Thursday, January 27, 2011

The Real Story with Obama's Colorado School Turnaround

During the state of the union address, Obama praised the Bruce Randolph school in Colorado for turning themselves around rather dramatically in a few short years.

Three years ago, Bruce Randolph was one of the poorest performing schools in Colorado. In 2010, 97% of the seniors graduated. Many of the graduates were the first in their families to get admitted into college.

How did they do it?

Sen. Michael Bennet and the school's principal Kristin Waters, convinced the Colorado government to give the school almost complete autonomy from the state's education bureaucrats over budget, staffing, schedule, school calendar, and curriculum.

One of the first things they did is terminate all of their tenured teachers and told them they could re-apply for their jobs. Only 5% got their jobs back. 95% of the tenured teachers weren't up to par.

The Gate's Foundation has done significant research into why public schools fail. Their conclusion is that it's all about teachers. The producer of the movie "Waiting for Superman" came to the same conclusion. Good teachers succeed and bad teachers fail our children. It's not any more difficult than that.

In the private sector a business can: A.) fire bad employees and B.) pay good employees a lot of money. You can't do that in government. That's the problem. It has to change.

If we're really serious about fixing the public schools, we need to give principals the ability to terminate bad teachers and reward great ones with substantial performance bonuses tied to international test scores. We also need to get schools out from under their state's education bureaucracies and let the principals and the parents who have kids in the school have a greater say in how the schools are run.

This is how the Bruce Randolph school was able to succeed. It's how other schools will be able to succeed as well.

Unfortunately, the teacher's unions have viscously blocked every attempt to implement these types of common sense reforms.

The big question is whether or not Obama and the Democrats are willing to do battle with their largest specialist interest group (the NEA) so that our kids can have a fighting chance in the global economy?

Wednesday, January 26, 2011

Obama's Tepid State of the Union Speech

Last night, President Obama delivered on of the most tepid state union speeches in recent memory. Obama's "winning the future" theme was exactly the right one. Unfortunately, very little of what he said will help us do that.

Obama should have held up the report from his own Deficit Commission. He should have told the American people that this is his program for moving forward. Then he should have turned around and handed it to John Boehner and asked him to pass it immediately.

Instead, we got a laundry list of disconnected new initiatives that just don't add up and won't do a thing to solve the looming fiscal crisis caused by too much government spending.

Here's the blow-by-blow analysis:

1.) Obama is calling for new "investments" on infrastructure. In this context, he's actually using the term "investment" correctly. Here's the problem: for years Democrats have called every bit of government spending "investments", including spending on transfer payments from one group to another. Only 6% of Obama's trillion dollar "stimulus" program was spent on real investments in our future. So, at this point it's difficult to trust what the Democrats say about this. Yes, we need to fix and upgrade our crumbling roads, bridges, ports, airports, water and sewage systems. But it has to be paid for by cutting subsidies and transfer payments.

2.) Obama mentioned China's "green energy" programs. Great! China is building the largest damn in the world. It's difficult to build a damn in the United States anymore because the extreme fringe of the environmental movement won't allow it. China has 30 nuclear power plants under construction. The last time the U.S. started a new nuclear power plant, Jimmy Carter was still president. Again, the extreme environmentalists won't allow it. Please tell us Mr. President, what specifically do you plan to do about your supporters, who have been blocking energy progress since the 1970s?

3.) Obama called for more "investments" in education. What he really means is more transfer payments to the teacher's unions who have destroyed our school system. No thanks. Been there, done that. Not a single dollar more at the local, state, or federal level should be spent on public schools until: A.) the teacher's unions are de-certified, B.) we abolish the entire notion of "tenure", which only serves to protect bad teachers, and C.) every school is taken away from the board of education bureaucrats and turned over to the parents who actually have kids in the school, i.e., every school is turned into a Charter school. Obama has claimed for years that he supports Charter Schools. It's time to put up or shut up. We're either going to truly reform one of the worst performing education systems in the developed world, or reconcile ourselves to becoming a second rate country.

