Competing with a No-Can-Fail Enterprise

Libertarian columnist and TV personality John Stossel has taken to calling “teachers unions, parent-teacher associations and school bureaucrats” the education “Blob.”  (Some old movie previews explain the reference.)

Stossel tells the story of Ben Chavis, who built some extremely successful charter schools in California.  Somebody took issue with the fact that he hired his wife as an accountant and rented some of his own land to the enterprise, and the local school board revoked his charter, sending his successful students back to the public system from which they’d come.

The reason, in Stossel’s view, is that although Chavis’s schools saved the overall education system money, with better results, it cost the district under the board’s control $10 million.  A more important lesson, however, may start with Chavis’s explanation:

“Yes. Some of the money did go to me,” he told me. “Someone had to step up and get space. We had 34 kids when I started. Today, we have 1,200.”

Stossel follows up, later in the essay, with this (emphasis in original):

Over the past six decades, as the number of students in public schools doubled, the Friedman Foundation reports that the number of non-teaching staff got eight times as large. Non-teaching staff means assistant principles, associate principals, secretaries, social workers, etc. Twenty-one states now have more school administrators than teachers.

That’s a lot of folks in back-office roles supporting the enterprise (and it doesn’t begin to take into account the investments in infrastructure, whether buildings or technology).  Chavis was running his schools with a more restrictive budget.  Taking the step into fully independent private schools, funds can be even tighter.

That dynamic is an increasingly obvious competitive advantage that government entities aren’t shy about using.  And in Rhode Island, it’s taken on new import as private organizations have struggled to adjust to the new normal of an economy in decline, even as debt-funded federal stimulus has helped to buoy the public sector.

Here’s an example.  At around 10:30 a.m., yesterday, RI Dept. of Education Public Information Officer Elliot Krieger (2011 gross pay of $98,146) sent out a press release touting the presence of Veazie Street School Principal Susan Chin at a White House ceremony in the Rose Garden with President Obama.  The story appears to have run on the six o’clock news on channel 12.

Also at the White House this week with President Obama were students from the robotics team at All Saints Academy in Middletown. All Saints (with which I am associated) is the diocesan Catholic elementary and middle school on Aquidneck Island, serving significant proportions of disadvantaged students and the children of military personnel stationed in Rhode Island.

Naturally, it’s up to an organization to send out press releases and alert the local media of its successes, but small private schools find it difficult to pay additional staff to handle back-office operations.  That’s increasingly the case, with the economy continuing to constrict the local population and the promise of more pain to come with the implementation of tolls on the Sakonnet River Bridge.

From an independent school’s perspective, what’s more important: supporting a robotics team that wins its state competition two years running and sends kids to the White House, or telling local journalists who may or may not report on it?

The same problems will eventually arise wherever the government sticks its hand into a marketplace to offer supplemental or competitive services. Consider Kate Nagle’s article on GoLocalProv, yesterday:

The individual overseeing care for [a] family member with development disabilities wanted to address the perceived discrepancies in the two care models.

“A consumer choosing RICLAS is not limited by a “resource allocation” because they are supported by state employees, who are paid via a collective bargain agreement which sets their wage rate,” the individual told GoLocalProv.

“Whereas as a consumer choosing a private provider like Trudeau or Fogarty is limited by the funding resource allocation allowed them and the wage rates set are under “project sustainability.” The consumer has to plan what supports their money will get them, within the limits of the resource allocation. A RICLAS consumer has no funding resource limit with regard to staff because of the collective bargaining agreement and mandatory minimum staffing.”

These problems apply to schools; they apply to healthcare; they apply to transportation services; they apply to any endeavor that the government enters alongside the private sector.  And in most cases, the result will be the same as John Stossel describes: more expense and inferior results.  The folks in the Blob aren’t bad people, but the incentives in government all point in the wrong direction.

Just so, government isn’t evil, it’s just unwieldy and poorly suited to conducting most human activities.  And it just may consume human flesh on contact.

Disclaimer: The views and opinions expressed in The Ocean State Current, including text, graphics, images, and information are solely those of the authors. They do not purport to reflect the views and opinions of The Current, the RI Center for Freedom & Prosperity, or its members or staff. The Current cannot be held responsible for information posted or provided by third-party sources. Readers are encouraged to fact check any information on this web site with other sources.

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