I neglected in my ballot summary to write about Proposition 1A which would authorize almost ten billion dollars in bonds to begin building a high speed rail transportation system. It would allow studies and right of way purchases to continue the work on this novel form of transportation. In the end the system might cost as much as $50 billion, so this is the first bite at the apple. High speed in this case means a bit more than 200 miles per hour. I've ridden on high speed trains in Europe and Japan and they are very comfortable.
I really like the idea of having high speed trains. It is an exciting idea. As air travel gets more and more complicated a connection that would allow you to go from San Francisco to LA in a reasonable amount of time sounds great.
But there is another side to the story. The measure would saddle the state with almost $650 million in annual debt service for the next thirty years. To put that in perspective, that number would almost wipe out the total amount of funding provided to students in grants to attend college.
I am concerned about the amount of debt the state has taken on in recent years. There are several measures on the ballot that would increase those totals substantially. In this year, I will vote NO on the measure even though the idea is an interesting one.
Monday, October 20, 2008
20 minutes can be a long time
Two Fridays ago I went up to a place on the Eastern Sierra called Hot Creek to fish. The two photos were within 20 minutes of each other. It gives you a very clear picture of why it is important to be prepared in high elevations. The day of fishing was cold but very clear. We got up out of the canyon at Hot Creek (which is a very pretty stretch of water) and changed and then went north on I-395. The second photo is about 20 minutes after we left Hot Creek. By the way, the cloud or fog bank in the first picture was not where the storm came from (which came from the north). (Photos by Bill Quinn)
Thursday, October 16, 2008
Nonsense
I get a lot of materials from all sides of the political spectrum. The attached picture came from a conservative friend. It makes the case that the book that Senator Obama is reading is a "muslim attempt to take over the US." I've read the book by Fareed Zakaria. It is a thoughtful treatment of the challenges that we face as a result of being in a world which has competing centers of power. I doubt my friend has read the book - but if Obama is reading it, from my perspective that is a good thing. Zakaria analyzes how America will prosper in a world where we are not the predominant power. His ideas are fresh and thoughtful, unlike the email.
Wednesday, October 15, 2008
Tonight's Debate was Decisive
There were several moments tonight. One of McCain's strongest moments was when he said "If you wanted to run against George Bush, you should have run four years ago." There were also moments where Senator Obama evaded the issue or mis-represented his position. Even with that I believe that Senator McCain demonstrated that he should not be president. Obama seemed to underplay his relationship with Ayers and ACORN. The record is clear. Even with those problems for Obama, which I believe are significant, I was troubled by McCain's performance.
In many cases McCain's responses to questions or redirect were inadequate or filled with glib generalities. In a couple of places the Senator was unable to follow up on an issue where he clearly had the advantage. On the issue of the Colombian Trade Pact, Senator Obama misrepresented the position he supported in the Senate. The choice on the issue is a simple one. Voting for the pact would allow US goods to be sold into the Colombian market without tariff. Under the Andean pact, which is current law, Colombian products already enter the US markets without tariffs. McCain stumbled through his response to Obama's nonsensical answer. Would labor leaders in Colombia be better off with a trade pact or without one? Obviously,they would be better off with the pact than without it. But McCain was unable to respond. That did not happen once but several times.
I am still not ready to vote for Senator Obama but the choice I have rejected is Senator McCain.
In many cases McCain's responses to questions or redirect were inadequate or filled with glib generalities. In a couple of places the Senator was unable to follow up on an issue where he clearly had the advantage. On the issue of the Colombian Trade Pact, Senator Obama misrepresented the position he supported in the Senate. The choice on the issue is a simple one. Voting for the pact would allow US goods to be sold into the Colombian market without tariff. Under the Andean pact, which is current law, Colombian products already enter the US markets without tariffs. McCain stumbled through his response to Obama's nonsensical answer. Would labor leaders in Colombia be better off with a trade pact or without one? Obviously,they would be better off with the pact than without it. But McCain was unable to respond. That did not happen once but several times.
I am still not ready to vote for Senator Obama but the choice I have rejected is Senator McCain.
Silly Polls
The Economist Magazine surveyed 142 economists (who were 46% democrat, 10% Republican and the rest independent) about the candidate's tax plans (presumably not the latest additions). And they came up with the following results. What amuses me is not the results but some cross tabs. For example, based on the sample McCain outpolled his ratings for those who thought his plans were good or very good by more than 40% (4.3% of 10%) while Obama underpolled his expected result by almost 20% (his expected support would be 46% and yet he only achieved 39.7%).
Ultimately, both candidates have been like a kid in a candy store with their proposals on taxes, especially in advance of tonight's debate. It is unlikely that either will be able to get a substantial portion of what they want. Ultimately, one has to look at whether the capital gains rate should be increased and whether things like the doughnut hole which Obama proposes on Social Security taxes (by exempting income between $100,000 and $250,000) is a good idea. Or whether some of the McCain gambits in housing are sound.
All the time I thought the Economist was a serious magazine not a kin to People.
Tuesday, October 14, 2008
Paul Krugman Wins the Nobel
As if the financial news were not already pretty trashy, the Nobel Committee announced that Paul Krugman won the Nobel in Economics. Remember this is the guy who called 40 of the last 3 recessions. A lot of Krugman's recent writing is in zero sum terms (one wins while others lose) and that is simply wrong-headed.
But his contributions to trade theory, which he won the award for, are substantive. He argued a couple of decades ago both for the importance of trade and that the world is not flat - linkages do matter in trade. But for the last decade he has taken on the role of a public intellectual - and there his contributions are less substantive.
In an NYT magazine article he said "For the America I grew up in -- the America of the 1950's and 1960's -- was a middle-class society, both in reality and in feel. The vast income and wealth inequalities of the Gilded Age had disappeared. Yes, of course, there was the poverty of the underclass -- but the conventional wisdom of the time viewed that as a social rather than an economic problem. Yes, of course, some wealthy businessmen and heirs to large fortunes lived far better than the average American. But they weren't rich the way the robber barons who built the mansions had been rich, and there weren't that many of them. The days when plutocrats were a force to be reckoned with in American society, economically or politically, seemed long past." That kind of stunning "analysis" reflects a misunderstanding of the first era of capital growth in the country, and also of the era in which Krugman grew up. He called this era the new "gilded" age.
Any student of both the history of the first age of American capitalism looks at the growth in well being of all Americans during the time and also of the gradual leveling of incomes as time passed. It was not because of governmental policy. The high taxes in the FDR era did not make the wealthy less wealthy nor the poor richer.
Krugman has some commendatory work on building our understanding of trade but on the whole most of his public writing is partisan bunk. In the Times Magazine article Krugman quoted Kevin Phillips, who like Krugman seems to believe in a new gilded age. While that makes for stunning partisan yammering it is lousy economics.
