Archives for category: Economy

Paul Thomas uses “Hamlet” and allegory to make the point that the myth of rugged individualism is over, that we are ruled by an oligarchy, and that we must redirect our belief system to recognize reality.

He writes:

“The U.S. is trapped in our false myths—the rugged individual, pulling one’s self up by the bootstraps—and as a result, we persist in blaming the poor for being poor, women for being the victims of sexism and rape, African Americans for being subject to racism. Our pervasive cultural ethos is that all failures lie within each person’s own moral frailties, and thus within each person’s ability to overcome. We misread the success of the privileged as effort and the struggles of the impoverished as sloth—and then shame those in poverty by demanding that they behave in ways that the privilege are never required to assume.

“We refuse to step away from the gaze on the conditions and actions of the individual in order to confront the failures of our society: the Social Darwinism of our capitalist commitments to competition and materialism.

“To place this in pop culture terms, the U.S. has too long been a Superman culture, the most rugged of rugged individuals, and it is time to replace that myth with a commitment to the X-Men (while not perfect, the X-Men mythology is grounded in community and a moral imperative about the sacred humanity in every person regardless of his/her status at birth, an imperative that rejects the tyranny of the norm).

“Once we recognize that community and solidarity are powerful, we will collectively change the paradigm, and like Hamlet, we will tear away false promises of the oligarchs, recognizing that the privileged ruling class in the U.S. (like kings in Hamlet’s Denmark) are substantially one level below excrement (“how a king may go a progress through the guts of a beggar”); and thus, the promise of a free people, the promise of democracy can be served only if we recognize our shared interests as workers, as humans, as the majority, and ultimately as the moral grounding too long ignored by the billionaire class we now serve.”

Anthony Cody is confused by the contradictions of the corporate reform movement. “On the one hand, we have a seemingly utopian project with bold pronouncements about the boundless capacity of all students – even those with serious learning disabilities – to succeed on ever more difficult tests. On the other hand, we have tests that are apparently intentionally designed to fail in the realm of two thirds of our students.”

Cody considers the views of Bill Gates, who has finally admitted that student motivation plays a role in whether students learn.

Cody points out that student motivation is affected by their sense of their own future. Yet as Gates himself admits:

“Well, technology in general will make capital more attractive than labor over time. Software substitution, you know, whether it’s for drivers or waiters or nurses… It’s progressing. And that’s going to force us to rethink how these tax structures work in order to maximize employment, you know, given that, you know, 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. And so, you know, we have to adjust, and these things are coming fast. Twenty years from now, labor demand for lots of skill sets will be substantially lower, and I don’t think people have that in their mental model.”

So if there are fewer jobs, a shrinking middle class, and fewer opportunities for social mobility, students face a bleak future. How can they be motivated in an economy where their prospects are dim?

Cody writes:

“Gates is suggesting we increase taxes on consumption by the wealthy, and use those revenues to provide a sort of subsistence level payment to the poor. He opposes an increase in the minimum wage because it might raise employer costs, which they would then try to cut by laying people off.

“Gates is unconcerned about income inequality as an issue. He defines poverty as abject starvation and homelessness, and hopes employers can be convinced to keep on employees because they do not cost very much.

“The motivation of 50 million K12 students in the US is directly related to the degree to which their education leads to a brighter future. We have a big disconnect here when the future does not, in fact, offer much chance at access to college or productive employment. And as Wilkinson and Pickett established in their book The Spirit Level, the level of inequality societies tolerate has a dramatic effect on the mental state and wellbeing of its citizens…..

“As I wrote earlier in the week, there seems to be an attempt to use ever more difficult Common Core aligned tests to certify as many as two thirds of our students as unworthy of such opportunities.

“This brings to mind a dystopian future where an underclass of Common Core test rejects is allowed to subsist with the bare minimum payments required to keep starvation at bay, while a shrinking cadre of insecure workers maintain the machinery that keep the lights on and the crops harvested.

“The fundamental problem of the current economy is that we have not figured out a means by which the top 1% can be persuaded to share the prodigious profits that have flowed from technological advances…

“I cannot reconcile how this future of growing inequality and a shrinking workforce intersects with the grand utopian vision of the Common Core. So then I go back and have to question the validity of the promises made for the Common Core, since the economic projections Gates is making here seem sound….

