Bacon's Rebellion

Virginia is doing such a good job of running state government (see the previous post) that the General Assembly now feels competent to tell lenders how to conduct their business. In the latest iteration of the payday lending saga, committees in both the state Senate and House of Delegates have passed a bill that creates complex conditions on the issuance of the short-term payday loans.

Jeff Schapiro describes the new regulatory regime as follows in the Times-Dispatch:

The new proposal — disparaged by lenders and their opponents — would restrict borrowers to one loan at a time. But the bill allows 10 loans a year — a level that troubles critics. It also would block borrowers from drawing another loan for 45 to 60 days if they’d had five within 180 days.

The length of the so-called lockout — the period of time a borrower would be ineligible for another loan — would be determined, in part, by what the customer owed.

The proposal caps interest rates at 36 percent but largely preserves pricey fees that lenders collect. The 36 percent figure is an important symbol for the industry’s critics because it is the maximum allowed by law.

Borrowers who promptly pay the five loans would have to wait only 45 days. But those who can’t repay on time would be eligible for a 60-day payoff plan and then would be prohibited for additional 60 days from taking another loan.

Further, the base cost of a loan would rise. Now $15 per $100 borrowed, it would increase to $20, pushing the price of the maximum $500 loan from $75 to $100. But because the loan must be repaid over a longer term — in the case of the typical borrower, four weeks rather than the current two — legislators say its cost would actually be lower.

Got that straight?

This bill looks like it’s destined for passage, and there’s a good chance that Gov. Timothy M. Kaine will approve it. The lobbyists and legislators will pat themselves on the back for a job well done. Then do-gooders will move on to other meddlesome good deeds. Will anyone bother to track the repercussions of the bill? Will anyone be able to measure whether poor and working class people wind up any better off than they were before? Will anyone notice if there’s a surge of bounced checks, or an increase in loan sharking, or a rise in personal bankruptcies?

I’m betting that no one will notice, or care. Payday lobbyists predict that some lenders will go out of business, foreclasing an option for at least some people in financial distress. But the lobbying-and-media circus will move on to the next cause of the day, and poor people will be forced to find whatever other means they can to make ends meet.

Virginians are Virginia’s harshest critics. We have little good to say about our government or the people who run it. But all things are relative. When outsiders rate the states, as the Pew Center on the States has done, Virginia comes out on top, sharing the highest grade, A-, with Utah and Washington state. To mangle a Winston Churchill quote, Virginia has the worst government — except all the others.

The Pew project, Grading the States 2008, rates the states on four broad criteria: fiscal systems, human resource systems, quality of infrastructure, and information technology. Virginia performed consistently well across the board, scoring the highest grade in the country for human resource systems.

Fiscal systems: A-
Human resources: A
Infrastructure: B+
Information technology: A

See the 50-state summary here. View details on Virginia here.

House Majority Leader Richard Saslaw, D-Springfield, could do for the Democrats what former Sen. John Chichester did for the Republicans: Keep them divided and fighting amongst themselves.

Del. Christopher Peace, R-Mechanicsville, is a bright, young up-and-comer in the House of Delegates. I’ve been impressed by the way he has worked with the Virginia Open Education Foundation in pursuit of open-source textbooks for Virginia schools that can be easily updated and printed on demand as circumstances warrant. (See “A ‘Textbook’ Study of Knowledge-Wave Education Policy.”)

But I was terribly disappointed by Peace’s defense of GOP budgeting for education in an op-ed piece published in today’s Times-Dispatch. The House of Delegates’ budget “does more for public schools” than any of the Democratic alternatives, he argues. By “doing more,” he means, “spends more money.”

Our budget increases funding for K-12 public education by more than $1 billion compared to the existing budget. In total, the House budget directs $13 billion to public education — exceeding the Senate’s proposal by $68 million and the governor’s by $193 million. By adopting our budget, we not only rejected the governor’s proposal to cut school construction grants by $220 million, but actually added $70 million. We also made a first-year pay raise for teachers a priority by providing the state’s share of a 2 percent raise in 2008.

