Archives for category: Economy
« Older Entries
Newer Entries »

Call Your Senator to Demand He or She Vote No on the Tax Scam!

By dianeravitch
December 19, 2017 //
11

Have you called Senators Collins, Rubio, McCain, Flake, Murkowski, Sasse, Corker, Lee, Paul, and Johnson — plus any others you can think of — about the tax scam? Just dial 202-224-3121. And then, if one or both your senators is Republican, go a step further. Google over to their website and find the phone number for their local office — and call that one, too. Not sure what to say? Heck: just read them the highlights of this column by economic blogger Andrew Tobias at andrewtobias.com:

“It would be fine to have a well-thought-through corporate tax reform that were revenue-neutral . . . and that did not encourage companies to move jobs overseas as the current Republican plan, being rushed into law, likely will.

“And it would be economically dumb but at least morally defensible to give the working poor and middle class a tax cut. They are struggling to get by! They’ve been cut out of the tremendous gains in wealth the country has made these past 30-odd years. It’s almost all gone to the top few percent, especially to the tippy top. (As you know, the net worth of just three individuals now exceeds the combined net worth of the entire bottom half of the country.)

“But what possible reason can there be to lower the top individual tax bracket from 39.6% to 37%? How would that help the working poor or middle class? How would it help fund revitalization of our crumbling infrastructure? How would it help reduce the deficit that Republicans care so deeply about when they’re not in power — but then explode when they are?

“What possible reason can there be to cut the estate tax (which they like to call the “death” tax but is effectively an inheritance tax on lucky multi-millionheirs and billionheirs)? How would that help the working poor or middle class or fund revitalization of our crumbling infrastructure or reduce the deficit?

“What possible reason can there be to cut the top tax rate on highly-earning professionals and business folk from 39.6% to 30% or so, as they “pass through” their income from LLC’s and S-corps? It’s no fun being taxed 39.6% on that portion of your income above $450,000 when you’re making $600,000 or $1 million or $3 million a year — but do we really need to go deeper into debt to cut those taxes? Shouldn’t we revitalize our infrastructure instead?

“Why has the “carried interest” loophole for hedge-funders survived yet again? It’s just an illogical giveaway to people, some of them immensely wealthy, who simply don’t need it.

“Why throw out “the individual mandate,” which is projected to raise the cost of health insurance for millions of Americans — and cause 13 million to lose coverage altogether? Republicans consider it a great way to save money, because when people lose their Affordable Care Act insurance, the government won’t have to provide the subsidies that make it affordable.

“With inequality threatening our economy and our society like never before (well, maybe like 1929), why would we do this to ourselves? Could it be because the Koch brothers and the Mercers and the Devos family and Wilbur Ross and Carl Icahn and the Trump family really want to?

“Call every Republican senator you can think of, especially these, and ask their staff these questions. Or if you call in the middle of the night, leave those questions on their voice mail. The Senate switchboard is 202-224-3121. Collins, Murkowski, Flake, Sasse, Corker, Rubio, Paul, Johnson, McCain . . . And then, if one or both your senators is Republican, go a step further. Google over to their website and find the phone number for their local office — and call that one, too.

“Seriously: we’re not going to get another shot at this.”

Categories Billionaires, Economy

Tax Cuts and the End of Corporate Social Responsibility

By dianeravitch
December 16, 2017 //
41

The GOP Tax Plan drops the corporate tax rate from 35% to 21%. Republicans say it will bring jobs to American workers. Democrats think it will bring larger dividends to shareholders.

What is remarkable, however, is the changed role of the corporation in relation to its workers.

“The corporate behemoths of postwar America — General Motors, General Electric, DuPont, IBM and the like — behaved in markedly different ways than those of today. They provided pensions for retirees. What they paid workers was a small percentage of what executives got, but it was not an infinitesimal fraction. And they paid a much bigger cut in federal taxes.


The corporations were, or at least aspired to be, part of the American bedrock.


“For years I thought that what was good for our country was good for General Motors, and vice versa,” a GM chief famously told Congress in 1953.
The Republican tax plan moving toward passage in Congress promises to erase one of the last remnants of that era, pushing the corporate tax rate to its lowest point since the 1930s.


