Tuesday, January 18, 2011

Making Money Fast



In Monday’s Washington Post, Education Secretary Arne Duncan was confident that the Elementary and Secondary Education Act, now known as No Child Left Behind (NCLB), will be reauthorized this year, arguing that “few areas are more suited for bipartisan action than education reform.”


But Duncan should take a step back and note that there are wildly differing views on exactly how to approach the country’s largest federal education law.


It’s true that voices across the political spectrum and much of the public are dissatisfied with the NCLB status quo. But Duncan shouldn’t count on consensus about the solution just yet, especially not with a new Congress in town. A reauthorization process would provoke a major clash between two very different philosophies about the federal role in education.


As rumors of an NCLB reauthorization float around, the most important question is: What is the proper role of the federal government in education?


One view, held by Duncan and the Obama Administration, is that the federal government can and should play an increasingly large role in American schools. They may have concluded that NCLB is broken, but that doesn’t mean they think the federal role in education is fundamentally flawed.


While the Administration will likely use the language of transparency and flexibility to rally for their reauthorization plan, their current course sets a trajectory for more government involvement in local education.


From Duncan’s point of view, special interest groups such as the education unions should have a place at the bargaining table, despite the fact that they have shown little interest in or willingness to compromise on what’s best for children. Duncan also sees a role for the federal government in what children across the country learn in school and has put federal money behind national standards and tests that would shape curriculum in schools across the land. But such a move would do more to empower bureaucrats in Washington than those closest to children.


The Administration’s philosophical approach to education reform also includes more spending from Washington. This was evidenced by the nearly $100 billion the Department of Education received through the stimulus and the $10 billion public education “edujobs” bailout last year.


The second philosophy believes that in order to help American students realize their education potential, Washington needs to get out of the way and stop trying to act as the nation’s school board. And because educational authority is constitutionally reserved to the states, there is very little the federal government can do to improve local education. The federal government not only lacks the authority to manage local schools but also provides less than 10 percent of school funding, meaning Washington is ill-equipped to serve the diverse needs of 50 million school children across the country.


Restoring federalism in education means moving dollars and decision making out of Washington and putting it back in the hands of state and local leaders. Conservative leaders in Congress have suggested that this will be their approach.


In any debate over NCLB, policymakers should keep two guiding principles in mind:



  1. Washington-centric education reform has been tried for more than four decades and has failed. More money and more federal programs are not the answer to improving education. The United States spends more than $10,000 per pupil per year, and per-pupil expenditures have nearly tripled since 1970. Yet reading ability has stagnated, achievement gaps persist, and graduation rates have idled. Federal intervention has not improved America’s schools.

  2. It’s time for a fundamentally different approach to education reform, one that empowers those closest to students. Distant, unelected bureaucrats in Washington are the farthest from students, yet they create much of the red tape local schools have to deal with. Education reform should begin to restore federalism in education by allowing states to bypass federal bureaucracy and use their share of federal education funding to meet their students’ needs and to act as laboratories of reform and innovation.


There is an alternative to NCLB that would go a long way in achieving these conservative principles: the Academic Partnerships Lead Us to Success (A-PLUS) plan, introduced in various iterations in recent years. Such a proposal would promote greater state and local control in education by allowing states to consolidate funding from dozens of federal education programs, bypass all the red tape, and direct resources to the most pressing education needs among their students. The A-PLUS plan also requires accountability through state-level testing and transparency about results for parents and taxpayers.


If this Administration is truly interested in using the reauthorization of NCLB to improve American education, it should back up its talk about flexibility and transparency by allowing states to opt out of burdensome federal mandates and direct money to the education priorities that make the most sense for their students. Coupled with requirements for transparency about results, such flexibility would ensure that the needs of students—not the demands of education unions, special interest groups, Washington bean-counters, and bureaucrats—will be met. Such an agenda is likely to garner broad support.





