The Library: One of My Favorite Government Operations

I often grumble about how government doesn’t do things as well as the private sector.

Yet, I love my local library.  It’s free to me. I can reserve books online, receive an e-mail when they’re ready to be picked up and go in and grab it right off the shelf and check it out myself in about 20 seconds.

The library system I use is funded by the taxpayers of three counties and it operates more or less autonomously from government, but it is governed by a Board of Trustees who are appointed by the government bodies of the three counties.

I have some ideas on why the library runs really well.  It’s the same reason that many police and fire departments run fairly well.  While they are taxpayer funded, they don’t answer to centralized Federal department, so the result or thousands of libraries and library systems throughout the country.

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Starbucks and Seattle’s Best Coffee

I recently discovered that Seattle’s Best Coffee is Starbuck’s fighter brand.  A fighter brand is a cheaper alternative to a company’s premier brand that it uses to compete head-to-head with cheaper competitors while minimizing sullying the value perception of the cornerstone brand.

Starbucks is putting Seattle’s Best in Burger King and Subway to compete against McDonald’s, on grocery shelves to compete against lesser brands and in vending machines.

Why fight it?  While a lot of people buy Starbuck’s premium coffee, many consumers buy cheaper stuff.   If that’s what some consumers want, you might as well provide it.

From a consumer standpoint, the risk is that Seattle’s Best and Starbucks become undifferentiated.  Car companies ran into this problem with their versioning with behind the scenes cost-cutting leading to many versioned products to be different in label only (Ford and Mercury).

But others have pulled off the versioning and maintained clear and relevant differentiation.  The Wall Street Journal article mentions Old Navy and The Gap as one example.

It’ll be interesting to watch how it plays out.

The Other Seth on the Kindle

Seth Godin has some wonderful ideas about what the Kindle should do to beat back iPad.    But, I have news for Seth.  Even a $49 or free Kindle isn’t going to beat the iPad.

Kindle was an awesome product. But, from what I can tell, the iPad is that much better.  The price is relatively immaterial.  Why have two devices that do about the same thing, but one does it much better?

Kindle may be able to occupy a profitable niche for book-0-philes, but unless it pulls an HTC leap in product development, it’s going to lose to iPad.

Kindle is a sunk cost. My guess (and as always, I could be wrong) is that Amazon would better off tying in with the iPad early before Apple’s iBookstore starts taking a chunk of their business.

I wish both devices would support pdf’s better.

Thomas Sowell’s Random Thoughts

Sowell’s Random Thoughts on the passing scene are always a treat.  Here are a few goodies from today’s column:

Even though some people say we are living in a “knowledge economy,” we are living in a political atmosphere in which ignorance has more power than ever. Washington politicians who have never run any business are telling all kinds of businesses– from automobile companies and banks to hospitals and insurance companies– how they have to run their businesses. This is the golden age of ignorance in power.

When you consider what an enormous windfall gain it is to be born in America, it is painful to hear some people complain bitterly that someone else got a bigger windfall gain than they did.

After North Korea torpedoed a South Korean ship, killing 46 sailors, was there even one-tenth the outrage that is ringing out loudly around the world because of 9 deaths that resulted from Israeli commandoes intercepting a ship heading for the Gaza strip?

He answered the third one later in the same column.  You’ll have to read it to see the answer.

As someone who spent 45 minutes recently untangling the strings of his kid’s $3 paratrooper army men, this one was especially good:

Electrical cords seem to be very sociable. Whenever there are two that are near each other, they almost always seem to get intertwined.

Liberals Do Not Understand Basic Economics

According to a Wall Street Journal Opinion piece by Daniel Klein, Self-identified liberals and Democrats do badly on questions of basic economics.

Klein asked 4,835 people eight questions that are answered by basic economics and asked them to identify their political ideology.  This is the average amount each political group answered incorrectly out of eight:

Very conservative, 1.30;Libertarian, 1.38; Conservative, 1.67; Moderate, 3.67; Liberal, 4.69; Progressive/very liberal, 5.26.

Here is more about the eight questions:

Consider one of the economic propositions in the December 2008 poll: “Restrictions on housing development make housing less affordable.” People were asked if they: 1) strongly agree; 2) somewhat agree; 3) somewhat disagree; 4) strongly disagree; 5) are not sure.

Basic economics acknowledges that whatever redeeming features a restriction may have, it increases the cost of production and exchange, making goods and services less affordable. There may be exceptions to the general case, but they would be atypical.

Therefore, we counted as incorrect responses of “somewhat disagree” and “strongly disagree.” This treatment gives leeway for those who think the question is ambiguous or half right and half wrong. They would likely answer “not sure,” which we do not count as incorrect.

