I’ve scoffed at the president’s proposal for improving on-time high school graduation rates and I’m not the only one. I think it’s only fair that I present at least one proposal that I think has a better chance of improving graduation rates in the most troubled areas. I won’t deny that I’m skeptical that paying teachers more will improve on-time high school graduation rates. Teachers’ pay rates have increased enormously over the last thirty years and we’ve got precious little to show for it (although we might have something as this study, recently brought to my attention, points out). Here’s my proposal: pay high school kids to go to school and to make progress.

The program would need to be carefully constructed. Only the most troubled schools. You’d need to have the kids clock in and out and get paid only at the end of the day. Cut class and they’re ineligible. Over 18 and they’re ineligible. Not making progress towards graduation and they’re ineligible.

Not a perfect system and I can see any number of flaws but at least it’s an incentive approach rather than a punitive one.

Walter Russell Mead has an extended article in a vein similar to what I posted a bit earlier today:

Fordism was once a term of abuse hurled at the factory system by Marxist critics who, rightly, deplored the alienation and anomie that mass production for mass consumption entailed. Has the Fordist factory system and the big box consumerism that goes with it now become our ideal, the highest form of social life our minds can conceive? Social critics also denounced our school system, justifiably, as a mediocre, conformity inducing, alienating, time wasting system that trained kids to sit still, follow directions and move with the herd. The blue model built big-box schools where the children of factory workers could get the standardized social and intellectual training necessary to enable most of them to graduate into the big-box Ford plant and shop in the big-box store. Maybe that was a huge social advance at one time, but is that something to aspire to or be proud of today? Don’t we want to teach our children to do something smarter than move in large groups by the clock and the bell, follow directions and always color between the lines?

What’s the “post-blue model”? We don’t know but we’re hurtling towards it.

The success of our institutions and ideas has so changed the world that they don’t work any more. We cannot turn back the clock, nor should we try. America’s job is to boldly go where none have gone before, not to consume our energies in vain attempts to recreate the glories of an unattainable past. We need to do for our times and circumstances what other Americans have done before us: Recast classic Anglo-American liberal thought, still the cultural and moral foundation of American life and the source of the commonsense reasoning that guides most Americans as they evaluate policy ideas and party programs, in ways that address the challenges before us.

Read the whole thing.

Megan McArdle has a pretty fair take on President Obama’s economic proposals in the State of the Union message. After quoting from the interview in which the president said if didn’t turn the economy around in three years he would be a one-term proposition, she remarks:

If Obama didn’t want to be judged on the basis of the economy’s performance, he shouldn’t have let his mouth write checks that he couldn’t cash. If it turned out to maybe be a little harder to steer the economy where you want it than he thought it was, then maybe he should lay off claiming that the Republicans drove the thing into a ditch.

But he hasn’t. Instead he’s complaining that the GOP won’t let him steer–pretty rich considering that he started out with a 60-seat majority in Congress, and chose to ignore the economy in favor of passing a health care bill that has gotten even less popular since we passed it to find out what was in it.

That’s the harsh version. The slightly kinder version is that Obama, stymied by an economy that’s still pretty weak, and an opposition that has no more interest in cooperating with him than Republicans did with Hoover, has turned to a laundry list of weak proposals that sound pleasing to interest groups, but wouldn’t achieve much. Of those, the best was allowing students who study here to stay here; the stupidest was probably adding yet another investigation of bank fraud (what have you been doing for the last three years, Mr. President?) And the worst was the bizarre proposal for states to force students to stay in school until graduation or the age of 18.

She then identifies the connecting thread in the speech as nostalgia for the 1950s or early 1960s. That’s a complaint I’ve made around here from time to time. Whether through ignorance of modern U. S. business or preference for the Fordist model of Big Business and Big Business, collaborating under the guidance of the velvet-gloved fist of Big Government, far too often Democrats tailor their policies towards that temporary, long-vanished Fordist world.

That world is failing everywhere, not just here. It could only exist in the isolated bubble of the 1950s when the U. S. was the world’s only functioning industrial economy, the others rebuilding after the war. Had Big Labor been successful in boosting the wages of its members faster and higher in the 1970s and 1980s, that would only have resulted in the jobs of its members that delivered high wages and only required modest skills being driven overseas faster.

It’s easier for Big Government to deal with Big Business but Big Business has shed jobs at an alarming rate. At it’s peak employment General Motors employed 600,000 people, mostly in the United States. Now it’s a third that. However successful GM is it will never be the engine of job creation it was once upon a time.

