The Progressive Ensign

insights and analytics to build an economy that works for all

Author: Patrick Hill (Page 1 of 7)

The Rich View Our Government as A Trusted Rule Keeper, The Common Man Not So Much

(Editor Note: Insight Bytes focus on key economic issues and solutions for all of us, on Thursdays we spotlight in more depth Solutions to issues we have identified. Fridays we focus on how to build the Common Good. Please right click on images to see them larger in a separate tab.)

Image: Your Little Planet

Thomas Jefferson and James Madison saw the need to frame a government such that ‘forced compromises’ would push political leaders to focus on the Common Good.  The institutions that maintain our common good include the federal government three estates:  The Supreme Court, Congress and The Executive.  In addition, the Fourth Estate, a Free Press is crucial for our citizens to have access to fair and impartial reporting about the activity of government officials and their policies. We have spotlighted the key role Education, as the Fifth estate, plays in educating our people to make critical decisions and understand comprehensively the information they receive from a Free Press.

Trust in our federal government has been falling since the presidency of Lyndon Johnson in 1965.

Source: Pew Research Center – 12/14/17

We noted in our first post on the Common Good that there were two factors contributing to the decline in trust:

We see two major factors for the lack of trust.  One, is that economic inequality has been increasing over the last 60 years to the point where it is at the worst it has ever been since 1929.  Americans expect their government to be the rule keeper of a fair shot at economic opportunity not a bastion for the rich and powerful.  As wealthy donors have taken over control of both major parties, the influence of the average citizen has been reduced to nearly nothing except at the ballot box – but not in legislative policy.”

The second major factor is the change in information access and news viewing habits of our society.

In the 1950s and 1960s families gathered around the television set to watch Walter Cronkite or Huntley and Brinkley bring them the news for the day.  These news anchors had teams of trained journalists in how to gather news, provide airing of opposing views and investigation to reveal the facts of the story. As cable news programs became popular people drifted away from central network journalist supported news programs toward popular ‘viewpoint news’ programs like Fox News or CNN.  Then, from 1995 until today, the Internet was a catalyst for the growth of blogging, and ‘friend news’ on Facebook which had virtually no formally trained journalists and limited understanding of the difference between facts and opinions.  Opinions spread virally through the Internet often with no foundation in formal fact gathering or fact finding investigation techniques. Today, we even have presidential spokespersons talking about ‘alternative facts’ to justify their policies or opinions.

Trust gaps by income level are increasing around the world with many developed countries showing double digit gaps between the top income quartile and the bottom income quartile and the U.S. with the largest gap:

In the U.S. incomes for the lower 80 % have been largely stagnant for the past three decades since the Reagan years, higher education costs rising to levels never seen before with student loan debt at $1.5 trillion dollars. In short, lower and middle income parents expect their children to have fewer opportunities and to make less money over their lifetime. This growing sense of hopelessness is in part triggering the populist movements we see world-wide. The top quartile trust government institutions the most because they are getting the benefits, tax cuts, relaxed environmental policies to allow their businesses to make as much money as they can, and continued stock buy backs to make even more money instead of increasing worker wages.  Workers see their votes not making a difference as Congress is at the beck and call of Corporate Nation States who make multi-million dollar campaign contributions and the Executive Branch now run by billionaires.

Little wonder the Common Good is not embraced by all people, for the rich they are on top of the economic pyramid. The rich get the laws they want and aren’t interested in sharing their wealth or time to build the Common Good.

Here is what will likely happen, in the end the rich will need to see that it is in their interest to build the Common Good, by contributing to our institutions of government and common people or they will lose what they already have and probably a lot more.

Wood Project Gives Ex-Offenders New Lives

(Editor Note: Insight Bytes focus on key economic issues and solutions for all of us, on Thursdays we spotlight in more depth Solutions to issues we have identified. Fridays we focus on how to build the Common Good. Please right click on images to see them larger in a separate tab.)