“The higher corporate rate was a holdover from a time when companies not only paid a larger share of taxes but provided more for workers, too. They put a larger portion of corporate income into paychecks and were much more likely to provide pensions.


“The notion of the corporation as a social institution was a defining feature of the mid-20th century — but that has been fading,” said Benjamin C. Waterhouse, a historian of business and politics at the University of North Carolina and the author of “ The Land of Enterprise ,” a history of American business. “These days, the broader trend has been that corporations have experienced an increase in political rights and a decrease in social responsibility.”

Today, the notion of corporations having a sense of social responsibility seems antique.

In the view of Republicans, social responsibility is a cost that corporations can not afford. Nor can they afford pensions. But they don’t blink at the thought of paying their top executives tens of millions of dollars a year.

Categories Economy

Steven Singer: The GOP Tax Scam and the Triumph of Plutocracy

By dianeravitch
December 2, 2017 //
46

The way the Senate Republicans rammed through a tax bill that affects everyone in the country without hearings or debates, without allowing Democrats to read the bill before the vote was taken, is an assault on basic democratic values.

Senator John McCain spoke eloquently during the health care debate about the need to return to normal order, where both parties work together, but even he abandoned what seemed to his principles.

There were no principles to be seen during the debacle in the Senate.

Steve Singer writes here about this rush to redistribute money to the wealthiest in our society, while telling baldfaced lies about its true purposes.

“I am no fan of the corporate Democrats who have taken over what used to be a progressive party. But we can’t blame them for this one.

“This scandal belongs entirely on the shoulders of Republicans.

“The Dems even offered a resolution to delay the vote so that legislators had a chance to read it. All 52 Republicans voted against it!

“This is what happens when the people lose control of their government.

“This is what happens when the rich control lawmakers with their money.

“There is no longer any doubt that we no longer live in a Republic. We no longer have any form of representative Democracy. We live in a pure plutocracy.

“The rich pay the representatives and the representatives do what the rich want.

“The wealthy are their real constituents. We are merely patsies told polite falsehoods to keep us in line.

“You have no political power.

“None.

“Governments get their legitimacy from the consent of the governed.

“You did not give your consent to give away more than a trillion dollars to rich douchebags who don’t need it. But Republicans gave it to them anyway.

“Therefore, our government has no legitimacy.

“We are an occupied people.

“We are the victims of a palace coup.”

There will be an election in 2018.and another in 2020.

We must take back our government.

Time to #Drantheswamp. It is full of snakes and alligators.

Categories Democracy, Economy, Fraud, Hoax

A Historian of the Depression Warns that Republicans Are Recreating Similar Conditions of Late 1920s

By dianeravitch
December 1, 2017 //
47

Robert S. McIlvaine is a scholar of The Great Depression. He warns that Republicans are endorsing the same flawed ideology that produced that devastating economic collapse.

““There are two ideas of government,” William Jennings Bryan declared in his 1896 “Cross of Gold” speech. “There are those who believe that if you will only legislate to make the well-to-do prosperous their prosperity will leak through on those below. The Democratic idea, however, has been that if you legislate to make the masses prosperous their prosperity will find its way up through every class which rests upon them.”

“That was more than three decades before the collapse of the economy in 1929. The crash followed a decade of Republican control of the federal government during which trickle-down policies, including massive tax cuts for the rich, produced the greatest concentration of income in the accounts of the richest 0.01 percent at any time between World War I and 2007 (when trickle-down economics, tax cuts for the hyper-rich, and deregulation again resulted in another economic collapse).

“Yet the plain fact that the trickle-down approach has never worked leaves Republicans unfazed. The GOP has been singing from the Market-is-God hymnal for well over a century, telling us that deregulation, tax cuts for the rich, and the concentration of ever more wealth in the bloated accounts of the richest people will result in prosperity for the rest of us. The party is now trying to pass a scam that throws a few crumbs to the middle class (temporarily — millions of middle-class Americans will soon see a tax hike if the bill is enacted) while heaping benefits on the super-rich, multiplying the national debt and endangering the American economy.”

