Thursday, November 24, 2005

No Child Left Behind -- How do you pay for it?

Still no well-developed thoughts yet, but one angle hit me this morning: Does NCLB place any requirements on a school system that should not be there?

Let's forget about administrative costs for the moment, and just think about what outcomes NCLB is after. Are there any of those outcomes which are bad or fruitless?

I hear school administrators (including the ones in my family) say NCLB is an unfunded mandate, as though that is something new, or something necessarily bad.

There are all kinds of requirements placed on school systems that aren't necessarily followed by funding from the government entity that issues the requirement. For example, school buildings are required to have fire alarm systems and sprinklers for the safety of the students and staff. This requirement is usually set by the state or municipal building code. But there is no expectation on the part of the school administration that either one of those government entities will provide the money to add the fire safety systems to the school buildings.

After all, the people that would be taxed by the municipality are the same folks who get taxed by the school system. So in the end, it doesn't make any difference which entity collects the tax, the same people are paying for the safety systems.

Maybe we should think of NCLB as a "safety standard." What one labels things can make a big difference in how others think about it (you can sell “manure” at the garden store, but not “feces”). The intended purpose of NCLB, at least as I understand it, is to ensure that school systems don't just give up on the kids that are challenging or expensive to educate.

Like the installation of a fire safety system, implementing NCLB will cost more in districts that don't already pay attention to the kids on the margin. The question is where that money should come from, and that question takes us back to libertarian vs liberal political views (more labels).

My view, which I guess you could label as libertarian, is that you should leave local matters up to local governments, and the more localized the better. In the case of NCLB, I can accept that the federal government has the duty and power to set national education standards that have to be met if you want to run a school. I’m also supportive of the concept that every American kid must have access to a decent education.

So now the question becomes: To how small a government entity can we delegate the funding duty?

A single school system is too small, at least here in Ohio. The approach of having urban, suburban and rural school districts, funded primarily by property taxes, means there is a broad diversity in the economic capacity across districts. So you need to have some kind of Robin Hood taxation system which pulls money from the wealthiest areas and gives it to the poorest ones.

In Ohio, we perform the redistribution function at the state level. Another choice is at the county level, and that might work pretty well here in Franklin County. But then Madison County, our neighbor to the west, might be in trouble. It is almost all farmland, but with suburban sprawl moving over its borders. That means more kids but an insufficient tax base, because of the lack of significant commercial activity in that county. I suppose that we could contemplate school funding zones which are comprised of multiple counties – something on the order of economic zones as defined by the US Dept of Commerce. Maybe we match them up with Congressional districts – wouldn’t that put on new spin on gerrymandering?!

That bring us to exactly where Ohio is today – overlaying the district level funding with a statewide funding system. It may not be working well, but it could if our elected officials fulfilled their duty. Ohio has a broad enough economy that we should be able to fund and administer our NCLB duties entirely within the state.

But what about my home state of West Virginia? The population of the entire state is about the same as Greater Columbus, but WV has very little commercial underpinnings, and it is shrinking every day (one bright spot is the major presence Toyota has established near Charleston). WV schools need help from other states to if they are to operate at higher standards.

Seems to me that if you argue that the federal government should fund any standard they put in place, then you are saying that the Robin Hood system for school funding should be broadened to the federal level. In other words, there are states which cannot raise the money to fund NCLB within their own borders.

Remember, every school system in every town, in every county, in every state has to meet the same standard. Every citizen of the US that the federal government would tax is also a citizen of a state, a county and a community.

If we think NCLB should be funded at the federal level, then why not federalize all public schools?

Which brings up situations like New Orleans. At what point does it become the duty of the head of a household to say, “it sucks around here, let’s move someplace better.” During the middle of the 20th century, there was a mass migration from Appalachia to the manufacturing centers in Ohio and Michigan. During the Depression, waves of people moved from the Ozarks to California. Those folks didn’t wait for the government to come make their life better – they lashed everything they could to the pickup and headed for the promised land.

When we use federal money to rebuild cities wiped out by natural disasters or to fund schools in failing economic zones, it seems to me like we are underwriting the bad decisions and fear of risktaking (in terms of moving) on the part of folks who want to stay in those areas. Maybe one of the key problems in America is that we built such a comprehensive social safety net that folks no longer feel at risk for much of anything, expecting someone else to bail them out (a thought planted by a friend). If insurance doesn’t cover our loss, there’s always someone to sue for insult and injury.

