Posts Tagged ‘Economic Issues’

Kansas Legislators’ Resentment for Public Schools Grossly Inappropriate

February 17, 2018 Leave a comment

An article by AP reporter John Hannah appeared in the Virginian-Pilot with this headline: “Kansas Public Schools Face Backlash on Endless Money Crisis”. The article describes the resentment Kansas legislators feel toward public schools for their insistence that they get the lions share of funding, which is forcing them to abandon their “pro-business” low taxation stance in order to fund things like schools, prisons, and infrastructure. As one legislator complained:

“It’s like the schools are the grain truck. Instead of sharing the grain, they just keep raising the sides on the bed and keeping it all for themselves,” said state Sen. Ty Masterson, a conservative Wichita-area Republican. “They’ve been able to keep themselves at the front of the line for a long time.”

What Mr. Masterson knows, I believe, is that the grain truck was replaced by a pick-up truck for years and the result if a long-standing deficiency in funds. As a public school advocate noted:

“You can’t blame schools,” said Mark Desetti, a lobbyist for the state’s largest teachers union. “You can lament it all you want, but it’s a problem of your own making.”

And the problem will require lots of money to fix because Kansas avoided spending nearly enough money for decades. As Mr. Hanna reported:

Kansas spends more than $4 billion a year — more than half of its general revenues — on its public schools. But the state Supreme Court ruled in October that even with a funding increase approved last year, it’s not sufficient under the state constitution.

The state has been in and out of lawsuits over education funding for decades, and the current one was filed in 2010 by four school districts. The Supreme Court has issued five rulings in the past four years requiring new spending on public schools.

In its last ruling in October, the court did not set a specific spending target but hinted that it could be $650 million more a year.

According to the GOP who passed the pro-business tax package that slashed spending in all areas, Kansas was supposed to be rolling in revenue by now since the new businesses they attracted would increase the tax base everywhere. Unsurprisingly, the tax cuts did nothing of the sort and so schools— especially schools serving low income children— suffered deep cuts and compromised programs. And now, the legislators who created this problem, are trying to turn taxpayers against the “greedy” schools who only want what is best for their students. The main reason for this desire to stir up resentment is the unflagging faith that taxes and government are bad… which means that any notion of increasing either is off the table.

“Maybe we say, ‘We’ve got to live within our means,'” said Senate budget committee Chairwoman Carolyn McGinn, a moderate Wichita-area Republican. “Maybe we need to reassess the direction we’re going.

House Speaker Ron Ryckman Jr., a conservative Kansas City-area Republican, said lawmakers are right to expect to squeeze other parts of state government if they increase spending on schools.

“That is the math of it,” he said. “There’s only so much taxpayer money.”

If the legislature is unwilling to contemplate higher taxes even though the lower taxes did not result in the anticipated stimulus to the businesses in the State, “the math of it” is immutable. But if the reassessment in the direction Kansas is going included an openness to higher taxes to provide superior government services, there would be more taxpayer money to spend and the schools, prisons, and infrastructure in the state would improve. And who knows? If those improved maybe some businesses might consider locating to their state. Lower taxes and crappy services didn’t work… Maybe it’s time to try something different.



The Trump Infrastructure Plan Privatizes Public Services, Relies on Profit Motive to Define Projects

February 14, 2018 Leave a comment

Over the past several days, countless articles have appeared either touting President Trump’s so-called “Infra-structure Plan” or calling it out as flim-flam. Whether one views it favorably or not depends in large measure on how one views the notion of the market as a force for good… and whether one believes that market forces have applicability to public projects. As anyone who reads this blog regularly realizes, I am skeptical about the marketplace as a positive force and I see some huge limitations to the proposal… especially as it applies to public schools.

First and foremost, as Valerie Strauss notes in her blog post, the reporting on the Trump administration’s “Plan” has downplayed one key fact: the Democrats assessment of the 2019 proposed budget indicates that it “calls for more than $240 billion in federal funding cuts to current infrastructure programs, which is more than he proposes spending on new infrastructure.” 

