Friedman Day 2011 a sold-out success

This morning the Bluegrass Institute celebrated Milton Friedman Day 2011 by presenting a series of lectures and videos honoring the dauntless defender of liberty in front of a sold-out crowd at the University of Louisville.

Jim Waters, Vice President of Policy and Communication at the Bluegrass Institute, opened the event by describing Friedman as “the great communicator.” As Waters discussed, Friedman was one of the greatest economic theoreticians of the 20^th century, but was also able to turn these complicated concepts into tangible ideas which any concerned individual could understand.

In doing so, “Milton Friedman changed the world. He’s still changing it, and I believe he’ll continue to do so for a long, long time.”

Professor Stephan Gohmann, BB&T Professor of Free Enterprise at the University of Louisville, discussed some of Friedman’s more technical contributions to economics and the liberty movement. Gohmann pointed out that countries with higher degrees of freedom significantly outperform those with less freedom, and that’s across virtually any indicator imaginable – GDP, mean income of the poorest segment of the population, life expectancy, infant mortality rates – you name it.

For Friedman, the importance of economic freedom among nations was a no-brainer.

Former Kentucky gubernatorial candidate, Phil Moffett, rose to discuss Friedman’s legacy in the school choice movement, pointing out that Milton and his wife, Rose, would have a lot to say about the disappointing state of Kentucky schools.

Moffett took a page out of one of Friedman’s many books, stating that parents, not government, are responsible for educating their children, and programs like school vouchers and charter schools put that power back into parents’ hands.

Among other notable attendees were State Rep. Tim Moore (R-Elizabethtown) and John Garen, Gatton Endowed Professor of Economics at the University of Kentucky who recently authored “An Unsustainable Path: The Past and Future of Kentucky Medicaid Spending.”

Friedman Day 2011 was another successful event presented by the Bluegrass Institute, and one that continued the legacy of free markets that Friedman did so much to promote. In the words of Milton Friedman, “You could see a remarkable revolution, if only you’d let the market go to work.”

This coming Sunday would have been Milton Friedman’s 99^th birthday.

Teachers denounce teachers’ union march on DC

Don’t think all of our teachers buy the positions of the National Education Association and its various state affiliates. That includes buying into the pending union-sponsored “Save our Schools” march on Washington, DC tomorrow. The march is mostly to fuss about funding for our schools with a few jabs at attempts to create some real standards and accountability for teachers thrown in, as well.

Actually, growing numbers of our nation’s more thoughtful teachers don’t buy in to the NEA and its ultra liberal, status quo slanted messages. Those professionally oriented teachers have now formed an alternative group called the Association of American Educators (AAE).

This refreshingly honest and candid teachers’ voice says some things about education that I’ll bet you won’t find in many Kentucky newspapers.

For example, regarding the pending Save our Schools march, AAE says:

“With declining membership, unilaterally negative press, and countless brewing legislative and legal battles, union leaders are struggling to win the messaging war. This made-for-media rally is their solution.”

The AAE continues:

“The solution is not an expensive rally to turn back the clock to a time when union-driven policies were not challenged. The solution is for individual teachers to be part of public discourse. We caution teachers not to confuse a union-led publicity stunt with credible teacher voices.”

Boy, is that candid! And, on target!

Read all the comments from the AAE about the NEA’s publicity stunt here.

If our teachers really want to save our schools, they can start by dumping the status quo, 1950’s factory union mentality that too many still cling to instead of risking possible heat stroke in DC just to prove they don’t really want change at all.

'Rewarding Failure' on #FOIAchat

I will be discussing education open records requests and "Rewarding Failure" on FOIAchat this afternoon. FOIAchat takes place each Friday, 2pm EST on Twitter as a way for transparency advocates across the nation to share stories and best practices for open records.

You can follow me on twitter @LoganBIPPS and the hashtag for the conversation is #FOIAchat.

Happy Milton Friedman Day

In honor of Milton Friedman Day 2011, here is a video of what appears to be a young Michael Moore receiving a few doses of economic reasoning. Enjoy!

Milton Friedman Video of the Day

Celebrate Milton Friedman's legacy of freedom for Friedman Day 2011, this Friday, June 29th!

Do you want to help fight corruption in government?

Do you trust your government?

A new Rasmussen poll claims that 46% of likely U.S. voters think most members of the United States congress are corrupt and an ever larger number think they seek office to further their own careers rather than defend the Constitution and take up for their constituents.

46% is a pretty big chunk, no?

At the Bluegrass Institute, we shine the light on corruption in government through transparency and accountability. We expose corruption and hold elected officials' feet to the fire. Help us keep an eye on YOUR government with an online recurring donation of $5, $20 or even $50!





Will you help us fight corruption in Frankfort?

AP: Honest high school graduation rates finally coming to a state near you

Someday, even to your state

This AP news story, which is cropping up like mushrooms in news outlets all over the country, is going to play out in Kentucky, as well.

Bluntly put, now that education agencies around the nation are finally being forced to get honest about high school graduation rates, the inflated claims of the past are about to tumble in most states.

Note, as I have previously mentioned, the AP article correctly says Kentucky will be the last, along with Idaho, to finally get truly accurate high school graduation rate data. The first report with such data won’t be released until 2014, by the way, just shy of a quarter of a century after KERA was enacted.

Because of our laggardly performance, the US Department of Education is requiring us to start reporting high school graduation rates this summer with a new formula that was extensively researched in 2006. This formula was found to work best in states like ours that had not yet developed decent student tracking programs.

