July 2010 • Volume 17 Number 7 ALSO IN THIS ISSUE Slouching towards socialism Page 4 Are families moving to Oklahoma? Page 8 How school choice came to Oklahoma Page 10 Higher education’s bubble is about to burst Page 12 Wherein the DHS budget shrinks and your family budget grows Page 14 Perspective July 2010 Vol. 17, No. 7 I N C A S E Y O U M I S S E D Brandon Dutcher I T Brandon Dutcher .................................. Editor Perspective is published monthly by the Oklahoma Council of Public Affairs, Inc., an independent public policy organi- zation. OCPA formulates and promotes public policy research and analysis consistent with the principles of free A ccording to the Tax Foundation, Oklahoma ranks 19th highest among the 50 states in state and local tax burden as a percentage of state income. Source: http://bit.ly/cgzjn3 enterprise and limited government. OCPA economist J. Scott Moody says Oklahoma’s pension liability may OCPA Trustees Blake Arnold Henry F. Kane . equal up to 40 percent of the state’s GDP bit.ly/cXsiMm Oklahoma City Bartlesville Liberal policy analyst David Blatt says the passage of State Question Mary Lou Avery Robert Kane Oklahoma City Tulsa 744 would create a substantial funding crisis for public services in Okla- Lee J. Baxter Gene Love homa. bit.ly/cT3mxp Lawton Lawton Steve W. Beebe Tom H. McCasland III Oklahoma Public Employees Association executive director Sterling Duncan Duncan John A. Brock David McLaughlin Zearley, citing the Oklahoma Office of State Finance, says between 5,000 Tulsa Enid David R. Brown, M.D. Lew Meibergen and 7,000 state workers would likely lose their jobs if State Question 744 Oklahoma City Enid passes. bit.ly/daYbbW Aaron Burleson Lloyd Noble II Altus Tulsa The NEA had 23,451 active K-12 education-employee members in Paul A. Cox Robert E. Patterson Oklahoma as of December 31, 2009—down four percent from the previ- Oklahoma City Tulsa Jay T. Edwards Oklahoma City Bill Price Oklahoma City ous year. bit.ly/9XnEnN Josephine Freede Patrick Rooney National Review’s Kevin Williamson says the oft-cited $14 trillion Oklahoma City Oklahoma City Kent Frizzell Melissa Sandefer national debt “doesn’t even begin to cover the real indebtedness of Claremore Norman American governments at the federal, state, and local levels,” which is Ann Felton Gilliland Robert Sullivan Oklahoma City Tulsa closer to $130 trillion. bit.ly/91Pj8Z John T. Hanes Lew Ward Oklahoma City Enid Indiana Gov. (and former OMB director) Mitch Daniels says Ralph Harvey William E. Warnock, Jr. ObamaCare represents “a huge mandated tax at the state level” and Oklahoma City Tulsa John A. Henry III Gary W. Wilson, M.D. “there is a very significant chance this is going to be a nightmare.” Oklahoma City Edmond Daryl Woodard bit.ly/c809Cq Tulsa James Bush III, acting president of the Southern Christian Leadership OCPA Adjunct Scholars Will Clark, Ph.D. Ronald L. Moomaw, Ph.D. Conference, says school choice helps to fulfill Dr. King’s dream. bit.ly/btnsma University of Oklahoma Oklahoma State University (Ret.) David Deming, Ph.D. University of Oklahoma Bobbie L. Foote, Ph.D. University of Oklahoma (Ret.) Ann Nalley, Ph.D. Cameron University Bruce Newman, Ph.D. Western Oklahoma State College F ormer Oklahoma Gov. Frank Keating says it’s time to get rid of the state income tax. bit.ly/b2XX6j American Enterprise Institute scholar Andrew G. Biggs says govern- Kyle Harper, Ph.D. Stafford North, Ph.D. University of Oklahoma Oklahoma Christian University ment employees at all levels—local, state, and federal—receive greater E. Scott Henley, Ph.D., J.D., D.Ph. Oklahoma City University (Ret.) Everett Piper, Ph.D. total compensation than private-sector workers. bit.ly/d3LelB Oklahoma Wesleyan University Russell W. Jones, Ph.D. Michael Scaperlanda, J.D. One Oklahoma school superintendent is earning nearly $156,000 to University of Central Oklahoma University of Oklahoma oversee a school district with fewer than 600 students. bit.ly/be7yYb Andrew W. Lester, J.D. Andrew C. Spiropoulos, J.D. Oklahoma City University (Adjunct) Oklahoma City University In a recent issue of Urban Tulsa Weekly, Tom Daxon and I argue that David L. May, Ph.D. Quentin Taylor Oklahoma can get better schools through better accounting. bit.ly/bHTgsw Oklahoma City University Rogers State University OCPA adjunct scholar David Deming says history teaches us that OCPA Fellows Steven J. Anderson, MBA, CPA “destruction awaits those who attempt to placate their enemies by surren- Research Fellow J. Rufus Fears, Ph.D. dering their weapons.” bit.ly/9GuUs0 Dr. David and Ann Brown Distinguished Fellow for Freedom Enhancement In a podcast interview with the editor of School Reform News, I extol J. Scott Moody, M.A. Research Fellow Oklahoma’s new special-needs scholarship law. bit.ly/atZGb7 Wendy P. Warcholik, Ph.D. The Washington Post reports that nonprofits are filling a need for Research Fellow OCPA Legal Counsel investigative reporting [bit.ly/aLNqlv], and a former Wall Street Journal DeBee Gilchrist # Oklahoma City assistant publisher agrees that these nonprofit news sites are important. OCPA Staff bit.ly/davCQh Michael Carnuccio / President Oklahoma’s pension deficits = government fraud. bit.ly/9VcDBB Brett A. Magbee / VP for Operations Brandon Dutcher / VP for Policy Cato Institute scholar Andrew J. Coulson says the U.S. economy needs Margaret Ann Morris / Director of Development Jason Sutton / Policy Impact Director fewer public-school jobs, not more. bit.ly/9u6hGX Bob Provine / Controller OCPA distinguished fellow J. Rufus Fears says America was founded Dacia Harris / Executive Assistant Chelsea Barnett / Special Projects Coordinator on moral principles. bit.ly/cJKjUq Clara Wright / Receptionist On Father’s Day in The Oklahoman, Gov. Brad Henry received some 1401 N. Lincoln Boulevard # Oklahoma City, OK 73104 well-deserved praise for his generosity of spirit. bit.ly/9PuzvV (405) 602-1667 # FAX: (405) 602-1238 www.ocpathink.org # firstname.lastname@example.org 96,767 Oklahomans have concealed-carry licenses. bit.ly/ag0YDV 2 Look who’s talking. OCPA’s speakers don’t disappoint. Larry Arnn John Bolton William F. Buckley, Jr. Dinesh D’Souza J. Rufus Fears Steve Forbes Tommy Franks John Fund Sarah Palin September 15, 2010 • Tulsa, OK Table sales are now available. Individual tickets (if available) will go on sale September 1. Newt Gingrich Steven F. Hayward For more information, call 405-602-1667. David Horowitz Laura Ingraham Gov. Frank Keating Jeane Kirkpatrick Rich Lowry