Kansas and Wichita quick takes: Monday May 2, 2011

Shale gas to be topic in Wichita. This Friday (May 6) the Wichita Pachyderm Club features Malcolm C. Harris, Sr., Ph.D., Professor of Finance, Division of Business and Information Technology, Friends University, speaking on the topic: “Shale gas: Our energy future?” Harris also blogs at Mammon Among Friends. … “Shale gas” refers to a relatively new method of extracting natural gas, as reported in the Wall Street Journal: “We’ve always known the potential of shale; we just didn’t have the technology to get to it at a low enough cost. Now new techniques have driven down the price tag — and set the stage for shale gas to become what will be the game-changing resource of the decade. I have been studying the energy markets for 30 years, and I am convinced that shale gas will revolutionize the industry — and change the world — in the coming decades. It will prevent the rise of any new cartels. It will alter geopolitics. And it will slow the transition to renewable energy.” … Critics like the Center for American Progress warn of the dangers: “The process, which involves injecting huge volumes of water mixed with sand and chemicals deep underground to fracture rock formations and release trapped gas, is becoming increasingly controversial, with concerns about possible contamination of underground drinking water supplies alongside revelations of surface water contamination by the wastewater that is a byproduct of drilling.” … Upcoming speakers: On May 13, Craig Burns and Glenn Edwards of Security 1st Title Co. on the topic “Real Estate Transactions, Ownership, Title, and Tales From the Trenches.” On May 20, Rob Siedleckie, Secretary, Kansas Social Rehabilitation Services (SRS) on the topic “The SRS and Initiatives.” On May 27, Todd Tiahrt, Former 4th District Congressman on the topic “Outsourcing our National Security — How the Pentagon is Working Against Us”.

Wichita City Council this week. On Tuesday the Wichita City Council will decide whether to spend $316,000 on capital improvements to the Wichita Ice Center. Improvements will include “HVAC system upgrades, new flooring, signage, interior and exterior painting, upgrades to the locker room facilities, ice skates, and a new point of sale system that will track program revenues and attendance.” This spending was already agreed to in a contract with the new managers of the facility, so approval seems certain. … On the consent agendas one item proposes to spend $36,087 on study, design and bid services to replace the passenger loading bridges at the Wichita airport. In 2003 the city budgeted $4 million for this project, but it was put on hold due to plans for a new terminal building. Now the city wants to go ahead and replace the existing bridges. Being on a consent agenda, this item will receive no discussion unless a council members wants to “pull” it for individual discussion.

Williams on the role of race in economics. Thomas Sowell reviewing a new book by Walter E. Williams, Race and Economics: How Much Can Be Blamed on Discrimination?: “Walter Williams fans are in for a treat — and people who are not Walter Williams fans are in for a shock – when they read his latest book, Race and Economics. It is a demolition derby on paper, as Professor Williams destroys one after another of the popular fallacies about the role of race in the American economy. … In recent times, we have gotten so used to young blacks having sky-high unemployment rates that it will be a shock to many readers of Walter Williams’ Race and Economics to discover that the unemployment rate of young blacks was once only a fraction of what it has been in recent decades. And, in earlier times, it was not very different from the unemployment rate of young whites. The factors that cause the most noise in the media are not the ones that have the most impact on minorities. This book will be eye-opening for those who want their eyes opened. But those with the liberal vision of the world are unlikely to read it at all.” … An interview with the author is available at Lew Rockwell interviews Walter Williams on his two new books.

Spending cuts preferred to taxes. A survey of Kansas voters conducted on behalf of the Kansas Chamber of Commerce found widespread support for cutting spending rather than raising taxes as the way to balance the Kansas budget. Support was also found for cutting state worker salaries, or reducing the number of state employees. See Kansas Chamber finds voters favor cuts, not tax increases to balance budget.

Except some prefer taxes. A coalition of groups is advocating for more revenue so that Kansas government can spend more. Some of the groups in the coalition advocate for those who truly can’t help themselves. But it’s no coincidence that the spokesman for the group is Mark Desetti, who is the lobbyist for Kansas National Education Association (KNEA), the state’s teachers union. Other school spending advocacy groups are prominent members of this coalition. Fortunately, many are starting to realize that the aims of school spending advocates like the teachers unions are not in the best interest of students, as shown below.

Teacher evaluation systems. Brookings Institution: “Of all the things that are under the control of policymakers and schools, teacher quality is at the top of the list in terms of impact on student achievement, and so there is a great interest in evaluating teacher performance.” Says Russ Whitehurst, director of the Brown Center on Education Policy: “If you’re unlucky enough to get a bad teacher three years in a row, you’re basically ruined — that’s 30 percentile points, it’s hard to recover from that. So we know that teachers are important, and we know that for the first time for reasons other than intuition.” Brookings is working on systems to evaluate the systems that school districts use to evaluate teachers, so that state and federal money can be distributed fairly, as a way to incentivize good teacher evaluation systems. … According to National Council on Teacher Quality, Kansas ranks very low among the states in policies relating to teacher effectiveness. For example, the report states: “Fails to make evidence of student learning the preponderant criterion in teacher evaluations.” … The prospects for reform in teacher evaluation and quality in Kansas are not good. Proposals that would improve Kansas in this regard have not been discussed — at least meaningfully — in this year’s session of the Kansas legislature. For example, this year the Legislature spent quite a bit of time on a policy where the period before teachers are awarded tenure could be increased from three to five years in certain circumstances. This is what qualifies as “school reform” in Kansas. Remember, Kansas ranks very low in policies that promote teacher quality. Tinkering with the policy on teacher tenure is not going to improve our teacher quality, as tenure is a system that ought to be eliminated. In Kansas the teachers union is Kansas National Education Association (KNEA), and it works overtime to block meaningful reform of our state’s schools.

Misguided efforts to improve capitalism. From Eamonn Butler: Ludwig von Mises — A Primer on how efforts by government to intervene in markets fail: Indeed, our efforts to manipulate the market economy, and make it conform to a particular vision, are invariably damaging. Capitalism is superbly good at boosting the general standard of living by encouraging people to specialise and build up the capital goods that raise the productivity of human effort. But when we tax or regulate this system, and make it less worthwhile to invest in and own capital goods, then capitalism can falter. But that is not a “crisis of capitalism,” explains Mises. It is a crisis of interventionism: a failure of policies that are intended to “improve” capitalism but in fact strangle it. One common political ideal, for example, is “economic democracy” — the idea that everyone should count in the production and allocation of economic goods, not just a few capitalist producers. But according to Mises, we already have economic democracy. In competitive markets, producers are necessarily ruled by the wishes of consumers. Unless they satisfy the demands of consumers, they will lose trade and go out of business. If we interfere in this popular choice, we will end up satisfying only the agenda of some particular political group. A more modest notion is that producers’ profits should be taxed so that they can be distributed more widely throughout the population. But while this shares out the rewards of success, says Mises, it leaves business burdened with the whole cost of failure. That is an imbalance that can only depress people’s willingness to take business risks and must thereby depress economic life itself.


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