March 8, 2011 12:00 A.M.

Union Myths
Private-sector workers haven't been immune to unions' deleterious effects as government workers have.

The biggest myth about labor unions is that unions are for workers. Unions are for unions, just as corporations are for corporations and politicians are for politicians.

Nothing shows the utter cynicism of the unions and the politicians who do their bidding like the so-called “Employee Free Choice Act” that the Obama administration tried to push through Congress. Employees’ free choice as to whether to join a union is precisely what that legislation would destroy.

Workers already have a free choice in secret-ballot elections conducted under existing laws. As more and more workers in the private sector have voted to reject having a union represent them, the unions’ answer has been to take away secret-ballot elections.

Under the “Employee Free Choice Act,” unions would not have to win in secret-ballot elections in order to represent the workers. Instead, union representatives could simply collect signatures from the workers until they had a majority.

Why do we have secret ballots in the first place, whether in elections for unions or elections for government officials? To prevent intimidation and allow people to vote the way they want to — without fear of retaliation.

This is a crucial right that unions want to take away from workers. The actions of union mobs in Wisconsin, Ohio, and elsewhere give us a free home demonstration of how little they respect the rights of those who disagree with them and how much they rely on harassment and threats to get what they want.

It takes world-class chutzpah to call circumventing secret ballots the “Employee Free Choice Act.” To unions, workers are just the raw material used to create union power, just as iron ore is the raw material used by U.S. Steel and bauxite is the raw material used by the Aluminum Company of America.

The most fundamental fact about labor unions is that they do not create any wealth. They are one of a growing number of institutions which specialize in siphoning off wealth created by others, whether they are businesses or the taxpayers.

There are limits to how long unions can siphon off money from businesses without facing serious economic repercussions.

The most famous labor union leader, the legendary John L. Lewis, head of the United Mine Workers from 1920 to 1960, secured rising wages and job benefits for the coal miners, far beyond what they could have gotten out of a free market based on supply and demand.

But there is no free lunch.

An economist at the University of Chicago called John L. Lewis “the world’s greatest oil salesman.”

His strikes that interrupted the supply of coal, as well as the resulting wage increases that raised its price, caused many individuals and businesses to switch from using coal to using oil, leading to reduced employment of coal miners. The higher wage rates also led coal companies to replace many miners with machines.

The net result was a huge decline in employment in the coal-mining industry, leaving many mining areas virtually ghost towns by the 1960s. There is no free lunch.

Similar things happened in the unionized steel industry and in the unionized automobile industry. At one time, U.S. Steel was the largest steel producer in the world and General Motors the largest automobile manufacturer. Not any more. Their unions were riding high in their heyday, but they too discovered that there is no free lunch, as their members lost jobs by the hundreds of thousands.

Workers have also learned that there is no free lunch, which is why they have, over the years, increasingly voted against being represented by unions in secret-ballot elections.

One set of workers, however, remained largely immune to such repercussions. These are government workers represented by public-sector unions.

While oil could replace coal, while U.S. Steel dropped from number one in the world to number ten, and Toyota could replace General Motors as the world’s leading producer of cars, government is a monopoly. Nobody is likely to replace the federal or state bureaucracies, no matter how much money the unions drain from the taxpayers.

That is why government unions continue to thrive while private-sector unions decline. Taxpayers provide their free lunch.

— Thomas Sowell is a senior fellow at the Hoover Institution. © 2011 Creators Syndicate, Inc.

« Longhorns 17, Badgers 1 | Main

Badgering the Witless

Well, now. Apparently that last post struck some sort of nerve, as it resulted in a record one day traffic spike at Iowahawk (don't like to brag, but it was up there in the multi-dozens). It also resulted in an email tsunami. The correspondence included a few critiques, some thoughtful, some stupid. Let's dispense with the stupid one first.

What qualifies you as a statistician?

I slept at a Holiday Inn Express last night.

