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By Nancy Thorner – 

Vaping: How Government Regulation Can Kill Innovation was the topic of The Heartland Institute’s continuing series of Wednesday evening events that are available free to the public. Featured speakers were Dr. Brad Rodu of the University of Louisville and Pamela Gorman of Smoke-Free Alternative Trade Association (SFATA). They discussed vaping from a scientific and industry perspective. 

Dr. Rodu is a professor of medicine at the University of Louisville, where he is a member of the James Graham Brown Cancer Center and holds an endowed chair in tobacco harm reduction research.  He is also a senior fellow at The Heartland Institute.  For the past two decades Dr. Rodu has been in the forefront of research and policy development regarding tobacco harm reduction.

Pamela Gorman is executive director of SFATA, the largest trade group representing and protecting the interests of the vapor industry. She has worked in the vaping and tobacco industries for nearly a dozen years. As an elected official in Arizona, Ms. Gorman served terms in both the state House and Senate.

What are E-cigarettes?

E-cigarettes are becoming an increasingly popular alternative to traditional combustible cigarettes.  Many countries around the world (such as England) are recommending these vapor products as a tobacco harm reduction solution, while the United States government and local authorities have been trying to regulate these products out of existence. 

Health professionals have long known that the smoke created by combustible cigarettes, rather that the nicotine, is what makes smoking harmful.  Smokeless tobacco and e-cigarettes provide a much safer and healthier alternative delivery system for nicotine.  

Dr. Brad Rodu introduced by Jim Lakely, Director of Communication at The Heartland Institute

A slide presentation was used to address the following issues:

1.  Poison reports by the American Association of Poison control Centers in 2015, showed that out of 547,286 reported exposures submitted, E-cigarettes came in very last at 0.5%.  At the high end were Cosmetics and personal care products (26%) and Household cleaners (21%).  

2.  Claims about E-cigarettes are exaggerated, such as, they are not loaded with toxins; they are not poisoning our children; they are not a gateway to teen smoking; they do help smokers quit; and indooteens.

  • Important to promote use as widely as possible as a substitute for smoking.
  • Passive exposure:  no evidence of signifir bans are not necessary. 

    3.  E-cigarette vapor contain nicotine, at various levels or none; water; propylene glycol and /or vegetable glycerin (both are in many consumer products and are FDA approved).  Propylene glycol is used to create artificial fog in theaters, concerts.

    4.  Nicotine and Caffeine are both addictive, but they can be used safely.  Both enhance concentration, performance levels, provide a sense of well-being and elevate mood.  Neither cause intoxication, nor are they not linked to any major disease.  We consume caffeine in coffee, tea and cola drinks.  Nicotine is delivered through smoking cigarettes and E-cigarettes, but it is the smoke created by combustible cigarettes smoking, not the nicotine that is dangerous.

    5. Medication to rid addition to combustible cigarettes provides only a temporary bridge to abstinence; it’s expensive; the very low dose of the medication is unsatisfying for smokers; there is only a 5% success.

    6.  The British are more informed than Americans about the use of E-cigarettes, which has led to a differing treatment of E-Cigarettes in the US.   The FDA, CDC, and the NIH all claim:

  • No evidence that e-cigs help smokers quit.
  • No evidence that e-cigs are less hazardous than cigarettes.
  • E-cigs might renormalize smoking and make it e a gateway to smoking among teens.
  • Only safe, effective methods should be used or quitting smoking.
  • E-cigs to be regulated exactly as cigarettes.

7.  The Royal College of Physicians & Public Health in England in 2015 found the following: 

  • Effective as aid to quit smoking.
  • E-cigs are not renormalizing smoking or serving as a gateway to smoking among
  • cant harm to bystanders. 

Pamela Gorman kicked the smoking habit with E-cigs

Once a smoker herself, Ms. Gorman’s used E-cigarettes to quit smoking.  She is now fighting for the free market principles in the vaping industry.  Like Pamela Gorman, nine million individuals have chosen to put down combustible cigarettes and instead use E-cigarettes.  Gorman put aside cigarettes in 2013, never picked one up again, and would find turning back distasteful.  

It was on June 22, 2009 when the Family Smoking Prevention and Tobacco Control Act (Tobacco Control Act) was signed into law.  It granted the FDA authority to regulate the manufacture, distribution, and marketing of tobacco products, as a way to protect the public and create a healthier future for all Americans. 

Restrictions created by the Tobacco Control Act:

The Tobacco Control Act does not:

The law makes clear that FDA’s role is to regulate and protect the public health, but it places a few restrictions on FDA’s powers. FDA cannot:

  • Require prescriptions to purchase tobacco products.
  • Require the reduction of nicotine yields to zero.
  • Ban face-to-face sales in a particular category of retail outlets.
  • Ban certain classes of tobacco products.

The Deeming Rule 

A big blow came to the vaping industry when almost overnight action taken by the Food and Drug Administration on 04/25/2014, to be made effective August 8, 2016, classified E-cigarettes in the same category as cigarettes (a combustible product) to be regulated like a tobacco product.  Called the Deeming Rule”, overnight E-cigarettes became tobacco rolled in paper.  The Facts on the FDA’s New Tobacco Rule.

According to Ms. Gorman, the vaping industry has a lease on life until August 8, 2018, when the FDA will prohibit 99.9%+ of vapor products on the market,” then all will go dark unless something is done. The new regulations are of concern for the e-cigarette industry, as approval of products offered will cost small companies millions of dollars that they cannot afford. 

If the FDA’s current approach is implemented, producers would be required to remove every single product from the market and submit expensive and burdensome applications for the chance to allow their products to stay on the market after the August 8, 2018 date.  There are 3,200 separate products and each one must go through separate testing that could cost $300,000 per application.  Then too, some of the studies required could take as long as 8 years. The Smoke-Free Alternatives Trade Association says the average vape shop makes $26,000 in monthly sales, which doesn’t leave a lot of room for new costs to be incurred.

As to the effectiveness of E-cigarettes, a report published on the National Center for Biotechnology Information’s website showed that vaping has helped decreased the smoking rates among 21 to 35 year-olds. 

