by Dr. Mark H. Shapiro
"Curst greed of gold, what crimes thy tyrant power has caused."... ...Virgil.
Commentary of the Day - November 29, 2008: The Bigger Bailout. Guest commentary by Poor Elijah (Peter Berger).I am not a political operative. When it comes to Presidential elections, I've almost always either voted for the losing candidate or wound up wishing that the candidate I'd voted for had lost.
I'm also not an economist, although degrees in economics and finance don't seem to have helped the masters of the universe in charge of our economy. Every year I teach my eighth graders about the Great Depression. We talk about how Americans in the 1920s spent more money than they had. We talk about the enormous debt they ran up, and how that debt finally caught up with the nation's overheated economy and sank it. Every year some fourteen-year-old raises his hand and observes, "Isn't that like what people do with credit cards today?"
How can something that occurs to a kid in eighth grade slip past the Federal Reserve and the former CEO of Goldman Sachs? In fairness, there was more to the Great Depression than excessive personal spending. Back then people were buying overvalued stocks and other securities with money that didn't really exist.
It would be comical if it weren't so appalling.
If the worst happens, it won't be just another Great Depression. It'll be the Even Greater Depression. After all, we're the baby boomers. Everything that happens to us is more special than anything that's ever happened to anybody else. On the other hand, things can't be too dire. The bailout includes billions in tax breaks and earmark pork for indisputably crucial sectors of the economy, from wooden arrows and race car tracks to moviemakers and bicycle commuters.
That'll teach those lobbyists. We're in a national crisis. The days of caving in to special interests are over.
Our candidates for President condemned these outrages in advance. Senator Obama [now President-Elect Obama] declared that "greed and irresponsibility" should have no place in devising a bailout. Senator McCain concurred that it would be "unacceptable for earmarks to be included in this bill." That was before they both voted for it.
I don't like picking up the tab for somebody else's greed or bad judgment. On the other hand, I don’t want to further weaken my country just because I'm angry about somebody else's greed or bad judgment. Either way, it probably isn't smart to vote on a four hundred page, trillion dollar measure when nobody besides its authors has actually read it. Swarms of smart investors made fortunes because they anticipated the market's collapse. If they and my middle school students could see this coming, why the sudden urgency?
Don't misunderstand. I have no idea what Congress should do. My problem is I don't think they know either. The problem goes beyond corruption and the malignant sway of self-interest. I've never harbored such grave and unremitting doubt about my government's simple competence to govern.
In an election that turned on war and looming economic disaster, it's absurd to expect that people cast their votes based on the candidates' positions on education. I know I didn't. But the sickness in our schools, like the sickness on Wall Street, is symptomatic of a national disease.
President-Elect Obama promised to "focus federal funding on the most effective programs" and to "support high-quality schools," as opposed presumably to all the candidates in previous elections who've promised to support ineffective programs and lousy schools. He proposes to "Make College a Reality" by further expanding enrollment in advanced placement programs, despite substantial evidence that the past decade of AP expansion to accommodate more students who aren't advanced has watered down material and diminished expectations to the detriment of college-bound students. He favors "clear and high expectations for student behavior," "school-family contracts," and "positive student behavior" teacher training workshops, all of which schools are already drowning in. His technology ambitions range from "interactive games" to "regular reports to parents."
The secret to improving student achievement isn't an education arcade for kids who can't read or a "meaningful" electronic report card. A flashy new twenty-first century stock ticker wouldn't make the stock market go up.
Senator McCain was similarly fond of platitudes. Like every other politician with a pulse, he favored "high standards and accountability," "quality teachers," and schools that "inspire every child to strive to reach his or her potential." He, too, endorsed funding for more "professional teacher development," the bandwagon workshops and canned programs commonly presented by experts who wouldn't know a real classroom if they tripped into one. While President-Elect Obama's proposals included charters and school choice, Senator McCain touted parental “empowerment” and choice competition as the key to improving public schools, as if most schools were deliberately trying not to improve. As for technology, he prescribed virtual schools, online courses and tutors, and "digital passport scholarships."
Most students' low achievement isn't because their school doesn't offer advanced calculus or French 5. It's because too many students can't read or do basic arithmetic. You don't need an exotic online curriculum for either.
Deceptions and bailouts don't just happen on Wall Street. Districts across the nation, including the entire state of California, have increasingly mandated that all students take algebra in eighth grade, despite substantial evidence, including the conclusions of a recent Brookings Institution report, that many eighth graders aren't ready for algebra. Jurisdictions from Dallas to Pittsburgh now prohibit giving any student work a grade lower than fifty, even if the student handed nothing in. In the nation's capital middle school kids who show up, do their homework, and get decent grades now receive a hundred dollars monthly salary for attending public school.
Artificially declaring all kids algebra students isn't any different from contriving to turn all adults into homeowners or their shaky mortgages into sound investments. You can't get something for nothing, or from nothing. Legislating inflated grades doesn't make anybody smarter. Paying kids to receive the already free benefit of a public education substitutes the motivation of a little ready cash for self-discipline and the internalized desire for self-improvement and self-government that a free people require to prosper and survive.
The cash will run out. It's already running out.
We can't afford new school proposals that aren't new and aren't the answer, anymore than we can afford obsessing about whether Sarah Palin deliberately drops her "g's" or whether Joe Biden is longwinded, or which airplane she tried to sell or which Amtrak he rides. If how many cars and houses he owns disqualified John McCain from caring about average Americans, then Democrats need to purge Franklin Roosevelt and John Kennedy from their party. If limited national experience is an automatic bar to the White House, Republicans need to bear in mind that Mr. Lincoln’s experience consisted of eight years in the Illinois legislature and one term in Congress.
Our first federal officers were Washington, Adams, and Jefferson. If a nation's progress can be gauged by the quality of its leaders, it isn't only our schools that have declined. I don't idealize our founders, but before we can repair our schools, our economy, or our government, we need to restore in our American character their respect for reason and intellect, their pursuit of virtue, and their sense of duty.
© 2008, Peter Berger.
Peter Berger who writes Poor Elijah's Almanack would be pleased to respond to comments sent to him in care of the editor.
The Irascible Professor comments: Poor Elijah correctly notes that the election of 2008 did not turn on issues of education. However, it appears that the electorate rejected much of the anti-elitist rhetoric that was aimed at encouraging voters to distrust candidates who were graduates of respectable institutions of higher education, and who who were able to speak in complete sentences, and who might even be able to put together a coherent paragraph. That is to their credit. At the same time, the economic crisis of 2008, in part, speaks to the weakness of our education system when it comes to educating the populace about economic issues -- both at the personal level and at the policy level. Very few students graduate from high school with even a basic understanding of compound interest, and relatively few graduate from college understanding the dangers of excess consumption based on easy credit.
Fewer still understood that when the value of what a country consumes exceeds the value of what it produces, trouble is around the corner. Even those who once were considered the "smartest people in the room" forgot that you can't make a silk purse out of a sow's ear. The notion that high-risk, sub-prime mortgages could be transformed into double-A or triple-A rated investments by packaging them as bonds or even worse as derivative instruments such as collateralized debt obligations seems to have escaped the vast majority of these so-called "smartest people." Likewise legislators and regulators who should have known better allowed themselves to be convinced by lobbyists for the investment banks that credit default swaps that "guaranteed" these opaque investment instruments weren't really insurance policies that should have been subject to state and federal insurance regulations. This little oversight allowed investment banks to leverage these credit default swaps at ratios as high as 40 to 1. Using this level of leverage the investment banks were able to sell trillions of dollars worth of these "insurance policies" while maintaining as little as three cents on the dollar in capital to cover them. Once the housing market started to decline the collateralized debt obligations started to drop in value. Because of the high leverage ratio, it didn't take long for the investment houses that wrote the credit default swaps to fall into insolvency. The financial house of cards then began to implode, and the bailouts began.