The threats to the American dream
The title of this daily post is a bit dramatic, I know. But that’s what I came up with when I thought about some of the themes I intend to write about today. It’s on my mind because of the news cycle and what I’ve been reading.
But some comments from readers Ryan, Paul and Peter are on my mind as well. And though I’m not going to fully address their comments in this daily. I am going to touch on them. I expect to respond more fully in the coming posts though.
The underfunding of US public education
I am going to start here since I just finished reading a piece on this in the New York Times. I have a lot of personal opinions on the issue since my wife is a teacher and administrator. But for now, I’m just going to give you the basic outlines. When I answer Ryan, Paul and Peter later, I hope to flesh out my thinking on education in greater detail though.
The underfunding of public education is emblematic of the pressures on ordinary American citizens because education is core to Americans’ moving up the skills curve to higher paying jobs as blue-collar jobs are outsourced and lower-income wage earners compete with immigrants for low-skilled jobs.
Here are the key macro points from the New York Times article:
Public education is a $650 billion national enterprise, comparable to the U.S. defense budget, except that the federal government pays only 8.5 percent of the cost. States and local school districts split the rest in varying proportions, but each state finances it differently. Texas and Louisiana tap plentiful oil and gas revenues; Northeastern states like Massachusetts and New Jersey rely on high income and property taxes. Arizona, which hasn’t raised income taxes in more than 25 years, counts more on sales taxes and other revenues generated by a growing economy. However they pay for it, K-12 schooling is the biggest single expenditure for all states, accounting for 36 percent of general-fund budgets on average.
The Great Recession devastated education funding in every region of the country. With tax revenues plummeting, legislators and governors desperate to slash spending turned inexorably to public schools. Anticipating sweeping teacher layoffs, the Obama administration in 2009 sent states a federal stimulus package of $100 billion specifically for education, but the recession outlasted it. In half the states, according to the National Center for Education Statistics, teacher pay adjusted for inflation was lower in 2016 than in 2000…
In Arizona, state funding per pupil has been below the national average since 1975, falling particularly after the mid-1990s, when lawmakers embarked on an almost unbroken streak of annual cuts in personal and corporate income taxes. Tom Rex, an Arizona State University researcher, calculated that if not for the cumulative effect of those tax cuts, the state general fund in 2016 would have totaled $13.6 billion instead of $9.5 billion, or more than 40 percent higher. Even in the depths of the recession, Brewer and the Legislature cut corporate income taxes 30 percent — roughly $550 million a year — in hopes of stimulating the economy, but without success. Voters approved a temporary 1-cent sales-tax hike in a 2010 referendum, with proceeds designated primarily for education, then decisively voted down a permanent extension in 2012.
These three paragraphs are crucial to understanding the threats to the American dream. On the one side you have an ideological view that smaller government is better because the private sector is allegedly more efficient. And that means cutting taxes and government spending so that people can spend their money as they see fit. On the other side is the knowledge of Americans that they live in the richest country in the world, wondering how it is that basic needs and services that give them security are being cut despite this wealth.
The way I see it, you have a basic tension. Small government means less goes into the common pot and more gets done in the private sector. So either people increasingly get their needs met by the private sector or they go without. In education in Arizona, we see this tension most starkly since the underfunding of public education there has been so extreme.
What should be clear though, is that this naturally favors the wealthy because they can afford to buy anything they don’t get through the common pot – education, health care, retirement, books from libraries, access to sporting facilities like swimming pools or tennis courts and garbage pick-up. Working class people can’t afford to pay for those services in the private sector. So they either receive a degraded service at lower cost or go without.
What’s the benefit of living in the richest country in the world then? Is it the opportunity to one day be rich as small government idealists might say? Or is it the guarantee of a minimum level of economic comfort and security as social democrats in a place like Norway might say?
When we talk about the American dream, that’s a central question.
The Brett Kavanaugh situation
Let me go from education to the Supreme Court nominee. And I want to talk about it in terms of norms and procedures because that fits with the post title theme. The way I see it, what has happened with Kavanaugh is an immense detour from existing norms on how Supreme Court Justices are nominated.
First, we had the nomination of Merrick Garland under Obama. That nomination was blocked under the pretense that it was illegitimate given the presidential election. Then we had a contentious election followed by two more Supreme Court nominations, of which Kavanaugh is the second. And in this nomination, we are finding an extraordinary level of secrecy regarding Kavanaugh’s past statements and opinions as they relate to his likely legal views.
Occam’s Razor says the answer is partisanship. And by that I mean a warping of rules and norms to achieve partisan ends. Now, we saw this during the Obama years with Obamacare and how it was passed without any Republican support. But we are seeing a breathtaking level of rule-breaking and norm-shifting under the Trump Presidency. And I doubt whether we can ever go back to the norms prior to his election.
I see this as a threat to democracy – to the American dream, if you will. Why?
If the ends justifies the means – and that means breaking norms and rules, you’re on a slippery slope the end of which countries like Russia and Turkey sit. That’s where a country has the trappings of democracy. But in practice, basic freedoms no longer exist.
How far is the US from that path? Could Donald Trump launch a first strike against North Korea, say, using the Bolton Doctrine, and then call Martial Law? Would the Supreme Court rule in his favor if he did so? Could the President then purge civil servants who posed a threat to national security from the ranks of government employ? Could he jail them as national security threats in a time of war?
You might think these questions are extreme. But we have witnessed other democracies move in that direction. What makes the US any different? The only thing that stands between the US and this outcome is adherence to the laws and norms that have governed it in the past, providing a check on Presidential Power, a separation of powers, and a reduction in partisanship.
What we are seeing now – with this ‘ends justifies the means’ ethos concentrates power and increases partisanship. It is an extremely dangerous threat to not just the American Dream but world peace. Unelected government officials trying to check Donald Trump’s worst impulses are no match for this.
But, hey, the unemployment rate is 3.9%
As I wrote this, the unemployment rate came in at 3.9%, with the US economy adding 201,000 jobs in August. Those are good numbers. And they will mean that the Fed will continue its rate hike campaign, putting a virtual lock on the December hike.
But given the fact I am writing this dystopian post on the threat to the American Dream, I can’t help but think about the propaganda this provides the Trump Administration. See, I get the government’s economic releases sent to me via email. And since Trump took office, I’ve noticed a change in norms in how the Department of Labor communicates. Here’s what I got last month, after the jobs report was released – note the part underlined in yellow.
When I first started getting these messages highlighting November 2016, I looked for a statistical reason to highlight that date. Maybe there was a phase shift of some sort. But I found nothing. And so my suspicion that this was pure political propaganda was confirmed. The reason it reads this way is because it is designed to highlight Trump’s achievements. So, in a departure from norms, the Department of Labor now couches its monthly economic statistics in terms that attempt to flatter the sitting President, effectively giving him free political advertising.
Moreover, let’s remember when Trump broke another norm and basically pre-announced a good jobs report, having a big impact on the bond market as the market frontran the actual report.
These things matter. Norms matter. Process matters. And when you break the rules for partisan or personal benefit, you erode the basis of democracy, which, in effect is a threat to the American Dream.
I am going to end this post early. I have to apologize for the downbeat tone. I don’t want to be negative. The US economy is doing great. The numbers are good. They are reason for Trump to want to beat his chest in self-congratulation.
But from where I sit the threats to the American Dream increase every day. And today is no different.