Simplistic Thinking from Educated People: Arne Duncan

Every time a representative of the government goes on the television or radio to talk about higher education, my blood boils a little at my recognition of the simple-mindedness that governs policy in that area. On last night’s Daily Show, Jon Stewart’s guest was Secretary of Education Arne Duncan. At the very end of the portion of the interview that went to air (the entire thing is available in three parts on the web), Duncan made the most indefensibly black-and-white assessment of the outcomes of education that I have yet encountered.

First, though, he pointed out that the United States is now ranked 16^th in number of college graduates, whereas a generation ago it was in first place. He further explained that our rate of graduation hasn’t fallen, but has leveled off, allowing fifteen other countries to surpass us. Now, after a good deal of research, I’ve found that different reports come to different conclusions on the exact ranking, and they base those rankings on different criteria applied to different countries, so I can’t pin down exactly which countries beat out the US on this subject, or even whether Duncan is quite correct with his statistics. But it’s certainly the case that we’re far from the top, and some countries can be pretty conclusively identified as exceeding us in provision of tertiary education.

Duncan’s point is apparently that our achievement of benchmark standards for secondary education is insufficient to prepare students for college and university. I’ll eagerly agree that that’s true, but it is unhelpfully presumptuous to assume that that’s the only important factor contributing to low levels of higher education attainment. What of the steadily climbing costs of college tuition and the dearth of public funds to compensate for the out-of-pocket expense for students and parents? Might that not hold back some perfectly capable students from actually obtaining the education that they’re intellectually, but not financially, suited for?

Among countries in the Organization for Economic and Cooperative Development, the United States is 29^th out of 34 in terms of how much funding for educational institutions comes from public funds. Not only is this situation accepted by US society, it is lauded by some elements thereof. Private institutional dominance of tertiary education, and indeed of all segments of society, increases competition and improves outcomes, they say. But with the US ranking somewhere around 16^th in educational attainment, it’s clearly not working that way. In fact, among the nations that are fairly reliably ranked well ahead of the US on this point, many are classed as those nations that conservative Americans tend to envision as socialist hellscapes.

Several Northern European countries are variously placed in lead positions on the list, including Iceland, Finland, Denmark, Norway, and the Netherlands. What’s more, an Economic Policy Institute study of the affordability and accessibility of higher education in various countries concludes that “Finland and the Netherlands should be models for the international community” when it comes to both of these factors.

The correlation between cost and completion rates is not overwhelming, but it is sufficient that it needs to be explored as a factor, rather than being discounted among the ongoing repetition of the claim that if kids are smarter, they’ll always do better. There are other factors, and to deny that is to accept such unforgivably single-minded approaches to solving our problems as will only worsen some aspects of the situation. It’s not just that we’re failing at educating our children, though certainly we are doing that. It’s also that we’re failing to provide our children with suitable opportunities, access, and incentives.

Duncan seems to be under the mistaken impression that the problem underlying our trend of slipping behind the rest of the post-industrial world is just that students are failing at an alarming rate. But it’s not just dropouts that account for the low completion rate; the US ranks behind most of the OECD countries in terms of actual enrollment in higher education. And that fact is specifically ascribed in part to rising costs. That should be fairly obvious, especially to a Harvard-trained economist like Arne Duncan. As opportunity costs rise, the rational motivation for people to invest in something goes down.

The response to this would probably – nay, certainly – be that the opportunity costs of not attending college are unquantifiably higher than the material costs of attending. To that I would offer the simple challenge: prove it. The claim is repeated in the media constantly, always asserted, always assumed, but never adequately proven. And it would be one thing if the assertion was just that, on average, people with higher education backgrounds tend to do better than those without them. But that’s not what representatives of the administration say. Instead, they spread the hideously uncritical idea that if you get a college degree you are guaranteed success, and if you don’t get one you are guaranteed failure.

Do you think I’m mischaracterizing their claims? Arne Duncan said it on the Daily Show: “We have a million young people dropping out of school every year. A million. There are no jobs. None. They are guaranteed poverty and social failure.”

Guaranteed, he says. That there are any guarantees in life is an odious and socially detrimental lie. Virtually nobody would argue that people aren’t better off overall if they’re educated. For my part, I think that education is the most important thing that a person can pursue in life, though I am careful to emphasize that there are different ways of pursuing education, some far less expensive than others, and that education can serve a variety of ends, from vocational training to living a richer, fuller life of poverty. But the universal economic benefit of higher education is a baseless assertion so long as there are other explanations for a portion of the correlation between education and earnings, and other alternatives as to how hiring and job training might take place.

