Civitas Review

Author Devine Explains the American Crisis


Author and Reagan administration veteran Donald J. Devine yesterday reviewed how the nation got to where we are now, and provided a glimpse of how we can get back on track.

The success of America is based on the synthesis of freedom and tradition, he said Wednesday at a Civitas event in downtown Raleigh.reagan

He was head of the federal civil service under President Reagan, and noted that the president charged him with cutting 100,000 non-defense jobs from the federal payroll. "We actually did it," Devine said, adding that Reagan also cut entitlement spending as a share of the gross national product.

But Reagan didn't cut spending just to save money, Devine said. Reagan proclaimed, "I'm cutting spending so I can reduce the power of the central government and return it to the states and people."

Stock-Market-DropMuch of our crisis is caused by federal action that oversteps the Constitution's separation of power. For example, too few of us appreciate the things Reagan didn't do, Devine said. There have been three times the Dow Jones Average has dropped 20 percent abruptly: in the Crash of 1929, the Wall Street meltdown in 2008, and in 1987. The first two sparked economic crises lasting years. Why don't we hear much about the 1987 slump? Certainly the experts told President Reagan he must step in to save the economy, as presidents did after the 1929 and 2008 crashes. Reagan's response: We have to let the market hit the bottom. "People have to see things have leveled off."

Devine recalled hearing Michael Reagan say of the incident: "My father did nothing — and it worked!" The economy quickly rebounded.

Yet, of course, today the challenges are immense. Devine noted that when the federal debt is added to other liabilities, the nation owes at least $76 trillion. "This can't last," he said. "We can't pay it."

Government seems more dysfunctional than ever. NYU Professor Paul Light summed it up, and echoed the Constitution, when he observed that "the federal government can no longer guarantee the faithful execution of our laws."

"We have a government that can't work," Devine said. Moreover, he added, "We didn't get into this by mistake. It was planned."

He traced the problem back to the Progressive Era, when Woodrow Wilson and other liberals decided that the Constitution had to be bypassed, because it divided power among the different branches of the government.

Our current plight shows how well progressive politics work in the long run. Can America come back?

One conclusion is that we must return to the synthesis of freedom and tradition Devine cited at the beginning of his talk. More of the answers will be found in his latest book, America's Way Back, which we will discuss soon in this blog.

NC's Day Care is Least Affordable in Southeast


An interesting article in the Atlantic examines the rising cost of day care and provides a state-by-state comparison of the relative affordability of day care. Surprisingly, even the Atlantic author has to point the finger of such rising costs at government regulation. A snippet:

So who's to blame for higher child-care costs? The government, I suspect.

Child care is a carefully regulated industry. States lay down rules about how many children each employee is allowed to watch over, the square footage centers need per child, and other minute details. And the stricter the regs, the higher the costs. If a center is required by law to have 25 square feet of space for every kid in a program, it can't ever downsize its building when rents rise. If it has to hire a care giver for every two children, it can't really achieve any economies of scale on labor to save money when other expenses go up.

The article also includes an infographic showing where states stack up in terms of average daycare costs as a percent of median household income for married couples. North Carolina sticks out as the most expensive in the Southeast, joining more expensive states like California, New York and Massachusetts.

The Atlantic article, however, looks only at the supply side of the equation to explain the expensive nature of day care. A few years ago I highlighted information from a state legislative task force examining day care in North Carolina. The information from the committee meeting shed light on the demand side of the day care equation as well. More than $1 billion of government money (state and federal) is being pumped into the state's day care industry. The funding came in various forms, including day care subsidies and government-funded programs like Smart Start and More at Four (now NC Pre-K).

So thanks to heavy government intervention both restricting supply and inflating demand, basic economics tells us that prices will rise. Many North Carolinians brag about our state's heavy "investments" in early childhood education programs – but the results are clear: day care is less affordable in NC than any other SE state.

Did you ever notice that whenever government gets involved to make things more "affordable," that they inevitably become far more expensive (think: housing, college, day care, health care)?

