Showing Leadership By Putting Graduates to Work

Nov 13, 2012Joshua McKinney

As part of the "Millennial Priorities for the First 100 Days" series, a recognition of the need to address student debt levels and unemployed graduates.

As part of the "Millennial Priorities for the First 100 Days" series, a recognition of the need to address student debt levels and unemployed graduates.

In 1933, Franklin D. Roosevelt was faced with a widespread catastrophe. The Depression had given birth to shattering rates of unemployment, bank failures, and a widespread loss of confidence in government. From the start, FDR knew that what the people needed most was reassurance that under his leadership, they could weather the storm. In his inaugural address on a gloomy March morning, FDR said, "This nation asks for action, and action now. Our greatest primary task is to put people to work. I am prepared under my constitutional duty to recommend the measures that a stricken nation in the midst of a stricken world may require." Soon thereafter, he set a high standard for new presidents during his first 100 days, launching a raft of New Deal reforms over his first three months in office.

With a laundry list of issues and a divided congress, President Obama faces hurdles in acting and acting quickly. In the three months following his second inauguration ceremony, his actions need to provide the country with reassurance that this ship is moving in the right direction under his leadership. Perhaps his most important task will be addressing this through the lens of education policy.

Education has long been the primary driver of upward mobility in America, a fact that is truer now than ever before. Yet as the demands on schools to impart 21st century skills have increased, school quality has not kept pace across the country, resulting in an ever-widening achievement gap. Our primary and secondary schools are tested to death but provide little to no growth in our national education numbers. According to NPR’s Claudio Sanchez, “the class of 2012 scored the lowest average SAT reading scores since 1972” while also managing to take a nine-point dive in writing. The only area where we saw a national improvement was in math, where it stands only five points higher than 40 years ago. Overall, College Board, which commissions the SAT, reports that six in ten college students are not ready for college work. Students are now faced with the decision to enter college unprepared or not enter college at all. The ACT reported even more dismal numbers: only a quarter of the high schoolers who took the test were college ready.

What comes of those students who enter into college unprepared? According to Complete College America, about 41 percent of the high school graduates who enter college are required to take remedial courses when they start college. Even more alarming is that two-thirds of these students fail to earn their degree in six years, some accumulating unreasonably high amounts of college loan debt.

What happens to the students who pass on college altogether? Armed with a high school diploma and little to no marketable skills, these students all to often face unemployment.

Is graduating college in four years the remedy, as many proclaim? It helps, but many college students are unemployed as well. The common problem for all three sets of students is the lack of skills – a problem which has also become a crisis in America.

To expect President Obama and Sec. Duncan to address every aspect of the system as a whole within the first hundred days is unreasonable. We can, however, expect them to address the increasingly alarming student loan bubble and the skills crisis.

Since 1978, average college tuition has skyrocketed by over 900 percent, while grants and scholarships continue to be slashed and only given to a select group of students. The result? Students are forced to mortgage their futures with student loan debt. This, accompanied with dismal job numbers for college graduates, has many worried that graduates will default on their loans, causing the bubble to burst and result in seismic shocks through every facet of American life. It is paramount that this bubble be addressed by the national government or the effects could cripple the already fragile economy.

One way to address this would be to get more young people to work. This could be done by revitalizing our skills training across the nation and investing in current skills training organizations such as yearup. If the president uses this approach, he can simultaneously address the skills crisis and the student loan debt crisis. But this project is more complex than simply increasing funding. It would have to begin with a role change for many of the community colleges around the nation. This is not to call for them to become full-fledged technical schools, nor should they carry identical curriculums to that of four-year institutions. They should, however, increase the number of classes available for training local people in the skills they need to do the jobs available in the area around them. Since the budgets of many community colleges are strained already, President Obama could provide tax incentives to companies that send trained workers to teach classes at their surrounding community colleges. This is imperfect in many ways, but could very well work if the nuances are worked out. 

President Obama has 100 days to reassure the people that his leadership will move this country in the right direction, just as FDR did in 1933. If he can solve the student loan debt bubble while addressing the skills crisis, he will send a solid signal to the American people that this country is really moving forward. 

Joshua Mckinney is the Senior Fellow in Education Policy for the Roosevelt Institute | Campus Network and a political science and philosophy double major at Morehouse College.

 

Barack Obama image via Shutterstock.com.

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The Maryland Dream Act: Giving Undocumented Students Like Me a Fair Shot

Nov 5, 2012Jonathan J. Green

Higher education should be accessible to all students looking to better themselves and give back to their communities.

Higher education should be accessible to all students looking to better themselves and give back to their communities.

Marylanders will see a long list of referenda items in this year’s ballot when they head to the polls tomorrow. For me, the most important one is the Maryland Dream Act, a bill that would allow the state’s undocumented students to pay in-state tuition at its public colleges and universities if they meet certain eligibility criteria and would give all students an equal shot at higher education. I am a living, breathing example of the type of student who would be helped by this bill – someone simply trying to better himself and give back to his community who met obstacle after obstacle in trying to attain higher education. The whole state stands to benefit when students like me can afford to attend the school of their dreams.

I grew up in an immigrant household. My family and I moved to the United States in 2005 and I entered 8th grade as an ESOL student shortly afterwards. The only guidance I was given in regards to school was “go to school and do well.” So I focused on academics like my parents suggested. I started high school taking all ESOL classes, but managed, with a lot of hard work, to move to honors courses, then AP courses, and even participated in a dual-enrollment program at my local community college.

But in my high school years, something else happened: I became a Marylander. I was so impressed by the dedication of the teachers and adults around me, and felt so fortunate to live in a state where education is valued and made accessible to everyone, that I had to give back. I started volunteering in my church, became part of mentoring groups, organized community service projects, and even became my senior class vice president. I was so involved at the end of my high school career that I racked up over 1,000 community service learning hours, far above the 50 that were required for graduation.

Throughout all of my work, I had thought I was like every other student in my high school. But during my senior year I realized that my parents’ legal troubles would have a significant impact on my road to higher education. Even though my weighted GPA at the end of my high school career was over a 4.0 and I had been involved in several leadership and community service activities, I couldn't attend the college of my dreams because my undocumented status meant I couldn't receive financial aid. Luckily I was able to gain admission into my community college’s highly selective honors program and received a private scholarship to fund my education for two years. Otherwise I wouldn’t have been able to attend college at all.