Without that sense of being already 'at risk,' we've lost our motivation to take risks. It was that motivation that caused our ancestors to come to America and give the great experiment a try. I bet the Fall of Rome began when the Roman citizens lost their fear of being invaded. I think that's where we are in the US today.

Fat, dumb and happy indeed.

Nationalized Legal Care

While we're contemplating the wisdom of a national health care system, why don't we talk about a nationalized legal care system as well?

I mean, I feel kinda deprived because there's lots of lawsuits I might be able to file if I only had the money to hire a lawyer to examine my life and figure out what injuries and insults I could make someone else pay for. If we had a nationalized legal care system, I could just go down to my local legal aid office and get a public servant/lawyer assigned to me.

I bet I could figure out a way to take just about all the risk out of my life with a comprehensive set of contracts, court orders, and settlements that specify the terms of all my relationships with friends, merchants, service providers, and even members of my church congregation. There would be no action whatsoever which I could take that would cause me personally to bear the cost of an unexpected negative outcome. And if someone else does me wrong -- look out.

Oh wait a minute, I forgot that everyone else would have all these things too. Sounds like it could be a statemate. At least it would be full employment for the lawyers...

Wednesday, November 23, 2005

Education = Prosperity?

In his blog, Professor Jim Horn observes
"What makes this morning’s New York Times
school demonization
any different from the average garden variety one, is that this time, in its
haste to lambaste the schools by making test score comparisons with other
nations, Staples does not bother to note that the other better nation, this time
Japan, has been in economic recession for over 15 years, despite its seemingly
advanced education strategies grounded in homogeneity and groupthink. I ask you,
Mr. Staples, is this the kind of model that we should emulate to keep America
from becoming “a second-rate economic power?”
I think Professor Horn is trying to get our public education system off the hook for being the chief cause of all ills in America, and I agree with him on this point. He makes a great observation that Japan has an education system which is widely viewed as a producer of well-educated kids. Yet their economy is not doing well at all. You could say the same thing about Germany.

But if you buy into this perspective, I think one of the actions you would have to argue for is allocating fewer resources to something we're not so good at (running the public education system), and allocating more to developing the economy to drive up employment and GNP.

Did America become a great economic and political power because our educational system was exceptional -- producing a smarter population than anyone else? If you go back to the dawn of the American industrial age, I don't think that was the case. America's strength flowed from: a) a political environment that allowed entrepreneurs to have a shot of success; b) a wealth of natural resources for the taking; c) a labor force that was willing to work hard to get their shot at the good life; and, d) having the good luck to form our country at the beginning of the Industrial Revolution.

You didn't need much education to work in a steel mill and earn a good wage. But that was because we had lots of steel mills, and came to dominate the world market. We've lost many of those manufacturing jobs to other countries. The whole middle class is disappearing from our economy. We increasing have only highly educated professionals and hamburger flippers, with not much in between. We need to have industries that employ lots of people. Even better if those products are desired outside our country and we can generate export income.
Many American jobs have been lost to uneducated workers elsewhere in the world. Maybe its more important to have employed Americans than educated Americans. These aren't mutually exclusive conditions, but you can't eat a diploma.

Monday, November 21, 2005

Subscription TV

The following was a response written to a comment on Mark Cuban's log: blog maverick

As we saw at CompuServe, technical capability/capacity and the uses of those capabilities/capacities ratcheted steadily upward over the years. When everyone was timesharing via line oriented text user interfaces on monochrome monitors (and teletypes!!), 300bps modems were sufficient. When higher speed modems appeared (especially 9600bps), some said "wow, we'll be able to print out those long reports to the local printer a lot faster now." But others said, you know, I think we can transmit color graphics and whole files with that much bandwidth.
The same kind of thing happened when broadband came into the home. At first, it just seemed like a faster way to do old things the old way. But there was always something waiting in the wings that just needed the greater capacity. Music sharing became the killer app.

On demand HDTV over the internet is one of those applications we all see coming down the road, but only because we've seen primitive video over the internet already, and now want a more variety and more quality. Consumers see the internet as a vehicle to get whatever they want whenever they want, and are impatient for the world's video archive to be put online (sounds a little like Audionet, huh?)

