Donna Ikeda, Clueless

Katherine Poythress covers education for Civil Beat, an attempt at a viable (i.e., paying) new media news and comment enterprise. Poythress called various Board of Education candidates to hear their opinions on the proposal to shift from the current elected Board of Education to an appointed Board. She found Donna Ikeda's views worthy of publication.

Katherine Poythress writes...

"In all those years, no matter what we did, no matter what we'd try — and it's funny because they talk about education reform and reinventing education today, and we've tried that many, many times — nothing has gotten better," Ikeda told Civil Beat.

From Ikeda's perspective, the board has become mired in petty politics. And without an effective board, even the most well-intentioned reforms for Hawaii's schools will go nowhere.

As the closing comment indicates, Donna Ikeda expects "well-intentioned" top-down control to enhance overall system performance. Many people in Hawaii apparently agree. This widespread compulsion to control others, which the Statewide school district enables, is the reason "nothing has gotten better".

In The Road to Wigan Pier, George Orwell speculated that socialist leanings originate in a hypertrophied sense of order, like compulsive handwashing or people who sort the socks and underwear drawer ten times a day. Elsewhere (e.g., "Raffles and Mrs Blandish", "Inside the Whale"), Orwell suggested that a preference for authoritarian politics originates in vicarious sadism. In Socialism, Ludwig Von Mises suggested that the socialist orientation originates in a primitive revenge fantasy. The Russian mathematician Igor Shafarevitch advanced a similar argument in The Socialist Phenomenon.

System performance measures summarize student performance measures. Student performance depends on policy variables, things which policymakers can manipulate like budgets and teacher credentials, and non-policy variables, which policymakers cannot manipulate, like heredity, prenatal nutrition, parent SES, and a supportive home environment. The key policy variable which determines student performance is student motivation. Policies which enhance student motivation will enhance system performance.

Schools give to many students no reason to do what schools require. Training an artistically or mechanically inclined child for an academic career using a transcript as the incentive is like teaching a cat to swim using carrots as the reward. It does not take 12 years at $10,000 per pupil-year to teach a normal child to read and compute. Compulsory unpaid labor is slavery, black or white, male or female, young or old.

Gandhi opposed compulsory attendance at school. He argued that parents are the natural teachers of children. Children, especially young children, will work their hearts out for the love of their parents. Older children will work for social reasons, for the love of their preferred subject, for freedom, or for rewards of which politicians and Professors of Education have no clue.

Size matters. The structure of the Hawaii education industry, encoded in the Hawaii Revised Statutes, is a policy variable. So long as remote authorities impose their designs on schools, the system will abide in the national cellar.

Update: misspelling of "Poythress" corrected.

Why School? (2010 Update)

(A modified version of a communication to a reporter for Civil Beat)

When John Waihee occupied Washington Place his Lieutenant Governor, Ben Cayetano, coordinated meetings of a group called the Commission on School Governance. At that time (c. 1993) Lt. Gov. Cayetano said: "We cannot afford to waste another generation of school kids." A school generation is 12 years. Since 1993 we have wasted a generation of school kids.

Anyone interested in school system performance will benefit from reading the Brookings Institution study by John Chubb and Terry Moe, Politics, Markets, and America's Schools (1991, originally entitled "What Price Democracy? Politics, Markets, and America's Schools") and the Brookings/Urban Institute/Committee For Economic Development study Vouchers and the Provision of Public Services (2000, C. Eugene Steuerle, et al. eds.). The latter discusses a variety of industries from national, international, and abstract perspectives at various of levels of abstraction. Some of the essays require the economic and mathematical expertise of a specialist in tax policy while some essays are quite accessible. The brush-clearing introductory remarks on "public goods" in E.G. West's "Education Vouchers in Principle and Practice; A Survey" (The World Bank Research Observer, 1997-Feb., online) provide useful background. West's "Education Vouchers in Principle and Practice (full report)" (online) combines theoretical analysis and empirical research. Joel Fried's discussion of "the agency problem" in "Pots and Kettles: Governance Practices of the Ontario Securities Commission" (online) suggests important considerations which apply across the board to discussions of the relative merits of State-monopoly providers and competitive markets in goods and services.

When Chubb and Moe designed their study of school effectiveness they ranked schools by student gains between 10th and 12th grade on standardized tests of Reading, Math, and Science (they did not use Social Studies because Social Studies scores did not correlate with anything, which is pretty funny if you know any statistics). They then looked for systematic differences between the top 25% of schools and the bottom 25% of schools. The largest difference was, as expected, parent SES. That is, student gains correlated strongly and positively with parent income. The second most influential variable was a composite variable which Chubb and Moe called "the degree of institutional autonomy". That is, the more people above the level of Principal telling the Principal how to do her job, the worse a school performed.

Consider this question: "From State (government, generally) operation of what industries does society as a whole benefit?", imagine either a dichotomous classification Likely/Unlikely or a continuum, highly unlikely (______.______) highly likely, and try to generalize some principle which generates the assignment or position of an industry in this scheme.

(Hint)
Eduardo Zambrano
Formal Models of Authority: Introduction and Political Economy
Applications
Rationality and Society, May 1999

Aside from the important issue of how it is that a ruler may economize on communication, contracting and coercion costs, this leads to an interpretation of the state that cannot be contractarian in nature: citizens would not empower a ruler to solve collective action problems in any of the models discussed, for the ruler would always be redundant and costly. The results support a view of the state that is eminently predatory, (the ? MK.) case in which whether the collective actions problems are solved by the state or not depends on upon whether this is consistent with the objectives and opportunities of those with the (natural) monopoly of violence in society. This conclusion is also reached in a model of a predatory state by Moselle and Polak (1997). How the theory of economic policy changes in light of this interpretation is an important question left for further work.

After the fall of the Soviet State the British poet and historian of that State, Robert Conquest, wrote that the West had insufficiently learned two important lessons: the limits to the amount of good that can be accomplished by organized force (the State) and the stultifying effects of bureaucracy, public or private.

"Deadweight costs of taxation" (see an online economics dictionary) considerations imply that State operation of most industry imposes greater costs than benefits. As Zambrano indicates above, "communication, contracting and coercion costs" determine the cost/benefit result from a welfare-economic point of view. When inputs and outputs are simple, when systematic expertise matters more than specific local knowledge, and when capitalization costs are high (e.g., structural steel, plate glass), a sufficiently large State may operate an industry at close to the cost/benefit level of an industry in the private sector. Since inputs to the education industry (each individual student's interests and aptitudes) vary enormously and outputs (the potential career paths graduates will follow in a diverse modern society) vary enormously, since capital costs are low, and since specific local knowledge matters more than (bogus) systematic expertise, the education industry is a highly unlikely candidate for State (government, generally) operation.

