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Krugman Says Stimulus Plan Is a Lemon — Democrats Allowed Themselves To Be Bullied

Posted on January 25, 2008 by Mike Bock

Paul Krugman writing in the New York Times about the new stimulus package says that Congressional Democrats have “allowed themselves to be bullied into doing things the Bush administration’s way.” He says the stimulus plan “looks like a lemon” because it “essentially consists of nothing but tax cuts and gives most of those tax cuts to people in fairly good financial shape.” Excerpts from the article:

Specifically, the Democrats appear to have buckled in the face of the Bush administration’s ideological rigidity, dropping demands for provisions that would have helped those most in need. And those happen to be the same provisions that might actually have made the stimulus plan effective.
Sending checks to people in good financial shape does little or nothing to increase overall spending. People who have good incomes, good credit and secure employment make spending decisions based on their long-term earning power rather than the size of their latest paycheck. Give such people a few hundred extra dollars, and they’ll just put it in the bank. In fact, that appears to be what mainly happened to the tax rebates affluent Americans received during the last recession in 2001.
On the other hand, money delivered to people who aren’t in good financial shape — who are short on cash and living check to check — does double duty: it alleviates hardship and also pumps up consumer spending.
That’s why many of the stimulus proposals we were hearing just a few days ago focused in the first place on expanding programs that specifically help people who have fallen on hard times, especially unemployment insurance and food stamps. And these were the stimulus ideas that received the highest grades in a recent analysis by the nonpartisan Congressional Budget Office.
There was also some talk among Democrats about providing temporary aid to state and local governments, whose finances are being pummeled by the weakening economy. Like help for the unemployed, this would have done double duty, averting hardship and heading off spending cuts that could worsen the downturn.
But the Bush administration has apparently succeeded in killing all of these ideas, in favor of a plan that mainly gives money to those least likely to spend it. Behind that refusal lies the administration’s commitment to slashing tax rates on the affluent while blocking aid for families in trouble — a commitment that requires maintaining the pretense that government spending is always bad. And the result is a plan that not only fails to deliver help where it’s most needed, but is likely to fail as an economic measure.
We don’t know for sure how deep the coming slump will be, or even whether it will meet the technical definition of a recession. But there’s a real chance not just that it will be a major downturn, but that the usual response to recession — interest rate cuts by the Federal Reserve — won’t be sufficient to turn the economy around. And if that happens, we’ll deeply regret the fact that the Bush administration insisted on, and Democrats accepted, a so-called stimulus plan that just won’t do the job.

From The New York Times, Stimulus Gone Bad, written by Paul Krugman

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How Can All Americans Live The American Dream?

Posted on January 18, 2008 by Mike Bock

Fred Thompson, in his new commercial showing in South Carolina, says that he has been a conservative all of his life. He says that he supports conservative principles. This is a commercial for which Fred paid a lot of money, and I’m sure its purpose is to encourage the conservative Republican base to experience warm and fuzzy feelings toward Fred.

But certainly, Thompson must have pondered all of the few words of this commercial carefully. It seems to me that two statements deserve a closer look. Fred said,

“In this country, if you play by the rules, you‘ve got a fair chance to live the American Dream.”

“Our basic rights comes from God, not from government.”

What in the world is Fred saying? I’m guessing the American Dream that Fred refers to is a dream centered on achieving material prosperity, a dream centered on financial security sufficient to enjoy the freedom that America gives to those with money — for example, the freedom to pay for your medical expenses, the freedom to send your kids to college, the freedom to take a vacation.

There are many Americans who are far from enjoying the American Dream — even though they are playing by the rules of going to school, working hard, obeying authority, paying taxes, etc. Fred says they have a “fair chance.” But many Americans feel they have not been given a fair chance at all.

Fred and our whole political process should honestly try to analyze why some Americans are prosperous and why some are not prosperous. It is an important topic that, for the sake of our social fabric, we need to understand. Living the American Dream is not simply a matter of playing by the rules — because, the rules themselves are skewed and unfair. As a country we need to look at this question of how the American Dream can be put within the reach of every American. It is a topic that should be center stage as part of our political discourse.

I earlier attempted an analysis of this general question in this post: Why Are We Rich?