This is why people pejoratively refer to Virginia’s two parties as the Repucrats and Demoplicans. The only answer either party offers for the challenge of reinventing education for the 21st century is “Mo’ Money!” Other than the so-called “65% solution,” which would require school districts to spend a larger share of their funds in the classroom and less on administrative overhead, Republicans have devised few alternatives to the if-schools-are-failing-they-must-need-even-more-money approach to education.

In Peace’s defense, his column does address the runaway-spending aspects of the Standards of Quality formula that determines the allocation of state aid for K-12 school programs. But that’s not a cause that will catalyze people into thinking creatively about education. The formula is so arcane — almost kabbalistic in its impenetrability — that peoples’ eyes glaze over when anyone tries to describe it. By contrast, open-source textbooks was a clever idea that anyone can grasp. Why can’t we see more fresh thinking like that?

If the Republicans want to differentiate themselves from the Democrats, bragging how they spend more money on education won’t do the trick. The public will always associate Democrats with greater spending on education. If the GOP wants to present an alternative to voters, they need to argue, it’s not how much you spend but how you spend it.

Middle income families enjoy the benefit of school choice — they can afford to move to better school districts. Most lower income families don’t have that option.

One way to extend school choice to poor families is to create educational tax credits encouraging donations to not-for-profit groups that would fund scholarships, suggests Chris Braunlich, a vice president of the Thomas Jefferson Institute for Public Policy and a regular contributor to Bacon’s Rebellion. The usual objection to tuition tax credits is that they would constitute a drain on the state treasury, but Braunlich offers a clever way around that.

In a new research paper, “Better Education for All Children,” Braunlich proposes limiting the size of the scholarships to the amount of state aid allocated to the student’s school district. That way, what the state loses in tax credits it recoups through a reduction in state aid to local education.

Scholarships limited by the size of state aid would not be terribly large, Braunlich concedes, ranging from $1,204 in Fairfax City to $5,870 in Lee County. Because such sums normally would cover only a fraction of private school tuitions, I cannot see them comprising a meaningful school-choice option by themselves. However, if private schools could supplement these scholarships with tuition breaks — as many already do for poor students — the number of students affected could be substantial.

Concludes Braunlich: “The impact on the state budget would be a ‘wash,’ neither having more or less money for educational needs. Most localities would still have the funding they need to educate their students and at-risk children would have an alternative for a better education.”

Fifteen-year-old students in Finland rank among the brainiest kids in the world, according to standardized test scores — outperforming their American peers by wide margins. In an article today, the Wall Street Journal asks, what makes Finnish kids so smart? A couple of key findings come through: It isn’t the amount of money spent on education. It’s the culture, stupid.

Finland, which has living standards comparable to the United States spends about $7,500 per student compared to $8,700 in the U.S. Finnish teachers get paid about the same. But Finland, population five million, is one of the world’s most homogenous societies. The article doesn’t say this, but I suspect it to be the case: There is much greater pressure for social comformity. When social conformity places a high value on education, that turns out to be a good thing.

Hannele Frantsi, a school principal, sets the tone: “We don’t have oil or other riches. Knowledge is the thing Finnish people have.” As a people, the Finns love to read. According to WSJ writer Ellen Gamerman, parents of newborns receive a government-paid gift pack that includes a picture book. Libraries are attached to shopping malls. Book buses road neighborhood streets like the Good Humor truck. Finland also has a drop-out rate much lower than the U.S. — about 4 percent compared to 25 percent.

The Finnish cultural emphasis on education is reflected also in the popularity of the teaching profession. Teaching jobs are highly competitive: More than 40 applicants for a job is not unheard of. While salaries are comparable to the U.S., Finnish teachers generally have more freedom.

Finnish teachers pick books and customize lessons as they shape students to national standards. “In most countries, education feels like a car factory. In Finland, the teachers are the entrepreneurs,” says [Andreas] Schleicher, of the Paris-based OECD.

Bottom line: Finnish teachers feel more invested in their work, and they are given more free rein for creativity. Compare that to the bureaucracy-laden, top-heavy approach to education in the U.S., where teachers function more like cogs in a machine.

When people say spending more money is the answer, look to Finland. When people say paying teachers more money is the answer, look to Finland. The multicultural U.S. may never be able to replicate Finland’s performance in standardized tests — especially when eight percent of U.S. students are learning English as a second language — but it is within our power to slash bureaucracy, put our cash in the classroom, give teachers more freedom and make their jobs more rewarding.