Meanwhile, I think television could turn into a subscription medium. You don't just watch "Desperate Housewives," you subscribe to it. With that subscription, you purchase the right and ability to download and record the current episode when it is broadcast. It doesn't matter when you watch it, although the really hot shows will be broadcast during "prime time" so that its audience gets a chance to see it at the same time as all their friends (don't want to be the last one to see a really juicy episode).

For many other kinds of shows (think "American Chopper"), the broadcast time might be in the middle of the night. But no one cares because you're recording it to view later anyway.

The key is that the show is distributed via a one-to-many broadcast technology, either directly from satellite or from a local terrestrial station. I don't know enough about the comparative economics of the two, but suspect that satellite distribution is much cheaper, although the customer-end equipment is more expensive.

My satellite TV service, DISH, broadcasts something like 150 channels all the time. That means that in one day, they could broadcast 3,600 unique one hour programs. In a week, it would be 25,200 unique one hour programs. Right now, a lot of those slots are filled up with informercials and junk. Why not instead fill them with subscription feeds?

It could be very democratic. Create a website with a library of all the possible programs. At any given time, viewers could submit bids for the programs they want to see broadcast. Since each hour represents 150 hours of broadcast capacity (using the DISH network as an example), at say 30 mins prior to the top of the hour, the top 150 vote getters would be retrieved and queued up, and at the top of the hour, they would get broadcast. Any show not making the top 150 that hour would be in the running for the auction in the following hour. There might be a show that takes a month to collect enough bids to make it to the top 150. That's okay too.

Maybe you pay for every bid, or maybe you get 100 bids/month for your monthly subscription. Maybe you can only record a show you bid on, or maybe you can record any show that gets broadcast as long as you pay your monthly subscription.

What's the money trail? Boy, lots of possibilities here. One is that the broadcaster (satellite company), pulls off a slice of every subscription for their trouble, and then the show producers get paid directly based on the proportion of total downloads their show gets every month. The producers are free to bury ad spots and product placement in their feed if they want to try to make a little extra money. Viewers can decide whether the show is good enough to put up with this stuff.

Let's preserve the wires for time-critical and narrowly focused telecommunications, at least until the wire-based technology gains a couple of orders of magnitude of price/performance. We can push 'television' to satellites if we're willing to experiment with radically different revenue models.

Saturday, November 19, 2005

Charter Schools, Vouchers and Privatization

I'm a big fan of the theory behind charter schools and vouchers because they give a choice to consumers (parents, kids, and even teachers) and cause money to flow to the schools that are getting results. This is exactly how our college system works in the US, and there's no reason why it can't work for elementary and secondary schools as well.

Would I be even happier if all schools were private? Maybe, but we need to ensure that everyone has access to a good education regardless of their ability to pay. There's no way to do that except to figure out a way to get money from the wealthy to subsidize the education of the poor.

The typical way of achieving this is to collect taxes and then let government entities make the decisions how to redistribute the money to public schools. The problem is that the people who make the decisions about how to distribute and use the money are politicians and bureaucrats who rarely demonstrate the ability to perform this function well. The charter school fiasco is an example. Once the vultures of our society learned that money was being handed out without adequate controls, all kinds of unqualified folks opened up charter schools to make a fast buck. The money was wasted and the kids got nothing.

Again, the college system provides a model. My eldest attended a private school here in Ohio. It was expensive, and our financial condition was such that we could not qualify for any financial aid. But this school is also known for giving generous scholarships to promising kids, which no doubt contributes to the excellence of the school. I’ve always joked that when you paid full tuition to a good private college, you are paying for both your own kid and one on scholarship. But I think it’s the truth, and it’s also okay with me.

The youngest considered Northwestern before choosing the Honors Program at Ohio State. One of things that really impressed me about Northwestern was that they said they select the students they want first (which is based on much more than academics), then figured out the funding. The student who gave us the campus tour said she came from the ghettos of Chicago, but was attending Northwestern for free. That’s the way it should be done.

For K-12, it would be a daunting task to go through same kind of admissions process used by colleges. That’s where vouchers come in. Every kid gets a voucher that’s worth say $10,000 per year, and can spend it at any accredited school. Each school can decide how to allocate that money to buildings, equipment, staff, books, extracurricular activities, and so on. Some may choose not to have sports, and put all the money into PhD level teachers in math and science. Others may focus on what we today call ‘vocational education.’ Others may have an athletic orientation, but not as a taxpayer-funded all-day playground. The athletics would have to be tied to a rigorous academic program.

