NEWSLINK, V8N1 In point of fact

I’ll have a tax- free espresso, please!
Voters in Seattle, caffeine capital of America, have rejected a controversial proposed 10 cent espresso tax. The tax would have tapped the lifeblood of a city where fancy espresso drinks are sold on nearly every street corner and where Starbucks and a generation of coffee chains were born. Initiative sponsor John Burbank said people who spend $3 to $5 on coconut mochas or iced vanilla lattes could afford an extra dime to raise millions of dollars each year for the city’s preschool and day-care programs. But coffee shop owners, including Seattle-based Starbucks, fought the tax. “It’s not a luxury item as far as the culture here,” Jeff Babcock, owner of Zoka Coffee and Roasters said. “It’s a cold, wet, damp environment. Coffee’s big, and everyone loves their lattes.” Most of his customers are the sort of Seattle liberals who dutifully vote for every school bond levy, Mr Babcock said, but they were not going for the espresso tax: “They just think it’s a crazy tax.” The ballot measure, Initiative 77, would not have taxed regular drip coffee, only espresso drinks.
“Voters of Seattle reject espresso tax,“ Rebecca Cook, Associated Press, September 17, 2003.

It’s the wife’s fault?
As a bankruptcy expert, Elizabeth Warren has seen the devastating effects on families when their finances collapse. She has also watched the number of bankruptcies escalate, rising 400 percent in the past 25 years. By the end of the decade, she says, an estimated 6 million families with children - 1 in every 7 such families - may declare bankruptcy. This year, there are more children going through parents’ bankruptcies than children going through their divorces. But Ms. Warren, a law professor at Harvard, rejects the conventional theory that over-consumption – squandering money on big-screen TVs, McMansions, restaurant meals, oversized cars, and luxury vacations – is to blame for insolvency and all those maxed-out credit cards. Instead, she points to the high cost of housing and education – fixed expenses that can quickly create a sea of red ink when families face layoffs, illness, or divorce. Skyrocketing healthcare costs add to the problem. Ironically, Warren sees Mom’s paycheck – a family’s second income, the very asset meant to provide more financial stability as a potential culprit rather than an economic cure. When middle-class mothers began entering the workforce en masse, she explains, their incomes gave parents more money to spend on housing. This created “frenzied bidding wars” for homes in desirable school districts. A deregulated mortgage industry compounded the peril by allowing homeowners to assume larger mortgages.
“Two incomes, more debt? A new study offers a controversial theory of why today’s families are having a tough time staying afloat, “ Marilyn Gardner, The Christian Science Monitor, September 17, 2003.

The sick man of Europe and his pills
The calculation is simple and politically dangerous for researching pharmaceutical companies: Drug outlays of German statutory health insurers rose from $16.7 billion in 1991 to $27.4 billion last year. And pharmaceutical companies are used to profit margins in the high double digits. It appears only logical then that drug manufacturers are having to ward off ever new attempts by government to reduce drug costs. Yet a glance at the list of the world’s leading pharmaceutical companies shows that past savings attempts of German health policy makers have had an adverse economic side-effect: They are partly to blame for the German pharmaceutical industry’s relegation to the second league. And while manufacturers of generic products have thrived, the lack of free price formation also prevents this segment from exhausting the potential for cost savings in the health sector. Although the weak development in Germany was partly caused by factors favoring investment in the United States, statutory health insurers as the principal buyers of medicine have an immediate influence on the attractiveness of a business location. “Germany slips into Second League,” Carson Knop, Frankfurter Allgemeine Zeitung, July 25, 2003.

The real education of David Stockman
The Reagan revolution, former Office of Management and Budget director David Stockman argued in his book, The Triumph of Politics, failed badly in its mission to shrink the government. It “was not the advent of a new day, but a lapse into fiscal indiscipline on a scale never before experienced in peacetime.” Today, he sees it much differently. “He was absolutely right on defense, and I was totally wrong,” Mr. Stockman said of Mr. Reagan. “The deficit was ballooning and anything I could cut I was for cutting. He was a hundred percent right because that is what brought the Soviet Union down, that is what ended and purged the world of the scourge of Communism, that is what really allowed for the flowering of liberal democracies in the ‘90’s,” he said. In Mr. Stockman’s view, it also allowed for lower military spending in future years.
“Selling One (Or More) for the Gipper”, Danny Hakim, The New York Times, September 7, 2003.

Mo’ money, More mediocrity
The U.S. spends more money on education than other major countries, but its performance doesn’t measure up in areas ranging from high-school graduation rates to test scores in math, reading and science, a new report shows. “There are countries which don’t get the bang for the bucks, and the U.S. is one of them,” said Barry McGaw, education director for the Paris-based Organization for Economic Cooperation and Development. The U.S. spent $10,240 per student from elementary school through college in 2000, according to the report. The average was $6,361 among more than 25 nations. Yet the U.S. finished in the middle of the pack in its 15-year-olds’ performance on math, reading and science in 2000, and its high-school graduation rate was below the international average in 2001. But from school boards to Congress, growing numbers of leaders say the federal government isn’t committing enough money to the task. Federal education spending has grown by $11 billion since President Bush took office (which) includes spending beyond the first 12 grades.
“Schools not getting bang for the buck," Ben Feller, Associated Press, September 18, 2003.