But his contributions to trade theory, which he won the award for, are substantive. He argued a couple of decades ago both for the importance of trade and that the world is not flat - linkages do matter in trade. But for the last decade he has taken on the role of a public intellectual - and there his contributions are less substantive.
In an NYT magazine article he said "For the America I grew up in -- the America of the 1950's and 1960's -- was a middle-class society, both in reality and in feel. The vast income and wealth inequalities of the Gilded Age had disappeared. Yes, of course, there was the poverty of the underclass -- but the conventional wisdom of the time viewed that as a social rather than an economic problem. Yes, of course, some wealthy businessmen and heirs to large fortunes lived far better than the average American. But they weren't rich the way the robber barons who built the mansions had been rich, and there weren't that many of them. The days when plutocrats were a force to be reckoned with in American society, economically or politically, seemed long past." That kind of stunning "analysis" reflects a misunderstanding of the first era of capital growth in the country, and also of the era in which Krugman grew up. He called this era the new "gilded" age.
Any student of both the history of the first age of American capitalism looks at the growth in well being of all Americans during the time and also of the gradual leveling of incomes as time passed. It was not because of governmental policy. The high taxes in the FDR era did not make the wealthy less wealthy nor the poor richer.
Krugman has some commendatory work on building our understanding of trade but on the whole most of his public writing is partisan bunk. In the Times Magazine article Krugman quoted Kevin Phillips, who like Krugman seems to believe in a new gilded age. While that makes for stunning partisan yammering it is lousy economics.
Monday, October 13, 2008
Answering Mrs. Mikey
Mrs. Mikey is a fan of Senator Obama.
In her comment to my post about thinking about not voting for any candidate she did some research on Senator Obama and Senator McCain. First, I am pleased that she has taken an interest in politics. Her responses need to be answered. Her base premise is that Senator McCain is more of the same, i.e. W3. There are certainly a lot of people who believe that. I can even concede that point. But that does not answer whether Senator Obama is Carter 2.
In her first point she cites his co-sponsorship of almost 600 bills and having 15 where he was a co-sponsor that became law. My response is simple. Every member of congress sponsors hundreds of bills. The real test of leadership is not sponsorship but how actively the member gets in on the issues. Senator Obama has been largely absent in this congress (as has Senator McCain) and based on his voting record had a prior record of no real leadership in either the Senate nor the Illinois legislature. As an insider, I find people who vote present on major issues(which Obama has done a lot), a demonstration of lack of leadership. He might well be a good executive leader. Many great presidents were lousy legislators. (And indeed the skills are not transferrable.) But I keep thinking that he is a Seinfeld Senator - great talk not a lot of substance. Indeed, one argument that Mrs. Mikey could make about McCain is that he has taken a number of leadership roles in the Senate on a number of issues - based on prior experience - Most Senators have not made good presidents. So one could argue that Obama's lack of a record in the Senate could be positive. I wonder.
Second, I would concede, although with a lot less energy, that both candidates have not been at their best in the last couple of weeks. I don't like McCain people using Obama's middle name. Nor do I like John Lewis making absurd charges about racism.
Third, I am concerned about both candidates relationships with people who I think have ulterior motives. Bill Ayers IS an unrepentant terrorist. His association to Senator Obama has been demonstrated. Tony Rezko is a convicted felon. And Rezko did at a minimum create the appearance of impropriety in his assistance to the Obamas on their home. In both of these cases and in the relationship with Franklin Raines, who I believe is a key figure in the current financial crisis, Obama has not offered a clear understanding of his relationships. He should. McCain does have some relationships with people who I find abhorrent. The Keating incident, if you go back and look at the history, is a big problem for me. But the size and scope of the savings and loan crisis, which began with efforts by a Rhode Island Congressman who was convicted of illegal activity to loosen the strings on Savings and Loan institutions was by most accounts minor. McCain, among the people in the center of the storm was the only one who was not directly accused of ethical lapses. But he did have a huge lapse in judgement. Note the outside scope of the S&L crisis was about a seventh of the current crisis.
So in spite of Mrs. Mikey's determined efforts to convince me I remain undecided.
In her comment to my post about thinking about not voting for any candidate she did some research on Senator Obama and Senator McCain. First, I am pleased that she has taken an interest in politics. Her responses need to be answered. Her base premise is that Senator McCain is more of the same, i.e. W3. There are certainly a lot of people who believe that. I can even concede that point. But that does not answer whether Senator Obama is Carter 2.
In her first point she cites his co-sponsorship of almost 600 bills and having 15 where he was a co-sponsor that became law. My response is simple. Every member of congress sponsors hundreds of bills. The real test of leadership is not sponsorship but how actively the member gets in on the issues. Senator Obama has been largely absent in this congress (as has Senator McCain) and based on his voting record had a prior record of no real leadership in either the Senate nor the Illinois legislature. As an insider, I find people who vote present on major issues(which Obama has done a lot), a demonstration of lack of leadership. He might well be a good executive leader. Many great presidents were lousy legislators. (And indeed the skills are not transferrable.) But I keep thinking that he is a Seinfeld Senator - great talk not a lot of substance. Indeed, one argument that Mrs. Mikey could make about McCain is that he has taken a number of leadership roles in the Senate on a number of issues - based on prior experience - Most Senators have not made good presidents. So one could argue that Obama's lack of a record in the Senate could be positive. I wonder.
Second, I would concede, although with a lot less energy, that both candidates have not been at their best in the last couple of weeks. I don't like McCain people using Obama's middle name. Nor do I like John Lewis making absurd charges about racism.
Third, I am concerned about both candidates relationships with people who I think have ulterior motives. Bill Ayers IS an unrepentant terrorist. His association to Senator Obama has been demonstrated. Tony Rezko is a convicted felon. And Rezko did at a minimum create the appearance of impropriety in his assistance to the Obamas on their home. In both of these cases and in the relationship with Franklin Raines, who I believe is a key figure in the current financial crisis, Obama has not offered a clear understanding of his relationships. He should. McCain does have some relationships with people who I find abhorrent. The Keating incident, if you go back and look at the history, is a big problem for me. But the size and scope of the savings and loan crisis, which began with efforts by a Rhode Island Congressman who was convicted of illegal activity to loosen the strings on Savings and Loan institutions was by most accounts minor. McCain, among the people in the center of the storm was the only one who was not directly accused of ethical lapses. But he did have a huge lapse in judgement. Note the outside scope of the S&L crisis was about a seventh of the current crisis.
So in spite of Mrs. Mikey's determined efforts to convince me I remain undecided.
Sunday, October 12, 2008
Stock Market Jitters
Subject: Parable of the Monkeys
Once upon a time in a village, a man appeared and announced to the villagers that he would buy monkeys for $10 each. The villagers seeing that there were many monkeys around, went out to the forest, and started catching them. The man bought thousands at $10 and as supply started to diminish, the villagers stopped their effort.