Help solicited from public

Federal level: A new bill (HR 1136) has been introduced by Reps. Tom Cole (R-OK) and Sanford Bishop (D-GA) that would change the predicate date in the FDA’s deeming regulations. The legislation is called the FDA Deeming Authority Clarification Act of 2017.  Changing the predicate date will not prevent the FDA from having approval authority over products introduced after the new predicate date, but it allows all current products to remain on the market without applying for marketing approval. Existing products will still have to meet safety and marketing standards imposed by the agency.  Co-sponsors are needed

Join  CASAA.org (Consumer Advocates for Smokefree Alternatives Association).

Heartland publicationVaping, E-Cigarettes, and Public Policy Toward Alternatives to Smoking by Brad Rodu, DDS; Matthew Glans, and Lindsey Stroud.  Pdf download available. 

The Smoking Status quo is unacceptable.  Although the American anti-smoking campaign is 51 years old, according to the CDC there are 39 million smokers in the U.S., with 480,000 deaths every year in the U.S.

If the status quo continues, in the next 20 years 9.6 million Americans will die from smoking.  All will be adults over 35 years of age.  None of them are now children. 

Thursday, May 21, 2015

Thorner: Vouchers in Waukegan? It’s a real possibility

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Waukegan families learn about the possibility of school choice for their kids | Image Source

By Nancy Thorner –

Last weekend in Chicago, Ted Dabrowski, Vice President of Policy at the Illinois Policy Institute, spoke at a conference hosted by the Franklin Center about his efforts to initiate a voucher program in northwest suburban Waukegan.

Dabrowksi, a passionate supporter of school choice, described the power of school choice as “allowing parents and students to decide which school choice option is the best fit for them.” Milwaukee, Wisconsin was cited as having a long standing voucher program with good results.

Dabrowski rightly referred to the Waukegan public schools an educational tragedy with low-performing schools, also prevalent in other Illinois cities, especially in Chicago. Chicago is home to 45% of the state’s lowest-performing elementary schools and high schools.

Accordingly, half of the state’s lowest-performing schools are located outside of Chicago’s borders in Aurora, East St. Louis, Rockford, Springfield, and Waukegan. Surely the family members of students in these districts want the option to have their loved one attend a higher-quality school, realizing just how important a quality education is for their child’s future.

About Waukegan: With a population of more than 90,000, the depressed city of Waukegan sits on the shores of Lake Michigan just minutes away from the prosperous communities of Lake Bluff and Lake Forest, yet Waukegan is as different as night and day. The collapse of manufacturing led to a massive shift in the city’s demographics. Houses can be bought for almost nothing.  As such, low income families have moved in. Hispanics now make up more than half of Waukegan’s total population, representing nearly 77% students in Waukegan schools.

With the above facts in mind, Dabrowski, in concert with the Illinois Policy Institute, perceived Waukegan — about 40 miles north of Chicago — to be fertile ground to introduce a voucher program.

With $12,000 spent per pupil, only 18% of the students graduate college ready. Additionally, because of the low performance of Waukegan Community Unit School District #60, the Illinois State Board of Education, or lSBE, had designated the school district for a possible takeover.

In introducing his voucher program to Waukegan residents, Ted Dabrowski and his team knocked on 13,000 doors with a petition in hand to educate residents.  Realizing the program had to be packaged in different ways to Hispanics, blacks, and a white minority, his petition advocating school choice was printed in both English and Spanish.

An important observation to make is that the Waukegan voucher does not involve fighting for change at the legislative level, but instead at the grassroots level.  Although the Waukegan voucher initiative is still in its infancy, a recent change in the Waukegan School Board could move the project along.  In the recent 2015 election, several incumbent members were defeated by pro-reform candidates, increasing the potential for school choice.

Givemechoice.org, a delightful short video by the Illinois Policy Institute, can be viewed by clicking on the right side of this link page under the title, “School Choice in Waukegan.” This promotional video has been utilized in Waukegan and other venues to educate the public about the benefits of a voucher program.  The video was likewise shown by Dabrowski to the assembled conference participants to begin his presentation.

Featured in this whimsical, cartoon-designed video is Erica, a freshman at Waukegan High School, which, the video says, is not the best fit for her.  Because her parents lack the money to send Erica to a school where she might blossom, she remains stuck in a school that is determined by her address.  Givemechoice.org conveys a positive messaging of school choice without bashing traditional public schools, for who can oppose giving parents the right to choose?

As far as school choice becoming a legislative reality here in Illinois, it doesn’t look all that promising in the near future.

It was in 2010 when Rev. Meeks, a black minister and an elected representative from Chicago’s inner city, sponsored a Chicago School Choice bill which called for a voucher program. The bill passed in the IL Senate but not the House.  Although many current legislators do believe in school choice, after Meeks’ failure the legislation was never revived to be acted upon.

In expressing how virtual schools  are not for everyone,  Dabrowski described his experience in trying to start a digital learning charter school in January of 2012.  It was to cover eighteen school districts with its aim of getting 1,000 kids to be part of the system under K12 Inc (The  K12 International Academy is a fully accredited, private online K-12 school that liberates students from rigid schedules, classes that move too fast or too slow, bullying, and other factors that stand in the way of success.). Not only did Dabrowski’s proposal fail, but a one-year moratorium was issued against establishing a virtual learning charter school.

The following two arguments were proposed by Dabrowski to consider when confronted by individuals who object to vouchers.

1.  Pubic education is the education of the pubic, no matter what form it takes.
2.  It’s not about what we teach, but how we educate.
The efforts being made by Ted Dabrowski on behalf of Chicago’s Illinois Policy Institute could help students succeed in Waukegan without excuses being made for low income or illegal immigrant students.
As Dabrowski remarked, “Going the grassroots way, engaging families and children hoping for a better education, is the best way to compliment a lobbying effort in Springfield.”
About the conference
 
“Amplify School Choice Chicago” was held May 15-16 at the Sheraton Chicago Hotel and Towers. Sponsored by Franklin Center for Government & Public Integrity, a non-profit organization that promotes a well-informed electorate and a more transparent government, Franklin Center’s new project, “Watchdog Arena”, headquartered in Alexander, Virginia, spearheaded the Chicago event coordinated and led by Josh Kaib.  Mary Ellen Beatty, the Director of Journalism Operations for the Franklin Center, accompanied Mr.Kaib to Chicago.  WatchdogArena.org is a news site powered by informed writers, bloggers, and citizen journalists. It will serve as a national publishing platform for articles that expose waste, fraud and abuse as well as examine a plethora of policy issues at all levels of government.  Other Watchdog Arena events held this year were in Washington, D.C.; Phoenix, Arizona; Denver Colorado; and Atlanta, Georgia.