Photo: USA Today

The US Forest Services has kicked off a new program to reclaim urban lumber from abandoned homes by using workers from non-profits who had criminal records.  The innovative program attacks two major problems in urban centers like Baltimore, where 70 % of criminal offenders are returned to prison within 3 years, and there are over 16,000 abandoned structures in the city.  Quite often the abandoned structures are hives of prostitution, drugs and criminal activity.

Morgan Grove, Urban Wood Project leader, says “It’s about air quality and water quality.  It’s also about reducing crime and helping people move forward”.  She continued by declaring, “At its core, it’s really still maintaining the mission of revitalizing that the Forest Service has had since the agency was started in the early 1900s.”

The following table outlines the linked issues of high crime, abandoned buildings, high prison rates and the health of communities:

Sources: Justice Policy Institute, Prison Policy Initiative – Maryland, USA Today – 6/11/18

It is interesting to note the issues Baltimore city officials face in reclaiming their communities to return them to being healthy places to live, environmentally, and to redeem the people in the community to a productive life. We see many of these same issues in the rural regions of our country, that have been left behind by losing jobs to other offshore sites, reduced education opportunities, poor health, drugs and slow Internet infrastructure.

As a country we are missing the opportunity to rebuild lives, the environment and the economy unless we support innovative programs like the Urban Wood Project.

Workers Struggling Under Credit Card Debt

Photo: finder.com.au

While consumers did pay down their credit card debt by $40 billion during the first quarter of 2018, they still owe a giant $1.021 trillion in revolving debt.  Credit card debt is at the second highest level since 2008, during the Great Recession.  Consumers piled on another $91.6 billion by the end of 2017, at a run rate of 104 % of the average over the past 10 years.

Sources: Marketwatch, WalletHub – 6/13/18

Adding to consumer woes are interest rates that are rising, adding to the servicing costs of credit card, auto loan, and student loan debts. Below the chart shows debt servicing costs as a percentage of disposable income, while mortgage debt servicing is declining consumer servicing costs are rising.

Sources: Federal Reserve, National Bureau of Economic Research, The Wall Street Journal, The Daily Shot – 6/13/18

Finally, non-supervisory worker’s wages are stuck at 2.5% and when inflation is taken into account are largely flat. As consumers continue to try and maintain their standard of living, they are taking on more revolving debt which is costing more for them to pay. This financial squeeze is sustainable as long as jobs are abundant as they seem to be now, but if the economy turns down and layoffs happen it will be hard times for workers.  A survey published today in the Wall Street Journal blog – The Daily Shot showed executives plan layoffs as the first approach to deal with tightened financial conditions and slow sales.

 Next Steps:

 Workers need to receive a living wage that is not stagnant as wages have been for the past 10 years since the recession. Over 14 % of all workers have not received a raise in the last year versus 11% prior to the recession. Stock buy backs need to end and those funds invested in raising worker wages, increasing productivity and providing job training and development.  Corporations stash over 40 % of their profits in overseas tax sheltered accounts – all those funds need to come back to the US with companies paying their fair share of taxes. Corporations are the beneficiaries of job training and education, and should pick up more responsibility in terms of taxes for apprenticeship programs on par with those in Germany to provide US workers with the advanced skills needed to obtain a good paying job and create a dual track besides college. Today, there are more job openings than candidates available to fill those jobs, we need to invest developing worker’s job skills to close the gap.

AT & T Wins Time-Warner – Americans Lose Free Press

 

Photo: Free Press

A federal court judge approved the $85 billion bid by AT &T of Time – Warner, creating a huge vertically integrated media giant.  The judge found no need for the kind of conditions placed on the Comcast acquisition of NBC Universal in 2011, or ensuring a free press.  Though both cases are quite similar in that AT & T and Comcast are both major media companies acquiring content providers and news organizations (NBC, and CNN).  In approving the Comcast – NBC bid, the judge laid out detailed conditions to protect consumers, requiring adherence to net neutrality for Internet supported content providers and assistance for low income users. Since the Comcast – NBC merger Comcast has violated several provisions of the agreement as outlined by former FCC commissioner Mignon Clyburn and Senator Richard Blumenthal including: not adhering to network neutrality in providing channels to consumers, slow implementation of low income Internet assistance programs, not providing smaller cable channels with fair rates to access regional sports networks and discriminated against Bloomberg Television (a competitor of CNBC).   Clyburn and Blumenthal in their op-ed piece pose three key questions to be answered in every major merger (our answer):