[youtube]http://www.youtube.com/watch?v=-mF_gyb7MkE[/youtube]

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More Urban High Schools Abandon Multitrack Curriculum and Put All Students on College Track

Posted on January 18, 2008 by Mike Bock

Interesting article in the New York Times says that urban high schools are centered on preparing all of their students for college. The article says that many urban high schools have abolished their multitrack curriculum that previously had pointed only a fraction of students to college and now have a program in which every student is considered to be on a college track. Excerpts from the article:

There is a growing sense of urgency among educators that the primary goal of many large high schools serving low-income and urban populations — to move students toward graduation — is no longer enough. Now, educators say, even as they struggle to lift dismal high school graduation rates, they must also prepare the students for college, or some form of post-secondary school training, with the skills to succeed.
In affluent suburbs, where college admission is an obsession, some educators worry that high schools, with their rigorous college preparatory curriculums, have become too academically demanding in recent years.
By contrast, many urban and low-income districts, which also serve many immigrants, are experimenting with ways to teach more than the basic skills so that their students can not only get to college, but earn college degrees. Some states have begun to strengthen their graduation requirements.
“This is transformational change,” said Dan Challener, the president of the Public Education Foundation, a Chattanooga group that is working with the area public schools. “It’s about the purpose of high school. It’s about reinventing what high schools do.”
“We don’t know yet how to get everyone in our society to this level of knowledge and skills,” said Michele Cahill, a vice president at the Carnegie Corporation, which, along with the Bill and Melinda Gates Foundation, is financing many of the new efforts. “We’ve never done it before.”
Although federal studies show that most students yearn for a college degree, each year tens of thousands will not even make it through high school. In New York City, for example, roughly half the students complete high school though the new small high schools have shown substantial improvement in graduation rates.
Of the 68 percent of high school students nationwide who go to college each year, about a third will need remedial courses, experts say. For various reasons, from financial to a lack of academic preparedness, thousands of low-income students drop out of college each year.
Fewer than 18 percent of African-Americans and just 11 percent of Hispanics earn a bachelor’s degree, compared with almost a third of whites, ages 25 to 29, experts say. Of families making less than $25,000 a year, 19 percent complete an associate degree or higher, compared with 76 percent of families earning $76,000 per year or more.
The innovations range from creating high schools that offer an opportunity to take college courses for credit, to devoting senior English classes to writing college application essays, and holding parties to celebrate students who complete them. New York City has a $10 million grant from the Carnegie Corporation to develop extensive college counseling and connections with higher education institutions at 70 small high schools and three redesigned large ones.
By the 1970s, academic standards were being lowered to make it easier to move large numbers students of different abilities toward the diploma that was considered sufficient education for most, the historians say.
Today, however, some states are putting in place more rigorous high school exit exams, and students understand that a diploma no longer provides entry to the middle class. Over the past two decades, the percentage of low-income students who say they want a four-year degree or higher has tripled, rising to 66.2 percent in 2002, from 19.4 percent in 1980, according to federal statistics. And parents are stoking their children’s hopes.
John Deasy, superintendent of public schools in Prince George’s County, said that he wants the students in his overwhelmingly low-income and minority district to have the same academic advantages as students in, say, Greenwich, Conn.
So the district has added eight Advanced Placement classes to all 23 high schools, including some in schools that had never offered one. The one high school that has drawn students from the upper middle class already had 26 A.P. classes.
“For a long time we believed in the ‘some kids’ agenda,” Dr. Deasy said. “Some kids will go to college, some kids will go to the work force, some kids can go to the military. That’s garbage. We believe that every kid can learn at a high level and that college is for every child.” He added, “If a student chooses not to go to college, that is O.K.”
Many of the new efforts involve building close relationships with local higher education institutions. North Carolina, for example, is creating 70 new “early college” high schools, where students can take college classes.
In 2005, 74.2 percent of the graduating seniors went on to post-secondary education: of those, 56 percent went to four-year colleges, 33 percent to two-year schools and 11 percent to advanced training, Mr. Travers said. The colleges at the top of the list: Bunker Hill Community College, the University of Massachusetts at Boston and Massachusetts Bay Community College.