Archives for category: Economy

Nevada is giving more than $1 Billion in tax breaks to woo automaker Tesla to build a huge factory to produce electric batteries.

The deal is controversial but not among Nevada legislators, who expect it to produce economic benefits and 6,500 jobs.

Education also produces economic benefits and jobs, but legislators don’t mind underfunding their schools, increasing class sizes, and short changing the next generation of Nevadans.

The Néw York Times says that Nevada is paying about $200,000 for each job that might be created.

Did Tesla really need the tax break to locate in Nevada?

“Richard Florida, a global research professor at New York University and a frequent critic of development incentives, said the factory would probably have been built in Nevada even without the generous subsidy.

“They had the site picked out; they started on it,” he said in an email. Companies like Tesla “exploit that information asymmetry,” creating uncertainty in a potential host state, he said. “They know where they want to locate, and then essentially game the process to get incentives from states. It is wasteful and it should be banned.”

Angie Sullivan, a teacher in Nevada who keeps me informed, sent out this Roseanne Barr video as a reaction to the Tesla handout: https://m.youtube.com/watch?v=0hmfBtk0WaE

Feeling down about corporate ownership of almost everything? So is David Greene. Gates, Walton, Bloomberg, Bezos, Murdoch, Koch. What don’t they own? Our votes.

David thinks back a century. Other oligarchs owned almost everything then. Of course, it didn’t occur to them to monetize the schools.

But we beat them back. We elected people to regulate the oligarchs. We can do it again.

Anthony Cody was not heartened by Marc Tucker’s vision of a new accountability system with fewer tests. In this post, he explains why. If ever there was a need for close reading, he believes, this is it.

Cody writes:

“Tucker’s plan is confusing. In a proposal in which accountability remains closely tied to a set of high stakes tests, Tucker cites the “Failure of Test-based Accountability,” and eloquently documents how this approach doomed NCLB.

“Tucker speaks about the professionalization of teaching, and points out how teaching has been ravaged by constant pressure to prepare for annual tests. But his proposal still seems wedded to several very questionable premises.

“First, while he blames policymakers for the situation, he seems to accept that the struggles faced by our schools are at least partly due to the inadequacy of America’s teachers. I know of no objective evidence that would support this indictment.

“Second, he argues that fewer, “higher quality” tests will somehow rescue us from their oppressive qualities. He also suggests, as did Duncan in 2010, that we can escape the “narrowing of the curriculum” by expanding the subject matter that would be tested.

“It is worth noting that many of the Asian countries that do so well on international test contests likewise have fewer tests. This chart shows that Shanghai, Japan and Korea all have only three big tests during the K12 years. However, because these tests have such huge stakes attached to them, the entire system revolves around them, and students’ lives and family incomes are spent on constant test preparation, in and out of school.

“Third, and this is the most fundamental problem, is that Tucker suggests that the economic future of our students will only be guaranteed if we educate them better. Tucker writes:

“Outsourcing of manufacturing and services to countries with much lower labor costs has combined with galloping automation to eliminate an ever-growing number of low-skilled and semi-skilled jobs and jobs involving routine work.

“The result is that a large and growing proportion of young people leaving high school with just the basic skills can no longer look forward to a comfortable life in the middle class, but will more likely face a future of economic struggle.

“This does not represent a decline from some standard that high school graduates used to meet. It is as high as any standard the United States has ever met. And it is wholly inadequate now. It turns out, then, that we are now holding teachers accountable for student performance we never expected before, a kind and quality of performance for which the present education system was never designed. That is manifestly unfair.”

“Tucker then repeats what has become the basic dogma of education reform. The economy of the 21st century demands our students be educated to much higher levels so we can effectively compete with our international rivals. Education — and ever better education to ever higher standards — is the key to restoring the middle class.”

But Cody objects:

“I do not believe the economy of the 21st century is waiting for some more highly educated generation, at which time middle class jobs will materialize out of thin air.

“Corporations are engaged in a systemic drive to cut the number of employees at all levels. When Microsoft laid off 18,000 skilled workers, executives made it clear that expenses – meaning employees, must be minimized. Profits require that production be lean. There is no real shortage of people with STEM degrees.

“On the whole, it is still an advantage for an individual to be well educated. But the idea that education is some sort of limiting factor on our economic growth is nonsense. And the idea that the future of current and future graduates will be greatly improved if they are better educated is likewise highly suspect.

“Bill Gates recently acknowledged in an interview at the American Enterprise Institute, “capitalism in general, over time, will create more inequality and technology, over time, will reduce demand for jobs particularly at the lower end of the skill set.”