  1. How will consumers be affected? Negatively by lack of competition
  2. What will this do to competition in the industry? Reduce competition significantly
  3. What will it mean for small businesses? Small businesses will be squeezed out of the market

For some reason, the court in the AT & T – Time Warner case did not seem interested in answering these questions related to safeguarding consumers, businesses or freedom of the press. Federal regulators found in the Comcast – NBC bid the need for 150 conditions to be placed on the merged corporate organization.

Today, the court saw a need for no conditions?  Why? When we have a deregulation federal government policy wave rolling across the country today it is even more imperative that conditions be in place if these giant mergers are to be approved.

Next steps:

Our position is the merger juggernaut needs to be stopped now, and this merger not approved – later we will have to break it up anyway.  Mergers contribute to lack of jobs as well which hurt wage gains by workers.  Media concentration limits access to information and choices for media coverage. In 1983, 90 % of media, entertainment and distribution markets were controlled by 50 companies, today, there are 6 major players:

By approving the AT &T – Time-Warmer deal the court is giving a green light to deals now under review like the Disney bid (Comcast biding too) for 21st Century media which would create yet another huge conglomerate strangling competition and reducing the number of news sources. Other major Internet players are waiting in the wings like Apple, Google, Amazon and Facebook who are flush with cash and looking to control both the Internet, broadcast and film content and distribution.

We have said that deals like this need to be reviewed in supporting the common good ensured by freedom of the press.  This AT &T deal should not be approved on media concentration and press limitation grounds.  Jefferson and Madison observed correctly that a democracy can not long survive without a well-informed citizenry making decisions based on multiple points of view. Major corporations win in deals like the AT &T – Time Warner merger, the American citizen loses.

The President Thinks Insulting Canada Will Help – The Facts On US – Canada Trade

(Editor Note: Insight Bytes focus on key economic issues and solutions for all of us, on Thursdays we spotlight in more depth Solutions to issues we have identified. Fridays we focus on how to build the Common Good. Please right click on images to see them larger in a separate tab.)

Image: Feedstuffs.com

Last weekend, POTUS has shifted tactics from ‘whack a mole’ to ‘whack a friend’ on trade when he declared in a tweet after the G-6 + 1 summit that Canadian Premier Justin Trudeau had betrayed the US:

“Based on Justin’s false statements at his news conference, and the fact that Canada is charging massive Tariffs to our U.S. farmers, workers and companies, I have instructed our U.S. Reps not to endorse the Communique as we look at Tariffs on automobiles flooding the U.S. Market!”  He continued in another tweet one minute later said of Trudeau’s comment, “US Tariffs were kind of insulting” and he “will not be pushed around.” Very dishonest & weak. Our Tariffs are in response to his of 270% on dairy!”

So, why is the President going after Canada anyway?  Canada, our long time neighbor to the north, ally during WWII, and trade partner that we actually have a trade surplus.  Yes, our trade with Canada is at a surplus of $8.4 billion in 2017, according to the New York Times, when services are added as shown below:

Sources: US Census Bureau, IFF, The Wall Street Journal, The Daily Shot – 6/12/18

Canada and the US have over $693 billion of commerce between the two countries and nine million American jobs depend on trade with Canada.

In the past year, the President has picked on Canada slapping tariffs on softwood lumber causing lumber prices in the US to soar, because the US imports 96 % of the lumber it needs mostly in residential housing from Canada.  POTUS has taken aim at Canada recently to include the country in the tariffs of 25 % on steel and 10 % on aluminum. Over the weekend he focused on dairy in as his tweet noted above about Canadian “270 % tariffs on dairy”.