He then announced that he would now buy at $20 each. This renewed the efforts of the villagers and they started Catching monkeys again.
Soon the supply diminished even further and people started going back to their farms. The offer increased to $25 each and the supply of monkeys became so little that it was an effort to even see a monkey, let alone catch one!
The man now announced that he would buy monkeys at $50! However, since he had to go to the city on some business, his assistant would now buy on his behalf.
In his absence, the assistant told the villagers, 'Look at all the monkeys in the big cage that the man has collected. I will sell them to you at $35 and when he returns from the city, you can sell them to him for $50 each.'
The villagers rounded up with all their savings and bought all the monkeys. Then they never saw the man nor his assistant ever again; only monkeys everywhere!
You now have a better understanding of how the Stock Market works.
A friend sent that to me. It concerns me because it assumes that the financial markets are part of a massive conspiracy. The real villain in this drama begins not with the financial markets, although they are partially to blame, but with changes in incentives in governmental policy. But this parable does not mention the changes in the Community Reinvestment Act, nor the books cooking at Fannie Mae. It does mention that the value of securities (or monkeys) change but gives no insight into why they change. The most important thing for all of us to do at this time is to calm down. The 24/7 news establishment wants to talk us into a crisis. They want to find villains. But calm here is the better option than creating false parables.
Once upon a time in a village, a man appeared and announced to the villagers that he would buy monkeys for $10 each. The villagers seeing that there were many monkeys around, went out to the forest, and started catching them. The man bought thousands at $10 and as supply started to diminish, the villagers stopped their effort.
He then announced that he would now buy at $20 each. This renewed the efforts of the villagers and they started Catching monkeys again.
Soon the supply diminished even further and people started going back to their farms. The offer increased to $25 each and the supply of monkeys became so little that it was an effort to even see a monkey, let alone catch one!
The man now announced that he would buy monkeys at $50! However, since he had to go to the city on some business, his assistant would now buy on his behalf.
In his absence, the assistant told the villagers, 'Look at all the monkeys in the big cage that the man has collected. I will sell them to you at $35 and when he returns from the city, you can sell them to him for $50 each.'
The villagers rounded up with all their savings and bought all the monkeys. Then they never saw the man nor his assistant ever again; only monkeys everywhere!
You now have a better understanding of how the Stock Market works.
A friend sent that to me. It concerns me because it assumes that the financial markets are part of a massive conspiracy. The real villain in this drama begins not with the financial markets, although they are partially to blame, but with changes in incentives in governmental policy. But this parable does not mention the changes in the Community Reinvestment Act, nor the books cooking at Fannie Mae. It does mention that the value of securities (or monkeys) change but gives no insight into why they change. The most important thing for all of us to do at this time is to calm down. The 24/7 news establishment wants to talk us into a crisis. They want to find villains. But calm here is the better option than creating false parables.
Saturday, October 11, 2008
Is there an option for None of the Above?
Over the last six months, I have watched and read almost everything I can find about both of the final nominees for the Presidency. I am dissatisfied with both choices and am uninclined to vote for any of the minor party candidates.
Here are the considerations that have kept me in this position.
John McCain - I admire his service in Vietnam and mostly his service in the Congress. While there have been notable times when I have disagreed with his positions on issues, I believe he has attempted to be a creative member of both houses. Early in his career he exercised some bad judgment in relation to the Savings and Loan debacle, but I believe he learned from his mistakes. His positions on health care and immigration are creative and IMHO much better than his opponents.
I am concerned about his seeming ability to go off on his own. One of the errors of the current president was his inability to consider alternative points of view. In this era, as Fareed Zakaria has suggested the President needs to work with allies and build them. While I think he would be better than the current incumbent at that task, I wonder how much better. But based on his experience in the Senate, where he has shown some capabilities to work across the aisles, he could be good at his job.
I am impressed with his key economic advisor, whose academic writings are impressive. Some of the proposals espoused by McCain are truly creative. However, I am concerned that for those, McCain has been unable to explain them clearly - I sense a lack of commitment to some very good ideas. Unfortunately, I thought the outlines of his housing proposal were poorly thought out. There is a developing body of literature on the housing crisis that suggests some possible changes in mortgage structures, which in the most charitable sense could have been the basis for his proposal in the second debate - but from my perspective he either threw the grand proposal out in desperation or was unable to explain the details of his proposal in the debate.
I have not been impressed that McCain has the ability to motivate the American people. His debate performances were adequate and no more. While I think he is a decent guy, I am not sure his ability to talk to us, is up to the standard required.
Barrack Obama - I am bothered by a non-existent legislative record. When one votes present on a major issue it is a sure sign of political maneuver and Senator Obama has voted present a lot. Were he not a candidate for president he would be considered an empty suit. In neither his service in the Illinois legislature nor the US Senate has he proposed or advanced a single legislative proposal of substance. Indeed, one cannot see any efforts at real leadership beyond the standard nostrums of his party.
His proposals for Social Security are absurd on their face. Whoever thought of the notch (taxing wages above $250k but exempting those between the current limit and $250K demonstrates little knowledge of the ability of higher income wage earners to time their income). I am also bothered by his other tax proposals, which I think would put the US tax system, which has one of the highest rate systems for corporate taxes and one of the most complicated systems for individual taxpayers, further away from the rest of the world. His health proposal was an improvement over Hillary care. Obama, in my knowledge has a couple of characteristics about his legislative record. First, like some politicians on the move, he has shown a disturbing propensity to duck tough votes (by voting present). Second, I cannot think of a single instance where he has taken a leadership role on a major legislative issue.
I am very concerned that Senator Obama has some very negative ties to people and ideas. His links to the Reverend Wright, Tony Rezko and Bill Ayers, while individually could be explained, in sum total represent some ominous clouds on his horizon. Indeed, to be friends with a racist preacher, convicted felon and radical, by themselves should not be dispositive - but their cumulative effect is troubling.
Senator Obama exhibits an almost naive understanding of the complex relationships in the world. His response to the Georgian crisis showed an inability to react to negative events in a realistic manner.
I am impressed with his key economic advisor. While I disagree with some of his scholarly work, I think he would help to guide the economy in some substantive and positive ways.
Senator Obama has at least the outlines of an inspirational figure. His rhetoric seems to move many people. But I look at the great speechmakers of the past and wonder whether he would be more like Kennedy (who gave great speeches but accomplished little) or Reagan (who gave great speeches and seemed to accomplish a lot). I also believe that electing the first Black president could help to continue toward racial reconciliation.
