The Donald and Boeing

McClatch has a story out examining Donald Trump’s claim that Boeing will move aircraft production to China. Sample quote:

For over a year, Donald Trump has had a message for voters whose livelihood depends on the aircraft industry, specifically aviation giant Boeing – elect me, or your jobs are moving to China.

Aircraft industry analysts say that claim is unfounded – “side-splittingly hilarious,” in the words of Richard Aboulafia, vice president of analysis at Teal Group, which studies a wide range of aviation-related industries.

“They’re an embarrassing misunderstanding of the aircraft industry,” he said of Trump’s claims.

Yet Trump continues to raise the idea of Boeing leaving the United States. “Oh, don’t worry; if I’m president it won’t happen,” the Republican presidential nominee said last month at a rally in Colorado Springs, Colorado. “If I’m president, Boeing will be very happy – believe me.”

Trump’s favorite example of what might be lost has been Boeing’s “big, big […] beautiful” facility in North Charleston, S.C. The company’s new plant employs more than 7,500 South Carolinians.

As an economist who follows the aviation industry closely, Trump’s claim is laughable and demonstrates zero industry understanding. Boeing has a ton of problems at the moment — the 787 program may never turn a profit, production of one of its cash cows, the 777-300ER, will soon come to an end, Boeing isn’t selling many widebody jets this year, its next generation 737 is limited as compared to the latest Airbus product, and its KC-46 tanker program is late and over budget — and none of them have anything to do with production line labor costs. The threat to Boeing employee jobs in South Carolina is from poor sales forcing a production slowdown, and not shifting jobs to China. The North Charleston plant builds 787, and Boeing has net orders for 19 thus far in 2016. Boeing has delivered 87 787s so far this year.

Joe Killian ain’t no blueblood

In his final column for the Greensboro News & Record, longtime political reporter Joe Killian offers up his views on government:

Maybe I’m coming off as a bit of a snob — one of those political elite types, contemptuous of the common people, who are exactly what’s wrong with this country.

Must be my blue blood background.

I’m a military brat. My father was a career Marine and my grandfathers Navy men and commercial fishermen.

I grew up in trailer parks, on military bases and — sometimes — in trailer parks on military bases.

….One year I would live in a largely rural area where people took pride in the low, low tax rates. But I couldn’t join the school band because my family couldn’t afford to rent an instrument or get me private lessons. The school system didn’t provide those things.

The next year I would live in a suburb where people occasionally groused about the taxes. But the band teacher pressed a trombone into my hands, told me to take it home and asked me to come after school for one-on-one lessons provided by the school.

One year I would live on a dirt road that became almost impassable in a heavy rain. People there would take it upon themselves to shoot rabid animals, tossing them into the woods to rot or burning them along with their garbage because there were no animal control or municipal garbage services.

The next year I would live in a cul-de-sac where the streets were salted before a snow and promptly plowed before we woke to go to work and school. Clean, efficient, affordable public transit was an option for those who didn’t own a vehicle.

Just putting two and two together here, seems to me Killian’s saying the inhabitants of the “largely rural area where people took pride in the low, low tax rates” are idiots because the true reality behind their false pride is a kid unable to play the trombone in the school band, while conversely those who “groused about the taxes” are also idiots. But he wouldn’t say that, would he, since he’s no blueblood.

But maybe I’m just reading between the lines a little too carefully. I’m sure Killian will explicitly explain why those who believe in lower taxes and smaller government are idiots in his new position as investigative reporter over at NC Policy Watch, because that’s what they do.

Certificate Of Need Application Costs Reach $1.5 Million in 2015

Talk about barrier to entry! In 2015, certificate of need (CON) application costs totaled just under $1.5 million. Fees for health care project proposals such as building adult care home facilities, kidney dialysis centers, or even relocating inpatient rehabilitation hospital beds range between $5,000 and $50,000. And, no, these application costs are not refundable. CON has become a high-risk regulatory game for medical professionals to navigate.

It’s time to end a law that prohibits patient choice, innovation, and access to lower cost care for North Carolina patients. For more information on the history and evolution of this law, be sure to visit 

NC’s sunset and periodic review of rules — reaping unexpected benefits

The news about the state’s periodic review and examination of existing administrative rules has taken an even more encouraging turn.

sunset progress March 2016

This particular reform comes from the Regulatory Reform Act of 2013. It’s one that I and my colleagues at the John Locke Foundation championed, and here’s why.

The bulk of economic literature shows that regulation is harmful to the economy. Cutting red tape and clearing out overregulation would therefore have beneficial effects for economic growth.

Sunset provisions with periodic review was found by researchers at Mercatus to have a “robustly statistically significant” effect in reducing a state’s regulatory burden — and consequentially an economically significant effect as well.

I’ve written previous updates on state rules weeded out thanks to this reform (see the graph above). Today, however, Carolina Journal has some new good news:

The Department of Health and Human Services is seeking repeal of six unnecessary certificate-of-need rules to reduce the regulatory burden on medical diagnostic centers and purchase of major medical equipment. Some health care experts welcome the reduced red tape, but say the changes don’t go far enough.

The proposal, which would be effective Dec. 1, is the latest example of the impact of regulatory reforms put in place by the Republican-led General Assembly. About 6,225 administrative rules have been reviewed throughout state government, and 690 are slated to be eliminated, while others are still under review for possible sunsetting.

“North Carolina’s Administrative Procedure Act mandates periodic review of all rules. The repeal of the CON rules is, in part, a response to that mandate,” said DHHS spokeswoman Kate Murphy. The agency has repealed 86 CON rules effective Feb. 1.