So, let’s look at that 270 % tariff figure, the US actually has a 2:1 surplus in diary products trade with Canada:

Sources: Bloomberg, Statistics Canada – 6/11/18

The reason there is a 270 % tariff on dairy powder is a system of supply management that was agreed upon by the US and Canada.  For most dairy products sold within the quota of US imports into Canada a tariff of 7.5 % is applied by the Canadian government.  When imports exceed the supply management quotas, super charges go into effect on products like dairy powder or over quota milk at 241 %.  Canada has established a supply management system with the US on dairy products, as most countries including the US subsidize their dairy industry.

Next Steps:

First, our President needs to treat our long-time ally to the north as an ally and friend to the American people with respect, dignity and cordial public discourse.  Privately, he may have disagreements, and negotiations should proceed to overcome trade imbalances where appropriate and to protect American jobs.

Second, the facts need to be used, not falsehoods as POTUS admitted in his first meeting with Trudeau, that he made up the idea there was an imbalance or equality or he didn’t know.  It is time to do the homework, research the facts in our relationship, preserve the on-going huge amount of commerce we already do, and figure out how to work more closely together as partners not adversaries.

Lyft Takes Responsibility for the Environment

 

Image: lyft.com

Lyft recently announced that it will be purchasing carbon offset credits to be used to make riding in Lyft cars carbon neutral. John Zimmer, Lyft, co-founder noted in a Medium post that in 2017 when President Trump announced the US was leaving the Paris Climate Agreement that Lyft was joining many other companies in We Are Still In, to declare as an alliance their commitment  to protecting the environment.  The group started by Michael Bloomberg brings state and local governments, businesses, universities and colleges representing 120 million Americans and $6.2 trillion of the economy affirming their commitment to the Paris agreement.

Zimmer outlines a bold effort with multi-million dollar investments in carbon control or emissions projects near major markets in Ohio, Michigan, and Oklahoma. The $11 billion ride sharing company declares, “your decision to ride with Lyft will support the fight against climate change.” The ride hailing company sees a future where all their vehicles are electric and carbon emission free – as the race is on toward electric cars and possible autonomous rides.

We applaud the move by Lyft, taking on corporate social responsibility for the millions of tons of emissions that Lyft cars are spewing into the air every year.  Some studies show that ride sharing rather than reducing the number of car rides people take, they actually are increasing because using the app is so easy and the cost relatively inexpensive. So, the move and commitment by Lyft to take responsibility for our environment is a key move we expect to see from every company that adds carbon emissions to the atmosphere.

Here are examples of the carbon footprint of various types of cars and transportation systems:

Sources: DEFRA, EIA, EPA, GREET, Shrinkthatfootprint.com – 6/7/18

Clearly the combination of solar with electric cars is promising along with public transit like the school bus or Eurostar rail.  We need to make carbon emissions emitted by all businesses a priority in government policy transparency to show consumers and investors how businesses are contributing to carbon emissions and what they are doing about the problem. The Lyft Green Cities Initiative demonstrates the commitment by Lyft to take responsibility for our environment that we expect to see from every business as they all contribute carbon emissions to the atmosphere.

Opioids Are Killing Our Young People Reducing Our Labor Force

(Editor Note: Insight Bytes focus on key economic issues and solutions for all of us, on Thursdays we spotlight in more depth Solutions to issues we have identified. Fridays we focus on how to build the Common Good. Please right click on images to see them larger in a separate tab.)

Image: thetab.com

The Opioid Epidemic is devastating for our young people.  The size of the opioid addiction death wave is so high that it is leading to a sharp decrease in the size of the 24 – 54 year old labor force group.

Sources: JAMA Open Network, Marketwarch – 6/7/2018

A paper recently published in the Journal of the American Medi­­cal Association found that 20 % of all Millennials deaths in 2016 were caused by opioid overdoses.  From 2001 to 2016 opioid deaths have increased by 292­­ %.  Experts believe the dip in the size of the 25 – 54 year old group is in part caused by the opioid epidemic compared to other developed countries.

