OWS Transition?

For an update on the status of the Occupy Wall Street (OWS) movement and perhaps learn something about where it is going, you can visit last Friday’s  Democracy Now with Amy Goodman, where excerpts from a panel discussion can be viewed. The panel discussion was sponsored by The Nation and held in the New School University in New York City, with the title “”Occupy Everywhere: On the New Politics and Possibilities of the Movement Against Corporate Power.” The participants include film maker Michael Moore, author Rinki Sen, Patrick Bruner (“veteran” OWS organizer), economic journalist William Greider and author Naomi Klein, with moderator Richard Kim. The video consists of excerpts from the discussion of what the movement has accomplished, where it is headed, what it needs to do for future growth and what needs it must fulfill if the bright promise they have aroused, that of changing the world, can gain any more traction. To begin with of course, the latter issue is not trivial and no one comes close to seriously expressing the magnitude of the problem. But so far, the incremental  steps that have been taken, such as the “99 percent” deeply resonate with all ages, and have created thirst for action that is more than just “occupy.”   Historians often express the view that the historical record of public arousal and activism against social injustice are not directly related to hard times per se, but emerge when the narrative that kept people down runs out of explanatory power. When hard times first come, people think they have to double down and work harder to get by (or maybe in the case of many Americans, they align themselves more clearly with God and religion–it’s their fault for not being a better provider–their faith hasn’t been strong enough to be rewarded by God) and finally, when multiple iterations of this strategy have failed, groups are formed that begin to articulate a better vision of tomorrow and coalesce into a more nationally identifiable  movement. That is what the OWS movement has brought to our door–they articulate the long-standing grievances we have with how our civil society has been structured and run in the last several decades.  And, they emphasize that the richest country in the world can afford to do better, can afford to do the things that they are talking about. The most boring among us have become the most rich and powerful and they have their boot on our neck. They want to establish an aristocracy so they can pass on their wealth to their offspring (no more inheritance taxes for one thing). The OWS movement is addressing issues that, economically, began in the 1970s, if not earlier. Let’s face it, at the moment, OWS is the only game in town;  after a little more than two months, the movement seems safely launched: it will surely oscillate a bit with the seasons, but one expects to see a process of growth and continued renewal and the “99 percent” is already a permanent member of our national lexicon. It’s a beautiful cutoff. The movement has already had detectable success in the November elections, particularly in Ohio. Patrick Bruner emphasized that by following Google Trends, the words used by the OWS movement have been sharply on the rise.

Other than recommend viewing the video, reading the transcript, or downloading the podcast,  I will emphasize one point from Naomi Klein’s contribution: it is one that I have been emphasizing for some time as many of you know from previous postings. Klein’s point is that the OWS movement must find a way to integrate into their language and template, the environmental movement while emphasizing the fragile condition of our planet, including the fact that we are at the beginning of a new mass species extinction (I added that last point). For this one, we have no doubt who is responsible.  The Republican party is into denial on these concepts, because, according to Klein, the business model they have for our future cannot exist if substantial effort is going to be put into saving the planet and reducing greenhouse gases; that would be giving up too much control, make us too socialized for their comfort. Furthermore, and perhaps more critically for them, they fear it would reduce their profit margin. Yet, for the OWS movement, fusing their anti-corporate, anti-neoliberal message with a “save the planet” motif will be the only source through which millions of new jobs can be generated to help create a badly needed new economy. A labor shortage needs to be created in America, such that wages will be driven upwards. To do that you need a scale of jobs that only a newly empowered movement can demand–one in which saving the planet generates new kinds of jobs through new investments, if necessary forced onto Wall Street.

Corporatists see the current crisis in some ways as a success, because it has created a labor surplus and a decrease in wage demands.  America needs to start making things again and applying our most creative instincts into this new mode of production. It’s all about infrastructure and the green economy. We cannot export the infrastructure needs of this new economy. The cities and suburbs we built after WW II were put together with long paved roads and big interconnecting highways, but this expansionary  lifestyle was based on oil at $20 a barrel or thereabouts. We should have known this would have to end once we reached our own “peak oil” condition in the 1970s. This suburban sprawl we currently have does not work when oil goes to $150 a barrel and yet, at the moment, it seems you have to practically be a visionary to see the magnitude of this looming failure. Most  believe they can still get by using automobiles and airplanes. With the explosion of the Asian and Indian economies, it is hard to see how gas prices are going to get any cheaper.  In rebuilding our urban and suburban living, we will need much better public transportation, including high speed rail and more electric cars, with electric power coming from sources that do not add greenhouse gases to the atmosphere, and we will need local markets, including food that do not require massive transportation. Some of these attributes of change, such as local farm markets are already being developed and increasingly available through local “farmers marlets.” Of course, by adopting an environmentalist strategy, the OWS movement will lose all possibility of any corporatist Republican support–but they don’t have that anyway. To convert the Tea Party members to the OWS movement, you have to convince them that government is not the source of the problem, that there is no such thing as a trickle down economy, and that government can actually serve to solve some of the major problems we face. This of course is just the reverse of what they believe now, but the “99 percent” is a catchy phrase. The advantage of the OWS movement over that of the Tea Party, is that the former promotes longitudinal thinking or long-range planning, engaging the frontal lobes of our brains. Repetition may be the best way to reach the frontal lobes of Tea Party persons and eventually things like the threat of global climate change coupled to a closer examination of their children’s future,  may become part of a newly refreshed Tea Party Engram. At the moment, expectations like this seem like a pipe dream, but the Tea Party began in harmony with the OWS movement–it’s just that they then blamed the government for the problem, not the corporations, though for a while, they were in their gunsights until they got co-opted by the Koch brothers.

