Is it still My Kind of Town? Chicago in the Age of Neo-Liberalism

By Matthew Dunn

                Chicago, the windy city, The Second City, Chi-town.  A place where the only thing bigger than the  skyscrapers are the dreams of its citizens from the traders in the pits, to the ballers on the courts. Creator of the of deep dish, the Chicago dog, and all kinds of magnificent meat.  Home of those lovable losers, The Chicago Cubs, the presently great Chicago Blackhawks, and of course Da Bears.  It gave us Michael Jordan, who not only won basketball championships, but forever cemented the relationship between business and sports.  Chicago gave us the Second City Comedy troupe, which spawned the careers of many of our great comedians like Bill Murray and Steven Colbert.  It allowed the rise of an African American woman, Oprah Winfrey, who was born into poverty to triumph over adversity and become one of the most successful media personalities ever.  And of course last but not least, Chicago gave rise to a small time community organizer, who would eventually become the most powerful person on the planet. 

                There is no doubt that Chicago has been a tremendous part of the American culture.  Besides these cultural phenomena, Chicago was also the birthplace of many of the most influential economic ideas.  Most of these came from The University of Chicago’s Department of Economics.  The Chicago School of Economics has long been considered one of the world’s best economic departments.  The faculty of the department have won more international awards for achievement in economics than any other university.[1]

                Along with the prestige of the university department, has come a general set of economic ideas.  Collectively these ideas make up much of what could be called free market fundamentalism, monetarism, or neoliberalism.  The ideas of neoliberalism could best be described in a quote by Milton Friedman, a Nobel Prize winner in economics, who taught at the University of Chicago:

The society that puts equality before freedom will end up with neither.  The society that puts freedom before equality will end up with a great measure of both.[2]

                Those who follow along with the neoliberal way of thinking believe that government causes almost all major economic problems.  This happens because governments try to contain or control the economic market.  Because of this neoliberal economists advocate for governments to de-politicize the economy. 

                Price Inflation is one of the major problems that neoliberal economists believe is caused by governments.  Neoliberal economists advocate for government to limit its actions so it can stop inflation.  Because governments have a tendency to spend more money than they take in, governments find themselves running deficits quite often.  Therefore because governments increase the supply of money, they are the main cause of inflation.  Neoliberal economists advocate that governments counter this by having government pass laws requiring governments to balance their budgets.[3]  In order to help them reach their goal of having a balanced budget, governments should also sell off assets, which private business could run at a profit.  This will help private business as well as helping government to unload costly assets.  Also, neoliberal economists recommend that governments loosen and end regulations on the market, in order to allow the market to reach its full potential.[4] [5]

                Since many of these ideas were formulated at the University of Chicago, it is only natural that they would have a great deal of influence on the city.  Since the 1800’s Chicago had been home to the Chicago Board of Trade, the world’s oldest futures and options exchange.  This exchange and the others that followed (such as the Chicago Mercantile Exchange) trade futures contracts on commodities such as eggs, meat, and grain.  These contracts are designed to reduce the amount of risk in price fluctuations for the suppliers of these commodities.  Traders who buy and sell these contracts can profit greatly or fail greatly, when they speculate on the contracts.  Free market economists from the University of Chicago saw these exchanges in the postwar United States as one of the last bastions of true free market capitalism. 

                In the 1960’s Leo Melamed became Chairman of the Chicago Mercantile Exchange.  Melamed was very interested in the ideas of free market capitalism and sought to expand the business of the exchange.  He believed that the exchange could make a great deal of profit trading futures in financial products such as currencies, stocks, and bonds.  Melamed discussed his ideas with Milton Friedman who went on to write a paper arguing for futures trading in the currency market.[6]  Friedman’s article and Melamed’s business savvy, worked and the exchange began trading futures based on financial products in the 1970’s.[7]  With trading in financial futures underway, the Chicago Mercantile Exchange expanded rapidly, and financial trading would create enormous fortunes in the city of Chicago in the following decades. 

