The Power of Words and the Ongoing Fight Against Common Core

We have known for some time that Common Core State Standards (CCSS) have left voters, legislators, parents, and teachers frustrated and confused. Now we are learn that the Standards have caused a controversy amongst another group: pollsters. In a recent clash of surveys, the Gallup poll shows 60% of Americans oppose Common Core while an Education Next survey shows support for the standards in the 53% to 68% range.

Why the big difference? Not surprisingly, it is the questions themselves.

Here was the Gallup question that showed 60% opposition: “Do you favor or oppose having the teachers in your community use the Common Core State Standards to guide what they teach?" And here was Education Next’s question that showed 53% support: [Q31a]. “As you may know, in the last few years states have been deciding whether or not to use the Common Core, which are standards for reading and math that are the same across the states. In the states that have these standards, they will be used to hold public schools accountable for their performance. Do you support or oppose the use of the Common Core standards in your state?" No wonder the results were so different and so controversial. In juxtaposition, the angle each pollster took is obvious. But downright humorous is how Education Next achieved a 68% support mark: they also asked a question Q31b., which left out the words Common Core and replaced them with “standards for reading and math.”

So, it appears the best way to build up Common Core is to produce a poll showing the public supports it, but in order to do that, the poll must not mention Common Core. This is particularly surprising given the elevation of Common Core to brand status in the last year. Imagine a poll for say, Ford or Coke that failed to mention Ford or Coke. (Perhaps a better comparison to the Common Core brand is the Edsel or New Coke.) As the conflicting polls indicate, wording matters. This appears to be particularly true of Common Core, no matter what the context.

Just three months ago, when Common Core legislation was before the General Assembly, Charleston Senators Larry Grooms and Chip Campsen offered a short amendment to the Common Core bill (H.3893). That amendment, hereafter known as Grooms-Campsen, said that:
"For the purpose of developing new college and career readiness English/language arts and mathematics state content standards, a cyclical review must be performed…. The review must begin on or before January 1, 2015, and the new college and career readiness state content standards must be implemented for the 2015-2016 school year." So what does Grooms-Campsen mean? That is the source of The Great “New” Conflict. It is a struggle over which of the two “new’s” in this paragraph is controlling.

Attorneys for the State Senate are dedicated to the first New. That would go something like this: any time new standards are developed by some group other than the State Board of Education (as were Common Core State Standards), a tweaking must take place periodically. It is time for that review in 2015, so let the tweaking of the current Common Core Standards begin around the first of the year.

Attorneys for State Superintendent of Education Dr. Mick Zais, who are dedicated to the second New, say Grooms-Campsen means something quite different: totally new state standards for Math and ELA must to be developed and that process must begin as soon as possible.

Hence the “New Conflict.”

The polling controversy and the New conflict are a perfect illustration for why Palmetto Policy Forum exists. When we first looked at the Standards issue nearly two years ago, we knew that the state was divided and misinformed. We also knew that South Carolina needed to get out of Common Core Standards and the federal testing that came with it. But this would need to be done without unneeded expense to taxpayers and a jarring effect on our children and teachers. That is why PPF rolled up our sleeves, recognized the teaching moment and looked for solutions. While some were simply pound the legislature, the Governor, the State Superintendent, we extended a hand and worked for a way out.

But the battle isn’t over.

There are those who would like to see warmed over CCSS as standards for 2015-2016, which is why we are committed to continuing to be actively involved in the revision process. In fact, Education Superintendent Dr. Mick Zais has appointed our own Palmetto Policy President Ellen Weaver to serve on an advisory panel for the new standards.

We are pleased South Carolinians will be developing the standards that will go into effect for the 2015-2016 school year. That was our goal all along, and the legislative win is a huge victory for federalism, local authority, and high standards. Our analysis framed the fight at the beginning, and our ongoing involvement will see us to the end of Common Core in South Carolina.


Dr. Oran P. Smith is Palmetto Policy Forum's Senior Fellow.

