Think tanks wrap-up

June 19, 2002 at 7:00 PM
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WASHINGTON, June 19 (UPI) -- The UPI think tank wrap-up is a daily digest covering brief opinion pieces, reactions to recent news events and position statements released by various think tanks. This is the second of two wrap-ups for June 19.

The National Center for Policy Analysis

(The NCPA is a nonprofit, nonpartisan public policy research institute that seeks innovative private sector solutions to public policy problems.)

Dallas -- In parents we trust?

by Casey Lartigue

In addition to all of the scholarly reasons educators and others give for why they fear parents having power over how their children are educated, here's one not discussed: everyone has relatives.

People can all think of a relative or friend who either is a bad parent or makes bad decisions in other aspects of their lives. And we can be sure that the relative or friend will become no more intelligent once he or she has a school voucher.

But the fact that some parents make bad decisions doesn't defeat the argument for school choice. Instead of being forced to send their children off to the local public schools, parents would be better off with several options.

Many of us may lament as we stand in a grocery store that there are 52 brands of dishwashing powder or liquid, but few of us would like it if the only "choice" were the government brand. Restricting choice because there might be mistakes brings to mind what philosopher Herbert Spencer said in 1891: "To protect people from the effects of folly is to fill the world with fools."

The question of parents being able to make good choices for their children will become very real if the Supreme Court approves the Cleveland voucher program. In a provocative 1999 essay, education guru Chester Finn directly addressed the question: "Can We Trust Parents?" His decision, after 2,500 thoughtful words, appeared to be "no."

Finn argued in his 1999 essay that we must recognize that some parents increasingly are part of the problem in education and presumably would remain so if they had a form of school choice. "Although many parents continue to work with great determination to ensure that their children develop into adults of sound character, an appallingly large number are falling down on the job," Finn wrote.

He noted that some parents have joined educators in pushing for grade inflation and against making academic distinctions -- banishing competition, rankings, standardized test scores. In addition, Finn says, an increasing number of parents are less likely these days to insist on basic decorum and conduct by their children or to expect their children to turn in homework, show up on time, or to do well in school.

Finn's argument shouldn't be confused with the one made by defenders of public education who argue that we shouldn't have school choice because low-income and minority parents either don't care or don't know to judge if a school is educating their child.

The self-interested unions and public school diehard defenders can be dismissed. But it isn't as easy to dismiss Finn, a long-time school choice supporter. And there's another reason Finn shouldn't be dismissed by school choice supporters when he questions if parents can be trusted to choose well: He's right.

Not everyone is a good chooser. But that misses the point: is it better to have people making decisions for themselves or to have those decisions dictated to them by a third-party? After all, if parents don't make the choice, who should? Ted Kennedy or Trent Lott? To paraphrase Winston Churchill, parents making decisions about how their children are educated may be the worst system in the world -- except for all of the alternatives.

Supporting educational freedom means accepting that people will make mistakes. We don't have government-run grocery stores because people feed junk food to their children. Nor do we have a government-run computer store because parents let their children play video games.

Although parents are sure to make mistakes, they should have power over how their children are educated. When a politician or educator makes a bad choice for you, he or she will do everything possible to cover up the mistake. On the other hand, many parents will try to reverse their bad decisions.

A great example of the value of school choice is Deidra Pearson, a Cleveland parent who is one of the plaintiffs highlighted by the American Federation of Teachers in its lawsuit against the Cleveland voucher plan. Pearson had used a voucher to enroll her son in a private school. Pearson pulled her son out after his grades declined and returned him to public school, where he earns mostly A's and B's.

Although voucher opponents cited Pearson's case as an example of the failure of vouchers, the opposite is true: Parents are better off with more choices. Would Ms. Pearson have been better off without any options? She was able to compare schools and find the one right for her child. Parents with vouchers or a tuition tax credit could then try out different schools -- as Pearson did -- to decide which school is best for their child.

(Casey Lartigue is an education policy analyst at the Cato Institute.)

Institute for Public Accuracy

(The IPA is a nationwide consortium of policy researchers that seeks to broaden public discourse by gaining media access for experts whose perspectives are often overshadowed by major think tanks and other influential institutions.)

WASHINGTON-- Huge pay gaps: Enron and beyond

Enron disclosed in court documents on Tuesday that before collapsing last year it paid out $744 million in salary, bonuses and stock grants to the company's 140 senior officers -- an average of $5.3 million each. The following IPA analysts commented on the disclosure:

-- Dean Baker, co-director of the Center for Economic and Policy Research.

"There has been a wide range of government policies facilitating the rise in executive compensation over the last two decades, which were supported by both parties. For example, when the Financial Accounting Standards Board wanted to require that firms list the cost of stock options as an expense against profits, Sen. Joe Lieberman, D-Conn., led the charge to stop the proposal. This has allowed firms to dramatically overstate their profits on their financial statements, even while they deduct the cost of stock options for tax purposes. Due to a lack of effective oversight, chief executive officers are often able to write themselves a blank check. This leads to an economy characterized by fraud and outright theft. The disparities between the money CEOs get and what the average worker gets have steadily been increasing -- 1965: 20 to 1; 1978: 29 to 1; 1991: 56 to 1; 1999: 107 to 1."