Separation of powers, federalism (local control), and the legal system of private property and contract law institutionalize humility on the part of State actors. No one has privileged access to divine inspiration. If a policy dispute turns on a difference in taste, numerous local policy regimes or a competitive market in goods and services allows for the satisfaction of varied tastes, while a State-monopoly system must inevitably create unhappy losers. If a policy dispute involves a matter of fact, where "What works?" is an empirical question which only an experiment can answer, numerous local policy regimes or a competitive market in goods and services will generate more information than will a State-monopoly enterprise. A State-monopoly enterprise is like an experiment wit one treatment and no controls, a retarded experimental design. The system of markets (title and contract law) calibrates the reward for improved answers to resource allocation questions to the urgency of the question and the magnitude of the resources involved.

Empirical research finds what the above theoretical analysis predicts. Abundant empirical, statistical evidence supports the following generalizations:
1. As institutions take from individual parents the power to determine for their own children the course of instruction and the pace and method of instruction, overall system performance falls.
2. Political control harms most the children of the least politically adept parents.

Why, then, is the government in the education business? This "why?" question has three interpretations:
1. The welfare-economic "why?".
2. The historical "why?"
3. The political science "why?".

In brief:

1. No good welfare-economic case exists for State operation of schools.
2. The policy which prevails across the US and which compels attendance at school, mandates tax support of school, and restricts parents' options for the use of the taxpayers' pre-college education subsidy to schools operated by State (government, generally) employees originated in religious intolerance (specifically, anti-Catholic bigotry) and the ambition of public-sector entrepreneurs like Horace Mann and Richard Armstrong.
3. The current system survives on dedicated lobbying by current recipients of the US taxpayers' $500 billion+ per year pre-college education subsidy.

The $500 billion+ figure seriously understates the cost to society of the policy which restricts the taxpayers' education subsidy to schools operated by dues-paying members of the NEA/AFT/AFSCME cartel. Additional costs include the lost improvements in educational methods and technology which a competitive market would generate and the opportunity cost to students of the time that they spend in school. The opportunity costs of student time in school include lost lifetime earnings, lower lifetime productivity, reduced longevity, and the cost of prison for the poor kids whose lives we trash.

It does not take 12 years at $10,000 per pupil-year to teach a normal child to read and compute. Most vocational training occurs more effectively on the job than in a classroom. State (government, generally) provision of History, Civics, and Economics instruction threatens democracy, just as State operation of newspapers and broadcast news media would threaten democracy (and currently help sustain totalitarian regimes in Cuba and North Korea).

If it is fraud for a mechanic to charge for the repair of a functional engine and if it is fraud for a physician to charge for the treatment of a healthy patient, then it is fraud for a school to charge for the instruction of a student who does not need our help. If "public education" is not an employment program for dues-paying members of the NEA/AFT/AFSCME cartel, a source of padded construction, supply, and personal service contracts for politically-connected insiders, and a venue for State-worshipful indoctrination, why cannot any student take, at any time, an exit exam (the GED will do) and apply the taxpayers' $10,000 per pupil-year subsidy toward post-secondary tuition at any VA-approved post-secondary institution in the State or toward a wage subsidy at any qualified (say, has filed W-2 forms on at least three adult employees for at least the previous four years) private-sector employer?

Candidate Questionnaire

Here's the candidate questionnaire from the Hawaii State Teachers' Association.
.......................................................................
2010 Election
HSTA Government Relations Committee
Questionnaire
Hawaii State Board of Education

Candidate's Name: Malcolm Kirkpatrick
Office Sought: Board of Education At Large
Occupational background: Diver (UH), US Navy Engineman, Secondary Math teacher, tutor
Educational background: B.A. (Math). U.H. 1973. P.D. (Secondary Math Education), U.H. 1982
Political background: Candidate for B.O.E. 1998, 2000,2002, 2004, 2006, 2008
Community service: Tantalus Community Association Board member (former). TCA workday coordinator (former). Workday volunteer.

What schools do your children attend or have your children attended? Public or private? If your children attend(ed) non-public schools, please indicate your reason(s): I have no children. I would homeschool if I did.

1. What are your top three priorities in public education as a member of the Board of Education:
a. I support decision-making based on empirical support of policy.
Please explain: The DOE has access to abundant research. The DOE collects volumes of raw data. These can guide decision-making.
b. I support credit-by-exam for all courses required for graduation.
Please explain: Credit-by-exam will enhance student motivation, reduce costs, and enhance overall system performance.
c. Repeal the Teacher Standards Board.
Please explain: No statistical, empirical research supports policies which restrict access to the teaching profession to people with College of Education coursework, as the Hawaii TSB requires. The TSB has advanced contradictory, complicated, and vague "standards" which raise costs and do nothing to raise system performance. The TSB places the HSTA and HGEA is a serious conflict of interest as representatives both of teachers and taxpayers.

2. If you are elected to the BOE, what would you do to promote a culture within DOE that is more supportive of teachers regarding such things as payroll lag, reclassification, etc.? I would support expansion of education options (multiple independent school districts, charter schools, tuition tax credits, school vouchers, homeschooling, etc.). If we disagree about a matter of taste, a range of education options allows the satisfaction of varied preferences, while the struggle for control of a Statewide monopoly school system must create unhappy losers. If we disagree about a matter of fact, where "What works?" is an empirical question which only an experiment can answer, numerous suppliers of education services will provide more information than will a Statewide monopoly enterprise.

The following are position statements on some critical issues. For each issue, indicate whether you support or oppose HSTA's position. Please attach additional pages if you want to elaborate or explain your response. Be sure any additional pages clearly indicate the position or question to which you are referring.

3. HSTA opposes any continuing erosion of teachers' health and retirement benefits.
Do you support or oppose HSTA's position?
Support___Oppose_X_
Please explain: I support policies which empower individual teachers to allot their pay as they see fit. Governments at all levels have made more promises than they can keep. It's time to stop making false promises.

4. HSTA supports paying teachers (e.g., new teachers, teachers returning from leave, etc.) in a timely manner and believes that the Board can assist in rectifying the current practice of delayed payments.
Do you support or oppose HSTA's position?
Support_X_ Oppose___
Please explain._____

5. The Collective Bargaining Law, Chapter 89, gives public employees the right to participate in deciding their wages, hours, and conditions of work. HSTA supports the preservation and strengthening of the intent and purpose of Chapter 89. HSTA opposes any action that diminishes the rights or protections granted public employees through collective bargaining or state legislation.
Do you support or oppose HSTA's position?
Support_X_ Oppose_X_
Please explain: It's a matter of interpretation. One size (or contract) does not fit all. Federalism (local control), separation of powers, and markets institutionalize the principle of humility. No one has privileged access to divine inspiration. Students, parents, real classroom teachers, and taxpayers would be better served by an education industry that featured greater local control (independent school districts at the County level or lower, expanded charter options, school vouchers).

