Kevin Drum - January 2013

Can Charter Schools Improve Over Time?

| Wed Jan. 30, 2013 1:03 PM EST

A new study from Stanford's Center for Research on Education Outcomes concludes that charter schools "post superior results with historically disadvantaged student subgroups." Via Twitter, Neerav Kingsland asks, "can you run this study through your skepticism wringer?"

The full study is a couple hundred pages long, so the answer is no. What's more, the main conclusion of the study is actually about the consistency of charter school results over time, not charter performance among minorities. Their primary takeaway is simple: charters that start out strong stay strong, and charters that start out weak stay weak. They don't get better over time as they "work out the kinks."

I actually find that reasonably plausible. Nonetheless, although I don't have time to read the full report right now, I can read the executive summary and point out a few issues:

Short time frame: "Using the broad range of data that CREDO has developed in partnership with 25 state education agencies, we follow student-level performance in schools from their opening through their fifth year."

Small sample size: "While the available data does not extend into the past, far enough to observe the birth of all [charter management organizations], a limited number of CMO 'births' are evident in the data window at our disposal and it is possible to observe their flagship school's performance before and after replication."

Confirms own biases: "Interviews with school staff along with our own observations of school activities and operations have formed the impression that the 'rules' of a school get set early on in the life of the school....If our admittedly limited, qualitatively-based conjecture is true and more generally supported, we conjectured that it should be possible to observe the phenomenon quantitatively and test the hypothesis statistically."

These are reasons to treat CREDO's conclusions with caution. Nonetheless, it's worth pointing out that some of CREDO's results aren't super friendly toward the charter movement. Lousy charters stay lousy over time, for example, and that's especially true for middle and high schools. Charter performance, on average, is pretty average. There are very few observable attributes that serve as signals of charter quality. So while their study confirms the bias they took into it—something that seems to be an absolute scourge in the ed reform field—it wasn't all just confirmation bias. A few of their results were challenging for the charter school movement.

Overall, I don't have a big issue with this study. It seems to be fairly modest in its claims, and its main policy recommendation is that since charters display a wide range of performance, they should be monitored closely and shut down early if they perform poorly. I'm generally in favor of lots of ruthless experimentation, so I guess this appeals to my biases.

As for whether charters really are especially strong among minority and low-income populations, that's been the subject of dozens of studies, not just this one. The CREDO study seems to confirm that it's possible for a charter to do especially well among these groups, but we still don't how easy it is, how scalable it is, how replicable it is, or how expensive it is. The jury is still out.

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Economic Performance in Q4 is....Hard to Get a Handle On

| Wed Jan. 30, 2013 12:01 PM EST

Economic growth turned negative last quarter, with GDP dropping 0.1 percent:

The drop was driven by a plunge in military spending, as well as fewer exports and a steep slowdown in the buildup of inventories by businesses. Anxieties about the fiscal impasse in Washington also contributed to the slowdown....The 22.2 percent drop in military spending — the sharpest quarterly drop in more than four decades — along with the drop in inventories and exports overwhelmed more positive indicators in the private sector, he said.

That's both odd and normal at the same time. It's odd because there's no real-world reason for military spending to jump around so much. A few percent from month-to-month, sure. But 22 percent in one quarter?

But it's also normal, because every quarter there's something like this when you dive into the internals of the GDP report. Final inventories rose or fell unexpectedly. State spending spiked or plummeted. Airplane sales or timber or durable goods or something showed an unusually big change.

So I guess my inclination is to simply take the headline number at face value: the economy was weak in Q4. Still, I'd temper that a bit. The military spending thing really is odd, and other economic indicators (employment, income growth, etc.) were reasonably strong last quarter. I wouldn't be surprised if we see some upward revisions to this.

On a political note, it would be nice if this report persuaded some people that government spending really does affect economic growth. Unfortunately, the kind of people who refuse to believe this seem to have a weird, walled-off section in the brains that makes an exception for military expenditures. Higher spending on bombs and aircraft carriers is good for the economy, but higher spending on bridges and electrical grids merely saps business from the private sector. I don't know if the anti-Keynesians really believe this or are only pretending to believe it, but it works out the same either way. A report like this won't change their peculiar views one whit.