I was amused by a couple of emails asking for my credentials, and/or pointing out Paul Krugman's sinecure at Princeton - as if this had any bearing on the validity of either of our conclusions. I may be a random internet drunk, but I am occasional cogent enough to recognize the ol' appeal-to-authority gambit. Unlike Mr. Krugman I am happy to cite/link to my source data, both in the previous post and in this one. It's a courtesy I learned at my beloved alma mater, Ottumwa Body & Fender (Southeast Iowa's finest dent repair institution). But hey, if credentials and oak-framed vellum degrees are your bag, let me share this email with you:

Dear Mr. Burger:
I edit educationnext.org. I have a blog on the site. I would like to do a blog that will depends heavily on your material,quoting you at length, as I also think Krugman is a nobel prize winning fraud and because your data are intrinsically interesting... I will link the piece to your site, obviously.

Paul E. Peterson
Henry Lee Shattuck Professor of Government
Director, Program on Education Policy and Governance
Harvard University
Senior Fellow, Hoover Institution

Degrees-y enough for you? Despite getting my name wrong, I accepted Prof. Peterson's request and encouraged him to go at my results hammer-and-tongs. His comments are here.

As for Mr. Krugman, I'll only note the remarks of his former ombudsman at the New York Times, Daniel Okrent:

"Op-Ed columnist Paul Krugman has the disturbing habit of shaping, slicing and selectively citing numbers in a fashion that pleases his acolytes but leaves him open to substantive assaults."

No shit, Sherlock.  Now to the numerical issues brought up by readers. 

The same site (NAEP) shows Wisconsin overall test scores are better than Texas overall test scores. (a) How in the world could Texas beat Wisconsin for every ethnic group and still be worse overall? (b) Why aren't you focusing on the most meaningful number, the overall average?

I am dumbfounded (derrrr...) by the number of people still confused by this. The short version, as I pointed out, is that Texas and Wisconsin have very different ethnic populations, and that the component groups have different means. Several emailers noted that this is a fairly common phenomenon in statistics known as Simpson's Paradox. Let's take a baseball example; suppose you were a manager and you were evaluating two hitters:

Hitter A:
Against right-handed pitchers: 300 at-bats, 90 hits (.300 average)
Against left-handed pitchers: 200 at-bats, 50 hits (.250 average)
Total: 500 at-bats, 140 hits (.280 average)

Hitter B:
Against right-handed pitchers: 100 at-bats, 32 hits (.320 average)
Against left-handed pitchers: 300 at-bats, 78 hits (.260 average)
Total: 400 at-bats, 110 hits (.275 average)

Hitter B has a higher batting average against both righties and lefties, but Hitter A has a higher overall average by dint of facing a different mix of pitchers. Now comes the question: it's the bottom of the 9th, two out, and you need a base hit. Who would you insert as a pinch hitter, A or B? The detailed data suggests Hitter B, irrespective of whether the pitcher was right- or left-handed. The overall average, in this context, is worse than meaningless - it leads you to exactly the wrong conclusion.

You're cherry-picking data to support a pre-conceived hypothesis. Why did you focus on NAEP, which is one of a number of data sets, and ignore statewide SAT/ACT scores and dropout rates which lead to an opposite conclusion?

Let's parse this one, because it's a more substantive criticism. First, why did I focus on the NAEP data? Because it is the most comprehensive, comparable and detailed data available for US education performance. It is administered at the same time, nationwide, to common age cohorts, and is designed to measure public school performance against defined standards in reading, math and science. NAEP testing is administered and compiled by the U.S. government, so it is flatly inane to insinuate it has a right wing ideological bias against Wisconsin. It's also the prefered data for academic researchers. If you want to argue there is a better yardstick for comparing state-to-state educational achievement, please feel free to do so - but only if your proposed alternative is more comprehensive, detailed and unbiased.

Now, with regard to SAT/ACT:

Let me first state my conclusion: the SAT/ACT is a garbage measure for comparing state-level public school achievement, even after controlling for ethnicity. Aha! He's dismissing it because it contradicts his conclusion! No, and here are the various reasons why.

1. There is no such thing as an "ACT/SAT" or an "SAT/ACT." There is an ACT, and there is an SAT*. Traditionally the ACT is the exam used by universities and colleges in the Midwest and Great Plains, the SAT on the coasts and Texas. The geographic lines have blurred over time, but in general which test a student takes depends on where they intend to go to college. In the Midwest, where I grew up, you took the ACT if you planned to go in-state or to a neighboring state. The very few people who took the SAT did so because they planned to go to a highly selective college on the East or West coast. That Midwest SAT self-selection is a big reason why states like Iowa and Wisconsin are chronically the top of the "average SAT" rankings - because only a few percent of the state's high school graduates, and usually the top achievers, take it.