                Soon after this in the 1980’s, Chicago would see the rise of it longest ever serving mayor, Richard M. Daley.  Daley is the son of the second longest serving mayor in Chicago history Richard J. Daley.  The elder Daley, was known as a tremendous power broker in the national Democratic Party, rumored to have rigged the Presidential Election in Chicago in 1960 to help John F. Kennedy become president.  However, once the younger Daley became mayor in the late 80s, his economic policies looked much more like a strong Republican’s rather than the party his father had been so influential in.  It seems as though he was strongly influenced by the economic ideas which emanated out of the prestigious university of his hometown. 

                Daley’s election was celebrated by the Chicago business community.  Daley was thought of as pro-business, which essentially meant that he supported neoliberal economic policies.  He laid off workers in city industries to cut government spending, supported renovations to bring in tourism and wealthy residents, and privatized city industries.  In one of his most famous moves, Daley privatized the city’s parking meters and gave a private company rights to the meters for 75 years.[8]  In addition to this, Daley along with Chicago Public Schools CEO Arne Duncan, pressed for more accountability in the schools, closed failing schools, and opened up more privately managed charter schools.[9] [10]

                Daley was able to win five terms as mayor in Chicago, serving even longer than his father did.  After his fifth term ended he decided not to run for another and Rahm Emmanuel, The White House Chief of Staff, succeeded him.  One of Emmanuel’s first jobs in politics was working on Daley’s campaign.[11]  Emmanuel won by a large margin in the mayoral election and has largely carried on Daley’s policies especially the one’s dealing with Chicago’s public schools. 

               

                So how has all of this free market policy worked out in Chicago?  Has it become an entrepreneur’s  paradise, that might have been imagined by economists at the University of Chicago?  Are the people of Chicago actively pursuing their own self interest, leading to a greater good?  For many of the residents of Chicago unfortunately the answer is no.

                Chicago in many ways can be seen as a failing city.  Descriptions of Chicago in recent business magazines use words like depressing and miserable in their headlines to describe the current state of affairs.  The unemployment rate and the rate of home foreclosure in Chicago are both well above the national average.  For those who are not employed, high sales taxes, long commute times, and the highest gas prices in the nation make for unpleasant travel conditions.[12]  For those without regular employment, coupled with a public transportation system that is perpetually underfunded, it compounds their already difficult situation.[13]  In addition to this, the parking meters, which were privatized under Daley, are now the most expensive in North America.[14]  Turns out privatization doesn’t always work out best for the consumer. 

                Chicago’s schools were reorganized in a neoliberal fashion under Daley as well.  However, this has not led Chicago’s schools to any kind of great improvement.  According to Northwestern University Chicago’s dropout rate is two points higher than the national average, and one out of every five male Chicagoans does not have a high school diploma.[15]  On the National Assessment of Educational Progress, tests that measure educational ability nationwide, Chicago’s test scores remained flat between 2003-2007, and high school performance continued to be very low.[16]  However, despite this, Mayor Emmanuel has continued to follow neoliberal policies in education, and is in the process of closing over fifty schools.[17]

                Although Chicago has had neoliberal policies drive their government actions for over 20 years, it has not helped with the city’s deficit.  The city has run deficits since 2001, and it doesn’t seem to be stopping anytime soon.  The budget deficit is predicted to continue increasing and may reach $800 million by 2014.[18]  With many public services already cut, and key assets sold off to private companies, one wonders where the city government will find the money for their debts. 

                Neoliberal economists believed that the power of the market combined with the reduction of the welfare state, would help African Americans improve their station in society.  Throughout his famous documentary “Free to Choose”, Milton Friedman showed many enterprising African Americans who were not taking government handouts and working hard to become part of the entrepreneurial and middle classes.  Chicago was a city that was much affected by segregation in the postwar era.  Martin Luther King Jr. moved to Chicago in 1966, in order to highlight the great amount of housing segregation which existed there.[19]  Has the power of the marketplace liberated African Americans from extreme poverty there?  Unfortunately it has not.  The average black person makes 45% of what whites make in Chicago.  The only city where the income disparity is worse between whites and blacks  in America is Dallas.[20]  In addition to this, segregation seems to continue on a great scale in Chicago.  The historically African America district of the South Side which has a population of 752,496, continues to be 93% African American.[21]

                Statistics such as these are abhorrent to many, but perhaps the most horrifying statistic about Chicago is the murder rate.  According to a recent investigative report, between 2003 and 2011 Chicago had 4,265 people murdered. This is death toll almost as high as the number of Americans killed in The Iraq War during the same time period.  In 2012, 512 people were killed.  This has led to some gang members nicknaming Chicago “Chiraq”.[22]  With murder rates as high as this, Chicago is one of the most violent cities in the nation. 