Merrill Matthews Ed Meese Stephen Moore Peggy Noonan Marvin Olasky Gov. Bill Owens Star Parker Michael Reagan Rep. Paul Ryan Joe Sobran Thomas Stafford John Stossel Cal Thomas Clarence Thomas Sen. Malcolm Wallop John Walton J.C. Watts Walter Williams 3 Oklahoma’s Private-Sector Share of Income Reaches New Low . By J. Scott Moody and Wendy P Warcholik O klahoma’s private-sector share of personal income has reached an all-time low, as govern- ment spending continues to crowd out private-sector Policy makers need to be reminded that only the private sector can create new wealth and income. Government can only spend what it taxes or borrows economic activity in the state. from the private sector. On June 18, the U.S. Department of Commerce’s Overall, the federal stimulus package has been Bureau of Economic Analysis released new bad news for Oklahoma’s private sector. personal income data for the first quarter Since increased government spending of 2010. As shown in Chart 1, Oklahoma’s crowds out private-sector spending, the so- private-sector share of personal income called stimulus package is really just a shift reached a new low of 62.14 percent—edging out the in the economy away from the private sector and previous low of 62.71 percent set in the fourth quarter towards the public sector. of 2009. We’re getting uncomfortably close to the day when Chart 2 shows the culprit behind this crowding out the private sector’s share of personal income dips of the private sector: the American Recovery and below 50 percent and the government generates the Reinvestment Act (the so-called “stimulus” package). majority of economic activity. % In the first quarter of 2010, the ARRA pumped $1.173 Economists J. Scott Moody (M.A., George Mason Univer- billion into Oklahoma’s economy—the highest of any . sity) and Wendy P Warcholik (Ph.D., George Mason Univer- quarter since the ARRA became law. sity) are OCPA research fellows. 4 Oklahoma ranks a disappointing 35th out of 50 in a new state-by-state ranking of tort costs and tort laws, but comprehensive lawsuit reforms enacted in 2009 have the state moving in the right direction By Lawrence J. McQuillan and Hovannes Abramyan A n efficient tort liability system is an important ingredient for a thriving free-enterprise economy. It ensures that businesses and individuals have proper us pay the price, whether we realize it or not. There is growing evidence that today’s U.S. tort system as a whole, and especially the system in incentives to produce safe products and provide safe certain states, is a net cost to society at the margin. In services, and that true victims are fully compensated. a new study, U.S. Tort Liability Index: 2010 Report A tort system of that kind encourages greater trust (available at pacificresearch.org), we measure which among market participants, more economic activity and states impose the highest, and the lowest, tort liability employment, and eventually a higher standard of living costs both in absolute and in relative terms. Our study for individuals in the society. An optimal tort system also measures relative tort litigation risks across provides maximum net benefits to society. states. Moreover, it examines which states have rules An inefficient tort system, on the other hand, im- on the books that, if implemented and enforced, help poses excessive costs on society, not the least of which reduce lawsuit abuse and tort costs, resulting in a is forgone production of goods and services. There is more balanced, predictable, and affordable civil- growing evidence that tort costs in the United States justice system. are far greater than in other countries, and that much The U.S. tort system is an industry, and, like any of the difference is due to excessive litigation and industry, it consists of inputs and outputs. Tort-system lawsuit abuse. inputs include such things as courthouses, judges, All of us shoulder the burden of an excessively juries, clerks, copying machines, law libraries, and expensive and inefficient tort liability system through the tort rules and procedures on the books that shape higher prices, lower wages, decreased returns on tort outputs. investments in capital and land, restricted access to Tort-system outputs consist of cases filed, personal- health care, and less innovation. Businesses that injury lawyers to file and handle the cases, damage spend more money each year on liability insurance awards, and settlement amounts. In short, the outputs have less money available for research and develop- from the U.S. tort liability system consist of monetary ment, or for health benefits for their employees. All of tort losses and tort litigation risks. 5 Our report uses comprehensive, hard data on all 50 The sinners are states that have relatively high states to assess separately the outputs and inputs of monetary tort losses and/or high tort litigation risks each state’s tort system and rank the states accord- and relatively weak tort rules on the books. The 20 ingly. We selected the variables after consulting with sinners are likely to face high and rising tort liability dozens of legal scholars, economists, university costs in the future if lawsuit abuse continues un- professors, insurance experts, and lawyers, and after checked. an exhaustive search of the scholarly academic The salvageables are states that have moderate to literature. high relative monetary tort losses and/or moderate to Our report measures outputs using 13 variables high tort litigation risks, yet have moderate to strong and then ranks the states from best to worst. The tort rules, probably as a result of recent reforms. If the Index is ordinally driven, meaning that each state is rules are implemented as written on the books, the 16 compared to the other 49 states across all variables. salvageables, including Oklahoma, are positioned to The 13 output variables are grouped into two catego- do a better job of containing their tort liability costs ries: monetary tort losses and tort litigation risks. The and to move up in future output rankings as the output rankings are free of any subjective bias of the benefits of reform feed back to improve outputs. report’s authors—they are based solely on outside, The suckers are the nine states that have weak tort independent data. rules on the books because The inputs to the U.S. tort they currently have rela- liability system include the tively low monetary tort rules on the books in each Oklahoma’s 2009 lawsuit losses and/or low tort state that