“These economic problems will not be addressed by Common Core, by charter schools or any other educational reforms. They will not even be addressed in a significant way by what we might praise as authentic education reforms, such as smaller class sizes or more time for teacher collaboration – though these are worthwhile and humane things.
Imperfect as they have been, public schools have been an institution under mostly democratic control, funded by taxpayers, governed by elected school boards, and run by career educators. Market-driven education reform is bringing the cruelty of commerce into what was part of the public sphere, attempting to use test scores to open and close schools like shoe stores, and pay teachers on test score commissions as if we were salesmen.

“The rhetoric of the corporate reform project draws on the modern movement for civil rights, and even Bill Gates asserts that his goal is to fight inequity. But elites have rarely, if ever, designed solutions that diminish their privilege, and this is no exception. It appears that corporate education reform has devised a means to affix blame for inequity on classroom teachers, even as technological advances make it possible to transfer even more wealth into its sponsors’ bank accounts, with fewer people being paid for the work that remains necessary. The promise that the Common Core will prepare everyone for the American dream is made a lie by the intentionally engineered failure rates on Common Core aligned tests.”

Joseph Stiglitz, a Nobel Prize-winning economist at Columbia University, writes that the increasing inequality in the U.S. is neither inevitable nor necessary. Other nations have experienced economic growth while assuring greater equality. We could as well, but the super-rich have managed to capture control of enough politicians to prevent any legislation that might increase their tax rates and assure a fairer society “with justice for all.”

Stiglitz writes:

“So why has America chosen these inequality-enhancing policies? Part of the answer is that as World War II faded into memory, so too did the solidarity it had engendered. As America triumphed in the Cold War, there didn’t seem to be a viable competitor to our economic model. Without this international competition, we no longer had to show that our system could deliver for most of our citizens.

“Ideology and interests combined nefariously. Some drew the wrong lesson from the collapse of the Soviet system. The pendulum swung from much too much government there to much too little here. Corporate interests argued for getting rid of regulations, even when those regulations had done so much to protect and improve our environment, our safety, our health and the economy itself.

“But this ideology was hypocritical. The bankers, among the strongest advocates of laissez-faire economics, were only too willing to accept hundreds of billions of dollars from the government in the bailouts that have been a recurring feature of the global economy since the beginning of the Thatcher-Reagan era of “free” markets and deregulation.

“The American political system is overrun by money. Economic inequality translates into political inequality, and political inequality yields increasing economic inequality. In fact, as he recognizes, Mr. Piketty’s argument rests on the ability of wealth-holders to keep their after-tax rate of return high relative to economic growth. How do they do this? By designing the rules of the game to ensure this outcome; that is, through politics.

“So corporate welfare increases as we curtail welfare for the poor. Congress maintains subsidies for rich farmers as we cut back on nutritional support for the needy. Drug companies have been given hundreds of billions of dollars as we limit Medicaid benefits. The banks that brought on the global financial crisis got billions while a pittance went to the homeowners and victims of the same banks’ predatory lending practices. This last decision was particularly foolish. There were alternatives to throwing money at the banks and hoping it would circulate through increased lending. We could have helped underwater homeowners and the victims of predatory behavior directly. This would not only have helped the economy, it would have put us on the path to robust recovery.”

Educators see the results of what Stiglitz describe in the unwillingness by politicians to provide equality of educational opportunity. Our Secretary of Education is a champion of privatization who prefers competition to equity and doesn’t care about segregation. State legislatures are cutting school budgets. Class sizes are growing. Teachers pay for school supplies. Public education is dying in urban districts like Philadelphia and Detroit, as rich white bankers pump money into privatization. Some see public education as a sector ripe for profit and plunder. In some states, such as Ohio, Michigan, and Florida, the for-profit charter industry has captured control of the government and suffers little or no regulation.

Stiglitz concludes:

“The problem of inequality is not so much a matter of technical economics. It’s really a problem of practical politics. Ensuring that those at the top pay their fair share of taxes — ending the special privileges of speculators, corporations and the rich — is both pragmatic and fair. We are not embracing a politics of envy if we reverse a politics of greed. Inequality is not just about the top marginal tax rate but also about our children’s access to food and the right to justice for all. If we spent more on education, health and infrastructure, we would strengthen our economy, now and in the future. Just because you’ve heard it before doesn’t mean we shouldn’t try it again.