Now, Arne Duncan wasn’t very specific when he said “a million students dropping out.” If he was referring to students who drop out of high school, sure, they have their work seriously cut out for them if they want to be materially or socially successful. However, I’d still consider it irresponsibly closed-minded to say that both poverty and social failure are absolute guarantees for every child who has dropped out of high school in recent years.

Even working at a fast food restaurant can eventually allow a person to make a living wage, as long as he or she doesn’t rush to have children or otherwise climb into a hole that can’t be escaped through years of earnest work and eagerly sought promotions. What’s more, I’ve known people who’ve dropped out of high school and then obtained GEDs earlier than when they would have theoretically graduated. Hell, my ex-girlfriend never finished high school, and she leapt easily from job to job, quitting without notice and being hired for positions with higher pay, more responsibilities, and better titles, all at a time when I, with my fancy NYU degree, couldn’t so much as secure an interview for anything more than an eight dollar per hour retail job. Some people are just lucky; some just aren’t.

Regardless, I don’t think Duncan was referring to high school dropouts. The only statistics that I could find on short notice were from the 2004-05 school year, at which time 540,382 students dropped out of school between grades nine and twelve. Unless that number has doubled in seven years, I think Duncan was referring to any student who has dropped out at any level, primary, secondary, or tertiary. If so, some of the Americans who have been guaranteed poverty and social failure according to Arne Duncan include billionaires Bill Gates, Paul Allen, Steve Jobs, Ralph Lauren, Dean Kamen, and Mark Zuckerberg, as well as a pretty extensive list of other highly successful individuals in a variety of fields.

This repetition of a shockingly simplistic set of talking points about higher education has got to stop. Is learning good? Chirst, yes! That part is perfectly simple. But it’s not a purely economic good, and to whatever extent it does improve your income potential, that’s not the only factor. There is something to be said for the influence of social connections, environment, work ethic, opportunity, investment capital, employer bias, and plain old luck. Amidst all of that, what I want to see happen is that kids start going to school not because they want to make money, but because they want to learn. Is it really too much to ask that we encourage education on those grounds, rather than trying to deceive every young person into pursuing something that he’s not interested in and at which he’s no good?

Only Taxing the Rich is Bad, Says O'Driscoll

The Yahoo! Finance web series the Daily Ticker today consisted of an interview with Gerald O’Driscoll, former Vice President and economic advisor at the Dallas Federal Reserve, and a senior fellow at Cato Institute. He was asked whether there was anything that either the Fed or Washington could do to spur job creation, and naturally O’Driscoll quickly turned to criticizing President Obama’s tax policies, describing the raising of marginal tax rates on millionaires and billionaires as economically destructive.

The interviewer reminded O’Driscoll of the counter-arguments that would come from the presidential administration and its supporters, then asked: “Do you make a distinction between taxes whether they’re aimed at individuals or corporations, or is it – bottom line – raising taxes on anybody is bad for the economy?”

I think that question presented O’Driscoll with a pretty clear choice: is the problem simply taxation in general within a weak economy, or is it taxation of businesses? Yet O’Driscoll appears to have avoided that simple choice and opted to advance an entirely different perspective.

He began, “Well I would say that raising taxes on the…” and then paused at length, searching for the right synonym for “wealthiest Americans.” I found that pause very telling. He knew about whom he was talking, but he needed to phrase it in a way that served his ends. Using the phrase “the rich” is perfectly clear to every viewer, but using the phrase “the source of savings and investment” obfuscates what we’re talking about and makes it harder to attach an image to the subject, but easier to affix it to a concept. So that was the phrase that O’Driscoll settled on, saying that raising taxes on the source of savings and investment is bad for the economy.

Now, did you notice how that avoids the simple one-or-the-other choice that he was given with the question? For simplicity, let’s drop the more pleasant synonym and just acknowledge that he’s talking about the rich. So when he’s asked whether it’s bad, in a weak economy, to raise taxes full-stop, O’Driscoll’s answer is really no, it’s bad to raise taxes on the rich in particular. Theoretically, his point of view leaves open the possibility of raising taxes on the poorest American’s without expectation of consequence. Of course, this is something that several Republicans have actually advocated, but it’s quite amazing to see that such callous initiatives have a theoretical underpinning.

O’Driscoll continues by rebuking the president for ostensibly failing to understand that most business are not C Corporations and thus are not taxed separately from their owners, “So when you raise taxes on individuals, you’re raising taxes on the business, and hence… you’re inhibiting job creation.”