Look for Kentucky’s high school graduation rates to drop somewhere around 10 points statewide. Instead of somewhere around 84 percent, we’ll likely fall in the mid-70 percent range.

However, if they don’t ‘alter’ their data (an unfortunate temptation), some individual school districts in the state are going to see their bubbles burst a lot more severely.

BTW, schools that might be tempted to ‘jiggle’ their data this year just to look good might be making a really bad choice. Data to calculate the new formula exists for many previous years in Kentucky for both the state and individual schools, so trend lines can readily be established.

And, the data for prior years already are publicly available.


Any sudden trends of improvement this year are going to stick out – just like, say, a sudden jump in ACT scores in Perry County.

Furthermore, because the US Secretary of Education is breathing fire about cheating on state testing used for No Child Left Behind, and because high school graduation rates are also used for NCLB, messing with the now more easily audited graduation rate data might bring federal as well as state heat.

Anyway, I hate to say I told you so, but I told you so.

In fact, I started telling Kentucky our dropout and graduation rate reporting was messed up in the mid-1990s. Maybe if people had listened back then, we’d have recognized how serious the problem was long ago and would have fixed much of the problem by now.

Instead, thanks to inaccurate reporting, we’ve probably been losing on the order of 10,000 kids a year since KERA began, every single year.

School districts wary of new state end-of-course exams

Over the past few weeks, school districts have been responding to a Kentucky Board of Education decision that new end-of-course exams in Algebra II, Biology, English II and U.S. History should count 20 percent of each student’s final grade.

Local boards that don’t want to weight the new tests that heavily are required to tell the state board why they will use a smaller weighting.

Apparently, local boards have plenty of reservations about the still-to-be-seen end of course exams, and a number of them are choosing to give the new tests far less than a 20 percent weight, as this and this news articles report.

Somehow, I can’t really blame the local boards – for now. Committing 20 percent of a student’s grade to an untried test isn’t student friendly.

Also teachers are still adjusting to the new curriculum that these tests are supposed to be built around, so for the next year or two students might not get all they need in class to get high scores on these tests.

However, over time, assuming the new tests prove out, schools that don’t provide meaningful weight to them will lose an excuse that was often used with the CATS assessments – students had no ‘skin in the game’ and didn’t try hard on those tests.

Poorest performing schools in Jefferson County get lots of rookie teachers

Probably too many rookie teachers

Management of the turn-around of Persistently Low-Achieving Schools in Jefferson County looks awfully shaky.

The Courier-Journal reports that 60 of the 135 teachers brought in to the second group of the district’s schools to be tagged as Persistently Low-Achieving are first-year teachers with absolutely no prior experience. They are going to face a demanding task: working in some of the district’s most challenged schools with some of the district’s most under-served students.

In addition, 20 more teachers coming into these Persistently Low-Achieving Schools are just transfers from one of the other Persistently Low-Achieving Schools that were identified this year. That might just be moving problems around.

Clearly, not everyone is happy about this, including the new Associate Commissioner for the ‘District 180’ program, Dewey Hensley. Hensley – who has a great reputation for school turn-around in the Atkinson Elementary School in Jefferson County – said he is not sure the district has gone far enough in its efforts to fix problems in these low-performing schools.

Kentucky Commissioner of Education Terry Holliday is also unhappy. He questions whether this large group of inexperienced teachers can raise performance fast enough to meet federal and state requirements.

I wonder if these new hire teachers are going to get the kind of mentoring they badly need as they start their classroom careers. With so many brand new teachers, it seems unlikely there are going to be enough experienced teachers in the school with the interest and time to do the job. After all, even experienced teachers in these schools will be facing some of the district’s toughest education challenges.

Swirling around on the periphery of all of this is the fact that at least some factors in the teacher restaffing action in Jefferson County may not be in compliance with House Bill 176 from the 2010 Regular Legislative Session. That bill established the Persistently Low-Achieving Schools program.

Among other things, HB 176 said union contracts could not interfere with the placement of teachers in these troubled schools. However, a report from the Kentucky Office of Education Accountability (OEA) indicates a Memorandum of Agreement between the union and the school district could indeed be interfering in ways the bill does not permit. Check out the OEA’s comments on page 40 of the report.

One thing seems pretty certain: we are going to be spending a lot of extra money in these schools, about half a million dollars a year per school, to turn them around. Somehow, it seems like more money by itself won’t be nearly enough.

Open Records: Jefferson County Schools, Berman performance evaluation

An open records request was sent today to obtain the most recent performance evaluation for outgoing Jefferson County Public Schools (JCPS) superintendent Sheldon Berman.

JCPS and Berman were part of the investigative report "Rewarding Failure" which shed light on the broken process of evaluating the performance of school district leaders. With this records request, the Bluegrass Institute is following up to see if there has been any progress!

You can track the request progress here!

Daviess County schools get really high speed Internet connections

Schools in the Daviess County School District are now all upgraded to a super-fast fiber-optic web connection, which the Owensboro Messenger-Inquirer (subscription) says is 200 times faster than the three T1 lines each school formerly used.

As I recall, T1 lines run at about 1.5 Megabytes per second, so the new connections are on a whole other plant from the cable modem and digital subscriber telephone system connections most households use for ‘high speed’ Internet service.

Of course, with digital learning becoming far more common in our schools, and with each child using a computer to access the web needing the equivalent bytes per second that a household would need, the requirement for fiber-optics is more apparent.

Sadly, fiber connectivity isn’t available everywhere in Kentucky, which means that while kids in Daviess County are about to see a real boost in their Internet education activities, children elsewhere are going to be left behind. We’ll have more to say on this bandwidth issue shortly in a forthcoming Bluegrass Institute report, so stay tuned.