“We have located the underlying source of the problem: political inequities and policies that have commodified and corrupted our democracy. It is only engaged citizens who can fight to restore a fairer America, and they can do so only if they understand the depths and dimensions of the challenge. It is not too late to restore our position in the world and recapture our sense of who we are as a nation. Widening and deepening inequality is not driven by immutable economic laws, but by laws we have written ourselves.”

Zephyr Teachout is running for governor in the Democratic primary against Andrew Cuomo. Cuomo has collected more than $30 million for his campaign, much of it from Wall Street titans. At the convention of the Working Families Party last month, Cuomo won over the union leaders, who delivered the WFP endorsement to him over Teachout. She must gather 15,000 signatures on petitions by July 7 from across the state to place her on the ballot for the Democratic primary ballot on September 9.

Among other things, she wants to change the way political campaigns are funded. She says:

“Right now, the campaign funding system leads to politicians basically being beggars at the feet of oligarchs. It’s what the progressives of another era called the invisible government: the private power that sits behind public power. Politicians are not making decisions based on what they think their constituents want or even what they think is best for their constituents. They’re making decisions based on who is giving them $60,000; that’s more money than any middle-class person can afford.”

In this interview, Teachout explains why she is running and why she thinks she has a possibility of upsetting Cuomo. Her basic issues are public corruption, about which she is an expert; the environment (she opposes fracking and favors alternative sources of energy); economic development; jobs; a higher minimum wage; and education. Everyone who runs for office in New York promises to “clean up” the ethical swamp in Albany. Teachout means it.

This article in Salon tries to understand education from an economic perspective. It says that the great expansion of public education occurred when our factories were expanding and we needed more workers. Now, with outsourcing and autation, society and our elites are less willing to invest in education, and so we live in an era of austerity and privatization.

Eric Levitz writes of the Obama administration’s reluctance to address glaring inequality:

“We have an economy in which 46.5 million Americans live in poverty, the real unemployment rate is above 12 percent, and our 400 wealthiest citizens enjoy as much wealth as the entire bottom half of the population. But a political system designed for gridlock, the grossly disproportionate influence of the rich, and Americans’ ideological aversion to class politics conspire to make it politically inadvisable for a Democratic president to even speak the words “income inequality” before a national audience. Absent the political will to explore redistributive structural reforms, we’re left with “ladders of opportunity,” and a vision of economic salvation through higher test scores.”

Levitz interviews philosophy of education professor David Blacker. He asks him about how charter schools fit into the current era, and Blacker replies:

“I think the logic there is a kind of marketization logic. It’s an ideal of privatization which I think is ultimately tied to… I think privatization is the twin of austerity. Austerity being withdrawal of public commitment and public expenditure. I see those things as hand in hand, and they are symptomatic, from my point of view, of this decrease in commitment to that project of universal public education. Because the market logic sort of implies that education is this contingent matter for individuals. It’s less of a social good. It’s less of something we ought to worry about collectively, and more a commodity that individuals need to seize or take advantage of on their own. Invest in yourself. Or parents, invest in your children.”

Peter Dreier of Occidental College explains how the Occupy Wall Street movement started a momentum that changed Seattle:

Friends,

An idea that only a year ago appeared both radical and impractical has become a reality. On Monday, Seattle struck a blow against rising inequality when its City Council unanimously adopted a city wide minimum wage of $15 an hour — the highest in the nation.

In my new article in The American Prospect, “How Seattle’s $15 Minimum Wage Victory Began in New York City’s Zuccotti Park,” I explain that this dramatic change in public policy is partly the result of changes brought about by last November’s Seattle municipal elections. But it is also the consequence of changing social conditions beyond Seattle, shifts in public opinion about business, government, and the poor, and years of effective grassroots activism around the country.

We can trace Seattle’s remarkable victory to the wave of local “living wage” campaigns in the 1990s, growing public outrage about corporate abuse and widening inequality, the explosion of anger that became Occupy Wall Street, and the rising protest movement of low-wage workers in the past two years.