1) Mandatory licensing of professional services increases the prices of those services (unenlightened answer: disagree). 2) Overall, the standard of living is higher today than it was 30 years ago (unenlightened answer: disagree). 3) Rent control leads to housing shortages (unenlightened answer: disagree). 4) A company with the largest market share is a monopoly (unenlightened answer: agree). 5) Third World workers working for American companies overseas are being exploited (unenlightened answer: agree). 6) Free trade leads to unemployment (unenlightened answer: agree). 7) Minimum wage laws raise unemployment (unenlightened answer: disagree).

If you find that your thinking does not agree with basic economics, I recommend that you read Thomas Sowell’s, Basic Economics: A Common Sense Guide to the Economy.  That’s an excellent start.  If you don’t care to take the time to educate yourself with basic economics, then at least consider the possibility that your thinking may be incorrect.

Anyone Mad at the Government?

The topic of discussion on the Chris Stigall radio show was BP and the oil spill.

A caller who was frothing mad at BP, Jerry, blamed lax regulatory environment that led to BP self-regulating, resulting in the oil spill.  Jerry thought this was a good for “stronger regulation” and kept repeating that BP had 97% of the safety violations.

Folks like Jerry baffle me.

According to Jerry lax regulation led to the spill.  So, why isn’t Jerry mad at the government?

According to his own words, the government is directly responsible for this.  He said that the government didn’t enforce regulation.  He said that government had issued a large number of safety violations to BP, but didn’t do anything about them.

I don’t know if Jerry is correct, but if this is what Jerry thinks, shouldn’t he apportion some of his blame to the government for not doing their job effectively?

He holds BP accountable, which I have no problem with, but Jerry not only gives government a free pass for its perceived failure, but wants to give more power to government.  That seems like bad logic to me.

But, this is the pattern that repeats over and over again.  Government interferes to fix some problem.  Some failure occurs which should have been fixed by the government interference.  In reality, the government interference may have caused it, but few people understand that.  They perceive it as another problem of the “market” that needs to be fixed, so they sanction even more government involvement.

It’s a spiral.  Government intervention partially caused the mortgage meltdown and contributed to soaring medical costs.  The fix? More government intervention in the form of new financial regulations and the Obama care.

And nobody seems to consider that these things may cause things to get worse – as previous government interventions have – not better.

Jason Whitlock

In Jason Whitlock’s latest Independent Thoughts column, Obama owes Bush an apology, Whitlock asserts that our political discourse is ” substance-less”.

Well, different would be taking responsibility for all the problems he inherited, including our substance-less, counter-productive political discourse, and working toward real change.

The irony.  Whitlock doesn’t seem recognize that his columns are substance-less.   If Whitlock would like some ideas for  discussions with substance, I recommend that the look through the archives of columnists such as Thomas Sowell, Walter Williams, John Stossel and Star Parker and attempt to use his voice to address some of the substantive points they make.

Here’s one recommendation.  Rebut the four column series by Thomas Sowell called Alice in Health Care.   Key substantive point from paragraph 3 of the first column in the series:

One of the biggest reasons for higher medical costs is that somebody else is paying those costs, whether an insurance company or the government. What is the politicians’ answer? To have more costs paid by insurance companies and the government.

In his column, Free Markets: Pro-Rich or Pro Poor, Walter Williams asserts that government intervention in markets is what actually makes it tougher for others to participate:

Restricted, regulated and monopolized markets are especially handicapping to people who are seen as less preferred, latecomers and people with little political clout.

Star Parker makes a point that relates directly to Whitlock’s comment about substance-less discourse in her column, Defining the conservative vs liberal divide.
Rather than seeing government’s job as securing our rights, the liberal sees it to invent them. The politician – or the empathetic judge – defines what is moral and just.
Whitlock, if substance is what you want, what do you have to say about these points?  There’s no shortage of substance filled debate if you care to look for it.

Wall Street Journal Opinion

Here are some good snippets from the Wall Street Journal Weekend Edition.  First, from an opinion piece called, Employers on Strike:

The private economy—that is, the wealth creation part, not the wealth redistribution part—gained only 41,000 jobs, down sharply from the encouraging 218,000 in April, and 158,000 in March.

There were some slivers of good news in the May jobs report. For those who have jobs, the average work week rose by 0.1 hours to 34.2 hours and earnings nudged upward by 0.3%. Manufacturers added 29,000 workers, and their hours worked jumped 5.1%, the best since 1983.