I probably would move more closely with the vision of the future that McCain offers in terms of policies I care about but I am not convinced that he could be successful in what looks like an increasing democrat majority in both houses of congress. At the same time I am ever cautious about having a unified government. The perils of that were well proven in the first two years of Clinton or the first several of W. In the end I keep coming back to two comparisons. Is Senator McCain a new figure or is he W3? Is Senator Obama a new figure with great new ideas or is he Carter2. Neither of those choices is appealing.
Here are the considerations that have kept me in this position.
John McCain - I admire his service in Vietnam and mostly his service in the Congress. While there have been notable times when I have disagreed with his positions on issues, I believe he has attempted to be a creative member of both houses. Early in his career he exercised some bad judgment in relation to the Savings and Loan debacle, but I believe he learned from his mistakes. His positions on health care and immigration are creative and IMHO much better than his opponents.
I am concerned about his seeming ability to go off on his own. One of the errors of the current president was his inability to consider alternative points of view. In this era, as Fareed Zakaria has suggested the President needs to work with allies and build them. While I think he would be better than the current incumbent at that task, I wonder how much better. But based on his experience in the Senate, where he has shown some capabilities to work across the aisles, he could be good at his job.
I am impressed with his key economic advisor, whose academic writings are impressive. Some of the proposals espoused by McCain are truly creative. However, I am concerned that for those, McCain has been unable to explain them clearly - I sense a lack of commitment to some very good ideas. Unfortunately, I thought the outlines of his housing proposal were poorly thought out. There is a developing body of literature on the housing crisis that suggests some possible changes in mortgage structures, which in the most charitable sense could have been the basis for his proposal in the second debate - but from my perspective he either threw the grand proposal out in desperation or was unable to explain the details of his proposal in the debate.
I have not been impressed that McCain has the ability to motivate the American people. His debate performances were adequate and no more. While I think he is a decent guy, I am not sure his ability to talk to us, is up to the standard required.
Barrack Obama - I am bothered by a non-existent legislative record. When one votes present on a major issue it is a sure sign of political maneuver and Senator Obama has voted present a lot. Were he not a candidate for president he would be considered an empty suit. In neither his service in the Illinois legislature nor the US Senate has he proposed or advanced a single legislative proposal of substance. Indeed, one cannot see any efforts at real leadership beyond the standard nostrums of his party. His proposals for Social Security are absurd on their face. Whoever thought of the notch (taxing wages above $250k but exempting those between the current limit and $250K demonstrates little knowledge of the ability of higher income wage earners to time their income). I am also bothered by his other tax proposals, which I think would put the US tax system, which has one of the highest rate systems for corporate taxes and one of the most complicated systems for individual taxpayers, further away from the rest of the world. His health proposal was an improvement over Hillary care. Obama, in my knowledge has a couple of characteristics about his legislative record. First, like some politicians on the move, he has shown a disturbing propensity to duck tough votes (by voting present). Second, I cannot think of a single instance where he has taken a leadership role on a major legislative issue.
I am very concerned that Senator Obama has some very negative ties to people and ideas. His links to the Reverend Wright, Tony Rezko and Bill Ayers, while individually could be explained, in sum total represent some ominous clouds on his horizon. Indeed, to be friends with a racist preacher, convicted felon and radical, by themselves should not be dispositive - but their cumulative effect is troubling.
Senator Obama exhibits an almost naive understanding of the complex relationships in the world. His response to the Georgian crisis showed an inability to react to negative events in a realistic manner.
I am impressed with his key economic advisor. While I disagree with some of his scholarly work, I think he would help to guide the economy in some substantive and positive ways.
Senator Obama has at least the outlines of an inspirational figure. His rhetoric seems to move many people. But I look at the great speechmakers of the past and wonder whether he would be more like Kennedy (who gave great speeches but accomplished little) or Reagan (who gave great speeches and seemed to accomplish a lot). I also believe that electing the first Black president could help to continue toward racial reconciliation.
I probably would move more closely with the vision of the future that McCain offers in terms of policies I care about but I am not convinced that he could be successful in what looks like an increasing democrat majority in both houses of congress. At the same time I am ever cautious about having a unified government. The perils of that were well proven in the first two years of Clinton or the first several of W. In the end I keep coming back to two comparisons. Is Senator McCain a new figure or is he W3? Is Senator Obama a new figure with great new ideas or is he Carter2. Neither of those choices is appealing.
Vietnamese Nail People and Federalist #10 and 51
My wife gets her nails done at a Vietnamese nail salon in our neighborhood. When she was last in the guy who did her manicure and nail polish was talking politics. He explained that this country was a great place because of the diversity of opinions and that one group did not control the system (as they had before he left Vietnam).
According to my wife this guy is a citizen - and he seems to understand the basis for our political system (which Madison argued in Federalist #10 and 51) better than a lot of his native born fellow citizens.
According to my wife this guy is a citizen - and he seems to understand the basis for our political system (which Madison argued in Federalist #10 and 51) better than a lot of his native born fellow citizens.
Wednesday, October 08, 2008
Tax Equity between the Candidates
The Tax Policy Center, which does a lot of good work on tax issues, did an analysis of the distributional effects of the Obama and McCain proposals. The numbers stand for themselves.
The Presidential Debate
As an undecided voter in this election, last night's debate did not help me decide. Neither candidate gave me much reason to vote for him. Both seemed to stay on script.
I think the exchange on health care went to McCain, but that is only because I believe that while Obama's proposals for reforming the health care system are superior to his former democratic opponents, ultimately the stabilization of health care costs will depend on a lot fewer mandates. Obama implicitly supports better benefits for the rich - because employees can keep existing plans - and that is something McCain should have caught him on. An employee who gets a Cadillac health plan from an employer - even if they make more than $250,000 would get that still under Obama. That says a lot about Obama's sense of equity. Under the McCain plan, everyone would start out with the same benefit, thus a Cadillac health plan would be funded out of the wealthier person's pocket not the tax code.
The problem with McCain's proposal is that it is hard to explain. It falls into what economists call a "transitional gains trap." Gordon Tullock's wonderful formulation, that we are unwilling to give up a bad thing for something that might be slightly better, fits here. Eliminating the employer deduction for health insurance (which is a remnant of WWII price controls) would introduce more market like decisions into the health care system. A $5000 refundable credit would more than cover the benefit that most employees get from their employer provided health care. But like some other parts of the tax code, that change will be almost impossible to achieve without a big fight.
McCain's opening gambit on housing would be expensive and I am not sure that the incentives in it are in any way appropriate. But I thought that McCain's attack on Obama on the credit crisis was mostly correct. Obama did, as most democrats did, support Fannie and Freddie - which are a base cause of the problems we face - more than most republicans.
I am also concerned about the legitimate comparison between Obama and McCain on legislative record. Obama has none. McCain, while I disagree with some of his record, has a long record on a series of issues. The danger here is not that Obama will not have a set of legislative proposals but that the majority in each house will probably be more successful in rolling Obama on issues than McCain.