6. HSTA supports legislation and funding of programs and activities that reward continuing education for teachers and provide cost-free opportunities for teachers to pursue professional development.
Do you support or oppose HSTA's position?
Support_X_ Oppose_X_
Please explain: I would support a legislative mandate that the College of Education allow teachers in service to audit courses at the U.H. College of Education tuition-free, if sufficient paying students enroll to justify the class. I oppose hiring of outside consultants to conduct in-service workshops. I oppose paying for travel and accommodations to out-of-State presentations.

7. HSTA supports legislation for compulsory or mandatory kindergarten in Hawaii.
Do you support or oppose HSTA's position?
Support___ Oppose_X_
Please explain: Abundant statistical, empirical research finds adverse effects and few benefits in early compulsory attendance. States which compel attendance at age 7 or 8 have higher 4th and 8th grade NAEP Reading and Math scores than States which compel attendance at age 5 or 6. Later is better. The rate of dyslexia in a population is inversely related to the age at which societies institutionalize reading instruction. Later is better. Studies of daycare find increased anti-social behavior associated with early institutionalization. Early compulsory attendance is strongly counter-indicated. Later is better.

8. HSTA supports legislative efforts to preserve public education and opposes the diversion of public funds or tax credits to non-public schools.
Do you support or oppose HSTA's position?
Support___ Oppose_X_
Please explain: It is a mistake to equate "education" and "school". It is a mistake to equate "government-operated schools" with "public education". Students, parents, real classroom teachers and taxpayers would benefit from an expansion of parents' options for the use of the taxpayers' pre-college education subsidy.

9. HSTA opposes any legislation to provide public funds for tax subsidies (tax credits, tax deductions) or vouchers for private education, religious or home school expenses, or inclusion of vouchers within the Individuals with Disabilities Education Act (IDEA).
Do you support or oppose HSTA's position?
Support___ Oppose_X_
Please explain: See answers to questions #5 through #8.

10. HSTA opposes any expansion of non-conversion charter schools. Before the legislature expands the number of non-conversion charter schools, the Department of Education must have a good handle on the current charter schools.
Do you support or oppose HSTA's position?
Support___ Oppose_X_
Please explain: The Department of Education should have NO handle on charter schools. The most effective accountability mechanism that humans have yet devised is the ability of unhappy customers (e.g., parents) to take their business elsewhere.

11. HSTA supports a single, statewide school district.
Do you support or oppose HSTA's position?
Support___ Oppose_X_
Please explain: States with numerous small school districts generate higher NAEP test scores at lower cost than States which maintain a few large school districts. Teachers would benefit from an expansion of contract options which multiple, independent school districts would offer.

12. HSTA supports legislation and funding to eliminate repair and maintenance backlog and keep repair and maintenance current to fix our public schools.
Do you support or oppose HSTA's position?
Support_X_ Oppose___
Please explain: I would also support an investigation of the competitive bidding process. We know from the Federal investigation of the DOT Airport Division how insiders rigged the competitive bid process.

13. HSTA supports legislation and funding to reduce construction backlog.
Do you support or oppose HSTA's position?
Support_X_Oppose_X_
Please explain: I would have to study this. Unit (per classroom) costs looked high to me when I last looked (ten years ago), at over $200,000 per room.

14. HSTA supports legislation and funding to provide a working phone in every classroom and to provide sufficient electrical and telecommunications infrastructure to accommodate school activities.
Do you support or oppose HSTA's position?
Support___Oppose_X_
Please explain: Performance gains would be insufficient to justify the cost to retrofit schools. Perhaps wifi would work.

15. HSTA supports legislation and funding to increase the safety and security of all schools.
Do you support or oppose HSTA's position?
Support_X_Oppose_X_
Please explain: Schools chosen by parents in a competitive market would be safer than the State-monopoly system which the HSTA protects. The one-size-fits-all approach of the Hawaii DOE guarantees, for many students, a mismatch between the student's interests and abilities, on the one hand, and the school's curriculum and methods of instruction, on the other.

16. HSTA supports preserving basic student support services such as librarians, counselors, tech coordinators, etc.
Do you support or oppose HSTA's position?
Support___ Oppose_X_
Please explain: I support a review of effectiveness. The Nobel Memorial Prize-winning economist James Buchannan attributed his success, in part, to his education in a one-room school house.

17. HSTA supports the utilization of alternative energy sources in the schools.
Do you support or oppose HSTA's position?
Support_X_Oppose_X_
Please explain: I support measures which reduce costs without lowering system performance.

18. HSTA suports legislation to amend the State Constitution to repeal the Expenditure Controls, Article VII, Section 5, which controls the state's expenditure by creating an expenditure ceiling and prohibits the state from spending the monies needed to invest in public education.
Do you support or oppose HSTA's position?
Support___Oppose_X_
Please explain: It does not take 12 years at $10,000 (or $17,000)* to teach a normal child to read and compute. Most vocational training occurs more effectively on the job than in a classroom. State (government, generally) provision of History and Civics instruction is a threat to democracy, just as State operation of newspapers and broadcast news media would be (are, in totalitarian countries like North Korea and Cuba).
Update: See this comment...

The path of big government and the welfare state is the path to broken promises and inter-generational warfare. The workers in California and vendors in Illinois are paying the price for the unsustainable public sector union contracts which preceded them, sometimes by decades.

Yet those of us who call for fiscal sanity and reform are derided by people like Sheldon Whitehouse and other Democrats as having no compassion.

Just the opposite is true.

It's called tough love. Those who feed the big government addiction are the cruel ones.

19. HSTA supports legislation to amend the State Constitution to repeal the Disposition of Excess Revenues, Article VII, Section 6, which prohibits the state from having any savings since tax refunds or tax credits must be given to the taxpayers of the state, thus, prohibiting the state from spending the monies needed to invest in public education.
Do you support or oppose HSTA's position?
Support___Oppose_X_
Please explain: See above. As Eric Hanushek observes, beyond a very low level resources do not matter much to school system performance. Compared to taxpayers in other US States and in other countries, Hawaii taxpayers already pay too much to operate the Hawaii DOE.

20. HSTA supports efforts to fully fund charter schools.
Do you support or oppose HSTA's position?
Support__X__Oppose___
Please explain: I support most policies which expand parents' options for the education of their own children.