At the end of my two years at community college, my dream was to transfer to the University of Maryland, College Park to study public policy or sociology. It seemed like the obvious choice since their programs for both disciplines are among the best in the nation and the school is located about 15 minutes away from my house. Despite gaining admission to the school, I could not attend because, as an undocumented immigrant, I wasn’t considered an in-state student. Instead of paying the more reasonable in-state price tag of $8,500, my legal status meant that I’d have to come up with $24,000 a year without any financial aid. That difference was more than my family could afford.

Again, I was fortunate. Goucher, a private college in the state of Maryland, was able to offer me some aid, which had made it a little more affordable than the public school of my dreams.

I have been lucky. But it is unacceptable that it is more affordable for me to attend a private school and live on campus than to attend the public school around the corner. Tomorrow, Maryland voters will consider Question 4, known as the Maryland Dream Act. It would give Maryland’s undocumented students the opportunity to pay in-state tuition if they meet certain eligibility criteria: attending and graduating from a Maryland high school or its equivalent, filing income taxes, attending a community college for the first two years, and others.

This bill is financially profitable for the state. Its passage will generate $66 million in revenue per graduating class for the state, according to an independent University of Maryland, Baltimore County study. The revenue comes from the fact that the more educated our workforce is, the more workers earn and thus pay in taxes back to the state. According to the study’s calculations, only about 435 students will take advantage of the Dream Act, or about 0.1 percent of the students enrolled in public higher education institutions in Maryland.

The Maryland Dream Act gives young Marylanders like me who come from tax-paying families a shot at higher education. Had it not been for Goucher, I would not have been able to continue my education and had the chance to improve my situation. There are hundreds of Maryland students like me hoping for a chance to succeed in life and give back to their home state of Maryland.

Jonathan Jayes-Green is the Roosevelt Institute | Campus Network's education policy center director at Goucher College and is a junior.

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What We’re Not Talking About When We Talk About Inequality

Oct 31, 2012Joelle Gamble

It's not enough to maintain a safety net that catches people when they fall. We have to keep them from falling in the first place.

It's not enough to maintain a safety net that catches people when they fall. We have to keep them from falling in the first place.

As a millennial, my generation has been told that if we simply work hard and go to college we will be able to achieve even greater economic gains than our parents. That promise now rings false. The gap between the economic have and have-nots is widening dramatically. Those of us who grow up in middle or low-income families may not have the opportunity to move up the socioeconomic ladder. With the widening gulf between rich and poor hampering economic opportunity so markedly that economist Alan Kreuger has named the phenomenon the Great Gatsby Curve, we need to ask ourselves if our political leadership is taking the right steps to address inequality in America.

The current election debate has focused on progressive tax policy and debt reduction as the central components of how government will both spur growth and reduce inequality in America. We only hear about how education, infrastructure, and health care play into the debate on specific occasions, such as when a question is directed toward one of those topics.

Meanwhile, the conversation around government priorities, outside of direct fiscal policy, has been limited to what programs people will lose if a particular candidate is elected. The two major presidential candidates, as well as many down ticket national candidates, regularly accuse each other of wanting to destroy social security “as it is” or restrict access to Medicare for seniors.

How we change tax rates on the middle class and how we continue to fund our social safety net are both important questions. Our government must ensure that the tax code is working fairly. It must make sure that social programs protect individuals when they fall. But the larger drivers of our economic growth and equality in the United States are being largely ignored in favor of these narrow topics. It is not enough to catch people when they fall. Government must, more importantly, ensure that its citizens have the equal access to resources that will make them less likely to fall in the first place. By providing equality and opportunity, we can spur long-term economic growth and prevent higher costs.

There are some investments that government can make that will do more for long-term economic growth and equality in America than others. Investing in education and job training, building a strong infrastructure of Internet access, and providing quality health care has been shown to not only reduce inequality but also promote economic growth.

Education and training are paramount in providing job opportunities. One of the largest factors affecting earnings inequality in the United States is technological change. Innovation has caused many modern companies and industries to become increasingly dependent on the availability of human capital found in the communities in which they are located. Areas with higher percentages of college-educated works are doing better at attracting and retaining business (and the jobs they bring) than areas with less educated populations. American workers need affordable access to education and skills training to be able to compete in the changing labor market.

Future worker competitiveness will also depend on building strong information infrastructure, especially increasing access to high-speed Internet, as Roosevelt Institute Fellow Susan Crawford rightly argues. Technology has created jobs that require workers to be able to work with large quantities of information and work collaboratively with partners who may not live in the same country, yet alone the same city. Even simple processes such as job applications or unemployment benefit applications now require access to a stable Internet connection. Currently, around one-third of Americans lack access to high-speed Internet.

As has been widely shown, access to quality, affordable health care reduces costs for individuals and their families, as well as American taxpayers as a whole. In the absence of access to affordable preventative care, only individuals with significant financial resources can pay for regular doctor visits, examinations and, potentially, long hospital stays. For those without large incomes, these basic health care needs can severely affect their ability to pay bills and sometimes send them into bankruptcy. Beyond basic care and insurance, affordable care for reproductive health services can serve as a step toward gender parity.

Not only do education, Internet access, and health care move us toward a more equal society, they also give taxpayers more for their tax-dollar. Individuals without access to quality schools and health care grow up to have fewer choices and opportunities to get high-skill, high-pay jobs that offer benefits. This makes them more likely to need social programs during the course of their lives. Making a stronger initial investment in programs such as education and heath care that give people opportunities is wiser than allowing the negative effects of failing to do so cripple the federal budget and the economy over the long run.

Making a stronger initial investment in opportunity via programs such as education and heath care is wiser than allowing the negative effects of not making those investments cripple the federal budget and the economy over the long run. None of this is to say that spending on defense, physical infrastructure, and our basic social safety net are not needed. But the United States needs to change its priorities and push for long-term planning with investments in long-term results. Education, information, and quality care are key to producing a more equitable society.