Speakers heard during Chicago’s two-day Amplify School Choice conference included: Ted Dabrowski, Vice President of Policy at the Illinois Policy Institute; Andrew Broy, President of the Illinois Network of Charter Schools; Bruno Behend, Senior Fellow for Education Policy at the Heartland Institute; Myles Mendoza, Executive Director of One Chance Illinois; and Illinois Representative Jeanne Ives.

The following School Choice options were presented during the conference as alternatives to the traditional “brick and mortar” public schools, especially to serve the needs of children living in poor neighborhood.

  • Traditional public schools
  • Charter schools (publicly-funded, privately run
  • Vouchers (“Scholarships”)
  • Education Savings Accounts (ESAs)
  • Homeschooling
  • Private schools

Participants also participated in a tour of Leo High School led by its president, Patrick Hickey. Leo High School has been providing quality Catholic eduction to young men from Chicago’s South Side since 1926.  100% of its seniors have graduated in the last six years, and more than 96% of them have gone on to college.

Saturday, January 31, 2015

Comments

Mark Weyermuller said…

Nancy

Excellent story

I agree the public sector unions are bad for the country. The teachers unions especially in Chicago and other large cities has destroyed education and raised the cost hurting property owners and businesses.

The unions have also encouraged the unfunded and unsustainable pension systems that must be eliminated today.

Right to work is the answer

Nancy, keep up the good work

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Friday, December 12, 2014

Thorner: Rauner joins Illinois Policy Institute Christmas party

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Gov.-Elect Rauner mingled with Illinois Policy Institute “Gifts of the Free Market” guests

By Nancy Thorner – 

Governor-Elect Bruce Rauner celebrated a “No Cronies Christmas” with the Illinois Policy Institute at its annual “Gifts of the Free Market” party in the Library of its Chicago headquarters Wednesday. The group’s CEO John Tillman and Vice President Kristina Rasmussen, along with the 300 members and friends gathered to celebrate Christmas cheer, enjoy incredible company, and applaud the fantastic gifts of the free market system, the greatest force for good in the human sphere.

To wrap up 2014, the group noted three victories achieved in Illinois: the defeat of three tax-hike proposals, stopping a state-funded ObamaCare exchange, and helping thousands of Illinoisans opt out of union membership.

Governor-elect Bruce Rauner made a guest appearance. Although the Illinois Policy Institute cannot support political candidates, CEO John Tillman, in introducing Bruce Rauner, noted that he had known Rauner since 2008.  Governor-elect Rauner deemed it an honor to be in attendance, offering special thanks to the staff of the Illinois Policy Institute for its leadership in promoting freedom and American principles. Rauner further noted how fortunate Illinois was to be home to an organization such as the Illinois Policy Institute where citizens can get engaged in making a difference.Rauner indicated that he saw being governor more than just a job.  He was here to work for the people of Illinois, humbled and honored to have the opportunity to do so.  Illinois has always been his home, having been born and raised in IL.  For Bruce Rauner, any self-sacrifice was well worth what it might entail, given his desire to bring about a New Day In Illinois come January 12, 2015.  Rauner indicated that he would give his all to restoring Illinois.  Referring to Illinois as the worst run state in this nation,  Bruce Rauner spoke of fighting for limited government, lower taxes, jobs, pension reform and choice in education.  When Bruce Rauner announced to his wife and children that he was running for governor, his youngest daughter expressed this concern, “Please don’t run for governor.  I don’t want you to go to jail.”

After winning his bid for governor in November, Rauner looked at every budget in every department, and found that things were a lot worse than he had originally thought them to be. It was then that governor-elect Rauner requested citizen help and investment to turn around state government.  Presently Rauner is looking for talented individuals — 500 in the next 60 days — who will be true pubic servants.  They must display talent, integrity, and principle and the willingness to treat Illinoisans with respect.  Rauner’s final remarks, “I will run the government from Springfield.”  Unlike Governor Quinn, Rauner will reside in the “The Governor’s Mansion” located in Springfield.  Rauner stayed to shake hands and pose for photos after his comments.

Acknowledgments were extended by CEO John Tillman to Institute’s heroes from 2014.  They included individuals, donors, and activists who took extraordinary steps to make Illinois a freer place to live and work.

Given the still fresh news of Judy Topinka’s unexpected death earlier in the day, within the room everyone was talking about who would replace her as comptroller.

Complimentary food and drinks were provided. Vocalist Lisa Sroka and Tony Jurich on keyboard performed Christmas carols and music of the season early in the evening, which likewise contributed to the festive mood experienced by those who participated in the 2014 Gifts of the Free Market Christmas party hosted by the Illinois Policy Institute.

 

Photos by Mark Weyermuller

Image 2  Image 3

 

 

By Nancy Thorner – 

The federal Dodd-Frank Act is considered by many to be the most significant financial legislation in modern history. Its purpose was to create a sound Economic Foundation to grow jobs, protect consumers, rein in Wall Street and big bonuses, end bailouts,and “too big to fail,” as well as prevent another financial crisis. Years without accountability for Wall Street and big banks had ushered in the worst financial crisis since the Great Depression that resulted in the loss of 8 million jobs, failed businesses, a drop in housing prices, and wiped out personal savings.

It was in response to this 2008 crisis, that the Obama administration urged prompt and full implementation of the “Dodd-Frank Wall Street Reform and Consumer Protection Act,” meant also to serve as an inoculation against future crisis. Dodd-Frank was signed into federal law by President Barack Obama on July 21, 2010 at the Ronald Reagan Building in Washington, D.C.