*There is also the BAT (Bondo Aptitude Test) for prospective students at my beloved alma mater, Ottumwa Body & Fender.

2. As others have noted participation rates for SAT and ACT vary widely by state, and there is a negative correlation between a state's test participation rate and its average score. Case in point: Maine is the worst scoring state on the SAT. Whuh-uhhh? Lily-white Maine? The principle reason is that SAT testing is compulsory for Maine HS graduates, college-bound or not. In most all other states SAT is optional; in Iowa (ranked #1) only 3% of graduates took it. Similarly there are a number of states where ACT is compulsory (CO, IL, KY, MI, TN, WY) and they are, unsurprisingly, near the bottom.

The point here is that college board exams are sometimes optional tests taken by college-bound seniors, sometimes a standard requirement for anyone graduating high school. This also begs the question - what about all those high school graduates who aren't immediately going to college, and haven't been board tested? Are they going to a job? The military? How well are they prepared educationally for those careers? Public elementary and secondary schools educate all kinds of students, only about half of whom go on immediately to 4 year colleges. The ACT and SAT only give a weak indicator for a portion of those public school graduates.

3. Even ignoring those previous issues, statewide ACT and SAT scores include both public and private high school graduates. As much as I'm sure Wisconsin's teachers unions would love to claim credit for the performance of the state's private school graduates, my interest was in comparing the performance of public school education between Texas and collective bargainin' Wisconsin.

Again, here is another opportunity for Simpson's Paradox. The proportion of private school enrollment varies considerably by state; about 14% in Wisconsin, about 7% in Texas. Wisconsin's is among the highest, while Texas is among the lowest. A cynic might wonder what it is about Wisconsin public schools that compels parents there to dig deep into their pockets to send their own kids elsewhere. Knowing a little about the two states' cultures, I instead believe it's largely a Catholic thing. For example, Austin TX and Milwaukee WI are about the same population size; Milwaukee has at least 8 Catholic high schools with over 5000 enrollment, where Austin has 4 small boutique Catholic high schools with less that 800 enrolled. But the point is, a lot of the kids taking the ACT and SAT in Wisconsin are from private schools. I can't find a separately reported number, but some studies suggest that private schools have lower dropout rates and that private school graduates are much more likely to matriculate to 4-year college (presumably requiring an SAT or ACT test). Taken together, if the national pattern holds in Wisconsin it suggests that more than 20% of the state's ACT and SAT takers are private school graduates (by contrast, in Texas it would be around 10%). Oh, and by the way -- private school graduates outperform public school graduates on the SAT.

So let's take that all together: if 20%+ of Wisconsin ACT/SAT takers are private school graduates, and private school graduates are relatively high performers, to what degree can unionized Wisconsin public schools take credit for a happy "state average" result?  This is precisely why I used NEAP statistics: common definitions, universality, public school focus, etc. I would be excited to see a comparison between Texas ACT/SAT scores, only if you were to control for (1) participation rate, (2) ethnicity and other socioeconomic factors, and (3) attendance at private vs. public school. If you can show that Wisconsin public schools consistently outperform Texas public schools after controlling for those differences, then you've contradicted my results.

And for those thinking I'm still evading the ACT/SAT question, may I present the ethnically-controlled 2010 ACT test results (h/t reader Larry Tunnell):

Average ACT Composite Score 2010
White students: Wisconsin 23.5, Texas 23.3 (national 23.1)
Black students: Texas 17.6, Wisconsin 16.9 (national 17.5)
Hispanic students: Wisconsin 19.8, Texas 18.7 (national 19.4)

Ignoring all the factors I previously mentioned, there are two things at odds with my NEAP results: white Wisconsin students slightly outperform white Texas students, and that the performance of Hispanic Wisconsin students and Texas students is reversed. But participation rates are much different in the 2 states, with only 62% of Wisconsin Hispanic students taking the ACT core plus, versus 83% in Texas. Keep in mind these results are (1) for all students, public and private, where private school is much more prevalent in Wisconsin; (2) only for the ACT; (3) among a self-selected group of students planning to enroll in 4-year college. Because of these confounds, the results are virtually meaningless as a measure of Texas public education versus Wisconsin public education - even the result for black students, which is completely consistent with my NAEP comparison.