Like it or not rather than relying on Big Business to revive the American economy, we need many, many more small, growing start-ups. The president’s proposal for that, easier credit for small businesses, is laughable. Today’s new businesses tend not to be as capital intensive as the new businesses of the 1950s. They’re frequently financed using credit cards. And anybody who’s tried to obtain an SBA loan knows that the ability to obtain one is essentially a signal that you don’t need one.

The most important thing that government could do to aid in the formation of new, young, growing businesses that will provide the jobs of the future is to get the heck out of the way. What do we get instead? The Stop Online Privacy Act which if enacted will beat down new and growing business to the benefit of a handful of established intellectual property barons.

Last night’s State of the Union message was, as I suspect most of us expected in an election year State of the Union message, a stump speech and, like most SOTUs, loaded with scads of proposals we’ll never hear from again. Here’s what the editors of the Washington Post heard:

A  STATE OF THE UNION address from a president seeking reelection is always an odd event. Especially in the face of a divided Congress, the president’s proclaimed program stands little chance of enactment. The ambitious agenda of years past gives way to the knowledge, born of painful experience, of how difficult that will be to achieve. Meanwhile, the president’s proposals are made in the context of the race about to be joined, stacked up against the pie-in-the-sky promises of his opponents. The subtext is, inevitably, less a blueprint of the year to come than an explanation of why the president deserves reelection and a sneak preview of a second-term agenda.

Neither I nor they found the speech particularly divisive. I found the speech notably empty of meaningful content. Here’s a quick test to help you see what I mean. Place “the reason that” as the opening of a sentence, whatever the apparent purpose of a particular policy proposal is next, and then the president’s proposal and see how it sounds. Let’s try some examples.

The reason that the high school graduation rate isn’t higher is that those who fail to graduate on time aren’t forced to stay in school until they turn 18.

The reason that income inequality has increased in the United States is that the top .1% of income earners aren’t taxed at a marginal rate of 30%.

The reason that more companies aren’t returning their manufacturing facilities to the U. S. is that the tax incentives they receive for doing so aren’t high enough.

IMO all of these assertions are risible. Here’s my point: even if every proposal in the SOTU were enacted into law I believe they would only effect minor changes in the problems that face us. 18 year old non-graduates would age out of the system rather than graduate. The highest income earners would adjust their compensation to avoid taxation (not to mention that the reason for increasing income inequality in the U. S. is that the incomes of the poorest haven’t increased fast enough not that the incomes of billionaires have increased too fast). China’s low labor costs and superior production engineering as well as the improved access to the Chinese market that local manufacturing provides would keep manufacturing there.

In a speech in which we don’t expect everything that’s proposed to be enacted into law and, arguably, nothing that’s proposed will be enacted into law why not aim for the sky? Why not dream big?

The full text of the speech is here.

Update

Let me put it another way. One way of looking at the last couple of years has been that the president has been blocked at every turn by obstructionist Republicans. I strongly suspect that will be the theme of the president’s re-election campaign. But there’s another way of looking at things as the editors of the Wall Street Journal explain in their remarks on the speech:

The New Yorker magazine this week has posted on its website a 57-page memo that economic adviser Larry Summers wrote to Mr. Obama in December 2008. It lays out nearly his entire agenda for the “stimulus,” reviving housing, the auto bailout and saving the financial industry. If anything, the memo overstates what would be needed to stabilize the financial panic, but nearly all of the stimulus spending priorities that the memo deemed “feasible” made it into law. They simply didn’t work as promised.

The Pelosi Congress also passed ObamaCare, Dodd-Frank, cash for clunkers, the housing tax credit, and much more. The only Obama priority it didn’t pass was cap-and-trade, which was killed by Senate Democrats.

Mr. Obama’s regulators also currently have some 149 major rules underway, which are those that cost more than $100 million. The 112th Congress hasn’t been able to kill a single major rule. The most it has been able to do is extend the Bush tax rates—which helped the economy by avoiding a tax shock—and slow the rate of increase in federal spending. This President has been “obstructed” less than anyone since LBJ.

When you get what you ask for blaming the results on obstruction is a pretty neat trick if you can pull it off.

I won’t deny that I’m tired, discouraged, and a bit frustrated. However, I’m alarmed at the increasingly strident tone of the commentariat in the blogosphere. Not here, thank goodness!

What I’m seeing are Left Bolsheviks and Right Bolsheviks and a distressing willingness to make judgments based on sweeping generalities.

