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Penn Economist Demonstrates NYTimes Op Ed Contributors Flawed Arithmetic, But Misses One Key Point

March 20, 2017 Leave a comment

In a March 16 post to RegBlog, University of Pennsylvania Economist Adam Finkel takes his University of Chicago colleague Deirdre Mccluskey to task for her flawed math in an op ed piece she wrote for the NYTimes. In the op ed essay published on December 23, Ms. McCloskey asserted that

“[a]s a matter of arithmetic, expropriating the rich to give to the poor does not uplift the poor very much. If we took every dime from the top 20 percent of the income distribution and gave it to the bottom 80 percent, the bottom folk would be only 25 percent better off.”

As Mr. Finkel pointed out in this post (and to the NYTimes editors), this would only be true if EVERYONE started with the same level of wealth… and in our country that is clearly NOT the case. Indeed, instead of using Ms. McCloskey’s assumption that everyone has equal wealth of $500,000, Mr. Finkel used some real world numbers to calculate the impact of redistribution:

In the real United States, however—where $500,000 is indeed a reasonable estimate of the average individual networth, but where the top 20 percent own 85 percent of all wealth—the math is very different. Among a representative sample of 1,000 Americans, there would be $425 million to redistribute among the bottom 800 people, who would each start with only $93,750.

When Mr. Finkel dissembles Ms. McCloskey’s argument further, however, he overlooks one key flaw in her thinking:

First, McCloskey asserts that once the poor have “a roof over their heads and enough to eat,” they have no further need for any of society’s accumulated wealth. Elsewhere, she claims that all progressives seek a “forced equality” that would require brain surgeons and taxi drivers to earn the same amount. The former assertion is callous, and the latter is a strawman: even the most repressive Communist regimes in history sought equality of opportunity—not equality of outcome. Surely, somewhere within the 99 percent of the ideological distribution between dystopian Darwinism and utopian equality-for-its-own-sake, there is room for fruitful discussion about whether we should favor some modest redistribution via a progressive tax code and social programs. But McCloskey’s caricature of both positions makes any compromise impossible.

This just in, Mr. Finkel: Ms. McCloskey’s assertion is more than callous. It completely overlooks the fact that in January 2015, 564,708 people were homeless on a given night in the United States. and 42,200,000 Americans lived in food insecure households, including 29,000,000 million adults and 13,100,00 million children. In all, 13 percent of households (or 15,800,000 million households) were food insecure. So by Ms. McCloskey’s logic, those lacking a roof over their heads and enough to eat, HAVE a further need for society’s accumulate wealth. 

The most discouraging part of Mr. Finkel’s article was this section:

Unfortunately, the basic mathematics of McCloskey’s claim are mangled. She may not prefer that we seek progressive tax and regulatory policies, but her claim that these policies do not “uplift the poor very much” is erroneous. That the Times has decided not to correct her error—even in the face of an email exchange in which the author herself acknowledged her mistake—may be an example of how tempting it is to ascribe black-and-white factual issues to the realm of “healthy controversy.”

We cannot hope to have a meaningful dialogue about redistribution until we face the unpleasant truths of homelessness and hunger… as well as some basic mathematical truths.

NYTimes Editors Remain Oblivious to the Link Between Choice and Austerity

March 20, 2017 Leave a comment

Today the NYTimes editors took Kansas Governor Sam Brown to task for his wrongheaded approach to taxation in his State as he is reportedly set to leave his state in the lurch as he leaves for a rumored  Ambassadorship to Rome. The editors offered a description of the tax scheme and its impact:

Mr. Brownback, a Republican first elected on the Tea Party crest of 2010, used his office as a laboratory for conservative budget experimentation. His insistence that tax cuts create, not diminish, revenues has left the state facing a ballooning deficit plus a ruling by the state Supreme Court that Kansas schoolchildren have been unconstitutionally shortchanged in state aid for years, with the poorest minority children most deprived.

The court ruled this month that they would shut the state’s schools if funding wasn’t made equitable by June 30. It found reading test scores of nearly half of African-American students and more than one-third of Hispanic students were deficient under aid formulas favoring more affluent school districts.