Categories Economy

Bill Becker: The Republican Tax Plan is a Massive Hoax!

By dianeravitch
November 30, 2017 //
58

Bill Becker is an internationally recognized expert on climate change and the environment.

In this article, he demonstrates how Republicans are pullling the wool over the eyes of the public.

Start with the graphic at the top of the article:

Of the 30 richest nations in the world, the U.S. ranks:

*29th in net income inequality
*29th in wealth inequality
*28th in poverty rate
*29th in life expectancy

Correlate those data with test scores on PISA and TIMSS. Amazing.

Becker writes:

“Question: As Republican leaders have described it, the central promise of tax reform is to put more money in the pockets of middle-class Americans and to provide more money for corporations to create jobs. Can we be confident of that result?

“Background: The answer is no. Earlier this month, CNN broadcast a meeting in which Donald Trump’s economic advisor, Bary Cohn, met with a group of CEOs. The meeting’s moderator asked for a show of hands on how many of the companies in the room would use their savings for capital investment in the economy if Congress reduced their taxes. Only two CEOs raised their hands. “Why aren’t the other hands up?” Cohn asked.

“Past experience provides the answer. Our bigger corporations have demonstrated that when they have extra cash, they don’t use it to create jobs; they use it to increase the value of their stock by raising dividends and buying back shares. CEOs and shareholders benefit, but not most middle- and lower-class households. They usually don’t own stocks. Eighty percent of stocks today are owned by the top 20% of income earners.

“Question: Republicans want to lure trillions of dollars back into the United States by giving a tax break to companies that repatriate the profits they have stashed overseas. By one estimate, the tax break would amount to a half-trillion dollars. Is it realistic to expect that these funds would be used to create jobs and to benefit middle-America?

“Background: Again, experience provides an answer. Congress gave a similar “tax holiday” in 2004 to companies that repatriated their overseas money. The Center on Budget and Policy Priorities found that CEOs again used their money to repurchase and raise the value of their stock and to pay dividends to shareholders. “Moreover, many firms laid off large numbers of U.S. workers even as they reaped multi-billion-dollar benefits from the tax holiday and passed them on to shareholders,” the Center found.

“What about today? Our big corporations are flush with cash and their earnings are healthy. They already could be investing their profits to create more jobs, if they wanted to. But when more than 300 business executives were polled over the summer, they said they would use repatriated money to pay down their debt, buy back their own stock to drive up its price, and engage in mergers, in that order.”

Oh, and by the way, Senator McCain announced that he would vote for the tax bill. The last possible independent has fallen in line with the party.

Categories Economy, Republicans

Republican Tax Plan Will Have Devastating Impact Across Society: Trickle-Down Economics Redux

By dianeravitch
November 30, 2017 //
35

The Republican Tax Plan will have devastating impact in many sectors of society, including education and healthcare. It will dramatically increase income inequality, by reducing taxes on the wealthiest and on corporations. The Republicans blithely assume that cutting corporate tax rates will lead to more job creation and economic growth, but past experience suggests that the bonuses for corporations will fatten profits for investors and have minimal impact on jobs.

“The tax plan has been marketed by President Trump and Republican leaders as a straightforward if enormous rebate for the masses, a $1.5 trillion package of cuts to spur hiring and economic growth. But as the bill has been rushed through Congress with scant debate, its far broader ramifications have come into focus, revealing a catchall legislative creation that could reshape major areas of American life, from education to health care.

“Some of this re-engineering is straight out of the traditional Republican playbook. Corporate taxes, along with those on wealthy Americans, would be slashed on the presumption that when people in penthouses get relief, the benefits flow down to basement tenements.

“Some measures are barely connected to the realm of taxation, such as the lifting of a 1954 ban on political activism by churches and the conferring of a new legal right for fetuses in the House bill — both on the wish list of the evangelical right.

“With a potentially far-reaching dimension, elements in both the House and Senate bills could constrain the ability of states and local governments to levy their own taxes, pressuring them to limit spending on health care, education, public transportation and social services. In their longstanding battle to shrink government, Republicans have found in the tax bill a vehicle to broaden the fight beyond Washington.

