Wednesday, September 24, 2014

"The case for fair-value accounting" in fall issue of National Affairs [updated]

I mentioned back in May that Jason Delisle and I were working on a long article about fair-value accounting. It's done, and you can find it in the fall issue of National Affairs--a periodical so serious, it doesn't even have pictures on its cover! The full text is here, but readers may find it easier to download the pdf and print out the whole thing.

Read pp. 95-111 !
I've written a lot about fair-value accounting--e.g., for Heritage, Forbes, and National Review--but up until now I had not given the issue the detailed treatment that it deserves. This article is our full statement on what fair-value accounting is, why it's needed, and how both parties have been inconsistent in their support for it.

I realize the topic seems dry, but all I can say is give it a shot, and you'll likely find it thought-provoking, and perhaps even entertaining. After putting together example after example of bogus "free lunch" accounting, even I was surprised at the extent of the government's malfeasance. And although most people realize that political advocates are not intellectually consistent, their flip-flopping on fair-value is one of the starkest (yet largely unrecognized) hypocrisies in all of Washington, DC.

Jason D. has a two-minute summary of the piece on New America's EdCentral site, and I'll update this post as we put out additional promotional material.

Update 9/26:  National Review has posted my own preview of the article, this one focusing on the "Understated Costs and Perverse Incentives" section.

Also, in an interesting development, the Center on Budget and Policy Priorities now opposes applying FVA to Social Security in response to our article:
Jason Delisle and Jason Richwine, writing in the latest issue of National Affairs, correctly note that the logic of our argument [against FVA] is inconsistent with a 2005 CBPP analysis of proposals to invest part of the Social Security trust funds in stocks instead of Treasury bonds.  We concur.  We have re-analyzed our assessment of investing a portion of the Social Security trust fund in equities and now come to a different conclusion than we did in 2005.
To understand what that all means, see the section of our article titled "Fair-Value's Fair-Weather Friends." More on this later.

Wednesday, August 27, 2014

Common Core's remarkably weak evidence base

Must this happen so often? The backers of a broad-based political movement tell you their cause is an evidentiary slam dunk, but then you look at the research yourself and find basically nothing there. The Common Core education standards (de facto national standards) are a great example. As I wrote for National Review earlier this week:
...[T]he Center for Education Policy at George Washington University has put together a compendium summarizing over 60 research papers related to Common Core design and implementation. If there is empirical evidence on the importance of strong standards, this is probably the place to find it. Unfortunately, only two papers in the entire compendium are devoted to measuring the impact of Common Core on test scores. Both papers employ the dubious correlation-across-states methodology, and both give mixed results at best.
Read the whole thing there.

Here's a radio interview I did to promote the piece:



And the Washington Free Beacon did a nice summary as well.

Tuesday, August 5, 2014

"Why we shouldn't raise teacher pay" published in The Federalist

I'd been meaning to write a piece on public school hiring practices, so when the editors of The Federalist offered me a chance to do something for them on education policy, I figured this was the time. Here's the thesis of the article:
Even without the tenure obstacle, putting the best teachers in the classroom is a more challenging problem than many reformers will admit. One of the most common reformist prescriptions is raising teacher pay to attract stronger applicants. The logic seems simple, even obvious. But raising teacher pay will not work. In fact, it could be counter-productive. The reason lies not just with the well-known difficulty in predicting who will be a good teacher, but also with the entrenched hiring system of public schools.
The article focuses on the latter obstacle--the teacher hiring system that often disfavors the brightest applicants--but an entire piece could be written on the difficulty in predicting who will become a good teacher. Yes, smarter teachers tend to be more effective, ceteris paribus, but the correlation is not strong. Even if public schools were eager to take in the best and brightest, doing so would be no panacea.


Here's the conclusion of the piece:
Public school systems need fundamental changes in how they operate to improve teacher quality, and abolishing tenure just scratches the surface. The creeping emphasis on credentials must be reversed. School administrators must be willing to hire promising applicants who never received the standard education-school training. Objective evaluation systems must be adopted and refined. All parties must become comfortable with a process that will increase teacher turnover. And, finally, the public must maintain sober expectations about the value of high-quality teachers, understanding that their effectiveness is naturally limited by the abilities and family situations of the students themselves. To effect all these changes, pundits and policymakers must move beyond their “pay teachers more” mantra. The idea is attractive for its simplicity, but in reality it is no solution at all.
 Read the whole thing here.

Monday, July 28, 2014

Paul Ryan's education plan: Good policy, wrong goal

The education portion of Paul Ryan’s “Expanding Opportunity in America” plan moves federal policy in the right direction, but part of the rationale is troubling.

First, some of the policy proposals. Ryan would turn federal funds for the ineffective Head Start program into a block grant for states to integrate into their early education services. Encouragingly, he would fund multiple randomized experiments to test claims made by preschool advocates. Let’s hope those are multi-site experiments conducted by outside investigators so that the results are most informative. As for K-12 education, Ryan would block-grant Title I-A spending and make it portable, part of a longstanding conservative goal. The block grant would lessen federal involvement in education, and the portability feature would encourage school choice.

These are all steps in the right direction, but I still feel uncomfortable reading through the education section. There is a troubling focus on the desire to “close the achievement gap.” In fact, based on the introduction, much of Ryan’s education plan appears premised on the need for gap-closing.


That’s a misguided and potentially counter-productive goal. Socioeconomic achievement gaps in school are inevitable for a couple of simple reasons: Smarter people tend to attain higher socioeconomic status, and smarter people also tend to have smarter kids. Those are generalities, of course, but in the aggregate it would be shocking if the children of rich kids did not do better in school than the children of poor kids, even if both groups enjoyed the same educational resources.

The gap-closing mindset leads to condemnation of schools serving low-income students as “failing” even when they might actually be doing a decent job. It generates layers of bureaucracy tasked with employing the latest pedagogical fads. It disregards the needs of gifted students looking for creative outlets. And it may ultimately undermine the case for school choice: When education reformers conclude that school choice does little to close test-score gaps, they will move on to alternative reforms that give less power to parents.

The success of an education policy should be measured not by how much it closes gaps, but by the degree to which it tailors instruction to individual student needs. School choice is probably the best way to pursue the latter goal, and I wish the Ryan plan—as positive as it is in most respects—had recognized that.