Opinionated @ CFE

Economy of Scale, Product Differentiation, and Education


In most companies, growing larger means you have the capability to offer a wider range of products and services than when you got started. Once your customer base reaches a certain size, products that were once too specialized to be worth pursuing are now worth the time and effort of investment. After all, no two customers are the same or have the same needs, and failing to meet customer needs means you will doom your business.

Education should operate in the same fashion. No two students learn the same way, and any given group of them may cover as many different career paths as there are students. Accommodating this variety is very difficult in a smaller school or school district for the same reasons that small companies can’t offer a wide array of specialized products: it’s simply not efficient to do so. This should mean that a larger school or school district should be able to offer many specialized areas of study. In practice, however, we’re married to the idea of producing the exact same product using the exact same methods because it’s “efficient”.


The College Degree Isn’t the Problem; the High School Diploma is


Sen. Howard Stephenson, with whom I often disagree, made some waves when he declared that college might be a waste of time. On the surface, it seems like a silly argument. College graduates still earn more than non-graduates and many skilled job positions still require a degree. That said, the return on investment has been getting much longer and many skilled professional without degrees often have just as much earning potential. I think this opens up a broader discussion on the real value of a college degree and a high school diploma.


SJR1 and SJR9 are Bad Policy


I’m a big fan of local control for practical reasons. You often get elected officials that are much more responsive and in-tune with the needs of their constituents. Bad decisions are contained to a much smaller effective area and experimentation with good ideas leads to more of them. When elected leaders fail to make good decisions or respond to the needs of the people, the “throttle factor” is often much better with your city council member than a state or federal representative.

We’ve seen this play out on the federal level for decades now. Bad decisions made at that level affect everyone rather than just a limited subset of the populace. The all-or-nothing gamesmanship often leads to contradictory laws and policies that are confusing and keep either from actually prevailing. Our state legislature often rails upon these failings, but now they’re turning around and doing the exact same thing to the cities and counties.


Education Policy in a Nutshell


The attitude of the education establishment can be easily summarized: “Ask us to try something different and we’ll just call it a waste of time and money. In fact, just give us more money to do the same thing we’ve been doing with no kind of institutional change and expect better results. And if it doesn’t work, you didn’t give us enough money. Whatever you do, don’t base any part of our compensation upon results, just on how long we can outlast the others.”

Teachers unions always talk out of both sides of their mouths. They tell us that they are advocates for quality education, but their actions and primary function are all about the Benjamins. Individual teachers and administrators may care, but they are ground up like so much steak in the meat grinder of powerful interests more concerned with money than educating kids.

Legislators do the same thing. They talk a good game about local control and letting teachers excel. When it come down to it, most of them end up making a big pile of rules for teachers to follow that does nothing but soak up time and make it impossible to innovate. Many school boards are no better. They treat professional adults like small children who are incapable of making decent judgment calls.

Anyone who supports this kind of entrenchment is an enemy to both quality education and the taxpayer. Get rid of the grandstanding legislators, the overbearing administrators, and the money-hungry unions and maybe, just maybe, we’ll see some exciting things happen in education.

What I Expect From a Candidate for State Office


I’ve already covered my requirements of someone running for federal office. In a lot of ways, managing a state can be even more complex than handling federal issues. Many problems tackled by the legislature are often based around narrowly-defined groups of people that cross political and sometimes geographic boundaries. It also requires more discipline since going into massive debt isn’t on the table as an option. Here’s what I expect out of anyone running for state office.


Fixing the 2010 Budget


Utah finds itself in yet another deep budget hole, this time to the tune of nearly $1B. This, of course, sets of the debate of if the Legislature should cut spending, raise taxes, or a bit of both. Sen. Steve Urquhart, who I have tremendous respect for, has called for his colleagues to oppose any new tax increases, focusing instead on finding places to make cuts. His rationale is that the rate of growth in state government expenditures has outpaced population plus inflation. While this sounds like a sound argument, it doesn’t mesh with some stark realities.

The demand for state services is not a function of just population and nowhere is this more obvious than in our transportation budgets. As we continue to live in the burbs and commute to work, vehicle miles driven has actually grown as much as twice as fast as population. The cost of construction materials has also risen dramatically higher than inflation as China and India consume more of the world’s steel and concrete supply. Education has also taken a hit as more ESL students enter our school systems, students that have a significantly higher cost to educate. (Large immigrant populations account for a significant part of New York’s high education spending and drag their results down.) A rigid formula leaves little room to address these kinds of variances.

We should also consider that despite all of the posturing, Utah’s state budget has been fairly stable as a percentage of state GDP. During the last two decades, it has fluctuated from a low of 15.5% to a high of 17.2%. That is an amazing amount of restraint given the large surpluses that we had just a few years ago. Whether this is because of or despite the hand-wringing about state government spending is anyone’s guess, but the caricature of free-spending double-talkers seems better suited to Congresscritters than it does our state government.

While I can certainly appreciate the sentiment against raising taxes unnecessarily, you can’t just sweep that option off of the table wholesale. I hope our state representatives and senators will bear this in mind as they start making tough decisions next month.

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