21. HSTA supports legislation to allocate all funds to schools according to a weighted student formula with the following conditions:
a. HSTA recognizes that there are essential elements that need to be in place in a child's education to ensure student success. Schools must have adequate funding for sufficient computers, software, equipment, and textbooks for every child. All laboratories, shops, and learning spaces must be properly equipped and maintained. Students, faculty, and support staff must have the training necessary to be proficient in current technology.
b. Teachers must be active decision-makers in how the money is spent.
c. Teachers' salaries must come from a central salary account based on the average teacher's salary.
d. Collective bargaining must be preserved.
Do you support or oppose HSTA's position?
Support___Oppose_X_
Please explain:
a. The use of any weighted student formula makes the DOE budget less transparent.
b. Principals should control schools, and parents should pick schools. Teachers would benefit from freedom to move between schools which offered a range of work environments.
c. "What works?" is an empirical question which only an experiment can answer. Would a pay schedule based, in part, on student performance raise system performance? Would a pay schedule which offered enhanced salaries for teachers in shortage areas make schools more appealing to students and parents? An institutional environment which featured multiple experiments in school operations would generate better answers to these questions than would a statewide monopoly school system.
d. If collective bargaining is a "right", why does the State and the HSTA force it on teachers? Does the right to keep and bear arms require I carry a firearm?

22. HSTA supports creating a funding source specifically for education.
Do you support or oppose HSTA's position?
Support___Oppose_X_
Please explain: This proposal would enhance the security of system insiders at the expense of taxpayers and all other State programs. It would make adjustments to the budget difficult in lean times.

___________________________ 2010-07-02 (2-July-2010)
(Signature)

Mailing address: ________________________ Work phone_______________
________________________ Home phone_______________
Business email ________________________ Fax number_______________
Personal email ________________________ cell phone_______________

* (Update) NCES gives three figures for the total DOE budget: "total revenues", "current expenditures", and "total expenditures". NCES gives two figures for enrollment: "September Enrollment" and "average daily attendance". This generates six possible figures for the DOE per pupil budget, which range from just shy of $10,000 to over $17,000. The Hawaii DOE compiles budget figures after the end of the fiscal year. The US Department of Education and Department of Commerce collect statistics from all local education agencies (LEA) which receive Federal funds, and publish various summaries. The figures therefore reflect a situation two or three years past.

Read Jay Greene's Blog

In "Education and Citizenship On The Left And Right" (Jay Greene's blog), Greg Forster writes

It’s widely known that one of the major reasons America adopted the government monopoly school system in the first place was hysteria over the cultural foreignness of Catholics. However, there’s another tidbit worth knowing. As Charles Glenn documents in The Myth of the Common School, one of Horace Mann’s motivations for pushing the “common” school system was his vitriolic contempt for evangelical Protestant Christianity. The hicks in the rural Massachusetts countryside with their backward and barbaric adherence to traditional Calvinist theology – which had survived down through the centuries from the Puritan settlers – was repugnant to civilized and enlightened Boston-Brahmin Unitarians like himself.

Someone had to do something to rescue these culturally deprived children from their unenlightened parents! That’s why Mann’s schools had such a heavy emphasis on teaching the Bible – teaching it in a very particular way. Part of the school system’s purpose was cultural genocide against evangelicals, to use the power of the state to indoctrinate their children with unitarianism.

Provision of History and Civics instruction by State (government, generally) employees threatens democracy. The roots of the current US (and world) financial difficulty go very deep, to the establishment of the State-monopoly school system.

Comment at Joanne's Place (2010-06-21)

Joanne Jacobs notices a new confirmation of an old result: Kids Get Computers; Scores Fall. Harriet left a comment.

TIMSS results, among others, as long ago as 14 years indicated that computers add little to basic instruction. This result parallels a similar assessment of the contribution which early use of calculators makes to Math performance. These are statistical results–”facts”, if you will–which admit various explanations and suggest various extrapolations.

First, note that most of these studies of school performance use standardized tests of reading comprehension and Math. As a wise lady from the ETS once said: “We can’t measure what’s important so we measure what we can.” When Chubb and Moe determined to study the relation between institutional structure and school performance, they used student gains between 10th and 12 grade on standardized tests of reading, Math, and Science. They did not use Social Studies scores because Social Studies scores did not correlate with anything (which is pretty funny if you know anything about statistics).

Second, computers have transformed so many industries one might reasonably project that they will transform the education industry when decision-makers face an incentive structure which rewards the choice of effective means. At Jay Greene’s blog, guest blogger Matthew Ladner described a successful charter thus:

Carpe Diem is a 6-12 school with 240 students. A value added analysis of test scores found that they have the biggest gains in the state of Arizona. Their math results are really off the chart, with some grades averaging at the 98th percentile on Terra Nova. Carpe Diem is a hybrid model school, rotating kids between self-paced instruction on the computer and classroom instruction.

Perhaps in the Vigdor and Ladd study we see the result of inept implementation and not a defect in the principle.

Third, skills improve with practice, and people will practice what they enjoy. When programs adjust the practice which they present to any student to that student’s skill level and when programs compose infinitely variable practice routines, it’s hard to see how they will not enhance student performance. Consider computer chess.

As usual: “What works?” is an empirical question which only an experiment (a decentralized public-policy regime or a competitive market in goods and services) can answer.

Try This At Home.

Cato entitles a post "Don't Try This At Home, Kids", which contradicts the intent. Do try this at home. Conventional school is a huge waste of time for any child of normal-or-above ability. A loving parent can teach a normally bright infant to decode the phonetic alphabet before that child can speak. A loving parent can teach a normally bright child to add, subtract, multiply, and divide whole numbers by age six, and to add, subtract, multiply, and divide fractions and decimals by age eight. With this preparation, children can start of the material high school teachers call "Algebra I", and with basic literacy and basic Algebra children can work independently on self-paced, self-selected studies. The conventional K-12 curriculum is a make-work program for dues-paying members of the NEA/AFT/AFSCME cartel. Compulsion detracts from education.

A "Standard" Con

Joanne Jacobs observes the publication of Education Secretary Arne Duncan's national standards, in "Core Standards: The Final Version". Harriet left a comment, expanded below.

Arne Duncan is either stupid or dishonest, or both. The same goes for all other serious promoters of national standards. Amateurs who accept the arguments for government-imposed education standards succumb to magical thinking.

Some years ago Harriet took the grades which the Education Trust and the Fordham Institute gave to individual US States for their standards, converted these grades into numbers on a 0-4 point scale, and applied the EXCEL correlation function to these numbers and State-level NAEP scores. The correlation was negative.

A "standard" is a unit of measurement. A kilogram weight is a standard. A meter stick is a standard. A mark on a thermometer is a standard. Academic standards are to intellectual growth what kilogram weights are to physical growth. Platinum meter sticks will not make children taller and elaborate academic standards will not make children smarter.