“The result is a behemoth piece of legislation that could widen American economic inequality while diminishing the power of local communities to marshal relief for vulnerable people — especially in high-tax states like California and New York, which, not coincidentally, tend to vote Democratic.

“All of this is taking shape at such extraordinary velocity, absent the usual analyses and hearings, that even the most savvy Washington lobbyist cannot be fully certain of the implications.

“Mr. Trump and the Republican leadership in Congress — stymied in their efforts to repeal Obamacare, and short of legislative achievements — have signaled absolute resolve to get a tax bill passed by the end of the year. As the sense has taken hold that Washington is now a trading floor where any deal is worth entertaining so long as it brings votes, interest groups have fixed on the tax bill as a unique opportunity to further their agendas.

“There’s a Christmas-tree aspect to the bill,” said C. Eugene Steuerle, a Treasury official during the Reagan administration and now a senior fellow at the Urban Institute. As an example, he cited the provisions in the House bill designed to appeal to the religious right…

“Economists and tax experts are overwhelmingly skeptical that the bills in the House and Senate can generate meaningful job growth and economic expansion. Many view the legislation not as a product of genuine deliberation, but as a transfer of wealth to corporations and affluent individuals — both generous purveyors of campaign contributions. By 2027, people making $40,000 to $50,000 would pay a combined $5.3 billion more in taxes, while the group earning $1 million or more would get a $5.8 billion cut, according to the Joint Committee on Taxation and the Congressional Budget Office.

“When you put all these pieces together, what you’re left with is we are squandering a giant sum of money,” said Edward D. Kleinbard, a former chief of staff at the Congressional Joint Committee on Taxation who teaches law at the University of Southern California. “It’s not aimed at growth. It is not aimed at the middle class. It is at every turn carefully engineered to deliver a kiss to the donor class.”

“In a recent University of Chicago survey of 38 prominent economists across the ideological spectrum, only one said the proposed tax cuts would yield substantial economic growth. Unanimously, the economists said the tax cuts would add to the long-term federal debt burden, now estimated at more than $20 trillion.”

The basic idea of trickle-down economics is that enriching those with the most will encourage them to invest in productive industries, create jobs, and thus help those at the bottom, as Money trickles down from the top.

The late Senator Daniel Patrick Moynihan described this as feeding the horses to feed the sparrows.

Categories Economy, Higher Education

Ben Tarnoff: What’s Behind The Rage to Teach Coding?

By dianeravitch
October 15, 2017 //
55

Ben Tarnoff writes about technology and Silicon Valley. In this article, he notes that many districts plan to teach coding as a basic skill, one that is necessary in the new global economy. He believes that the push for more coders is not about helping young people find jobs, but about enabling the computer industry to lower wages.

This month, millions of children returned to school. This year, an unprecedented number of them will learn to code.

Computer science courses for children have proliferated rapidly in the past few years. A 2016 Gallup report found that 40% of American schools now offer coding classes – up from only 25% a few years ago. New York, with the largest public school system in the country, has pledged to offer computer science to all 1.1 million students by 2025. Los Angeles, with the second largest, plans to do the same by 2020. And Chicago, the fourth largest, has gone further, promising to make computer science a high school graduation requirement by 2018.

The rationale for this rapid curricular renovation is economic. Teaching kids how to code will help them land good jobs, the argument goes. In an era of flat and falling incomes, programming provides a new path to the middle class – a skill so widely demanded that anyone who acquires it can command a livable, even lucrative, wage.

Forget Wall Street – Silicon Valley is the new political power in Washington

This narrative pervades policymaking at every level, from school boards to the government. Yet it rests on a fundamentally flawed premise. Contrary to public perception, the economy doesn’t actually need that many more programmers. As a result, teaching millions of kids to code won’t make them all middle-class. Rather, it will proletarianize the profession by flooding the market and forcing wages down – and that’s precisely the point.

At its root, the campaign for code education isn’t about giving the next generation a shot at earning the salary of a Facebook engineer. It’s about ensuring those salaries no longer exist, by creating a source of cheap labor for the tech industry.