It's True: The Fed Really Can Print All the Money It Wants To

| Wed Jan. 30, 2013 1:02 AM EST

Over the past few years, the Fed has been hugely profitable, sending more than $50 billion annually to the Treasury. The Wall Street Journal reports today that this gravy train may come to an end a few years from now, but don't shed too many tears for the folks in the Eccles building:

If the Fed were to record a loss, it could print its own money to cover its expenses—at no cost to the Treasury. The Fed would record a loss as a deferred asset, which would represent how much money the Fed would need to make up before it started sending profits to the Treasury again.

How great is that to be an agency that can just twiddle a few bits in its computer system whenever it needs to cover its budget? Sure, you knew already that the Fed could print money, but this makes it all a little bit more concrete, doesn't it?

Amazon Defies Gravity For Yet Another Quarter

| Tue Jan. 29, 2013 7:17 PM EST

Amazon announced higher revenue today but sharply lower profits. Investors don't seem to care much: Amazon shares closed down a bit on the news, but as I write this they've already made up all of the loss and then some in after-hours trading. Matt Yglesias is amazed:

Amazon, as best I can tell, is a charitable organization being run by elements of the investment community for the benefit of consumers. The shareholders put up the equity, and instead of owning a claim on a steady stream of fat profits, they get a claim on a mighty engine of consumer surplus. Amazon sells things to people at prices that seem impossible because it actually is impossible to make money that way. And the competitive pressure of needing to square off against Amazon cuts profit margins at other companies, thus benefiting people who don't even buy anything from Amazon.

It's a marvel, all right. The general idea, as near as I can tell, is that Amazon will build up lots of brand loyalty and will eventually be able to raise prices a bit without losing its customers. Maybe. I suppose I'd probably be willing to pay a slight premium to buy something on Amazon if my only alternative were an outfit I didn't know anything about. (Or if I'd gotten some Amazon gift cards for Christmas, which I did.) So maybe they'll eventually be able to pull this off. The problem is that, increasingly, their competition won't be small e-retailers I've never heard of, but a handful of fellow giants who all have good reputations, good service, low prices, and easy checkout. That's a tough space to make a profit in.

I suppose it's also possible that selling actual stuff will merely be a loss leader for the Amazon services that make money in the future: remote storage, cloud computing, rakeoffs from Amazon affiliates, etc. Maybe maybe maybe. Still, my daddy taught me that a P/E of 3,479 was just a wee bit optimistic. I think I'll stick to the craps tables in Vegas. The odds are better.

Immigration Reform and the English Language

| Tue Jan. 29, 2013 4:21 PM EST

Matt Yglesias, after reviewing the evidence about the effect that immigration has on wages—very little, probably—says correctly that "we're stuck in a mostly phony argument about wages that does nothing to ease people's real fears about nationalism and identity." Paul Waldman goes a step further and isolates the real problem: language. "Make them learn English" may be entirely unnecessary, since Mexican immigrants appear to follow exactly the same language path as every other immigrant group, but in political terms "it could be the key to passing immigration reform":

As a group, Americans have contradictory feelings about immigration....Most Americans acknowledge that we're all descended from immigrants of one kind or another....They also appreciate that immigration gives our country vitality, and that immigrants are exactly the kind of hard-working, ambitious strivers that drive our economy and culture forward. But at the same time, many feel threatened when they see the character of their towns and cities change, and nothing embodies that change more than language. When people walk into a store and hear a language being spoken that they don't understand, they suddenly feel like foreigners in their own neighborhood, alienated and insecure. I'm not putting a value judgment on that feeling, but it's undeniable.

