Politicians and pundits seem to have difficulty sometimes telling the difference between government budgets and the overall economy. This is apparent in two instances this weekend.

First, Sen. Barack Obama’s economic “plan” has as one of its main action items a $50 billion transfer to the states to “jumpstart the economy.”

Aiding and abetting is Stateline.org, with its unattributed claim that state budget problems are the result of “falling revenues triggered by the housing and mortgage crisis,” marring an otherwise very informative article.

They should have talked to Kentucky Sen. Julian Carroll(D), whose recent statement seems to indicate he understands that giving legislators more money to play with may not be the best use of our resources.

Kentucky politicians of both parties need help understanding that artificially limiting the supply of healthcare services keeps prices artificially high.

Fortunately, Alaska Governor Sarah Palin gets it. Senate President David Williams is Sen. John McCain’s campaign chairman for Kentucky. Maybe he can get Palin to come here and explain it to him like she did to the Anchorage (Alaska) Daily News back in February:

“The Certificate of Need is being used by lobbyists and health-care organizations to limit competition — through appeal of other’s certificate awards or by filing suit against the state for those awards. As one member of a citizen committee studying CON in 2007 put it: “the only voices heard (testifying for continuing CON even more stringently) were from the financially vested physicians and hospitals.” Currently, there are seven active Certificate of Need lawsuits involving the state and private sector health-care providers.”

“As I said recently in my State of the State Address to the Legislature, “Under our present Certificate of Need process, costs and needs don’t drive health-care choices — bureaucracy does. Our system is broken and expensive.” Eliminating the CON program, with certain exceptions, will allow free-market competition and reduce onerous government regulation.”

After Palin comes here and sets us straight, then she could go talk to officials in Pennsylvania, Florida, and Michigan and show them how to lower their healthcare costs.

Early this year, Alaska Gov. Sarah Palin implemented Alaska’s Checkbook Online program through her Department of Administration. It is more comprehensive than that proposed by Kentucky Rep. Jim DeCesare last year or the one he has already filed for next year.

If Beshear wants to hurry up making good on his campaign promise to make Kentucky government spending less secretive to help cut down on corruption, perhaps he should follow the example of Sen. John McCain’s vice-presidential pick.

Very few people are really trying to portray the Massachusetts universal health insurance fiasco as something other than a really bad disaster that just hasn’t worked out at all.

Usually when such spin is attempted, the spinner just winds up looking goofy and in need of being set straight.

Kentucky’s big government health scheme supporters would do very well not to bark up this tree.

Kentucky looks bad in a new report from Achieve, Inc. on the first results from the American Diploma Projects new Algebra II End-of-Course Exam.

 Among the 12 states participating, Kentucky’s student sample got the fewest number of multiple-choice questions correct.

 In an even bigger surprise, only one state got lower scores on the open-response questions on this new exam. Given all the emphasis on CATS open-response questions, our kids should have murdered this part of the test – IF they had any math knowledge. Instead, they got blitzed.

 Overall, no state got a lower number of correct points than Kentucky.

The report takes pains to point out that the percentages of students tested in each state varied, making state-to-state comparisons from this first testing year somewhat difficult. However,

 While only 3 percent of the kids taking Algebra II in Kentucky were tested, Arkansas tested a whopping 92 percent of their kids. But, Arkansas got more total points correct, more open-response questions correct, and more correct points even on open-response questions. With so many Arkansas kids tested, and given the near certainty that the Kentucky Department of Education didn’t select its very worst schools for testing, there is no doubt that we got spanked by Arkansas – another Southern state.

This just adds more evidence to what we already know from Kentucky’s deplorably high college math remediation rates and the importance of algebra from the National Mathematics Advisory Panel. The panel found that algebra is the key to higher level math, but it must be taught properly. Math instruction in earlier grades must be coordinated to get kids ready for algebra.

It is really a straight-forward lesson, but sadly one our agenda-driven educators have yet to learn.

Earlier this year, Sen. Julian Carroll complained about spending “cuts” in the state budget. But Wednesday, in a legislative committee meeting, he sang a different tune.

In fact, he now describes our problem as one of overspending and says we have been borrowing too much. Wonder where he got an idea like that?
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Be warned, though. As exciting as it may be to see someone start to come around, conversion to fiscal sanity can be a slow, painful process. And elections have a powerful impact on politicians, even those without opponents. Let’s see where he is in January.

It’s hardly newsworthy anymore to see the truth die a painful death on the editorial page of the Lexington Herald Leader. But to see reporters make multi-billion dollar misstatements is more than a little disappointing.