Seattle’s union and community organizers, and their allies in government, did not wait for the time to be “ripe.” They helped ripen the time — seizing new opportunities and building on past successes.

Now that Seattle has established a new standard, the pace of change is likely to accelerate quickly as activists and politicians elsewhere seek to capture the new mood. Many other cities and states are now looking to follow in Seattle’s footsteps. The momentum for raising the minimum wage will not only improve living conditions for millions of Americans. It will also spark a new wave of organizing, by revealing how the combination of inside politics and outside protest can bring about progressive change.

Five years from now, Americans may look back at this remarkable victory in Seattle and wonder what all the fuss was about.

Feel free to circulate and repost.

Peter

——————————————————————
Peter Dreier
Dr. E.P. Clapp Distinguished Professor of Politics
Chair, Urban & Environmental Policy Department
Occidental College
1600 Campus Road
Los Angeles, CA 90041
Phone: (323) 259-2913
FAX: (323) 259-2734
Website: http://employees.oxy.edu/dreier
New book: The 100 Greatest Americans of the 20th Century: A Social Justice Hall of Fame (Nation Books) — published July 2012

“The hottest places in hell are reserved for those who in times of great moral crises maintain their neutrality” – Dante

David Leonhardt says the latest data demonstrate that a four-year college degree is worth the investment. In fact, it pays so well that it actually rewards those who get the degree. College graduates with a four-year degree definitely make more money than those who didn’t finish college or those with only a high school diploma.

He concludes that everyone should get a four-year degree.

“Not so many decades ago, high school was considered the frontier of education. Some people even argued that it was a waste to encourage Americans from humble backgrounds to spend four years of life attending high school. Today, obviously, the notion that everyone should attend 13 years of school is indisputable.

“But there is nothing magical about 13 years of education. As the economy becomes more technologically complex, the amount of education that people need will rise. At some point, 15 years or 17 years of education will make more sense as a universal goal.

“That point, in fact, has already arrived.”

Now, it is hard to argue against college for all. I personally believe that anyone who wants to go to college should do so. I also believe that every state should have free public universities so students can enroll and leave with no debt.

But what puzzles me is this: first, if everyone has a four-year degree, will there still be a big wage premium for everyone? Second, the Bureau of Labor Statistics projects that most of the new jobs in the next decade won’t require a college degree. These will be jobs like “personal care aides,” home health aides, construction workers, retail salespersons. Will college graduates fill those jobs?

just wondering.

Our economy is changing in ways that are alarming. Income inequality and wealth inequality are at their highest point in many decades; some say we are back to the age of the robber barons. Most of the gains in the economy since the great recession of 2008 have benefitted the 1%, or even the 1% of the 1%. The middle class is shrinking, and we no longer have the richest middle class in the world. The U.S. has the highest child poverty rate of any of the advanced nations of the world (and, no, I don’t count Romania as an advanced nation, having visited that nation, which suffered decades of economic plunder and stagnation under the Communist Ceausescu regime).

Forbes reports that there were 442 billionaires in the U.S. in 2013. Nice for them. Taxes have dropped dramatically for the top 1% since the 1970s. But don’t call them plutocrats. Call them our “job creators,” even though they should be called our “job out-sourcers.”

Now what caused these changing conditions? My guess would be that unbridled capitalism generates inequality. Deregulation benefits the few, not the many. People with vast wealth give large sums to political candidates, who when elected, protect the economic interests of their benefactors. Anyone who wants to run for President must raise $1 billion or so. Where do you raise that kind of money? You go to the super-rich, who have the money to fund candidates of both parties, as well as an agenda to keep their money and make more.

A recent paper by Martin Gilens of Princeton University and Benjamin I. Page of Northwestern University concludes that “economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while mass-based interest groups and average citizens have little or no independent influence. Our results provide substantial support for theories of Economic Elite Domination and for theories of Biased Pluralism, but not for theories of Majoritarian Electoral Democracy or Majoritarian Pluralism.” Recent decisions by the U.S. Supreme Court removing limits on campaign contributions by corporations and individuals reinforce elite control of our political system. The danger signals for democracy are loud and clear.