                In November of 2008, Barack Obama was elected President of the United States.  As a man who had worked his way up through Chicago politics, he had much to thank the city for.  When he first went to Washington, he brought Arne Duncan and Rahm Emmanuel along with him, to give them high level cabinet posts.  By appointing these two men to his cabinet, he showed that he was in favor of the policies that Chicago had followed in the decades before.  Frank Sinatra once sang in the famous song “My Kind of Town”, that Chicago was one town that won’t let you down.  Unfortunately for many of the residents of Chicago, the conditions have let down many, especially the most vulnerable populations.  If these neoliberal policies, many of which originated in Chicago, continue in the United States, much of the country will continue to be let down. 

               

               

               

               

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[1] University of Chicago Economic Department, http://economics.uchicago.edu/about/history.shtml.  (Accessed June 18, 2013). 

[2] Friedman, Milton.  Free To Choose: A Personal Statement.  Directed by Peter Robinson.  Arlington, Virginia, 1980. 

[3] Chang, Ha-Joon.  Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism.  New York: Bloomsbury Press, 2008.  Location 3167. 

[4] Klein, Naomi.  The Shock Doctrine.  The Rise of Disaster Capitalism.  New York:  Picador, 2007.  Pgs 68-69. 

[5] These are no means the only ideas of neoliberal economists, just some of the major ones.  If you are interested in learning more about neoliberal economic theory any of the books or films mentioned in these footnotes can give you a great deal of information.

[6] Lambert, Emily.  The Futures:  The Rise of the Speculator and the Origins of the World’s Biggest Markets.  New York: Basic Books, 2010.  Pgs 80-82. 

[7] Harvey, David.  The Enigma of Capital and the Crises of Capitalism.  New York:  Oxford University Press, 2010.  Pg 262. 

[8] Moreci, Michael.  “Chicago: The Privatized City of the Future”.  http://www.huffingtonpost.com/michael-moreci/chicago-the-privatized-ci_b_187753.html.  (April 16, 2009).

[9] Kingsbury, Kathleen.  “Will Arne Duncan Shake Up America’s Schools?”.  http://www.time.com/time/nation/article/0,8599,1866783,00.html.  (December 16, 2008). 

[10] Mayor Daley put Chicago’s schools under mayoral control.  The superintendent’s of the Chicago Public Schools was redefined, and renamed the Chief Executive Officer.  This title implies a business leader, rather than a civic one. 

[11] Rahm Emmanuel Biography.  http://en.wikipedia.org/wiki/Rahm_Emanuel.  (Retrived June 17, 2013).

[12] Wile, Rob.  “25 Facts That Make Chicago The Most Depressing Big City in America”.  http://www.businessinsider.com/chicago-is-the-worst-american-city-2013-6#this-year-forbes-named-chicago-the-countrys-fourth-most-miserable-city-its-residents-suffer-from-long-commutes--1. (June 2, 2013).

[13] Moreci, Michael.  “Chicago: The Privatized City of the Future”.  http://www.huffingtonpost.com/michael-moreci/chicago-the-privatized-ci_b_187753.html.  (April 16, 2009).

[14] Abernathy, Samantha.  “Chicago Has North America’s Most Expensive Parking Meters”. http://chicagoist.com/2012/12/26/chicago_has_nations_most_expensive.php.  (December 26, 2012).

[15] Wile, Rob.  “25 Facts That Make Chicago The Most Depressing Big City in America”.  http://www.businessinsider.com/chicago-is-the-worst-american-city-2013-6#this-year-forbes-named-chicago-the-countrys-fourth-most-miserable-city-its-residents-suffer-from-long-commutes--1. (June 2, 2013).

[16] Ravitch, Diane.  The Death and Life of the Great American School System:  How Testing and Choice are Undermining Education.  New York:  Basic Books, 2010.  Pgs 158-159.