4.) Obama called for building high speed rail lines in California and the Midwest. The last thing in the world we need is to waste money on a government run high speed rail system, which will cost a ton of money, almost no one will use, and will quickly degrade and stagnate like every other service the government tries to provide. A better answer to providing mass transit is to eliminate state and local laws which prevent private entities from competing to provide bus and other types of mass transit services. The Philippines have privately run mass transit systems, which do a great job at getting a lot of people where they need to go.

5.) Obama is right about the crazy organization of the federal government and all of the duplication across agencies. For example, the federal government has 72 welfare programs. They could all be collapsed into a single program that provides cash subsidies to the poor and disabled. We'd save a TON of money on administrative costs. A TON. Do you actually think that he will do anything like this? I don't.

6.) Obama called for a 5 year "spending freeze" on domestic discretionary spending. This won't even come close to balancing the budget. His freeze might reduce the deficit by $400 billion over the next 10 years, but deficits are projected to be $14 TRILLION dollars over the next 10 years, which will double the national debt to $28 trillion. His freeze amounts to less than 3% of the projected new debt. It's not enough to keep the country solvent.

7.) Obama is finally paying attention to the trade agreements with Columbia and Panama which have been languishing on the shelf for years. That's a good thing.

8.) He paid some lip service to tort reform to help reign in heath care costs. This is also a good thing, but I don't think he's serious given that Trial Lawyers are among the largest contributors to the Democrat Party.

9.) He also mentioned lowering the corporate tax rate, which is the highest in the world, and simplifying the tax code. This is the one recommendation from his deficit commission that he seems to be endorsing. It's a great idea and it should be done to help restore our competitiveness.

10.) Of course Obama had to throw some red meat to the fringe left by bashing oil companies and successful people. No surprise, but it is getting really, really old.

It's pretty obvious that Obama still doesn't understand that the country faces an almost insurmountable fiscal disaster caused by excessive government spending. Here are the two big questions: A.) Will the GOP actually do something about it? B.) If the GOP does do something about it, will Obama really go along? We'll see.

Sunday, January 23, 2011

Healthcare Reality Check

The GOP House has voted to overturn the huge mess known as Obamacare. We'll see if it passes the Senate. Regardless, President Obama is not going to sign. So, the GOP is already starting work on replacing Obamacare with their own ideas.

What should the GOP propose? There are two countries that can guide us.

Switzerland undoubtedly has the best healthcare system in Europe. Singapore has the best healthcare system in the world. Switzerland spends about 10.8% of GDP on healthcare. Singapore spends less than 4%. Healthcare expenditures in the U.S. have ballooned to a whopping 16.5% of GDP.

Neither Switzerland or Singapore have the kind of "socialist" or "single payer" systems that enchant the know-nothings on the American left. In fact, public expenditures on healthcare as a percentage of the total is about the same in Switzerland and the U.S. The government spends a much lower percentage of the total in Singapore:

Switzerland -- 55%
United States -- 50% average, depending on the state
Singapore -- 34%

Why do their systems work to control and costs and ours doesn't? Singapore and Switzerland have similar philosophies -- they put people in charge of their own care, but they also require them to take responsibility.

In Singapore you are required to save 8% of you income for healthcare. You can use your health savings to buy insurance and pay for out-of-pocket expenses. The government subsidizes health savings for very low income people.

In Switzerland you are required to spend 8% of your own money on health insurance. The government subsidizes insurance payments for very low income people. Out of pocket expenses are additional.

Switzerland and Singapore have created nation's of healthcare shoppers, who use their own healthcare dollars wisely.

The problem in the U.S. is that Medicare, Medicaid, and employer paid insurance take financial responsibility away from individuals so people don't have any incentive to use medical services in a cost effective way.

I've been to Singapore. They have a great and very cost effective healthcare system. It cheaper than ours. They also have better outcomes than we do. ditto for Switzerland.

The answer to escalating healthcare costs in the U.S. is not to give more control to power hungry politicians and greedy bureaucrats. The answer is personal responsibility and personal control. Singapore and Switzerland have shown us the way. Are American politicians smart enough to follow? We'll see.