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The Baltimore Sun

Education to Win the Future!

So if we're gonna "win the future" (in the president's winning phrase) we're all gonna need s'more book-learnin', according to just about all the important economists in the United States. Just a few months back, one of them, employed at the Federal Reserve Bank of Richmond, Va., told me just that to my face as I was stuffing it on the bank's dime. So you know it's settled consensus.Why anyone would question this obvious wisdom is anyone's guess. But two new articles do.First, consider Remapping Debate's longish discussion of the Education über alles meme and what it means to economic policy.The piece says that more higher education is not a "magic bullet"—which is itself a bold achievement in these days of near unquestioned fealty to the education mantra. But then the story goes a bit further, exploring how and why the "It's Education, Stupid" idea has been sucking all the oxygen out of economic policy discussions for a generation.Turns out making expanded higher education the be-all, end-all conveniently puts the blame for failure on ordinary idiots, while drawing attention away from stuff like the destruction of unions, the shrinking minimum wage, and a whole host of tax and trade laws that, by design, benefit the ultra wealthy at nearly everyone else's expense. As is the style at Remapping Debate, the writer eases into it like he would a hot tub:

Still, the debate over what education can achieve is closely connected to far-reaching differences over policy, especially when it comes to helping workers who do not have degrees. In short: the more powerfully someone believes in the education answer, the less likely he or she is to support other strategies to boost wages or improve job quality.
You suppose? Takes him a while to get to the nub, but, five paragraphs from the story's end, he does:
an emphasis on education holds natural appeal for analysts who approach the question of economic development and income growth with hostility toward labor market regulations or other interventions. Jason Fichtner, a senior research fellow at the Mercatus Center, a free market think tank, explained in an interview last month that he and his colleagues were worried that growing inequality would lead to increasing demand for redistribution, regulation, and government services. Mercatus has begun to explore ways to improve primary education and expand college access, he said, as a way to "avoid those policies."
It hardly needs noting that the Mercatus Center is funded by the folks (>coughcough<)  who derive billions of dollars from the policies that encourage outsourcing, wage erosion, environmental degradation, and job insecurity for average Americans. So I'll not mention it either.Jeff Faux of the Economic Policy Institute goes directly to the point in his American Prospect story titled "America's Trade Policy of the Absurd" (HT Newstrust):
For three decades, both Democratic and Republican administrations have been making trade deals with elites of other countries that favor the interests of multinational investors over the interests of American producers and workers. U.S.-based banks and corporations get access to cheap labor and to the financial systems of other nations. In return, U.S. workers are exposed to competition from countries where wages are suppressed (Mexico) or where government runs effective industrial policies (Germany) or both (China).
Not to worry, soothed the politicians and pundits: Let the foreigners make the old stuff, we Americans will get the clean, green industry jobs dreaming up and designing new products. So as their parents were downsized, many young Americans took out loans to get educated for the new high-tech service economy. But it turns out that in the new deregulated global market, anything that can be done with a computer can be offshored to India, China, and other places where first-rate technical workers get paid a fraction of American wages.
So, of course:
From Wall Street's perspective, our trade policies are a great success. U.S. labor costs are down, profits from offshoring are up, and America's financial elite have a growing investment in the foreign countries that are eating our economic lunch. From the perspective of America's global elite, what's not to like?
The cruel joke is that this is the crowd that is presumed by the press and the politicians to represent the interests of the American people. John Chambers, the CEO of Cisco Systems, puts millions of dollars into a state-of-the-art research facility in India and says that his goal is to become a "Chinese company," but his company still gets to influence elections, lobby Congress, and otherwise drive U.S. trade policy.
(Here's a quick way to understand how today's savvy journalist might equate Cisco Systems' CEO with middle America: In 2010 Chambers made about a million and a half bucks a month—about 475 times what a normal American earns on the job. But Chambers would have to work 266 years to amass what hedge fund wizard John Paulson "earned" last year alone. So: lower middle class).Read the stories together, then reach for your sidearm the next time anyone—anyone!—starts in with that "education-for-competitiveness" bullshit.But education does count for something—if it's the right kind of education. Consider the smart guys and gals who dreamed up this novel way to steal taxpayer money that was supposed to go to poor areas. As Bloomberg reported Tuesday:
Since 2003, some of the world's biggest financial companies, including Goldman Sachs Group Inc., U.S. Bancorp, JPMorgan Chase and Prudential, have taken advantage of a federal subsidy that will cost taxpayers $10.1 billion -- and most of the public has never heard of it.
Investors have used the program, called New Markets Tax Credits, to help build more than 300 upscale projects, including hotels, condominiums, office buildings and a car museum, on streets far from poverty, according to Treasury Department records released through a federal Freedom of Information Act request.
We don't tax them at rates above that which we tax normal folks. We give them tax credits. So they can build a museum for their 500 cars.But this is not because they own the government and the economists who advise it and the reporters who interview those economists.It's because they're better educated and more skilled.And so can you!

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