So imagine an individual citizen/voter who has those two contradictory feelings. He sincerely wants his country to welcome immigrants, and he thinks that cultural diversity is basically a good thing, but he got a little freaked out last week when he went down to the drug store and felt like he just got transported to Mexico City. He doesn't like feeling alienated, but he also doesn't like that tiny voice inside him that says "Send them back where they came from!" He knows that voice isn't right, but when he sees signs in other languages or hears other languages spoken, that voice gets a little stronger.

What the "make them learn English" provision says to him is: Don't worry, it's going to be OK. We're going to make sure that this wave of immigrants is woven into the American tapestry just like the prior waves of Irish and Italian and Chinese immigrants. They won't take America over. They'll become American.

This is exactly right, and I think we're less than honest if we don't acknowledge that plenty of us lefties feel a bit of this sometimes too. It's human nature. And that gives me an excuse (again!) to link to my second-favorite Chris Hayes piece ever. It's about John Tanton, the founder of FAIR, the nation’s oldest and most influential immigration restriction group. For years, Tanton tried to preach an anti-immigration message based on economic and conservation grounds. But it didn't work. Chris tells us what did work:

Crisscrossing the country, Tanton found little interest in his conservation-based arguments for reduced immigration, but kept hearing the same complaint. “‘I tell you what pisses me off,’” Tanton recalls people saying. “‘It’s going into a ballot box and finding a ballot in a language I can’t read.’ So it became clear that the language question had a lot more emotional power than the immigration question.”

Tanton tried to persuade FAIR to harness this “emotional power,” but the board declined. So in 1983, Tanton sent out a fundraising letter on behalf of a new group he created called U.S. English. Typically, Tanton says, direct mail garners a contribution from around 1 percent of recipients. “The very first mailing we ever did for U.S. English got almost a 10 percent return,” he says. “That’s unheard of.” John Tanton had discovered the power of the culture war.

The success of U.S. English taught Tanton a crucial lesson. If the immigration restriction movement was to succeed, it would have to be rooted in an emotional appeal to those who felt that their country, their language, their very identity was under assault. “Feelings,” Tanton says in a tone reminiscent of Spock sharing some hard-won insight on human behavior, “trump facts.”

Cultural insecurity and language angst are the key issues here. It doesn't matter if they're rational or not. Anything we can do to relieve those anxieties helps the cause of comprehensive immigration reform.

Quote of the Day: How Not to Be a Jackass

| Tue Jan. 29, 2013 3:04 PM EST

From the Hispanic Leadership Network, a conservative group offering advice to Republicans on how to use "tonally sensitive" language when talking about immigration reform:

Don't use phrases like 'send them all back,' 'electric fence,' 'build a wall along the entire border'....Don't use the word 'illegals' or 'aliens.' Don't use the term 'anchor baby'....Don't characterize all Hispanics as undocumented and all undocumented as Hispanics.

Good advice! (Via Steve Benen.)

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Bring Back Earmarks!

| Tue Jan. 29, 2013 2:08 PM EST

Atrios wants to bring back earmarks:

Giving members of Congress a few nice things (sometimes corrupt, sometimes not) for their districts is a way actually get things done. There's nothing wrong with members trying to bring the pork back to their districts. We should stop seeing this as inherently problematic.

I agree. Political horsetrading may be distasteful in the abstract, but in reality it's the way compromises get forged, human nature being what it is in our sadly fallen state. So if you want to get things done, you need trading chits like earmarks.

But there's more to it than that. The truth is that, within reason, legislators should have the power to direct money to their districts. They're supposedly the ones who know their districts best, after all. The key thing to keep in mind is that sometimes there are projects that are really important to locals that just aren't ever going to pass muster with DC bureaucrats who, for good and appropriate reasons, score spending requests largely via formula. This leads to understandable frustration with how tax dollars are being spent. Earmarks are a relief valve, a way of giving a bit of local control over federal spending to locals themselves, who can spend it as they see fit. It might not be the way you or I would spend it, but that's OK.

I think there was a justified sense during the aughts that earmarks had gotten out of control. Unfortunately, we overreacted. They probably needed to be scaled back, but they shouldn't have been eliminated. Earmarks represent a bit of local control over tax dollars that's basically salutary in modest doses.