You might also be interested in reading Michael Moore’s ten suggestions for where the OWS movement should go in terms of being more specific in their demands. When your through reading that, look down at the comments to see a whole bunch of additional suggestions made by readers. Perhaps you have one or two of your own. There’s probably room for something about neoliberalism.

RFM

The subject of the cover story article was “happiness.” By investigating recent research into happiness, they discovered that people generally become happier after age 46 than before. And, since the average age of people in the world is 47, the average person should be happy. They imagine that the concept of happiness is like the U-turn in the pipes underneath your kitchen sink–you go down for a while, then make a U-turn at 46 and start to feel better about life. This seems to occur no matter what your economic conditions is, so the obvious solution for addressing sadness is to wait until you turn 46 and everything should get better. So that seemed to be the emphasis of the article–if you’re unhappy, just wait, you will make the kitchen sink U-turn and things will get better. How reassuring. The article goes on to talk about other factors forming happiness, including neuroticism and extroversion, the polar ends of the happiness scale, with extroverts generally happier. And they mention other factors that include gender (women tend to suffer more from depression), external circumstances and, as mentioned previously, age. Education is one of the “external circumstances;” it makes people happier, but that may be because educated people are, on average, more wealthy.

But, putting aside age-related happiness, and focusing on one of the more obvious sources of happiness–that of money–is where we see The Economist begin to lose its bearings as it so often does when viewing topics through an ideological lens (as if the same factors worked in every culture–an unproven hypothesis). Europeans believe that growth-oriented, free-market economies got it all wrong–their system of social democracy is far superior and they have data to prove it. In fact, in America, we provide some of the data that helps make their case through our poverty rates and income inequality. Europeans often cite such data from America as evidence for strengthening their approach. Evidence that money is not the entire source of happiness also comes from data gathered by The Economist. Hong Kong and Denmark have similar income per person levels, but Hong Kong’s average life satisfaction score is 5.5 on a 10 point scale, while that of Denmark’s is 8, significantly higher. The Economist’s unwavering commitment to the free market economy makes it impossible for them to define why there is a difference in the life satisfaction scores, when the income level is about the same. Writer Eric Alterman has less difficulty in providing a more objective appraisal and suggests that the life satisfaction score of Denmark puts them ahead of Hong Kong because it’s a better place to live. If you have ever been to the two countries, you shouldn’t have any difficulty understanding Alterman’s conclusion.

In making comparisons between Hong Kong and Denmark, The Economist forgot to mention that there might be something in the way that public support is offered that helps create a more satisfied population in Denmark when compared to Hong Kong. Alterman points out that there is no mention in the article that Denmark spends nearly one-third of its gross domestic product on government-run benefits and taxes its citizens at an equivalently high rate. In recent years, the top bracket in Denmark is more than 60%, roughly about the place where we were before Ronald Reagan. With these revenues, the state pays nearly 5 percent of GDP on the unemployed and as much as 2 percent on “flexicurity,” or labor market programs to help retrain workers who have been displaced.  In contrast, the United States pays just 0.16 percent, which is, by quite a margin, the lowest level in the Organization for Economic Co-operation and Development or OECD (Western economies). As a result, the unemployment rate is much lower in Denmark than it is in the United States. Denmark’s “quality of life” index is higher than that of America, with advantages like universal health care, day care and an extremely low rate of poverty that’s not even 1/4 of what we have in the United States. They have learned how to build a country for all of its citizens, not just those at the top. In America, most of us live such that the very wealthy have in fact most of the country’s wealth.

Alterman states that “American journalists tend to treat inequality as a fact of life. But it needn’t be. In 2009, the average income of the top 5 percent rose. Everybody else’s fell, furthering a 40 year trend during which the share of total income going to the wealthiest 1 percent of Americans has risen from about 8 percent during the 1960s to more than 20 percent in 2011.”

“U.S. income inequality outpaces that of every other advanced industrial nation–never mind Denmark. That puts us in the same category with miserable places like Turkmenistan. Authors Jack Hacker and Paul Pierson point out that these changes have resulted from deliberate decision-making in congress, whose members’ elections are funded by the same wealthy folks enjoying all the benefits.”

“Since the late 1970s, they note, Congress has cut tax rates on the highest incomes over and over, together with capital gains and estate taxes. It has also made it more difficult for unions to organize and extract a fair share of the profit pie for workers. At the same time, Congress has loosened federal oversight and restrictions on banks and other financial players. It repealed the Glass-Steagall Act in 1999 to allow the creation of global megabanks like Citigroup and JP Morgan Chase that are “too big to fail” and hence too big to behave responsibly with their investors money.” In short, the Danish score well on this test for reasons that those writing in The Economist are unable to concede or describe. Their contentment comes from the fact that they live in a society where everyone has an education, opportunity and have pay for retraining, funded by government, should they lose their job.”