[17] Democracy Now.  “Chicago to Shutter 50 Public Schools: Is this Massive Closure an Experiment in Privatization?”  http://www.democracynow.org/2013/5/28/chicago_to_shutter_50_public_schools.  (May 28, 2013). 

[18] Jones, Tim.  “Chicago’s Budget Deficit Widens $50 Million to $635.7 Million”.  http://www.bloomberg.com/news/2011-07-29/chicago-s-budget-deficit-widens-50-million-to-635-7-million-mayor-says.html.  (July 29, 2011).

[19] Allen, Susie and Michael Drapa.  “When King Made History At UChicago”.  http://www.uchicago.edu/features/20120109_mlk/.  (Retrived June 18, 2013).

[20] Cottrell, Megan.  “Second City or Dead Last?  Income Apartheid in Chicago”.  http://www.chicagonow.com/chicago-muckrakers/2011/02/second-city-or-dead-last-income-apartheid-in-chicago/.  (February 28, 2011). 

[21] Demographic Information gained on Wikipedia’s article on the South Side of Chicago.  http://en.wikipedia.org/wiki/South_Side,_Chicago#Demographics.  (Retrived June 18, 2013).

[22] Morton, Thomas. “Chiraq”.  VICE produced by HBO.  Originally aired on June 9, 2013.  Statistics found on corresponding website, http://hbo.vice.com/episode-nine.  

Manufacturing Crisis: Panic Attacks in the American School System

By Matthew Dunn

                American schools are in crisis!  The school system is broken!  The failure of schools is leading to economic catastrophes!  AH I can’t breathe!  In the last few years there have been many statements such as this regarding the current state of education.  But before we allow a panic attack to fully overwhelm us, let’s take a moment and relax, before we let ourselves get out of control. 

                So what has been presented about the crisis of American education?  There have been a lot of statistics thrown around talking about how the United States is falling behind in terms of educational achievement.  According to these statistics the United States ranks near the bottom of the list for educational achievement of the economically developed countries.  The conclusion seems to be that government waste, teacher ineffectiveness, and inefficient management has caused the poor conditions in American schools.  The media has constantly reinforced these messages with news reports and films.  In recent years, education has gotten a great deal more focus because of this supposed crisis.

                With the perception that American schools are failing, policy makers have gone into action to try and address the problem of education.  The No Child Left Behind Law of 2001, set national standards that every school would have to meet or face funding cuts or closing.  In addition to this, policy makers at the state and federal level, have created policies which use market based solutions for education such as the Race to the Top initiative.  These solutions are thought to make schools more efficient because the staff who run the schools will be held accountable for the performance of the students.

So what has this supposed educational crisis done to our nation?  Has it caused other nations to threaten our sovereignty?  Has it caused the sales of our products to become substandard?  Has it negatively affected our economy?  The answers to all three of these questions is no.  As much of the world, the United States has had a great deal of economic problems over the last few years, but these were most caused by wild speculating done in various markets.  Most of this speculation was done by very well educated people.  The crisis in education is often presented as some kind of national security threat, but no educated person can argue that the United States has lost military dominance over the world.  The ease at which the United States seems to navigate multiple wars and covert actions can leave no one doubting that our military abilities are supreme.  Has our competiveness in business weakened?  According to the latest edition of Forbes magazine’s list of 25 largest public companies in the world, ten of them are American, and this nearest competitor is China with five.  Considering that China has around a billion more people than the United States, the U.S. seems to be competing and winning just fine. 

Other arguments say that our workers are not educated enough and companies must import labor from elsewhere to perform highly skilled jobs.  This argument tries to appeal to people worried about the children of America chances in the labor market.  Also it appeals to a nationalistic sense that Americans should be doing the good work in this country.  However, importing labor is nothing new in the United States.  The United States is a country where we have consistently promoted and prided ourselves on having emigrants from other countries moving here.  Since the days of Alexander Hamilton (himself and immigrant) we have tried to get some of the most talented people from around the globe to move here and help our institutions grow.  If one ever watches the quintessential American institution of baseball, we know that many of the best players are brought here from other countries. 