Now, onto dropout rates.

I had a few people email accusing me of "ignoring" the hideous dropout rate in Texas, reported by Krugman as over 38%. In no case have I seen a source citation for this number, which appear to have sprung, like the Goddess Venus, fully formed from a mythical clamshell.

A couple of notes on this. First, it appears that different states have traditionally used different definitions of "dropout." Some are more indicative of simple attrition - for example if High School X has an incoming freshman class of 200 students, and only 130 of those freshman graduated with the class 4 years later, it had a 35% "dropout rate" - regardless of the reason. Other states were more dilligent in tracking where the lost students went (GED, transfer to private schools, work, jail, etc.) before counting them as true "dropouts." As a result traditional state-specific dropout rates were hard to compare. That's why in my update to the last post I focused exclusively on the commonly-defined NCES dropout tables. You may quibble with their definition, but it is consistent and applied the same across different states. As an aside, reader Dr. William Borland (Principal Research Engineer, Georgia Institute of Technology, lah-tee-dah) points out that 2010 state-specific public high school dropout rates are now available- and bolster my case.

2010 Public High School Event Dropout Rates
White students: Wisconsin 1.4%, Texas 1.8% (national average 2.8%)
Black students: Texas 6.3%, Wisconsin 7.8% (national average 6.7%)
Hispanic students: Texas 5.3%, Wisconsin 5.4% (national average 6.0%)

While no dropout event is good, Texas is hardly the outlier national shame claimed by Krugman. In fact, it has below national average dropout rates for all 3 ethnic groups considered, consistently in both 2007 and 2010 measures. Among white students, Wisconsin had the second lowest state event dropout rate (NJ #1), where Texas was tied for 7th. Among black students, Wisconsin was #39, Texas tied for #24. Among Hispanic students, Wisconsin was tied for #21, Texas was tied for #17.

Again these are based on a one-year calendar, based on continued enrollment from one October to the next. I will note there is a difference in kind between the NCES definition of "event dropout rate" (leaving school during a given year) and "graduation rate" (a common class cohort from freshman year to senior year). Using the common NCES definition for the 2007-8 public school senior class, Texas had a 73.1% graduation rate, where Wisconsin's was 89.6%. 

So Wisconsin ranked #1 on the average graduation rate measure, where Texas came in #35. Not great for Texas, but I would note this overall number does not control for ethnicity (I have been unable to find the relevant graduation rate breakdown). As an aside I would also note that even without such controls, Texas still outranks lavishly unionized California and NY. The curious thing here is the seeming parodox between event dropout rates and graduation rates. Even with compounding and taking into account population demographics, the overall graduation rate gap between Texas and Wisconsin seems much larger that what would be suggested by the year-to-year event dropout rate (remember, both are based on NCES standard definitions). My hunch - and it's just a hunch - is that the effect of family mobility is at play here. In order to track dropout rates, researchers have to track enrollment status of individual students over time. This also involves issues of privacy, and/or losing track of students when they move. Texas is a key entry point for immigrants from Mexico and Central America, many of whom later move on to other U.S. states. Once an immigrant student enters the Texas public school system, it is one thing to track their enrollment status from year to year; it is another thing to track their enrollment status from freshman to senior year, especially if they have moved with their family to, say, Nebraska. It's unclear to what degree this plays a role in Texas' dropout vs. graduation rates, but if it does the shorter-period event dropout rates are a superior measure of true student retention.

Why the focus on Texas vs. Wisconsin? What about other non-union / non-collective bargaining states?

Because I'm lazy. And because I have dilligent readers like Michael Pollard who volunteer to do that for me. The short recap to Michael's NAEP results is that after controlling for ethnicity, compared to the running-dog Gang of Five non-collective bargaining states (TX, VA, SC, NC, GA), Wisconsin is a (1) middling performer for white students; (2) below middling for Hispanic students, and (3) an absolute disaster for black students.