Joelle Gamble is Deputy Field Director of the Roosevelt Institute | Campus Network.

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What Do We Get Out of Government?

Oct 25, 2012

"Let us not be afraid to help each other -- let us never forget that government is ourselves and not an alien power over us." FDR said those words in Marietta, Ohio in July 1938, but it's just as relevant today. As conservatives continue to deride every attempt to create progressive change through government as an oppressive socialist takeover, we need to remember that government is nothing more or less than an expression of common initative -- a forum through which we come together to build the things we need to make our country stronger.

"Let us not be afraid to help each other -- let us never forget that government is ourselves and not an alien power over us." FDR said those words in Marietta, Ohio in July 1938, but it's just as relevant today. As conservatives continue to deride every attempt to create progressive change through government as an oppressive socialist takeover, we need to remember that government is nothing more or less than an expression of common initative -- a forum through which we come together to build the things we need to make our country stronger. In the video below, the Roosevelt Institute's Rediscovering Government Initiative looks at the government's vital role in every facet of society, from encouraging innovation to defending our shores, and at what we can still achieve if we're willing to dream big.

Click here to find out how you can get involved in the Rediscovering Government Roadshow.

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Live at Dissent Magazine with "From Master Plan To No Plan"

Oct 24, 2012Mike Konczal

I have an article in the latest Dissent Magazine, co-written with Aaron Bady, titled "From Master Plan to No Plan: The Slow Death of Public Higher Education." It's now live and kicking off their newly redesigned webpage. It starts with Ronald Reagan in California in the 1960s, does a history of the creation and strengths of the University of California's Master Plan system and its dissembly, and ends with what John Aubrey Douglass calls the the Brazilian Effect. It's full of riot cops, occupations, moderate Republicans, thoughts on elasticities of supply, for-profit schools and more.

I have an article in the latest Dissent Magazine, co-written with Aaron Bady, titled "From Master Plan to No Plan: The Slow Death of Public Higher Education." It's now live and kicking off their newly redesigned webpage. It starts with Ronald Reagan in California in the 1960s, does a history of the creation and strengths of the University of California's Master Plan system and its dissembly, and ends with what John Aubrey Douglass calls the the Brazilian Effect. It's full of riot cops, occupations, moderate Republicans, thoughts on elasticities of supply, for-profit schools and more.

I hope this starts to move the conversation forward on higher education outside a specific focus on student debt, because that is likely to reach its limits outside a broader vision of what needs to be accomplished. Andy Kroll wrote a similar piece that went live earlier this month, so I think there's a lot of interest in this topic. In March, Catherine Rampell wrote about the Brazilian Effect in economix. Andrew Ross wrote a fantastic piece for Dissent's series on education on the aggressive expansion of NYU and other universities as part of a conscious urban planning framework, combining growth models based on the FIRE industires with those in the ICE (intellectual, cultural and educational) industries, which is an important part of the puzzle.

This may be my favorite written thing with my name on it and, as I've been given opportunities I wouldn't have had without public higher education, this political and economic battle means a lot to me. Hope you check it out.

 

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Roosevelt Reacts: At the Presidential Debate, Mitt Misleads and Obama Omits

Oct 4, 2012

After the first presidential debate last night, which focused entirely on domestic policy, Fellows and staff from the Four Freedoms Center, Campus Network, and Pipeline weigh in with what was said, what was left out, and what was just an outright fib.

After the first presidential debate last night, which focused entirely on domestic policy, Fellows and staff from the Four Freedoms Center, Campus Network, and Pipeline weigh in with what was said, what was left out, and what was just an outright fib.

Thomas Ferguson, Senior Fellow, Roosevelt Institute; Professor of Political Science, University of Massachusetts, Boston; Contributing Editor, AlterNet:

My first reaction is simple: These guys have some nerve talking so cavalierly about teachers. Virtually from their first words, both the president and Governor Romney got lost in a fog of details. They begged questions, frequently argued from different premises, tossed off too many details without context, and rarely held a focus long enough for many in the audience to discern what they were talking about. The effort was a case study in how not to illuminate very much.

So what? I’d guess that Romney’s endless talk about “jobs” may persuade a few of his listeners that somehow his arithmetic actually does add up, but that number probably will not be large. I suspect, too, that the president’s highlighting how Romney’s voucher plans might change Medicare even for Americans now in their fifties probably was widely understood, too, and will work in the opposite direction. Possibly Romney, by not looking wooden, might pick up some tiny increment of public support. But my guess is that this debate changed few minds for all the talk of a Romney “victory.” My own takeaway is that both candidates’ harping on the genius of the American people and the virtues of the market system made it easy to lose sight of virtually all the important points at issue. I’d say the candidates battled to close to a draw, while America lost.

Dorian Warren, Fellow, Roosevelt Institute; Associate Professor of Political Science & School of International & Public Affairs, Columbia University:

Debates are rarely game-changers in presidential elections, and last night's debate was no different. The quick assessments of Romney's more aggressive performance compared to President Obama's weak and sleepy responses are correct, as far as they go. But we should remember that incumbents always do poorly in the first debate. As political scientist Sam Popkin argues, sitting presidents don't have time for debate prep, and they aren't used to being challenged the way Romney challenged Obama last night. Clearly, the Obama team's strategy was for the president to play it safe and not come across as an angry black man. We also know that Obama has never been a good debater -- recall the 2007 Democratic Primary debates where both Hilary Clinton and John Edwards put in consistently better performances. Obviously, we know who won the nomination despite his weak performance relative to his adversaries. What will happen now through the next debate will be fact-checking the claims made by both candidates followed by obsessive poll watching to see if and how the numbers move. In the end, of the small number of voters uncommitted, last night's debate wasn't decisive nor did it sway potential voters one way or the other. 

Joelle Gamble, Deputy National Field Director, Roosevelt Institute | Campus Network:

What was noticeably absent in last night’s debate was the mention of the role of everyday Americans in the economy, health care, and governance. Candidates talked about making strong investments in the future, but they did not elaborate on the role future Americans play in making their promises a reality. The bottom line for both campaigns was essentially this: “Vote for me and everything will be (or continue to be) better. Nothing bad will happen to people who are comfortable with their lives. Those who are unhappy with things will only see immediate benefits because of my policies.”