But, ending on a happy note, at least in Daviess County the upgrade is actually cheaper than the former system. The three T1 lines each school formerly used cost a total of $1,200 a month per school. The new fiber service is only $750 a month per school.

Nice shopping, Daviess County Public Schools!

Cheating our kids: poor performance = pay increase?

If your child's school district had only 11.6% of 11th grade students meeting the benchmark ACT score for math in 2008 and an embarrassing 9.2% in 2009, would say say there is work to do? With scores not much more impressive in other subjects would you say the superintendent deserved a perfect score on their performance evaluation?

Well, this is the case in Carter County Public Schools. Below are graphs indicating the percentage of 11th grade students meeting the ACT benchmark score in various subjects. The numbers are not flattering.

Despite these numbers, superintendent Darlene Gee was given rave reviews on her evaluations with ZERO mention of student performance. These evaluations were accompanied by salary increases. Significant increases...

Take a look at the evaluation for yourself...

2009 evaluation

2010 evaluation

This amounts to rewarding failure. Student performance is poor while the leader of the district continues to receive significant pay increases? How does that work?

New study says healthcare reforms make business owners nervous

The National Federation of Independent Businesses released a study this month called "Small Businesses and Health Insurance: One Year After Enactment of PPACA". It appears they have found that small business owners are a bit nervous...

Read the full report here.

A finding that stuck out to me was that businesses not currently offering health insurance have no incentive to start offering this benefit after the enactment of the Patient Protection and Affordable Care Act. Once again we see that government intervention in the marketplace discourages incentives for the individual and business and ends up costing everyone more money and fewer choices.

Generally when the government meddles in the private sector, it is bad news and results in limited choice. Say for instance, investing in electric cars or providing tax incentives to theme parks.

Quote of the day: Restoring liberty?

“But a Constitution of Government once changed from Freedom, can never be restored. Liberty, once lost, is lost forever." --John Adams

Video: BIPPS' Jim Waters on Kentucky Tonight's debt discussion

Jim Waters of the Bluegrass Institute took part in a panel discussion about United States' debt problems on Monday night's 'Kentucky Tonight'.

You can watch the full discussion here.

Milton Friedman Video of the Day

A classic Milton Friedman clip, educating Phil Donahue on the virtues of self-interest. Enjoy!

Come celebrate Milton Friedman's legacy of freedom at the University of Louisville Belknap Campus this Friday, July 29th at 8 AM. Click here to RSVP for Friedman Day 2011!

Cheating on Kentucky’s state tests getting more risky

In the aftermath of the huge cheating scandal in Atlanta’s public schools – where educators, not students, stepped over the line – the Kentucky Department of Education is getting very proactive to preclude similar problems on Kentucky’s new assessments. Those new assessments go into use in the spring of this coming school term.

According to a Kentucky School Boards Association news release, the state is going to have the contractor for the new assessments employ forensic detection systems to spot cheating. There will also be a test security audit to find out if there are any loopholes in the testing program. Other actions will also be taken, including continued required briefing of staff about inappropriate conduct.

By the way, forensic detection already may have played a part in confirming the ACT college entrance test cheating scandal in the Perry County Public School District. School staff members involved in that improper activity are still under investigation. Perhaps we will see action concerning those individuals soon.

So, as we approach the start of a new school year, any Kentucky teachers and school leaders who might be contemplating inappropriate actions to boost test scores would be wise to take on a new-school-year’s resolution: Don’t!

Your career and reputation isn’t worth it.

Your students deserve better examples.

And, the odds are going up that you will get caught!

The power of choice, free-markets in education

The Wall Street Journal recently published a great discussion about free market solutions to pressing education problems. The video also dispels a lot of myths about school choice.



The power of choice is amazing.

Click here to see 10 reasons why Kentucky's children deserve school choice!

BIPPS on 'Kentucky Tonight' ... tonight!

Jim Waters, vice president of policy and communications for the Bluegrass Institute, Kentucky's free-market think tank, addresses the debt-ceiling controversy tonight on KET's Kentucky Tonight at 8 p.m. (EDT)

Click here to watch last week's show on the issue. Panelists included Kathy Gornik, chairman of the Bluegrass Institute board of directors.

Waters will be joined by WKU economics professor Brian Strow, Kentucky AFL-CIO president Bill Londrigan and UK economics professor Ken Troske.

Bill Goodman hosts the hour-long, award-winning public affairs program, which is replayed at 2 a.m. on Wednesdays.

During the live Monday broadcast, viewers with questions and comments may participate by calling 1-800-494-7605 or by e-mail at kytonight@ket.org or use the message form at www.ket.org/kytonight.

Bill Gates on his decade of involvement with school reform

$5 billion later, he says, “It's hard to improve public education—that's clear.”

In a recent Wall Street Journal interview Gates admits laments that his first major foray into school reform – the creation of small enrollment high schools – didn’t make much of a difference where it counted with greater numbers of students going on to college.

Writes the Wall Street Journal:

“The reality is that the Gates Foundation met the same resistance that other sizeable philanthropic efforts have encountered while trying to transform dysfunctional urban school systems run by powerful labor unions and a top-down government monopoly provider.”

Part of Gates’ problem may be the advice he’s been getting. For more on that, click the “Read more” link.

Read more »

Milton Friedman Quote of the Day

"All of these (entitlement) programs involve some people spending other people's money for objectives that are determined by still a third group of people. Nobody spends somebody else's money as carefully as he spends his own. Nobody has the same dedication to achieving somebody else's objectives that he displays when he pursues his own."