Source: OECD Employment and Labor Market Statistics – 6/7/18

A comparison to OECD countries finds the U.S. labor force in the key mid-career 25 – 54-year-old group at 5 % less, which converts to millions of our young people left out of the labor force. When our labor force is not growing in this key age segment we are in store for a continuing decline in GDP growth, standards of living and few people to support our retired population. The total labor force even with the recovery since 2008 has been dropping to a 10-year low of 63 % overall:

Source: Department of Labor, The Wall Street Journal, The Daily Shot, 6/3/18

Certainly, more than the opioid epidemic is contributing to our low labor force participation rate including: companies automating many jobs so they are not hiring more workers, workers leaving the work force due to not finding work, a skills mismatch between job openings and candidates with the right skill set and the baby boomer population aging into retirement.

Next Steps:

The opioid epidemic strikes hardest in our Heartland as we recommended in an earlier blog on Heartland Development Centers that among other development investments to fund mental health, addiction and counseling services to help our young people in rural regions of the Midwest and South to return to active productive lives. Every day, families are suffering from the drug addiction crisis and our economy is suffering along with our young people.  Our Congress, corporations, non-government organizations, government and health services groups need to establish a partnership to target the problem of drug addiction head on, with a major funding commitment, the latest strategies in drug rehabilitation, and job training programs which include high quality apprenticeship skills development leading to good paying jobs.

Protectionist Policies Are Damaging the Mexican Economy and US Businesses Today!

(Editor Note: Insight Bytes focus on key economic issues and solutions for all of us, on Thursdays we spotlight in more depth Solutions to issues we have identified. Fridays we focus on how to build the Common Good. Please right click on images to see them larger in a separate tab.)

Image: hurd.us.gov

Last Friday, POTUS announced that he was considering just dropping the NAFTA agreement.  His announcement sent the Mexican Stock Market racing down with the fall continuing today:

Source: Patrick Hill, The Progressive Ensign – 6/5/2018

When President Trump was elected in November of 2016, the Mexican market tumbled, then regained when it seemed the Administration would negotiate in good faith.  Then, late 2017 threats and bullying started with the latest swoon when POTUS wanted to just pull out of the agreement.

The administration continues to use a ‘whack a mole’ policy approach, even with Vice President Pence suggesting last week that the NAFTA agreement should be renegotiated every 5 years.  Trade agreements are complex, legal documents which business leaders, consumers and government policy makers depend upon in making economic, infrastructure and industry plans for 10 to 20 years into the future.  Corporations when they plan for building a manufacturing plan, are looking at government trade policies and trends over the next 10 years to determine whether a plant will be profitable or not.  Policy makers can’t be changing the rules of the economic game constantly.

We are concerned that the anti-Mexico trade policies of the administration will continue to cause uncertainty, chaos and severe trade constraints driving the Mexican economy into a recession or worse.  Mexico is the second largest trading partner for the US.  States like California and Texas depend on exports to Mexico and will be hurt if the Mexican economy continues to slide:

Sources: US Census Bureau, Reuters, The Wall Street Journal, The Daily Shot – 5/4/18

Mexico just announced today their first shot across the economic bow of the US.  Slapping tariffs totaling $3 billion on whiskey, cheese, pork and other products. A spokesman for the trade group Farmers for Free Trade commented on ongoing trade war economic missiles being hurled at each other, declaring that the new tariffs would have disastrous consequences for farmers, “Hog, apple, potato and dairy farmers are among those suddenly facing a 10 or 20 percent tax hike on the exports they depend of for their livelihoods. Farmers need certainty and open markets to make ends meet. Right now they are getting chaos and protectionism.” Larry Kudlow, the President’s chief economic advisor shared the latest negotiating strategy for NAFTA on Fox and Friends, taking a strong protectionist stand against a three nation agreement, ‘preference now, and he asked me to convey this, is to actually negotiate with Mexico and Canada separately.”

Next Steps:

We know from research that when the Mexican economy does better, immigration from our south of the border neighbor goes down.