Why We Have To Get Healthcare Right: Part I

Healthcare could be the single most important lynchpin policy issue that America has to grapple with today. There are two indisputable facts everyone can agree on when it comes to healthcare: first, everyone needs medical care at some point, and second, the cost of medical treatment is astronomically high. A couple days of uninsured hospital care could easily saddle someone with a lifetime of debt. It is impossible to bury your head in the sand deep enough to deny that our healthcare system is broken and needs reform. What many don’t realize however, is just how important healthcare policy is, and how desperately needed reform is. Let’s take a tour of six different policy arenas that are deeply entwined with healthcare. Here are the first three...

Immigration Policy
One of the central issues driving the immigration debate is the cost of providing healthcare for uninsured illegals. The Center for Immigration Studies estimates that the current cost of treating uninsured immigrants who entered this country illegally at all levels of government to be $4.3 billion a year, primarily at emergency rooms and free clinics.[1] Furthermore, the healthcare benefits that come with citizenship are a major driver of immigration. As US citizenship policy is currently interpreted, any child born within the geographic borders of the United States is granted automatic birthright citizenship, and that includes the children of illegal aliens. Tens of thousands of illegal immigrant mothers have crossed into the US as they near childbirth in order to gain citizenship for their children, and it’s attending healthcare benefits. Though these children are citizens, their mothers, fathers, and siblings that often stay with them in America are not. Since illegal aliens account for 25% of the US population without medical insurance, and are responsible for 70% of the increase in uninsured patients, it’s safe to say that getting healthcare reform right will deeply impact our immigration policy.[2]

Fiscal Policy
The cost of modern medicine is no secret. With advanced medical technology has come equally advanced costs. For example, in 2012 the total healthcare spending in America hit $2.8 trillion, or $8,915 per person.[3] It is not hard to see why we are closing in on having a $20 trillion national debt when we are spending close to 3 trillion dollars every year on healthcare services. Overall, the national debt has increased by an astronomical 7 trillion dollars since president Obama took office, and this increase is largely tied to the immense amounts that have been spent to fund Obamacare.[4] This immense debt is driving our economy into the ground as we continue to struggle to recover from the fiscal crash of 2008, and overall job creation and economic growth limp along. Crunching the economic numbers alone ought to drive us to reform our healthcare system.

Poverty Assistance Policy
Just as with the other policy arenas we’ve talked about, poverty policy is permanently intertwined with healthcare policy. The primary driving concern of the policy controversy surrounding poverty assistance in America today is not so much people’s lack of access to food or housing, but their lack of access to adequate healthcare. The very goal of Obamacare is to expand insurance coverage to the very poor, but it is backfiring. The expanded coverage has dramatically increased non-urgent emergency room visits as low income patients on Medicaid come in to the emergency room seeking routine care such as treatment of lice or braces for minor sprains.[5] This trend to go to the emergency room regardless of the treatment needed actually undermines the quality of care that the poor receive as they would be better off going to specialists in most cases. If we get healthcare reform right, that will necessarily result in huge strides forward in poverty assistance policy.

To be continued...


Tim Caiello is a 2014 graduate of Columbia International University and Outreach Coordinator at Palmetto Policy Forum.






[1] http://www.moneynews.com/NealAsbury/Immigration-healthcare-illegal-emergency/2013/05/09/id/503579/

[2] http://www.fairus.org/publications/the-sinking-lifeboat-uncontrolled-immigration-and-the-u-s-health-care-system-in-2009

[3] http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/downloads/highlights.pdf


[4] http://www.cnsnews.com/news/article/terence-p-jeffrey/706025967449751-federal-debt-7t-under-Obama


[5] http://www.marketplace.org/topics/health-care/ers-are-still-busy-affordable-care-act-and-all

Government Run Insurance: One Veteran's Nightmare

Medicaid expansion: what’s all the fuss?  Isn’t it compassionate to have the government provide health care for those in need?  And besides – Washington is paying for it, so isn’t it “free money” for states like SC?  Unfortunately, reality says, “Not so fast!”

This week, we hear the experience of one American soldier with Tricare, a government run insurance program for the military.  He has learned the tough lesson that insurance coverage doesn’t equal care as he battles narrow network providers, incompetency, miscommunication, and a maddening maze of red tape, bureaucratic hoops and denied care.  If this is the way the federal government says “thank you for putting your life on the line for our country,” you can only imagine the quality of care those in Medicaid have come to expect…

“I am a full-time member of the active duty Army National Guard, and served several tours of duty in Iraq. My experience with federally administered healthcare has been a nightmare.