I thought both candidates did an adequate job. Both cited too many gotcha vote comparisons. Both were reasonably clear on their priorities. But McCain had the larger task to turn the tide that seems to be working in Obama's favor and there I believe he was unsuccessful.
I think the exchange on health care went to McCain, but that is only because I believe that while Obama's proposals for reforming the health care system are superior to his former democratic opponents, ultimately the stabilization of health care costs will depend on a lot fewer mandates. Obama implicitly supports better benefits for the rich - because employees can keep existing plans - and that is something McCain should have caught him on. An employee who gets a Cadillac health plan from an employer - even if they make more than $250,000 would get that still under Obama. That says a lot about Obama's sense of equity. Under the McCain plan, everyone would start out with the same benefit, thus a Cadillac health plan would be funded out of the wealthier person's pocket not the tax code.
The problem with McCain's proposal is that it is hard to explain. It falls into what economists call a "transitional gains trap." Gordon Tullock's wonderful formulation, that we are unwilling to give up a bad thing for something that might be slightly better, fits here. Eliminating the employer deduction for health insurance (which is a remnant of WWII price controls) would introduce more market like decisions into the health care system. A $5000 refundable credit would more than cover the benefit that most employees get from their employer provided health care. But like some other parts of the tax code, that change will be almost impossible to achieve without a big fight.
McCain's opening gambit on housing would be expensive and I am not sure that the incentives in it are in any way appropriate. But I thought that McCain's attack on Obama on the credit crisis was mostly correct. Obama did, as most democrats did, support Fannie and Freddie - which are a base cause of the problems we face - more than most republicans.
I am also concerned about the legitimate comparison between Obama and McCain on legislative record. Obama has none. McCain, while I disagree with some of his record, has a long record on a series of issues. The danger here is not that Obama will not have a set of legislative proposals but that the majority in each house will probably be more successful in rolling Obama on issues than McCain.
I thought both candidates did an adequate job. Both cited too many gotcha vote comparisons. Both were reasonably clear on their priorities. But McCain had the larger task to turn the tide that seems to be working in Obama's favor and there I believe he was unsuccessful.
Monday, October 06, 2008
Twitterpation at the AP
Who is Douglass K. Daniel of the AP? Evidently not a reporter probably also not a competent news analyst. In an "analysis" titled "Palin's words carry racial tinge" Daniel purports to argue that any criticism of Senator Obama is racially tinged. That charge is completely false. Daniel does not bother to back his claim with any facts, he thinks that the mere assertion of a string of issues is enough.
He quotes Governor Palin who said "Our opponent ... is someone who sees America, it seems, as being so imperfect, imperfect enough, that he's palling around with terrorists who would target their own country," He describes that as " A deliberate attempt to smear Obama."
Palin was trying to make a point that Obama does not believe in the idea of American exceptionalism. She said "This is not a man who sees America like you and I see America. We see America as a force of good in this world. We see an America of exceptionalism." You may disagree with the Governor's conclusion but it is absurd to suggest that the differences in conclusions are in any way racist.
Daniel then moves Palin's comments on the Obama relationship with William Ayers. Palin described (correctly) that Ayers is both an unrepentant terrorist and close to Obama. Daniel makes the absurd claim that the relationship between Ayers as "not close." But that is contradicted by the facts. Early in Obama's political career Ayers and his wife hosted a fund-raiser, does Daniel believe that this kind of sponsorship is a random event? The other issue raised by Daniel's claim is whether active service on a board where Ayers and the Senator served and jointly wrote bylaws constitutes a close relationship. Ayers may or may not be on the inside of Obama's circle of advisers. But the relationship between Obama and Ayers is well established both from the fund raiser and from his work on the Annenberg project.
Daniel gets even more absurd when he claims that Palin's "incendiary" charge draws media and voter attention away from the worsening economy. It also comes after McCain supported a "pork-laden Wall Street bailout plan" in spite of conservative anger and his own misgivings. Oh, by the way Mr. Daniel, Senator Obama also supported the "pork-laden Wall Street bailout." And based on polling the anger about the package was not limited to conservatives.
Finally Daniel raises the specter of Willie Horton. In the 1988 election Al Gore (last time we checked Gore is a democrat) raised the issue of a furlough program that Governor Dukakis had authorized. Horton was furloughed and committed another crime on furlough. The Horton ad was run once, although the GOP raised the issue in a number of forums. Some lefties argue that because Horton was Black the issue was racist. Dukakis' policy was fool-hardy. But Daniel ignores the consequences of the policy and focuses on the race of the perpetrator.
Ultimately, Daniel's "analysis" is an almost textbook example of media bias. A person could disagree with Palin's conclusions. Many do not believe in the idea of American exceptionalism. William Ayers may not be a close adviser to Obama. But to claim that any of this is somehow racist is nonsense. In case one thinks that Daniel is being attacked I have attached the CNN coverage on the Ayers link to Obama.
He quotes Governor Palin who said "Our opponent ... is someone who sees America, it seems, as being so imperfect, imperfect enough, that he's palling around with terrorists who would target their own country," He describes that as " A deliberate attempt to smear Obama."
Palin was trying to make a point that Obama does not believe in the idea of American exceptionalism. She said "This is not a man who sees America like you and I see America. We see America as a force of good in this world. We see an America of exceptionalism." You may disagree with the Governor's conclusion but it is absurd to suggest that the differences in conclusions are in any way racist.
Daniel then moves Palin's comments on the Obama relationship with William Ayers. Palin described (correctly) that Ayers is both an unrepentant terrorist and close to Obama. Daniel makes the absurd claim that the relationship between Ayers as "not close." But that is contradicted by the facts. Early in Obama's political career Ayers and his wife hosted a fund-raiser, does Daniel believe that this kind of sponsorship is a random event? The other issue raised by Daniel's claim is whether active service on a board where Ayers and the Senator served and jointly wrote bylaws constitutes a close relationship. Ayers may or may not be on the inside of Obama's circle of advisers. But the relationship between Obama and Ayers is well established both from the fund raiser and from his work on the Annenberg project.
Daniel gets even more absurd when he claims that Palin's "incendiary" charge draws media and voter attention away from the worsening economy. It also comes after McCain supported a "pork-laden Wall Street bailout plan" in spite of conservative anger and his own misgivings. Oh, by the way Mr. Daniel, Senator Obama also supported the "pork-laden Wall Street bailout." And based on polling the anger about the package was not limited to conservatives.
Finally Daniel raises the specter of Willie Horton. In the 1988 election Al Gore (last time we checked Gore is a democrat) raised the issue of a furlough program that Governor Dukakis had authorized. Horton was furloughed and committed another crime on furlough. The Horton ad was run once, although the GOP raised the issue in a number of forums. Some lefties argue that because Horton was Black the issue was racist. Dukakis' policy was fool-hardy. But Daniel ignores the consequences of the policy and focuses on the race of the perpetrator.