Brownback’s solution to this deficit is not a tax increase to improve the funding deficiency cited by the court. His solution is to offer the students “choice”, a solution the NYTimes editors derided:

Mr. Brownback played no small role in the long-running school crisis by leading the Republican Legislature to limit school aid after enacting the largest tax cuts in state history, for upper-bracket business owners. Characteristically, the governor’s reaction to the court mandate was to further undermine schools by suggesting parents “be given the opportunity and resources to set their child up for success through other educational choices.”

But wait! Isn’t this the same editorial board that champions Eva Moskovitz’ Success Academy because ti gives parents “the opportunity… to set their child up for success through other educational choices”? Isn’t this the same editorial board that views charter schools as the best means to improve the failing schools in New York City?

My question to the NYTimes editors is this: Can’t you see that the underlying motive of the pro-charter school movement and Sam Brownback are identical? They BOTH want to diminish funding for schools while deregulating their operations so that privatizing profiteers can take them over. Maybe the results of Governor Brownback’s failed policies linking tax cuts to deregulated charters will help them connect the dots going forward.

This Just In: Trump Reinstates Gouging on Student Loans. DeVos and GOP are Silent

March 19, 2017 Leave a comment

Several media outlets, including The Hillannounced yesterday that President Trump issued a letter that rolled back Obama-era guidance that forbade student loan debt collectors from charging high fees to defaulted borrowers. This rollback was based on a technical argument that “…the initial guidance handed down by the Obama administration in 2015 should have been subjected to public comment before it was issued.” 7,000,000 people with loans through the Federal Family Education Loan Program that are held by guaranty agencies are affected by this decision. The last sentence of the article is chilling:

The amount owed in student loan debt has surpassed that of credit card debt — about $1.2 trillion.

So it is now conceivable that 7,000,000 voters are subject to fees that are as much as 16 percent of the loan’s principal and accrued interest should they fall behind in their loan payments for any reason. This means that when these borrowers are forced to choose between paying off credit cards or paying off student loans they might opt to defer the credit cards… or might skip a meal every day or so… or let their electricity be turned off. One thing is certain, they will be less able to buy goods and services, which will put a drag on the economy. And another certainty is that fewer students will plunge into debt making it increasingly difficult for our workforce to improve its skills.

And where are the voices of protest from the Department of Education? From the GOP? Or, for that matter, from the Democratic Party?

One hopes the Trump administration might seek public comment on this change… but it is unlikely to do so for they know that many of those who would protest it would be wearing those bright red hats that say “Make America Great Again”.

Trump/GOP Budget Ignores Scientific Findings and Students in Poverty— And the Planet— Pay the Price

March 19, 2017 Leave a comment

Guardian articlereporter Sam Thielman posted an decrying the Trump/GOP budget’s decision to cut funds for school lunches by $200,000,000 despite solid evidence that they are a cost effective way to improve student performance and health outcomes. In yet another case of the Trump administration’s ignorance of science (see the denial of climate change for countless other examples), the President’s budget director offered this explanation for the cuts:

When Mick Mulvaney, director of Donald Trump’s office of budget management, told press on Thursday that the administration’s attack on school meal programsbecause they “don’t work”, he did not mean that they don’t feed hungry children.

“Let’s talk about after-school programs generally: they’re supposed to help kids who don’t get fed at home get fed so they do better in school. Guess what? There’s no demonstrable evidence that they’re actually doing that,” Mulvaney said. “There’s no demonstrable evidence they’re actually helping results, helping kids do better in school.

This last statement got the attention of Dr. Michael Weitzman whose studies DID demonstrate that “kids who don’t get fed at home” do better in school when they receive a nutritious meal:

That statement is “an outrageous, fallacious comment that clearly reflects a lack of knowledge, or perhaps even worse, dishonesty”, said physician Michael Weitzman in an interview with the Guardian. Weitzman is the former chair of pediatrics at New York University, where he currently teaches, and this year’s recipient of the John Howland award, the highest honor bestowed by the American Pediatric Society.