So in the meantime, we can’t even be honest about the kind of country that gets generated by the social democracies of Europe. Our news media, describes Europe as a bunch of countries that are on their last legs financially because of too many social programs. Yet these programs produce a country that has a far higher index of social success than we do and they tend of have export economies because the same people stay in their jobs for life and get better and better at what they make. In this country, people have multiple jobs before they are thirty and this mobility of our work force means that we don’t make very many things that other people want to buy. In the meantime, we can’t decide whether a country like China, which owns a large fraction of our debt, is an enemy or friendly competitor. If it’s the latter we had better fix a lot that’s broken about the social fabric of our country.

RFM

Sputnik I

The announcement that the Tevatron particle accelerator will be closed by the Department of Energy (DOE) in September of this year, prompted the following:
At the close of WWII, when American science had produced the first atomic weapon, it seemed as if we had an insurmountable and unchallenged lead in nuclear science and technology. But that lead quickly faded into an  armaments race, once the Soviets developed their own atomic device as the Cold War began in earnest. Two other prominent developments in America at that time included the dawn of nuclear energy, developed under the Atomic Energy Commission (AEC) and basic science research into the structure of the atom, carried out largely within our research universities. Some of the latter had already begun when Robert Oppenheimer took a position at Berkeley and began to acquire scientific visibility in nuclear physics. Until that time, nuclear physics was an almost exclusively European enterprise. But after the war, nuclear physics rapidly acquired a new identity: Made in America. Some universities suddenly emerged as major science research institutions through the acquisition of a linear accelerator, like that developed at Stanford University in 1962. Within the American research university, the dominance of nuclear physics in the early days after the war, it the most visible scientific discipline on the American campus: in the 1950s it was common to judge the quality of an entire research university by knowing where its Physics department was nationally ranked. Though national laboratories continued to develop nuclear technology, largely expressed through improvements in military hardware, research university nuclear physics pursued the structure of the atom and a field known as “particle physics” emerged as physicists bombarded atoms with increasingly higher energy particles and watched for the appearance of subatomic particles released by the atomic scale collisions. It still challenges the imagination to realize that a single atom with its electrons flowing in orbit is mostly a vast empty space and once that is grasped,  then try to understand that, if this is true, why don’t we fall through the floor rather than being supported by it? The reason that we don’t fall through the floor is the same reason that splitting the atom unleashes enormous energy.

In the era of the physicist, it seemed like a permanent pecking order had been established in American research universities that would go on in perpetuity, with nuclear physics permanently installed as the head honcho: Federal funding guaranteed it. Of course, along the way, many nuclear physicists evolved into astrophysicists, but that is a different story. In a fairly dramatic way, the pecking order of science in America, with physics at the top,  began to change soon after the Russians launched Sputnik in 1957 (a month later the Russians launched Sputnik II).  This Russian achievement created such a shock during the Eisenhower administration such that there was a kind of mass hysteria to think that the Russians could beat us at anything–but they did.  Physicist Edward Teller, the patron saint of the hydrogen bomb, said, in response to Sputnik, that the United States had lost “a battle more important and greater than Pearl Harbor“ (you can recognize Teller’s attitude as that of someone with a personal investment in continuing with the arms race). In response to Sputnik, Eisenhower did what every self-respecting President does in a pinch–he turned to a committee charged with making recommendations and assessments on what to do. One of the major reports to come out of that period was the Seaborg report, which substantiated what many Americans had concluded already, that America had fallen behind the Russians in science and math education and a national consensus developed that not enough Americans had an opportunity to get their education at a major research university. The Seaborg report recommended a doubling of research universities in America. At the time of Sputnik,  based on the percentage of Ph.Ds generated in the prewar days (the basic university structure did not change significantly from the 1930s until Sputnik arrived), there were only sixteen research universities, most of which were in the Midwest or East Coast, with three on the West Coast; this “sweet sixteen” included (not ranked in order; * are public/state universities) (1) University of Minnesota*; 2) Stanford; 3) University of Chicago; 4) Columbia University; 5) University of Illinois*; 6) University of Michigan*; 7) University of California (Berkeley)*; Harvard; 9) Penn; 10) Princeton; 11) Cornell; 12) Johns Hopkins; 13) Yale; 14) MIT; 15) California Institute technology; 16) University of Wisconsin*. Collectively, these institutions generated the majority of doctorates (PhDs) in the 1930s.

Our national response to Sputnik was probably the single most intelligent decision we made as a nation during the entire fifty years of the Cold War: we made a conscious decision to embellish research universities and establish new ones such that qualified students could experience a more sophisticated and challenging education and research environment, as we made it easier, through student loans, scholarships and fellowships, to get a college education and enroll in graduate school. Thus, we launched the Golden Age of the American Research University which lasted roughly from 1958 to 1968. As a result of this energetic new enterprise, we hired large numbers of faculty and began to develop more sophisticated funding agencies. Infrastructure support, such as improved laboratory space, training grants and support for scientific meetings all took their modern form during those days of accelerated support. Federal funding for research reached its highest % of GNP (0.25% in 1968) during that era.  Today, we have a very large number of research universities. A recent classification system by Carnegie defines a research university as one which has granted at least 50 doctorates in fifteen different disciplines each year. Yours is very likely among them. When Lyndon Johnson was President, he made sure, in the post-Sputnik era, that the Federal funding agencies funded much more broadly than they did initially and his watchdog insistence helped to diffuse Federal research dollars more broadly than that observed initially. Thus, Federal funding has penetrated its way into most higher education institutions and of course,  not just through NIH/NSF funding.