Free to Choose, Part 4

These are some poignant words to keep in mind as the government spending controversy comes to a head.

Come celebrate Milton Friedman's legacy of freedom at the University of Louisville Belknap Campus, July 29th at 8 AM. Click here to RSVP for Friedman Day 2011!

'Kentucky Tonight': More on the debt-ceiling debate

Jim Waters, vice president of policy and communications for the Bluegrass Institute, Kentucky's free-market think tank, addresses the debt-ceiling controversy Monday on KET's Kentucky Tonight at 8 p.m. (EDT)

Click here to watch last week's show on the issue. Panelists included Kathy Gornik, chairman of the Bluegrass Institute board of directors.

Waters will be joined by WKU economics professor Brian Strow, Kentucky AFL-CIO president Bill Londrigan and UK economics professor Ken Troske.

Bill Goodman hosts the hour-long, award-winning public affairs program, which is replayed at 2 a.m. on Wednesdays.

During the live Monday broadcast, viewers with questions and comments may participate by calling 1-800-494-7605 or by e-mail at kytonight@ket.org or use the message form at www.ket.org/kytonight.

Smells like school spirit

Here is a NY Times/David Brooks Op-Ed that is well worth your time to read if you care at all about certain elements in the public school system who would mislead us about the need for real reform.

Milton Friedman Quote of the Day

"Increasingly, schools have come under the control of centralized administration, professional educators deciding what shall be taught, who shall do the teaching, and even what children shall go to what school. The people who lose most from this system are the poor and the disadvantaged in the large cities. They are simply stuck. They have no alternative."

Free to Choose, Part 6

Come celebrate Milton Friedman's legacy of freedom at the University of Louisville Belknap Campus, July 29th at 8 AM. Click here to RSVP for Friedman Day 2011!

Kentucky’s statewide virtual high school gets even better!

We’ve been fans of the Barren Academy of Virtual and Expanded Learning (BAVEL) ever since issuing our report last year about “Virtual schooling in Kentucky: Great promise with challenges.”

Now, BAVEL is expanding its program thanks to a three-way partnering with the Florida Virtual Schools and Pearson Virtual Schools.

This new partnership could allow BAVEL to expand the grades it can serve to include middle schools and to offer many more courses to high school students. Pearson indicates its virtual offerings in partnership with the Florida Virtual Schools now include 100 different courses.

BAVEL is Kentucky’s totally on-line digital learning experience. Completing BAVEL results in the award of a standard Kentucky high school diploma.

BAVEL students take all courses on line and can do so 24 hours a day, 7 days a week, 365 days a year. This incredible flexibility meets needs of a wide-ranging group of students who are in danger of dropping out due to having to work or being confined due to medical reasons, or who just are not thriving in a standard classroom setting.

BAVEL students actually do a district-to-district transfer into the Barren County Public School District even though they don’t change their living place.

WCLU Radio reports that:

“Over 95 students have graduated from BAVEL with over 100 students enrolled this past school year alone from among more than 20 Kentucky public school districts.”

BIPPS’ own Holly Carter reports she took courses from Florida Virtual Schools a number of years ago, and they were high quality. So, the program at BAVEL, already good, are about to get even better.

Medicaid/Medicare Fraud Reveals Incentive Problems

Following up on what Holly presented this morning, I've produced a short video with the Cato Institute's Michael F. Cannon detailing some of the particularly nasty aspects of Medicaid/Medicare fraud.



One of the issues that makes Medicaid/Medicare fraud so intractable is that the lawmakers who approve the programs' spending have muted incentives to crack down on fraud since any antifraud program would impose costs on constituents. If you haven't yet, read John Garen's report on Medicaid in Kentucky.

Medicaid Fraud Exposed

An Unsustainable Path warns of the dangerous trajectory of Kentucky's Medicaid spending. Now, we have a look at some of the deeper problems with the Medicaid program.

New alarming investigative videos by James O'Keefe show rampant fraud in Medicaid departments across the country. So far, he's released two videos exposing corrupt practices in Ohio, North Carolina and South Carolina. Medicaid offices don't blink an eye at offering applications and acceptance to applicants posed as self-proclaimed drug dealers and terrorists.

You can watch the two videos below to see exactly what is wrong with this system:





Is this what Medicaid was really intended to do? As spending levels continue to increase and the nation is on the brink of fiscal disaster, states and the federal government must closely examine Medicaid programs and staff practices. This corrupt behavior is one thing we should all be able to agree to cut.

Don’t know much about geography, either!

New federal testing results for geography were released today, and the results are not impressive.

In fact, Education Week’s headline pretty much sums it up.

“Students Lose Way in NAEP Geography Test”

Between 1994 and 2010 scores rose a bit for fourth grade students but stayed flat for eighth graders and declined by a statistically significant amount for high school seniors.

Not surprisingly, Daniel Edelson, the vice president of education at the Washington-based National Geographic Society, took a dim view of the new scores. He said:

“The basic story here is that we have not invested in geography education at all in the last decade. Both for workforce preparedness and national security, there are big costs to neglecting geography education. You need people who can reason about geographic challenges … people who understand water and energy systems.”

One interesting comment from EdWeek says:

“Geography and other social studies are often lumped together in courses, which can reduce students’ ability to form a coherent foundation of knowledge over time.”

Could that be a problem in Kentucky, too?

Unfortunately, the new report only provides nationwide results. Individual state performance was not surveyed.

Cheating on state assessments could bring more federal intrusion

Education Week is reporting (subscription?) that US Secretary of Education Arne Duncan is really unhappy about major cheating scandals on state assessments unfolding in Atlanta and Washington DC.