We often hear talk of the “hollowing out” of the middle class. We know that many regions in our country are economically depressed because they lost the local industries that provided good jobs for high school graduates. Some of those jobs were lost to new technologies, and some were outsourced to low-wage countries. Free trade sounds good, but did the politicians realize how many millions of jobs and thousands of corporations would move to Mexico, China, Bangladesh, and other countries that do not pay what Americans consider a living wage?

Instead of looking in the mirror, our politicians blame the schools. They say that we lost those jobs because our schools were preparing students poorly, not because the “job creators” wanted to export jobs to countries that pay their workers a few dollars a day.

The politicians say we must send everyone to college so we can be “globally competitive,” but how will we compete with nations that pay workers and professionals only a fraction of what Americans expect to be paid and need to be paid to have a middle-class life? How can we expect more students to finish college when states are shifting college costs onto individuals and burdening them with huge debt? How can we motivate students to stay in college when so many new jobs in the next decade–retail clerks, fast-food workers, home health aides, janitors, construction workers, truck drivers, etc.–do not require a college degree? (The only job in the top ten fastest growing occupations that requires a college degree is registered nurse.)

So here we are, with politicians who could not pass an eighth grade math test blaming our teachers, our schools, and our students for economic conditions that they did not create and cannot control.

In a just and sensible world, our elected officials would change the tax rates, taxing both wealth and income to reduce inequality. There is no good reason for anyone to be a billionaire. When one man or woman is worth billions of dollars, it is obscene. A person can live very handsomely if their net worth is “only” $100 million. How many homes, how many yachts, how many jets, does one person need? In terms of income taxes, consider this: under President Dwight D. Eisenhower, the marginal tax rate for the very rich was 91%; it is now 35%. The tax on long-term capital gains has dropped from 25% to 15%. No wonder that billionaire investor Warren Buffett famously said that there has indeed been class warfare, and “my class has won.” Buffett noticed that secretaries in his office were paying a higher tax rate than he was. He even took to the op-Ed page of the New York Times to complain that the tax code unfairly spared the richest Americans.

Will the “job creators” lose all ambition if they can’t pile up billions and billions? I doubt it very much. Surely there will be even more people yearning to get very rich, even if their wealth has a limit of $100 million or even $200 million.

We need to spend more to reduce poverty. We need to spend more to make sure that all children get a good start in life. We need to reduce class sizes for our neediest children. We need to assure free medical care for those who have none. We have many needs, but we won’t begin to address them until we change our tax codes to reduce inequality.

Michael S. Teitelbaum, author of a new book called “Falling Behind? Boom, Bust, and the Global Race for Scientific Talent,” writes in the Los Angeles Times that claims of a shortage of scientists and engineers are exaggerated.

He reminds us that there have been at least five cycles of hand-wringing since the end of World War II about our alleged technological decline. The reality, he argues, is that the STEM fields are not suffering shortages:

“Nearly all of the independent scholars and analysts who have examined the claims of widespread shortages have found little or no evidence to support them. Salaries in these occupations are generally flat, and unemployment rates are about the same or higher than in others requiring advanced education.

“Science and engineering occupations are indeed crucial to modern economies, but they account for only a small part — about 5% — of the workforce. There is some evidence of too few professionals in certain fields that currently are hot, such as social media and petroleum engineering, or in localized hot spots such as Silicon Valley.

“But in a wide range of other science and engineering fields, and in most parts of the country, the supply appears ample and sometimes excessive. In the large field of biomedical research, for example, talented young PhDs are facing daunting career challenges, with only about 1 in 5 likely to find the tenure-track academic posts to which most of them aspire.”

He urges that we continue to strengthen math and science education in K-12, because educated citizens should have an understanding and knowledge of math and science, not because there will be lucrative careers awaiting them. There will be for some, but not for all or even most.

He writes:

“U.S. schools currently produce large numbers of high-performing science and math students (about one-third of the world’s total in science) but also very large numbers of students with low test scores that partly explain the less-than-stellar U.S. rankings in international comparisons. This is a reflection of educational and economic inequalities that need to be addressed energetically, but it is not a reason to urge every American student to pursue a STEM degree.