As software mediates more of our lives, and the power of Silicon Valley grows, it’s tempting to imagine that demand for developers is soaring. The media contributes to this impression by spotlighting the genuinely inspiring stories of those who have ascended the class ladder through code. You may have heard of Bit Source, a company in eastern Kentucky that retrains coalminers as coders. They’ve been featured by Wired, Forbes, FastCompany, The Guardian, NPR and NBC News, among others.

A former coalminer who becomes a successful developer deserves our respect and admiration. But the data suggests that relatively few will be able to follow their example. Our educational system has long been producing more programmers than the labor market can absorb. A study by the Economic Policy Institute found that the supply of American college graduates with computer science degrees is 50% greater than the number hired into the tech industry each year. For all the talk of a tech worker shortage, many qualified graduates simply can’t find jobs.

More tellingly, wage levels in the tech industry have remained flat since the late 1990s. Adjusting for inflation, the average programmer earns about as much today as in 1998. If demand were soaring, you’d expect wages to rise sharply in response. Instead, salaries have stagnated.

Still, those salaries are stagnating at a fairly high level. The Department of Labor estimates that the median annual wage for computer and information technology occupations is $82,860 – more than twice the national average. And from the perspective of the people who own the tech industry, this presents a problem. High wages threaten profits. To maximize profitability, one must always be finding ways to pay workers less.

Tech executives have pursued this goal in a variety of ways. One is collusion – companies conspiring to prevent their employees from earning more by switching jobs. The prevalence of this practice in Silicon Valley triggered a justice department antitrust complaint in 2010, along with a class action suit that culminated in a $415m settlement. Another, more sophisticated method is importing large numbers of skilled guest workers from other countries through the H1-B visa program. These workers earn less than their American counterparts, and possess little bargaining power because they must remain employed to keep their status.

Guest workers and wage-fixing are useful tools for restraining labor costs. But nothing would make programming cheaper than making millions more programmers. And where better to develop this workforce than America’s schools? It’s no coincidence, then, that the campaign for code education is being orchestrated by the tech industry itself. Its primary instrument is Code.org, a nonprofit funded by Facebook, Microsoft, Google and others. In 2016, the organization spent nearly $20m on training teachers, developing curricula, and lobbying policymakers.

Categories Economy, Technology

Supreme Court Likely to Crush Unions and Eliminate Protections for Minimum Wage Workers This Term

By dianeravitch
October 2, 2017 //
33

The addition of Neil Gorsuch has given conservatives the decisive edge on the Supreme Court that they have sought for many years.

The Janus case is likely to slash the resources of unions. Another case will be a setback for minimum wage workers, those who labor for $7.25 an hour.

These cases together will widen economic inequality and shift greater power to corporations.

Janus is about union dues.

“The Supreme Court on Thursday agreed to hear a case that could deal a crushing blow to organized labor.

“It was one of 11 cases the justices added to the court’s docket from the roughly 2,000 petitions seeking review that had piled up during the court’s summer break.

“In the labor case, the court will consider whether public-sector unions may require workers who are not members to help pay for collective bargaining. If the court’s answer is no, unions would probably lose a substantial source of revenue.

“The question was before the justices last year in Friedrichs v. California Teachers Association, and they seemed poised to rule against the unions when the case was argued in January 2016. But the death of Justice Antonin Scalia the next month resulted in a 4-to-4 deadlock.“

The minimum wage case may inflict devastating harm on low wage workers.

Slate reports:

“In recent years, the nationwide Fight for $15 movement has succeeded in persuading several states and cities to raise their hourly minimum wages well above the federal minimum of $7.25. But the effort to ensure a living wage for workers may be headed for a serious setback in the U.S. Supreme Court. Depending on how they rule in a case set for argument next week, the justices could make it much more difficult for millions of workers to secure even the meager wages guaranteed by existing federal law.

“On Monday, the day that kicks off the Supreme Court’s new term, the justices will hear arguments in three consolidated cases with far-reaching implications for wage-earners. The cases—Epic Systems Corp. v. Lewis, Ernst & Young LLP v. Morris, and National Labor Relations Board v. Murphy Oil USA, Inc.—are all about whether employers have the right to compel workers go through onerous individual arbitration proceedings in order to bring labor law claims. If the justices answer that question in the affirmative, then the affected workers will—as a practical matter—find it nearly impossible to win back pay in cases involving wage law violations.

