An interesting article in the New York Times featuring a ‘Republican’, Florida governor Charlie Crist, who is currently vying for a Republican seat in the senate, just vetoed a bill that would have essentially based teachers’ pay on results, primarily students’ test scores. It would have also eliminated the general, long-term tenure granted to teachers. It is simply another example of people wanting to be paid, regardless of their performance. If teachers were paid according to their students’ success, we would see a significant increase in their preparation, care, and time spent with students. It would also eliminate those teachers who create a suck on state budgets, as well as an overall improvement in education. Since the public education system has decreasing returns to scale and down-sizing is what they need, this would provide a channel to get rid of poor educators.
(Dr. Tufte, for some reason blogger isn't letting me hyper-link the article, so it's here instead).
"The Democrats’ bill, sponsored by Senator Christopher J. Dodd of Connecticut, would give the Federal Reserve oversight of the largest financial institutions, those with at least $50 billion in assets. And it would let the Treasury secretary — with support from regulators and the approval of a special panel of three bankruptcy judges — take over any giant company that posed systemic risk to financial stability, and essentially force it out of business."
Granting the Government an unchecked ability to take over the large private companies that appear to pose a "systematic risk" may well decrease the risk that financial institutions are willing to assume in lending to individuals and businesses. This would decrease liquidity and increase the likely hood of a new recession.
The article also points out that the Federal Reserve thinks the recovery is real, but there will be some problems down the road given the condition of many state and local governments.
I can only hope that the Fed leaving interest rates and monetary policy alone in the coming months will help improve the economy further and we won't go back into a recession.
Continuing on with some more sport economics, this article explains the prices paid by the public when a team stadium is introduced and subsidized by the city. I found it very interesting that so many stadiums have been built in the last 20 years. On average, over half of the teams in the MLB, NFL, and NBA have received new stadiums. The argument is about whether these stadiums should be subsidized by the public, for private gains. Some economists argue that it hurts the local economy by lowering personal income. Others say that it is increasing the worth of the city and providing positive economic leisure benefits. I agree that stadiums are an important part of a local economy. Everyone here in Utah knows what the Delta Center is even if they don’t follow sports at all. The problem with subsidies is if a team happens to relocate and the public is left with the tab. This article about the Astrodome provides more information on the downside of stadium subsidies.