Sources: Five Thirty Eight, PEW Research, The World Bank – 2/28/17

The GOP administrations needs to start treating Mexico with dignity, respect and partnership – which they have earned as our southern neighbor and ally. When the Mexican people are prospering, they don’t seek jobs in the US.  So, instead of withdrawing support for NAFTA which our farmers and other businesses throughout the US are profiting by, focus on the main issue which is the imbalance in autos, trucks, automotive parts and manufacturing as the chart below describes:

Sources: US Census Bureau, The Wall Street Journal – 6/2018

Let’s start using evidence, facts and real insights in negotiating our agreements with our allies instead of bullying, prejudice and smear tactics. We recommended over a year ago, that the Administration, focus on the automative industry imbalance, and protect worker jobs and US businesses:

  1. Tax companies that move jobs to other countries. For example, a company moves a $1 billion plant with a 1000 workers offshore, they pay a 10 % plant offshore tax or $100M, and $20k per worker or $20M penalty to be used for training and apprenticeship programs in the US. (Tax the action we don’t want.)
  1. Establish worker councils in corporations to make decisions jointly, ensuring apprentice and new job training programs are in place.
  1. Offer incentives to keep plants here including fed, state, and local tax reductions, and training programs implemented in local universities and colleges.
  2. Train US workers on advanced assembly and use of robotics in manufacturing to build increased productivity capability and reduce costs.

POTUS Employs ‘Whack a Mole” Trade Tactics Launching the Trump Trade War (TTW)

 

Image: danbyink.bangordailynews.com

After declaring two weeks ago a trade truce with China, POTUS declared last week that 25 % tariffs would be imposed on $50 billion of Chinese of Chinese goods if they don’t commitment to purchases of US energy and agriculture products.  Commerce Secretary, Wilbur Ross left China on Sunday with no real progress except to make the Chinese angry, confused and upset.

The bullying, intimidation, zero sum negotiating tactics may work in the rough and tumble of New York real estate but not international trade where over 70 years of careful negotiations by all the major trading partners have put into place a trading platform with rules and fairness wherever possible.  Now it is true that some nations take advantage of the slow, ponderous and confusing decision making of the World Trade Organization.  But blowing up the present trade agreements by saying things like Vice President Pence said last week to Canada and Mexico that the NAFTA agreement should be revisited every five years is insulting, duplicitous and lacking in good faith.  So last Friday, to heap more chaos on the NAFTA negotiations POTUS says he is thinking of just pulling out of NAFTA completely.  Welcome to a POTUS caused trade war, we call The Trump Trade War (TTW), as history books will likely record.

Prime Minister Trudeau of Canada has condemned the way the US administration has been treating a valued partner calling the actions “frankly insulting”, and in return he receives more trumped (pun intended) up national threats.  He continued in an NBC interview:

“The idea that the Canadian steel that’s in military, military vehicles in the United States, the Canadian aluminum that makes your, your fighter jets is somehow now a threat?” Trudeau declared. “Our soldiers who had fought and died together on the beaches of World War II… and the mountains of Afghanistan, and have stood shoulder to shoulder in some of the most difficult places in the world, that are always there for each other, somehow — this is insulting to them.”  Maybe our POTUS doesn’t understand that dying for a common cause is a higher value than provoking, bullying and intimidation to make an extra short term buck.

EU ministers are confused and upset at being grouped in with China in steel and aluminum tariffs.  The United Kingdom, France, Germany, Mexico, Canada, Turkey and Japan have either announced or launched retaliatory tariffs on US goods and are reviving trading alliances that the US has abandoned like the TTP (Trans Pacific Partnership).

Sources: The Wall Street Journal, The Daily Shot – 6/4/18

The TPP non – US nations are in a dialog with China who is excited about filling the role the US once occupied. Experts note the long term effects and loss in business for the U.S., Adam Posen, president of the Peterson Institute for International Economics observed, “It will be hard to establish trust in the U.S. again, and all the uncertainty will drive down investment and productivity.”

US businesses are busy trying to minimize the damage to their export revenue streams,. Farmers in the midwest have already found that China has cancelled some sorghum shipments causing ships to be turned back, as the Chinese are making deals with Russia for agricultural goods.  American businesses are being cut out of customer contracts now, resulting in lost business that will be extremely difficult to get back once new suppliers are in place. Still incredibly, the White House trade team blows up the present world-wide trade framework replacing it with nothing, which results in uncontrolled reprisals and chaos. Seems like economic missiles have been launched and attacked nations are sending economic missiles back (sounds like a trade war to us, the TTW (Trump Trade War).