Ultimately, Daniel's "analysis" is an almost textbook example of media bias. A person could disagree with Palin's conclusions. Many do not believe in the idea of American exceptionalism. William Ayers may not be a close adviser to Obama. But to claim that any of this is somehow racist is nonsense. In case one thinks that Daniel is being attacked I have attached the CNN coverage on the Ayers link to Obama.
Margaret Spellings Reflects
In an article for Inside Higher Education Margaret Spellings, the Secretary of Education, made an assessment of her tenure. Not surprisingly, it is a relatively favorable one.
Her comments on Congress are decidedly more benign than the ones she made in an op ed in politico in February. There she claimed "While business leaders embrace the future, Congress is vigorously defending old structures and outdated practices in higher education at the behest of entrenched stakeholders who advocate the status quo. In Congress’ latest attempt to renew the Higher Education Act, which sets policy for more than 6,000 institutions that govern 18 million students and through which $85 billion in federal tax dollars flow each year, its response to the fundamental structural problems that plague our higher education system and threaten U.S. competitiveness is anemic at best." At the time she demonstrated a misunderstanding of the role of the federal government. The highlighted portion is but one example. The higher education act does not "set policy" for institutions, it sets federal policy for higher education. That may seem like a small difference but it is a critical one. The strength of the American system of higher education, is that it is not a system controlled from one source. Spellings never bothered to confront that nuance.
In the interview Spellings now comments “I would give Congress an incomplete on the latest reauthorization,” because “they haven’t fully appreciated the big picture of some of these issues. That’s why there needs to be more leadership from the field, from really all of us who care about these issues.” I wonder what she would give for her own performance. In spite of a national commission which seemed unable or unwilling to reflect on the delicate nature of the relationship between higher education and the federal government and in spite of a complete lack of direct involvement in the reauthorization process (the Administration never offered their own proposals for the reauthorization act) I am pretty sure she would give her performance higher marks. For all that lack of leadership, she believes that the federal government should have federal solutions.
It ultimately comes down to the original rationale for the creation of a US Department of Education, which Spellings reflects almost perfectly. When the Department was created it was argued that we needed a federal department to "coordinate" education. The rationale was silly then and as Spellings has demonstrated over the last several years, it is even sillier now. That does not mean that the federal government should have no role in education policy, but Spellings' expansive view is one that is directly contrary to the current strengths of the our educational system.
Her comments on Congress are decidedly more benign than the ones she made in an op ed in politico in February. There she claimed "While business leaders embrace the future, Congress is vigorously defending old structures and outdated practices in higher education at the behest of entrenched stakeholders who advocate the status quo. In Congress’ latest attempt to renew the Higher Education Act, which sets policy for more than 6,000 institutions that govern 18 million students and through which $85 billion in federal tax dollars flow each year, its response to the fundamental structural problems that plague our higher education system and threaten U.S. competitiveness is anemic at best." At the time she demonstrated a misunderstanding of the role of the federal government. The highlighted portion is but one example. The higher education act does not "set policy" for institutions, it sets federal policy for higher education. That may seem like a small difference but it is a critical one. The strength of the American system of higher education, is that it is not a system controlled from one source. Spellings never bothered to confront that nuance.
In the interview Spellings now comments “I would give Congress an incomplete on the latest reauthorization,” because “they haven’t fully appreciated the big picture of some of these issues. That’s why there needs to be more leadership from the field, from really all of us who care about these issues.” I wonder what she would give for her own performance. In spite of a national commission which seemed unable or unwilling to reflect on the delicate nature of the relationship between higher education and the federal government and in spite of a complete lack of direct involvement in the reauthorization process (the Administration never offered their own proposals for the reauthorization act) I am pretty sure she would give her performance higher marks. For all that lack of leadership, she believes that the federal government should have federal solutions.
It ultimately comes down to the original rationale for the creation of a US Department of Education, which Spellings reflects almost perfectly. When the Department was created it was argued that we needed a federal department to "coordinate" education. The rationale was silly then and as Spellings has demonstrated over the last several years, it is even sillier now. That does not mean that the federal government should have no role in education policy, but Spellings' expansive view is one that is directly contrary to the current strengths of the our educational system.
Saturday, October 04, 2008
Dan Lungren for Congress
Dan Lungren has been a Member of Congress in two different districts. He was first elected as a member from a district(42d) in Southern California and in 2005 beat out two other candidates to represent a district (3d) near Sacramento. In time between those two congressional stints he was Attorney General and he also made a run for Governor.
His opponent in 2006 was an emergency room physician named Bill Durston. Lungren won with almost 60% of the vote. Durston is running again. But this time Durston has run a despicable campaign. For the last week or so he has run an ad, called "End Politics as Usual" that is a typical political cheap shot that uses grainy photographs. As pointed out in the Sacramento Bee - the ad is misleading in its claims.
Durston is opposed to the American involvement in the Iraq war. He has also tried to make the point that his key issues is the role of special interests in politics. He says unequivocally he is against the "special interests." His campaign site has a video of a portion of a 2006 debate on the role of special interest money in politics. But if you look up his campaign disclosures a good deal of his contributions have come from groups like Sheet Metal Workers and the National Air Traffic Controllers Union. I am not sure how he can make the claim that he is against special interest contributions when he accepts them. He is either naive or disingenuous.
Congressman Lungren is a conservative who represents a conservative district. Unlike his next door neighbor, John Doolittle, he is not an unbending one. His recent vote on the bailout package (Lungren voted yes, even though he had reservations on the package.) is an example of his willingness to dig in on the issues. I am not sure whether Durston actually believes the muck his campaign is putting out or whether he is being led by campaign consultants. In either case that does not make for much a case for his election.
On the other hand, Lungren's willingness to think out issues and even consider alternative views on an issue, makes a strong case for retaining him.
His opponent in 2006 was an emergency room physician named Bill Durston. Lungren won with almost 60% of the vote. Durston is running again. But this time Durston has run a despicable campaign. For the last week or so he has run an ad, called "End Politics as Usual" that is a typical political cheap shot that uses grainy photographs. As pointed out in the Sacramento Bee - the ad is misleading in its claims.
Durston is opposed to the American involvement in the Iraq war. He has also tried to make the point that his key issues is the role of special interests in politics. He says unequivocally he is against the "special interests." His campaign site has a video of a portion of a 2006 debate on the role of special interest money in politics. But if you look up his campaign disclosures a good deal of his contributions have come from groups like Sheet Metal Workers and the National Air Traffic Controllers Union. I am not sure how he can make the claim that he is against special interest contributions when he accepts them. He is either naive or disingenuous.