Because of policy decisions made early on in the implementation process, it became nearly impossible for regulators to enact smart and well-coordinated regulations.  Furthermore, the process of rolling out the regulations became extremely political.

A brief Summary of the Dodd-Frank Wall Street Reform and Consumer Protection Act can be read here.

As part of its Liberty Speaker’s Series, the Illinois Policy Institute, CEO and President John Tillman, hosted a discussion of Dodd Frank and its fallout on Tuesday, October 28, at its headquarters in Chicago, 190 S. LaSalle Street, 40th Floor Library.

On the panel to discuss Dodd-Frank were three individuals who had been appointed to various government commissions to assist in the drafting, implementation, and oversight of the Dodd-Frank Act.

Paul Atkins, chief executive of Patomak Global Partners, LLC, was appointed by Congress and served from 2009 to 2010 as a member of the Congressional Oversight Panel for the Troubled Asset Relief Program (TARP). Atkins was then asked to serve on FSOCK, a creation of the Dodd-Frank Act and a uniquely powerful body within the executive branch of the US government.

It consists of 15 members, of which 9 are the chairs of other federal financial regulatory agencies charged with identifying and responding to emerging risks throughout the financial system (to prick the financial bubbles before they happen).  The Secretary of the Treasury serves as the Chairperson of the Council.

In discussing Dodd-Frank, Mr. Atkins warned that whenever a bill has “consumer” and “protection” in it, watch your wallets. Atkins called the 2,319 page bill basically rubbish.  Not unlike Obamacare, Dodd-Frank was pushed through Congress with no one knowing what was in the bill until after it had passed.  While Dodd-Frank created thirteen new offices and agencies, the government only got rid of one agency.  Dodd-Frank conveys the message that government knows best under the assumption that if enough smart people are assembled in the same room with enough information, they can do better than the free market.

Speaking about SIFI (Systemically Important Financial Institution) Institution), the $50 billion in consolidated assets threshold at which bank holding companies are subject to enhanced prudential supervision was called science fiction by Atkns. The $50 billion SIFI threshold sweeps in too many small banks that don’t pose a systemic threat, thus diluting attention from the big banks that do.

Jill E. Sommers served as a CFTC commissioner (U.S. Commodity Futures Trading Commission) for five years, from 2008 to 2013, one of only two Republicans.  The mission of the CFTC is to protect market participants and the public from fraud, manipulation, abusive practices and systemic risk related to derivatives — both future and swaps — and to foster transparent, open competitive and financially sound markets.

Ms. Sommers, as one five CFTC members, spent more than two years writing the Dodd-Frank Act rules to bolster oversight of the $639 trillion swaps market and the futures industry following a shortfall in customer funds at the failed brokerage MF Global Holdings Ltd.  Criminal or civil charges have yet to be filed against MF Global after the company left a $l.6 billion shortfall in customer funds when it filed for bankruptcy in October of 2010.

Sommers expressed concern over the agency’s approach to completing Dodd-Frank rules, citing a lack of coordination with the SEC and oversea regulators, that the agency hadn’t adequately considered public comments on proposed rules, and that an analysis of regulatory costs and benefits was lacking.  Industry needed relief from rules that were impossible to employ when first instigated.

Jill Sommers vented her frustration as to the role of the oversight and regulation of swap markets in a speech delivered before the Cadwalader Energy Conference in October of 2012, the day before the definition of “swap” became effective and compliance rules for swap deals kicked in.  According to Sommers, if dozens of requests weren’t granted for relief, the market could be damaged and irreparable harm could follow for market participants.  Sommers bemoans the fact that many of the rules finalized were vague and subject to legal challenges, which has resulted in real, unintended and very costly consequences.  Sommers has little confidence that the rules already in place have a chance of withstanding the test of times.  She instead believes that the commission will be consumed over the next few years using valuable resources to rewrite the rules we knew or should have known would not work in the first place.

Christopher Giancarlo was confirmed by unanimous consent of the U.S. Senate on June 3, 2014.  On June 16 he was sworn in as a CFTC Commissioner whose purpose is to protect market participants and the public from fraud, manipulation, abusive practices and systemic risk related to derivatives (both futures and swaps) and to foster transparent, open, competitive and financially sound markets.  Giancarlo’s term expires in April 2019.  Giancarlo took the place vacated by Jill Sommers on the CFTC.  His work on the Commodity Futures Trading Commission might be defined as the clean-up phase.  Giancarlo considers the Futures and Swap markets important to a thriving economy.  Of importance is that the government doesn’t interfere.  Food and energy prices are low because we don’t have government setting the price.

Mr. Giancarlo defined the Swap Market as looking more like the bond market, and the Futures Market more like the stock market.  The Swap Market, in comparison to the Futures Market, operates as controlled over-the-counter growth.  The Swap Market is now a global market.

On Sept. 9  Giancarlo gave the Keynote Address to the Global Forum for Derivatives Markets (35th Annual Burgenstock Conference) in Geneva, Switzerland.  He began his remarks by indicating that they would be his own and did not necessarily constitute the views of his fellow CFTC Commissioners or its staff.

Giancarlo posed three questions, although he realized that many in attendance already knew the answers and that they didn’t inspire confidence in the future.

  1. Are we fully honoring the commitment to coordinate our efforts to reform the derivatives market?
  2. Are we avoiding protectionism?
  3. Or are we building new 21th century protectionism around regional financial markets, especially in swaps and futures?

Giancarlo further indicated that “this lack of coordination in swaps clearing does not exist in a vacuum.  It is preceded by an uncoordinated approach in formulating the regulations of swap trading.”

The fourth anniversary of the signing of the Dodd-Frank was noted this summer on July 21. Most Americans think more regulation is the answer and that Dodd-Frank solved the problems causing the crisis, even believing that the law didn’t go far enough to punish private firms responsible for the crisis.  If anything, Dodd-Frank has made the financial system even more fragile than it was prior to the 2008 crisis.