Now, you might have thought that accelerated funding for research, induced by the shock of Sputnik, would primarily benefit the mathematicians and physicists, since deficiencies in these areas were supposedly where the problem was. However, the end result of Sputnik was not to reinforce physics and math, though some of that took place, but the real impact was to shift the emphasis of scientific research away from physics into the biological sciences. The largest recipient of Federal research dollars increasingly went to the National Institutes of Health, not the National Science Foundation (which assumed more responsibility for funding the physical sciences, but was delayed in its creation due to an argument between Vannevar Bush and the Truman administration). There were two reasons for this seeming paradox: first and foremost was Mary Lasker, in honor of whom the Lasker prize is given each year–it is America’s most prestigious scientific award. Lasker (a graduate of the University of Wisconsin) was instrumental in convincing congress to fund health-related research and elected officials realized that they could finally return to their districts and tell their constituents that something was now being done about cancer and heart and lung disease. Legislators discovered that they  could get re-elected that way. People were far more interested in those issues than hearing whether or not we were winning the Cold War. These two forces–Mary Lasker and re-electability based on emphasizing health-related research–merged to create institutional funding that allowed the biological sciences to begin dominating institutional research, first in molecular biology and later in neuroscience. Today, if you want to rank a university on the basis of its scientific reputation, you are far more likely to pick an area of biological or medical sciences rather than physics.

Though things drifted away from physics as the epicenter of the American research university, American physicists still dominated the fields of astrophysics and particle physics and the opening of the Tevatron accelerator in Illinois (as part of the Fermilab) in 1983, ushered in a three-decade period of creative particle physics, progress and continued American dominance of the field. But the glow of American physics was shattered when Congress ceased to fund the supercollider that was then under construction in Texas in the early 1990s. That failure created a huge wave of unemployment among particle physicists in America, many of whom went to Wall Street and helped design the equations and mathematical models for investment houses that helped bring down the economy and usher in our current deep recession.  The lack of a new generation of particle accelerators in America, allowed the Europeans to proceed with their plans for one, without U.S. competition; they constructed the Large Hadron Collider outside Geneva at  CERN, the European Organization for Nuclear Research, which opened in 2010. If there exists a Higgs Boson, the particle that is hypothesized to give atomic particles much of their mass, then it will likely be discovered at the CERN accelerator, with Americans serving as participants, advisers and colleagues rather than leaders in the effort. That is why it is with a note of sadness that I personally view the Department of Energy’s decision to close the Tevatron accelerator: accompanying that announcement is the unannounced end of American exceptionalism in particle physics.

America still rules the biological sciences, but the eight years of Bush’s suppression of science and its harsh funding policies, particularly with regard to stem cell research, put American biological sciences on the same trajectory that American particle physics has undergone in the last few decades. Bush’s policies invited other countries to accelerate their own research activities and today we are no longer keeping the most talented scientists that come from other countries to study and obtain their PhD in the United States. I have seen our offers to them go unheeded as they go to South Korea, Europe or back to China. The tide of science has shifted, primarily because Americans are too naive to understand the importance of science in an industrialized society. It’s as if we have retreated back to the 1930s–like de javu all over again!  This recession, when it’s over, may be the single most devastating event to American science in its all too brief history.
RFM

To Obama’s credit, the American Re-investment and Recovery Act (ARRA) of 2009 at least partially funded some of the recommendations that came out of the 2005 NAS report. However, the two-year period of ARRA’s influence is now coming to an end and no programmatic energy seems available to build on ARRA, so we are likely to slide back into pre-stimulus conditions, rather than continue to move forward.  Five years after the NAS committee report, the same committee (consisting of scientists, educators and corporate heads) generated the current report of 2010,  Rising Above the Gathering Storm, Revisited: Rapidly Approaching Category 5 which attempts to re-evaluate the issues by summarizing what was done and what still lies ahead of us, if we are going to reverse a significant decline in the standard of living for most Americans.   The last link provided allows you to visit the NAS website and download a copy of the 100 plus page report as a pdf (for free) or you can buy a book of the report for $18. The central concept that all of us must debate is this: to what degree have middle class income levels stagnated over the past 30 years because businesses have changed their model from the Golden Watch (50 years of company service rather than the certain future of downsizing and corporate buyouts) to the golden parachute (businesses take increases in worker productivity and don’t reward the workers, but shift the corporate wealth to reimburse lavish executive salaries and the value of the company stock?).  Alternatively, to what degree have we failed our workers because we are not bringing on new innovative technology jobs that can replace and improve workers compensation and job security? The NAS report focuses exclusively on the latter issue, but we cannot forget or forgive the super capitalism conditions that brought one in seven Americans into poverty.