Congressman Lungren is a conservative who represents a conservative district. Unlike his next door neighbor, John Doolittle, he is not an unbending one. His recent vote on the bailout package (Lungren voted yes, even though he had reservations on the package.) is an example of his willingness to dig in on the issues. I am not sure whether Durston actually believes the muck his campaign is putting out or whether he is being led by campaign consultants. In either case that does not make for much a case for his election.
On the other hand, Lungren's willingness to think out issues and even consider alternative views on an issue, makes a strong case for retaining him.
The Juice - Guilty
Last night, thirteen years to the day from his "If it don't fit, you must acquit" verdict O.J. Simpson was found guilty of 12 counts of robbery and kidnapping. When he is sentenced in December he could face life in prison. One of his defense guys said "He is extremely upset, extremely emotional." O.J.s co-defendent's lawyer yammered about how the two defendents should have had their trials separated. Anything around O.J. seems to attract hype.
When the murder verdict was announced I was one of the few people in the country that was willing to accept it. For some strange reason I had been in LA for the summations visiting clients and thus heard all four summations. I had not followed the trial, in part because I was annoyed at the coverage it received. I thought, even though I was concerned about the Judge's seeming preening and Johnnie Cochran's outrageous antics that the jurors would be able to sort out the facts. The summations of the prosecution were incompetent. Neither was very well organized. Neither did a reasonable job of summarizing their case. Both could be used as bad examples in law schools. Cochran's summation was comical - he seemed to care little for courtroom decorum or for the facts in the case. But the last summation, by Barry Schenk, was excellent. He began with a short discussion of the concept of reasonable doubt and then carefully broke down a number of issues in the case where he asserted there could be reasonable doubt.
O.J.s trial launched a number of people's careers as media bimbos. You know the type - paraded by cable news as experts who comment on almost everything and make almost any story they are involved with somewhat salacious. One wishes that with O.J.s conviction that trend would be ended. But I doubt it will.
When the murder verdict was announced I was one of the few people in the country that was willing to accept it. For some strange reason I had been in LA for the summations visiting clients and thus heard all four summations. I had not followed the trial, in part because I was annoyed at the coverage it received. I thought, even though I was concerned about the Judge's seeming preening and Johnnie Cochran's outrageous antics that the jurors would be able to sort out the facts. The summations of the prosecution were incompetent. Neither was very well organized. Neither did a reasonable job of summarizing their case. Both could be used as bad examples in law schools. Cochran's summation was comical - he seemed to care little for courtroom decorum or for the facts in the case. But the last summation, by Barry Schenk, was excellent. He began with a short discussion of the concept of reasonable doubt and then carefully broke down a number of issues in the case where he asserted there could be reasonable doubt.
O.J.s trial launched a number of people's careers as media bimbos. You know the type - paraded by cable news as experts who comment on almost everything and make almost any story they are involved with somewhat salacious. One wishes that with O.J.s conviction that trend would be ended. But I doubt it will.
Friday, October 03, 2008
September Madness
One of the great things about the net is the creativeness of its inhabitants. The picture above came from an email I received earlier in the week. It was created by a person named Spumoni. While there are some quibbles about who should be in the brackets - and who will make it to the final four (with the Paulson Plan is it the Secretary of the Treasury?) it is a great piece of work!
Bailout Legislation
The emergency bailout bill has passed the house. Included in this bill to resolve what is supposedly a "crisis" is the following language at §503.
SEC. 503. EXEMPTION FROM EXCISE TAX FOR CERTAIN WOODEN ARROWS DESIGNED FOR USE BY CHILDREN.
(a) IN GENERAL.—Paragraph (2) of section 4161(b) is amended by redesignating subparagraph (B) as sub paragraph (C) and by inserting after subparagraph (A) the following new subparagraph:
''(B) EXEMPTION FOR CERTAIN WOODEN ARROW SHAFTS.—Subparagraph (A) shall not apply to any shaft consisting of all natural wood with no laminations or artificial means of enhancing the spine of such shaft (whether sold separately or incorporated as part of a finished or unfinished product) of a type used in the 10 manufacture of any arrow which after its as sembly—
''(i) measures 5⁄16 of an inch or less in diameter, and ''(ii) is not suitable for use with a bow described in paragraph (1)(A).''.
(b) EFFECTIVE DATE.—The amendments made by this section shall apply to shafts first sold after the date of enactment of this Act. t
I consider that I understand a lot about the sophisticated terms in the financial markets and politics. But I am not sure why this particular provision fits within the definition of an emergency. I also understand the term "shaft" and could speculate why this provision would be included in this bill. But should it be limited to wooden shafts?
SEC. 503. EXEMPTION FROM EXCISE TAX FOR CERTAIN WOODEN ARROWS DESIGNED FOR USE BY CHILDREN.
(a) IN GENERAL.—Paragraph (2) of section 4161(b) is amended by redesignating subparagraph (B) as sub paragraph (C) and by inserting after subparagraph (A) the following new subparagraph:
''(B) EXEMPTION FOR CERTAIN WOODEN ARROW SHAFTS.—Subparagraph (A) shall not apply to any shaft consisting of all natural wood with no laminations or artificial means of enhancing the spine of such shaft (whether sold separately or incorporated as part of a finished or unfinished product) of a type used in the 10 manufacture of any arrow which after its as sembly—
''(i) measures 5⁄16 of an inch or less in diameter, and ''(ii) is not suitable for use with a bow described in paragraph (1)(A).''.
(b) EFFECTIVE DATE.—The amendments made by this section shall apply to shafts first sold after the date of enactment of this Act. t
I consider that I understand a lot about the sophisticated terms in the financial markets and politics. But I am not sure why this particular provision fits within the definition of an emergency. I also understand the term "shaft" and could speculate why this provision would be included in this bill. But should it be limited to wooden shafts?
The VP debate
If the goal last night was to change minds, then last night's debate of the Vice Presidential candidates was a failure. Palin certainly held her own despite a couple of slips. (President Talibani?) Both candidates had been well schooled in the "art" of counting silly votes. At one point Biden's claim about only 5% of the small businesses making more than $250,000 becomes an argument about what is a small business and whether the figure quoted is gross or net income. I am increasingly skeptical of the tendency to count votes. The claims that either candidate voted 472 times to do X, is political nonsense. The more important question is not how many procedural votes a person took which had a peripheral relationship to a topic but what the substance of an elected official's voting patterns are - those two are not the same.
I was also bothered by Biden's discussions about health insurance. Palin had a marvelous chance to nail him on his assertions but she either chose to or was unable to respond. The McCain plan assumes that the market will help lower costs. That is an assumption, but a reasonable one. There is not very good information about what people pay for health insurance - between actual and co-pay costs. Government run programs will be more expensive and Palin missed the chance to do that.
