Tuesday, May 02, 2006

Further signs that we have a school system, not an education system

If you pay attention to the way schools are run, you will quickly note that their goals as an organization are the betterment of schools, and their associated employees. Nothing illustrates this point better than the closing of the Rhea County Schools:

Some 3,800 youngsters got Friday and Monday off because of the action taken by Dallas Smith, superintendent of Rhea County schools in east Tennessee, to ease transportation spending.

and why did they get Friday and Monday off? Because of high fuel costs:

Rhea County Finance Director Brad Harris said county schools spent $14,000 on fuel in March, compared to $7,800 in March 2005. He said fiscal year to-date-spending was up from $68,000 to $102,500.

Now lets think about this. We have a school district that is facing a $34,000 annual increase in it's transportation budget. In response, rather than finding someway to save that money and still service it's customers (ie, students) it simply stops serving them for two days. Does anyone not think that all school employees got paid for those two days they weren't working?

Given a 20 school day month, and $14,000 a month in fuel costs, closing for those two days saved them $1400.

According to the Tennessee Education Associations salary schedule the minimum amount anyone in that school district was being paid was around $22k a year. Given a standard 2000 hour work year (and educators work many fewer hours per year than that) and a stock 8 hour work day, each employee who didn't work on that day cost the district at least $176. This means that if the district has more than 8 employees it cost more to pay them to be idle than it saved by not running the busses.

Or to put this in a different light, finding a way to reduce the districts payroll by just 1.5 employees would have provided sufficient fund to make up the whole years transportation cost increase. Given that just a single elementary school in the district has 7 assistants, I suspect they could have found the money to keep the schools open if they really cared about the education of the students. Clearly the schools are more important than the students.

Sunday, April 23, 2006

Markets in work visas

Frequently, problems simply evaporate when a healthy market is brought to bear and a good is monetized. I see no reason the same cannot be true about work visas. Consider the following proposal:

Establish a class of work visas that can be traded freely. Such visas would provide the same labor market mobility as is enjoyed by citizens (ie, you can change jobs, start businesses, move about within the country, etc freely). Let's call them M-1 visas. An M-1 visa would be for a specific period of time, say a 6 year window (Jan 2007 - Dec 2013 for example). Each M-1 visa would be owned by it's current assignee. Ownership could only be transfered if the previous owner were verifiably outside the US, or possessed some other legal justification for being in the US.

We are currently in a situation were we have a large number of illegal aliens. To dig ourselves out of this situation, first secure the southern border (most likely acheivable with a wall/fence and increased patrols). Second, grant each illegal currently in the country an M-1 visa if they step forth to claim it. I realize this sounds like amnesty, and as if we are rewarding law breaking, but hear me out. What do you think most of the illegals currently in the country will do with their M-1 visa? Some of them might elect to remain in the country working for $10 an hour, 60 hours a week, 52 weeks a year (say around $31k a year, or about $20k a year after taxes) for the next six years. Or, you could go home and cash out your M-1 visa by selling it to someone else. How much do you think that M-1 visa is worth to an Indian engineer with a $100k job lined up in the bay area? $200k maybe? Effectively, the M-1 visa grant to the illegals is a payment to deport themselves. It consists of the US franking a new kind of currency (the M-1 visa) that it uses to pay people to leave.

And if a former illegal alien (now M-1 visa holder) chooses to stay, they now have a large asset to attach in the event of incuring expenses. If they wind up in the ER, the hospital can sue to collect by attaching their M-1 visa, possibly forcing their deportation in order to collect if they needed to foreclose to collect. If a former illegal alien (now M-1 visa holder) rear ends your car and has no insurance, you can sue to collect by attaching his M-1 visa. If a former illegal immigrant would like to start a business, they can offer their M-1 visa as collateral.

If there are really jobs American's won't do, then employers can lend money to mexicans to purchase M-1's in the open market, and bring them in legally to do those jobs. If we *really* need more imported tech workers, then their pay will begin to reflect the cost of purchasing their M-1 visas.

Failure to vacate the country upon visa expiration, or failure to cooperate with a deportation order (in the event of visa foreclosure) would be a felony, punishable by a mandatory 1 year in prison, and would disqualify a person from reentry under the M-1 visa program.

After the initial grant, a number of M-1 visa's could be auctioned off each year, that number to be determined by congress, much as we currently do with US treasury bonds. I personally suggest two million a year. You would naturally want to stop issuing all other sorts of work visas. Two million visa's a year at $200k each would bring in $400 billion a year in revenue to the US treasury.

Naturally, there would be certain basic requirements for being eligible to purchase an M-1. Clearly we wouldn't want to bring in criminals, or know terrorists. The most efficient means of handling this problem would be to allow *anyone* to pay to prequalify as an M-1 purchaser. This is a simple service that entails a background check, and since being prequalified conveys no right of entry, prequalify as many folks as will pay for it.

But what, you may ask, about those people who are patiently waiting in line to enter this country? The people who played by the rules? That depends on their numbers. If the number is small relative to the current illegals (say 2 million) then you simply grant those in line an M-1, just as you did for the illegals. There after there *is no line*. Queuing is a most inefficient way to allocate goods. If the number of large (say 24 million) you simply allow them each year as new M-1 visas go to auction to bid in a special preauction. Each one of them has *one* right to purchase an M-1 in such auctions. Over time, you burn off those who were in line, and they get a benefit for playing by the rules.

Immigration solutions from the tech front

It strikes me that one of the central problems with immigration is the inability to prevent illegal aliens from working. At the core of this problem is the fact that our current social security system, like so many systems from it's era is a system of identification, rather than authentication.

An identifier for a person or thing is simply some label used to reference it. Social security number 123-45-6789 is an identifier for Joe Blow. One of Joe's Mastercard accounts may be identified by 1234 5678 9012 3456. Knowing an identifier does not mean you are the person or thing being identified. In general you would *like* identifier to be generally knowable.

An authenticator is something that demonstrates that you are the person or thing being identified. An example of this might be your password for your online banking. Authenticators tend to be either secrets, or related to secrets.

An identifier is not an authenticator, but we treat it as such with social security numbers. This leaves us playing stupid games like matching names associated with social security numbers to try to feret out potential mismatches.

I suggest a different approach.

First, revamp the social security card with a smart card. This smart card would have a private key, generated as part of the manufacturing process, that never leaves the card. At time of issuance by the Social Security administration it would be issued a digital certificate signed by the Social Security Administration. It would have a pin pad, and it's holder, by issuing it's pin, could authorize it to sign a challenge message.

Second, require employers at the time they hire someone, to submit to their social security card a challenge to be signed, and use that to verify that they are the social security card holder (ie, the challenge matches the certificate for this person issued by the Social Security Administration). Require all tax documents related to this worker to carry a copy of the workers certificate, and the signed challenge.

Third, make it a felony, with a mandatory 2 year sentence, to employ a person without verifying their Social Security card in this manner. Corporate officers should be the ones criminally liable for this sentence.

Legal immigrants would receive a social security card just like anyone else (if they were legal to work), but with a certificate that expires at the end of their visa period. This way it would be crystal clear to anyone employing them how long they may legally work.

Such cards would be hard to forge, and if the process of creation were handled correctly it would be relatively easy to trace out the source of forgeries.