“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.”
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.
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.
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:
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.
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 29th, at the University of Louisville.
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.