Even Gov. Steve Beshear backed off his early puffery about the pension special session fiasco earlier this summer. Slowing down the growth rate of the underfundedness of the public employee benefits plans very clearly means that the hole will be larger in 2025 than it is now. And that is assuming future lawmakers follow through on all the suggestions in HB 1.

It’s going to be very difficult to get anyone in the House to take pension reform seriously with this kind of misinformation still floating around out there.

Two days ago the Kentucky Department of Education (KDE) released new information on Advanced Placement (AP) performance and SAT college entrance test results. The news about the AP in particular was really good – spectacularly good, in fact – actually, far too good to be true.

The racial breakout in the report indicated that between 2007 and 2008 the total umber of public school students taking at least one AP course had gone up from 13,246 to 14,687.

Meanwhile the total number of students scoring a 3, 4 or 5 (scores generally acceptable for college credit) had absolutely skyrocketed from 6,586 to 10,941, an incredible jump – 66 percent – in just one year. This indicated an astounding 74.5 percent of the 2008 AP takers had scored high enough to receive college credit, a huge jump from the 2007 percentage of 49.7 percent.

Well, it didn’t happen

I questioned the department right away about this unbelievable one-year change.

Within two hours the KDE press release was revised.

The revision now says the total number of public school students scoring in the magic 3-4-5 range in 2008 was only 7,144, not 10,941. Thus, the real rise in the total number of students getting college-accepted scores was only 8.5 percent, not 66 percent. The percentage of all students who took the AP in 2008 and got at least a three score was only 48.6 percent, not even as high as last year’s figure. Talk about a dramatic difference!

This gets more interesting

The revised KDE news release changes all the 2008 numbers for all the racial groups scoring 3-4-5. Instead of 9,246 whites scoring a three or more in 2008, the revised number is only 6,103. The number is up very slightly from 2007, but the number of whites taking the AP rose even faster from 2007 to 2008. As a consequence, 49.7 percent of Kentucky’s whites in public schools had a score of 3 or higher on the AP in 2007, but this dropped slightly to 48.6 percent in 2008. If the original release’s figures had snuck by us, you would be getting told about a dramatic rise from that 49.7 percent figure in 2007 to 73.8 percent in 2008.

That is a huge difference – slight decline in the percentage of whites getting college acceptable scores versus a very large increase.

For African-Americans, once the corrected scores came available, the original percentage of students scoring 3 or more shrank from 39 percent to only 29.6 percent for 2008, lower than the African-American success rate of 30.1 percent in 2007.

Then it gets strange

The KDE changed their numbers, but they forgot to change one of their lead sentences which says, “Since 2004, the number of Kentucky public high school students taking AP examinations and scoring 3, 4 or 5 has increased by more than 50 percent.” The truth is that between 2004 and 2008 the percentage increase is somewhat less at only 47 percent. However, using the numbers from the original news release, the claim should have been that the increase was 125 percent. I don’t know what the department was looking at when it assembled the first news release and came up with the slightly more than 50 percent figure. How did all these numbers get so messed up?

I have some additional questions about the data, even in the revised release. I’ll save that for a later post, once I learn more. But, one thing is certain; if you read any recent news articles claiming dramatic progress on AP participation and scores from last year – forget them. It didn’t happen. In fact, while the participation rates are up slightly, the percentages of success are down, which isn’t exactly that “great education progress” you’ve been hearing about.

The Lexington Herald Leader editorial board still doesn’t understand the role of basic economics in the health insurance marketplace. This leads them to promote a conclusion they can’t justify and a solution that hasn’t worked despite its repeated application over the last half-century.

“Money remains the biggest obstacle to Gov. Steve Beshear’s campaign promise to insure all Kentucky children. It would require an additional $40 million from the state to cover all eligible kids.”

“The federal government would pick up the rest.”

“It’s a great deal for states.”

“Kentucky could spend $440 to cover a child in KCHIP, and the federal government would pay $1,560. The match is not quite that favorable for Medicaid, but it’s close.”

The implication is obvious: raise taxes, spend the money, and everything will be fine. Or the modern version, which involves simply borrowing the money first.

Americans are slowly coming to understand the economics of gas prices. If we subsidized $2 for every gallon of gas, that soon wouldn’t be enough and we know it. Healthcare is no different.

The answer is less government spending on healthcare — and less cost-increasing regulation. Not more.

KRS Executive Director Mike Burnside addressed a half-empty room of mostly sleepy-looking legislators — see the video below — and dropped a bomb that might otherwise have been big news. The changes to the public employee benefits plan in HB 1, which really do nothing to fix the financial problems of the system, caused the state to spend $20 million upgrading computers.

How’s that belt-tightening going, Ferris Bueller? Bueller? Bueller?
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