As concluded in a committee staff report titled, “Failing to End Too Big to Fail: An Assessment of the Dodd-Frank Act Four Years Later’, released just days before the fourth anniversary signing of the Dodd-Frank Act by President Obama in 2010, the Dodd-Frank Act did not end “too big to fail” as the law’s supporters claim, but actually had the opposite effect of further entrenching “too big to fail” as official government policy.  According to Oversight and Investigation Subcommittee Committee Chairman Rep. McHenry, “Rather than institute market discipline and a clear rules-based regime, four years later Dodd-Frank’s failed policies have only worsened the risks within the financial system and recklessly handed financial regulators a blank check for taxpayer-funded bailouts.”  The report is available here.

Another article worth reading by Calomiris and Meltzer was published on Feb. 12, 2014 in the WSJ: How Dodd-Frank Doubles Down on ‘Big to Fail’.  It relates how Dodd-Frank doesn’t address problems that led to the financial crisis of 2008.

It remains to be seen if Mitch McConnell does controls the U.S. Senate in 2015, whether the Republican Party will push for full or partial repeal of Dodd-Frank.  In the meantime, Commission J. Christopher Giancarlo has his work cut out for him as a CFTC Commissioner.

 

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L to R: Ted Dabrowski, State Rep. Tom Morrison, Joe Bast

By Nancy Thorner – 

Last week was National School Choice Week. Negative vibes and views about school choice whether achieved through vouchers, charter schools, Educational Savings Accounts, or by other means are quite common. Three years ago a study by Greg Forster, PhD used available empirical studies to show that vouchers improve outcomes for both participants and public schools in A Win-Win Solution: The Empirical Evidence on School Choice.

It’s easy to understand how participants would benefit by giving them more options, but schools likewise benefit. Vouchers introduce healthy incentives for public schools to improve. Forster’s 2011 report indicates how 11 out of the 12 gold-standard studies on school choice found that choice improves student outcomes; the other study found neither a negative nor positive impact (Friedman Foundation for Educational Excellence, April 2013).

Chicago’s celebration of School Choice Week was commemorated at a joint venture held by The Heartland Institute and the Illinois Policy Institute at an evening event on Thursday, January 30, at the headquarters of The Heartland Institute, One South Wacker Drive #2740. Joe Bast is President and CEO of The Heartland Institute.  John Tillman heads the Illinois Policy Institute as its CEO.  Moderator was Bruno Behrend, Senior fellow for education policy, The Heartland Institute.  Members of the panel were Joseph Bast, Heartland’s president; Tom Morrison, Illinois State Representative (R-54); and Ted Dabrowski, Vice President of Policy, Illinois Policy Institute.  All have expertise in education policy.

The discussion centered on how to improve our schools and give children a chance at a better future.  There was ample time provided for attendees to direct questions to the three panelists.  Free school choice educational materials was on hand to help spread the reform message, as was the book “What American Can Learn from School Choice in Other Countries,” which presents a wealth of information and insights into how parents in many other countries have more freedom of choice in education than Americans do and without the financial penalty.

In his opening statement moderator Burno Behrend spoke of the need to transform instead of reform, questioning why school districts and administrators even have to exist.  The panelists were given a series of questions by Behrend for general response. At other times a specific question was directed to only one of the panelists for his consideration.

The following article is worthy of consideration prior to the responses of the three panelists when quizzed by Burno Behrend about the use of technology to advance education.

Frederick Hess and Bror Saxberg in their joint article published in the SPRING 2014/ VOL. 14. NO 2 of Education Next, “Schooling Rebooted: Turning educators into learning engineers”, advances the understanding of technology as a tool rather than some kind of secret sauce. . . The most important thing is the vision of what you’re going to do.  Once you’ve got vision, there are various kinds of support that are needed in terms of curriculum and infrastructure.  Trying to backfill technology into existing systems can be difficult. 

All three panelists spoke favorably about the use of technology in education.  Ted Dabrowski is convinced that technology will break down the status quo in education, allowing for more innovation.  Tom Morrison spoke of the use of tablets enabling students to work at their own pace with a teacher available to check that students are doing their assignment, while Joe Bast believes that a technology revolution is already taking place outside of the school in virtual learning.

Selected statements made by Ted Dabrowski, Tom Morrison, and Joe Bast on a variety of subjects:

Ted Dabrowski –

  • Children who are forced to remain in failing schools must be turned into heroes and not the victims they are perceived to be by those resisting vouchers or school choice.
  • Four of 100 kids in Illinois’ worst schools won’t be college ready, meaning 96% aren’t going to make it.
  • Make the case for vouchers by 1) doing a better job of promoting the money case, 2) having an action plan when the anti-choice side fights back with massive amounts of money, and 3) thinking more of being in a constant campaign mode as is the practice of unions.
  • The pro school choice side is lousy at building coalitions.  We miss opportunities by not partnering with parents who have children in the worst schools or who do want a choice.  There are those even in suburban schools who would prefer to send their children to a private school. [Moderator Behrend raised the issue of how to overcome the stigma of poor kids attending mostly white suburban schools.]

State Rep. Tom Morrison (R-Arlington Heights) –

  • Taxpayers are no longer willing to keep paying higher tax rates even if guaranteed a better educational outcome, in a realization that throwing more money at education is not the answer.
  • The term “voucher” has gotten to be a bad word and doesn’t sell well with so-called soccer moms.  Might be better to call them “opportunity scholarships” instead, where the money follows the child.
  • In crafting a bill for Educational Savings Accounts, a family would receive the money and could choose how to spend it. Shopping around is possible as there is no need to spend the money all at one place. Any bill would need to stipulate non-means testing and a further requirement for qualification at 1-1/2 times the poverty level. Without these factors the legislation would be difficult to sell to legislators.
  • Raised the question of whether it’s fair to force kids in Chicago to attend faulty schools?

Joe Bast –

  • People in the front lines are the last ones to realize how much progress has taken place in school choice:  1.6 million children are attending charter schools. 250,000 are attending private school through vouchers.
  • The other side has lots of money.  We are outspent 100 to 1.  We must win the political argument and the rest will fall into place.
  • In answer to Ted Dabrowski who suggested that every child might be given the opportunity of school choice, Bast cited the lack of money and of political support for Ted’s universal proposal.
  • Teacher burn out does happen.  Burned out teachers who remain in the teaching profession, lured to stay by generous pension, do just as well in their teaching as do younger and more enthusiastic teachers. How so?  The really talented teacher leave the teaching profession to work in other fields, leaving in its wake the burned out teachers.
  • Believes the next governor will sign on to vouchers or choice legislation.  Illinois is way out of line with other states.