EdWeek says the feds are now talking about creating anti-cheating rules states will have to follow with their assessment programs to keep a watch for cheating.

Getting caught for cheating on tests with federal implications could have serious consequences. The EdWeek article indicates this might involve charges of fraud.

As always, the federal lever is funding. States that don’t want to follow the federal playbook on cheating might find themselves shorted on federal education dollars.

Read more »

Video: Kathy Gornik discusses U.S. debt on Kentucky Tonight

Bluegrass Institute board chair Kathy Gornik took part in a panel discussion about the United States' debt on KET's Kentucky Tonight.

Watch the full broadcast.

Teacher Professional Development: Not producing better education

At first blush, it doesn’t seem to make sense. Shouldn’t giving teachers more on the job training, called “Professional Development” (PD) in education circles, create better education programs?

Apparently, a new federally sponsored student concludes the answer is: NO, at least for seventh grade mathematics teachers.

The study was conducted by the American Institutes for Research and the MRDC organization.

Education Week says (subscription?):

“The focus of the training was to better prepare teachers to cover rational number topics, such as fractions, decimals, percent, ratio, and proportion, which are seen as an important foundation for learning algebra but also a common stumbling block for students.”

And, the PD program selected was supposed to be based on all the collective research on what works best.

So, the fact that the training failed to improve either teacher knowledge or student performance is especially troubling.

This certainly raises uncomfortable questions:

Clearly, this offers another example to support our long-raised concerns about the quality of research in education (such as in this blog).

It also raises concerns about the ability educators to even know what works.

Ironically, the new study indicates that recent cutting of funding for PD in Kentucky might not have been such a bad idea. If PD isn’t effective, we’d just have been wasting our money.

Poor performing teachers in DC fired

While Kentucky doesn’t even have a formal process to follow for revoking teaching certificates for poor performance and firing a teacher is a long and drawn out affair, in Washington, DC, they are getting serious about getting low-performing teachers out of the classroom.

The Washington Post reports that more than 200 teachers were just fired for poor performance in the classroom.

Apparently, the DC school system doesn’t have the same restriction on such action that is found in most states’ teacher tenure laws. Evaluation systems in the nation’s capital are exempt from collective bargaining.

It will be interesting to see how this action plays out in the chronically under-performing DC classrooms.

Government is Not Society

A recent Courier-Journal editorial, lamenting University of Louisville Hospital’s financial inability to provide indigent-care for all non-Jefferson County residents, demonstrates a logical fallacy that so many mainstream political pundits commit – equating government with society.

Those committing this all-too-common flaw in reasoning imply that if there’s something wrong in society then government intervention is the only possible solution. The heroic leap in logic is obvious when isolated, but still smuggled into all manner of political debate.

No one understood the difference between the coercion of government intervention and voluntary social cooperation better than Milton Friedman:

The fundamental principal of the free society is voluntary cooperation. The economic market, buying and selling, is one example. But it's only one example. Voluntary cooperation is far broader than that. To take an example that at first sight seems about as far away as you can get -- the language we speak; the words we use; the complex structure of our grammar; no government bureau designed that. It arose out of the voluntary interactions of people seeking to communicate with one another. (Free to Choose, Part 1)

Why must the lack of healthcare for the indigent necessitate government intervention? What about market solutions, like easing AMA-enforced restrictions on the entry of new physicians into the healthcare profession? What about other purely voluntary solutions, like through the charitable giving of religious or ethnic institutions? Sadly, after decades of the Great Society crowding out this sort of voluntary cooperation, the common view prevails that it’s not my responsibility to look out for my neighbor -- it’s the government’s!

To find sustainable solutions to these genuine societal ills, we must learn from great thinkers like Milton Friedman -- we must take more individual responsibility for ourselves and our neighbors, and remember that there’s a whole lot more to society than the government.

Milton Friedman’s message will be heeded loud and clear at Freidman Day, July 29^th, at the University of Louisville. Click here to RSVP.

Dr. John Garen's Herald-Leader Medicaid op-ed

Author of "An Unsustainable Path: The Past and Future of Kentucky Medicaid Spending" and Bluegrass Institute adjunct scholar Dr. John Garen published an op-ed in the Lexington Herald-Leader. The piece discusses the need for Medicaid Reform. You can read the op-ed here.

You can also read/download the full text of "An Unsustainable Path" for more information about Kentucky's Medicaid plight.

BIPPS Board chair addresses the debt ceiling Monday on 'Kentucky Tonight'

Kathy Gornik, president of Lexington-based THIEL Loudspeakers and chairman of the Bluegrass Institute Board of Directors, addresses the debt-ceiling controversy Monday on KET's Kentucky Tonight at 8 p.m. (EDT)

Gornik, who will talk about the possible impact of raising the debt ceiling on her business, will be joined on the program by Andy Hightower, executive director of Kentucky Club for Growth, Terry Brooks, executive director of Kentucky Youth Advocates, and an AARP representative.

Bill Goodman hosts the hour-long, award-winning public affairs program, which is replayed at 2 a.m. on Wednesdays.

During the live Monday broadcast, viewers with questions and comments may participate by calling 1-800-494-7605 or by e-mail at kytonight@ket.org or use the message form at www.ket.org/kytonight.

Milton Friedman Quote of the Day

"Sometimes the market looks like chaos, and so it is. But underneath it is highly organized by the impersonal forces of a free marketplace."

Free to Choose, Part 1

Come celebrate Milton Friedman's legacy of freedom at the University of Louisville Belknap Campus, July 29th at 8 AM. Click here to RSVP for Friedman Day 2011!