I believe the American people understand the differences in choice between the two campaigns - although they have not finished their calibration of the personal side of these people. Obama and Biden would like to get us out of Iraq sooner than McCain - although realities may limit the range of action for whoever wins. Ditto for domestic politics. There is not much possibility that either candidate will be able to do as much as they promise. There will not be the money.
But did the debate change any minds? No.
I was also bothered by Biden's discussions about health insurance. Palin had a marvelous chance to nail him on his assertions but she either chose to or was unable to respond. The McCain plan assumes that the market will help lower costs. That is an assumption, but a reasonable one. There is not very good information about what people pay for health insurance - between actual and co-pay costs. Government run programs will be more expensive and Palin missed the chance to do that.
I believe the American people understand the differences in choice between the two campaigns - although they have not finished their calibration of the personal side of these people. Obama and Biden would like to get us out of Iraq sooner than McCain - although realities may limit the range of action for whoever wins. Ditto for domestic politics. There is not much possibility that either candidate will be able to do as much as they promise. There will not be the money.
But did the debate change any minds? No.
Wednesday, October 01, 2008
Policy Sense and Nonsense
Edward Abbey, the American author who died in the late 1980s said “There is science, logic, reason; there is thought verified by experience. And then there is California.” 
Over the last couple of years I've been engaged in a debate which proves Abbey's aphorism.
All states have what are called licensure statutes for educational institutions. Some license both public and private institutions; some only license private institutions. Twenty years ago California had a notorious statute which allowed all sorts of nefarious institutions to operate with impunity. As a part of the Master Planning process, I did a report on the issue of licensure and found that one institution, authorized under this statute offered a Ph.D. in Analytical Chemistry without anyone on the staff who had had even one course in Chemistry. Part of the new Master Plan for Higher Education created a new statute which tamped down that kind of silliness. The new statute eliminated the prior standard which allowed any institution with $50,000 in assets to operate with a state license and substituted a new series of regulatory requirements. But the state also created an exemption for private institutions that were accredited by the regional accrediting agency. The logic of that proposition was sound. Regional accreditation is a process by which the quality of an institution is judged by peers in higher education. In California public and private institutions are accredited by the Western Association of Schools and Colleges (WASC). WASC is a human process but actually encourages institutions to think about the quality of what they do. There is a lot of discussion by critics that accreditation does not do everything for everybody (and that is true) but it does a pretty good job of separating wheat from chaff. The WASC exemption was in place with a very simple (and correct notion) - why duplicate a process that exceeds any one that the state could create?
A couple of years ago the statute began a process of periodic review. There was some pretty good evidence that the regulatory framework had not worked as intended. While the $50,000 institutions were chased out of the state, the review by the state bureau in charge of this program was lax. The consumer attorneys wanted to extend the reach of the regulations to include WASC accredited institutions. They captured the process in the start and were able to modify the exemption (which was one of the pieces of the legislation that functioned pretty well). But the draft was also troubling from a number of other views. It mushroomed to a several hundred page monstrosity.
The first time the bill got a serious hearing it was held up in the committee. A GOP assembly member (Roger Niello) who had been put on the committee temporarily drafted a much more straight forward alternative - but the leadership in the Assembly would not give his proposal any serious consideration. We finally clarified the language on WASC accredited institutions to have a clear and unambiguous exemption. But there were lots of issues left in the bill. For example, what should the state do about the institutions that operate branch campuses in California but are accredited by another regional accrediting agency (there are six regionals across the country)?
The process here was not a very good one. And the Governor realized that. Ultimately, next year, what needs to be done is to write a much more simple regulatory structure. The Act should try to accomplish three things. First, it should establish a system which regulates bad behavior and encourages good for those institutions which are not yet accredited. Second, it should continue the principle that recognizes the value of regional accreditation. Third, it should decide how much regulatory oversight should be done for regionally accredited institutions that are not recognized by WASC. In my mind that is not a large bill - it is fairly simple.
The Governor was right to veto the existing measure - let's hope that next year the legislature will act with alacrity to pass a more reasonable measure.
Over the last couple of years I've been engaged in a debate which proves Abbey's aphorism.All states have what are called licensure statutes for educational institutions. Some license both public and private institutions; some only license private institutions. Twenty years ago California had a notorious statute which allowed all sorts of nefarious institutions to operate with impunity. As a part of the Master Planning process, I did a report on the issue of licensure and found that one institution, authorized under this statute offered a Ph.D. in Analytical Chemistry without anyone on the staff who had had even one course in Chemistry. Part of the new Master Plan for Higher Education created a new statute which tamped down that kind of silliness. The new statute eliminated the prior standard which allowed any institution with $50,000 in assets to operate with a state license and substituted a new series of regulatory requirements. But the state also created an exemption for private institutions that were accredited by the regional accrediting agency. The logic of that proposition was sound. Regional accreditation is a process by which the quality of an institution is judged by peers in higher education. In California public and private institutions are accredited by the Western Association of Schools and Colleges (WASC). WASC is a human process but actually encourages institutions to think about the quality of what they do. There is a lot of discussion by critics that accreditation does not do everything for everybody (and that is true) but it does a pretty good job of separating wheat from chaff. The WASC exemption was in place with a very simple (and correct notion) - why duplicate a process that exceeds any one that the state could create?
A couple of years ago the statute began a process of periodic review. There was some pretty good evidence that the regulatory framework had not worked as intended. While the $50,000 institutions were chased out of the state, the review by the state bureau in charge of this program was lax. The consumer attorneys wanted to extend the reach of the regulations to include WASC accredited institutions. They captured the process in the start and were able to modify the exemption (which was one of the pieces of the legislation that functioned pretty well). But the draft was also troubling from a number of other views. It mushroomed to a several hundred page monstrosity.
The first time the bill got a serious hearing it was held up in the committee. A GOP assembly member (Roger Niello) who had been put on the committee temporarily drafted a much more straight forward alternative - but the leadership in the Assembly would not give his proposal any serious consideration. We finally clarified the language on WASC accredited institutions to have a clear and unambiguous exemption. But there were lots of issues left in the bill. For example, what should the state do about the institutions that operate branch campuses in California but are accredited by another regional accrediting agency (there are six regionals across the country)?
The process here was not a very good one. And the Governor realized that. Ultimately, next year, what needs to be done is to write a much more simple regulatory structure. The Act should try to accomplish three things. First, it should establish a system which regulates bad behavior and encourages good for those institutions which are not yet accredited. Second, it should continue the principle that recognizes the value of regional accreditation. Third, it should decide how much regulatory oversight should be done for regionally accredited institutions that are not recognized by WASC. In my mind that is not a large bill - it is fairly simple.
The Governor was right to veto the existing measure - let's hope that next year the legislature will act with alacrity to pass a more reasonable measure.
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