Question and Answer Highlights –

  • Jeff Berkowitz of Chicago Now spoke about the importance of keeping the message simple.  As related by Berkowitz, there are 15,000 students in the Chicago Public Schools.  Unless we get 30 senators to vote for voucher legislation it won’t happen.  At the end of the day it will be a pitchfork political battle with the fierce educational lobby.  Whether school vouchers or pension reform, it’s all about money which is the driving force.  When you can’t get the money, what do you do?  Said Berkowitz:  If the right message (public policy) is presented to get the people to move, the money will be found.  Legislators must then be convinced to vote the right way.  A better job of messaging is needed.
  • Education doesn’t appear anywhere in the Constitution because the Founders didn’t want the government to manipulate schools.
  • Common Core with its standards for each grade level might sound good to many.  This presents the opportunity to show how ineffective Common Core actually is with government centralization. Common Core was referred to as “Obamacore.”
  • Schools are to serve the children; children are their customers.
  • The best schools in Chicago are charter schools.  Even when located in areas with the same demographics, children fare better than in a traditional school setting.
  • There is 60% support for school vouchers.  The pubic gets it. It’s all about politics!
  • All total there are 6.3 million individuals in public school education.  Half of the system (3.2 million) is made up of pricy and often unnecessary administrators.

Moderator Behrend’s closing thoughts:

The envelope must be pushed. Common Core was depicted as the “last gasp of centralized, top-down education.”  And why doesn’t centralization work?  Because one size fits all just doesn’t work.

Two dates to consider saving:

1.  Tuesday, February 11 – Tevi Troy will present a lecture on his book, What Jefferson Read, Ike Watched, and Obama Tweeted:  200 Years of Popular Culture in the White House.  To register call 312/377-4000 or visit heartland.org.

2.  Friday, September 12 – Michelle Malkin has been engaged to be the Keynote Speaker at The Heartland Institute’s 30th Anniversary Benefit Dinner. Visit: benefit. Heartland.org or contact Gwendalyn Carver at gcarver@heartland.org or call 312/377-4000.

Monday, February 03, 2014 at 09:30 AM | Permalink

 

 

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John Tillman, CEO of The Illinois Policy Institute, welcomed economist Don Boudreaux to Chicago on Thursday, January 23, as the first speaker of its Liberty Speakers Series scheduled for the first half of 2014. Visit illinoispolicy.org/events to see the full lineup of speakers and how to RSVP.

Tillman heard Boudreaux speak 10 years ago at an event in Canada, at which time Boudreaux made a powerful impression on Tillman when speaking about liberty. It was this encounter after 10 years had elapsed that prompted Tillman to invite Don Boudreaux to speak on this topic: “What’s in a wage? Why income doesn’t tell the whole story.”

Introduced by John Tillman, Boudreaux is a senior fellow at the Mercatus Center and a professor of economics and former economics department chairman at George Mason University. He holds the Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus. His specialization is globalization and trade, law and economics and antitrust economics.

Mr. Boudreaux writes the blog Cafe Hayek (cafehayek.com) with Russell Roberts and pens a regular column on economics for the Pittsburgh Tribune-Review. Out of Boudreaux’s blog posts at Cafe Havek evolved his 2012 book: Hypocrits & Half-Wits: A Daily Dose of Sanity from Café Hayek. Boudreaux has appeared numerous times on John Stossel’s Fox show to discuss a range of economic issues.

Don Boudreaux in public has criticized Noble Laureate Economist Paul Krugman, stating that Krugman frequently ‘commits elementary errors’ when discussing economics. Boudreaux is recognized as a libertarian.

Following the impressive introductory remarks by John Tillman, Mr. Boudreaux discussed how the quantities and qualities of what ordinary Americans consume are closer to rich Americans than they were in past decades, further explaining what that phenomena means for real inequality in America today. Boudreaux’s premise: America’s middle class has not stagnated economically since the 1970’s.

Mr. Boudreaux disagrees with President Obama’s intent to make income inequality into a political issue, believing as the president does that income inequality has declined in America with the rich benefiting the most. But given that an item’s performance is far superior to the 70’s product and at a lesser cost, quality of life has improved for the poor and middle class since the ’70’s.

Four years ago Robert Reich, Clinton’s Labor Secretary, made this not uncommon statement that dovetails with President Obama’s embrace of income inequality that calls for wealth redistribution.

After three decades of flat wages during which almost all the gains of growth have gone to the very top, the middle class no longer has the buying power to keep the economy going.

Using a Chicago connection, Don Boudreaux through a slide presentation displayed pages randomly chosen from a 1975 Sears catalog showing an item relative to cost and the number of hours needed to purchase that item in terms of 1975 work hours, followed by a comparable item and its cost to purchase relative to work hours needed in 2014. (Note: Mr. Boudreaux purchased the 1975 Sears catalog off Amazon for $.05 cents, but bemoaned how overnight shipping of the catalog set him back $40 plus dollars.)

Items chosen randomly by Boudreaux for comparing work hours needed to purchase an item in 1975 in contrast to a similar item purchased in 2013:

Exercise Machine: 15.8 work hours to buy in 1975 at $74.95. 5.4 work hours to purchase a finer and more streamlined exercise machine in 2013.

Four drawer metal filing cabinet: 44 work hours to buy in 1975 at $207.95. Only one fourth of the time (11 hours) needed in 2013.

Microwave Oven: 93 work hours to buy in 1975 at $440. A similar size would require 4 hours of work time in 2013.

Color TV: 158.6 hours or nearly a month of work hours in 1975 at $749.95 for the best TV available, but with no remote and only 4 channels. 17.1 hours of work time in 2013, remotes are now standard and there are an array of channels and other perks built into the set.

Notable is that no item was more expensive today to purchase than it was in 1975, even adjusted for inflation.