It's about time ... to end ag subsidies

Fifteen years and billions of dollars later, legislation has been proposed that would "eliminate agriculture direct payments subsidies completely and permanently."

When these direct payments to farmers began in 1996, they were meant "to serve as a temporary transitional handout to farmers as they moved in a more market-oriented direction."

But good intentions do not a temporary government program make.

The direct payments program has cost taxpayers $41 billion since Congress made it permanent in 2002.

According to the Congressional Budget Office, eliminating these subsidies would save $28 billion over the next decade.

Gubernatorial Candidate David Williams: Shut down Jefferson County Board of Education

Taking a cue from other large cities like New York and San Diego, Kentucky Senate President/Candidate for Governor David Williams is calling for a shut down of the Jefferson County Board of Education and transfer of power over schools to the mayor of Louisville.

It’s a dramatic proposal, but something better needs to happen in the Louisville school system, where a huge proportion of the state’s lowest performing schools are found and where dropouts and poor academic performance are an everyday fact of life.

Read more »

Nice commentary on teachers who cheat

Reason Online makes some good points in this article about teachers making excuses for cheating to hide problems with status quo education.

KY Chamber session gets some things right about education

I was on the road when the Kentucky Chamber of Commerce held its annual conference, but a post in the chamber’s blog concerning an education discussion is worth a look.

It was a three-way panel with former US Secretary of Education Margaret Spellings, international education consultant Sir Michael Barber, and Kentucky Commissioner of Education Terry Holliday.

Some points:

Spellings says business people must act as “the point of the spear” in fighting for education reform in order to develop a qualified workforce that meets the demands of a new economy. Both parents and business leaders should demand higher expectations from students and, most importantly, teachers and administrators.

She also said Kentucky had room for improvement in identifying and retaining effective teachers and removing ineffective teachers. She didn’t like the lack of charter schools and noted the disappointing achievement gap between white and minority students.

Barber said, “Any system that wants to make progress has to stop feeling sorry for itself and take responsibility for its own future.” He also pointed out, “Spending money alone won’t fix the system.”

Holliday admitted that a third of our kids are not graduating from high school. He also pointed to another shocking fact: “A meager four counties are graduating the vast majority of our state’s college-ready students.” That means the vast majority of Kentucky’s 174 school systems are not meeting this very important goal.

Clearly, there is much work to be done.

Educator cheating on tests increasing across the nation

Kentucky not immune

Fox News reports that there is a disturbing rise in school staff and teachers cheating on tests their students take.

Even US Secretary of Education Arne Duncan is “stunned.”

And, don’t think that cheating is just happening elsewhere. Right here in Perry County, Kentucky a district-wide cheating scandal on the ACT is still an open and, so far, unpunished issue.

Read more »

Budget surplus!? Think again

The Beshear administration is touting a budget surplus for this fiscal year and claims that roughly $100 million will be deposited into the rainy day fund.

This is a bit misleading, no? When a state has billions of dollars in unfunded liabilities in public pensions and has to borrow $97 million from a future year's Medicaid budget to plug a hole in the current year's, an extra $100 million does not count as a "surplus".

Until the pension system is fully funded and Medicaid (which is currently on an unsustainable path) is on solid ground, claiming a surplus seems a bit premature.

Talking about pension reform is just the first step

With Kentucky House leader Greg Stumbo stating that pension reform for new hires is up for discussion, does this mean we may finally get somewhere with state pension reform in the next General Assembly?



While we need to do much more than simply open the discussion about public pensions, this is certainly a step forward from Gov. Beshear's believe that this problem will take care of itself.

Milton Friedman Quote of the Day

"The free market enables people to go into any industry that they want; to trade with whomever they want; to buy in the cheapest market around the world; to sell in the dearest around the world. But most important of all, if they fail, they bear the cost. If they succeed, they get the benefit and it's that atmosphere of incentive that has induced them to work, to adjust, to save, to produce a miracle. This miracle hasn't been achieved by government action - by someone sitting in one of those tall buildings and telling people what to do. It's been achieved by allowing the market to work."

Free to Choose, Part 1

Come celebrate Milton Friedman's legacy of freedom at the University of Louisville Belknap Campus, July 29th at 8 AM. Click here to RSVP for Friedman Day 2011!

Williams proposes turning JCPS over to the mayor

Senate President and GOP gubernatorial nominee David Williams is proposing eliminating the Jefferson County Board of Education and placing the state’s largest school district under the control of the Louisville mayor.

It’s a new idea for Kentucky that is already being done elsewhere – including New York City, which has seen significant academic improvement since the mayor took over the school system.

Noting that a majority of the lowest-performing schools in the commonwealth are in Louisville, Williams said the Jefferson County Public Schools system is are holding back the rest of the state.

He said the JCPS board is “dysfunctional and is under the control of the teachers union (and) will never change unless people stand up.”

It’s no shocker that defenders of the status quo oppose Williams’ move.

Jefferson County teachers union boss Brent McKim called the Burkesville Republican’s comments “ridiculous,” while Gov. Steve Beshear claims “the system has worked well.”

Actually, what’s “ridiculous” is, according to the Legislative Research Commission, is that the teachers union has stood in the way of the district placing enough highly skilled educators in JCPS’ lowest-performing schools.

Finally, based on his Pollyanna comments, the governor seems uninformed about the fact that Jefferson County is home to 59 percent of Kentucky’s Persistently Low-Achieving Schools – way more than the percentage of Kentucky’s public-school students enrolled in JCPS.