“In the typical case involving wage law violations—such as when a firm makes employees work off the clock, pays less than the minimum wage, or fails to pay extra for overtime—plaintiffs bring what’s called a collective action (similar, but not identical to, a class action) in order to recover back pay from a common employer. Each worker’s claim might be worth only a few hundred or few thousand dollars, but when the defendant is a large firm with lots of similarly situated employees, the collective action might be worth millions. So while virtually no lawyer would want to take on an individual case on behalf of such a plaintiff, it’s much easier to find competent counsel to litigate a potentially more lucrative collective action.

“To pre-empt this possibility, more and more firms are inserting individual arbitration clauses into employee contracts. These clauses require employees to pursue workplace-related claims before private arbitrators rather than in federal or state court. These clauses also, critically, require employees to pursue their claims individually rather than through collective actions.”

These are victories long sought by the most reactionary elements of the most powerful elites in America. ALE, the Koch brothers, the DeVos family, and all those collectively known as “Dark Money” are close to achieving one of their most cherished goals, the victory of capital over labor.

Categories Economy, Equity, Unions

New Study: Education Is Important, But It Is Not the Key to Economic and Social Mobility

By dianeravitch
October 1, 2017 //
20

Rachel M. Cohen writes in The Atlantic about a new study by Jesse Rothstein, showing that education is important but it is not the key to economic and social mobility.

She writes:

“A new working paper authored by the UC Berkeley economist Jesse Rothstein builds on that research, in part by zeroing in on one of those five factors: schools. The idea that school quality would be an important element for intergenerational mobility—essentially a child’s likelihood that they will one day outearn their parents—seems intuitive: Leaders regularly stress that the best way to rise up the income ladder is to go to school, where one can learn the skills they need to succeed in a competitive, global economy. “In the 21st century, the best anti-poverty program around is a world-class education,” Barack Obama declared in his 2010 State of the Union address. Improving “skills and schools” is a benchmark of Republican House Speaker Paul Ryan’s poverty-fighting agenda.

“Indeed, this bipartisan education-and-poverty consensus has guided research and political efforts for decades. Broadly speaking, the idea is that if more kids graduate from high school, and achieve higher scores on standardized tests, then more young people are likely to go to college, and, in turn, land jobs that can secure them spots in the middle class.

“Rothstein’s new work complicates this narrative. Using data from several national surveys, Rothstein sought to scrutinize Chetty’s team’s work—looking to further test their hypothesis that the quality of a child’s education has a significant impact on her ability to advance out of the social class into which she was born.

“Rothstein, however, found little evidence to support that premise. Instead, he found that differences in local labor markets—for example, how similar industries can vary across different communities—and marriage patterns, such as higher concentrations of single-parent households, seemed to make much more of a difference than school quality. He concludes that factors like higher minimum wages, the presence and strength of labor unions, and clear career pathways within local industries are likely to play more important roles in facilitating a poor child’s ability to rise up the economic ladder when they reach adulthood….

“Jose Vilson, a New York City math teacher, says educators have known for years that out-of-school factors like access to food and healthcare are usually bigger determinants for societal success than in-school factors. He adds that while he tries his best to adhere to his various professional duties and expectations, he also recognizes that “maybe not everyone agrees on what it means to be successful” in life….

“Rothstein is quick to say that his new findings do not mean that Americans should do away with investments in school improvement, or even that education is unrelated to improving opportunity. Certainly the more that people can read, write, compute, think, and innovate, the better off society and liberal democracy would be. “It will still be good for us if we can figure out how to educate people more and better,” he says. “It might help the labor market, our civic society, our culture.” But Americans should be more clear, he says, about why they are investing in school improvement. His research suggests that doing so in order to boost a child’s chances to outearn their parents is unlikely to be successful. According to Rothstein, education systems just don’t go very far in explaining the differences between high- and low-opportunity areas.”