But this is a quintessential flaw in our current electoral political system. Citizens are simply voters and nothing more. We show up to the polls and mark our calendars for the next major election. For this reasons, political candidates have resigned themselves to only telling us what we want to hear before an election instead of what we need to hear to be invested in their policies afterwards. For either candidate to execute their plan well, a fully engaged citizenry is needed throughout their entire four years in office. Their success is dependent upon our continued participation on November 7th.

This participation requires a shared responsibility for the efficacy of our economic recovery. Some people will have to waste less gas or change their habits if we want to be more energy-efficient in the future. Others will have to adjust to a new system of health care if we want to be healthy as a country in the future and lower costs. The fact of the matter is, in order to keep moving in a positive direction, things will change for everyday Americans. The presidential candidates need to make it clear that we will have to be participants in that change if we want to be a better nation.

Jeanne Tilley, Roosevelt Institute | Pipeline, Greater Boston:
 
Millennials, if you went to bed after the debate feeling disheartened, that’s okay. You weren't alone. That debate was not for us. I love that Dodd-Frank got so much play, but President Obama and Governor Romney each missed the mark on talking to younger generations -- particularly on education.
 
President Obama mentioned twice that he wants funding to hire “100,000 math and science teachers,” and Governor Romney gave schools here in Massachusetts a mostly deserved tip of the hat for being among the best in the country. But while these statements came during a discussion of the role of the federal government, they failed to drill down on the role of education and thus the role of educated citizens in the American social framework.
 
I was disappointed that the candidates avoided discussing two key aspects of education policy last night. First of all, I wish that the DREAM Act had been raised. It’s plausible that this will come up as part of the foreign policy debate in the coming weeks, and I try to maintain hope that eventually we can have a comprehensive immigration reform debate. But the DREAM Act is not really about foreign policy and national security. It is about creating opportunity for young, undocumented Americans to enter the hallowed demographics of “small business owners” and “middle-income families” that everyone courts so strongly during election season. American demographics are changing, and in order to remain competitive on the global stage, we need to embrace the talented, committed young people who are already here and give them every opportunity to succeed.
 
Teachers’ unions were also roundly ignored -- perhaps not surprising given recent controversies, but still unfortunate. (In fact, unions as a whole were not mentioned once, and even the ever-popular auto industry got but one brief line.) Millennials are teaching in droves, typically through structured service programs, before graduate school or entering the broader job market. This teaching bent is mainly temporary, however; most programs last only two to three years. 
 
I think President Obama’s idea to hire 100,000 STEM teachers is a great one. But once schools have recruited and trained all these teachers, the trick is to keep them in the classroom working their magic with American school children and to make sure they feel supported by their parents, schools, and government outside the classroom. The unions may well have a powerful and positive role to play in striking this balance. The time to talk it over and find out is now. American education statistics no longer top the world. For candidates who talk about global competitiveness and making sure small businesses have someone to hire, leaving education out of this debate is a huge oversight.
 

Rahul Rheki, Roosevelt Institute | Campus Network Senior Fellow for Health Care; Senior, Rice University: 

To me, the philosophical difference between the president and Governor Romney -- the visions they put forth for the role of government in America -- could not have been more stark. The barbs traded over healthcare were particularly emblematic of this dichotomy. Whereas Romney lambasted the ACA's "unelected board" for rationing care -- the IPAB is only advisory, mind you -- while distancing himself from his own signature health reform achievements in Massachusetts and proposed Medicare voucherization, President Obama embraced the provisions of the ACA that provided universal coverage, ended pre-existing conditions clauses, and ensured a thriving American social safety net for the coming decades. The competing choice, in my mind, was evident: the challenger's "every man for himself" versus the incumbent's "we're all in this together."

Tim Price, Deputy Editor, Next New Deal:
 

Given how much time the candidates spent talking past each other last night, it’s odd that some of their biggest flubs came in areas where they actually agreed, or at least claimed to. For Romney, it was health care reform – his most significant achievement as governor, and the one he’s barely been able to mention during this campaign for fear of conservative revolt. Though he was able to dodge most of the president’s criticisms throughout the debate by adopting new policy positions on the fly, his hair-splitting about whether Romneycare should be a model for national legislation was the least convincing part of his performance. Pressed to explain why he’d repeal the Affordable Care Act given that it’s essentially a scaled-up version of the plan he adopted in Massachusetts, Romney seemed to argue that Romneycare might be an appropriate model for every state, but not all of them at the same time. If states are the laboratories of democracy, he apparently wants Massachusetts to keep a tight hold on its patents.

As for President Obama, when he wasn’t wandering through a fog of obscure policy details, he was conceding far too much ground to conservatives. One of the most eyebrow-raising moments of the night was when Obama began the discussion of entitlements by declaring that he and Romney share a similar position on Social Security. Do they really? If so, progressives have a lot more to worry about than we thought, since Romney’s running mate is the author of a plan that would privatize it. Then there was the question about the need to cut deficits, where instead of rejecting the premise and making the case that we need a bigger deficit to create jobs, Obama defended his budget plans as Bowles-Simpson with a cherry on top. Instead of articulating a bold progressive vision for the economy and a strong defense of the social safety net, he often sounded like a moderate running in a Republican primary.

Rajiv Narayan, Roosevelt Institute | Pipeline, California:

We bring as much of our own perception to the debates as the presidential candidates add with their responses and rebuttals. Having recently landed my first job out of college, I understand the importance of building a labor force with diverse skills and an economy rich with opportunities. But what I understand to be even more important is the community of support that got me from my diploma to my first paycheck. That means teachers. Tonight I saw one candidate who praised teachers, but was unwilling to keep intact those programs supporting classrooms for political reasons. Likewise, I was disappointed by the political “strategery” at work on health care reform. When we reach a point where Governor Romney is threatening to dismantle the (unspecified, seemingly unpopular) parts of a health program cloned from his health program, in order to reinstate from the states, where "democracy's experiments take place," the most successful version of that program, I'm afraid we've become audience to Dadaist political theater.