“Students with talent and enthusiasm for science and engineering should be strongly encouraged to pursue their interest in such careers, and informed that most do offer higher earnings than in many humanities and arts fields. Yet they also need to know about large differences in career prospects among science and engineering specialties, and to understand that conditions can and do change dramatically over time, sometimes even during the period it takes to pursue a degree.

“Given such uncertainties, students who major in science and engineering must recognize that employers value not only strong specialized skills but also broader knowledge and capabilities. They want employees who can communicate clearly with non-specialists, work effectively in multi-specialty teams and understand the basics of business and management.
Radical changes in K-12 education cannot be justified on the basis of pervasive but largely unfounded claims of widespread shortages of scientists and engineers.”

The lesson: We should increase our efforts to educate the lowest-performing students in STEM subjects in K-12, those in the bottom 25%, because these subjects are valuable for success in almost every kind of career and for informed citizenship, not because of false alarms by politicians.

http://www.latimes.com/opinion/commentary/la-oe-teitelbaum-stem-fears-20140420,0,120851.story#ixzz2zWcJB8az

http://www.latimes.com/opinion/commentary/la-oe-teitelbaum-stem-fears-20140420,0,120851.story#ixzz2zWbH5yoO

It is curious that duo many supporters of the Common Core standards want choice among schools but celebrate the standardization and lack of choice among suppliers of education materials. They want to multiply choices of schools while standardizing learning and standing back while only two, perhaps three at most, mega-publishers create nearly identical products for the nation’s students and schools.

Robert Shepherd posted a comment about the death of competition in the marketplace for educational materials. Consolidation started years ago as large companies bought up small companies, and as small companies found they were financially unable to compete with the giant corporations. Those trends have accelerated to the point where only two or three corporations control the education publishing industry. He wonders if anyone cares. I say yes, but no one knows how to stop this monopolizing trend. We feel powerless. To whom do we direct our complaints? This is not an oversight. Creating a national marketplace for vendors of goods and services was an explicit purpose of Race to the Top.

Joanne Weiss, who was Arne Duncan’s chief of staff and who directed Race to the Top, wrote in The Harvard Business Review:

“The development of common standards and shared assessments radically alters the market for innovation in curriculum development, professional development, and formative assessments. Previously, these markets operated on a state-by-state basis, and often on a district-by-district basis. But the adoption of common standards and shared assessments means that education entrepreneurs will enjoy national markets where the best products can be taken to scale.

“In this new market, it will make sense for teachers in different regions to share curriculum materials and formative assessments. It will make sense for researchers to mine data to learn which materials and teaching strategies are effective for which students – and then feed that information back to students, teachers, and parents.”

This may explain why so many major corporations are enthusiastic about the Common Core. It promises them a national market for their products and bring America’s schools into the national economy, where consolidation reigns. Walmart wins, Amazon wins, Google wins, small-scale enterprises lose and disappear.

Robert Shepherd writes:

“I am despairing of anyone’s paying any attention to the consequences for markets in educational materials on the CC$$ and of inBloom.

“Perhaps we have become so used to people using political influence to fix markets in this country that they simply don’t think twice when they see another instance of this. Is that the problem? Or is it that people don’t understand why these dramatically reduce the number of players in the educational materials market? Or are people just fine with having a couple of all-powerful providers of educational materials and with having all the little companies go under. Maybe people are OK with curricula from the educational equivalent of McDonalds or Walmart or Microsoft.

“Even on this blog, when I post about these matters, there is very, very little, if any, response.

“When I started in the educational publishing business years ago, there were 30 companies competing with one another. When the teachers at a school got together to decide what book they wanted to use, there were many, many options. Now, there are three big providers that have almost the entire market. What were previously competing companies are now separate imprints from one company.

“And the CC$$ creates ENORMOUS economies of scale for those few remaining publishers, making it almost impossible for any other publisher to compete with them.

“And inBloom creates a single monopolistic gateway through which computer-adaptive online materials must pass. A private monopoly created by the state.

“Are people OK with this? Where are the articles and essays and speeches about these issues from those opposed to Education Deform? One can understand the silence from the deformers–they created these deforms precisely in order to ensure their monopoly positions. But . . . but . . . why the deafening silence from the other side?