Union membership is another factor that explains whether children can escape poverty. But unions are under siege, and that route has been nearly closed off by the joint efforts of ALEC, the Koch brothers, the Walton family, and other billionaires who want to pull the ladder up behind them and claim that school choice will solve the economic disparity that benefits them.

Categories ALEC, Betsy DeVos, Billionaires, Economy, Research, School Choice, Unions

Jennifer Berkshire: Education Can’t End Poverty, So Why Do Pundits Keep Saying So?

By dianeravitch
September 21, 2017 //
36

Jennifer Berkshire interviews Harvey Kantor, author of a recent book that explains why some people have substituted education as the answer to poverty instead of job-creation or income transfers.

I happen to believe that education is crucial for everyone, and especially for those who live in poverty. But education alone is not enough.

Berkshire cites an article by David Leonhardt of the New York Times, who wrote last May that education was the most powerful force for reducing poverty and raising living standards. Leonhardt dismisses vouchers but admires charters, without acknowledging their penchant for cherrypicking or noting how many charters are failures, even by their own goals.

This claim is a fixture in the corporate reform world. They would like the public to believe that charter schools can raise test scores and thereby solve the problems of poverty. Berkshire might have also cited Wendy Kopp, who has said and written many times that we don’t have to fix poverty first, we have to fix the schools. (Of course, no one ever actually said that “we have to ‘fix’ poverty before we can ‘fix’ the schools, other than Kopp herself.) This is an offer that corporate leaders love, because throwing money at TFA and charter schools is a lot more attractive than raising corporate and individual tax rates. (The marginal tax rate during the Eisenhower administration was 91%. Today it is in the high 30s.)

Berkshire and Kantor discuss this strange belief that education, important as it is, can raise living standards without other major changes in social policy.

She writes:

Unions are weak. Wage growth is non-existent. Plutocrats have all the power. And yet the myth that education is all we need to finally “fix” poverty persists. AlterNet education editor Jennifer Berkshire talks with historian Harvey Kantor about how the US gave up on the idea of responding to poverty directly, instead making public schools the answer to poverty. Hint: it all starts in the 1960’s with the advent of the Great Society programs. Fast forward to the present and our belief that education can reduce poverty and narrow the nation’s yawning inequality chasm is stronger than ever. And yet our education arms race, argues Kantor, is actually making income inequality worse.

Jennifer Berkshire: I read in the New York Times recently that education is the most powerful force for *reducing poverty and lifting middle-class living standards.* It’s a classic example of what you describe in this excellent history as *educationalizing the welfare state.*

Harvey Kantor: Education hasn’t always been seen as the solution to social and economic problems in the US. During the New Deal, you had aggressive interventions in providing for economic security and redistribution; education was seen as peripheral. But by the time you get to the Great Society programs of the 1960’s, education and human capital development had moved to the very center. My colleague Robert Lowe and I started trying to think about how that happened and what the consequences were for the way social policy developed in the US from the 1960’s through No Child Left Behind. How is it that there is so much policy making and ideological talk around education and so little around other kinds of anti-poverty and equalizing policies? We also wanted to try to understand how it was that education came to shoulder so much of the burden for responding to poverty within the context of cutbacks in the welfare state.

JB: You argue that by making education THE fix for poverty, we’ve ended up fueling disappointment with our public schools, a disillusionment that is essentially misplaced. Explain.

HK: One of the consequences of making education so central to social policy has been that we’ve ended up taking the pressure off of the state for the kinds of policies that would be more effective at addressing poverty and economic inequality. Instead we’re asking education to do things it can’t possibly do. The result has been increasing support for the kinds of market-oriented policies that make inequality worse.

If we really want to address issues of inequality and economic insecurity, there are a lot of other policies that we have to pursue besides or at least in addition to education policies, and that part of the debate has been totally lost. Raising the minimum wage, or providing a guaranteed income, which the last time we talked seriously about that was in the late 1960’s, increasing workers’ bargaining power, making tax policies more progressive—things like that are going to be much more effective at addressing inequality and economic security than education policies. That argument is often taken to mean, *schools can’t do anything unless we address poverty first.* But that’s not what we were trying to say.

Categories Charter Schools, Economy, Poverty
« Older Entries
Newer Entries »