Perhaps this is what White House chief economist Christina Romer was looking at yesterday when she cited “encouraging developments” in the jobs market and “continuing signs of labor market recovery.” We doubt this was the private reaction in the Oval Office, whose occupant was told by Ms. Romer and economic co-religionist Jared Bernstein that the February 2009 stimulus would kick start a recovery in growth and jobs.

Imagine if Ms. Romer had instead promised in 2009 that Congress could spend nearly $1 trillion, and 16 months later the unemployment rate would be nearly 10% and that more than 2.5 million additional Americans would be without jobs. Would Congress have still spent the cash? Well, sure, Congress will always spend what it can get away with, but the American public would have turned against the stimulus even faster than it has.

Congress raised the minimum wage to $7.25, pricing more workers out of jobs. The teen unemployment rate rose to 26.4% in May, and for those between the ages of 25 and 34 it rose to 10.5%.

I added the italics.

Nice work.  If the message wasn’t clear, Obama’s economists don’t know what they’re doing.

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George Will

Thanks to Don Boudreaux of Cafe Hayek for directing me to George Will’s latest column, The danger of government with unlimited power.  Will provides an excellent history of the political origins of two schools of thought when it comes to government power.   That’d be nice to throw out at a cocktail party.  Ah, you’re more of a Wilsonian Progressive. Personally, I’m more Madisonian in my views.

Thomas Sowell gives a philosophical background in his book, A Conflict of Visions, which highly recommend.

Here’s a great sentence from the column:

Government’s limited purpose is to protect the exercise of natural rights that pre-exist government, rights that human reason can ascertain in unchanging principles of conduct and that are essential to the pursuit of happiness.

While I agree with it,  it doesn’t operate at the level I like to operate.  My pondering brain asks, what is a natural right that pre-exists government?  To me, that phrase plays the same role as the creatures in the woods of M. Night Shyamalan’s The Village Spoiler alert: The creatures were costumes the adults used to keep the kids from wandering off and finding civilization.

I think there’s a better reason for limited government.  A reason that doesn’t require faith in pre-existing natural rights.  The answer is: “Power corrupts.”

But, still this isn’t the level I like to operate.  I wonder why does power corrupt?  I answered that on March 12, 2010 in my post Why Does Power Corrupt?

Is Education Really So Terrible?

I think we’ve been conditioned to believe that education in the U.S. is in dire straits.  I had that impression myself, until a recent e-mail exchange regarding education made me think about it more.

That exchange made me think about the evidence  we have to say education is so bad.  The key pieces of evidence seem to be:

1) The results of standardized test scores in comparison to other countries and in comparison to prior test scores relative to the amount of money we spend on education.

2) Anecdotal horror stories.

3) High school diplomas that do not seem to be worth much.

4) High school graduates that are considered by colleges and employers to be unprepared to function.

Undoubtedly, pockets of poorly managed schools exist.  But, in many areas, education isn’t so bad.  Suburbs are known for quality public schools.

I’m not sure, and neither are educational experts, that standardized test results are a valid gauge of education success.  Yet, baffling, these same experts seem to continue to use the test results to indicate success.  It seems that if they know the drawbacks to using standardized test scores, they might consider employing creativity to find other measures of educational success.  For example, have they ever thought about surveying parents to see what they think?

Let’s entertain for a moment that I’m right.  That with the exception of some bad pockets, most schools do a good job at educating folks.  I think if you compare things like adult literacy rates to a hundred years ago, it would be hard to argue otherwise.

So, if we assume education isn’t so bad, the next good question to ask is, how could that be right?

I think it’s because of parental accountability, which is the main source of accountability in education.

Most parents hold their educational providers accountable, even in this age of government-run, public schools there is still choice that is exercised by parents to get their kids into quality schools.

They try to live in areas that have quality public schools.  They may also choose to send their kids to private school or home school, or enroll their kids in supplemental programs at the library, community center, churches or places like Mathnasium, private music lessons and so forth.  They meet with their teachers and principals and form PTA’s to influence what happens in the school.

Parents also hold their kids accountable for showing up, behaving, completing assignments and progressing.

If I’m right that education isn’t so bad, I believe parental accountability is the reason.

I interpret the data differently than others. I actually think that data supports my theory of parental accountability.

They see the growth in the amount we spend on education and the relatively static test scores and conclude that education is in bad shape.

My conclusion is different.  The fact that test scores haven’t changed much, I believe, supports my theory that parental accountability is the most important factor in education and the increase in spending has had no impact on that accountability.

Now, I’m not saying education isn’t as good as it can be.  Far from it.  But, I don’t think the answers will be found in top-down measures issued from DC or state capitols.  The answers will be found in further encouraging parental accountability.