Education: A Golden Age

“The education sector’s structure and policies will change more in the next 3 years than they changed in the last 2,500 years”

Robert Reich: Wages and spending 1973-2008


The Federal Reserve Board’s “beige book” for June and July offers a clear explanation for why the economy has slowed to a crawl. It shows American consumers cutting way back on their purchases of everything from food to cars to appliances to name-brand products. As they do so, employers inevitably are cutting back on the hours they need people to work for them, thereby contributing to a downward spiral.

The normal remedies for economic downturns are necessary. But even an adequate stimulus package will offer only temporary relief this time, because this isn’t a normal downturn. The problem lies deeper. Most Americans can no longer maintain their standard of living. The only lasting remedy is to improve their standard of living by widening the circle of prosperity.

The heart of the matter isn’t the collapse in housing prices or even the frenetic rise in oil and food prices. These are contributing to the mess but they are not creating it directly. The basic reality is this: For most Americans, earnings have not kept up with the cost of living. This is not a new phenomenon but it has finally caught up with the pocketbooks of average people. If you look at the earnings of non-government workers, especially the hourly workers who comprise 80 percent of the workforce, you’ll find they are barely higher than they were in the mid-1970s, adjusted for inflation. The income of a man in his 30s is now 12 percent below that of a man his age three decades ago. Per-person productivity has grown considerably since then, but most Americans have not reaped the benefits of those productivity gains. They’ve gone largely to the top.

Inequality on this scale is bad for many reasons but it is also bad for the economy. The wealthy devote a smaller percentage of their earnings to buying things than the rest of us because, after all, they’re rich. They already have most of what they want. Instead of buying, the very wealthy are more likely to invest their earnings wherever around the world they can get the highest return.

This underlying earnings problem has been masked for years as middle- and lower-income Americans found means to live beyond their paychecks. But they have now run out of such coping mechanisms. As I’ve noted elsewhere, the first coping mechanism was to send more women into paid work. Most women streamed into the work force in the 1970s less because new professional opportunities opened up to them than because they had to prop up family incomes. The percentage of American working mothers with school-age children has almost doubled since 1970 — to more than 70 percent. But there’s a limit to how many mothers can maintain paying jobs.

So Americans turned to a second way of spending beyond their hourly wages. They worked more hours. The typical American now works more each year than he or she did three decades ago. Americans became veritable workaholics, putting in 350 more hours a year than the average European, more even than the notoriously industrious Japanese.

But there’s also a limit to how many hours Americans can put into work, so Americans turned to a third coping mechanism. They began to borrow. With housing prices rising briskly through the 1990s and even faster from 2002 to 2006, they turned their homes into piggy banks by refinancing home mortgages and taking out home-equity loans. But this third strategy also had a built-in limit. And now, with the bursting of the housing bubble, the piggy banks are closing. Americans are reaching the end of their ability to borrow and lenders have reached the end of their capacity to lend. Credit-card debt, meanwhile, has reached dangerous proportions. Banks are now pulling back.

As a result, typical Americans have run out of coping mechanisms to keep up their standard of living. That means there’s not enough purhasing power in the economy to buy all the goods and services it’s producing. We’re finally reaping the whirlwind of widening inequality and ever more concentrated wealth.

The only way to keep the economy going over the long run is to increase the real earnings of middle and lower-middle class Americans. The answer is not to protect jobs through trade protection. That would only drive up the prices of everything purchased from abroad. Most routine jobs are being automated anyway. Nor is the answer to give tax breaks to the very wealthy and to giant corporations in the hope they will trickle down to everyone else. We’ve tried that and it hasn’t worked. Nothing has trickled down.

Rather, the long-term answer is for us to invest in the productivity of our working people — enabling families to afford health insurance and have access to good schools and higher education, while also rebuilding our infrastructure and investing in the clean energy technologies of the future. We must also adopt progressive taxes at the federal, state, and local levels. In other words, we must rebuild the American economy from the bottom up. It cannot be rebuilt from the top down.


2008/07/25 Posted by | Policy | 1 Comment

Obama’s education perspective: not yet fully formed, not yet modern, not yet bold

The sky over Washington, D.C., was gray and gloomy this past Saturday when Barack Obama addressed thousands of members of the National Education Association, the nation’s largest teachers’ union, who had assembled several blocks from the Capitol for their annual convention.

