Stanford University has issued a new report on the effectiveness of charter schools – this time in Pennsylvania. Their conclusion:

Compared to the educational gains the charter students would have had in their traditional public schools, the analysis shows that students in Pennsylvania charter schools on average make smaller learning gains.

The Stanford study was particularly solid methodologically, comparing charter school students with comparable peers in schools they left.

Yet as long as there is one charter school out there that performs better than the average public school, we will continue to have people swearing that schools should be run like businesses and charter schools are the answer to all that ails public education.

As for me, I want schools run by education professionals, which the Stanford researchers suggest are more likely to lead effective schools. In conclusion, they write:

Charter school authorizing is one of the policy levers that can affect the overall quality of charter school options that are available for families. A systematic, thorough and well-designed charter authorizing process increases the likelihood that an applicant’s desire to help students is matched by a sufficient level of competence and planning to actually be able to do so.

Every time I think I’m going to have time to devote to writing, I quickly become overwhelmed with work, community, and/or family obligations. Hope ever springing eternal at DCT Advisors, I hope to have some time to devote to writing over the next few months.

Some of the things about which I plan to write:

• Public Education. I increasingly am convinced that our public education system is headed in the wrong direction, primarily because we have given our schools over to people who talk solely about accountability and running schools like a business. We also aren’t teaching boys effectively and aren’t teaching very many students to “think.”
• Higher Education. I increasingly am convinced our higher education system is headed for an crash. The price of higher education has risen more quickly even than health care because federal and state governments have subsidized schools in ways that distort markets and allowed them to create bureaucracies whose focus is less and less on the education of students. The quality of education, too, is suffering as we accept more and more students into schools they are ill-suited to attend and “dumb down” our system to produce more graduates. Finally, there are some very thoughtful efforts to improve higher education that should to be highlighted.
• Technology. I think the technology revolution forecasters have been predicting for at least 20 years finally is here, and technology truly is transforming how we work, interact with one another, and even think. We need to understand what technology is doing to us.
• Economic Development. Public officials could not be doing a worse job of fostering economic development. First, they are subsidizing a few large businesses to the detriment of many smaller businesses. Second, they are trying to outsource functions better performed by government. Third, they are trying to insource activities where the market rightly has written off economic development possibilities. Fourth, they are beholden to industries that probably are only to weaken in coming years and decades. Fifth, they aren’t promoting “quality of life,” which goes hand in hand with successful economic development efforts.
• Tax and Spend. Taxes are not out of control; who pays and who doesn’t is. The concentration of wealth in the hands of a few is a recipe for instability over the long haul. By the same token, we do need to reduce the size of government strategically to balance budgets – the key word being “strategically.”
• Finance. There is no greater waste of this nation’s talent than in the financial services industry, which is less and less about facilitating real economic growth and more and more is about creating financial bubbles. They should be exposed for what they are at every opportunity.
• Rule of Law. We have a Bill of Rights for a reason, and it’s what makes us great. We need to stop discarding it every time it’s “inconvenient.”
• Caregiving. I generally write very little of a personal nature, but I think caregiving deserves some discussion/reflection.

So much to say, so little time … and often in error, never in doubt.

Neither a borrower nor a lender be;
For loan oft loses both itself and friend,
and borrowing dulls the edge of husbandry.

What is a bond? The first two definitions offered by the Merriam-Webster dictionary give us some idea: “something that binds or restrains” (fetter) and “a binding agreement” (covenant).  A government bond possesses both characteristics.  First, a bond is a covenant by the government to the holders of its debt to pay them back.  Second, a bond ties the hands of government to manage its money in ways we will discuss later.  At its basest level, however, a bond is nothing more than a loan.

How does a bond differ from a stock? If you own a stock, you have an ownership interest in the seller; if you own a bond, you do not.  The private sector can raise money by selling stocks or bonds, but the public sector theoretically is limited to taxes and bonds because it cannot transfer an ownership interest in itself to another person.  (This assumes, of course, that you do not believe political contributions are the equivalent of public sector stock transfers in which contributors buy ownership interests in their favorite elected officials – “a rose by any other name” as Shakespeare would say.)

How does a bond differ from a deficit? The West Virginia Constitution provides that the Legislature may not amend a budget bill “so as to create a deficit.”  If the West Virginia Legislature approves a $100 million bond, does it not owe $100 million to bondholders and hasn’t it thereby created a budget deficit?  Of course, it has.  But just as we have been happy to construe public approval of a lottery as public approval for slot machines and table games, our political officials have been happy to ignore this inconvenient truth.

How does a bond differ from a loan? It does not.  There is a borrower – the government, a lender – the bondholder, an interest rate – the coupon, a payback period – maturity, and even collateral.

A bonding transaction may be simple, but bonding’s rich cast of characters, as intriguing (double meaning intended) as any who inhabit Shakespeare’s Hamletonian world, are not.  Tomorrow we will begin with an essential character in any bonding story: the lovely, fair-haired Ophelia.

To bond, or not to bond: that is the question:
Whether ’tis nobler for the State to suffer
The slings and arrows of daily misfortune,
Or to take on debt to fight a sea of troubles.

Bonding has been much in the news lately.  On the one hand, West Virginia School Building Authority executive director Mark Manchin has proposed a “bond anticipation sale” to generate funds for public school building construction and renovations. Otherwise, the School Building Authority will not be able to dole out its usual largesse because none of its current bonds mature before 2014.  On the other hand, the West Virginia Parkways Authority is struggling to structure a bond deal to complete the new four-lane U.S. Route 35 to West Virginia’s border with Ohio and in the process establish a toll road.

Bonding is one of the most important things a government can do; yet I have never seen a thoughtful and thorough-going discussion of the topic outside of Robert Caro’s non-fiction masterpiece The Power Broker: Robert Moses and the Fall of New York. One reason: People think bonding (like technology) is far more complicated than it really is.  Another reason: Certain powerful individuals and organizations have little incentive to educate you about bonding and its mega-winners and losers.

Fortunately for you, I was never bamboozled by the man behind the bonding curtain, nor am I financially dependent upon any of bonding’s mega-winners.  (This has not always been the case.)  So let’s set sail for a sea of troubles….

[H]eed their rising voices, for they will be heard.

New York Times editorial
Saturday, March 19, 1960

In 1960 the New York Times published a full-page advertisement titled “Heed Their Rising Voices” that sought to raise funds to defend Dr. Martin Luther King, Jr. against an Alabama perjury indictment.  The advertisement, which contained several inaccuracies, was critical of the Montgomery, Alabama, police.

The New York Times soon was sued by Montgomery public safety commissioner L.B. Sullivan, who obtained a $500,000 defamation judgment against the Times and others.  Mr. Sullivan’s lawsuit was part of a larger effort to drive the New York Times and other newspapers, which were providing favorable coverage of the Civil Rights movement, out of the South and out of business.

Mr. Sullivan and his ilk might have succeeded, too, were it not for the United States Supreme Court.  In New York Times Co. v. Sullivan, the Court threw out Mr. Sullivan’s verdict and set an extremely high bar, “actual malice,” for proving defamation against public officials. In his opinion for the Court, Justice William Brennan cited

a profound national commitment to the principle that debate on public issues should be uninhibited, robust, and wide-open, and that it may well include vehement, caustic, and sometimes unpleasantly sharp attacks on government and public officials.

Last fall, a voice largely fell silent concerning some important public issues for reasons that will be described in greater detail in due time.  It is time for that voice and other voices to rise again.