Hey, it's been a fun two days based on a simple 30-minute study of educational statistics. As regards the effect of teacher collective bargaining on student learning, I wouldn't call what I did conclusive; just pointing out the fallacy of aggregate statistical comparisons. For a definitive study of the effect, I would point to Caroline Hoxby's (Harvard/ MIT /Stanford, lah tee dah) 1996 QJE paper, which statistically controls for additional variables. Her main conclusions: collective bargaining increases the input provided to schools (spending, construction and the like), but actual decreases school output (test scores and the like). If you don't like Greek letters, here's Hoxby discussing the effect on YouTube.

Anyhoo, class dismissed. I'm off to pound out a dented quarterpanel.

March 05, 2011 in Science | Permalink

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By SEAN PARNELL

The revolution that began in Tunisia, spread to Egypt, and is now dramatically unfolding in Libya is far from over. The events in North Africa and the Middle East threaten to push the price of oil well above $100 a barrel—and make the importance of oil to America's security clearer than ever.

Over the past several decades, we have allowed ourselves to become dependent on oil from unstable regions that are hostile to our nation. The United States relies on an open Suez Canal, the security of which has been funded by our tax dollars for decades. With gasoline prices surging, and manufacturing and transportation costs rising, the rising cost of goods will soon impact every American, putting our economic recovery at risk.

The U.S. imports more than 63% of its oil. The time is now for our federal government to re-examine its current policy—which severely hampers domestic oil exploration and development—and to learn from our recent history.

In the 1970s, the OPEC embargo led to long lines at gas stations, with families waiting for hours to buy gas for their cars. Rationing was enacted, and Americans fought each other for a gallon of gas. The power of OPEC was indisputable.

One of the most significant outcomes of that embargo was the Trans Alaska Pipeline System. Americans knew we needed to develop domestic energy to balance the power of cartel oil. For 40 years, oil from Alaska has allowed our nation to stand with some degree of energy independence. Building that pipeline on American soil was prescient.

Millions of American jobs are directly tied to our energy production. Even as the energy sector necessarily diversifies, oil will continue to be a key piece of our national energy profile for many decades.

And yet Alaska and the Gulf states have been blocked from developing America's oil by politically driven federal policy, much of it aided by misinformation. If Americans wonder what our economic Achilles' heel is, they need look no further than the federal regulatory system that delays permits for domestic exploration and production.

In Alaska, an oil company can buy federal leases, spend over $3 billion in permitting and capital costs, apply for an air permit from the Environmental Protection Agency (EPA), and then wait for five years and still have no permit. In one case, the EPA's refusal to grant a permit for Royal Dutch Shell to drill in the Beaufort Sea delayed the creation of 54,700 jobs annually and $145 billion in payroll.

Alaskans have significant limits placed on us by the federal government, but we are hardly alone. In Wyoming, it takes years to get permits for oil-related development. Republican Gov. Matt Mead has asked the Interior Department to rescind its "Wild Lands" policy, which removes a state's discretion for land use. Last year Gov. Bobby Jindal (R., La.) pleaded with the Obama administration to end the moratorium on deep-water drilling in the Gulf of Mexico, which affects 33 permitted exploratory wells. To date, only one new well has been approved.

Meanwhile, the EPA received a $3 billion increase in its budget last year. It produced 42 significant regulation packages in the first 18 months of the current administration, each costing our economy tens of millions of dollars.

Lost American jobs are one consequence of not developing our domestic oil, but there are others. By shutting down domestic production, the Department of Interior and the EPA are now essentially driving U.S. foreign policy in the Middle East. The State Department is relegated to a reactive role because we remain dependent on foreign oil.

By delaying leasing and permitting for exploration and development, and by locking up lands without congressional approval or authority, these agencies have locked down domestic oil with no responsibility for the consequences. The rest of us feel them: increased reliance on Middle East oil and lost economic opportunity.

As we watch fuel prices rise, inflation take hold, and government debt reach record levels, Alaskans and those in other oil-producing states are frustrated. We wonder why the Obama administration is openly hostile to a sector of our economy that has created hundreds of thousands of jobs, kept the country on an even keel even during the recession, and produces a global commodity we depend on every day.