"Uniformity shall prevail" say the control freaks, who would turn civilian society into an industrial army. In The Road to Wigan Pier, George Orwell argued that socialism originates in a hypertrophied sense of order, like compulsive handwashing or obsessively rearranging the socks drawer. Elsewhere, (e.g., "Raffles and Mrs. Blandish", "Inside the Whale"), Orwell suggests that a preference for authoritarian politics indicates vicarious sadism. In Socialism, Ludwig von Mises suggests that socialist leanings originate in a primitive revenge fantasy.

The State (government, generally) cannot subsidize education without a definition of "education". Public frustration with the ever-rising cost and marginal performance of the NEA/AFT/AFSCME cartel's schools (the "public" schools) prompts legislators and administrators to deflect criticism of the NEA/AFT/AFSCME cartel's schools with distractions such as "standards", which voters apparently expect authorities to wield against failing schools, as a nun would yield a ruler in catechism class. Problem is, insiders get to define the standards and wield the ruler. Internal accountability mechanisms fail, through a process which economists call "regulatory capture". In the case of the NEA/AFT/AFSCME cartel's schools the industry starts the process several steps along the path. The most effective accountability mechanisms that humans have yet devised are policies which give to unhappy customers the power to take their business elsewhere.

Humans are not standard.

Profit in Education

In "Not Welcome Sign = No R&D" EdReformer Tom Vander Ark relates the hostility of public sector employee organizations toward parent choice in education to the slow pace of innovation in the education industry. Vander Ark quotes an Oregon statute:...

All materials would become the property of the OVSD and the State of Oregon. OVSD would run all logistics for maintenance of this program (contracting, rate-setting, procurement, etc.).

The impact on incentives should be clear. Why would investors support the development of effective instructional methods if the State will steal them and deprive investors of any chance to recoup? One might draw an analogy to the disincentives to minerals exploration in countries where the State claims all sub-surface resources.

Joanne Jacobs noticed the Vander Ark article. A visitor (ceolaf) asked about the role of profit in the education industry and Harriet left a comment, with a botched link (the Joel Fried article, repaired in the expanded and revised comment below).

Thomas Sowell (Knowledge and Decisions) and Milton Friedman (Capitalism and Freedom) discuss, in abstract, the role of markets in allocating resources to meet human wants. Myron Lieberman (Privatization and Educational Choice) discusses the role of market incentives in the education industry in particular. Friedrich Hayek addresses the role of markets (freedom, really) in generating information on human wants and resource availability, here. Please make time to read Hayek's brief essay.

“Profit” is a bookkeeping term, the difference between total revenues and total costs. An organization which has no line in its balance sheet for profit must attribute all revenues to costs. This says nothing about the motives of people in the organization.

Joel Fried
Pots and Kettles: Governance Practices of the Ontario Securities Commission, part 2 The Government’s Principal – Agent Problem.

2. The Government’s Principal – Agent Problem
The principal-agent problem for the private sector is well known: the owner/principal delegates to a manager/agent the responsibility to provide some services for the principal. The problem is one of structuring contracts and institutions to insure that, in carrying out her duties, the agent acts in the principal’s interest rather than her own.

Citizens of a country also face a principal – agent problem. Citizens “own” the machinery of government and employ bureaucrats to act as their agents in running this machinery. To reduce the costs of monitoring, the principals choose a legislature/board of directors to oversee the agents. Monitoring mechanisms are similar to those in the private sector: there are financial accounting standards that are met for each budgetary unit, and an external auditor checks these internal accounts. Transparency is maintained, in part, through freedom of information regulations. Compliance with procedures and other regulations are met both through internal monitoring and checks by units external to the bureau. Finally, contracts are structured, at least in a limited manner, to align the incentives for agents with those of the principals.

There is, however, an additional problem in the public sector that does not exist for private firms. The firm has a well defined objective function – the maximization of profits – whereas the apparent objective for the government is the maximization of some index of a (weighted) level of welfare of the electorate. An unambiguous index of social welfare has been impossible to construct (bold mine, HT) and, in its absence, monitoring the public sector is further complicated because data is generally lacking on whether or not the objective was actually approached and/or achieved and what the costs are that are linked to any specific objective. In effect, because of distribution issues and public goods, the cash flows measured with traditional accounting procedures will be, at best, only superficially correlated with that objective. Thus, looking at cash flows will provide the principals an extremely poor method of monitoring their public sector agents.

[As an aside, this last point: "...looking at cash flows will provide...an extremely poor method of monitoring...public sector agents" is why Harriet expects only marginal results from the popular "audit the DOE" imperative. As Harriet explained here, the difference between the demands which public-sector providers of education services make on taxpayers and students, on the one hand, and the tuition charged by schools in competitive markets, on the other, firmly establish the existence of gross waste and fraud in the US State-monopoly school system.]

Governments do not need to recognize “profit”; they could tax every dollar-denominated transaction. Markets do not need “profit”; contracts with investors could promise a percentage of receipts or a percentage of the amount lent (like a bond). Accounting rules which recognize “profit” allow a business to shield some revenue from taxation by deduction of research costs or capital expansion costs.

A market economy (a legal system which protects title to property and, by extension, enforces contracts) calibrates the rewards for the solution to resource allocation questions to the magnitude of the resources at issue and to the urgency of the question. “What do you want to eat for lunch?” is a question which becomes more urgent with every hour that passes since your last meal and which involves, over a nation of 300 million people, hundreds of millions of dollars worth of food and prep time. A marginally better answer, such that several thousand people will spend an additional dime on lunch, or which saves a dime for each meal served to several thousand people, can make the person who finds that answer wealthy.

“What History (or Math, or poetry, etc.) should thirteen year-olds study?” is as inappropriate a question for citizens to pose to a State (government, generally) bureaucracy as “What size shoes should thirteen year-olds wear?” would be, as becomes obvious when one rephrases the question: “What Math material should my neighbor’s 13 year-old daughter study?” (what size shoes should she wear?). Remote authorities do not know this child. There is no good argument for taking from her mother the power to answer this question. Even if her mother needs help finding the answer, there is no good argument for restricting her choice of advisers to State (government, generally) employees.

As Harriet has written many times before, the US taxpayers' $555 billion+ per year age 5-18 education subsidy ($2.9 billion, Hawaii) significantly understates the cost of the current US State-monopoly school system.

The cost of the US State-monopoly school system includes the opportunity cost to students of the time they spend in school. It does not take 12 years to teach a normal child to read and compute. Most vocational training occurs more effectively on the job than in a classroom. This opportunity cost appears as lost productivity in two forms: absent child labor and less practiced adult labor. Just as few adults will exhibit native fluency in language without early experience, "fluency" in carpentry, masonry, machine tool use, or other vocational skill depends on early experience.

The cost of the State-monopoly school system includes the cost of prison for the children of poor and minority parents who are ill-served by a school system designed by and for academics.