Hannah Locke, Roosevelt Institute | Campus Network Senior Fellow for Energy and Environment; Senior, Goucher College:

C-SPAN, Fox News, Twitter, Facebook---tax policy, Big Bird, educational vouchers, zingers. The Internet was alive with puns, expressions of disgust, tired and overused commentary, and the usual spin. Is this what the battle for the soul of our country looks like? Boiled down to cherry-picked numbers, to stuttering sentences of little substance, to talking over the moderator? What does our Millennial generation garner from such a discussion? We laugh and point and tweet and snark, but I’ve started to wonder whether that level of  “political engagement” is worth bragging about.

Meanwhile in Venezuela, the people are taking to the streets, risking their own lives to demand a fair and transparent democracy. The challenger, Henrique Capriles, heads a coalition of opposition groups who contest not only the continuation of Chavez’s isolating economic practices, but the proliferation of violence and fear in Venezuela. What started as state-sanctioned Robin Hood behavior quickly bred into a festering, sprawling disease of chaotic violence where anyone—poor, rich, liberal, conservative—runs the risk of getting in trouble with the street gangs or the military.

So next time we bemoan our elections, let’s take a step back and put things into perspective. We aren’t on a black list for going to an opposition leader’s website. We aren’t risking a bullet in the head every time we step out to a rally, stump speech or fundraiser. We aren’t risking our families’ future on the hope that our country can be something better than one of the most violent nations on this planet.

We go to the polls, and we vote. Sometimes, we should take a moment to recognize how much we’ve got, just as much as we recognize what we don’t have yet.

Kyle Shepherd, Roosevelt Institute | Pipeline:

My favorite passage of the night came from the candidates' back and forth on federal regulation of the economy. "You couldn't have people opening up banks in their garage and making loans," Romney said. "Every free economy has good regulation. At the same time, regulation can become excessive."

I love imagining people loaning money out of their garage. For all the talk of the American people's ingenuity, it seems like someone on the right must think this is a good idea. But this statement also points to the key differences between the two candidates on regulation, albeit in broad strokes. And as a progressive, this is a big deal to me, because Romney wants to eliminate important financial protections that don't have enough teeth to begin with.

Dodd-Frank, like much government oversight of the economy, can be easy to criticize. Detractors say it’s unwieldy, opaque, and brings unintended consequences. It's also not immediately apparent how it has solved the problem of banks being "too big to fail." Romney played on this by saying he wants to repeal and replace it with more intelligent regulation that will create jobs. This was a somewhat new proposal from him, as he has previously stated he just wants to repeal it, but it's also important to note he remains characteristically vague on the subject, making deeper analysis of his policies difficult. It's safe to say, however, that it would probably involve decreases in regulation on derivatives and relaxing the restrictions that have been imposed on the large, systematically important firms. This would debatably result in more jobs, but would certainly result in more banking profits.

Obama didn't do much to advance any new policy initiatives. He instead defended Dodd-Frank, mentioning the "reckless behavior" of Wall Street and touting the capital requirements and bank "living wills" imposed by the legislation he supported. There are some good things in Dodd-Frank, and it's much needed legislation that will hopefully strengthen over time as regulators adapt and enforce its stipulations.

The discussion of the role of government in regulating financial institutions is a vital one. These are important issues that get to the heart of inequality, corporate welfare, and consumer protection in our country. We need people to be able to borrow money with confidence they are not being taken advantage of, and the banks need to understand their risk is real and can't be passed over to someone else along the financial daisy chain. The debate on this issue needs to more fully acknowledge the risks inherent in the economy, who should assume responsibility for those risks, and what policies can make that happen.

Unfortunately, the debate as framed last night presented only two options. Either Dodd-Frank, a bill mercilessly attacked by lobbyists, only supported by key financial interests in order to prevent a stronger bill from passing, and only partially enforced -- or weaker regulations and restrictions as offered up by Romney.

Lydia Austin, Roosevelt Institute | Campus Network Senior Fellow for Economic Development; Senior, University of Michigan:

It seems that the hype surrounding this debate -- the numerous news articles and coverage dedicated to it -- was greater than the actual event. Both candidates held their own, both threw out a lot of facts related to tax policy and Medicare, and both were on the defensive for some amount of time. Romney had the most at stake coming into tonight: he desperately needed to rebrand himself as someone who understands the middle class and is responsive to Americans' frustrations. I think he effectively did that. Not an outstanding performance by either candidate, but in terms of who shifted the public discourse, it was definitely Romney (though now the Internet is blowing up with Big Bird photos).

Ken Lefebvre, Roosevelt Institute | Campus Network member; Senior, University of Massachusetts:

Last night we witnessed two opposing narratives clash, unmitigated in their stances, and mostly unmoderated in their discourse. We saw a president tired from four years of entrenchment in the daily minutiae of national politics, and we saw an ever-eager opponent going into this fight with the gloves off. It could be said that Mitt Romney won this debate through his writers and an ability to look presidential. At the same time, Obama did what he had to to maintain his steady ground and consistent policies. Little was accomplished in this debate, and both candidates made the same talking points together that they had for months before. No new details were offered. You really could take segments of their commercials and edit them as if they were the debate. Emotional responses may tip the polls toward Romney for the time, but voters learned little from either candidate in this display.

Jean-Ann Kubler, Roosevelt Institute | Campus Network member; Senior, Skidmore College:

After sifting through the talking points and empty rhetoric of last night’s debate (we get it, 5 trillion is a big number), the American public is left with very little substance on which to compare the incumbent Obama and challenger Romney. The two candidates made bold attempts, particularly during the economic segment of the debate, to appear as if they were presenting facts and specifics about tax plans, the deficit, and creating jobs. But in the end, what did viewers learn other than that Romney and Obama have starkly different opinions on how theoretical math works? Can Obama decrease the deficit by spending more and taxing more? Romney said no, but demonstrated no evidence other than his lack of faith. Can Romney spend $2 trillion extra on defense without raising taxes on the middle class to pay for it? Obama said no, and the math seems to back him up, but he was unable to present his argument in a manner that would be digestible by a common viewer. What the common viewer could easily discern, however, was that two presidential candidates with four Ivy League degrees between them, who both claim that the key to their governing style is bipartisan leadership, were unable to put aside polarizing, partisan rhetoric long enough to provide the American people enough information to make an educated decision about the future of our country.