As residents of our individual states, we desire responsible resource development. We don't want to live and work in a spoiled nest. We also want to create jobs that contribute to our economic recovery. Why should we spend billions overseas for foreign oil when we could spend those dollars here at home?

Mr. Parnell, a Republican, is the governor of Alaska.

Longhorns 17, Badgers 1

Please pardon this brief departure from my normal folderol, but every so often a member of the chattering class issues a nugget of stupidity so egregious that no amount of mockery will suffice. Particularly when the issuer of said stupidity holds a Nobel Prize.

Case in point: Paul Krugman. The Times' staff economics blowhard recently typed, re the state of education in Texas:

And in low-tax, low-spending Texas, the kids are not all right. The high school graduation rate, at just 61.3 percent, puts Texas 43rd out of 50 in state rankings. Nationally, the state ranks fifth in child poverty; it leads in the percentage of children without health insurance. And only 78 percent of Texas children are in excellent or very good health, significantly below the national average.

Similarly, The Economist passes on what appears to be the cut-'n'-paste lefty factoid du jour:

Only 5 states do not have collective bargaining for educators and have deemed it illegal. Those states and their ranking on ACT/SAT scores are as follows:

South Carolina – 50th
North Carolina – 49th
Georgia – 48th
Texas – 47th
Virginia – 44th

If you are wondering, Wisconsin, with its collective bargaining for teachers, is ranked 2nd in the country.

The point being, I suppose, is that unionized teachers stand as a thin chalk-stained line keeping Wisconsin from descending into the dystopian non-union educational hellscape of Texas. Interesting, if it wasn't complete bullshit.

As a son of Iowa, I'm no stranger to bragging about my home state's ranking on various standardized test. Like Wisconsin we Iowans usually rank near the top of the heap on average ACT/SAT scores. We are usually joined there by Minnesota, Nebraska, and the various Dakotas; Vermont, Maine, New Hampshire...

... beginning to see a pattern? Perhaps because a state's "average ACT/SAT" is, for all intents and purposes, a proxy for the percent of white people who live there. In fact, the lion's share of state-to-state variance in test scores is accounted for by differences in ethnic composition. Minority students - regardless of state residence - tend to score lower than white students on standardized test, and the higher the proportion of minority students in a state the lower its overall test scores tend to be.

Please note: this has nothing to do with innate ability or aptitude. Quite to the contrary, I believe the test gap between minority students and white students can be attributed to differences in socioeconomic status. And poverty. And yes, racism. And yes, family structure. Whatever combination of reasons, the gap exists, and it's mathematical sophistry to compare the combined average test scores in a state like Wisconsin (4% black, 4% Hispanic) with a state like Texas (12% black, 30% Hispanic).

So how to compare educational achievement between two states with such dissimilar populations? In data analysis this is usually done by treating ethnicity as a "covariate." A very simple way to do this is by comparing educational achievement between states within the same ethnic group. In other words, do black students perform better in Wisconsin than Texas? Do Hispanic students perform better in Wisconsin or Texas? White students? If Wisconsin's kids consistently beat their Texas counterparts, after controlling for ethnicity, then there's a strong case that maybe Texas schools ought to become a union shop.

Luckily, there is data to answer this question via the National Assessment of Educational Progress (NAEP). The NAEP is an annual standardized test given to 4th and 8th graders around the country to measure proficiency in math, science, and reading. Participation is fairly universal; if you've had a 4th or 8th grader in the last few years, you're probably familiar with it. Results are compiled on the NAEP website, broken down by grade, state, subject and ethnicity.

So how does brokeass, dumbass, redneck Texas stack up against progressive unionized Wisconsin?