And Guardian writer Thielman offers more evidence in case Dr. Weitzman’s word is insufficient:

The connection between childhood nutrition and hard educational metrics such as attendance and test performance has been documented repeatedly, by universities as well as government agencies including the Centers for Disease Control and Prevention. But Weitzman and the other researchers who worked on the Boston study demonstrated explicitly that federally funded nutrition programs improve academic performance. That they help to alleviate poverty as well is simply a bonus.

So why would the Director of the Office of Budget and Management fly in the face of scientific findings and support cutting school lunch? For the same reason that the current administration and the GOP want to ignore the findings of climate science: the benefactors of scientific findings are not profiteering lobbyists with deep pockets. School children raised in poverty do not vote and do not have anyone with boatloads of money for political campaigns who can speak on their behalf. The planet earth has vocal supporters who generate petitions but there is no profit-making group advocating for clean air and clean water that compares with the auto and petroleum industries…. or the nascent water sellers.

So taxpayers save a few cents in order for corporations to save huge sums on their tax bills while children suffer and corporations no longer need to follow “stifling regulations” that help sustain planet earth. Welcome to the plutocracy.

GOP Budget Analysis: Housing and Urban Development Cuts Devastate Cities, Hurt Children

March 19, 2017 Leave a comment

With the GOP in control of the House, Senate, and White House, their President has an opportunity to advance a budget that accomplishes everything set forth the GOP platform, and, as NYTimes writer Yamiche Alcindor related in an article that appeared on Thursday, cities are going to suffer mightily as a result. Here’s Mr. Alcindor’s overview of the HUD budget cuts:

Mr. Trump spent months on the campaign trail promising to fix “broken” inner cities, appealing to African-Americans with the question, “What do you have to lose?”

In terms of money, the answer turns out to be: plenty. Mr. Trump would cut the budget of the Department of Housing and Urban Development by 13 percent and eliminate programs like the Community Development Block Grant, which cities have used to fund programs like Meals on Wheels as well as homeless shelters and neighborhood revitalization initiatives.

His budget proposal would eliminate the Commerce Department’s Minority Business Development Agency, the Education Department’s 21st Century Community Learning Centers, which run before- and after-school programs, as well as low-income heating assistance, community services block grants and the HOME Investment Partnership, which helps state and local governments build, buy and rehabilitate affordable housing.

It would cut funding for rental assistance and job training. In fact, the budget reaches deep into every agency to cut programs for the urban poor. Even the Department of Energy’s small weatherization program to help insulate the houses of the poor — obscure to even seasoned government watchers — would be eliminated.

Using the city of Baltimore as an example of the adverse impact, Mr. Alcindor offers some specific examples of the impact these cuts would have on one city. He quotes Karen D. Stokes, the chief executive officer of Strong City Baltimore, on the citizens who benefit from her program: “These are people who are trying to better themselves. They are here trying to become productive citizens. There is nobody here looking for a handout.”

Even GOP leaders are wary of these cuts, viewing them as contradictory to the message conservatives are trying to send and ultimately do not help solve some of the intractable problems he faced as the mayor of a small city:

Scott Smith, a Republican who was mayor of Mesa, Ariz., for six years, said the Community Development Block Grant program lined up with the ideals of small-government conservatives by providing communities flexible money. Mr. Smith said he used the funds to operate a shelter for dozens of homeless veterans with mental health issues.

“If you cut home grants, you still will have people struggling to get housing,” he said. “If you cut Community Development Block Grant programs, you will still have the homeless veteran.”

This just in, Mr. Smith: your political party no longer cares about “people struggling to get housing” or “the homeless veteran“… They are looking out for their donors who are “makers” and not those who are taking from them to enroll in programs that help those who “… are here trying to become productive citizens”. 