The report’s center of gravity is that our economy must generate good-paying jobs that rely on high skills and education and that we must stimulate and reward innovation that seeks to generate such jobs. The report emphasizes the fact that over the past few decades investments in science and technology have provided the vast majority of jobs created in our economy, including those created at the bottom of the socioeconomic scale.  To recover our leadership will require  massive investments in how we educate our students in science and engineering, to inspire a new generation of creative, scientific solutions to our problems, while energizing the formation of a new economy, one that takes full advantage of our need to return to scientific and technical innovation within our own borders. The 2010 report emphasizes that we are falling seriously behind from where we once thought we should be. Right now the globalization of our economy heavily favors the Chinese, whose recent wealth, acquired through manufacturing, conforms to the same model that led to our own acquired wealth in the 19th and 20th centuries–that new Chinese wealth is now being invested and re-invested into economic expansion in manufacturing, including the high tech sector of the Chinese and global economy. Right now, China seems to have a lock on manufacturing solar panels and American companies are finding it tough going and hard to raise money to fund their own manufacturing capacity in this young industry. We gave away too much and we lost too much time during the GW Bush administration, whose focus primarily was on the financial sector of our economy and the privatization of government agencies. The culture of our country has become financialized and far too much attention is given to using money to make money, often by the same deceptive methods that led to our economic meltdown. If you want to read an alarming story, the NYT recently reported on the difficulty that American solar panel companies are having getting started and competing with the Chinese.

One section of the report provides factoid summaries that, by themselves, should ring alarm bells or evoke disgust that we should ever have let ourselves get so far behind, particularly since we seem to get politically distracted by thirty years of cultural wars.  As I read each factoid in the report, I couldn’t stop, as each new summary  seemed more telling than its predecessor, though there are many more in the publication. Here are a few (the numbers at the end are the references which can be obtained from the pdf article).

• Thirty years ago, ten percent of California’s general fund went to higher education and three percent to prisons. Today, nearly eleven percent goes to prisons and eight percent to higher education.1
• China is now second in the world in its publication of biomedical research articles, having recently surpassed Japan, the United Kingdom, Germany, Italy, France, Canada and Spain.2
• The United States now ranks 22nd among the world’s nations in the density of broadband Internet penetration and 72nd in the density of mobile telephony subscriptions.3
• In 2009, 51 percent of United States patents were awarded to non-United States companies.4
• The World Economic Forum ranks the United States 48th in quality of mathematics and science education.5
• Of Wal-Mart’s 6,000 suppliers, 5,000 are in China.6
• There are sixteen energy companies in the world with larger reserves than the largest United States company.7
• IBM’s once promising PC business is now owned by a Chinese company.8
• The legendary Bell Laboratories is now owned by a French company.9
• Hon Hai Precision Industry Co. (computer manufacturing) employs more people than the worldwide employment of Apple, Dell, Microsoft, Intel and Sony combined.10
• Only four of the top ten companies receiving United States patents last year were United States companies.12
• United States consumers spend significantly more on potato chips than the government devotes to energy R&D.13
• In 2000 the number of foreign students studying the physical sciences and engineering in United States graduate schools for the first time surpassed the number of United States students.15
• Federal funding of research in the physical sciences as a fraction of GDP fell by 54 percent in the 25 years after 1970. The decline in engineering funding was 51 percent.16
• Manufacturing employment in the U.S. computer industry is now lower than when the first personal computer was built in 1975.18
• In the 2009 rankings of the Information Technology and Innovation Foundation the U.S. was in sixth place in global innovation-based competitiveness, but ranked 40th in the rate of change over the past decade.19
• China has now replaced the United States as the world’s number one high-technology exporter.20
• According to the ACT College Readiness report, 78 percent of high school graduates did not meet the readiness benchmark levels for one or more entry-level college courses in mathematics, science, reading and English.64

On and on it goes as the list grows larger with no entries in which we are number one, unless you want to include our per capita expenditures on health care or the fact that we have a deficient k-12 education system in science, with   many science and math teachers who lack accreditation in the discipline. Yet, we spend more per student on education than any other OECD (Organization for Economic Cooperation and Development) country, but we continue to fall behind in math and science. Are teachers are the problem? I say parents are the problem combined with a popular culture that downplays science and technology, while emphasizing pop cultural icons. The problem is our modern culture. Perhaps it will take further erosion of our standard of living before science can be implemented as it was when Sputnik was first launched in 1957. As the committee says in their report “The United States appears to be on a course that will lead to a declining, not growing, standard of living for our children and grandchildren.”

The committee’s top recommendation is to generate 10,000 new teachers trained in math and science and get them out into the k-12 school systems to benefit the students. Move American students to the best students in science and math education in the world. Also proposed is to “Strengthen the skills of 250,000 current teachers by such actions as subsidizing the achievement of master’s degrees (in science, mathematics, or engineering)
and participation in workshops, and create a world-class mathematics and science curriculum available for voluntary adoption by local school districts throughout the nation.”

You can’t have well-trained science teachers without increased scientific research in the universities that train them, so the committee supports the doubling of math and science research expenditures over a seven year period. Although the committee’s proposal was attempting to emulate the doubling of the NIH budget, those of us funded through NIH have discovered that after the doubling, GW Bush constrained the growth of NIH thereafter to an annual rate of 1%  and today, the budget of NIH is roughly where it would have been without the period of doubling, but  maintained on the traditional growth rate of 6% per annum. In other words,the NIH budget is now as imperiled as it was in the 1990s, with hundreds of quality research grants that go unfunded and our research enterprise reduced to grant writing. Some relief came from ARRA, but that is ending now and we will soon back to the days of less than 10% funding in many areas of NIH and a very bleak picture for research opportunities–even in biomedical research. The highest level of % GDP funding for NIH took place in the med 1960s and once the “threats” of Sputnik were deemed to be over-rated, funding for basic science research, even in medically related fields began to decline as a % of GDP. Obama has sworn to reverse the decline in research emphasis, but it is not clear whether the climate we are currently in will allow any new priorities to be implemented. The election we are facing could well postpone, if not outright kill any new initiatives to increase the scientific competitiveness of our American enterprise.

Those that remain in the financial sector probably feel OK about the country. These financial giants are not investing in rebuilding America, but seem content with continuity in creating new financial bubbles. In addition, they like the fact that America has a very big military and can protect the country and themselves should significant problems arise. So, the fact that they are making big bucks, means that nothing serious has to be done, except that Obama probably has to go, since he is the one force that meddles too much with the industry. The only healthy way to solve America’s highly risky future is to take over the banks, force them to make loans that help rebuild the country, provide incentives for American firms to keep jobs in America and expand the technological and innovative side of their manufacturing. If a company decides to relocate, then give the workers of that company the opportunity, with low interest Federal loans,  to buy the company and continue supporting the jobs. After all, we allow leveraged buyouts by rich people, why not leverage buyouts for the workers. This is not a serious breach with the policies we have in place today, it’s just adding a little more force to the arm twisting. Yes, you could describe this as an extension of socialism, but does anyone believe that government support of big business with tax breaks and subsidies is not a form of socialism. Are we that afraid of a word, especially when it’s something we already have in play?

What almost no one understands, including those that vigorously support or oppose the injection of more science into our educational and research objectives is that science itself is politically divisive. The right-wing of this country, including many in the financial sector, believe that too much influence that comes from science introduces a fifth leg of the governing stool and that it has the potential to completely swamp the politicians who want to remain in control and keep America as a playground for the wealthy. We have met the enemy and it is us!

RFM

A gripping story, describing three generations within a family (the Nicholson family in Grafton, Mass) who experienced three different transitions in our economy, including the post-WW II, post-Vietnam and today’s recession, was published a few weeks ago in the New York Times. For the millennial generation of 18-29, the unemployment rate, officially at 14 percent, approaches the level  for that group during the Great Depression. But, now add to that the 23 percent that have stopped looking for work, based on Bureau of Labor statistics, and you come up with a whopping unemployment rate of 37 percent, the highest it has been in more than three decades and within the range of the 1930s. For young adults seeking work today, this is their Great Depression. Adult unemployment in the Great Depression reached about 20% of the work force (though numbers for this period are not as accurate as today’s; some numbers that are higher for unemployment during the depression did not include classifying workers in emergency work, like the temporary work created by Federal jobs programs, etc as being employed).

Among the millennial generation, a college education helps, but the unemployment rate among college-educated young adults is currently at 5.5%, or nearly double what it was on the eve of the Great Recession in 2007. That is the highest level by two percentage points, since the bureau began keeping records in 1994 for those with at least four years of college. A college degree is no longer an insurance policy against prolonged unemployment. We have hollowed out our economy and exported many good paying jobs to China, India, Ireland and many other countries. In contrast to the ease with which an American company can move to another country, in Germany for instance, it is much harder, because any country proposing to move must make certain that they have employee retirement, benefits and alternative job training taken care of and many firms in that country have governing boards that have 50% of membership elected by the employees. Companies faced with these obstacles often give up thinking about relocating to take advantage of cheap labor in another country.

So far there are no signs that things are getting better for any group of workers in our economy, quite independent of their level of education. Indeed, recent economic forecasts suggest that our economy will contract before it expands, as stimulus money runs dry and nothing is available to pick up the slack.  Europe’s decision to introduce an anti-Keynesian fix to their problems, beginning with Greece, is compounding the issues we face in reaching for a more global and balanced economic recovery. So what happened?

A major fault line in our economic recovery strategy was the insufficient level of the stimulus package we engineered to soften the blow of the collapse. If we had invested somewhere between two and three times what we did invest as our stimulus package, we surely would have been seeing more light at the end of the tunnel by now (too much of the stimulus package was in the form of tax breaks, which are often not used or used late). Very likely, we would have started seeing new job growth through a stronger nurturing of the new economy we will require,  as new businesses could have been generated based on the richest resource we have–our scientific and technological skill level, which now lies fallow because of poor investment decisions and too much money spent on propping up banks and corrupt financial institutions. This unfortunate outcome, the lack of a sufficient Keynesian response to our financial collapse, has left us with rich bankers and unemployed young people. Is that an even sensible trade? Where will our economy come from that we need in order to generate good-paying jobs that can fill the void and the reduce the vast unemployment debt we have accumulated as the biggest obstacle for our future? Right now we seem to be content to let the bankers get away with it and allow our young people to suffer. They are paying the real cost of this economic disaster.

The youngest member of the Nicholson family, caught in exactly this circumstance, remains optimistic about his future, a very different outlook compared to those who went through the Great Depression in the 1930s. Let’s hope we can right our ship in sufficient time to reward his optimism and start generating the new economy by investing in the one area where we stand a chance of regaining leadership–the art and science of saving our planet and learning to live within the limitations of  finite planetary resources. Are we that stupid? Have we been out-Foxed? Is corporate power too much for us to resist and prevent us from reshaping our economic foundations? I don’t think so, but these numbers for the unemployment among young people must become more broadly known and right now the traditional media that we rely on for news refuses to get down and dirty in the places we need in order to flush out and reveal the truly suffering class, our youth, who are currently spared from despair by their innate optimism. How much longer can that last? It would be better for all of us if it didn’t last much beyond tomorrow because it is fixable.

As a companion to the worst recession since the Great Depression, we have a political and financial system that got embedded in the army and acquired the art of generating financial bubbles. Those same people that gave us our bubbles, including the dot com and the sub-prime mortgage fiasco, have given us a solution by a massive transfer of wealth that has yet to be recognized as such. Scott Nicholson’s good paying job went into buying a Goldman Sachs executive a new house and a new boat and a twenty five year lease on an expensive boat slip in Long Island.

According to Lou Dubose, editor of The Washington Spectator (highly recommended), here is what the banking industry visited on our economy: $14 trillion in lost household wealth; 8 million jobs gone, not yet returned or even on the horizon (thus the need for brand new ones); 200 community banks closed and more than $14 trillion in bailouts accompanied by a staggering increase in deficit spending needed to keep the economy out of a depression (it just wasn’t enough to give us a good jump start). The credit default swaps that swamped our economy were created by speculators that didn’t actually own the stock in question. What they made was a bet about whether one stock might default and another investor gave them  credit default swap insurance against that happening. Neither investor actually invested in the company per se. By the time credit default-swap trading destroyed the economy, 90 percent of the traders were speculators and many of them were banks. Furthermore, it was the Wall Street bond lawyers who wrote the “Commodities Future Modernization Act” that Phil Gramm held up as the wave for our new future in 2000. With the final regulatory constraints out of the way, over the counter derivatives went from $100 trillion in 2000 to $600 trillion when the economy collapsed in 2008–that was 10 times the GDP of the entire world! Graham was Wall Street’s operative in the Senate, but the bill had strong support from Clinton’s Treasury Secretary (Larry Summers–now in charge of Obama’s National Economic Council). Not surprisingly that bill also had the strong endorsement of Alan Greenspan. The same people who engineered our financial meltdown are now engineering our recovery. Any wonder why we are not seeing anything close to a recovery? Is there any doubt why the recovery that was engineered for us to enjoy is not enjoyable at all? Obama hired the wrong team. We need a new one. For starters, I would recommend Joseph Stiglitz.

RFM

This bill sailed through the house, but got blocked in the Senate where all good things come to an end. But the clever tactic of including it in the reconciliation process (part of the savings from the new student loan bill will help pay for the new healthcare insurance bill) dropped it into the can-do box under the radar screen.

Student loans began with the Federal Family Education Loan Program, created in 1965. Under Clinton, the Department of Education began its own direct loan program and most schools would sign up for one vs the other (bank vs Fed), not both. At that time, the Federal Government would set the rates and terms. Once at 20% of all student loans, as our economy went south, the percentage of direct Federal loans has grown, now at about 35% and soon to be 100% of all new student loans. Banks can still give loans, but they will not be secured by the Federal Government and will presumably be prohibitive in cost–so be wary!

Loan repayment schedules have been improved. The new bill will limit payments to 10 percent of discretionary income and forgive balances after 20 years. But these changes only apply to loans taken out by new borrowers on or after July 1, 2014. They are not retroactive.

Public-service workers on the income-based repayment plan can have their remaining balances forgiven after 10 years. That’s the same as the old law.

Now the major challenge in front of us, is to make a new economy that provides jobs for college graduates and doesn’t reduce them to competing for the same jobs that high school graduates get in line for. So far there is too much of that going around, especially for an “advanced” “civilized” “modern” society. That is the mother of all assignments for the weekend. How to build a better economy. Here is my first suggestion: any business that is going to be sold by its owners or downsized by a Private Equity firm, is given first opportunity for purchase to the employees, who with government help to secure loans, can assume ownership and try to run the business as a profitable enterprise. Remember that one problem we have is what I call the “Microsoft Problem.” That is too many corporations trying to emulate Microsoft’s unseemly profit margins and as a result, workers pay has stagnated and they did not financially gain as their company productivity went up: savings from that source went into CEO pay and company profit margins to elevate the value of the stock. The golden parachute appeared and the gold watch went in the toilet.   Worker ownership should be less concerned about profits and more concerned about jobs and products. And, we know where the creativity for the place is typically found–yes in the workers. Remember the high financiers of today’s corporate world, understand a leveraged buyout, but don’t know how to make things. Making things is the key to an industrialized society with equitable wealth distribution. Everybody has a skill. We need to get all those Chrisitan militia people back to work as well. They are getting a little scary out in the hinterland.

RFM

Pawlenty was inspired to enter politics because, when he was a law student at the University of Minnesota, he heard Ronald Reagan say “government is not the solution, it’s part of the problem.” You all remember that one. It is hard to imagine any adult committing themselves to a political career on the basis of a single slogan, but once you get to know Pawlenty, you realize that, in his case, it might actually be true. Had he been in the GW Bush administration at the right time,  he would have been the first to coin the effective phrase “better a smoking gun than a mushroom cloud.” You get the picture–he’s the kind of quipper that fashions catchy phrases of deep statesmanship timbre.  And, like every good Reaganite, Pawlenty believes that our entire gigantic economy is determined by one thing and one thing only–the income tax rate. So that’s Pawlenty–he’s in favor of slogans and against taxes. He also goes Reagan one further as an ideologue–he probably doesn’t have Alzheimer’s yet, which otherwise might account for some of his actions. In that sense, Reagan, or at least his legacy, was lucky.

After Pawlenty’s election as governor (2002), replacing our previous wrestler governor, Jesse Ventura, he began to wrestle on his own with the state budget. He looked at the tax structure of Minnesota and claimed that our high taxes were driving businesses out of the state.  His quip was “I can hear the sucking sound of jobs leaving Minnesota.” In response to that quip, a well-known businessman, a member of Pawlenty’s own party, wrote a popular op-ed piece, pointing out that companies actually  like to settle in Minnesota because the taxes in the state have been used judiciously to fabricate an excellent public education system and companies like to settle in states where there is a well-educated workforce. That might be one reason why, until Pawlenty came along, the state of Minnesota had one of the highest per capita earnings in the country. In fact, when you look at the relationship between the State and Federal governments financial exchange, that is, the difference between what the Feds pay to the State of Minnesota from all sources of Federal expenditures vs what the State pays to the Federal government, Minnesota was in the top 5 states in the country, with each individual in the state paying ~$1294 more to the Federal government than the state got back from the Feds. That’s how we keep a lot of Reagan states from going into receivership. Pawlenty’s ideologue approach to that problem was to reduce the income growth of the state and the average median income in comparison to the growth rates of most other states. In that way the Fed/State balance picture should look better. Got it?

Then too there is the matter of Pawlenty’s priorities. He went to law school at a time when the state and the Federal government were helping to subsidize higher education. In fact, he might not have been able to afford to go to college, much less law school, if tuition had not been relatively low, all by design to improve the education and skills of our citizens.  Given that fact, once elected governor of Minnesota, he promptly and severly cut the higher education budget, forcing higher tuition costs to the point that fewer and fewer people (that are roughly where Pawlenty was economically about thirty years ago) can afford to go to college. Currently the medical school at the University of Minnesota has the second highest rate of tuition for any public medical school in the country (Colorado is first).

Well at last some people seem to be on to Pawlenty. Perhaps it was the Obama victory coupled to the financial collapse that has convinced just about everyone except Pawlenty that Reaganism hasn’t worked out quite as well as he would have us believe. As if called upon to be the national spokesman to head off a complete collapse of Reaganism, Pawlenty tried one more quip of the type that in the past he has managed to get away with. The state recently released its budget projection for the coming fiscal year and,  like every other state, things don’t look good, with a $4.6 billion deficit projected. So, in response to the devastating news, Pawlenty held a press conference to provide what he thought was convincing statistical evidence that states which taxed less were in far better shape than Minnesota. The trouble was that Pawlenty’s own data, obtained from the Census Bureau,  refuted his case. Using the same data that Pawlenty showed at his press conference, a reporter for Min2020 (Jeff Van Wychen) showed that under Pawlenty, the state of Minnesota had cut its tax rate from 2002-2006 by 10.9 %. Only three other states cut their spending by more than Minnesota. But further elaboration of the data revealed that during that period of declining state taxes, employment growth was substantially below the national average (see bar graph). Of equal importance, other reports have shown that Minnesota’s position relative to other states in terms of median household income, unemployment levels, pupil-teacher ratios, and many other important indicators of a state’s well-being have deteriorated substantially. When these factors are counted, Minnesota has been among the ten worst performing states in the country, all taking place during Pawlenty’s tenure as governor. In short, Pawlenty put the state of Minnesota into a nosedive. In fact, Minnesota did not become a laboratory to prove that Reaganomics works, as Pawlenty had promised, but quite the opposite. Under Pawlenty, Minnesota has been the national experiment to demonstrate what happens to a once prosperous state when you stop investing in education and infrastructure. Our bridge didn’t fall down by accident (it was originally built with the wrong size gusset plates, but Federal support for bridge maintenance was used for other “budget balancing” strategies).

I don’t know how quickly Pawlenty left the room after demonstrating his prowess for statistics and facts. Nor do we know yet whether the Minnesota 2020 article will catch on more widely in the state. But at least one reporter is hot on the scent. Given Pawlenty’s miserable performance as an outdated ideologue, it would be entirely fitting to invite him to California to close the last leaf on the book of Reaganomics, while visiting the Reagan library and going horseback riding with Nancy. I would love to be there. We have two more years of this clown and he has reassured Minnesotans that he won’t accept Federal money to help Minnesota meet its enormous budget deficit. Have you noticed how few Republican ideologues can ever learn something new? It’s just not in their DNA.