In support of the bureaucratic imperative to regulate and in the name of "equality" and "standards" the US State-monopoly school system imposes a uniformity of treatment upon an enormously diverse student population with a wide range of interests and aptitudes. Obvious costs include apathetic scholarship and perfunctory effort as adult workers. The cost of the US State-monopoly system also includes the opportunity cost to society of the lost innovation in instructional methods and individualization of curriculum which a competitive education industry would generate.

We walk over the Comstock Lode every day, unaware of the wealth beneath our feet.

Happy Birthday

Today (2010-05-29) is the 22nd birthday of the gymnast Cheng Fei.

In Abstract

Over at Joanne's place, Harriet entered a conversation about the role of unions in education. In response to a reference to "free market fundamentalists", Harriet left the comment below.
..................................................................
The argument for policies which give to individual parents the power to determine for their own children the choice of curriculum and the pace and method of instruction parallel closely the argument for a market economy in general. Markets, the system of title and contract, institutionalize humility on the part of State actors. “What works?” is an empirical question which only an experiment can answer.

“Private property is socially defined” say my Marxist friends, trying to sound deep while stating the obvious. All legal regimes are socially defined. The system of private property combines control over resources with the authority to transfer control, to other parties on mutually agreed-upon terms.

In general, free marketeers accept that society at large benefits from a State strong enough effectively to suppress competition in the extortion business and to enforce contracts. Markets (the system of private property and contract law) combine local knowledge of resources with the incentive to use these resources in ways that please others. Markets calibrate the reward for improved answers to resource-allocation questions to the magnitude of the resources at issue and the urgency of the question. “What do people want for lunch?” is an empirical question which only an experiment can answer realistically. “What resources (including time) does it take to bring an infant to the point that s/he can contribute to society?” is an empirical question which only an experiment can answer with any accuracy. A State-monopoly enterprise is like an experiment with one treatment and no controls: a retarded experimental design.

The US State-monopoly school system lurches from fad to fad because it is a State-monopoly enterprise. Read Steven Moser’s meditation on campaigns in the People’s Republic of China in Broken Earth: The Rural Chinese. Current recipients of the US taxpayers’ $600 billion+ K-12-dedicated revenue stream have no interest in a less expensive answer to the question: “How do we prepare the next generation to replace their parents?” Thus, the continually expanding span of school attendance, the continual demands for more funding, and the systematic elimination of alternatives to schools as providers of education.

The arguments for State (government, generally) subsidy of education are weak. The arguments for State operation of school are so weak as to be nearly non-existent.

Not that it matters. It makes about as much sense for people who are not in government to argue about what governments should do as it makes for the swimming survivors of a mid-ocean shipwreck to argue about what sharks should eat.
.....................................................................

Exercise for the reader: Compose criteria which classify industries on the basis of their suitability for State (government, generally) operation. Imagine either a dichotomous classification (likely candidate, unlikely candidate) or a continuum
-1----------0---------1
from "highly unlikely" to "highly likely".

What criteria would you suggest?

Joanne's New Blog

Joanne Jacobs has a new blog, Community College Spotlight. Be a neighbor. Visit.

In Memoriam

Harriet Tubman (born Araminta Ross, c. 1820) died on this day, 1913-03-10.
From the Wikipedia entry (citing Larson, Kate Clifford. Bound for the Promised Land: Harriet Tubman, Portrait of an American Hero:...

Master Lincoln, he's a great man, and I am a poor negro; but the negro can tell master Lincoln how to save the money and the young men. He can do it by setting the negro free. Suppose that was an awful big snake down there, on the floor. He bite you. Folks all scared, because you die. You send for a doctor to cut the bite; but the snake, he rolled up there, and while the doctor doing it, he bite you again. The doctor dug out that bite; but while the doctor doing it, the snake, he spring up and bite you again; so he keep doing it, till you kill him. That's what master Lincoln ought to know.

Ravitch Review (Updated)

Joanne Jacobs collects commentary on the The Death And Life of the Great American School System, the latest work by Diane Ravitch. Harriet left this comment...

Diane Ravitch deserves respect for her energy and dedication, displayed in her numerous publications and for the endurance she displayed in wading through volumes of educationese while researching Left Back. Any normally compassionate reader will finish __Left Back…__ appalled at the arrogance of socialists (Dewey, Cubberley, et. al.) who treated other people’s children as their clay. Ravitch laments the abandonment of a rigorous classical curriculum in favor of a succession of fad reforms that reduced system performance and raised costs. While Ravitch criticizes the policies which self-appointed experts prescribed, she does not question the premise that some expert ought to prescribe curriculum.
In “School’s Out“, his review of the latest Ravitch book, Chester Finn writes:
“Diane and I go back a very long way–three decades, give or take–and in addition to the personal friendship we have, during that period, shared a basic diagnosis of what’s awry in U.S. education. It boils down to this: Most kids aren’t learning nearly enough of the important stuff that they ought to be learning.”

That’s not a diagnosis; that’s a symptom. Why do schools fail?

Finn continues: …”She would undo most if not all of the “structural” reforms that have been put in place in recent years–mayoral control, performance-based pay, charter laws and other choice schemes, reliance on entrepreneurship and market incentives, federal efforts to incentivize and prod the system to change in constructive directions, testing- and results-based accountability and more. She would, instead, look to the “great American school system” and a (somehow) renewed culture and family structure to do right by our children.”

Umm…”Schemes”? Vouchers and charter choices enhance overall system performance. And when/where has “reliance on entrepreneurship and market incentives” been tried?

Elsewhere, Finn writes: “Any successful redesign will require a clear-eyed assessment of what has and has not worked in the effort to achieve the last generation’s reform goals, and must open itself to new aims. It will demand long, concerted effort by experts, civic and business leaders, educators, parents, and policymakers. And while it must be realistic about politics and the difficulties of transition, any overhaul of American education must also be informed by an overarching vision of the kind of system it is after. That vision, more than the details of individual reform proposals, may be what is most sorely needed now.”

Finn does not hide his commitment to centralized (expert) control.

As Neal McCluskey observed, Chester Finn is no fan of market-oriented reforms. Ravitch and Finn may merit the term “conservative”. They in no sense qualify as pro-(school)choice.

Milton Friedman rejected the label “conservative”. He called his viewpoint “liberal” (in the classical, 19th century sense of the word, meaning pro-freedom).

Several lines of evidence support the following propositions:
1. As institutions take from individual parents the power to determine for their own children the choice of curriculum and the pace and method of instruction, overall system performance falls.
2. Political control of school harms most the children of the least politically-adept parents.

Political control of school invites critics and defenders of the current system to imagine prescribing reforms to that system. Critics such as Finn and Ravitch do not address the obvious fact that their opponents occupy their current positions because of this system. Public-sector unions, their kept politicians, and Professors of Education won the contest for control of this system. Reform proposals which ignore the rules of the game that enabled this result must either accommodate the policy preferences of these interest groups, or fail.

Practically, this observation implies that effective reform will occur one family at a time, as parents decide to homeschool.

Update: A Volokh conspirator discusses the newspaper report on the Ravitch book. Harriet added 2 cents worth (comment 67).

Jay Greene on Education Research

Jay Greene initiated a discussion of federally-funded education research. Harriet would have left a comment, but it went over-long.

The tax-funded education research apparatus provides an endlessly entertaining playpen for the statistically literate puzzle addicts who become quantitative researchers and to the proponents of non-quantitative research such as Jim Horn, who's authority depends on the authority of the statistically literate empiricists. Both groups deserve the mistrust which Jay Greene advocates in his essay.

Professor Greene's recommendation, that legislators restrict the Federal role to accumulation and distribution of raw data, likely would lead eventually to the situation which he laments. What data would the Feds amass? Why suppose that the people who collect these data would perform any more honestly than climate scientists who report favorable data from non-existent stations in China and omit stations which yield data contrary to their preconceptions? Substitute "school" for "weather station" or "proxy source" (fossil tree, stalagmite, glacial gas bubble), and "standardized test" for "thermometer" or "tree rings", or "isotope ratio".

Some Texas financier once said: "Money is like manure: when you spread it around it can do a lot of good; when you heap it in one place, it stinks."

Government policy may effectively address problems which arise from free rider issues and tragedies of the commons, such as overfishing, or from other sources where free rider problems inhibit market solutions, for example, the threat from Earth-crossing asteroids. I expect, however, that, given a sufficiently large budget for a sufficiently long time, the Asteroid Defense Agency would spend its budget on plush conference venues and overpriced, redundant studies, and, come crunch time, perform as well as the French army in 1940. We're screwed, or we're robbed, then screwed.

Education does not belong in either of the above categories. Parents have an alternative to the wasteful and abusive, tax-funded K-PhD school apparatus. Homeschool. The market (meaning, whatever happens in the absence of State coercion beyond the protection of individuals and property) will generate more reliable information on effective practice than will PREL (nee the Pacific Regional Education Lab, once an offshoot of the Northwest Regional Education Lab and now the "Pacific Resources for Education and Learning").

Read Cato, Watch Fox

A Severe Irony Deficiency
Posted by Andrew J. Coulson

Tomorrow night at 8:00pm, Fox Business News will air a John Stossel special on the failures of state-run schooling and the merits of parental choice and competition in education. I make an appearance, as do Jeanne Allen and James Tooley.

News of the show is already making the rounds, and over at DemocraticUnderground.com, one poster is very upset about it, writing:

When will these TRAITORS stop trying to ruin this country?

HOW can AMERICANS be AGAINST public education?

Stossel is throwing out every right-wing argument possible in his namby pamby singsong way while he “interviews” a “panel” of people (who I suspect are plants) saying things like preschool is a waste of money and why invest in an already-failing system….

I hate Stossel and I hate all of those who think the way he does.

This poster goes by the screen name “Live Love Laugh.” I guess there wasn’t enough space to tack “Hate” onto the end.

Harriet adds this to the "To do" list.

Case, Djou, or Hanabusa

Harriet at one time regarded the three candidates for US Congress from the windward Oahu district (Neil Abercrombie's seat) as competent and qualified. Any of them would represent the people of Hawaii well. Senator Hanabusa fell in Harriet's estimation after introducing SB2007.

Measure Title: RELATING TO BUDGETARY POWERS.
Report Title: Budgetary Powers; Legislature; Governor
Description: Clarifies the budgetary powers of the legislature and the executive branches of government.
Companion:
Package: None
Current Referral: WAM
Introducer(s): HANABUSA

Underlined material is added.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Section 37-31, Hawaii Revised Statutes, is
amended to read as follows:
"137-31 Intent and policy. It is declared to be the policy and intent of the legislature that the total appropriations made by it, or the total of any budget approved by it, for any department or establishment, shall be deemed to be the maximum amount authorized to meet the requirements of the department or establishment for the period of the appropriation, excepting as may otherwise be provided by law, and that the governor and the director of finance should be given the powers granted by sections 37-32 to 37-41 in order that savings may be effected by careful supervision throughout each appropriation period with due regard to changing conditions; and by promoting more economic and efficient management of state departments and establishments[.];provided that the powers granted to the
governor and the director of finance by sections 37-32 to 37-41 17 shall not be construed to include the power to:
-(1) Restrict funding to a program to the extent that the program cannot adequately execute its intended purpose; or
-( 2 ) Suspend or abolish any existing program, if the program has been authorized bv the leaislature and moneys have been appropriated for the program, unless specifically authorized by the legislature by legislative act.

....
....
....

5. No modification or amendment shall reduce an allotment
below the amount required to adequately execute the intended purpose of an existing program authorized by the legislature and for which moneys have been appropriated unless specifically authorized by the legislature by legislative act.

....
....
....

no reduction shall reduce an allotment below the amount required to adequately execute the intended purpose of an existing program authorized by the legislature and for which moneys have been appropriated unless specifically
authorized by the legislature by legislative act.

....
....
....

The governor shall not utilize the powers granted under sections 37-32 to 37-41 to:
-(1) Restrict funding to a program to the extent that the program cannot adequately execute its intended purpose; or
-(2) Suspend or abolish any existing program, if the program is authorized by the legislature and moneys have been appropriated for the program, unless specifically
authorized by the legislature by legislative act.

Without the power of the single State-wide elected office to restrict expenditures, the State budget becomes a commons, which politicians will abuse. This is the argument for a line-item veto at the national level. Currently, the Hawaii Revised Statutes requires that the Governor balance the budget and gives her the power to do so. Senator Hanabusa's amendment to State law would deprive the Governor of that power. With this bill, Senator Hanabusa assures public-sector workers that she elevates their interests above the interests of taxpayers (and locks in a powerful constituency for the upcoming Congressional election).

Basic Budget Arithmetic

What is the DOE per pupil budget? With three figures for total budget and two for enrollment, this question has six reasonable answers.

2005-2006 School Year
Total Revenues: a=$2,703,718,000
Total Expenditures: b=$2,026,254,000
Current Expenditures: c=$1,805,521,000
Fall enrollment: d=182,818
Average Daily Attendance: e=168,009

According to the online calculator, this gives...
a/d=$14,789
a/e=$16,092
b/d=$11,280
b/e=$12,060
c/d=$9,876
c/e=$10,746

Guestimating here, suppose the average classroom teacher makes, say, $40,000 before taxes. Suppose that pension and benefits add 50% or $20,000 to the cost of a classroom teacher's total compensation. How many students would the average teacher have to take into her home to earn her salary as a contractor to parents empowered to provide for their children's education?
$60,000/$16092=3.728; round up to four.
$60,000/$9,876=6.075; round down to six.