I almost admire how the language of this quotation allows O’Driscoll to exclusively designate millionaire business owners as “individuals.” Raising taxes on lower or middle class workers doesn’t raise taxes on business. Even raising taxes on millionaires who primarily earn their income from things like investments in businesses they don’t own is not equivalent to raising taxes on businesses. Do neither of these groups count towards the discussion? That seems suspiciously convenient for O’Driscoll’s argument.

Essentially, that argument seems to be that it’s destructive to raise taxes on extremely wealthy individuals, because they might use some of their own wealth to invest in the businesses they own or from which they profit. Meanwhile, by this line of thinking, there is no particular problem with raising taxes on people who will definitely use a portion of their slight income to purchase things like food, clothing, and gas.

I admit that my understanding of economics is rather rudimentary, but it seems to me that a sure-fire way to create jobs is by raising demands for goods and services, thus increasing the size of the workforce required to supply that demand. Unless I’m wrong about that, it’s pretty asinine to suggest that allowing the wealthy to hoard their money while thinking nothing of depriving the poor of theirs is the best way to stimulate the economy. Sure, business owners need personal wealth to invest in their industries. But why on Earth would they do so if demand for what they’re offering remains flat.

By contrast, if a wealthy American is legitimately interested in earning the highest margins from his business, he would be a fool not to make investments to match growing demand, unless of course his wealth has been taxed out of existence. But I hardly think anybody’s proposing that, and I certainly don’t think that paying a thirty-five percent marginal rate would cripple a billionaire’s investment capabilities.

Learn to Be Better at the Job You Don't Have

I will be posting a much more in-depth commentary on a related topic later on, but I've just heard about some news related to labor policy, which I'd like to address first. President Obama announced today that a new initiative in "winning the future" will be to invest in providing college students with training for manufacturing jobs. That spurs me to ask one question as loudly and vociferously as possible: Why college students?

If we believe that manufacturing jobs will help to turn the recession around, what benefit is to be gained from drawing candidates for those new jobs from among a pool of college-educated workers? Doesn't that background specifically make them differently qualified? Having formal education in the fields of physics or mechanical engineering might help you to better understand the processes and machinery involved in making industrial or consumer goods, but I don't see how it helps you to actually do a better job of working on the line, assembling those products, and running that machinery. Neither do I see how saddling future manufacturing laborers with student loan debt will help to ease their financial burden once those jobs come to contribute to an economic recovery.

Frankly, even if the government's investment was channeled into trade schools rather than community colleges, how does that actually help? This constant, unquestioned emphasis on both job training and college education relies on what is to me an obviously false premise: that the problems facing nine to twenty percent of American workers today is not a lack of available jobs, but a lack of qualifications among the labor force. The government seems to believe, against evidence and common sense, that increasing training and education will cause jobs befitting those qualifications to appear out of the ether.

Why does labor policy consistently place the burden of future recovery on the worker rather than the industry, those who are struggling rather than those who merely have reduced profit margins, the individual rather than the economy as a whole?

The Department of Labor recently reported that manufacturing jobs were cut in May. In light of that, on what is the government basing the assertion that increased manufacturing will spur the economy in coming months and years? What are they doing to make that happen, other than telling people "Get ready - we promise this is what you're going to be doing after you graduate"?

Manufacturing jobs, if I'm not mistaken, tend to be blue collar labor. And like much blue collar labor, and indeed like many jobs in sales and office work and other traditionally white collar positions, the ability to do the job effectively relies largely on on-the-job training. No degree program can teach you the exact skill set you'll need for a specific job, and unless in-depth background knowledge is essential for a particular career path, acquiring a degree is often just a waste of time and money.

But again, Obama and the government as a whole seem to think the reason there are so few manufacturing jobs is not that the industries are failing in the U.S. or outsourcing their labor to cheap foreign workers, but because employers are sitting in their offices, pouting that nobody in America has the training to do the jobs that they'd so desperately like to fill. But what I think is that if those jobs existed in greater numbers, and if there were incentives for employers to keep them in the United States, manufacturers would hire whomever demonstrated the overall competence and trainability to be able to perform the needed tasks.

As a matter of fact, that seems obvious to me. But I don't see labor policy ever developing to reflect that. I think we'll go on delaying people's entry into the labor market by pushing them through higher levels of education while waiting either for the economy to turn around on its own or for a greater collapse to drive us to a breaking point.