Like other bloggers, Jeff Baird is a working stiff who plugs away at his job by day and pursues his blogging passion at night. But with virtually no cash — just some help from some of his computer-geek friends — he has produced a news-aggregation website of startling technical sophistication within just a few months. I take a special interest in Rightside News because I gave Baird, who lives in Richmond and reads Bacon’s Rebellion, some advice early in his venture on how to hone his editorial focus. What he has accomplished on a shoestring is nothing short of remarkable.

As one might expect from the name of his publication, Rightside News takes a right-wing slant on the issues — certainly more conservative than my own. Baird has a wide range of interests, which shows in his selection of articles, but his common theme is the threat to the American way of life from uncontrolled borders. Two of his three news channels are entitled, “Border & Sovereignty” and “Jihad USA.” Drawing upon a wide range of Internet reporting and commentary, one channel highlights the phenomenon of illegal immigration and broken borders, while the second focuses on the spread of militant jihadism inside the United States. In both instances, Baird rounds up perspectives that you will rarely see displayed on the front page of your newspaper, much less on television (unless you watch Lou Dobbs).

Although Baird’s interests are global (his third news channel is “Global Jidad”), he cannot help but be interested in how the issues play out in his own back yard, Virginia. If you’d been reading Rightside News, for instance, you could known that Esam Omeish, the militant leader of the Muslim American Society whose appointment to the Virginia Commission on Immigration sparked so much controversy, spoke at an organizing conference a week ago at the University of Toledo.

While Oneish does not preach violent jihad, there are others in Virginia who do. (See “Jihadists in our Midst.”) Then there is the Jamaat ul-Fuqra (“Community of the Empoverished”), which maintains a secretive compound the back woods of Charlotte County. The Gates of Vienna blog provides one blogger’s inquiries into this community that, he alleges, “refused to let its girl children go to school, and had top members arrested and convicted by the FBI for firearms violations. “

Jihad inside the United States is a realm where the Mainstream Media has proven over more than six years since 9/11 that it has little interest in pursuing. Clearly, we don’t want to cast apersions on innocent Muslims living peacefully and lawfully in this country by launching witch hunts for jihadists. But on the other hand, we can’t let politically correct thinking blind us to the reality that home-grown terrorist movements have taken root.

It is beyond the scope of Bacon’s Rebellion to track militant jihadists. Our mission is building more prosperous, livable and sustainable regions. But Jihad inside the U.S. is read meat for Baird. If readers share Baird’s concerns, I recommend Rightside News to them. Baird wants to create original content for his website, so he is looking for contributors. Anyone willing to write and do research on the topic should feel free to contact him at
[email protected].

One of the responses we received from readers of THE ESTATES MATRIX was that we were a bit hard on the role of advertising in MainStream.

Please tell us why it is not a conflict of interest to publish on page A-1 of the 24 February WaPo a He Said / She Said story on the Dominion Power transmission line along the Rappahannock River and then run a full page color image ad for Dominion Power on page A 20 with the opening text: Every Day Dominion Biologist George Birdsong helps Hundreds of fly fishermen enjoy Virginia’s Catch.”

Back on 8 February Jim Bacon noted the arrival of a new Publisher / Media Chief at the Washington Post Co. Jim’s post “Who Will Report the News? WaPo Gets New Publisher” raised the right issues but received no comments.

The new publisher, Katharine Weymouth, was – before her promotion – the Vice President of Advertising.

A strange place from which to select a new “publisher?

Today’s WaPo Section A is 18 pages and four of those pages are full color image ads for energy Enterprises and energy Enterprise supported Institutions. Each one includes material or suggests interpretations that those concerned with shrinking human’s ecological footprint would question.

MainStream Media is now the mouthpiece of Second Estate Enterprises. They no longer have a way to play an honest role in the Fourth Estate.

EMR

Gov. Timothy M. Kaine is expected to announce today a plan to regulate high-risk mortgage lenders and staunch the rise in home foreclosures — which the Center for Responsible Lending estimates will number more than 62,000 in Virginia before the mortgage crisis ends. According to the Washington Post: