Looking Deeper: Who Will Profit from a U.S. Loan Default?

Washington StalemateIt’s been awhile since I’ve shared serious thoughts, but the absurdity of the current political stalemate in Washington that may lead to a loan default by the U.S. roused me to share these.

Since the sub-prime mortgage debacle, I’ve been awaiting the next scam that will enable Wall Street tycoons to get richer while making the rest of us poorer. I fear I’ve found it in the current stalemate in Washington and the impending crisis over a failure to raise our national debt ceiling. With all the expert concerns about not raising the debt ceiling (see, for example, Bruce Bartlett’s article in the NY Times), why are politicians playing with fire? Is it because some of them really want to destroy our government? Is it because John Boehner simply wants to keep his job as Speaker – or that others fear a crazier right-wing Republican may replace him? Is it because Democrats are merely petulant? On the surface, these explanations are attractive enough to garner a knee-jerk following, but there may be a deeper game afoot here.

It’s getting more and more difficult to make huge amounts of money in our free market system. After all, new laws and regulations stem old schemes, so new schemes must be invented in a more restricted market. But here’s a simple fact: Whenever there is a financial crisis, not everyone loses; some win – and sometimes win very big, especially when the crisis is enormous. Just look at all the new billionaires who came out of the multi-trillion dollar world mortgage debacle.

So how about disrupting the world’s economic system by having the U.S. default on its debts? That certainly sounds like it would be a big enough crisis to provide a new opportunity for some to make vast fortunes while the rest of the world loses. With unlimited political contributions – our country’s form of legalized bribery – market movers and shakers can buy politicians to do their bidding and cause such a crisis.

Is this a grand conspiracy theory? No, it doesn’t take a conspiracy for politicians to be complicit. Lobbyists and big contributors have access and deliver rational-sounding arguments to elected officials. And politicians and their staff don’t need – or care – to look deeper, beyond those arguments, as long as those contributions keep coming to meet their primary objective: staying in power. Indeed, given the extreme polarization of our political system, it appears each side hears only what they want to hear, listening solely to their own side’s news media.

Given the stakes at hand here – both for the potential big winners and many losers – I fear we’re all being fooled by increasingly strident statements that keep us from seeing what may be the more fundamental objective at play: providing a diversion for another massive theft of our money by a few at an enormous cost to the many. In football, we’d call it a “head fake.”

The ownership of the media by a few, focused interests helps ensure that probing reporters and analysts don’t investigate or discuss such possibilities.

So here we go again. Another bubble may be about to burst, and this time before we’ve had a chance to recover from the last one. I just wish I were knowledgeable enough to know how to take financial advantage of this one.


CERPP Conference Remarks: 2012

21st Century Knowledge and Skills:
The New High School Curriculum and the Future of Assessment

Perspectives: Media, Politics, and the
Responsibility of Higher Education

Roderick G. W. Chu
Chancellor Emeritus, Ohio Board of Regents

January 13, 2012
I delivered the following presentation and remarks in Los Angeles at the USC CERPP 2012 Conference.

1. The Case for Change from Within

As Chancellor of the Ohio Board of Regents (the state coordinating board for Ohio’s public and private colleges and universities), I lived at the interface among the worlds of K-12, higher education, and politics, so I’m delighted to reiterate some of what I learned from our conference speakers and participants, to offer a few observations of my own, and to hear those my fellow panelist, Scott Jaschik, representing the Fourth Estate of the press and media.

Before getting into the topic, however, I need to ask: Why change? Harry Brighouse kicked off this conference with his though-provoking challenge regarding the purpose of education. Yet mine is a serious question, because in many ways, the school curriculum fundamentally hasn’t changed for about 100 years.

Indeed, our agrarian school calendar hasn’t changed for over 200 years, despite the fact that less than 2% of our population – and virtually no kids – work on farms and many students lose 70% of what they’ve learned in the school year during their summer breaks.

Despite the local control authority of over 10,000 school districts, our industrial one-size-fits-all model of education has persisted, in the face of students who learn different subjects better at different times and in different ways – the age-graded instead of ability-graded system that Morgan Polikoff mentioned yesterday – and of cognitive research that has found that our model successfully educates mainly the 25% of students who are abstract learners but not the 75% who are contextual learners.
Why do we continue to educate kids for our past, instead of for their future?

NY Times columnist Thomas Friedman wrote so persuasively on the impact of globalization and the Internet in The World is Flat – now almost 7 years ago. He brought popular attention to the fundamental sea changes that have occurred in the past decade.

At this conference 2 years ago, I noted forces driving change because of state policies. Since then, the impact of the Great Recession has settled in.

Per capita state funding in constant dollars for public colleges and universities has shrunk to its lowest point in 25 years and hefty increases in tuition has barely kept resources level, in the face of the highest enrollments in history. [SHEEO SHEF 2010]

Yet things continue not to change much, driving higher education further down the death spiral I described then of inadequate higher education funding resulting in graduates without the requisite capabilities to produce growth, leading to economic and social decline, producing further shortages in funding for education.

As one who has been tweeting the pearls of wisdom I’ve picked up during this conference, I am hopeful that a tipping point of public understanding on the critical need for dramatically improved educational outcomes may come about through the social media.

For example: this excerpt from the viral YouTube video, Shift Happens.

It has become clear to most Americans that the objective of making students college-ready is critically important economically – since an educated populace is the key to winning in a world of global competition, and a knowledge and creative economy – and continues to be the main defender of a free and democratic society. But it’s also becoming clear that we need to re-ignite the American Dream that Jaime Aquino spoke of so passionately last night – of enabling future generations to do better than the current one, socio-economically.

On the political scene, I see a continuing building of the Perfect Storm. Because of a muddling economy in most states and communities, there will be a continued inability and political unwillingness to invest what’s needed to dramatically improve educational attainment with 100-old strategies, techniques, and attitudes. Further, increased public demand will pressure politicians to transfer the heat they’re feeling, resulting in their demanding better performance and greater accountability for results, while at the same time, they continue not to invest more in the education of our children and adults.

The educational establishment will continue to do what it’s proven itself best at doing: resisting change. Millions of the K-12 teachers and college and university professors who will be retiring in the next several years will deny there’s a need to change, hoping to ride out this perfect storm until they retire.

Tristian Stobie’s graph yesterday Accelerating Change Demands Different Skills reminded me of Al Gore’s graphs in An Inconvenient Truth. Yet educators seem to be very much like those who deny global warming and their need to do something to contribute to a solution. Where is our Union of Concerned Educators, crying for action by our own colleagues to rescue our future?

So what hope is there for change? Will the Academy recognize higher education’s responsibility for school reform?

(continued ➛)

2. Higher Education’s Responsibility for School Reform

Despite my gloomy introduction, I’ve always been tremendously optimistic about the ability of our higher education institutions to change the future.

After all, we in higher education have the privilege of working with the single biggest concentration of intelligence our country has!

If we adopt 7 Habits of Highly Effective People Stephen Covey’s habit of focusing on our circle of influence (what we can do), rather than our circle of concern (what we need to rely on others to do), we can reignite the American Dream for vast numbers of Americans!

Of course, changes to the Ivory Tower will be required. Higher education needs to take some responsibility to instigate and facilitate change. The Academy needs to become the change it wants to see in others.

For the first time in 900 years, the Academy no longer has oligopolistic control over the transmission of knowledge, as demonstrated by the Khan Academy and Sal Khan’s thousands of video instruction clips on YouTube, and MIT’s Open Courseware initiative.

For the Academy to remain relevant, it must become more than transmitters of knowledge. It must generate graduates who are critical thinkers and synthesizers, who can and do – as Trevor Packer stated – employ their thinking skills to translate knowledge into action.

But even if the Academy is willing to accept its responsibility as a collaborative partner in K12 curriculum reform, the challenge will be enormous.

We need to bridge the K-12/higher education divide.

  • The K-12 world has mainly been about authority and control, not results.
  • Our education colleges are now seen as our institutions’ cash cows rather than creators of colleague educators.
  • Higher education faculty disdain what’s being taught in their disciplines in K-12 schools, yet do little to change this sad state of affairs.

An example: Prof. James Loewen’s revealing picture of the sad inadequacy of K12 history texts and instruction in his book Lies My Teacher Told Me. Yet, as Trevor Packer noted, until faculty are recognized for helping their K12 colleagues, most won’t invest their time doing so.

In general, most colleges and universities don’t work effectively with elementary and secondary schools, despite their inability to successfully remediate the academic preparation of entering students in most disciplines, let alone the needed non-cognitive skills we don’t try to remediate.

Perhaps one reason for this failure of engagement is that we have competing objectives:

  • Some seek authority and control;
  • Others focus on job protection and salary increases;
  • Most faculty are concerned with professional regard,
  • research and publication, and
  • creating the next generation of professors.

Will the enlightened self-interest that David Conley mentioned – or public or political suasion – convince K12 and higher education that we must work together and agree on the primacy of one objective: Educational Equity, Excellence, and Success for All?

As Jaime Acquino challenged last night, America’s colleges and universities educate our nation’s educators and we are somewhat culpable for their shortcomings. We also educate many of our local, state, and federal policy makers, and, I shudder to think, we are somewhat responsible for their shortcomings as well.

Higher education has claimed to be about developing critical thinking and synthesis abilities in our students. As we’ve heard throughout this conference, we need to be about more – about nurturing dispositions and the ability to act effectively on the knowledge we have imparted.

As Allison Jones and Christyan Mitchell noted, we need to define what students need to be life-ready and help them acquire these skills. We also need to help politicians, as Doug Christiansen mentioned, by declaring the achievement level required – cut scores on assessments – to do college-level work.

If “it takes a village,” we need to get out of our ivory towers and work with others in our villages to define and develop the needed knowledge and skills, attitudes and beliefs, motivation and behavior for many, many more to succeed.

We need to get beyond eduspeak and express cognitive and non-cognitive standards in terms students and their families can understand. If we want them to take responsibility for their own education, standards need to pass the “refrigerator test”: be in language and succinct enough to put up on the refrigerator door, so students and their families can work on and monitor their attainment progress.

As a former businessman, I was heartened by Carolyn Adams’ observation: Educators need to work with the employers of our villages. For when we do, we’ll find their standards for career-ready employees are the same, academically, as those for college entry. Actually, as Patrick Killonen just reported, recognized workforce needs are greater than those for college entry, since workers must have non-cognitive skills and dispositions not required to enter college:

  • Interpersonal skills such as teamwork – which, as I noted yesterday, schools call “cheating” – and
  • Intrapersonal characteristics, like integrity – in an era in which 70% of high school graduates admit to have cheated in school.

Getting American education out of our death spiral will take far greater wake-up calls than a former chancellor can muster. Perhaps the cries of public opinion and a greater exposure to the new realities from respected members of the media can help.

With that hope, I’ll turn the session over to Scott. Thank you.

CERPP Conference Remarks: 2010

What Matters Now: College Access and Success 
in the Age of Obama

In Sync: Linking State Higher Education Imperatives 
to the New Federal Agenda

Roderick G. W. Chu
Chancellor Emeritus, Ohio Board of Regents

January 14, 2010
I delivered the following presentation and remarks in Los Angeles at the USC CERPP Conference on College Access and Success.

1. A Big, Hairy, Audacious Goal

Faced with the greatest recession since the Great Depression, President Obama has offered not just an “audacious goal,” as others have referred to it earlier in this conference, but a BHAG – a Big, Hairy, Audacious Goal

– that “by 2020, America will once again have the highest proportion of college graduates in the world.” We all welcome the President’s recognition of importance of higher education in meeting the challenges of a 21st century world.

The State Higher Education Executive Officers – SHEEOs – have been carrying this message for years and provided important input to President-elect Obama’s transition team as they formulated their agenda, and are delighted that they listened.

I’m honored that I was elected by my fellow coordinating and governing state system heads to chair SHEEO during one of my years as Ohio’s Chancellor and am especially proud of the outstanding work that SHEEO’s president, Paul Lingenfelter, has done in leading the organization’s work –

so proud that I’m happy to borrow some of his slides to help inform my remarks today.

If you’d like more information on state higher education policy thoughts, please go to the SHEEO website where you’ll find some of Paul’s and others’ presentations and white papers.

(continued ➛)

2. The Sad Reality

Although higher education is the only investment that government makes that actually pays back (with an annual return of 15-20% on investment), our governments – especially state governments, for that’s where bulk of operating assistance to colleges and universities comes from – haven’t been making much of those investments.

During the past 25 years, state funding per student in constant dollars – the blue bars on this chart – has risen and fallen, pretty much in line with state economic conditions, but over time has basically been flat and slightly declining. Total state expenditures have increased in constant dollars during this time, since enrollments have risen – the purple line.

Per student tuitions have doubled, though, after adjusting for inflation – the top gray-green bars.

Our elected officials, good at “heat transfer,” have pointed their fingers at America’s campuses, blamed them for being profligate, and demanded they increase their productivity.

Institutions have responded by saying our elected policy makers simply need to understand the importance of higher education and provide adequate funding.

These arguments have been going back and forth for at least 40 years, but things haven’t changed: Funding continues to be inadequate and campuses continue to do what they’ve always done.

However, the fact is that the U.S. does spend twice what the rest of the developed world does on educating each college student … and our higher education results haven’t changed, while the rest of the world has been catching up and surpassing our college attainment rates.

(continued ➛)