Hagan Drops in Polls, Offers Confused Signals on Obamacare


Recent Civitas polling showed that likely NC voters may be ready to replace U.S. Senator Kay Hagan – when asked if they feel Hagan deserves to be reelected or if it is time to give a new person a chance, respondents answered they prefer to give a new person a chance by a 20 percentage point margin (50 to 30).

Other recent polling shows Hagan growing increasingly vulnerable. In response, Hagan has called for an investigation into the failed rollout of the federal health exchange website. This is just for show, of course, as Hagan has decided to feign outrage over the website's failure only after it has become painfully obvious to all observers what a failure it has been.

Hagan also sends mixed signals in her alleged support for the Unaffordable Care Act itself.

Hagan's attacks are focused on the website's problems and fixes to the Affordable Care Act. Republicans see the health care law as a big weakness for her going into her re-election race next year.

But Hagan said she hasn't wavered from support for the law itself….Hagan also supports a bill that would let individuals keep their health plans.

But isn't a key component of Obamacare itself the one mandating certain coverages for all insurance plans, you know, so that people aren't stuck with "substandard" plans that they actually chose? So how can one claim to fully support the law while simultaneously supporting legislation to change one of its most important parts?

Perhaps as further evidence of Hagan's confusion and growing desperation is this news account detailing a conference call for reporters she hosted yesterday. Here is a snippet from the article, providing a glimpse into the difficulty Hagan is having answering even basic questions:

A reporter from the Greensboro (N.C.) News & Record asked why Hagan, like President Obama, had told people that if they liked their health plans they’d be able to keep their health plans.

There was a long pause before Hagan responded, then a deep intake of breath. “You know, Doug,” she responded, “the, um” — here she exhaled and paused again — “the way these, the — the regulations and the law, uh” — pause — “came forward recently, I think people were surprised that the, uh, the — the actual original plans would be, um, would be canceled.”

Another North Carolina reporter asked Hagan what she is telling constituents whose premiums have doubled or whose plans have been canceled.

Deep inhalation. “Well, a lot of people, I, I am encouraging everybody to go on the site, uh, uh, I — look through it, find out what the benefits are,” she began. She also said constituents could call her office, “and we will certainly, uh, do what we can to help those individuals and put them in contact, uh, with the right — with the right person, and, and, and help them.”

(HT: Carolina PlottHound)

Another Obamacare Promise Unfulfilled


We all know that President Obama repeatedly lied when he promised "if you like you health plan, you can keep your health plan" while trying to sell the public on the Unaffordable Care Act, something he half-heartedly apologized for last week.

One of his other promises was that increasing competition and choice for health insurance consumers would be a priority. This, too, is proving to be a lie.

As the Heritage Foundation points out in this analysis, "In the vast majority of states, the number of insurers competing in the state’s exchange is actually less than the number of carriers that previously sold individual market policies in the state." Indeed, in 78 percent of U.S. counties, insurance shoppers on the exchange will have to choose from 3 or fewer providers.

North Carolina fares worse than most states, with a literal monopoly in the majority of NC counties – only one insurance provider offering plans on the exchange. Small wonder why so many North Carolinians are facing sticker shock by the new insurance plans they are being forced into.

Chalk up yet another aspect of  the Obamacare nightmare that the critics got right.

NC NAEP results unchanged


This has been a big week for K-12 education news.   Yesterday  state test results which helped to measure the impact of new Common Core standards were released. I shared my thoughts here.

Also, earlier in the week the National Assessment for Education Progress (NAEP) released 2013 test results .  NAEP is a national test that is administered every two years.  A sample of fourth and eighth grade students in each state is tested in reading and math.  Test results allow states or regions to compare to one another.

How did North Carolina do?  General speaking,  2013 results show little change from 2011. There were slight gains  of one and two points for fourth and eighth grade reading scores but the gains are not statistically significant.

North Carolina's fourth and eighth grade reading scores mirror national scores.  For mathematics ,North Carolina's average score (for fourth graders (245)  was slightly above the national average  (241).  Math scores for North Carolina eighth graders (286) is considered statistically similar to the national average math score for eighth graders (284).

For additional information on North Carolina NAEP scores see here.