Does this sound like a system that "has worked well?”

In fact, Williams’s description of the board as “dysfunctional” may have been too nice.

Stumbo on defined contribution

Charles George, manager of public affairs for the Kentucky Chamber of Commerce, tweeted from the Kentucky Chamber Business Summit and Annual Meeting where state representative Greg Stumo was speaking:

Defined contribution is certainly something that needs to be talked about. Why? Simply put, public pensions, as they stand now, are breaking the backs of cities, counties and states.

Bluegrass Beacon: Whitfield’s vote tilts playing field toward union contractors

In a real head scratcher, Hopkinsville Rep. Ed Whitfield and 26 of his fellow Republicans voted to allow the federal government to force nonunion contractors to sign project labor agreements as a condition for working on military construction projects. The measure passed by a single vote, 204-203.

Read my latest Bluegrass Beacon column here.

Milton Friedman would have a lot to say about Louisville's Metro Sewer District

The recent turmoil at Louisville’s Metropolitan Sewer District (MSD) and Mayor Greg Fischer’s ensuing outside audit of the agency’s management and governance should come as no surprise to Kentuckians, at least to those of us who understand the power of incentives.

And no one understood the power of incentives better than the late Milton Friedman.

As Milton and his wife Rose Friedman wrote in their best-selling work Free to Choose, “Experience shows that once government undertakes an activity, it is seldom terminated. The activity may not live up to its expectation but that is more likely to lead to its expansion, to its being granted a larger budget, than to its curtailment of abolition.”

The governmentally-privileged MSD in Louisville is a textbook example of this lesson.

Why should Kentuckians expect a business that is legally guaranteed a comfortable rate of return to lose much sleep over providing an efficient product through sound management? Barring front page headlines of corruption or political outcry, MSD faces virtually no incentives to lower costs or provide a quality product to consumers. Instead, MSD will soon raise rates by 6.5% per year.

Just think if business worked this way for the little guy­­­… Hey small business owners! As long as you don’t infuriate customers to the point that they’re imploring local officials and rioting in the streets, you’re sure to enjoy a hefty profit!

If only life were this easy for the rest of us.

The Friedmans’ message will be heeded loud and clear at Freidman Day, July 29^th, at the University of Louisville.

$2 Trillion

You think it's hard to cut spending in Frankfort? This short video I produced with Austin Bragg helps explain the trouble with the federal government's "multi-year budget cuts." They're just not very credible projections.




Here's a Jim Waters op-ed on the challenge of cutting spending from the Herald-Leader.

Prichard joins in on education statistics fantasies

I wrote yesterday about some pretty bad analysis of education performance in a new report from a group at UK.

Today, I stumbled across more of the same in the Prichard Committee’s blog. This time, it’s a fiction that Kentucky captures most of its high school dropouts accurately.

Don’t believe it!

Prichard simplistically looks at the total number of high school diplomas and certificates handed out in 2010 and tries to compare that to the number of eighth grade students who took Kentucky Core Content Tests back in 2006.

Prichard says Kentucky had 43,711 graduates in 2010, which matches the Kentucky Department of Education’s (KDE) data on page 14 in the June 1, 2011 Nonacademic Data Briefing Packet.

But, the KDE has not told us how many of those diplomas and certificates were awarded to students who took more than the standard amount of time to earn them. The release of that detailed data has been delayed until August, a dubious delay I have mentioned before.

However, an Excel spreadsheet report covering the previous year shows 135 diplomas were awarded to learning disabled students who spent five years in high school and another 756 students also took more than four high school years to earn a diploma. They would not have been part of the Class of 2009 back in the eighth grade.

Based on the 2009 data, I would estimate nearly 900 students who got a high school credential in 2010 were not part of the class when it was in eighth grade back in the 2005-06 school year.

Also, other research I have done indicates that in Kentucky about 1,500 students transfer to public high schools from non-public schools between grades eight and nine. Prichard’s analysis totally ignores this extra input to the class’ enrollment upon high school entry.

Putting this together, the real 9th grade first time entrants for the class of 2010 would not be the 50,841 students Prichard claims; it would be more like 52,341.

At the other end of the process, the total number of graduates from this entering group of ninth grade students would be something like 43,711 minus 900, or only 42,811.

That means we ‘lost’ 52,341 minus 42,811, or 9,530 students. But, the KDE’s Nonacademic Data Brief’s Table 1a only shows 6,647 dropping out of the Class of 2010 as it proceeded through each grade in high school.

Where did the other 2,883 go?

Don’t ask Prichard.

But, do ask KDE why it is taking so long to get accurate dropout and graduation rate information in the “education state.”

Kentucky will be the last, or second to last, state to finally report accurate high school graduation data, and that won’t reach the public until 2014.

And, I suspect I will have to point out errors in Prichard’s analysis every year until then.

Cafe Hayek on government schools

Economist Donald Boudreaux discusses the importance of competition in education. A line that stuck out to me:

"...each government school has a captive pool of students, and that government schools get their revenues not from paying customers but from taxed property owners."

The Bluegrass Institute has long been an advocate of more competition in the education system.

Nonsense Kentucky education rankings appear again like a bad ghost

Surprise: UK’s economists are pushing the latest fairy tales

The Lexington Herald-Leader just announced a reincarnation of a totally bogus education ranking system originally fabricated by the Kentucky Long Term Policy Research Center (KLTPRC).

According to the article, the ‘new’ rankings are loaded with many of the very same statistical gaffs we found in the old KLTPRC reports.

