t like competition, he said, and this was the reason why.

    I mentioned that often liberals are opposed to school choice because they say that poor uneducated parents are not equipped to make decisions regarding schools for their children. This is not true, Cain said. “It’s part of that whole attitude that government can make better decisions for a poor family then they can make for themselves.”

    A focus of this conference is that liberty and free markets are superior in creating prosperity for everyone. But many people believe that one person becomes rich only if others become poor. I asked: Why do people believe that? Why have we as conservatives not been successful in getting out that message? Why doesn’t the president seemed to believe that?

    Cain said that President Obama doesn’t believe this because he is “at least a socialist.” Republicans have not been good about managing “sharper, clearer messages about certain things.” He said and the Republican National Committee focuses on raising money, which is good, but they don’t do a good job of explaining what the Republican Party stands for. Cain said that while he supported current chairman Michael Steele for that job, he doesn’t know what Steele believes are the priorities or focal points for Republican candidates running for office in November.

    While we know that we have to do something about spending, taxes, and education, these are general, broad statements, he said. We even know how to fix most problems. “We just don’t have the political will or the leadership to fix some of these problems. That’s what America faces, that’s our biggest challenge.”

  • Economic principles to be applied at event in Wichita

    The Americans for Prosperity Foundation announces a meeting with the title “Applying Economic Principles to Current Events and International Issues.”

    The special guest presenters at this meeting are Gabriella Megyesi and Gregory Rehmke. These two speakers are also presenting at the Free the World Seminar 2010. This evening event allows people who are unable to attend the three-day seminar a chance to hear from these presenters.

    The event will be held on Tuesday, July 27, 2010, from 7:00 pm to 8:30 pm at the Wichita Downtown Public Library at 223 S. Main, on the third floor.

    Gabriella Megyesi taught economics at the Britannica International School in Budapest, Hungary, and earlier taught economics (in English) at Alternaltív Kôzgazdásgi Gimnázium, a Hungary’s first private school after the fall of communism. She currently develops course materials on economics and entrepreneurship, as well as speaking regularly for Economic Thinking and the Foundation for Teaching Economics seminars.

    Gregory Rehmke directs programs for Economic Thinking and lectures at seminars for the Foundation for Economic Education, the Independent Institute, and the Institute for Economic Studies-Europe. He is coauthor of The Complete Idiot’s Guide to Global Economics.

    For more information contact John Todd at john@johntodd.net or 316-312-7335, or Susan Estes, AFP Field Director at sestes@afphq.org or 316-681-4415.

  • RightOnline in Las Vegas this week

    Later this week the RightOnline Conference takes place in Las Vegas, Nevada.

    This is the third year for this conference. It’s held at the same time — and in the same city — as the Netroots Nation. Or NutRoots, take your pick.

    The event features a lot of training and some great speakers. Michele Bachmann will headline the Friday dinner, and the Saturday general session features speakers like Andrew Napolitano, Mike Pence, Robert McDowell, Herman Cain, Erick Erickson, and John Fund.

    RightOnline is sponsored by the Americans for Prosperity Foundation. Click on Podcast: Erik Telford Previews the RightOnline Conference to hear an interview with AFP’s Erik Telford. To keep up on Twitter, the hasthag is #ro10.

  • Charles and David Koch, supporters of free markets and economic freedom

    Economic freedom and market-based policies create the most opportunity and prosperity for everyone, including the poor and the environment, says Richard Fink, and that’s why Charles and David Koch of Wichita-based Koch Industries, Inc. support these principles and public policy organizations that work to advance them.

    In the following article, Mark Tapscott of The Washington Examiner interviews Richard Fink, president of the Charles G. Koch Charitable Foundation and an executive vice president of Koch Industries, Inc.

    In the article, Tapscott explains that economic freedom and free markets are not the same as big business. Fink explains the role of the Kochs in supporting institutions that promote economic freedom and free markets. He says that the tea party is a positive development of citizens concerned about government growth and spending, and that accusations that it is an “astroturf” movement controlled by corporate sponsorship is nonsense.

    What if all businessmen were as dedicated to free markets as the Kochs?

    By Mark Tapscott

    Among the biggest obstacles to restoring American freedom and prosperity is the fact too many corporate executives are all too happy to play footsie with government bureaucrats, usually in an attempt to gain a competitive advantage over competitors.

    Consumers — and taxpayers — are always the biggest losers when Big Government and Big Business get in bed together.

    One result is that instead of having to put consumers first, the corporations put the bureaucrats first. Prices go up, the quality of service goes down, and not infrequently corruption eventually results (See Enron and cap-and-trade, for example).