That’s my reaction to the reaction to Mitt Romney’s tax returns. I don’t honestly give a damn how large his income is or how much he paid in taxes as long as a) he operated by the rules and b) he didn’t lobby to get the rules changed for himself. I’m incensed at the Congress for making the rules and, particularly, the Democratic Congressional leadership for bitching for eight years about the Bush tax cuts and then voting to keep them. Pick one, dammit.

Seeing some sort of wrongdoing on his part because of course the rich have gotten so on the backs of the poor and of course the rich have rigged the tax system and they’re all equally guilty simply boggles my mind. What are we, Madame Defarge?

I think the stridency is misplaced. I won’t be going to man the barricades to support the Princeton economics department against the University of Chicago’s business school. Or, worse, the Harvard Law School vs. the Harvard Business School. That’s what the argument is not about the universal rights of man.

I don’t see why anybody else should be eager to do so but that’s certainly the tone I hear.

Take a look at William Galston’s preview of the 2012 SOTU in The New Repujblic. I really wonder if this it true:

President Obama cannot run away from his record; he must run on it. And he cannot make the 2012 election a contest between two futures—unless and until he provides a persuasive narrative of the economic situation he inherited and his response to it since he assumed office. That narrative provides the indispensible foundation for his forward-leaning proposals, and for the contrast he wants to draw with the Republicans. He cannot say, as Bill Clinton did in his 1996 State of the Union address, that “Our economy is the healthiest it has been in three decades.” Nor can he say what Ronald Reagan did in 1984, that “America is much improved.” What he can say is that the difficult, unpopular decisions he made at the beginning of his presidency—such as the successful rescue of GM and Chrysler—saved the country from a second Great Depression and began to lay the foundation for a solid recovery. We’re on the right track, he could continue, but we’re not moving down it fast enough. The imperative is not to change course, but rather to speed up, and that is the administration’s principal focus.

Making the point that it might have been worse would certainly point to the FUD (fear, uncertainty, and doubt) campaign that I expect the president or, at least, his surrogates to campaign on. It has the unfortunate side effect of undermining whatever it was he stood for in 2008. Additionally, I can’t recall any president running for re-election successfully on such a platform. You might point to Truman but I think Truman was a special case. He was finishing up FDR’s fourth term and Democrats had come to believe that they White House theirs by right. He also had a kind of authenticity that no candidate today can match.

What I expect in the SOTU is another dreary boring Christmas tree wish list of things that the president has no intention of actually putting any weight behind. I may have to struggle to watch it.

I’m going to be franker and more brutal in this post than I generally am. The problem with the evils that David Brooks points to in his column today is that nobody knows what to do about any of them. Here’s his headline example:

Parlier’s father abandoned her when she was young and crashed his car while driving drunk, killing himself and a family of four. Maddie is smart and hard-working. She did reasonably well in high school but got pregnant her senior year.

She and the father of her child split up, which put the kibosh on her college dreams because she couldn’t afford day care. She temped for a while. Her work ethic got her noticed, and she got a job as an unskilled laborer at Standard Motor Products, which makes fuel injectors.

Parlier earns about $13 an hour. She’d like to become one of the better-paid workers in the plant, but, in today’s factories, that requires an enormous leap in skills.

What’s the key message in that parable? Is it that we need subsidized daycare? That we need job training programs? No. Is it that some people are unlucky? No. It’s that bad choices can stunt your life and your children’s lives. Abandoning your family is a choice. Drinking and driving is a choice. Based on what was reported in the column getting pregnant was a choice. Raising your child as a single parent rather than giving him or her up for adoption is a choice. Electing to raise your child as a single parent is a choice. All of these choices have implications The sum total of these implications is that “smart and hard-working” Maddie is stuck in a job with pay low enough that her life and that of her child won’t be easy.

Would subsidized daycare help? Would job training programs help? They might. No government program can immunize you against making bad choices and, at least for some of those who’ve made bad choices, ameliorating the consequences of making bad choices will lead them to make more bad choices. I’d rather see our sympathy enlisted on behalf of those who are just plain unfortunate and there are plenty of them.

As to Mr. Brooks’s assertion that insecurity drives men to do stupid things, the insecure we shall always have with us.

I think we’ve reached a critical point at which the salvage value of any number of our institutions is approaching zero. Tinkering around the edges just won’t cut it any more. Our system of public education is no longer about educating children—that much is obvious from the raw numbers. Real spending on education has tripled while on-time graduation rates in major urban school districts has hardly budged. Judging by its results the primary objective of the public education system is not educating children but employing adults at rates of pay that would otherwise elude them.