The first problem I ran into was finding a primary care provider. I have Tricare Prime Remote since I am a full-time active service member in a rural location. The first doctor Tricare referred me to ended up being an Urgent Care clinic, which doesn’t take patients, but sees people like an emergency room instead.  I called  Tricare back and they gave me a huge list of doctors to call, most of whom said they have never taken Tricare and have told Tricare many times to take them off the network provider list.  I then called Tricare again and was given yet another list to choose from.  After several calls I finally found a primary care provider and was able to set an initial appointment.

On my first visit to the doctor, I told him about the health issues and pain I have, all of which stem from things that have happened to me during my multiple deployments to Iraq. The doctor told me the issues I am having are serious and need immediate attention. He scheduled referral appointments for me with a neurologist and gave me two different prescriptions which he called into the local pharmacy.

When I went to the pharmacy to pick up my prescriptions, the pharmacist told me that Tricare had denied them both because they needed preauthorization from the prescribing doctor. I contacted both the doctor and Tricare and forms were sent to my doctor to sign and send back to Tricare. My doctor did this and there was no response from Tricare. I called them again and they claimed they had never received anything from the doctor. I contacted the doctor and they sent me the confirmation they had received when they originally submitted the forms back to Tricare, but they agreed they would send them again. Tricare then denied both of the prescriptions saying no generic versions of them were available. 

After all of that, I went to my appointment with the neurologist. This was about three weeks after the initial appointment with my primary doctor. When I went to check in and gave them my ID card, they told me they don’t accept Tricare.  After working with them and getting Tricare on the phone they agreed to see me. The neurologist talked with me and looked at the notes from my doctor and then set up the test that I needed as well as multiple MRI’s. The front desk set up dates for all of these appointments.   

My first appointment was about three weeks after my initial appointment with the neurologist. When I showed up to check in for my testing, the receptionists asked me why I was there. I told her I had testing being done today. She then said, “You mean Tricare never told you that we weren’t going to be able to do the test?” I told her no, I had not been contacted by anyone. At this point I called Tricare again to find out what was going on. They told me I had been referred to a different neurologist and that that had been done over two weeks ago. They told me if I didn’t want to wait I should go to the VA. I asked why I hadn’t been told and they said they would now send me a letter telling me and could also send me an email if I would like.               

Once I got the email with the referral information for the neurologist that Tricare had found me, I called them to try and set up an appointment to have the test done. That neurologist’s office told me I couldn’t set up an appointment, but that it had to be in writing from my primary care doctor. I then called them and requested them to contact the neurologist and set up the appointment for me.

So as it stands right now it has been around six weeks since my first visit to the primary care provider and I have not been able to get any medications, have any test done, or been able to obtain any follow up on treatment. I can’t even add up all the man hours I have waited on the phone and driving to appointments that I ended up not even being seen. All in all I find it appalling the way I have been treated as an American war veteran.  And I can promise you: government-run insurance is no silver bullet.”

Ask The Economist: Exploring Quantitative Easing

“Inflation everywhere is a monetary phenomenon,” said Milton Friedman, in his famous 1970 essay titled, The Counter-Revolution in Monetary Theory. What he meant is actually quite simple. Inflation (an overall increase in the price levels of an economy) only occurs when the amount of currency printed by the Federal Reserve exceeds the amount of goods being produced.

For example, let’s say a country only produces widgets, the market determines their price to be $1, and this creates demand for 1,000 widgets. Next, let’s assume that the supreme commanders of the country, Lords Krugman and Bernanke, decide to miraculously double the amount of money held in the bank accounts of the widget consumers. These consumers feel rich and start demanding more widgets.

 

However, nothing else in the economy has changed. Manufacturers are still producing just 1000 widgets. The resources and technology of the economy are completely unaffected by the appearance of more money. So if these “rich” consumers start demanding more widgets, but the manufacturers are producing the same amount as before, the price of widgets will start to rise. And suddenly we have inflation, with no increase in real Gross Domestic Product (GDP), the only real measure of actual production in an economy.

The same inflation occurs when the Federal Reserve simply adds currency to the US economy. This is exactly what the central bank has been doing with their controversial “quantitative easing” (QE) program, in their desperate bid to manufacture a recovery from the never ending recession of 2008.