“This is the future we face until there is a fundamental economic realignment. Fewer jobs. Continued inequality and greater concentration of wealth.”

Cody argues for a different vision, in which accountability goes far beyond teachers and schools:

“For far too long educators have accepted the flagellations of one accountability system after another, and time has come to say “enough.”

“We need to learn (and teach) the real lesson of NCLB – and now the Common Core. The problem with NCLB was not with the *number* of tests, nor with when the tests were given, nor with the subject matter on the tests, or the format of the tests, or the standards to which the tests were aligned.

“The problem with NCLB was that it was based on a false premise, that somehow tests can be used to pressure schools into delivering equitable outcomes for students. This approach did not work, and as we are seeing with Common Core, will not work, no matter how many ways you tinker with the tests.

“The idea that our education system holds the key to our economic future is a seductive one for educators. It makes us seem so important, and can be used to argue for investments in our schools. But this idea carries a price, because if we accept that our economic future depends on our schools, real action to address fundamental economic problems can be deferred. We can pretend that somehow we are securing the future of the middle class by sending everyone to preschool – meanwhile the actual middle class is in a shambles, and college students are graduating in debt and insecure.

“The entire exercise is a monumental distraction, and anyone who engages in this sort of tinkering has bought into a shell game, a manipulation of public attention away from real sources of inequity.”

Cody says:

“We need some accountability for children’s lives, for their bellies being full, for safe homes and neighborhoods, and for their futures when they graduate. Once there is a healthy ecosystem for them to grow in, and graduate into, the inequities we see in education will shrink dramatically. But that requires much broader economic and social change — change that neither policymakers or central planners like Tucker are prepared to call for.”

The ASCD published an eye-popping chart showing that NAEP long-term trend test scores for 17-year-olds were flat from 1971-2012. At the same time, economic productivity soared by 375%, and gross domestic product grew by 100%.

What do you make of that?

I have pointed out repeatedly that our students have never excelled on international tests. On the first international test in 1964, our students came in last of 12 nations. Yet as I explain in my book “Reign of Error,” over the next half-century we outperformed the other 11 nations who had higher test scores.

What do you make of that?

Writing in the International Business Times, investigative journalist David Sirota reports that Microsoft admits keeping $92.9 billion offshore to avoid paying $29.6 billion in taxes, according to the most recent filings with the Securities and Exchange Commission.

He writes:

“Microsoft Corp. is currently sitting on almost $29.6 billion it would owe in U.S. taxes if it repatriated the $92.9 billion of earnings it is keeping offshore, according to disclosures in the company’s most recent annual filings with the Securities and Exchange Commission. The amount of money that Microsoft is keeping offshore represents a significant spike from prior years, and the levies the company would owe amount to almost the entire two-year operating budget of the company’s home state of Washington.

“The company says it has “not provided deferred U.S. income taxes” because it says the earnings were generated from its “non-U.S. subsidiaries” and then “reinvested outside the U.S.” Tax experts, however, say that details of the filing suggest the company is using tax shelters to dodge the taxes it owes as a company domiciled in the United States.”

He adds:

“Apple and General Electric, which also employ offshore subsidiaries, are the only U.S.-based companies that have more money offshore than Microsoft, according to data compiled by Citizens for Tax Justice. In all, a May report by CTJ found that “American Fortune 500 corporations are likely saving about $550 billion by holding nearly $2 trillion of ‘permanently reinvested’ profits offshore.” The report also found that “28 of these corporations reveal that they have paid an income tax rate of 10 percent or less to the governments of the countries where these profits are officially held, indicating that most of these profits are likely in offshore tax havens.”

“Microsoft’s use of the offshore subsidiary tactics has exploded in the last five years, with the amount of Microsoft earnings shifted offshore jumping 516 percent since 2008, according to SEC filings.”

That kind of money, repatriated to the United States, could underwrite prenatal care for low-income women, provide early childhood education for all low-income children, underwrite medical clinics in low-income communities, and save public education in cities like Detroit and Philadelphia, where it is in dire peril. Imagine $550 billion invested in the well-being of our children! Imagine using that money to reduce our child poverty rate, which is currently the highest among the advanced nations of the world.

In an article in Dissent magazine, four authors argue that the notion of America as a “post-racial” society is wrong. The public and politicians tend to blame blacks for the conditions in which they live, as though racism were a thing of the past and the doors of opportunity are wide open for all. Even the election of a black President has not wiped out historic disadvantages that a significant proportion of black Americans are born into.