Education has not been prominent in the presidential campaign to date and it’s unlikely that will change. Nonetheless, attention must be paid when Obama peddles his education wares to salivating teachers’ union members, who are equally ready to applaud or assail anyone — be he Republican or Democrat, mere mortal or Obama — who challenges their core beliefs.

The NEA always presents a particularly tough crowd for Obama because he sees education as one proven pudding of his bipartisan bona fides. Thus, on Saturday he could not simply recycle union claptrap and tell the NEA all the nonsense it desperately wanted to hear. The question, then, was this: In what way would Obama, in his speech, choose to break from the teachers’ union orthodoxy and thereby shore up his work-across-the-aisle credentials?

In the past, he has tried to do this by supporting the completely reasonable idea, unreasonably attacked by the NEA, that good teachers should receive more money than bad ones. Last year, well before he secured the presumption of presidential nomination, Obama suggested at the NEA convention that so-called merit pay for teachers made sense (for which suggestion he was the recipient of sundry boos). And in April of this year, in a segment on FOX News Sunday, Obama restated that position to host Chris Wallace.

Obama: I think that on issues of education, I’ve been very clear about the fact — and sometimes I’ve gotten in trouble with the teachers’ union on this — that we should be experimenting with charter schools. We should be experimenting with different ways of compensating teachers.

Wallace: You mean merit pay?

Obama: Well, merit pay, the way it’s been designed, I think, is based on just a single standardized test — I think is a big mistake, because the way we measure performance may be skewed by whether or not the kids are coming into school already three years or four years behind.

But I think that having assessment tools and then saying, “You know what? Teachers who are on career paths to become better teachers, developing themselves professionally — that we should pay excellence more.” I think that’s a good idea, so…Paying useful employees more money than lousy employees is indeed a “good idea”; in most industries, in fact, it’s known as common sense. Not so, though, in the American public school bureaucracy in which educators — the good, bad, and ugly — all receive raises based not on which subjects they teach or how well they teach them but on how long they’ve been in the profession. Tenure trumps talent.

Saturday, via video from Butte, Montana, Obama again told the NEA that merit pay made sense, and again boos swelled from the crowd. Good for him. He deserves credit for backing a smart idea. But that in no way proves that Obama has gone against his party or subscribes to his own post-partisan speechifying.

Merit pay may arouse the NEA’s ire and Republicans’ ardor, but it’s hardly a policy out of step with many left-leaning thinkers or with the Democratic party. Last November the liberal Center For American Progress released a report, “The Future of Teacher Compensation,” on the reformation of teacher salaries through merit pay. In September 2007, Democratic Representative George Miller, chairman of the House Committee on Education and Labor, clashed publicly with NEA President Reg Weaver after Weaver opposed any inclusion of merit pay in an updated draft of the No Child Left Behind law that Miller constructed.

Merit pay for teachers is abundantly sensible — so much so, that opposing it is widely seen as batty. The USA Today editorial board wrote last year, “Objecting to merit pay today amounts to opposing a proven tool for making teachers more effective.” The same can be said about charter schools, which Obama commendably supports but which are nonetheless also supported not only by Republicans but by large swaths of liberals and the Democratic party.

And despite his advocacy for merit pay and charter schools, Obama still took from the NEA convention its presidential endorsement after 79.8 percent of the union’s voting delegates backed him.

What else did Obama say to the NEA on Saturday? He said public schools need more money, he said he was a stalwart opponent of vouchers and private-school choice, he said we need 100,000 new teachers, he said we can’t hold teachers and schools accountable without holding parents accountable too, he said we need “better pay for teachers across the board,” and he accused McCain of “recycling tired rhetoric about vouchers and school choice.”

Such elocutions hardly amount to a post-partisan prescription for reforming the nation’s failing schools. Opportunities for Obama to show such post-partisan leadership have arisen– such as last month, when Washington, D.C.’s voucher program (supported by Marion Barry, even) was under attack from congressional Democrats — but the candidate has passed on these opportunities.

Nonetheless, Obama says that in the realm of education policy his actions have demonstrated his commitment to post-partisanship. Such meager efforts as his scarcely merit such claims.

— Liam Julian is a Hoover Institution research fellow who writes frequently about education.