shape its tort- reforms were largely driven by litigation risks and, there- system outputs—its mon- earlier reforms adopted in fore, believe that reform is etary tort losses and tort not needed. litigation risks. Tort rules can neighboring Texas. Our study also examines be crafted by voters, legisla- evidence from today’s top tors, and/or judges, either economists and legal directly or indirectly, in each state. It is helpful to think scholars on the benefits of lawsuit reform in people’s of tort rules as the dials that can be turned to influ- lives. We review important research findings that have ence the final outputs of the tort system. emerged since our previous edition was published in Our report uses 29 variables to rank each state’s 2008. The studies document that lawsuit reform can tort rules. These 29 input variables are grouped into cut insurance premiums; increase productivity, em- three categories: monetary caps, substantive-law ployment, output, earnings, and the tax base; boost rules, and procedural and structural institutions. We innovation and sales of new products; lower health judged how effective, stringent, rigid, or binding each care costs while improving health care access; and variable was in each state based on current statutory save lives. law or on court decisions/common law. Connecting this evidence to the U.S. Tort Liability The state that has the best tort rules on the books— Index leads to one vital conclusion: A better index and that will be heading in the right direction if the ranking for a state—achieved through a commitment rules are fully implemented—is Oklahoma, followed to meaningful lawsuit reform—translates, everything by Texas, Ohio, Colorado, and Mississippi. States else being equal, into a better legal environment in that implement meaningful tort reform challenge their which to invest human, physical, and financial capi- neighbors to do the same or be at a competitive tal, the ingredients for self-sustaining economic disadvantage in the battle to attract people and growth and personal prosperity. Given these profound capital. Oklahoma’s 2009 reforms, for example, were and sweeping benefits, state lawmakers and ordinary largely driven by the earlier reforms adopted in citizens would be wise to promote and enact legal neighboring Texas. reforms that eliminate lawsuit abuse. % By merging the output and input results, we can Lawrence J. McQuillan (Ph.D., George Mason University) divide the states into four groups: saints, sinners, is director of business and economic studies and senior salvageables, and suckers. fellow in political economy at the Pacific Research Institute Briefly, the saints are states that have relatively low (PRI) in San Francisco. He is a coauthor of the U.S. Eco- monetary tort losses and/or low tort litigation risks nomic Freedom Index, published with Forbes, which ranks the 50 states according to how friendly or unfriendly their and relatively strong tort rules on the books. These state-government policies are to free enterprise and five states are well positioned to contain their tort consumer choice. Hovannes Abramyan (B.A., University of liability costs in the future if the rules are imple- California, Berkeley) is a public policy fellow in business and mented as written. economic studies at PRI. 6 U.S. Tort Liability Index: 2010 Report A state-by-state ranking of tort costs and tort laws Personal Resident Overall Farm- Commercial Other- Home- Med- Product self- Commercial Monetary and active Total Litigation Output Auto owners’ multi-peril liability owners’ mal liability insurance self-insurance Tort Loss Largest “Judicial attorneys incoming Risks State Ranking losses losses losses losses losses losses losses losses losses Ranking Awards hellholes” cases awards Ranking Alabama 25 5 38 30 6 33 22 21 26 20 18 15.7 25.5 35 25 41 Alaska 1 45 16 8 2 11 6 9 6 1 2 1.0 1.0 7 3 1 Arizona 16 31 10 18 19 8 30 33 34 17 17 20.6 1.0 9 32 25 Arkansas 30 15 7 19 42 45 11 12 40 39 26 5.9 25.5 15 40 33 California 41 33 19 31 44 23 15 31 8 38 28 50.0 25.5 37 15 47 Colorado 32 30 29 34 41 30 33 39 18 37 41 1.0 1.0 31 10 12 Connecticut 42 42 3 41 30 27 40 37 24 30 36 5.9 1.0 46 44 39 Delaware 20 48 12 14 34 2 47 1 32 21 21 10.8 1.0 1 47 22 Florida 48 44 8 29 38 29 25 27 49 43 43 40.2 50.0 38 36 48 Georgia 28 24 41 20 21 44 28 2 35 14 25 15.7 1.0 24 46 34 Hawaii 2 26 2 1 17 1 12 28 3 2 1 1.0 1.0 22 4 6 Idaho 7 14 30 37 16 17 2 22 25 15 12 1.0 1.0 20 6 7 Illinois 47 35 25 33 46 36 46 46 9 45 48 10.8 50.0 48 16 46 Indiana 29 16 48 43 29 42 21 14 27 31 34 5.9 1.0 10 28 13 Iowa 10 10 21 21 36 32 29 15 5 34 20 1.0 1.0 8 17 3 Kansas 12 17 42 10 13 43 7 40 17 10 16 5.9 1.0 21 20 15 Kentucky 36 28 50 35 8 41 31 29 46 23 42 5.9 1.0 30 21 20 Louisiana 11 40 20 3 1 50 1 8 41 3 8 5.9 1.0 32 27 28 Maine 6 7 17 38 3 26 35 7 19 11 7 1.0 1.0 27 9 11 Maryland 24 39 22 11 27 22 43 18 38 24 29 1.0 1.0 33 22 19 Massachusetts 17 38 5 6 45 13 38 5 12 40 19 5.9 1.0 49 5 23 Michigan 43 43 43 22 33 31 20 48 50 28 47 1.0 1.0 42 24 30 Minnesota 26 21 23 24 20 49 23 35 21 12 23 5.9 25.5 41 2 31 Mississippi 21 2 9 12 26 39 3 16 39 29 10 1.0 25.5 28 45 40 Missouri 45 12 45 27 43 38 16 36 29 41 40 5.9 1.0 47 49 43 Montana 44 34 32 50 47 19 17 17 44 47 45 1.0 1.0 36 41 32 Nebraska 33 23 33 17 37 46 19 47 22 42 39 1.0 1.0 19 29 17 Nevada 40 49 15 45 39 3 14 44 42 44 44 20.6 1.0 4 38 26 New Hampshire 23 19 13 49 11 40 42 42 13 32 32 1.0 1.0 12 13 4 New Jersey 50 50 4 40 48 20 45 49 48 48 50 30.4 50.0 39 50 49 New Mexico 38 9 24 46 22 14 32 38 30 33 31 1.0 50.0 23 33 44 New York 49 47 18 44 49 5 50 43 11 49 46 45.1 50.0 50 34 50 North Carolina 3 20 11 7 5 10 9 24 23 4 4 1.0 1.0 5 7 2 North Dakota 5 3 26 23 4 25 24 13 1 8 5 1.0 25.5 2 1 9 Ohio 15 13 44 16 14 37 18 6 15 6 9 20.6 1.0 34 37 37 Oklahoma 35 18 47 9 10 48 39 20 37 19 30 15.7 1.0 43 35 38 Oregon 34 36 35 48 35 6 13 30 36 35 37 10.8 1.0 26 26 27 Pennsylvania 46 37 27 42 50 9 44 50 31 50 49 25.5 25.5 40 11 42 Rhode Island 39 46 1 32 31 12 41 25 43 36 33 1.0 1.0 44 42 35 South Carolina 14 25 6 39 7 24 26 10 45 16 15 1.0 1.0 14 43 21 South Dakota 4 6 31 4 9 21 10 19 2 7 3 1.0 1.0 6 39 14 Tennessee 22 11 49 15 32 34 37 3 20 27 24 1.0 1.0 18 30 18 Texas 18 27 28 5 24 47 8 11 16 9 11 35.3 25.5 16 12 36 Utah 13 29 14 28 15 7 36 41 28 26 22 5.9 1.0 13 8 5 Vermont 37 4 39 47 40 18 49 26 14 46 38 1.0 1.0 45 19 29 Virginia 8 22 36 2 12 15 27 23 10 5 6 1.0 1.0 11 48 24 Washington 31 41 37 26 28 16 34 34 33 22 35 5.9 1.0 25 18 16 West Virginia 27 32 34 36 18 4 4 4 47 18 