One of the most discouraging things about the last two years was seeing swing voters in focus groups, when asked what President Obama's economic strategy was, repeat different versions of "Well, I know he said we needed to save the banks. Beyond that, I'm not sure." When Obama in his first State of the Union gave a vigorous defense of bailing out the banks, saying he knew it about as popular as a root canal, and saying "I get it", it was very memorable to voters. But when his predictions about what would happen when the banks were stabilized -- they would start making loans to businesses, and businesses would start hiring -- didn't happen, and instead the banks gave themselves record breaking bonuses, voters turned on Obama fast. In exit polls on Nov. 2nd, when asked who was most to blame for the bad economy, voters by a wide margin said Wall St. was most to blame, and the voters who said that went Republican by a 14-point margin.



Obviously, saving the banks hasn't been the President's only economic strategy. The stimulus bill, while too small, was an important job creator/saver. Saving the American auto industry was an incredibly important thing to do. Health care reform was in part a long term economic strategy. The infrastructure bank idea is a great potential job creator. Extending unemployment insurance helps keep money in the economy. And all the tax cutting going on is clearly meant to have some stimulative effect, although how much is highly debatable.



However, there have certainly been times where Secretary Geithner, who has been the main driver of the economic strategy, seems to think and act as if helping the big banks and helping the economy amount to the same thing. The tepid reaction to the foreclosure crisis has sure felt that way -- apparently we can't freeze foreclosures or do much to help homeowners because it might "endanger" the banks. In fact, I would argue the exact opposite: that our number one economic strategy right now should be to shift money from the big banks to the real economy, to Main Street businesses and workers and consumers. The big banks are hoarding extraordinary amounts of money, and they are clearly not investing it in job creating businesses. They are speculating with it, they are trading with it, they are investing in complicated financial instruments that do nothing to create jobs- in fact, they are sucking capital out of the real economy that might actually create jobs. These massive financial conglomerates have way too much concentrated wealth and market power, and that is weakening the rest of the economy.



This is one reason why, as I wrote a couple of times last week, it is so important to write down the mortgages of homeowners who are underwater. Taking that money out of the bankers' hands and putting it in the hands of the hard pressed middle class would do more to stimulate the economy than any other thing the President could do right now. This is also why the Federal Reserve's new proposed rule, out last week, on swipe fees is so good. It would generally limit swipe fees to 12 cents per transaction. Right now the average is 44 cents, and with most small businesses it's quite a bit higher. If this rule is upheld, this is money that will go straight from the big banks' profit margins into the main street economy -- all told, probably a $15 billion boost going back to retailers, restaurant owners, taxi cab drivers, and hopefully consumers. $15 billion going from Wall Street, speculative economy into the real economy is a nice lift right now. This is why I have been working with retail business leaders and consumer groups to support this new regulation.



Unfortunately, not all Democrats see it this way. Tom Carper and Mark Warner tried to head off the amendment that made this regulation happen in the Senate, and have been lobbying the Federal Reserve against a strong regulation on the subject ever since they lost the legislative fight. And Barney Frank, who is a great liberal on social issues but spends way too much time with bank lobbyists, was whining on Friday how unfair the proposed rule was to the poor bankers.



Barney, you got this one wrong. Democrats should not be looking out for the bankers, we should be looking for every single opportunity we can to drain the Wall St. swamp. The big banks are hoarding money. They have way too much market power, and when their profits expand, they put that money into the speculative economy rather than the real economy that manufactures goods, sells products and services, and creates jobs. When we take a dollar away from them, and put it into the real economy, there is actually a multiplier effect as people on Main Street spend or invest the money in real products. When mortgages get written down, it helps the real economy. When swipe fees on credit or debit card transactions get lessened, it helps the real economy. If we instituted a transactions tax on every trade made on Wall St, and put that money into a jobs program, that would help the real economy.



The big banks are hoarding our money. Our best economic program right now is to shift money from the banks, and put it into the hands of consumers who might actually buy products and businesses who might actually hire more workers.







Source:http://removeripoffreports.net/

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