Not only do the middle class live better today, but the poor — using the criteria of whether a household has a dishwasher, central air conditioner, colored TV, a stove, and a refrigeration to assess judgment — likewise do. Mr. Boudreaux found that in comparing All households in 1971, Poor Households in 1984, and Poor households in 2005, that poor households in 2005 had more of the 6 criteria items than all households did in 1971.

Mr. Boudreaux did admit that the Consumer Price Index average wage when adjusted for inflation has remained about the same for non-supervisory wages since at least 1964, the first year the BLS started its record keeping.

Boudreaux then proceeded to present three reasons why measurement of wages doesn’t necessarily support a narrative of middle-class stagnation or a lone basis on which to judge the living standards of the American people.

1. Consider the improvement in product quality and variety available today at less cost.

2. Consider the rise over the past few decades in the portion of worker pay taken as (nontaxable) fringe benefits.

3. Consider how over the past three decades the average wage has been held down but the great increase of women and immigrants into the workforce. While lesser-skilled workers entering the workforce in any given year were paid wages lower than the average, the measured statistic of “average hourly wage” has remained unchanged or stagnant over the years, even though real wages of actual flesh-and-blood workers employed in any given year rose. In the same article, The Myth of a Stagnant Middle Class, published in the Wall Street Journal on January 23, 2013, Don Boudreaux wrote:

According to the Bureau of Economic Analysis, spending by households on many of life’s “basics” — food at home, automobiles, clothing and footwear, household furnishing and equipment, and housing and utilities — fell from 53% of disposable income in 1950 to 44% in 1970 to 32% today.

Why do people perceive themselves to be worse off, when what ordinary Americans consume is closer to that of rich Americans (consider the same electronic products used by both), and that it’s unlikely that an average American would trade his wages and benefits in 2013 for the same real wages with lower fringe benefits, higher prices, a limited selection, and inferior products to those available in the 19450s or 1970’s?

According to Don Boudreaux: Many of the improvement made in products are so small that they are masked in the largeness of numbers. Consider the bag of celery which in 70’s didn’t have a top that could be resealed for freshness. Then too, what we hear influences thinking. Being told that stagnation is present by our politicians and through the media, people just accept and believe. It matters not that facts to counter such thinking are staring them in the face.

In closing Mr. Boudreaux noted his second Chicago connection, the just announced decision to shutter the Sears store in the Loop, after which John Tillman presented Don Boudreaux with a pen to honor his participation in the Illinois Policy Institute Liberty Speaker Series for 2014. Tillman joked how Boudreaux would have to present three lectures to earn the pen.

John Tillman, as CEO of the Illinois Policy Institute, expressed excitement about 2014, (illinoispolicy.org/about-us/) calling it a pivotal year. Believing as Tillman does that free enterprise is the greatest force for good, this force can work to help lift up the poor and the disadvantaged.

Tillman described his positive outlook for Illinois in terms of the fall of the Berlin Wall in September, 1988. It was the general consensus that the wall would never come down; however, things were already in motion to make it happen prior to the fall of the wall.

To paraphrase Tillman, there are similar undercurrents present in Illinois. Even Speaker Mike Madigan is sensing that change. Republicans must seize the moral high ground in making the argument about the far reaching tentacles of liberty. Tillman asked for our help to possibly make Illinois the biggest story in this November’s election.

Wednesday, September 25, 2013

Detroit-zombie01a

By Nancy Thorner – 

After more than 40 years of liberal Democrat control, Detroit declared bankruptcy. Some define insanity as continuing the same behavior and expecting different results. Yet, that is exactly what Democrat politicians are advocating as a solution for Detroit, more bailouts! Capitulating to ridiculous union demands, generous welfare spending, high taxation, excessive government interference and political corruption brought Detroit to destruction. More of the same won’t save it.

A must read is this bleak account about Detroit in the aftermath of an August visit by Ted Dabrowski, Vice President of Policy at the Illinois Policy Institute, and his friend and colleague, Paul Kersey, a Detroit native and Director of Labor Policy at the Illinois Policy Institute. The story ends with these words: The city [Detroit] relied on state and federal subsidies to keep its broken program afloat  Detroit is now about reforms it could’ve andshould’ve passed. Illinois needs to avoid that ending [Detroit’s]. It has to avoid the temptation to pass fake and meaningless reforms that perpetuate its crisis. Instead, it needs to go for the big bold reforms that will keep our state great.

The fall of Detroit is a story that must be told to prevent Chicago from following the same course as Detroit.  On July 18th the city filed for the largest municipal bankruptcy in U.S. history after decades of out-migration, economic stagnation and urban decay.

The Illinois Policy Institute met this challenge on September 18, with an event held at the Union League Club in Chicago.  Three experts from Detroit and Chicago discussed the policies and economic factors that led to Detroit’s bankruptcy and what Chicago and other cities can learn from the Motor City.

Panelists included:

  • Henry Payne, an editorial cartoonist, editorial writer, and weekly columnist for The Detroit News
  • Jim Luorio, Managing Director, TJM Institutional Services and CNBC Analyst
  • Bill Johnson, former Director of Administration & Budget, Wayne County Commission
  • Moderator, John Tillman, CEO and President of the Illinois Policy Institute

Jonathan Greenberg, Vice President of External Relations at the Illinois Policy, introduced the three distinguished guests. Prefacing his introductions, Greenberg reiterated what has become a dictum of the Illinois Policy Institute: “Policy changes Lives – Just as good policy improves communities, bad policy destroys families and communities.”

While Detroit was once an industrial power house and home to millions, two-thirds of its inhabitants have left. Remaining is a city desperately poor and where for entire blocks there exists a waste land of nothingness.

Moderator John Tillman initiated the discussion with his account of having grown up in Detroit by first providing the following “food -for-thought-what- if” statement as a backdrop for what was to follow:  “Think of dialing 911 for a family member who has had a heart attack and waiting 60 minutes for an ambulance to show up.” Of course this would be unacceptable and perhaps fatal. Fundamental services must be provided for city dwellers or they will leave. Tillman spoke of going to Tiger Stadium in 1978.  It was pretty rough then, but when returning in 1979 he found that the hotel he had stayed in had become a Salvation Army facility.  The death spiral had begun.