14 5.9 50.0 29 31 45 Wisconsin 9 8 40 13 23 28 5 45 7 13 13 5.9 1.0 17 14 10 Wyoming 19 1 46 25 25 35 48 32 4 25 27 1.0 1.0 3 23 8 Source: Pacific Research Institute, http://www.pacificresearch.org/docLib/20100525_Tort_Liability_Index_2010.pdf 7 Are Families Moving to Oklahoma? . By J. Scott Moody and Wendy P Warcholik T hree months ago in these pages (“Voting with Their Feet,” April 2010) we looked at Oklahoma’s migration patterns and found that, since 2005, signifi- “25 to 44” age cohort adding 27,784 people. What may explain this dramatic shift? Clearly, the sudden surge of in-migrants after 2005 was a major cantly more people are moving into Oklahoma than factor. Put simply, families from other states are are moving out. Chart 1 shows that since 2005 Okla- moving to Oklahoma for a better lifestyle. As we homa has gained nearly 56,000 new residents from showed in April, many of these in-migrants are com- out of state. ing from California, where raising a family is signifi- Unfortunately, the data do not provide any informa- cantly harder to do than it is in Oklahoma (with its tion as to the characteristics of these new residents. lower taxes, more affordable housing, and so on). Are they empty-nesters moving to retire in Oklahoma? Moreover, there is another piece of evidence which Are they young families moving for a better lifestyle suggests many of these in-migrants are families: a (jobs, affordable housing, good education, etc.)? The spiking birth rate. Naturally, the decision to have answer is important because an influx of empty- children is a major life event which then leads to other nesters has much less of a long-term economic changes, including relocation. A young couple may impact than would an influx of families. not be a “family” prior to relocation, but may become Fortunately, however, the Census Bureau does one shortly thereafter. Also, small families may produce a number of complementary data sets that become larger families. In either case, changes in the can be used to shed light on this question. birth rate can be an important telltale sign. The first place to look for answers is the change in And indeed this is in this case. As shown in Chart 3, population by age cohort. Chart 2 and Table 1 show since the post-2005 surge of in-migrants, Oklahoma’s the yearly percentage change of four age cohorts birth rate has spiked to a new level. Between 2000 using an index value starting in 2000. The most and 2005, new births averaged 50,671. Between 2006 striking feature in the chart can be seen in the “under and 2009, the average of new births jumped to 18 years” and “25 to 44 years” age cohorts. 54,079—an average of 3,408 more births per year. Between 2000 and 2005, the “under 18” age cohort Clearly the birth rate was getting an assist from the lost 7,968 people while the “25 to 44” age cohort lost additional 27,784 people in the “24 to 44” age cohort, 42,890 people. Then, remarkably, between 2005 and contributing to the 34,923 people in the “under 18” 2009 those same age cohorts gained people—with the age cohort. “under 18” age cohort adding 34,923 people and the Overall, the evidence, while circumstantial, strongly Table 1 Oklahoma’s Population by Age Cohort July 1, 2000 to July 1, 2009 Amount Index Value Under 18 18 to 24 25 to 44 45 to 64 65 years Under 18 to 25 to 45 to 65 and Year Total years years years years and over Total 18 24 44 64 over July 1, 2000 3,453,943 891,894 358,410 972,341 774,682 456,616 1.00 1.00 1.00 1.00 1.00 1.00 July 1, 2001 3,464,729 885,502 371,524 959,177 791,071 457,455 1.00 0.99 1.04 0.99 1.02 1.00 July 1, 2002 3,484,754 885,632 380,081 949,715 810,895 458,431 1.01 0.99 1.06 0.98 1.05 1.00 July 1, 2003 3,498,687 884,797 385,540 937,797 829,409 461,144 1.01 0.99 1.07 0.96 1.07 1.01 July 1, 2004 3,514,449 881,241 390,622 932,965 845,895 463,726 1.02 0.99 1.09 0.96 1.09 1.02 July 1, 2005 3,532,769 883,926 387,237 929,451 864,595 467,560 1.02 0.99 1.08 0.96 1.11 1.02 July 1, 2006 3,574,334 892,657 387,971 934,002 885,087 474,617 1.03 1.00 1.08 0.96 1.13 1.04 July 1, 2007 3,612,186 902,105 385,533 942,288 901,579 480,681 1.04 1.01 1.07 0.97 1.15 1.05 July 1, 2008 3,644,025 907,488 384,449 946,907 915,894 489,287 1.05 1.02 1.07 0.97 1.17 1.07 July 1, 2009 3,687,050 918,849 386,532 957,235 928,472 495,962 1.07 1.03 1.08 0.98 1.18 1.08 Sources: U.S. Department of Commerce: Census Bureau; Oklahoma Council of Public Affairs. The comparative growth indices were created by setting the base year (2000) equal to one and then multiplying each successive year by the growth rate. This makes it easier to visualize the relative growth differentials without worrying about the differences in starting values. 8 points to families as being a significant share of when considering any policies which would adversely 56,000 new Oklahoma residents since 2005. This is affect Oklahoma’s reputation regarding taxes, afford- good news for Oklahoma’s economy, especially able housing, and a job-friendly business climate. % considering it helped to reverse a disturbing decline Economists J. Scott Moody (M.A., George Mason Univer- in the “under 18” and “24 to 45” age cohorts prior to . sity) and Wendy P Warcholik (Ph.D., George Mason Univer- 2005. Policymakers should keep these facts in mind sity) are OCPA research fellows. 9 How School Choice Came to Oklahoma By Patrick B. McGuigan F or many years I have reported in newspapers, in cyberspace, and in the broadcast arena. Due to my own interest and leavened by experiences as an Star Parker, and Colorado Gov. Bill Owens to detail not only the theory but also the practice of school choice. When I was a commentator at The Oklaho- inner-city educator, I have written hundreds of stories man, I often focused on such speakers and on break- on education. A high percentage of those have been ing news about successful choice programs. focused on school choice. In the late 1990s, public charter schools were While choice was once a sidebar or “inside page” authorized in Oklahoma. That cracked open the door story, it is now defining American educational reform. to more responsive use of public dollars for the public Most reformers are politically conservative—but not purpose of educating children. Even the Oklahoma all. Most opponents are liberal—but not all. And 2010 City Public School Foundation advocated limited will be remembered as the year that education choice forms of school choice in its 2000-01 advocacy of more dramatic and substantive than charter schools funding reforms. became part of the fabric of Oklahoma law, with Who Led Us to This Choice conservatives and liberals on both sides of the debate. In recent years, the most vital advance was prob- State Rep. Jason Nelson of Oklahoma City joined ably the formation of a school choice coalition under last winter with state Sen. Patrick Anderson of Enid to the leadership of Oklahoma City attorney Bill Price, fashion legislation (first advocated years ago by working closely with Leslie Hiner of the Indianapolis- former state Sen. Scott Pruitt) designed to allow state based Foundation for Educational Choice (formerly funding for special-needs children to follow those the Friedman Foundation). Coalition participants children to whatever school is best for them. meet regularly, usually at a working lunch at OCPA, to Those two Republicans were joined in support by a share information and propose action. In February, small but important group of Democrats, led by black school-choice advocate Patrick Byrne, the CEO of state Reps. Anastasia Pittman of Oklahoma City and Overstock.com, came to Oklahoma for a press confer- Jabar Shumate of Tulsa. ence, a speech to a joint meeting of Rotary, Lions, and I’ve previously reported how House Bill 3393 gath- Kiwanis clubs in Oklahoma City (Price introduced ered steam, picking up momentum after Gov. Brad him), and a meeting with key civic leaders in Tulsa. Henry and his wife Kim, responding to a request from Price was among the Oklahomans who traveled to Speaker-designate Kris Steele, allowed the proposal Philadelphia in November 2009 to explore expansive to bear the name of the daughter the Henrys lost to a examples of school choice. They visited Spruce Hill rare illness 20 years ago. Christian School, talked with legislators like black As the Lindsey Nicole Henry Scholarships for Democrat state Sen. Anthony Williams, and partici- Students with Disabilities Program Act worked its way pated in long exchanges with people who have made through the Legislature, massive lobbying from inner-city education reform a reality. Oklahomans entrenched interests tried to stop the idea. But timely who made the trip included state Reps. Lee Denney calls to wavering Republicans from former Florida (R-Cushing) and Jason Nelson (R-Oklahoma City) and Gov. Jeb Bush stiffened the spines of key legislators— state Sens. Brian Bingman (R-Sapulpa), John Ford (R- and the rest is history. Bartlesville), Dan Newberry (R-Tulsa), and Gary How We Learned About Choice Stanislawski (R-Tulsa). Also on the trip were former Milton Friedman, the late Nobel Prize laureate in state Rep. Susan Winchester, Ginger Tinney of Profes- economics, made the case for a modern version of sional Oklahoma Educators, Michael Carnuccio (sev- school choice in America, providing evidence again eral months before he became OCPA president), Dr. and again that a market could work in education just David Hand (dean of the Oral Roberts University as it does in the rest of American life. Friedman and College of Education), Tom Daxon, and Matt Robison his wife, Rose, believed in the power of ideas. of the State Chamber (who later fashioned a timely Here at home, the Oklahoma Council of Public Affairs Chamber endorsement of House Bill 3393). From that (OCPA) came along in 1993. Beyond presentation of trip came the nexus of the school choice push in the fundamental economic truths and constant scrutiny of 2010 legislative session. government spending and taxation patterns, school There’s the recent “back story,” but there’s more. choice has been one of the most frequent ideas pre- Over the past decade, the Black Alliance for Educa- sented in OCPA publications and public forums. tional Options (BAEO) emerged as a major national OCPA hosted speakers like Marvin Olasky, John force for education reform. And that group had Walton (of the Wal-Mart family), black conservative impacted the thinking of black leaders here in Okla- 10 homa, including state Rep. Jabar Shumate of Tulsa. upper chamber. In a series of lengthy essays in Perspective spread Sen. Kathleen Wilcoxson of south Oklahoma City, a over several years, I detailed the bluntness and former educator, deliberatively took colleagues candor of leaders like north Tulsa pastor Donald through the pluses and minuses of the bill, doing the O’Neil Tyler. He began to speak out several years math and making the case about as dispassionately back, with words of truth to power: “I have kids in my as could be imagined. Williamson and Wilcoxson, church that graduate and can’t read. And you tell me both Republicans, planted seeds two years ago that this system is working?” grew into the durable sapling of choice this year. Tyler got attention when he bluntly declared that if Judy Eason-McIntyre, who represents north Tulsa, Oklahoma ever created full-scale choice, allowing could not have been clearer in her support for the funding to flow to willing providers like his church, he New Hope bill. And perhaps the toughest assessment would take 60 to 100 kids from his part of town “who of Democrats by a Democrat that day came from Tom are not now in school at all”—and would stand Adelson, another Tulsan. He told colleagues who were accountable for the results. assailing Williamson’s bill that the “lofty and empty Then there’s Deborah Brown of Tulsa, one of the rhetoric on my [Democratic] side” had embarrassed dozen people I most admire in Oklahoma today. This him. He voted for Williamson’s bill. one-woman powerhouse has drawn to herself a Several Democrats who stood for choice that day coterie of world-class educators working at the edge are still in the upper chamber, but each broke against of a ghetto. She graduates college-bound youngsters the Nelson-Pittman-Anderson bill this year. In the long from a system that includes both a private school and run they still contributed to reform. As for Eason- a charter system. Deborah says she could double her McIntyre and Adelson, their opposition to this year’s numbers if full-scale choice came to measure can’t remove the drama and Oklahoma. singular clarity of their 2008 reflections. Ms. Brown, my kindred soul, is Focusing on Children, Not Politics admittedly a long-standing critic of Both hope and admonition come in public school failures. So, what about this first draft of history. Reformers Betty Mason, the retired Oklahoma always assumed, with pretty good City Public Schools superintendent? reasons, that the first school-choice She’s now running St. John Christian measure to make it through