Michelle Tham, Roosevelt Institute | Campus Network member; Sophomore, American University:

The presidential debate had a lot more number-crunching than I expected. However, this didn't mean that all the numbers were correct. One ironic rhetorical point Romney has been using throughout his campaign (and continued at the debate) was "disregard the fact-checker and studies." Yet Romney's tax plan is defended by the Heritage Foundation. Furthermore, Romney mentioned clean coal. Since 2009, clean coal has already been identified as more of a misleading political frame than actual clean energy. Currently, there's no economical way to capture and eliminate carbon emissions from coal itself -- dirty or clean. On the same note, as Romney praises the idea of clean coal, he also misunderstands the collapse of the solar company Solyndra. There is no Solyndra scandal. Solyndra was simply a startup solar-power equipment manufacturer that was funded under the Bush administration. Solyndra fell because of the lack of demand and overseas competition. It has nothing to do with Obama's initiative for higher clean energy funds. Finally, the idea of investing in Solyndra itself adheres to Romney's idea of economic growth. 

Mawish Raza, Roosevelt | Institute Campus Network member:

The start of the presidential debates last night had stirred up much more excitement than the debate itself was able to offer. Governor Romney presented an aggressive side that clamored over President Obama’s passiveness, but aside from the candidates' demeanor, the debates didn’t touch on many key issues, including women’s rights or immigration reform. Even during the dialogue on education and health care, neither candidate even mentioned the right for a woman to make her own decisions with her body or education being a right for all individuals. 

Governor Romney repeated his commitment to education several times, along with his plan to allow parents to choose where to send their children. That’s great, but what about kids coming from broken families and being raised in poverty? What about human trafficking victims who are sold to the streets until disposed of? What about the failing education systems in inner cities? Because commitment to the education system doesn’t provide kids in these communities with instantaneous financial support, education often isn’t an answer for them. In these environments, the only plausible option for them may be to turn to drugs or crime. And when we focus on the family, where the emphasis on education will be placed on the parent’s engagement with their child, we are neglecting entire populations of youth around the country. This creates a cyclic culture of poverty for young people.

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State and Local Education Funding Declined (Again) in 2011

Sep 28, 2012Mike Konczal

Here's something that might put larger trends into perspective. Earlier this month, the Bureau of Economic Analysis released data on state and local spending for the 2011 year. Here's how spending looks for state and local spending on elementary and secondary education:

Here's something that might put larger trends into perspective. Earlier this month, the Bureau of Economic Analysis released data on state and local spending for the 2011 year. Here's how spending looks for state and local spending on elementary and secondary education:

This isn't adjusted for inflation, so the decline is even worse. The dotted line is the seven-year pre-recession average projected forward. I'm pretty cynical about these things and knew that spending had declined in 2010, but I had expected it to even out or go up in 2011. Instead, it has declined further.

There's been yearly increases in spending on elementary and secondary education going back decades. We didn't develop some sort of technology that made educating young people cheaper in 2009 - instead, states were hit hard by a housing crash and liquidity issues that come with having to maintain a balanced budget in light of the worst downturn since the Great Depression. This also comes on top of the mass layoffs of teachers, some 200,000 during this recession. Rather than firing teachers while spending more elsewhere, we are just spending less educating our children, period. This is the worst kind of disinvestment, made at the worst possible time.

To bring in teachers' unions, the anti-teacher's union agitprop film "Won't Back Down" is getting negative reviews, including Liza Featherstone in Dissent and Dana Goldstein in The Nation. When you see examples of parents filling in for a failing school system, notice that this will increasingly be the case with declining funding for education. That gap in the graph above is being filled by parents and teachers for free or with children getting less education. Megan Erickson wrote about this trend in Jacobin, noting, "parents and kids are increasingly being asked to pitch in and paint the building or hawk candy bars to fill budget gaps. That’s because the values of freedom, autonomy, and choice are in perfect accordance with market-based 'reforms,' and with the neoliberal vision of society on which they’re based."

And this graph is why you need some organization at the front lines fighting for better spending on education, which is part of what teachers' unions do. There's been some great write-ups of the successes of the teachers' union strike in Chicago, including Richard D. Kahlenberg at The New Republic, Hamiltion Nolan at Gawker, and Josh Eidelson at Salon. A significant part of the strike was over broader and better educational outcome and more resources for schools. As this graph shows, it is a battle that will continue to be important.

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Larry Katz on the Real Reason Education is the Key to Economic Growth

Sep 25, 2012Bo Cutter

The expansion of the American education system produced 100 years of economic growth, but we need a new model to achieve a sustainable, equitable future.

The expansion of the American education system produced 100 years of economic growth, but we need a new model to achieve a sustainable, equitable future.

The Next American Economy breakfast seminars resumed last week with a discussion with Professor Larry Katz focusing on his and Professor Claudia Goldin's book, The Race Between Education and Technology. If you haven't read this book, there is a great deal about our economy you won't understand. If you don't read at least the introduction now that you've been told, shame on you.

Larry has several fundamental insights. (These are the ones I picked out; he might prefer to highlight others.)

First, at a minimum, 25 percent of our productivity growth -- and therefore our economic growth -- over the 100 years between 1870 and 1970 is due directly to increases in the average number of years of education of the American people. It is highly likely that the actual contribution of education is significantly greater; 25 percent is a minimum.

Second, during this period, economic growth was high and equality actually improved in America despite fundamental economic and technological change -- change every bit as great as the changes we have seen in the last 30 years. In other words, we have been here before. We dealt with the effects of technological change in the past through advances in education. There is no obvious reason we could not do so again.

Third, the fundamental educational change during this period was "the high school movement," a grassroots-driven movement that saw free, gender-neutral access to high school as critical to community success. 

Fourth, there has been no recent educational revolution similar in scope to the high school movement, and the big change that has occurred -- the growth of post-secondary education -- has not been free. Not coincidentally, the growth of educational attainment in America has slowed, economic growth has slowed, and inequality has risen. 

