School Choice Works, Privatization Won't

by Jack Markell

forwarded by Edd Doerr from   Education Week

With the next presidential campaign getting under way, pundits have quickly focused more on the horse race than on where the candidates stand on important issues like improving public education.

One area that deserves far more attention is the array of proposals to divert public spending on education into private school vouchers or "education savings accounts" that can be used for private and parochial schools, home schooling, and other programs that aren't part of the public education system.

These policies, already enacted in several states and proposed in several more, are a reminder that privatization is not a ready-made solution for every government problem.

Here's why these programs don't produce results for our students.

Everyone agrees that solid academics are the foundation for career and college readiness. Yet, according to a review by the Center on Education Policy, numerous studies have concluded that vouchers, the prime example of privatization, "don't have a strong effect on students' academic achievement." If voucher programs are motivated by a desire to improve educational outcomes for our young people, and not simply to divert public spending to private education, then their unsettled and uneven history does not support continuing them.

—Nip Rogers for Education Week

Compounding this problem is that the private and parochial schools that receive tax dollars are, in many cases, not accountable for providing a quality education to young people, particularly those most at risk of falling behind.

In the public school system, states are required to establish baseline expectations of accountability through standards and testing. Although hardly beloved, standardized-test scores are the most effective method we have to identify which students need our help, which is why civil rights groups like the American Civil Liberties Union and the United Negro College Fund have been among the most vocal advocates for statewide assessments. They know it is most often poor, minority students—those who most need our help—who most often don't receive the education they need. When we don't provide a valid way to measure students' achievement and hold educators and schools accountable for their academic growth, those students are too easily forgotten.

Children in home, parochial, and private schools aren't required to take state assessments. State officials can't track these students' growth to make sure they don't fall behind. Private school teachers and home-schooling parents aren't required to teach to the state's educational standards; and they don't have to be rigorously licensed or certified like public school educators.

Voucher systems also divert millions of taxpayer dollars out of our public schools. While we should respect and encourage parental engagement and choice of schools—including private, parochial, and home schools—for their children, it is not acceptable to divert limited public education funding at the cost of the public schools that serve our communities.

Public funding for these voucher programs also presents significant policy issues because so many schools affected include a religious component in their curriculum. In general, the government should not be in the business of funding programs or institutions that promote one religion over all others.

But being against vouchers for these reasons isn't enough. Political leaders have a responsibility to articulate a clear vision for what an improved public school system looks like.

That means using parent choice among traditional, charter, and magnet schools to foster innovative instruction, and hold public schools accountable for giving students the best opportunities possible.

It means demanding more rigorous college and career standards like the common core.

It means providing better support for our teachers, including training them to use data about student achievement effectively, and evaluating them appropriately.

It means more dual-enrollment and Advanced Placement courses to challenge students and reduce the cost of college.

It means investing in high-quality early-childhood programs so all kids enter kindergarten ready to learn.

And it means recognizing that too many of our students arrive at school hungry and from traumatic family situations. Serving these children effectively requires different types of training and community resources.

I agree with former Florida Gov. Jeb Bush that policymakers should be "more daring" when it comes to education policy. But that must mean pushing the public school system to improve, not following the suggestions of a number of candidates for president and state lawmakers who would use taxpayer money on unaccountable programs that ultimately cut funding from public schools.

Jack Markell, a Democrat, is in his second term as the governor of Delaware. He is a former chair of the National Governors Association and was a co-chair of the initiative that established the Common Core State Standards.

Kicking the Crisis Can Down the Road

by Gary Berg-Cross

We've all been awash in the recent media coverage of largely ideological arguments over the size of government and its spending , the threat if unfunded “entitlements” and the possible fall out from not increasing the debt ceiling. According to economist Joe Stiglitz much of the discussion has been aimed at the wrong issues:
“Our economic situation is the result of 30 years of unbridled right wing free market ideology. “Unaffordable tax cuts and wars, a major recession, and soaring health-care costs – fueled in part by the commitment of George W Bush’s administration to giving drug companies free rein in setting prices, even with government money at stake – quickly transformed a huge surplus into record peacetime deficits.”

Stiglitz adds, “Regrettably, the financial markets and right-wing economists have gotten the problem exactly backwards: they believe that austerity produces confidence, and that confidence will produce growth. But austerity undermines growth, worsening the government’s fiscal position, or at least yielding less improvement than austerity’s advocates promise. On both counts, confidence is undermined, and a downward spiral is set in motion.”

In a way we seem to have avoided an immediate disaster, unless you count the disastrous impacts to our political system, good government or things like lowering unemployment and an anemic economic recovery. With the economy shrinking we have perhaps kicked the disaster can down an ugly and dangerous road for a few months. Looking down that road economist Michael Hudson put it:

"since the government can’t supply the credit, that means that the economy is going to have to rely on commercial banks. And they’re going to charge interest. And it means that all of the growth that does occur in the economy is basically going to be paid to Wall Street, not to the people who produce the wealth, not to industry or its employees. The economy is going to shrink. Industrial corporations will shrink. Real estate will shrink. And the government isn’t doing anything to prevent this shrinkage into a deeper and deeper recession."