all the Academy in northeast Oklahoma City. hurdles in Oklahoma would be a Betty has promised that if the Legislature allows modest scholarship program centered most likely money to follow children in all areas of education, “I among “at-risk” children in our poorest school dis- know we could make that work, and make it real for tricts. But in a tough fiscal environment that led to our children.” Already educating 110 students, she trimming the sails of many tax credits, the first step guarantees her system could handle another 90 beyond charter schools wound up being a true paren- children if the money were forthcoming. tal choice program, funded with taxes and aimed at a Democratic state Rep. Rebecca Hamilton of Okla- vulnerable population. homa City was a more subdued advocate of school Lindsey’s Law passed thanks to a strong-enough choice, joining Pittman and Shumate in backing Republican majority, a small cluster of pro-reform Nelson’s historic push for Lindsey’s Law. In 2008, she Democrats, and support from a governor who no one told colleagues underprivileged children live lives dared believe would favor such an idea before he that most legislators can’t even imagine. Choice gives was invited into the discussion. them real hope in the real world. Shumate, in that Years ago, I chose to chronicle the story of choice same debate, said school choice is the best anti- as it unfolds in Oklahoma. I do not dictate strategies poverty program he’s ever seen. or tactics. Still, I can’t help reporting this: choice came As advocates revel in the victory achieved this year, to Oklahoma because supporters kept themselves they must remember those whose words and deeds in focused on children, not politics. It came because past years laid the groundwork for reform. advocates never stopped talking to opponents and When the Choice Debate Changed because they reached out to diverse people on the In the 2008 legislative session, then-Sen. James basis of shared values. Williamson of Tulsa, a Republican, pushed the “New Happy birthday, Milton Friedman (would have Hope” proposal to create a tax-credit-financed schol- turned 98 years old on July 31). Thank you for your arship. After a lengthy and emotional debate, the idea that we should be free to choose. % dam broke to favor choice—seven Democrats joined Patrick McGuigan (M.A. in history, Oklahoma State every Republican as the measure sailed through the University) is editor of CapitolBeatOK.com. 11 Higher Education’s Bubble Is About to Burst By Glenn Harlan Reynolds I t’s a story of an industry that may sound familiar. The buyers think what they’re buying will appreci- ate in value, making them rich in the future. The student loans, which cannot be expunged in a bank- ruptcy. She’s stuck in a financial trap. Some might say that she deserves it—who borrows product grows more and more elaborate, and more $100,000 to finance a degree in women’s and religious and more expensive, but the expense is offset by studies that won’t make you any money? She should cheap credit provided by sellers eager to encourage have wised up, and others should learn from her buyers to buy. mistake, instead of learning too late, as she did: “I Buyers see that everyone else is taking on mounds don’t want to spend the rest of my life slaving away to of debt, and so are more comfortable when they do so pay for an education I got for four years and would themselves; besides, for a generation, the value of happily give back.” what they’re buying has gone up steadily. What could But bubbles burst when people catch on, and go wrong? Everything continues smoothly there’s some evidence that people are until, at some point, it doesn’t. beginning to catch on. Student loan Yes, this sounds like the housing demand, according to a recent report in bubble, but I’m afraid it’s also sounding a the Washington Post, is going soft, and lot like a still-inflating higher education students are expressing a willingness to bubble. And despite (or because of) the go to a cheaper school rather than run up fact that my day job involves higher debt. Things haven’t collapsed yet, but education, I think it’s better for us to face they’re looking shakier—kind of like the up to what’s going on before the bubble housing market looked in 2007. bursts messily. So what happens if the bubble col- College has gotten a lot more expen- lapses? Will it be a tragedy, with millions sive. A recent Money magazine report of Americans losing their path to higher- notes: “After adjusting for financial aid, paying jobs? the amount families pay for college has Maybe not. College is often described skyrocketed 439 percent since 1982. ... as a path to prosperity, but is it? A col- Normal supply and demand can’t begin to lege education can help people make explain cost increases of this magnitude.” more money in three different ways. Consumers would balk, except for two things. First, it may actually make them more economically First—as with the housing bubble—cheap and productive by teaching them skills valued in the readily available credit has let people borrow to workplace: computer programming, nursing, or finance education. They’re willing to do so because of engineering, for example. (Religious and women’s (1) consumer ignorance, as students (and, often, their studies, not so much.) parents) don’t fully grasp just how harsh the impact of Second, it may provide a credential that employers student loan payments will be after graduation; and want, not because it represents actual skills, but (2) a belief that, whatever the cost, a college educa- because it’s a weeding tool that doesn’t produce civil- tion is a necessary ticket to future prosperity. rights suits as, say, IQ tests might. A four-year college Bubbles burst when there are no longer enough degree, even if its holder acquired no actual skills, at excessively optimistic and ignorant folks to fuel them. least indicates some ability to show up on time and And there are signs that this is beginning to happen perform as instructed. already. And, third, a college degree—at least an elite A New York Times profile on May 28 described one—may hook its holder up with a useful social Courtney Munna, a 26-year-old graduate of New York network that can provide jobs and opportunities in the University with nearly $100,000 in student loan debt— future. (This is more true if it’s a degree from Yale debt that her degree in Religious and Women’s than if it’s one from Eastern Kentucky, but it’s true Studies did not equip her