2008/07/24 Posted by | Policy | Leave a comment

Robert Reich: economics approach should be bottom-up

Tuesday, July 22, 2008
A Short Primer on McCainomics Versus Obamanomics: Top-Down or Bottom-Up

McCain and Obama represent two fundamentally different economic philosophies. McCain’s is top-down economics; Obama’s is bottom-up.

Top-down economics holds that:

1. If you give generous tax breaks to the rich, they will have greater incentive to work hard and invest. Their harder work and added investments will generate more jobs and faster economic growth, to the benefit of average working people.

2. If you give generous tax breaks to corporations, reduce their payroll costs, and impose fewer regulations on them, they will compete more successfully in global commerce. This too will result in more jobs for Americans and faster growth in the United States.

3. The best way to reduce the energy costs of average Americans is to give oil companies access to more land on which to drill, lower taxes, and lower capital costs. If they get these, they’ll supply more oil, which will reduce oil prices.

4. The best way to deal with the crisis in credit markets is to insure large Wall Street investment banks, as well as Fannie and Freddie, against losses. This will result in more loans at lower rates to average Americans. (Bailing them out may risk “moral hazard,” in the sense that they will expect to be bailed out in the future, but that’s a small price to pay for restoring liquidity.)

All of these propositions are highly questionable, especially in a global economy. The rich do not necessarily invest additional post-tax earnings in the United States; they invest wherever around the world they can get the highest returns. Meanwhile, large American-based corporations are doing business all over the world; their supply chains extend to wherever they can find low labor costs combined with high output, and their sales to wherever they can find willing buyers. Oil companies, too, are operating globally and set their prices largely at the point where global supply meets global demand. Additional drilling here creates environmental risks for us but generates the same marginal benefits for consumers in China, India, and Europe as we might enjoy (most likely not for a decade or more). Credit markets are global as well, so the beneficiaries of bailouts of large investment banks and lenders are also worldwide while the potential costs (including moral hazard) fall on American taxpayers.

This isn’t to argue that top-down economics is completely nonsensical. America is, after all, the world’s largest economy. So whatever helps the top of it will to some extent trickle down to everyone else here, and whatever hurts the top is likely to impose some burdens all the way down.

But in a global economy, bottom-up economics makes more sense. Bottom-up economics holds that:

1. The growth of the American economy depends largely on the productivity of its workers. They are rooted here, while global capital and large American-based global corporations are not.

2. The productivity of America workers depends mainly on their education, their health, and the infrastructure that connects them together. These public investments are therefore critical to our future prosperity.

3. Global capital will come to the United States to create good jobs not because our taxes or wages or regulatory costs are low (there will always be many places around the world where taxes, wages, and regulatory costs are lower) but because the productivity of our workers is high.

4. The answer to our energy costs is found in the creativity and inventiveness of Americans in generating non-oil and non-carbon fuels and new means of energy conservation, rather than in access by global oil companies to more oil. So subsidize basic research and development in these alternatives.

5. Finally, in order to avoid a recession or worse, it’s necessary to improve the financial security of average Americans who are now sinking into a quagmire of debt and foreclosure. Otherwise, there won’t be adequate purchasing power to absorb all the goods and services the economy produces. (As to “moral hazard,” the financial institutions that did the lending had more reason to know of the risks involved than those who did the borrowing.)

Listen carefully to the economic debate in the months ahead in light of these two competing economic philosophies. And hope that the latter wins out in years to come.

2008/07/24 Posted by | Policy | Leave a comment

Improving Public Schools Hearing

U.S. House of Representatives Committee on Education and Labor

George Miller, Michael Bloomberg, Joel Klein, Adrian Fenty, Michelle Rhee, Arne Duncan.

George Miller

Adrian Fenty

Michael Bloomberg

Joel Klein

Michelle Rhee

Beverly Hall

Arne Duncan

2008/07/17 Posted by | Policy | 1 Comment

Martin/CNN on Obama and McCain and vouchers

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” “All I want is for my children to get the best education they can.”

That statement, along with so many others, has been a consistent one that I’ve heard on my radio show and in discussions with parents for years, especially those whose children are stuck in inner-city schools with decrepit buildings and a lack of critical resources.