The declared victory is avoiding default, a downgrade from the ratings agencies and resulting higher interests rates that would be paid to borrowers. But this got me thinking about the power of rating agencies and their investment allies. You remember these rating guys - S&P and Moody's. During the run up to the debt ceiling these were the organizations threatened to cut the US's sweet AAA credit rating for sovereign debt for the first time in its history. This is a real threat since countries have to pay a higher rate if they are risky. As a recent WAPO story said:

"Investors drove borrowing costs for Italy & Spain to 14-year highs, fueling sharp stock market drops in London, Frankfurt, Paris, Milan and Madrid. Though Italian and Spanish bonds later rebounded, borrowing rates for both nations remained dangerously high, at more than 6 percent — and closing in on the 7 percent threshold that eventually triggered bailout talks with Greece, Ireland and Portugal."

Rating agencies had a lot to do with framing the debt ceiling debate as a crisis with unsustainable $14.3 trillion U.S. debt. They even provided their view of a credible medium-term plan to reduce the debt. It had to be at least by $4 trillion or they still might consider a downgrade leading to higher interest rates.

To some this seemed sound advice and people follow the bond market's prophecies closely:

"The bond market is, as they say, the smartest market in the world; so they must know what they’re doing when they send yields on the ten year Treasury down to 2.6% and the thirty year bond down below 4%." Don't Get Caught in the Treasury Bond Trap


But to me this is all conditioned by the memory that these forms are the same ones that liberally giving out top ratings to ultimately worthless structured mortgage products in 2005-2007. These are the fiscally irresponsible guys who facilitated the housing and credit bubble inflation. They did not provide sound advice and seemed to put their own interests along with their allies ahead of the ultimate customers and the nation. One reason the debt is soaring now is that incompetent economics involving unsecured loans and irresponsible credit allowed an $8 trillion housing bubble to grow out of control so that when it crashed it melted the larger economy. This drove down our tax base so that governments have to borrow money to meet their budgeted needs.

Following the housing bubble collapse with its resulting financial meltdown, there was widespread agreement on the need for reform both banks and rating agencies. One idea was that the banks, aka securitzers, should be forced to keep some investment “skin in the game,” meaning a stake in the mortgages they issued. If they collapse then the bank loses money directly. The Dodd-Frank included bill required to this effect, but only got a minor piece of skin. Many wanted to require a 10 or even 20 percent stake in mortgages, but the final bill had just 5 percent. Furthermore, the regulators exempted traditional 20-percent-down mortgages that have low risk of the fault. So now banks need keep no skin in the game on those.

Rating companies were the other target. They had to defend themselves in the face of all of this and said, "Well, yes, we gave AAA ratings on junk mortgages, but they’re legally only opinions."

The Dodd-Frank bill was the Feds attempt to correct this saying that rating agencies are liable for their opinions. Seems reasonable and responsible, but the rating agencies and their investment bank allies who have real political clout didn't want any skin in that game either. The responded in effect that they expected a free lunch just like always:

"We want to make money by selling our opinions. We need to. It's what we do and people need an idea about what options might make them money on a reliable basis. But we don’t want to have to take any responsibility for those opinions. That''s too hard. It might get in the way of us making money. Don't ask us to do that. It sounds too much like Social Justice. We live by the phrase, 'let the buyer beware.'
And one more thing. We'll show you what we can do if you upset us. We might have to downgrade the U.S. government rating. Our banker and investment friends will make a good profit from this. Good for then, but you wouldn't want to play the rate that Greece has, would you? "


So now a few organizations sit in judgment of the viability of national finances. If you go into debt an entire nation might be up for sale at fire sale prices. You can read about just such things starting now in Greece, but likely in other parts of the Euro-zone. It looks like one western history's great fire-sales is starting, as Greek officials began appointing advisers for the country's ambitious privatization drive. Last week Europe's banker, Germany, signaled it was interested in snapping up assets in the energy and tourism sectors. The Chinese are already buying up ports and Greece is thinking of selling some islands. Greek finance minister, Evangelos Venizelos announced:

"Our target is clear, and it is to generate €1.7bn from privatizations by the end of September and €5bn by the end of the year,"

By one report Austria is thinking of selling mountains to pay off their national debt and on this side of the Atlantic cities are thinking of privatizing their parking meters. All part of a process that turns historically public assets over to the control of private actors, whose bottom line is less investment than extracting maximum profit in the short run.

This all does reminded me a bit of the warning that Naomi Klein provide in Shock Doctrine: The Rise of Disaster Capitalism. Klein argued that crises are intentionally created to push the free market agenda or fight government actions. You see this whenever a natural, economic, war-related, or other disaster such as a financial meltdown happens. Narrow profit driven folks seize this as an opportunity to quickly impose a brand of economic policy benefits an oligarchic elite at the cost to most everyone else. This may result in increased unemployment, pushing the cost of essential goods up rapidly, and otherwise increasing poverty. All this may happen while the masses of people are still in shock and unable to react within a slow moving Democratic system. In the midst of such crises free marketers are able to destroy social protection, such as union rights, and to install a virulent, mutant version of free market capitalism. An example of profits from financial crisis such is being seen in the Greek fire sale. It could happen it, and is happening across Europe. See America Is Being Raped ... Just Like Greece and Other Countries.

It is perhaps why we are seeing such calmness among some as we slowing move along kicking a mix of crisis and future disasters down the road.