to repay. Payments on the everywhere to some degree.) debt are about $700 per month, equivalent to a While an individual might rationally pursue all respectable house payment, and a major bite on her three of these, only the first one—actual added monthly income of $2,300 as a photographer’s assis- skills—produces a net benefit for society. The other tant earning an hourly wage. two are just distributional—about who gets the good- And, unlike a bad mortgage on an underwater ies, not about making more of them. house, Munna can’t simply walk away from her Yet today’s college education system seems to be in 12 the business of selling parts two and three to a much greater degree than part one, along with selling the even- Your Tax Dollars at Work harder-to-quantify “college experience,” which as often as It’s a good thing Oklahoma politicians enacted not boils down to four (or more) years of partying. more than $300 million in “revenue enhance- Post-bubble, perhaps students—and employers, not to ments” this year, because it would have been a mention parents and lenders—will focus instead on pity to see this position go unfilled. education that fosters economic value. And that is likely to According to an ad posted last month on press colleges to focus more on providing useful majors. HigherEdJobs.com, “Gender and Women’s (That doesn’t necessarily rule out traditional liberal-arts Studies at Oklahoma State University invites majors, so long as they are rigorous and require a real applications for a visiting fellow finishing her or general education, rather than trendy and easy subjects, his dissertation in gender studies for the aca- but the key word here is “rigorous.”) demic year 2010-11. ... The fellow will teach 2 My question is whether traditional academic institu- core courses (Feminist Theories and Introduc- tions will be able to keep up with the times, or whether— tion to Gender Studies) and 2 topics classes in as Anya Kamenetz suggests in her new book, “DIY U”— the candidate’s area of expertise. ... Gender and the real pioneering will be in online education and the Women’s Studies at Oklahoma State University is a small program devoted to expanding work of “edupunks” who are more interested in finding horizons for women, LGBTQ [Lesbian, Gay, new ways of teaching and learning than in protecting Bisexual, Transgender, and Questioning] existing interests. individuals, and people of color in Oklahoma I’m betting on the latter. Industries seldom reform and has an interdisciplinary curriculum.” themselves, and real competition usually comes from the But lest you fear there’s any moral confusion outside. Keep your eyes open—and, if you’re planning on at our institutions of higher learning, rest as- applying to college, watch out for those student loans. % sured that “OSU-Stillwater is a tobacco-free Glenn Harlan Reynolds is a professor of law at the University campus.” of Tennessee. He blogs at Instapundit.com. This article origi- —Editor nally appeared June 6 in the Washington Examiner. 13 Married Fathers: America’s Greatest Weapon Against Child Poverty By Robert Rector T he mainstream media, liberal politicians, activists, and academia bewail child poverty in the U.S. But in these ritual lamentations, one key fact remains less. Single parents now comprise 70 percent of all poor families with children. Last year, government provided over $300 billion in means-tested welfare hidden: The principal cause of child poverty in the aid to single parents. U.S. is the absence of married fathers in the home. The positive effects of married fathers are not According to the U.S Census, the poverty rate in limited to income alone. Children raised by married 2008 for single parents with children was 35.6 percent. parents have substantially better life outcomes The rate for married couples with children was 6.4 compared to similar children raised in single-parent percent. Being raised in a married family reduces a homes. When compared to children in intact married child’s probability of living in poverty by about 80 homes, children raised by single parents are more percent. likely to have emotional and behavioral problems; be True, some of this difference in poverty is due to the physically abused; smoke, drink, and use drugs; be fact that single parents tend to have less education aggressive; engage in violent, delinquent, and crimi- than married couples. But even when married couples nal behavior; have poor school performance; be are compared to single parents with the same educa- expelled from school; and drop out of high school. tion level, the married poverty rate will still be about Many of these negative outcomes are associated with 70 percent lower. the higher poverty rates of single mothers. But, in Marriage is a powerful weapon in fighting poverty. many cases, the improvements in child well-being In fact, being married has the same effect in reducing associated with marriage persist even after adjusting poverty as adding five to six years to a parent’s for differences in family income. This indicates that the education level. father brings more to his home than just a paycheck. Unfortunately, marriage is rapidly declining in Despite the politically correct gag rule, marriage American society. When President Lyndon Johnson remains America’s strongest anti-poverty weapon. To launched the War on Poverty in 1963, 93 percent of reduce poverty in America, policy makers should American children were born to married parents. enact policies that encourage people to form and Today the number has dropped to 59 percent. maintain healthy marriage and delay childbearing The U.S. is steadily separating into a two-caste until they are married and economically stable. system, with marriage and education as the dividing Marriage is highly beneficial to children, adults, and line. In the high-income third of the population, society. It needs to be encouraged and strengthened, children are raised by married parents with a college not ignored and undermined. % education; in the bottom-income third, children are Robert Rector (M.A., Johns Hopkins University) is a senior raised by single parents with a high school degree or research fellow at The Heritage Foundation. Toward a Pro-Family Tax Policy By Brandon Dutcher In an important article in the current issue of The margin of error of plus or minus 3.1 percentage points. Family in America (“A Capital Catastrophe: Why a Little- The surveyor asked this question: Noticed Crisis Portends Economic Disaster”), Bryce J. “Now thinking about early-childhood policy in Okla- Christensen highlights “the irreplaceable role of the homa, assuming the state government had a limited intact family in fostering social capital formation” and amount of money, which of the following do you believe argues that lawmakers could boost long-term economic should take precedence?” prosperity if they would stop favoring tax-subsidized • Increasing daycare subsidies for families when fractured families at the expense of heavily taxed intact professional childcare is used for their young families. child(ren) ................................................... 