Alan Aja, Daniel Bustillo, William Darity, Jr., and Darrick Hamilton lay out the facts of continuing racial disparity in employment, wealth, and self-employment to demonstrate that blacks continue to be severely disadvantaged.

The authors off two proposals to provide economic security to all Americans. One is a universal trust account, which would be larger for those who are needy. The other is a guaranteed federal job. Both are expensive yet considerably less than the cost of the economic stimulus plan, which saved the nation’s banks. Imagine: saving our society.

Paul Thomas here takes on some of the most sacred beliefs of U.S. culture. He argues that poverty is destiny, and that education is not the great equalizer. He says that wishing it were so does not make it so.

He writes:

“In the U.S. both poverty and affluence are destiny, and those who shudder at that reality are confusing verbs: Yes, poverty should not be destiny, but false claims will never allow us to achieve that ideal.”

Thomas quotes Matt Bruenig, who wrote:

“One convenient way to describe what’s going on is that rich kids are more likely to get a better education, which translates into being richer and wealthier as adults. It is certainly the case that richer kids are more likely to get a college degree, and it is certainly the case that getting a college degree leaves you much better off on average than not getting one. But this does not explain the full picture of social immobility. Take a look at this super-complicated chart, which I will describe below….

“So, you are 2.5x more likely to be a rich adult if you were born rich and never bothered to go to college than if you were born poor and, against all odds, went to college and graduated. The disparity in the outcomes of rich and poor kids persists, not only when you control for college attainment, but even when you compare non-degreed rich kids to degreed poor kids!

“Therefore, the answer to the question in the title is that you are better off being born rich regardless of whether you go to college than being born poor and getting a college degree.”

Thomas says that our popular myths have a dark side. They allow us to blame the poor for being poor, for not working hard enough, for lacking “grit.”

We do not live in a meritocracy, saysThomas, but in a society where race and class determine most people’s destiny.

He does not wish to be considered a fatalist. Instead, he says, we must “Commit to social and education policy grounded in equity, and not in competition or market forces.” So long as we believe that it is up to each individual to rise or fall on their own, without regard to large social and economic forces, nothing will change.

Mel Brooks memorably said, “It’s good to be the King.”

In these times, it is good to be rich enough to buy public policy to protect your interests and stay rich.

New York has such a group.

Yes, they can.

The Progressive.com managed to get a copy of ALEC’s agenda for its 41st annual meeting in Dallas.

ALEC wants to eviscerate Medicaid, support fracking, and expand charter schools in hopes of destroying America’s great public school system.

All for the corporations and the 1%, nothing for the people.

They are shameless.

Unbelievable. Microsoft lays off 18,000 workers while pressing Congress to expand the number of visas for engineers, mathematicians, scientists, and other workers. Bill Gates, Warren Buffett, and casino operator Sheldon Adelson wrote an article calling for Congressional action to increase H-1B visas.
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Senator Jeff Sessions responded with rage, directed mainly at Gates and at the the tech industry as a whole. He said: “”What did we see in the newspaper today?” said Sessions, “News from Microsoft. Was it that they are having to raise wages to try to get enough good, quality engineers to do the work? Are they expanding or are they hiring? No, that is not what the news was, unfortunately. Not at all.”

Sessions said:

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“What is the situation today for American graduates of STEM degrees and technology degrees?” said Session. “Do we have enough? And do we need to have people come to our country to take those jobs? Or, indeed, do we not have a shortage of workers, and do we have difficulty of people finding jobs?”

“Sessions recently sponsored a forum that assembled some of the leading academic critics of the H-1B program. The group assessed the consequences of hiking the H-1B cap from 85,000 to 180,000, as proposed in the Senate’s comprehensive immigration bill.

“They warned of increasing age discrimination since most of these foreign workers are young, as well as make it harder for U.S. STEM graduates to find work. A cap hike could hurt wages as well. Critics say schools now produce many more STEM graduates than there are jobs for them.

“Microsoft wasn’t the only company to get in Sessions’ crosshairs. He cited a letter by more than 100 large corporations sent to Congress late last year, urging immigration reform. The signees included many companies, such as Hewlett-Packard and Cisco, which have had recent layoffs.

“And just as it is not always true what is good for General Motors is good for America, likewise, what may be good for Mr. Adelson and Mr. Microsoft and Mr. Buffett is not always in accord with what is good for the American people. I know that. They are free to express their opinion, but I am going to push back,” said Sessions.

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