If your average DOE classroom contains 24 students, the average DOE teacher carries bewteen three (24/6-1) and five (24/4-1) out-of-classroom parasites on her back.

"What about special ed?", defenders of the NEA/AFSCME cartel will ask. The State Auditor has calculated that sp-ed students cost, on average, twice what regular ed kids cost, and the DOE reports that sp-ed enrollment amounts to about 11% of the population. Let the mean cost of a regular ed student be x. Then the mean cost of a sp-ed student is 2x. Special ed enrollment (fall, 2005) was .11(182,818) or 20,110. This gives a regular-ed population of 162,708.

Now, solve
2(p)(20,110)+(p)(162708)=$2,703,718,000 => p=$13,324
2(q)(20,110)+(q)(162708)=$2,026,254,000 => q=$9,985
2(r)(20,110)+(r)(162708)=$1,805,521,000 => r=$8,895

If we trust the DOE's accounting, regular-ed students cost, on average, between $8,895 and $13,324 per year. If the legislature were to mandate that the DOE allot 2/3 of the lower figure, $5930 to Parent Performance Contracting, rounding up to $6,000 (for convenience), the average classroom teacher could earn her current compensation by taking ten neighborhood kids into her house.

Your legislators would rather bankrupt the State.

When You're In A Hole...

Jay Greene linked to "Out of Chalk", by RiShawn Biddle. Teacher pensions contribute to the difference between "Total Revenues", and "Current Expenditures". The Digest of Education Statistics gives a "Total Revenues" figure of $520,643,954,000 nationally and $2,703,718,000 in Hawaii over the 2005-2006 school year (Table 172), and a "Current Expenditures" figure of $449,594,924,000 nationally and $1,805,521,000 in Hawaii over the 2005-2006 school year (Table 177). This, for a total US "public" (i.e., government) school enrollment of 49,113,298 nationally and 182,818 in Hawaii, according to table 35.

Read Megan

Please read Megan McArdle's recent post on unions, pay schedules, and merit pay.

Hawaii's charter school legislation binds charter schools to the Hawaii State Teachers' Association.

SB 2437

Testimony. SB 2437
DATE: Monday, February 01, 2010
TIME: 1:15PM
PLACE: Conference Room 225


To: Senate and House Education Committee members
From: Malcolm Kirkpatrick
In re: SB 2437
2010-02--1

Please DO NOT support SB 2437 as written.

This bill proposes to address a shortfall in tax receipts with an increase in the rate at which the State taxes commercial activity. An implicit assumption behind this bill is that the proposed rate increase will generate increased revenues. A further assumption behind this bill is that the State will spend the generated revenues wisely.

Both assumptions are probably false.

Across the US, tax receipts declined as commercial activity declined. Tax receipts will recover when commercial activity recovers. Taxes have the same effect as fines. You can without mistake consider a tax as a fine on the taxed activity. Taxes reduce the entrepreneur's incentive to start a business, the investor's incentive to lend, and the tradesman's incentive to practice his trade.

Hawaii is not the only State under financial stress. Look to California to see Hawaii's future. California faces a $10 billion per year projected budget shortfall where ever-increasing demands by an unrestrained public sector have caused a collapse in real estate prices and new business start-ups. Anyone who buys land in California paints a target on his back. Anyone who opens a business in that State volunteers to be bled white. Investors and productive workers have fled. They will flee Hawaii, also.

SB 2437 lacks any indication that Hawaii's legislature intends to reduce the demands made upon the productive private sector by this State's bloated public sector. Hawaii's tax-subsidized K-Ph.D. education industry exhibits the defects of tax-subsidized State-monopoly industries elsewhere. Across industries, across countries, monopolies deliver wretched goods and services at high cost and subsidized goods are over-consumed.

The people of Hawaii are among the highest taxed in the US, as measured by total State and local expenditures per capita. Hawaii's State-monopoly school system cost taxpayers nearly $15,000 per pupil to operate in the 2005-2006 school year, when the DOE (2008 Digest of Education Statistics) reported total revenues over $2,703,718,000(table 172) and total enrollment of 180,728 (table 34). $2,703,718,000/180728= $14,960

The nearly $3 billion per year DOE budget total does not include two large additional costs of this system. The cost of the State-monopoly school system includes the opportunity cost to students of the time they spend in school and the cost to society of the lost innovation in instructional methods which a competitive market would generate. The lost opportunity cost appears as reduced lifetime earnings, reduced longevity, losses due to crime, and the cost of prison for the poor kids whose lives we trash.

For all this cost to the people of Hawaii, the tax-subsidized State-monopoly education industry delivers a level of performance which puts Hawaii in the national cellar. By some measures we are dead last. The 1996 TIMSS placed Singapore at the top of international rankings and the US among the laggards among the world's industrial democracies. The Singapore fifth (5th) percentile score (TIMSS 8th grade Math) was higher than the US fiftieth (50th) percentile score. With Hawaii's DOE delivering instruction which puts Hawaii students in the national cellar, Hawaii's valedictorians will be shining Singapore's janitors' shoes.

Will higher tax rates repair Hawaii's dysfunctional school system?

Arthur Laffer summarized the relation between tax rates and tax revenues with the notorious Laffer Curve, the inverted parabola. Critics who ridicule the Laffer Curve reveal more about themselves than about Dr. Laffer. Charles L. Schultze, who served as chairman of the United States Council of Economic Advisers during the Carter Administration and as director of the U.S. Bureau of the Budget from 1965-67 during the Johnson Administration and as President of the American Economic Association, called the Laffer curve a straightforeward consequence of standard economic analysis.

Increased tax rates will not generate increased revenue, and the Hawaii's K-PhD State-monopoly education industry will not improve with more money.

Across the US, between 1920 and 2006, total expenditure per pupil in average daily attendance increased from $685 to $11,643 and current expenditure per pupil in average daily attendance increased from $571 to $10,041, in constant 2007 dollars, according to table 181 of the 2008 Digest of Education Statistics.

In Hawaii, current expenditure per pupil in fall enrollment has increased from $4,280 in 1970 to $10,131 in inflation-adjusted dollars, according to table 184 of the 2008 Digest of Education Statistics.

It does not take 12 years at $10,758 (table 182, current expenditures per pupil in Fall enrollment, 2005-2006), or $14,960 to teach a normal child to read and compute. Most vocational training occurs more effectively on the job than in a classroom. State provision of History, Civics, Economics, or other "social studies" is a threat to democracy, just as State operation of news media would be (is, in totalitarian countries).

Until Hawaii's politicians reject the demands of Hawaii's predatory public sector, investors will shun this State and entrepreneurs will take their business overseas or underground.

Thank you for this opportunity to speak.