2009 4th Grade Math

White students: Texas 254, Wisconsin 250 (national average 248)
Black students: Texas 231, Wisconsin 217 (national 222)
Hispanic students: Texas 233, Wisconsin 228 (national 227)

2009 8th Grade Math

White students: Texas 301, Wisconsin 294 (national 294)
Black students: Texas 272, Wisconsin 254 (national 260)
Hispanic students: Texas 277, Wisconsin 268 (national 260)

2009 4th Grade Reading

White students: Texas 232, Wisconsin 227 (national 229)
Black students: Texas 213, Wisconsin 192 (national 204)
Hispanic students: Texas 210, Wisconsin 202 (national 204)

2009 8th Grade Reading

White students: Texas 273, Wisconsin 271 (national 271)
Black students: Texas 249, Wisconsin 238 (national 245)
Hispanic students: Texas 251, Wisconsin 250 (national 248)

2009 4th Grade Science

White students: Texas 168, Wisconsin 164 (national 162)
Black students: Texas 139, Wisconsin 121 (national 127)
Hispanic students: Wisconsin 138, Texas 136 (national 130)

2009 8th Grade Science

White students: Texas 167, Wisconsin 165 (national 161)
Black students: Texas 133, Wisconsin 120 (national 125)
Hispanic students: Texas 141, Wisconsin 134 (national 131)

To recap: white students in Texas perform better than white students in Wisconsin, black students in Texas perform better than black students in Wisconsin, Hispanic students in Texas perform better than Hispanic students in Wisconsin. In 18 separate ethnicity-controlled comparisons, the only one where Wisconsin students performed better than their peers in Texas was 4th grade science for Hispanic students (statistically insignificant), and this was reversed by 8th grade. Further, Texas students exceeded the national average for their ethnic cohort in all 18 comparisons; Wisconsinites were below the national average in 8, above average in 8.

Perhaps the most striking thing in these numbers is the within-state gap between white and minority students. Not only did white Texas students outperform white Wisconsin students, the gap between white students and minority students in Texas was much less than the gap between white and minority students in Wisconsin. In other words, students are better off in Texas schools than in Wisconsin schools - especially minority students.

Conclusion: instead of chanting slogans in Madison, maybe it's time for Wisconsin teachers to take refresher lessons from their non-union counterparts in the Lone Star State.

****
Update: a few emails complaining that I focused on NAEP 4th and 8th graders, and didn't address Krugman's "point" about Texas dropout rates. I would note that "average state dropout rate" (non-controlled for ethnicity) is as uninformative as "average state ACT/SAT." Some research suggests Hispanic students, for example, tend to have higher dropout rates than black students despite performing marginally better on standardized tests. But still, the level of Texas dropout rate claimed by Krugman (38%+) is rather disturbing, and it does seem rather odd that somewhere between 8th and 12th grade Texas students are attacked by an epidemic of stupidity.

So I decided to investigate.

Mr. Krugman (please note - I don't call anyone "Doctor" unless they can write me a prescription for drugs) doesn't mention where he gets his dropout statistic from. I suspect a database somewhere in his lower intestine. So I endeavored to find most detailed / recent / comprehensive state-by-state dropout table, which appears to be this 2006-7 report from the National Center for Education Statistics.

Event Dropout Rates for 9th-12th graders during 2006-7 school year:

White students: Texas 1.9%, Wisconsin 1.2% (national average 3.0%)
Black students: Texas 5.8%, Wisconsin 7.8% (national 6.8%)
Hispanic students: Texas 5.6%, Wisconsin 5.2% (national 6.5%)

White and Hispanic Texas students indeed seem to dropout at a higher rate than their counterparts in Wisconsin, although in both cases (a) the difference is not statistically significant; and (b) in both cases, both states are significantly below the national average. Among black high school students, Texans have significantly lower dropout rates than their national cohort and Wisconsinites. Black high school students in Wisconsin have significantly higher dropout rates than national.

Your first question is probably, "why do the union teachers in Wisconsin hate black students?" Sorry, can't help you there, I'm stumped too.

Your second question is probably, "why are these number so discrepant with the 30% dropout numbers I've always read?" The reason is these are event rates, representing the probability a kid will drop out in a specific year. For cumulative dropout rate, you would have to compound; for example if the 1-year dropout rate is 10% the 4 year survival would roughly be 0.9^4 =~ 65%.

March 02, 2011 in Science | Permalink

By CHARLES G. KOCH

Years of tremendous overspending by federal, state and local governments have brought us face-to-face with an economic crisis. Federal spending will total at least $3.8 trillion this year—double what it was 10 years ago. And unlike in 2001, when there was a small federal surplus, this year's projected budget deficit is more than $1.6 trillion.