It was then that Bill Johnson spoke about a sequence of four events which led to Detroit’s downfall.  According to Mr. Johnson, the downfall of Detroit was a long process. After World II Detroit was the destination for many blacks, as was the city of Chicago. While Detroit was once known as one of the wealthiest cities, it is now one of the poorest. The same applies in measuring Detroit’s record of safety.

  • The 1967 riots, which were about looting and burning and nothing else, scared the hell out of white people initiating a stampede to the suburbs.
  • The forced school busing of 1970 enacted to segregate both blacks and whites, which went on for a number of years, forced more whites out of Detroit.
  • The election of Mayor Coleman Young in 1974, mayor for twenty years until 1994, bought into office policies aimed at creating a level playing field. Once again white people were scared and more exited to the suburbs.
  • Coleman vs. the U.S. in 1980 gave Coleman the authority to impose a 3-1/2 % income tax in the city of Detroit. The accumulated tax burden to live in Detroit was more than many residents were able to pay, so they moved to greener pastures.

Being a black himself, Johnson made this observation: Voters kept electing individuals who are too ignorant or who have had little experience in running a city or anything. During Mayor Coleman’s time a business group did bring a plan for revitalization of Detroit, but Coleman wasn’t going to allow a group of white people living in the suburbs to tell him how to run his city.

Johnson noted how in 1960 Detroit had 200,000 school children. Today there are 50,000 or less students, and the schools are in shambles offering little hope or opportunity. There is not enough money in the state to fix Detroit’s schools.

Chicago and the entire state of Illinois, not unlike Detroit’s mismanagement, are papering over deficits year after year. African-Americans also have left Chicago, 200,000 strong.

Detroit stayed afloat instead of collapsing years earlier because of the anti-poverty programs enacted by the administration of President Lyndon Johnson, which included a whole host of programs.  Detroit could no longer afford to keep the programs going after the money dried up.  As to Johnson’s anti-poverty programs, they didn’t rid Detroit of poverty or even reduce it.  The poverty level remained the same as it was prior to Johnson’s Great Society programs.

With a question about Common Core, Johnson spoke about his involvement with the monopoly that is Common Core as the provider of educational programs and services. Teacher unions was described as the most radical union in this nation.  The only way to improve education is through competition. Johnson likes charter schools where money follows the child.  A bright spot in Detroit is that there is a lively charter school movement.  Young people are moving back, from which will develop young families who will feel comfortable to call Detroit their home.

Adding to the discussion, Henry Payne expressed his insights.  Mr. Payne moved to Detroit in 1999, so he qualifies as a relative new-comer.  His move was prompted by a natural fascination with the city as home to the auto industry.  Payne described Detroit as the most dysfunctional city in America.  “It is folly to think that cities are not immune from what happened in Detroit.”  There was expressed reservation by Payne in feeling optimistic about Detroit.

The tipping point came for Detroit when its middle class was lost.  With it went the inability to sustain Detroit financially.  Without a taxing body, money wasn’t  available to provide adequate fire or police protection for Detroit residents.  Detroit’s murder rate crept up to 52  per 100,000.  In 1980 New York City was likewise facing severe problems and on the verge of bankruptcy, with a murder rate of 24 murders per 100,000, but Mayor Rudy Giuliani’s policies saved the middle class from moving out of the city.  Now New York City’s murder rate is 6 per 100,000.

Although difficult to believe when Chicago is commonly referred to as the nation’s murder capital, Chicago’s per capital murder rate, although lower than in other cities with populations above 40,000, in 2011 — the last year records were tabulated comparing cities — the FBI ranked Chicago behind over three dozen other American cities with a per capita murder rate of 15.98 per 100,000 residents.

As safety is paramount to the middle class and for the wealthy, more of these individuals might be convinced to flee Chicago?  Also, as pension obligations continue to grow they will begin to squeeze out financial support needed to provide fundamental services.  The same is being experienced in most large cities.

Henry Payne suggested writing Letters to the Editor or showing up at meetings with Mayor Emmanuel and the City Council.  Indicated by Payne is that Chicago has had pretty good leadership over time.  Detroit is now being forced to do with pensions what it should have done years ago.  Regarding its valuable three billion art collection, the city refused to put its collection into a non-profit foundation.  Detroit’s art collection could now be on the chopping block.

Jim Luorio had far less to say than did the other two experts, Bill Johnson and Henry Payne, but his comments were just a pertinent, and maybe even more so, because they dealt with the subject of why fund markets matter.  Although a somewhat difficult subject to understand, the main thrust of Luorio’s comments were two fold:  1)  Anticipated revenue of pension fund investments many times fall below expectations, thereby creating a further shortfall of funds available for distribution.   2)  The downgrade of Chicago’s credit rating three times over has created a reluctance to loan Chicago money.  This has resulted in a higher borrowing rate for money, with an increased burden to pay off  bonds carrying the higher interest rate.  This is money that could be put to better use in Chicago.

In rounding out the discussion, John Tillman expressed optimism, as he is prone to do.  While admitting that Chicago’s financial crisis is worse than Detroit’s, he countered by saying that Chicago has not yet lost its middle class.

Three articles posted recently on Illinois Review, one by Yahoo Finance and two by Ted Dabrowski, has not given me the confidence expressed by John Tillman.

1.  Illinois has the most threatened state pension plan and is the most poorly funded state in the U.S., as Yahoo Finance reminded in a post on Monday, September 23.
2.  According to Ted Dabrowski, Vice President of Policy at the Illinois Policy Institute, Illinois is on the hook to pay out $620 billion in pension benefits over the next 32 years.

3.  A second article by Ted Dabrowski spoke of Illinois as having the nation’s 2nd highest unemployment for six straight months with a figure remaining above 600,000.  The U-6 rate, which includes not just unemployed, but also people working part time while seeking full-time work, as well as unemployed people who haven’t looked for work in the past four months but have sought employment in the past year, sets the figure at 16.1 percent.  More than 1 million Illinoisans are underemployed or underemployed.

You must now be the judge.  Can Chicago be saved?

Wednesday, September 25, 2013 at 05:51 PM | Permalink