Secondly, the recent tax bill will make it increasingly difficult for state and local governments to raise the matching funds envisioned by the federal government.

Thirdly, if private funds are the source, there must be a means of making a profit in order to attract investors. While road and/or bridge repairs could be funded by tolls, it is hard to fathom how school facilities could be upgraded while collecting an analogous “user fee” from students or parents.

Finally, no one in either party seems to be wiling to tell American voters the truth: if we ever hope to find the estimated $2,000,000,000,000 needed for infrastructure upgrades in the next decade we will need to raise taxes… and the public seems unwilling to do so. Better for them to believe that by cutting “waste fraud and abuse” it will be possible to fix the roads, repair the dilapidated schools, and replace the crumbling bridges.

Atlantic Article Underscores Dis-equalizing Forces in “Tax Reform”, Offers Little Hope for Change

February 8, 2018 Leave a comment

Clint Smith’s Atlantic magazine article describing the “subtle subversion” of public education embedded in the new tax code fittingly features a picture of West Philadelphia University City High School with a fallen tree blocking the entrance: a great metaphor for the situation Philadelphia and ALL cities serving children raised in poverty face.

As one who lived in University City for three years, attended the two colleges that border University City, student taught at West Philadelphia HS, and lived in Philadelphia itself for a total of seven years I remember reading about West Philadelphia University City High School and how it would draw on the expertise of the colleges and nearby tech firms to help motivate the students in that part of town to work hard, stay in school, and aspire to college. In reading the Wikipedia entry about the school, it is evident it was doomed from the start, despite its high-minded goals and good intentions:

The district, community, and universities of West Philadelphia argued to make UCHS a math and science magnet school. The most gifted (mostly white students at the time) students were eligible to attend. UCHS was created to represent a new approach to learning in urban education, new in the sense that it would utilize the latest education, technology, and community resources to provide a meaningful individual program for each student, regardless of race or economic background. It aimed to create a college-based environment before entering college.

But complications with the school construction delayed the opening, the teachers assigned to the school “were not ready”, and, after three years the “Individualized Study Program” that was to be the hallmark of the program was abandoned. As Wikipedia described it: “The school’s mission was lost due to gang-related crimes. There was no structure or discipline from the beginning, allowing the students to get out of control.”

After a tumultuous time period when fights, drugs, and racial strife wracked the operation of the school and it’s test scores failed to meet the standards set by the district governed by an agency established by the State, and charter schools housed in the school facility fell short of the mark, it’s doors closed and in 2013 the 31 year old facility was leveled. Oh, and the declines in state funding didn’t help at all! Here’s data from Wikipedia:

In 1975, Pennsylvania provided 55 percent of school funding statewide; in 2001 it provided less than 36 percent.[19] An analysis determined that increased district spending was limited by a state system which relies heavily on property taxes for local school funding. As a result, wealthier school districts with proportionately more property owners and more expensive real estate have more funds for schools. The result is great disparities in school system expenditures per student. In 2000, the Philadelphia school district spent $6,969 a year per student. Seventy percent of Philadelphia’s students are at or near the poverty line. This contrasts with expenditures per student in wealthier suburban school districts: Jenkintown, $12,076; Radnor, $13,288; and Upper Merion, $13,139.[19

Given the arc of this urban school serving children raised in poverty and aspiring to provide them with the tools needed to roll in college, one would hope that any tax legislation passed at the federal level would help provide equitable funding for the Philadelphia schools and provide sufficient revenues to address the issues that face urban schools— issues like drug addiction, the lack of before and after school programming, and support for parents struggling to make ends meet. As Mr. Smith notes in his article, the new tax code not only does nothing to help public schools, it works against them by encouraging affluent parents to enroll their children in private schools. And the new tax code not only does nothing to help address the needs of children raised in poverty, it diminishes the revenues available for those programs and, until the last stalemate, was not going to fund health care for those children. As I write this post, community health centers that serve poverty stricken areas are being used as a bargaining chip in negotiations for the budget.