And for the past 20 years, one of the most talked-about solutions for parents stuck in dead-end, failing schools is to give them the option to use vouchers to send their children someplace where they could get a quality education.”

“But part of the reason why vouchers have been denounced and dismissed is
because Democrats have been far too obstinate on the issue, and have not
listened to their constituents, especially African-Americans, who overwhelmingly
support vouchers…. Obama’s opposition is right along the lines of the National
Education Association, and the teachers union is a reliable and powerful
Democratic ally. But this is one time where he should have opposed them and made
it clear that vouchers can force school districts, administrators and teachers
to shape up or see their students ship out.

“It is unconscionable to ask a parent to watch as his child is stuck in a
failing school or district, and ask him to bank on a politician coming up with
more funds to improve the situation. Fine, call vouchers a short-term solution
to a long-term problem, but I’d rather have a child getting the best education
— now — rather than having to hope and pray down the line.”

“But leaving out vouchers does a tremendous disservice to the parents who are fed up with deplorable schools, and allows school districts to operate with impunity and without any real competition.”

2008/07/17 Posted by | Policy | Leave a comment

Ideologi og fakta


“Høyresidas markedsløsninger gir ikke mer kvalitet og likeverd i skolen. Både privatisering, rangering, stykkprisfinansiering og økt konkurranse fører til større sosiale forskjeller og dårligere resultater. Vi må få fram verdiforskjellene mellom oss og de andre, sier Henriksen.”

Faktum: det har allerede i 30 år vært godt kjent at fravær av valg og konkurranse fører til dårlige resultater og til at elever med foreldre med få ressurser kommer kronisk dårligst ut.  En hel generasjon er gått tapt.

Så lenge Ap/AUF og SV/SUF argumenterer ideologisk og ikke basert på fakta og bruker stadig mer penger med stadig mindre offentlige resultatdata å vise til vil Høyre og FrP med rettferdighet dominere utdanningspolitikken i Norge.  Vi oppfordrer Ap/SV til å følge eksempelet til Democratic Party i USA og gå sine utdanningsretningslinje-synspunkter etter i sømmene, fundamentalt, basert på faktiske erfaringer de siste ~35 årene.

2008/07/15 Posted by | Policy | Leave a comment

Robert Reich on the need for an unemployment insurance guidelines overhaul

Tuesday, July 08, 2008
Why Most Who Lose Their Jobs Don’t Get Unemployment Benefits

The great American jobs machine is grinding to a halt. In response, Congress has just extended unemployment benefits 13 additional weeks, over and above the 26 weeks normally provided. That’s good as far as it goes.

But most people who lose their job these days don’t qualify for any unemployment benefits at all.

How can this be? Simple. In order to be eligible, most states require you to have been working in the job you lost full time, and for a certain number of years.

These requirements made sense decades ago when labor markets were far more stable – when most working people stayed in the same full-time job for years, and only lost it temporarily during the downdraft of a recession, picking it up again when the economy rebounded. And back then, one full-time breadwinner could keep a family whole. In those days, unemployment insurance counter-balanced recessions by keeping money in the pockets of working families.

But nothing is stable about today’s labor market. Every time the economy sinks, employers fire workers permanently. Even when the economy is doing fine, pink slips proliferate — although under these circumstances it’s easier to find a new job. All of which means a growing fraction of the labor force is in a job only a few years.

Meanwhile, full-time jobs are vanishing. More companies are contracting out their work. As a result, more people are doing several part-time jobs, or are self employed. They’re also more likely to be part of a couple whose family depends on two sets of paychecks.

So when times get tough, as they are now — and people lose a job after having it for only a few years or lose their part-time job or lose their client, or one member of a couple loses earnings — a family can be in real trouble. And there are no unemployment benefits, not even partial benefits based on the proportional loss of income from a part-time job, to help them. Or to help counter-balance the economy as a whole.

It’s a disgrace that most Americans who lose their jobs don’t qualify for unemployment insurance. It’s also bad for the economy because unemployment insurance is less effective as a counter-cyclical device. Congress should expand coverage (condition federal UI funding of states) so a majority of American families have some security in these perilous times.

2008/07/8 Posted by | Policy | Leave a comment

The effect of technology and globalization on old K-12 education system

2008/07/2 Posted by | Policy | Leave a comment