Finally, this slowdown in education is probably a more important factor in the stunning rise in inequality we've seen than the shift of income toward the top 1 percent, which has grabbed more of the headlines.

Based on this discussion with Larry, I conclude that the mantra of the next successful political movement in America should be sustainable, equitable growth, and that this is a plausible goal. 

I'll go further. A long period of relatively high economic growth is within our reach starting in a couple of years if we would get out of our own way. I've written a piece on this titled "An American Renaissance," which I'll send to anyone who asks.

But this is not a layup. If we are to grow more rapidly over the next 20 years than we did on the last 20, we have to have a productivity revolution. More of our growth will have to come from productivity -- about 80 percent in the next decade, as opposed to 35 percent to 50 percent in the last three decades. To keep growth constant with the last 3 decades, labor productivity will have to grow by about one-third. If none of this happens, the generation born during the last decade will experience about 60 percent of the per capita income growth as did the generation born in the '60s.

The single most important thing we could do to increase the rate of growth of productivity is to increase the level of educational attainment of Americans. But sustainable, equitable growth is not a goal either of our current parties cares much about. The current progressive movement's singular focus on income distribution is both misplaced and convenient. Misplaced because there are better, more available paths to take that would accomplish both more equity and more growth; convenient because this focus enables it to ignore all the real issues. The right's obsession with unfettered markets is even more nuts and completely ignores the economic history of how American growth actually happened.

A true next American revolution in education will not be a simple linear extension of our current system. It will involve a combination of lifelong learning and certification, a commitment to teaching students how to learn continually, an equally deep commitment to what Larry Katz calls contextual training, a renovation and invigoration of our community college system, the use of the web in unique, student-oriented, and user-friendly ways, and major long-term costs. I would guess $50 to $75 billion annually for a long time -- between one-third and one-half a percent of GDP.

 But our current plan, of course, is to do nothing meaningful. As I've said before, the two parties are on a course to gut most of the government in order to protect the entitlements and retain the worst features of our current tax system. As an example, the total of all of the non-personnel investments in the federal budget is now $310 billion, or 8 percent of the total federal budget and slightly less than 2 percent of GDP, and it will fall to $270 billion, or 5 percent of the total budget and about 1.5 percent of GDP, over the next 10 years. This is a plan to build a low-growth, unsustainable economy with growing inequality.

Not to belabor a point I've probably made too frequently, but the door is wide open for what one might call a new progressivism or a new conservative movement. The old right can then focus on its Brigadoon-like vision of a time when the market roamed free and unfettered. The old left can focus on income distribution. And the real work of building a workable society based on sustainable and equitable growth can be carried out by whoever decides to reach first for the prize.

Roosevelt Institute Senior Fellow Bo Cutter is formerly a managing partner of Warburg Pincus, a major global private equity firm. Recently, he served as the leader of President Obama’s Office of Management and Budget (OMB) transition team. He has also served in senior roles in the White Houses of two Democratic Presidents.

 

School classroom image via Shutterstock.com.

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Should We Stop Referring to Student Loans as "Financial Aid"?

Sep 14, 2012Mike Konczal

Students who take out loans aren't receiving special favors. They're making financial transactions like any other.

Do we make both a conceptual and analytical mistake when we refer to student loans as a form of "financial aid"? Should that term be something to be resisted? Demos' Tamara Draut brought up this point in a conversation recently, and I think it needs to be explored further, because it frames how we speak about student loans.

Students who take out loans aren't receiving special favors. They're making financial transactions like any other.

Do we make both a conceptual and analytical mistake when we refer to student loans as a form of "financial aid"? Should that term be something to be resisted? Demos' Tamara Draut brought up this point in a conversation recently, and I think it needs to be explored further, because it frames how we speak about student loans.

The government records and documents student loans as a form of aid. Here's a list of the "amount of financial aid awarded to full-time, full-year undergraduates, by type and source of aid," and loans are listed right next to grants. When pundits say that "student aid" has exploded over the past decade, and argue that aid is driving increases in tuition, it disguises that the aid that has exploded is a signficant amount of debt for young people.

I've taken out loans and received gifts. When I've signed up for, say, a car loan, I never went "oh you shouldn't have" afterwards, like when I've received a really nice birthday gift. I understood that the creditor wanted to lend me a certain amount of money at a certain rate, and I wanted to borrow it. Full stop. Unless the interest rate charged is purposely manipulated for some reason [1], there's no reason to think of this as aid at all.

Student loans are an economic transaction, the same as if the government contracted out to build a bridge, or hired a person to serve in the military or police force or be a teacher. The money spent here isn't "aid." Hiring someone to build a bridge exchanges labor for cash. Student loans exchange cash now for cash later plus interest. Those student loans would be underprovided without the government, certainly, but in the same way that bridges and law enforcement and other goods would also be underprovided if they weren't done by government.

I think this clarifies some of the issues and responses I'm seeing in the discussion about whether or not higher education is driven by increases in so-called "aid." Megan McArdle wrote in Newsweek, "In a normal market, prices would be constrained by the disposable income available to pay them. But we’ve bypassed those constraints by making subsidized student loans widely available." Let's leave aside the issue that the vision of education constrained by disposable income is Mitt Romney's vision that students should get "‘as much education as they can afford." There's a bigger issue.

I'm not sure what "normal market" means here, but many kinds of markets, perhaps even all of them, aren't constrainted by disposable income. Major, long-term debt fuels all kinds of important purchases, from houses to cars to health care to big-ticket durable goods. Events like retirement or having kids are dictated by longer-term savings decisions. Much of your monthly spending, like your rent or your cell phone, is in a contract that stipulates some future payments must be made regardless of your disposable income. There's a reason economists talk about spending as influenced by lifetime incomes.

Student loans are a way of mitigating a credit constraint, which is different than providing aid. Here it reflects not subsidized demand, but actual demand smoothed over a long time period. That's going to put a lot of demand into play. It shouldn't surprise us that demand is very high when credit constraints are removed. Higher education is one of the most important mechanisms of social and economic mobility we have, and it is also one of the primary ways we have for people to fully develop their talents and capabilities.