By expanding the use of 529 savings plans for K-12 education, capping tax deductions for local and state taxes at $10,000, and slashing education spending at the state level in the 30+ states governed by the GOP, K-12 education will be starved for revenues and the funding formulas used to allocate funds will not have the marginal amounts needed to fund property-tax poor  school districts. It will, in effect, put all the schools in the nation in the same death spiral as Philadelphia schools encountered in the 1990s and 2000s.


Koch Brothers Warning Redux: Voting in ALL Elections, ESPECIALLY Primaries, Is Essential!

February 5, 2018 Leave a comment

On of Diane Ravitch’s posts early yesterday included a link to an article by Jeff Bryant, a politically progressive and reliably insightful blogger on public education issues that covered the meeting the Koch Brothers heard recently that placed public schools in their cross hairs as a major target for “reform” in the coming year. Unlike Diane Ravitch, who often sidesteps criticism of the Democratic Party, Jeff Bryant is not reluctant to criticize the party for it’s failure to stand up to the “reformers” who advocate anodyne sounding initiatives like “choice”. Pulling no punches, he writes:

Democrats, over the years, have pulled away from their historical support for public schools and classroom teachers and have gradually embraced the language of “reform” and “choice” Republicans use. Many Democrats have turned against teachers union, joined the Republican chorus to “bust” the public school “monopoly,” and embraced numerous alternatives to traditional public schools that sap the system of its resources.

The Koch brothers’ 700 cronies contributed $100,000 each PER YEAR. That’s $70 million dollars… more than twice the $32 million the AFT and NEA gave to campaigns in 2016! And while that list is not available to the public, I’m guessing that some on that list might own newspapers and TV stations… I’m guessing the Sinclair broadcasting group and Rupert Murdoch might be on the list…

The unions DO need to push back harder against the neoliberals in the Democratic Party, but they will never have a megaphone as big as the Koch brothers…

And one other problem unions face is resentment among taxpayers that translates into a lack of support for their efforts to provide decent wages and working conditions for their employees. Teachers and school district employees who are union members, unlike most employees in the private sector, receive good health benefits, leave time for illnesses, and defined benefit pensions. The fact that these wages and benefits are underwritten by taxes leads to resentment and that, in turn, reduces the public’s support for public education. As long as the public sector wages and benefits mirrored that of the private sector, support for school district employees was relatively strong. Now that the private sector has embraced the private sector’s concept of employees as “free agents” and former President Reagan’s assertion that “government is the problem” there is less support for school district employees compensation packages.

And last but not least, all who read this blog need to be vigilant at the state and local level. Formerly non-partisan school board races and GOP primaries are places where a small investment by the Koch’s will go a long way toward tilting state legislatures toward the ALEC mindset! Laurence Lessig cautioned in a talk I heard a few years ago that the real damage inflicted on democracy by Citizens United was in the primary elections where small bands of voters could be activated to nominate candidates who hold extreme views on either end of the political spectrum. This has contributed to the polarization as much as the echo chambers on Facebook and other social media. Informed voting in ALL elections is the only cure for this malady.

Income Disparity Results in Life Expectancy Disparity, Pain Disparity… and Hope Disparity

February 5, 2018 Leave a comment

Our local newspaper today features a commentary by Peter, Orszag, a Bloomberg View columnist and a vice chairman of investment banking at Lazard. Mr. Orszag also has extensive experience as an economic advisor at the federal level, having served as President Barack Obama’s director of the Office of Management and Budget from 2009 to 2010 and the director of the Congressional Budget Office from 2007 to 2008. In his commentary, Mr. Orszag reviews  Happiness for All? Unequal Hopes and Lives in Pursuit of the American Dream, a book by Carol Graham of the Brookings Institution, which Orszag describes as “the empirical version of Hillbilly Elegy“.