As readers here know, North Carolina’s extensive CON regulations are one of biggest remaining obstacles to the state becoming truly First in Freedom.

DHHS Proposes To Lighten The Administrative Load For Certificate of Need Applicants

In the latest edition of the North Carolina Register’s proposed rule making, the state Department of Health and Human Services (DHHS) proposes to repeal six administrative rules related to the state’s restrictive Certificate of Need law – one in which medical professionals and hospitals are required to ask the state permission (and then their competitors) to establish new health facilities or update major medical equipment.

If repeal goes into effect by the end of the year, then the CON administrative process will be a bit lighter for parties interested in applying to be licensed as a diagnostic center or to purchase medical equipment/technology inclusive of CT scanners, x-rays, mammography, ultrasound, echocardiography, or nuclear medicine.

For example, let’s say that your local urology group wants to upgrade its CT equipment. The CON application for that equipment would no longer require these physicians to find the following evidence that justifies why upgrading CT equipment is necessary for the medical community.

  • Documentation that surrounding market competitors and affiliated health facilities are using their CT equipment at 80% of operating capacity within the past year.
  • Documentation that the applicant’s current CT equipment is projected to or has reached 80% maximum operating capacity within three years of initial acquisition.
  •  Documentation that the applicant’s utilization projections are based on the experience of the provider and on epidemiological studies.

While repealing these rules would definitely reduce the time commitment to file a CON application, the larger issue at hand is that CON still leaves central planners with the final say on any diagnostic center expansions or updates that exceed $500,000 (this threshold, by the way, has not kept up with medical inflation since 1994).

The Carolina Journal has the full story here.

Private school fighting back against voucherphobia

Private schools that accept voucher students need to push back against uninformed voucherphobes.  Here is a letter to the editor from Lauri Ake, principal of Fayetteville Christian School, that does just that:

Fayetteville Christian School decided to become a participating school in the N.C. Opportunity Scholarship program three years ago because we believe spiritual development as well as academic growth is what students need. We partner with families who agree that some of the most influential people in their children’s lives should share the same beliefs.

I specifically want to address the critics’ “concerns” over private schools’ lack of accountability. Keith Poston of the Public School Forum (“Opportunity on the rise,” July 23) was correct when quoted that private schools aren’t held to the same academic standard. That’s true at Fayetteville Christian School. We are dually accredited through ACSI (Association of Christian Schools International) and AdvanceED, which is the accrediting agency all public schools in North Carolina receive accreditation through. We hold ourselves to additional standards that the public schools do not. We do use licensed teachers and offer lateral entry positions for qualified personnel who are willing to get the educational training, just like the public schools.

Finally, the biggest concern voiced is that precious funding is being diverted to private schools. A scholarship recipient receives $4,200 for the year from the state. That’s a $4,096 savings based on the N.C. Department of Public Instruction’s Facts and Figures 2015-2016 per pupil expenditure. The scholarship receives no federal or local funding, so Cumberland County is actually saving money.

Obviously families in Cumberland County want alternatives to public school.

Unfortunately, the folks at the Fayetteville Observer titled the letter, “Some private schools accountable.”  The truth is that all private schools are accountable to parents, regardless if they participate in a voucher program or not.

Busing not the “best way to improve black or Hispanic achievement”

The Brown Center on Education Policy at the Brookings Institution just published “Bringing back busing: Do benefits outweigh cost?,” a must-read article on forced busing.  The author is David J. Armor, Professor Emeritus at George Mason University, who has written extensively on the subject.

The article includes a case study that compares student performance in Wake and Mecklenburg counties in 2004 and 2005.  At that time, Wake County assigned certain students based on socioeconomic status, while Charlotte-Mecklenburg had returned to a neighborhood schools assignment policy.  When adjusted for socioeconomic status, there was little difference between the performance of black and white students in the two districts.  Similarly, the black-white achievement gap was nearly identical.

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Dr. Armor concludes,

In my opinion, these advocates have not made a sufficient case that more desegregation (either racial or economic) is the best way to improve black or Hispanic achievement, and also that large-scale desegregation is a realistic goal and can be accomplished without the same controversy and resistance that occurred in the 1970s.  Indeed, the growth of predominantly minority group charter schools suggests that preference for an “own-group” school is not limited to middle class white parents.

WSFCS charter takeover?

Winston-Salem Journal ponders the possibility that a Winston-Salem-Forsyth County School could be part of new Achievement School District, in which five of the state’s lowest-performing schools will be converted to charter schools:

“Absolutely,” said Beverly Emory, superintendent of Winston-Salem/Forsyth County Schools. “I would imagine… there would be some look our way.”

Based on last year’s state performance scores, Forsyth County is home to as many as eight of North Carolina’s lowest performing elementary schools and could be looked at for inclusion in the ASD. The state will choose five elementary schools, each from a different district and each performing in the bottom five percent on the state’s grading scale — based mostly on state test scores.

The bill, signed into law last month, calls upon the State Board of Education to hire a superintendent for the new district and select five schools for the ASD pilot in 2017. Once selected, a district can either relinquish that school to the state — and, eventually, the charter management operator selected to run it — or close the school.

Note the healthy dose of skepticism over the ASD wrapping up the article. Some might say it’s unbiased journalism presenting the other side of the story. However—maybe it’s just me—other might say it reflects the mainstream media’s overall skepticism of charter schools because—horror—it “strips resources” from public school systems.

Semi-related: News & Record says schools participating in the state’s Opportunity Scholarship Program shouldn’t discriminate against gay students—-or gay parents.