Calling a For Profit Cyber School Receiving Public Money a “Public School” is Misleading and Disingenuous

March 18, 2017 Leave a comment

On Thursday afternoon, Common Dreams posted education reporter Jeff Bryant’s latest Education Opportunity Network article, “What Betsy DeVos Means When She Says “Public Schools” on their website today… and it is an understatement to say her definition of “public schools” is misleading. As Mr. Bryant notes, there is an effort underway across the country to rebrand “…for-profit virtual charters and private school recipients of taxpayer-backed vouchers as public schools.” Such re-branding is misleading and disingenuous. These schools play by different rules. They are deregulated, not subject to the same accountability standards as public schools, and not governed by publicly elected officials. They are no more a public institution than a bouncer at a bar or a security guard at a department store are “policemen.” While the bouncer and security guard perform some of the same functions as a police officer, they have far less training, a far narrower scope of responsibility, and are not answerable to the public. If police departments heard that bouncers and security guards were “re-branded” as public policeman they’d be annoyed. Yet people seem to think public school teachers should be unperturbed when for profit institutions or virtual instruction enterprises are called “public schools.”

But, as Mr. Bryant notes, the public is generally unaware of the differences between charter schools and bona fide public schools, and this lack of understanding has created an opening for opportunistic charter profiteers:

These important differences between charter schools and traditional public schools are not generally understood or appreciated by even the most knowledgeable people, which is why charter advocates put so much energy and resources in marketing their operations as “public” schools.

Jeff Bryant concludes his article with this:

School choice proponents like DeVos often argue that all that matters is whether students who attend charters, online schools, and private academies do well on standardized tests and that parents are generally satisfied with these choices.

But this argument ignores the tax-paying public that deserves to know whether those outcomes are being achieved without wasting our public dollars, which more often than not, they probably are.

If a school is governed by a board elected by the voters, adheres to regulations developed by a state agency in accordance with laws passed by elected officials, and is held to standards set by elected officials or their appointees, it is a “public” school. Anything else is anti-democratic and private and should not receive any public funds from taxpayers.

The “Trump Effect” Could Devastate Colleges and Graduate Schools

March 17, 2017 Leave a comment

Steven Saul’s NYTimes article today describes a phenomenon being called “The Trump Effect”:

The president of Portland State University, Wim Wiewel, met last week with 10 prospective students in Hyderabad, India. But what started as a get-acquainted visit quickly turned into more of a counseling session, as the students expressed fears about coming to the United States this fall.

One student, who is Muslim, said his father was worried that America had an anti-Muslim attitude, Mr. Wiewel recounted. “Several others said they were concerned about the ‘Trump effect,’” he said in an email.

“I’d say the rhetoric and actual executive orders are definitely having a chilling effect,” Mr. Wiewel wrote, referring to the Trump administration’s travel ban.

Like many universities across the country, the Oregon university is getting fewer international applications.

Nearly 40 percent of colleges are reporting overall declines in applications from international students, according to a survey of 250 college and universities, released this week by the American Association of Collegiate Registrars and Admissions Officers. The biggest decline is in applications from the Middle East.

The article cites the financial impact this decline in foreign students could have on schools, especially on graduate programs where foreign students bring in $32,000,000,000 to the economy. Mr. Saul offers some data on graduate school enrollments:

Slumping graduate school applications can now be seen at universities ranging from giant Big Ten public universities like Ohio State and Indiana University to regional programs such as Portland State, with just over 27,000 students, including more than 1,900 international students.

At Indiana University, international applications for undergraduate programs increased 6 percent, but graduate applications for some programs are posting big drops, said David Zaret, vice president for international affairs.

Mr. Zaret said international applications to the masters program in business were down 20 percent, and down 30 percent in both the master of law program and at the School of Informatics and Computing. The university will not have problems filling the programs, but the drop might affect the overall quality of the applicant pool, he said.

Mr. Saul’s article included several quotes from graduate school officials who attributed the declines to other factors that “the Trump effect” and also cited grad school deans who were concerned that the “yield” of incoming foreign students might be lower than usual because many students who were accepted before the President issued his Executive Order on immigration might re-think attending college or grad school in the US.

Far worse than the loss of revenue is the loss of our country’s reputation one that welcomes individuals of all races and colors. As the college official above indicates, universities are unlikely to have problems filling their programs, but they might have a lower quality of applicants as a result. And as the quality of their applicant pool diminishes, so, too, does the quality of our work force in the long run. And so, too, does the quality of life. As President Trump would say: “Sad”….

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