In her book, Ms. Graham describes the many adverse effects of income disparity, linking it to life expectancy, the stress, and the experience of physical pain. As one would expect, those living in poverty have shorter life expectancies, experience more stress, and experience feelings of pain far more than those living in affluence. But what Ms. Graham found was that those differences are more marked than ever and are widening. And her findings are not an isolated piece of research: David Blanchflower of Dartmouth College and Andrew Oswald of the University of Warwick, drew the same conclusions using a different data set. And Mr. Blanchflower and Mr. Oswald took the findings a step further and found that a consequence of the disparity is despair. Comparing US workers to those in Latin America where, sadly and astonishingly, income disparity is less than in our nation, they found that low-income American workers are less likely than their Latin American counterparts to believe that “hard work gets you ahead.”

These findings have a clear impact on public education. As noted repeatedly in previous posts, the majority of students in our nation attend public schools where disparate funding is the rule and not the exception. And, as noted repeatedly, the “reformers” who want to “fix our broken schools” effectively insist that it can be done without addressing the economic disparities that are the underlying cause. Some, in fact, would look at the findings of Ms. Graham, Mr. Blanchflower and Mr. Oswald as evidence that grit is needed more than money. The problem isn’t poverty, its the reaction to poverty… especially when that reaction is a rejection of the narrative that anyone can succeed if they just work harder.

Alas, Mr. Orszag’s neoliberalism— and that of the Brookings Institution’s Carol Graham— comes through in the concluding paragraph of his essay:

After illuminating striking differences across income groups in pain, hope, optimism and stress, Graham is correct in pointing out there are no easy fixes at hand. She’s also right to say that the best way to start to address the gaps is to work to better understand them.

Here both Mr. Orszag and Ms. Graham are wrong. We don’t more studies to understand how poverty is debilitating the spirits of millions of families and children. How income disparity undercuts our economy, our democracy, and the well being of our citizens. We need to begin closing the gap in economic disparity by transferring some of the wealth from the .1 percent to the 99.9% who have been short-changed. And both Mr. Orszag and Ms. Graham should be making the point that Congress’ most recent actions are going to only make matters worse. But they, I assume, will wait for more data to come in showing that as the income disparity increases the differences in well-being between the haves and have-nots increases as well.

Raj Chetty’s Latest Study Demonstrates that High Inequality = Lost Opportunity and “Lost Einsteins”

February 4, 2018 Leave a comment

Early last December when I was on vacation away from the internet I missed an article by NYTimes columnist David Leonardt titled “Lost Einsteins: The Innovations We’re Missing“. In the article Mr. Leonardt describes the most recent research of Stanford professor Raj Chetty, who has done extensive work documenting the effects of income inequality on our country. His latest research examines the impact of income inequality on invention, and the results show that more than half of our students are missing out on opportunities to develop the backgrounds needed to become inventors. Mr. Leonardt, in examining Mr. Chetty’s research and the actions of Congress regarding “tax reform” writes:

The project’s latest paper, out Sunday, looks at who becomes an inventor — and who doesn’t. The results are disturbing. They have left me stewing over how many breakthrough innovations we have missed because of extreme inequality. The findings also make me even more frustrated by new tax legislation that will worsen inequality. This Congress is solving economic problems that don’t exist and aggravating those that do.

The key phrase in the research paper is “lost Einsteins.” It’s a reference to people who could “have had highly impactful innovations” if they had been able to pursue the opportunities they deserved, the authors write. Nobody knows precisely who the lost Einsteins are, of course, but there is little doubt that they exist.

Using tax records and data on the issuance of patents, Mr. Chetty’s research team reached the following conclusions:

  • children who excelled in math were far more likely to become inventors

  • Only the top students who also came from high-income families had a decent chance to become an inventor

  • Low-income students who are among the very best math students — those who score in the top 5 percent of all third graders — are no more likely to become inventors than below-average math students from affluent families

  • Middle-class students have innovation rates closer to that of the poor than the affluent

  • children from the southeastern United States are notably unlikely to become inventors.