If actual demand overwhelms the supply of the system, that's a problem of supply, not demand. And the obvious solution is to increase the supply. Throughout our country's history we've done that in landmark bills that do it through public provisoning paid for by taxation, bills like the Morrill Act and California Master Plan. Now, as that system is left to crumble, we are looking to the private, for-profit sector to fill that gap. I fear that will only exacerbate the cost problems we've seen so far, and the data is looking that way too

But if not as a form of financial "aid," how should we refer to student loans?

[1] There's a narrow, though important, question about whether or not student loans are a "subsidy" because their interest rates are too low or too high. The Department of Education found that (R-10) for ”Direct Loans, the overall weighted average subsidy rate was estimated to be -13.91 percent in FY 2011; that is, the overall program on average was projected to earn about 13.91 percent on each dollar of loans made, thereby providing savings to the Federal Government.” What's a good word for the opposite of a subsidy? Whatever it is, student loans are that. Others argue that there needs to be a higher discount rate used to calculate this, and then you would see a subsidy. Let's assume for this post that the interest rate is seen to be fair by all parties.

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Young woman paying bills image via Shutterstock.com.

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Two Issues with Megan McArdle's Piece on Higher Education

Sep 13, 2012Mike Konczal

Megan McArdle has a new cover story at Newsweek, "Is College a Lousy Investment?"  Is the benefit worth it with rising costs? Several people have addressed the benefit part, particularly Dylan Matthew here and Reihan Salam here.

Megan McArdle has a new cover story at Newsweek, "Is College a Lousy Investment?"  Is the benefit worth it with rising costs? Several people have addressed the benefit part, particularly Dylan Matthew here and Reihan Salam here.

I have a piece about higher education that I'm really excited about coming out in the next few weeks with Aaron Bady for Dissent, so I don't want to spoil it. But for now, I think there are two important things to engage with in McArdle's piece. The costs part is important, because this will likely be the center-right argument going forward, and I think it has problems in an important way. McArdle:

Vedder adds, “I look at the data, and I see college costs rising faster than inflation up to the mid-1980s by 1 percent a year. Now I see them rising 3 to 4 percent a year over inflation. What has happened? The federal government has started dropping money out of airplanes.” Aid has increased, subsidized loans have become available, and “the universities have gotten the money.” Economist Bryan Caplan, who is writing a book about education, agrees: “It’s a giant waste of resources that will continue as long as the subsidies continue.” [...]

In a normal market, prices would be constrained by the disposable income available to pay them. But we’ve bypassed those constraints by making subsidized student loans widely available. No, not only making them available: telling college students that those loans are “good debt” that will enable them to make much more money later.

This is based on something called the Bennett Hypothesis. In the 1980s Education Secretary William Bennett argued that increases in student aid largely just allowed colleges to raise their tuition, capturing all that money. If true, this would be the lowest hanging policy fruit imaginable: save money by not providing aid and lower tuition in the process.

Sadly, there's no evidence for this argument. And I mean "no evidence" not like "there's significant debate" or "reasonable people disagree," but like this has been extensively studied and the general consensus is that it is not true. I spent some time going through this research and couldn't find anything conclusive, and requests from others writing on this haven't been helpful. This could likely be true as it relates to for-profit schools -- there's a study somewhere that indicates this -- which shouldn't suprise us, as for-profits exist to suck up federal subsidies by business design. But it doesn't appear to be true for the vast majority of higher education, and to whatever extent it could be true it isn't a major driver.

 Here's a big post by David L. Warren, president of the National Association of Independent Colleges and Universities, listing all the institutions that have investigated this. Among other studies and experts quoted, here's:

“Regarding the relation between financial aid and tuition, the regression models found no associations between most of the aid packaging variables (federal grants, state grants, and loans) and changes in tuition in either the public or private not-for-profit sectors.”
 
– U.S. Department of Education National Center for Education Statistics, Dec. 2001, Study of College Costs and Prices 1988-89 to 1997-98, Vol. 1
 
“The Commission finds no evidence to suggest any relationship between the availability of Federal grants and the costs or prices in these institutions,” and “has found no conclusive evidence that loans have contributed to rising costs and prices.”
 
– National Comission on the Cost of Higher Education, February 1998, Straight Talk about College Costs & Prices
 
“After the change to the Stafford loan limits beginning in AY 2007-08, the price [of college] … increased at a rate generally consistent with prior years. [...] Overall, [previously conducted] analyses are descriptive and do not necessarily indicate a linkage between increases in the loan limits and changes in tuition or borrowing.”
 
– Government Accountability Office, May 2011, Federal Student Loans: Patterns in Tuition, Enrollment, and Federal Stafford Loan Borrowing Up to the 2007-08 Loan Limit Increase
This is important, because McArdle's argument allows her to make it seem like government action to provide for higher education is largely counterproductive. Rather than examining the decreasing support for higher education, the difficulty of finding "Baumol’s cost disease" in higher education, the growth of a "hybrid" design for our public education sector, the decrease in Pell grants relative to total college costs, the way that the for-profit industry is taking over for public institutions, or the issue of risk-shifting to the individuals and providing services out of fees instead of taxes - rather than it being a choice on how we provide the essential social good of higher education, and who benefits and who loses from those choices - McArdle can imply that if the government tried to make education more affordable it would backfire and just make the problem worse.
 
This becomes even more of a problem with the second issue, the likely transmission mechanism. Just because aid goes up doesn't mean that prices must go up - the increases in food stamps haven't caused an equivalent increase in food prices. In a follow-up post to her article, she alludes to the microeconomic issue at play: "Vedder’s theory is that, as he put it, universities are raising tuition 'because they can'."
 
In economics-speak, that means that the supply of higher education is inelastic relative to price. If that's the case, then the right course of action is for the government to provide more supply at a cheaper price; i.e., free higher education. JW Mason has argued that if supply is inelastic, "each dollar spent on grants to students reduces final tuition costs less than one for one, each dollar spent on subsidies to public institutions reduces tuition costs by more." Think of it as "the public option for higher education" argument, with the same motivations. This is not a new argument. in 1899, the president of Stanford argued that “if the State makes no provision for higher education there is no other agency on which we can depend to supply it.” That seems as relevant now, over 100 years later, as it did back then.
 

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