The first phase of the ’08 bailout intervention - called “active monetary policy” - involved keeping short term interest rates artificially low, (by purchasing U.S. government bonds), and acquiring more public debt (in order to infuse more money, or in econ speak “liquidity”, into the market). However, this intervention proved impotent in the face of near 0 or even negative real short term interest rates, leaving no room for further economic “stimulation.”

So the Federal Reserve then adopted a measure called quantitative easing (QE). This involved targeting the longer term interest rates by purchase of financial assets from commercial banks. The Federal Government currently holds $2.054 trillion worth of such assets, but intends to taper off active purchases by October and let the existing assets expire as scheduled.

Two key questions surface: 

• GDP has not expanded significantly since the end of the recession, so why are we not seeing the inflation we would expect from so much additional money being dumped into the economy?
• What will the consequences of the end of this expansionary monetary policy be?

To answer the first question, the Federal Reserve Bank pays interest on reserves held by banks. It has cleverly set this payment at a rate marginally higher than what the banks can expect to make by lending money to consumers. Thus, the Fed has incentivized banks to sit on this additional liquidity and keep the currency from ever really seeing the actual economy. Thus, no hyperinflation.

Since it doesn’t “cost” the Fed anything to keep printing money and paying interest to these banks, this is likely to continue even when QE officially expires, in a bid to prevent the extremely high inflation that would occur if all these built up reserves were released into the economy. After October, the Fed will likely start selling its stock of government debt in the market to soak up this liquidity. What exactly was the point of this money shell game?  Even if we are doomed to end up where we started, the Fed evidently feels better to have been busy moving money around.

When the Quantitative Easing plan expires, the Fed has given the markets enough notice that we are likely to see a only a soft deflation in both asset prices and the stock market as people start pulling money out to take advantage of higher interest rates. This should not ultimately effect the real economy, since the infused liquidity was not actually in play in the first place. However, since markets and economies are affected by public perceptions in the short run, I would expect some negative but temporary swings throughout October.

---Abir Mandal, PhD Candidate, Clemson University Department of Economics and Palmetto Policy Forum Summer Fellow

Ask The Economist: Are Government Agency Banks a Good Idea?

People often associate capitalism with “Wall Street greed” and corporate fat cats getting special favors from government. The truth is, anytime the government is involved in the business of anything beyond protecting individual and property rights, it leads to a distortion of the free market and in fact detracts from authentic capitalism. We call this cronyism.

One of the most prominent examples of this phenomenon are government agency banks, such as the World Bank, Export-Import bank (Ex-Im), USAID and the International Monetary Fund. While the stated reasons for such institutions always sound noble, the numbers and perverse incentives they generate tell a different story.

Businesses often turn to such agencies when they are unable to raise enough funds for a project from the private capital markets at an attractive interest rate. The business then approaches the relevant bank to bridge the financing gap—either on the project side (such as to actually construct a factory) or the purchaser side (to finance the purchase of goods and services from the project). Either way, these government banks (and thus taxpayers) assume the risks that private financiers are unwilling to undertake.

Some businesses in the US and abroad claim they need this funding to stay in operation.  But this begs the question: if a business cannot exist without being subsidized by the government, wouldn’t the taxpayer dollars being used to prop it up be more efficiently allocated elsewhere by the free market? This would be true capitalism at work and the “creative destruction” that accompanies it. Unfortunately however, many well-connected (and often well-off) shareholders of such businesses continue to benefit from forced taxpayer “generosity.” This hardly seems fair.

Some of these agencies claim to be profitable—i.e. they bring in revenues in excess of what they take from the taxpayers. Even if this were true (and such claims are often doubtful when you account for documented cases of waste and fraud), these claims ignore the “opportunity cost” of the government allocating these funds. (This means we will never know the actual losses from such investments, because the alternative, potential use of this money will never see the light of day.)

For example, when you spend money you have earned, you have incentive to prioritize your spending to ensure that you get the biggest “bang for your buck” possible. You chose carefully, because a bad decision hits you in the wallet where it hurts! But when a government spends taxpayer money, it has no such compulsions since the risk of losses are socialized (ie - borne by you the taxpayer).