  • (innovation rates) are low for African-Americans and Latinos

  • innovation rates are low for women

There are a host of conclusions that could be drawn from these findings. Mr. Leonardt focuses on the clearest and most unarguable ones and concludes:

Our society appears to be missing out on most potential inventors from these groups. And these groups together make up most of the American population.

The groups also span the political left and right — a reminder that Americans of different tribes have a common interest in attacking inequality.

How can we do so? We can stop showering huge tax breaks on the affluent and reinvest the money where it’s needed. We can work to narrow educational inequities.

Mr. Leonardt also offers another possibility drawn from Mr. Chetty’s research: we could offer opportunities for those who have the potential to become innovators with those who already are. Chetty’s research team determined that “Children who grow up exposed to a particular type of invention or inventor are far more likely to follow that path.” Given that finding, it might be possible to develop social networks with role-model-innovators or create mentoring programs that do so.

Mr. Leonardt and Mr. Chetty could be missing a major factor that, based on my experience over the past 15 years, is glaringly obvious. Schools serving affluent students do not worry about the standardized tests that determine whether a school is “failing” and, consequently, spend more time and money on the arts and offer a wider array of electives. It is not surprising that a student who scores well on the math section of a standardized test might lack the same propensity for inventiveness and innovation as any student who attended an affluent school, for the student in an affluent school has been more widely exposed to a wide range of topics, and one important element of innovation is the ability to apply ideas across different modalities of thinking. A student whose curriculum is marly focussed on passing a standardized test might do well on that test but might also lack the opportunity to draw on skills learned in music classes, art classes, or drama. Our emphasis on standardized testing, then, combined with the income inequality exacerbates the innovation gap and adds to our “lost Einstein” population.

I’ll conclude this post with a couple of quotes from an entrepreneur who concurs with Mr. Leonardt’s alarm, and Mr. Leonardt’s closing:

“There are great differences in innovation rates,” Chetty said. “Those differences don’t seem to be due to innate ability to innovate.” Or as Steve Case — the entrepreneur who’s now investing in regions that venture capital tends to ignore — told me when I called him to discuss the findings: “Creativity is broadly distributed. Opportunity is not.”

“We do a pretty good job at identifying the kids who are good at throwing a football or playing a trumpet,” Case said. “But we don’t do a particularly good job of identifying the kids who have the potential of creating a phenomenal new product or service or invention.” We all suffer for that failure.

Business CEO Who Avoid Taxes Castigate Government’s Failure to Fix Social Problems

February 3, 2018 Leave a comment

Having served on the Board of a regional health insurance consortium in New York State, I feel like I have a greater understanding of the health care problem than the average voter. And as one who led and consulted with public school districts for 35 years I have a sound understanding of the social issues children face in our world. And as one who believes that democracy can only thrive in a regulated and equitably taxed economy, I am deeply distressed over the direction our country is taking in its efforts to fulfill the mantra that “government is the problem” by starving it of resources. So I find it particularly galling to read an article like David Gelles’ recent NYTimes piece describing businesses as the salvation for health care and, presumably other social ills and infrastructure problems… especially when the article’s opening paragraphs read:

Can private businesses solve public policy problems better than the government? It’s a question that has persisted for decades and taken on new resonance now that a career businessman is in the White House.

There has never been a clear answer. For every sign of success — a smooth privatized toll road or a gleaming charter school — there have been obstacles revealing just how difficult public works can be.

And the final straw came when Mr. Gelles quoted Apple CEO Timothy Cook, he who failed to pay his fair share of corporate taxes, claiming “Government has “become less functional and isn’t working at the speed that it once was”

There was more to the article… but I confess that I stopped reading when I read that quote from Mr. Cook.