    But there are honest leaders in the corporate world who go a different way. Charles and David Koch of the Wichita-based Koch Industries are among the preeminent examples of such men and women.

    They’ve built one of the world’s largest private corporations based on the principles of free markets and competition.

    For more than 40 years, the Kochs have also been aggressive supporters of those principles in the public policy arena, a fact that always flusters critics of economic freedom.

    Continue reading at The Washington Examiner.

  • Free the World Seminar 2010 in Wichita

    As a recent Wichita Eagle Op-Ed article expressed, today’s students are not financially literate, but when given this background, their opportunities in life are unlimited: Jim Graham: Kansas youths need to be financially literate.

    After so many decades of prosperity in the U.S., Europe, and Japan, why are so many people in Latin America and Africa still poor? What lessons can we learn from recent rapid economic growth in China and India? Can U.S. firms and workers compete with low-wage workers in China, India, and other countries? Sessions apply economic principles to current events and international issues, and are designed for teachers, students, and others interested in economics, geography, and history.

    Presentations will include video clips, handouts, and some active learning simulations led by Gabriella Megyesi. Click to read more about Gabriella Megyesi and this seminar in this flyer.

    Register and reserve your spot with our Summer Adventures in Learning Director, Khristi Bates, at 316-686-0152 ext. 160 or email her at Khristi.Bates@TheIndependentSchool.com.

    Please feel free to spread the word!

    Thank you,

    Mrs. Jean Garvey

    Event details: July 26 to 28, from 9:00 am to 4:00 pm, at The Independent Upper School in Room 201. The cost is $75 for adults, $50 student. The event has limited space.

  • Financial reform bill as bad as can be

    The United States financial reform legislation that just passed through conference committee is just about the worst possible bill that could emerge. In its analysis, The Wall Street Journal concluded “perhaps the best summary is to hail Dodd-Frank as the crowning achievement of the Obama ‘reform’ method. In the name of responding to a crisis, the bill greatly increases the power of politicians and regulators without addressing the real causes of that crisis. It makes credit more expensive and punishes business without reducing the chances of a future panic or bailouts.”

    Others are critical of the bill, too. The Cato Institute’s Mark A. Calabria wrote “That thin semblance of reform will let Congress and the Obama administration claim they brought Wall Street to heel. But by dodging all the hard issues, this ‘reform’ makes it likely that the next crisis will put the last one to shame.”

    Later Calabria wrote “Perhaps it should come as no surprise that Sen. Christopher Dodd and Rep. Barney Frank, the bill’s primary authors, would fail to end the numerous government distortions of our financial and mortgage markets that led to the crisis. Both have been either architects or supporters of those distortions. One might as well ask the fox to build the henhouse.”

    Investor’s Business Daily agrees: “The two sponsors, Rep. Barney Frank and Sen. Chris Dodd, are as much responsible for the financial crisis as any two people in America. Yet, we’re now supposed to believe that they, and their flailing party, which can’t even meet its legal obligation to produce a budget, have now fixed our financial system.”

    We ought to be wary of government — who many believed caused the crisis — claiming that it can fix the present crisis and prevent another. Liberals believe that the right regulations, when enforced by smart and dedicated federal regulators, can prevent the usual failure of government regulations. But writing earlier this year in The Wall Street Journal Allan H. Meltzer explained why this won’t happen: “This is because regulation is static, while markets are dynamic. If markets don’t circumvent costly regulation at first they will find a way later. … Regulation often fails either because regulators are better at announcing rules than at enforcing them, or because the regulated circumvent the regulations.”

    While some might proclaim that free markets produce perfection, Meltzer wrote: “Capitalists make errors, but left alone, markets punish such errors.”

    We’re not leaving markets alone. Instead, we’re stepping up the intervention.

    Triumph of the Regulators

    The Dodd-Frank financial reform bill doubles down on the same system that failed.

    President Obama hailed the financial bill that House-Senate negotiators finally vouchsafed at 5:40 a.m. Friday, and no wonder. The bill represents the triumph of the very regulators and Congressmen who did so much to foment the financial panic, giving them vast new discretion over every corner of American financial markets.

    Chris Dodd and Barney Frank, those Fannie Mae cheerleaders, played the largest role in writing the bill. Congressman Paul Kanjorski even offered a motion to memorialize it as the Dodd-Frank Act. It’s as if Tony Hayward of BP were allowed to write new rules on deep water drilling.

    The Federal Reserve, which promoted the housing mania and failed utterly in its core mission of monitoring Citigroup, will now have more power to regulate more financial institutions and more ability to dictate the allocation of credit.

    Continue reading at The Wall Street Journal.