Next Steps:

To begin, our political leaders need to stop being invisible as the world trade fabric unravels. Next Congressional leaders need to bring all key trade factions, business and trade representatives and develop an alternative to the destructive protectionist policy now being implemented.  Sound trade policy based on win – win negotiations, fair agreements, protections for labor, working within the WTO, and legal order will win over allies and concessions from adversaries.  The GOP administration needs to stop going it alone, and work with our allies, build consensus, and make improvements in the present painstakingly developed agreements over the past 70 years. Over 1100 economists, the US Chamber of Commerce and world leaders have condemned the declared TTW which needs to end now.

Funding Education to ‘Common Good’ Levels Will Increase Prosperity and Reduce Civil Conflict

(Editor Note: Insight Bytes focus on key economic issues and solutions for all of us, on Thursdays we spotlight in more depth Solutions to issues we have identified. Fridays we focus on how to build the Common Good. Please right click on images to see them larger in a separate tab.)

Image: Your Little Planet

Last week, we noted that public education for all was viewed by founding fathers like Madison and Jefferson as essential to informing and building intellect of our citizens to make good decisions selecting our political leaders.  A well-educated citizenry would be able to separate the leader focused on the common good from the leader who would rule unjustly as a tyrant.  Madison and Jefferson proclaimed that a well-educated voter is the last bulwark to build majority moving away from a tyrannical faction.  Certainly, we need to shift from a tyrannical faction today – the oligarchy.

So, what role does funding play in public education performing its role as the Fifth Estate, alongside the three main branches: The Supreme Court, Congress, and The Executive with the Fourth Estate being the Press?

The key factor in how well education is building the common good across all income levels is funding.  Since 1975 funding by state and local governments for higher education has dropped from 60.3 % to to 34.1 % in 2010. The last eight years has seen this figure continue to drop close to 24 %. Public colleges and universities have coped with the unprecedented drop in state and local funding by raising tuition year after year to the point where students are now carrying the highest level of student loan debt ever at $1.5 trillion. Families can’t keep up with the tuition increases

Source: Center for Budget and Policy Priorities, 8/15/16

Because of this huge debt load millennials are not buying first homes at the rate of previous generations, and they are moving in with parents to live.  Plus, couples are now postponing starting families as the birthrate has dropped to the lowest level in 30-years way below the needed replacement level. In regard total education US federal funding accounts for only 14 % of education spending vs OECD countries where national general funding is allocated across regions at 54 %.  The property tax maybe the way Madison recommended where local communities wanted local control. Yet, to make the quantum leap in education for all to build the common good a new source of funding must be found at the federal level to balance the funding between poor versus wealthy districts.

When as a country we don’t make the financial commitment it says that for all the platitudes about the importance of public education, regardless of private schools and for profit colleges, we need to ensure that all citizens receive a good high quality education that create lifelong opportunities for them to contribute to our society.

Ironically, funding for public education has continued to decline since the 1980s and steeply recently since the Great Recession.  As Corporate Nation States and the Elite continue cutting funding to federal, state and local government these common good building institutions and the people they serve suffer. The mantra of ‘my kids are taken care of’ I don’t need to worry about yours with my tax dollars has held up and politicians keep getting elected and putting pro profit and private educators in key positions like the Secretary of Education today, who has zero interest in rebuilding public education but is instead working hard to dismantle it. The way change in building the common good is going to happen is when voters realize they have been sold an education equality myth for decades. Only when we set a top priority on public education funding at ‘common good building levels’ of the 1970s will our democracy work for the middle class, ending income equality and create an enduring prosperity.  Someday Corporation Nation State executives and the wealthy who own them, will figure out that having a whole generation in debt, not building households, not buying goods and services at growing economic levels and not bringing new babies into the world is going to cause great loss in wealth for them!  If they aren’t concerned about losing wealth, they need to heed the point that  the democracy that provides the framework for their wealth will fall if the common good is not continuously built.

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