25 percent Dr. Christensen is correct. And, as is usually the case • Redirecting a portion of the daycare subsidies toward in Oklahoma, good policy also happens to be good a tax break for families in which one parent stays politics. A scientific telephone survey of 1,000 likely home with young child(ren) ....................... 61 percent voters registered in Oklahoma was conducted February • Don’t Know/Refused ................................. 14 percent 25 through March 8, 2010 by SoonerPoll, the same firm It’s time for the Oklahoma Department of Human that conducts the “Oklahoma Poll” for the Tulsa World. Services budget to get a little smaller, and for your The poll, which was commissioned by OCPA, has a family budget to get a little bigger. % 14 Reclaiming America’s Legacy of Freedom By Brett A. Magbee T he Hardeman Auditorium at Oklahoma Christian University started filling at 5:30 on each of those five Monday evenings during OCPA’s Spring Lecture attendance: “Absolutely brilliant” … “I never knew a lot of that history before” … “I’m so glad I came” … “I’m bringing some people with me next time.” After- Series. A few minutes before 6:00, the pace became wards, people picked up OCPA materials, ordered Dr. frenzied as people scurried to get a seat before Dr. J. Fears’ lecture series on DVD, and just stayed to visit. Rufus Fears began his talks about America’s The excitement at the literature table reflected the founders, the Constitution, and the ideas which contagious nature of historical knowledge presented formed our Republic. in a compelling and thought-provoking way. Little wonder. He is the David Ross Something wonderful is at work in the Boyd Professor of Classics at the Univer- hearts of Americans—an awakening of sorts sity of Oklahoma, where he holds the to the need for eternal vigilance to preserve G.T. and Libby Blankenship Chair in the History of our Republic. For 17 years, OCPA has been on the Liberty. He is also the Dr. David and Ann Brown front lines of the battle. We have fought the good fight Distinguished Fellow for Freedom Enhancement at because we know we are blessed with a legacy of OCPA. Dr. Fears has a tremendously loyal and dedi- freedom. That’s why we are busy forming four new cated fan base, not only in Oklahoma but across the “freedom centers” at OCPA, because freedom is worth country. defending. The positive response was unanimous from those in Won’t you join us by supporting our work today? % Dr. J. Rufus Fears asks a question of a member of the audience during OCPA’s Spring Lecture Series on “The Founders’ Legacy of Freedom.” Questions always followed each of Dr. Fears’ lectures. His answers to wide- ranging questions were as insightful as his lectures, causing most to stay to hear what Dr. Fears would say next. OCPA’s Chelsea Barnett assists the attendees who wanted OCPA literature, pocket Constitutions, and order forms for DVDs of the lecture series. OCPA president Michael Carnuccio welcomes attendees to the lecture series, giving special recognition to Oklahoma Christian University for providing the facility. 15 NONPROFIT ORG. U.S. POSTAGE Change Service Requested PAID OKLA. CITY, OK PERMIT NO. 2573 Oklahoma Council of Public Affairs 1401 N. Lincoln Blvd. Oklahoma City, OK 73104 Perspective is published monthly by the Oklahoma Council of Public Affairs, Inc. No substantial part of the activities of OCPA includes attempting to influence legislation, and OCPA does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office. Q U O T E U N Q U O T E “Never take a dollar from a “I think it was David Brooks who “[State Sen. Jim] Wilson (D- free citizen through the coercion once remarked that all college towns Tahlequah) said too many teachers of taxation without a very are the same place. He was thinking in the state’s education system do it legitimate purpose. We have of the identical feeling that one gets simply to make a living, not neces- a solemn duty to spend that in places from Berkeley, California, sarily because they are passionate dollar as carefully as possible, to Madison, Wisconsin—the similar about educating young people.” because when we took it we coffee shops, the carbon-copy Tahlequah Daily Press reporter Josh Newton, in a June 7 news story diminished that person’s bookstores, the indistinguishable freedom.” attitude of smug correctness. But it “I think it’s pathetic that somebody’s Gov. Mitch Daniels (R-Indiana) extends far beyond that. The identity on the airwaves in this country of American universities reaches that’s allowed to say this kind of “This is a good time to be a little deep into their psyches—where all garbage.” less constrained in your think- of them want to be Berkeley and MSNBC host Ed Schultz, criticizing ing. … Think big and bold.” Madison, and all of them are the “dangerous” Glenn Beck for being Former Florida Gov. Jeb Bush, offering “a huge supporter of homeschooling advice to Republican candidates. Gov. ashamed of being elsewhere.” and private-school vouchers” Bush predicts that after the election Joseph Bottum “you’re going to see the emerging “Don’t taze my granny!” Cantor-Ryan wing of the Republican [If trends continue], “in two years Lonnie Tinsley of El Reno, Oklahoma, party—the policy activists—in their what you know as public education who had called 911 when he became ascendency. … And you’ll have activist you will not recognize. It will be concerned his grandmother, Lona Varner, conservative governors. In 2011, I think hadn’t taken her medications. The El you’re going to see all sorts of efforts charter schools or private schools all Reno Police Department dispatched to act on the belief in entrepreneurial publicly funded.” officers to Varner’s apartment and, capitalism and limited government.” State Sen. Richard Lerblance (D-Hartshorne) alas, tazed the octogenarian.
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