It may well be that the low on-time graduation rate is a result of choices. Whose choices? The difference between adults and children is that we don’t generally encourage children to make life-threatening choices. Their parents? How do those choices justify the additional spending?

Is the primary purpose of our healthcare system healing the sick or boosting those who work in the industry into the 1%? Real healthcare spending, at least three-fifths of it government spending, has increased dramatically over the period of the last 30 years. Is the population that much healthier?

It may well be that the results our healthcare system achieves relative to those in other OECD countries is due to poor choices on the part of Americans. We eat too much, we eat the wrong stuff, we don’t exercise enough, we smoke, we use drugs. How do those choices justify the additional spending? The retort that healthcare is a luxury good or the like is a non sequitur. If I spend my money on more healthcare as a display of wealth, that’s a luxury good. When the federal government spends Party A’s money to pay Party B for Party C’s healthcare, that’s no luxury good. It’s an abuse of the democratic process.

I think it’s reasonable to believe that we can and should do more to help the unfortunate. As I’ve written above I think that our institutions are failing us in that regard and need a major overhaul.

However, I don’t believe that without becoming a society of slaves we’ll ever succeed in protecting people from the consequences of their bad choices or those of their parents. Anything that’s not worth doing is not worth doing well.

Bret Stephens, writing from November 7, 2012:

It doesn’t matter that Mr. Obama can’t get the economy out of second gear. It doesn’t matter that he cynically betrayed his core promise as a candidate to be a unifying president. It doesn’t matter that he keeps blaming Bush. It doesn’t matter that he thinks ATMs are weapons of employment destruction. It doesn’t matter that Tim Geithner remains secretary of Treasury. It doesn’t matter that the result of his “reset” with Russia is Moscow selling fighter jets to Damascus. It doesn’t matter that the Obama name is synonymous with the most unpopular law in memory. It doesn’t matter that his wife thinks America doesn’t deserve him. It doesn’t matter that the Evel Knievel theory of fiscal stimulus isn’t going to make it over the Snake River Canyon of debt.

Above all, it doesn’t matter that Americans are generally eager to send Mr. Obama packing. All they need is to be reasonably sure that the alternative won’t be another fiasco. But they can’t be reasonably sure, so it’s going to be four more years of the disappointment you already know.

It may well be the case that Gingrich is the candidate who energizes the Republican base. That won’t matter because he will energize the Democratic base as well and repulse moderates.

I don’t know whether Mr. Romney will be able to shrug off nine months of character assassination or learn to stop alienating a good portion of the electorate (or have his words misquoted so that they alienate a good portion of the electorate). I do know that any ticket with Romney at the top will be about as white bread as you can possibly get. Will white bread be enough?

There’s really only one question that needs to asked: can Romney win enough states that McCain didn’t last time around to become president? Can he win the states that McCain did?

I don’t disagree with Greg Mankiw’s notions of how our tax system should be redesigned which can, roughly, be summarized as:

• Replace the income tax with a value-added tax.
• Introduce Pigouvian taxes on “bads”, e.g. gas at the pump.
• Simplify!

Even if you acknowledge that those are the right things to do IMO the probability that we will do them is vanishingly small. Here’s what I think is more likely to happen:

1. We’ll introduce a VAT on top of the income tax.
2. We’ll exempt more people from the income tax and raise the rates on the highest earners.
3. We won’t introduce a steep gas tax (the last guy to propose that was resoundingly defeated in his run for the presidency).
4. We’ll make the system even more complicated that it is now.

I think there are two basic tools you should use in evaluating the likelihood of any particular policy actually happening. First, try drafting a campaign speech proposing it. If you can’t imagine any politician doing that, if the candidates who’ve proposed it have been defeated, and, particularly, if you find it much, much easier to write the campaign speech attacking the proposal, it ain’t gonna happen. Second, check whether it a) puts more money in the politicians’ pockets or b) gives politicians more power. There are really only two reasons to seek political office: rent-seeking and the desire for power. If the policy doesn’t do one, the other, or both, it’s not likely to be enacted into law.

A VAT in the absence of an income tax reduces political influence over raising revenue; a VAT on top of an income tax increases it and provides more money to boot. A complicated system provides more political influence over raising revenue than a simple one would and provides plenty of cracks for money to fall through. That’s why we’re so overdue for tax reform. On average we engage in major tax reform every twenty or so years. It’s been nearly thirty.