A voucher could not just automatically be redeemed for cash. I propose that the number of vouchers which get redeemed is tied to performance on standardized tests. For example, if you have 500 kids in a school, but only 450 pass the tests, the school can only redeem 450 vouchers. You have trust that the test are valid measures of academic achievement, but we have already crossed that bridge. With this approach, bad schools are rapidly starved out, even if the parents don’t care, as is sometimes the case.

For parents who are really concerned about their kids’ education, the voucher system allows them to select schools which provide the education and environment they want for their kids, regardless of the family’s financial status. For the parents who don’t care, the tie of the voucher reimbursement to test scores keeps the parents’ ambivalence from letting bad schools carry on anyway.

Okay, so here’s the more radical component of vouchers: I believe that the public school system should be disbanded and converted to a 100% private system. A school corporation must be accredited and chartered by the state to be able to redeem vouchers, but the management of such a school is selected by a Board of Directors, and the Board of Directors is elected by those who turn in vouchers to attend the school. Each school corporation determines it own compensation program for staff, including the school calendar, salaries and benefits. Teachers are free to form unions, and school corporations are free to decide whether they will be union shops.

Some school corporations will specialize in K-6 perhaps, running just one building or hundreds of buildings across the state. Other school corporations will do K-12, but only in one community. There might even be school corporations that run only 9-12 schools that specialize in music and the arts. The combinations are endless. Larger school corporations might use their economies of scale to enable academic programs which smaller corporations just cannot afford. As an example of what I mean, as a computer science major I attended Ohio State in the 1970s because they had one of the largest academic computer complexes in the country, something a little school like my eldest’s private college could never afford. However, she studied music education, which doesn’t require a big capital budget. It was much more important for her to have access to well-respected faculty and to get to go on performance tours.

It could work. But it means wrestling power away from the politicians. And that takes an involved and informed public (whoops, slipped into another rant).


Tuesday, November 15, 2005

Free TV a Goner?

WSJ 11/14/05 p B8 "Hollywood Writers Push Back Against Product Placement"

The Writers Guild of America wants a code of conduct developed which requires disclosure at the beginning of each TV show of the products which were incorporated because of placement deals (i.e. as opposed to being part of the writer's storyline). If the studios don't go along with this, the writers intend to seek support from the FCC.
One of the signs of the end of an industry is when its incumbents seek the government's help in maintaining the status quo, rather than let free market forces drive sellers to produce what buyers desire.

It's not that I don't understand where the writers are coming from. Their ability to get future employment is heavily influenced by how their prior work is perceived by future employers. If the requirements of a product placement deal make a writer's scripts look like a joke, potential future employers might disregard that writer as a candidate for future scripts. The writers are probably just as concerned that their peers will look down their noses at them unless the writer can say "they made me put that big speech about Lime Coke in the love scene."

Television writers misunderstand their role. They aren't journalists, who have a higher calling to seek truth and communicate it to the public. Writers get paid when they produce something for which someone is willing to pay, like a TV script with embedded product placement. Seems to me that if a writer is really good, they might be able to weave product placement into a script almost seamlessly. If the scripts the writers produce are valuable and scarce, they have more power to set terms and conditions. But if that were true, they wouldn't need the government to intervene.The folks who produce and distribute TV shows are realizing that their world is at the beginning of a radical change, and they're desperately trying to figure out what the new revenue model will be.

Advertising revenue from discrete 30sec commercials is about to evaporate. The people who run the television business aren't going to let their ability to participate in the future of video entertainment get screwed up by the writers. For every Guild member who refuses to write for a show because they don't like something, there will be multiple underemployed writers willing to take their place. The Writers Guild needs to adopt or be rendered irrelevant.

Very few creators of art get to make a lot of money and also have complete control of their product. Mozart died penniless because he value art over wealth. We're all thankful for that. "The Fountainhead" by Ayn Rand is a classic story of artist freedom versus art-for-money. I'm sure television writers are frequently asked to change their scripts to meet someone else's needs (e.g. to support a political position). Is there a real difference here?

So to the members of the Writers Guild, you have a choice:
  • Resist change, and cry to the government for help if you don't get your way. Your employers will find a way to do without you.
  • Work on updating your craft, and figure out how to blend the commercial requirements of your business with your artistic vision. Be part of the solution, not part of the problem.
  • Get out of the business now. If you want freedom, write a book --- oh, wait a minute, I forgot about the editors.

Guess you need to write a blog...