-- Julianne Malveaux, an economist and columnist.

"You have people who are being rewarded for chicanery while others are serving life-long sentences for crimes that are minuscule in comparison. There are people who are walking away from the table with multimillion-dollar bonuses for wrongdoing while others who followed all the rules are struggling to get their pensions paid ..."

-- Scott Klinger, co-director of Responsible Wealth, Klinger is the author of "Titans of the Enron Economy: The Ten Habits of Highly Defective Corporations." A chartered financial analyst, Klinger is a former portfolio manager at United States Trust Company.

"While the public, Congress, and even the stock exchanges have had constructive dialogues to prevent future Enrons, corporations like Enron continue to thumb their noses at change, as they deepen and extend corrupt executive compensation practices."

-- Betsy Leondar-Wright, co-author of "Executive Excess 2001: Layoffs, Tax Rebates, The Gender Gap; Eighth Annual CEO Compensation Survey," and communications

director for United for a Fair Economy.

"Enron gave golden parachutes to failed executives while giving peanuts to thousands of laid-off employees. Massive layoffs have often been rewarded by executive raises. Chief executive officers of firms that announced layoffs of 1,000 or more workers last year earned about 80 percent more, on average, than executives at 365 top firms surveyed by Business Week. These layoff leaders averaged $23.7 million in total compensation in 2000, compared with $13.1 million for CEOs as a whole. The top job-cutters received an increase in salary and bonus of nearly 20 percent in 2000, compared to average raises in that year for U.S. wage workers of about 3 percent and for salaried employees of 4 percent."

The National Center for Public Policy Research

(NCPPR is a communications and research foundation dedicated to providing free market solutions to today's public policy problems, based on the principles of a free market, individual liberty and personal responsibility. NCPPR was founded to provide the conservative movement with a versatile and energetic organization capable of responding quickly and decisively to late-breaking issues, based on thorough research.)

CHICAGO -- Ten-second response: Bush administration, Senate Finance Committee formally approve placing tax subsidy to environmental groups in tax code to promote land grabs by environmentalists and the government

by Gretchen Randall

Background: Yesterday the U.S. Senate Finance Committee approved out of committee the U.S. Care Act of 2002, a bill initially designed to promote donations to charitable organizations through tax incentives. However, Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, and Sen. Charles Grassley, R-Iowa, ranking member, added a provision that would give private property owners a 25 percent reduction in the capital gains tax if they sell their property to a local, state or federal government or non-profit group such as an environmental group for purposes of conservation. Several Republican senators as well as the White House have endorsed the plan as well. The White House proposed a 50 percent capital gains tax reduction for this provision earlier this year, calling it a "Conservation Tax Credit."

Ten-Second Response: Why should the government encourage with a subsidy the sale of private property to one buyer over another? All buyers and sellers should be equal in the marketplace.

Thirty-Second Response: This expensive proposal would take property off the tax rolls and deprive communities of money to fund schools, roads and law enforcement and probably harm the environment as well. Only someone who believes governments are better stewards of the land than private citizens could possibly favor such a proposal. The record is starkly and scandalously clear: Private owners are much better stewards of the land than any government. Furthermore, if a government agency truly believes it is best for the land to be owned by government, it always has the option of outbidding the other prospective buyers -- an option that would be far less expensive for taxpayers than this program of subsidizing all land purchases, regardless of environmental merit. This proposal is also an inappropriate fundraising scheme for environmental organizations, many if not most of which have a political agenda.

Discussion: Earlier this year the Bush administration's Department of Interior included in its budget a "Conservation Tax Credit" to give a 50 percent reduction in the capital gains tax if a property owner "voluntarily sell(s) land or water to a government agency or qualified conservation organization for conservation purposes." Now a similar provision has reappeared in the faith-based charity bill. To receive the reduction in capital gains tax, the sale must be for a "qualified conservation purpose" which includes preserving the land for outdoor recreation, protection of natural habitat or preserving open space for the "scenic enjoyment of the general public." This provision would apply for sales made after Dec. 31, 2003.

The provision for the capital gains tax reduction was sponsored by the following 11 senators: Sen. Jeffords, I-Vt., Sen. Grassley, R-Iowa, Sen. Baucus, D-Mont., Sen. Hatch, R-Utah, Sen. Snowe, R-Maine, Sen. Daschle, D-S.D., Sen. Kerry, D-Mass., Sen. Lincoln, D-Ark., Sen. Bingaman, D-N.M., Sen. Rockefeller, D-W.Va., Sen. Torricelli, D-N.J. Sen. Phil Gramm's, R-Texas, motion to strike the provision was defeated.

The bill, a substitute for the House bill H.R. 7, now goes to the full Senate. H.R. 7, approved by the House, does not contain this tax reduction provision.

(Gretchen Randall is the director of the John P. McGovern, Md. Center for Environmental and Regulatory Affairs at The National Center for Public Policy Research.)

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