For example, the UK study dares to rank scores from the ACT college entrance test for all 50 states. This is a serious statistical mistake, one students who just completed a freshman college statistics course should easily recognize.

The problem: in most states the ACT is only taken voluntarily by students who want to go to colleges that require it in preference to the SAT. Because most East and West Coast schools prefer the SAT, and because students who don’t plan to go to college don’t take the test at all in most states, there currently is a huge difference in the percentage of high school graduates in each state that take the ACT. The latest available data for 2010 shows that in Maine only 10 percent of the high school graduates took the ACT, while in Kentucky 100 percent of our graduates took this test because Kentucky now requires all students to take the ACT.

Any comparison of such wildly different test samples, especially when the Maine sample was totally voluntary and is in no way related to a statistically valid random sample, is total nonsense.

In fact, if we do a somewhat better comparison, like only looking at ACT scores for those states that had a very high percentage of graduates taking the test (96 percent or more participation), we get the following ranking graph.


Somehow, that doesn’t look too impressive, does it?

By the way, years ago when the Kentucky Long Term Policy Research Center first started ranking ACT scores for all the states, we called ACT, Incorporated to find out what they thought about this. The ACT told us they strongly discourage doing such inappropriate rankings precisely because participation varies so widely from state to state.

I guess the UK crowd never talked to ACT about the character and limitations of this data. I think most Statistics 101 courses go into precisely those sorts of mistakes.

The news article also says that the new rankings include state-to-state comparisons of high school dropout data. That is absolutely unacceptable.

Kentucky’s dropout and graduation rate reporting was officially audited in 2006 and found to be seriously inaccurate, creating an overly rosy picture of what is really happening in our schools.

Even though it is now 2011, the Kentucky Department of Education has yet to release any dropout and graduation rate data based on more solid information that we will get in the future from a recently introduced high quality student tracking system, so the inflation in graduation rates and the unreliably low dropout rate reporting continues in the latest data.

But, Kentucky is way behind in getting accurate dropout and graduation rate data. Most other states have had high quality reporting for some time now, and they are reporting accurate, and usually much lower, graduation rates with correspondingly higher dropout rates.

So, we again have a huge statistical ‘apples-to-oranges’ mess, with inaccurate, picture-inflating data from Kentucky matched up against much more truthful reporting from elsewhere. No wonder we look good, but this comparison isn’t trustworthy. Armed with the facts, a Statistics 101 student would turn up his or her nose.

There are a lot more problems with trying to simplistically rank scores from the National Assessment of Educational Progress. Clearly, the people who created this report didn’t read my freedomkentucky.org Wiki item, “The National Assessment of Educational Progress,” which is often called the NAEP.

If they had, they would have discovered things like this telling map, which treats the latest available NAEP Grade 8 Math data like the statistically sampled data it is.



Once the statistical sampling errors in the NAEP are considered, only one state in the country, West Virginia, had white student scores that were lower than Kentucky’s in the 2009 NAEP Grade 8 Math Assessment. By the way, whites comprise about 85 percent of Kentucky's students.

Now, how’s that again about Kentucky’s rankings against other states?

Why would professors from the University of Kentucky’s school of economics resurrect such an inaccurate ranking system?

I wish I knew.

Read more »

Taking liberty to the airwaves: BIPPS talks Medicaid on WKCT

Jim Waters, vice president of policy and communications, will be on Bowling Green's 930 WKCT-AM's "Drive Time" at 5:20 p.m. (central) this afternoon to discuss the Bluegrass Institute’s new report on the unsustainability of Kentucky's Medicaid program by UK economist John Garen, Ph.D.

Listen here.

Waters advocates for fundamental reform and questions whether managed care alone – which Gov. Steve Beshear is touting – will achieve the kind of savings needed to get Kentucky’s Medicaid budget back on solid footing.

Kentucky moves Medicaid to managed care

Yesterday, Gov. Beshear hosted a press conference announcing the move of Kentucky's Medicaid population to managed care.

The state has selected three new companies to manage the commonwealth's Medicaid population: CoventryCares, WellCare, and Centene Corp. Each has signed a three-year contract. Meanwhile, the state renewed Passport Health Plan's contract for one more year.

In a press conference yesterday, the governor said the move will save the state $375 million in general fund expenditures over the next three years.

The goal is to move Medicaid enrollees onto one of these three plans by October 1; however, a federal waiver for the state's move has not yet been approved.

As the new Bluegrass Institute report discussed, Kentucky Medicaid spending is growing at an unsustainable pace. Will this move be what the state needs to get the program on track?

John Garen discusses Medicaid on 'Coffee and Markets'

John Garen, professor of economics and Bluegrass Institute adjunct scholar, was interviewed on the Coffee and Markets podcasts about Kentucky's Medicaid battle. Listen to the podcast here. Below the podcast you can also read a transcript of the interview.

This interview comes on the heels of the release of "An Unsustainable Path: The Past and Future of Kentucky Medicaid Spending".

Quote of the day: Even government at its best

“Government, even in its best state, is but a necessary evil." --Thomas Paine

Lexington budget vetoes stand, let's keep moving

The Lexington city council decided not to override Mayor Jim Gray's line item vetoes that helped to curb wasteful spending in Lexington. Read the Herald-Leader's report here.

We wrote quite a bit about this and applauded the mayor for fighting for spending cuts BUT this should be viewed as just the first step. There are many other financial issues that must be tackled so that Lexington can get on solid footing for the future. Public pension reform, privatizing city owned golf courses, etc... The list goes on and on...

I encourage all Lexingtonians to contact their council member and urge them to not rest now, to keep fighting for reductions in wasteful spending!