Several trillions more in debt have been accumulated by state and local governments. States are looking at a combined total of more than $130 billion in budget shortfalls this year. Next year, they will be in even worse shape as most so-called stimulus payments end.

For many years, I, my family and our company have contributed to a variety of intellectual and political causes working to solve these problems. Because of our activism, we've been vilified by various groups. Despite this criticism, we're determined to keep contributing and standing up for those politicians, like Wisconsin Gov. Scott Walker, who are taking these challenges seriously.

Both Democrats and Republicans have done a poor job of managing our finances. They've raised debt ceilings, floated bond issues, and delayed tough decisions.

In spite of looming bankruptcy, President Obama and many in Congress have tiptoed around the issue of overspending by suggesting relatively minor cuts in mostly discretionary items. There have been few serious proposals for necessary cuts in military and entitlement programs, even though these account for about three-fourths of all federal spending.

Yes, some House leaders have suggested cutting spending to 2008 levels. But getting back to a balanced budget would mean a return to at least 2003 spending levels—and would still leave us with the problem of paying off our enormous debts.

Federal data indicate how urgently we need reform: The unfunded liabilities of Social Security, Medicare and Medicaid already exceed $106 trillion. That's well over $300,000 for every man, woman and child in America (and exceeds the combined value of every U.S. bank account, stock certificate, building and piece of personal or public property).

The Congressional Budget Office has warned that the interest on our federal debt is "poised to skyrocket." Even Federal Reserve Chairman Ben Bernanke is sounding alarms. Yet the White House insists that substantial spending cuts would hurt the economy and increase unemployment.

Plenty of compelling examples indicate just the opposite. When Canada recently reduced its federal spending to 11.3% of GDP from 17.5% eight years earlier, the economy rebounded and unemployment dropped. By comparison, our federal spending is 25% of GDP.

Government spending on business only aggravates the problem. Too many businesses have successfully lobbied for special favors and treatment by seeking mandates for their products, subsidies (in the form of cash payments from the government), and regulations or tariffs to keep more efficient competitors at bay.

Crony capitalism is much easier than competing in an open market. But it erodes our overall standard of living and stifles entrepreneurs by rewarding the politically favored rather than those who provide what consumers want.

The purpose of business is to efficiently convert resources into products and services that make people's lives better. Businesses that fail to do so should be allowed to go bankrupt rather than be bailed out.

But what about jobs that are lost when businesses go under? It's important to remember that not all jobs are the same. In business, real jobs profitably produce goods and services that people value more highly than their alternatives. Subsidizing inefficient jobs is costly, wastes resources, and weakens our economy.

Because every other company in a given industry is accepting market-distorting programs, Koch companies have had little option but to do so as well, simply to remain competitive and help sustain our 50,000 U.S.-based jobs. However, even when such policies benefit us, we only support the policies that enhance true economic freedom.

For example, because of government mandates, our refining business is essentially obligated to be in the ethanol business. We believe that ethanol—and every other product in the marketplace—should be required to compete on its own merits, without mandates, subsidies or protective tariffs. Such policies only increase the prices of those products, taxes and the cost of many other goods and services.

Our elected officials would do well to remember that the most prosperous countries are those that allow consumers—not governments—to direct the use of resources. Allowing the government to pick winners and losers hurts almost everyone, especially our poorest citizens.

Recent studies show that the poorest 10% of the population living in countries with the greatest economic freedom have 10 times the per capita income of the poorest citizens in countries with the least economic freedom. In other words, society as a whole benefits from greater economic freedom.

Even though it affects our business, as a matter of principle our company has been outspoken in defense of economic freedom. This country would be much better off if every company would do the same. Instead, we see far too many businesses that paint their tails white and run with the antelope.

I am confident that businesses like ours will hire more people and invest in more equipment when our country's financial future looks more promising. Laying the groundwork for smaller, smarter government, especially at the federal level, is going to be tough. But it is essential for getting us back on the path to long-term prosperity.

Mr. Koch is chairman and CEO of Koch Industries, Inc. He's the author of "The Science of Success: How Market-Based Management Built the World's Largest Private Company" (Wiley, 2007).