And in addition to having little incentive to make good investment decisions, these banks are put in the position of choosing winner and losers among American companies: who will get cheaper, government-guaranteed funds and who will have to play by the regular rules of the game?

Perhaps the most persuasive argument for the US government to back agencies like this is to “level the playing field” for American industries since other countries have similar crony-type institutions. However, if another country is intent on bad fiscal policy (which is what financing otherwise unprofitable ventures entails) this does not mean that the US should do the same.

Instead, the American government should just let its citizens enjoy the cheap products and services made available on the back of taxpayers of other countries and use the dollars saved on true government priorities (such as paying down our enormous debt) or never taking them out of the pockets of taxpayers to start with.

We should do the American people a favor and shut these banks down.

LEARN MORE:

This week, Forum Chairman Jim DeMint writes that only 2 percent of all exports involve Ex-Im assistance.  He also shared this helpful chart from the Mercatus Center at George Mason University showing the breakdown of who benefits from Ex-Im (note the “unknown” section:  Ex-Im routinely loses track of whom they’ve been helping.)

---Abir Mandal, PhD Candidate, Clemson University Department of Economics and Palmetto Policy Forum Summer Fellow

(Click on image to enlarge)

"Move On When Reading" = Good Education Policy!

Imagine trying to navigate the challenging waters of fourth, fifth and sixth grade science, social studies, and English unable to read. Unfortunately, this is the case for too many Palmetto State children, who are "socially promoted" based on seat time alone rather than proficiency. So how do we help ensure students have this fundamental tool for academic success? New research from Arizona supports one of our key initiatives that answers this question.

The Grand Canyon State has long been on the cutting edge of education transformation, and we could learn much from them. One innovative policy that Arizona recently implemented is called Move On When Reading. This is simply a benchmark requirement mandating that any third grade student without sufficient reading competency be prevented from advancing to the next grade until she is ready. While this change was met with the inevitable opposition, the results speak for themselves. When the law was passed, there were an estimated 4,300 third graders who would be retained based on the law. However, since its passage, the Move on When Reading mandate has caused school systems to focus on helping their students achieve the necessary competency through additional support like tutoring and summer school. Now it is estimated that the number of students likely to be held back is well under 750! This is a truly impressive educational triumph, and it came during a time when school budgets were decreasing. With our new Read to Succeed law, struggling young South Carolina students should finally get the help they need as well. Hopefully we will soon fill this space with Arizona-like results.

READ FULL ARTICLE HERE

Ask the Economist: Minimum Wage Laws or Minimum Skills Laws?

Infographic: American Action Forum http://goo.gl/ZuQC8N

     Many feel-good policies are ultimately disastrous. One of these, the concept of a government-mandated minimum wage, is particularly counterproductive. 

On the face of it, what could be so bad about guaranteeing the poorest workers in society receive wages high enough to ensure a minimum standard of living? (Especially since it only comes at the cost of "immoral corporate greed"?) 

     The answer is: a lot. No company will ever employ a means of production that costs more than the benefit it derives from said factor. Labor is no different. If the minimum wage is set at $10 an hour, the employees who get paid that much must at least provide that amount of returns to the employer. What about people whose lack of skills or education prevents them from producing enough value? They wind up suddenly unemployed, or, if they were unemployed in the first place, farther than ever from a much needed job. 

     Who are these people? They would be the least educated and, thus, the poorest members of society. These are the very individuals the Left says that minimum wage increases would help. History bears this out. Youth and minority unemployment always tends to increase the most when recessions hit. (Again, this is because as minimum wage laws curtail the adjustments the labor market needs to handle such downturn.) In effect, minimum wages only serve to make skills below a certain threshold untradeable in the job market. If a person is willing to trade his skills for low wages, even something like $5/hour, and is able to find someone willing to pay him that wage, the government has no business telling them that they cannot complete this mutually beneficial transaction. In this light, minimum wages make very little economic sense and essentially amount to arbitrary government restrictions on the free market. 

     These economic realities must be remembered in light of the ongoing debate over minimum wage laws so that our good intentions don't translate into bad policies that end up hurting the very people we want to protect.

---Abir Mandal, PhD Candidate, Clemson University Department of Economics and Palmetto Policy Forum Summer Fellow