Oh, and they don't have any effect on overall spending, either. Earmarks redirect spending, they don't increase it.

Imaginary Columns, Imaginary Wars

| Tue Jan. 29, 2013 1:21 PM EST

Today brings two very peculiar columns. First up is Jonah Goldberg, with this mighty odd way of framing his distaste for allowing women to serve in combat roles:

What if, during the presidential campaign, Mitt Romney had accused President Obama of wanting to let servicewomen serve in combat? After all, Obama had hinted as much in 2008. What would Obama's response have been? My hunch is that he would have accused Romney of practicing the "politics of division" or some such and denied it.

Really? The hook for the whole column is Obama's imaginary response to an imaginary question from Mitt Romney? That's the best he could do? My hunch is that Romney didn't mention this because he was in enough trouble with women already, and my further hunch is that if he had, Obama would have said it was under review but that he was generally in favor of equal opportunity etc. etc.

Next, Ed Kilgore draws my attention to a lengthy tirade by Kirsten Powers about President Obama's war on Fox News. I guess that's fine. After all, it's no secret that Fox isn't his favorite network. But what is it that set her off? Apparently it was the answer Obama gave when Chris Hughes asked him if it was possible to establish better relationships with Republicans:

One of the biggest factors is going to be how the media shapes debates. If a Republican member of Congress is not punished on Fox News or by Rush Limbaugh for working with a Democrat on a bill of common interest, then you'll see more of them doing it.

That seems....unexceptionable. How did that turn into the latest evidence of a nuclear war on Fox? Beats me.

I dunno. Something in the water today?

Washington DC's Final Glass Ceiling

| Tue Jan. 29, 2013 12:55 PM EST

I don't pay a lot of attention to Los Angeles city politics, but I was intrigued by Jim Newton's rundown of the three main contenders for the mayoralty and their likely choices for chief of staff:

Greuel's chief deputy controller is Claire Bartels, a veteran of City Hall....Bartels' counterpart in Garcetti's camp is Ana Guerrero, the daughter of migrant farmworkers and a seasoned community organizer....Perry employs a chief of staff who is a former critical-care nurse, Kathy Godfrey.

All women. Interesting. There's never been a woman as chief of staff in the White House, has there? Let's check. Nope. Not a one. Along with treasury secretary and defense secretary, I guess this is the final frontier for the glass ceiling in DC.

Republicans Still Hellbent on Cutting Taxes on the Rich

| Tue Jan. 29, 2013 11:51 AM EST

Stymied at the national level, Republicans have spent the past couple of years focusing a lot of their energy at the state level. And they've had considerable success. Hundreds of abortion restrictions have been passed. Voter ID laws were enacted all over the country. Just recently half a dozen Republican-controlled states have started efforts to game the Electoral College in preparation for the 2016 election.

So what's next? Apparently state sales taxes. CBPP's Elizabeth McNichol reports:

In an alarming trend, governors in Louisiana, Nebraska, and North Carolina have proposed eliminating their state’s personal and corporate income taxes and raising the sales tax to offset the lost revenue....Proponents claim that eliminating income taxes and expanding the sales tax would make tax systems simpler, fairer, and more business-friendly, with no net revenue loss. In reality, they would tilt state taxes against middle- and lower-income households and likely undercut the state’s ability to maintain public services. Specifically they would:

  • Raise taxes on the middle class.
  • Require huge sales tax hikes.
  • Levy those new, higher rates on a much larger number of transactions.
  • Create an unsustainable spiral of rising rates and widening exemptions.
  • Fail to boost state economies.
  • Make state revenues much less stable.

There's more detail at the link. But the bottom line is pretty simple: This is a transparent effort to reduce taxes on the rich and increase taxes on the poor and the middle class. No matter how flowery their speech, Republicans remain hellbent on cutting taxes on the rich no matter what the consequences. Given how well the rich have done recently and how poorly the middle class is doing, this is nothing less than jaw dropping.