                In fact by judging from some international standards, the United States does not seem to be in crises at all.  According to the United Nations education index which measures level of education as being a component in well being and quality of life, the United States received a score of .978 out of a possible 1 which no nation received.  This score made the United States 13^th in the world on the educational index.  13^th may not be 1^st, but the United States ranks above such other powerful nations such as Germany, France, The United Kingdom, Japan, and China.  It should also be noted that tied for 1^st place on the educational index is Cuba, which we know does not use market based solutions for education.  Sometimes, South Korea is held up as an example that American schools should follow.  South Korea performs very well on international exams and is known as having a top notch education program.  South Korea has extensive testing and test review programs for students.  Incredible amounts of pressure are put on South Korean students to perform well on exams.  In another statistic, South Korea also has one of the highest suicide rates in the world?  Is that the kind of education system we want to be replicating?

                Most of what has been peddled by the educational reform movement has been designed to put Americans in a state of crisis over our educational system.  If the public perceives there is a crisis, than this allows policy makers to implement policies which might never go through it there was substantial public debate on them.  In fact, in New Orleans the very real crisis of Hurricane Katrina was used to close many public schools and open up the city to market based solutions such as the expansion of charter schools.  As a public we should not get too riled up about the state of our schools, because it allows policy makers to play off of our fears and create policies that we might not want.

                However, if we are concerned about the state of our schools, we might want to look at some examples of successful and unsuccessful school areas.  If we want to look at a country which is similar to our own, we can look to Canada.  Canada ranks higher than us in most educational achievement studies, and Canada has a very high percentage of teachers who are unionized and have excellent pay and benefits.  Also because education is very much a state by state issue, we might want to look at individual states.  Massachusetts, when compared to nations internationally, performs at nearly the same levels as top countries.  Massachusetts has a strong statewide curriculum and over 90% of its teachers are unionized.  So apparently when we look at these examples, government planning and unionization, which are so often portrayed as the reasons schools are failing seem to do well in many instances.  So the next time you hear someone who talks about the crises facing America’s schools, just tell them to chill.  

The Fate of Nooglers: An Analysis of The Internship *Spoiler Alert*

               Everyone who is willing to work hard can make it in America.  At least what the old wisdom says.  It is the belief that has caused immigrants to move here from the founding of the nation, and it is the reason that so many of us work so hard in this country.  However, over the last few years some have begun to question the so called “American Dream”, and have pointed out that it is merely a myth.  Those who make this argument have a point, it seems as though the path to prosperity is not an easy one in an era where crisis seems to be everywhere.

                Far from being another dumb comedy, The Internship, addresses this very serious concept.  In the film Owen Wilson and Vince Vaughn play two recently laid off salesmen.  Although they were very good at their jobs, there simply was not a market for their services anymore.  So the two of them take a page out of the old manifest destiny handbook and move west to California and pursue a prestigious internship at Google.  During this internship, the interns will work in teams of five and the team that wins the competition will be given positions at Google.  The two are obviously outmatched by the much younger and tech savvy college interns.  However, through their hard work, positivity, and cleverness both Vaughn and Wilson with their team of misfits manage to win the competition and earn the much coveted positions.  The movie shows that with the right set of personality traits, even people as out of place as the two protagonists, can reach great heights.

The film becomes a product of Hollywood myth making.  While the younger characters in the film complain of how difficult it has become to make it in America, the characters that Wilson and Vaughn play remind the young members of their team to be positive, even when confronted with almost impossible situations.  Their positivity transforms the team and the underdogs go on to win.  Never mind the fact that they are working for nothing, the dream should keep them alive.  Like many other Hollywood films, this one seeks to inspire dreams in its viewers and follows the familiar rags to riches story popular in America. 

Throughout this film, Google is portrayed very well.  As the film is partly a two hour commercial for the company, we see all the great aspects of working and being a part of Google.  In one scene Vaughn is shocked to find out that he can eat and drink whatever he wants from the cafeteria for free.  Also shown is the non-traditional work environment where creativity is encouraged, from glass boards for writing, funky colored bicycles for riding, and nap pods where employees can rest.  This is a far cry from the horrible sales experience that Owen Wilson’s character has in the mattress shop where he is constantly berated by his idiotic and sexually inappropriate boss (played very amusingly by Will Ferrell).  However, there is a great deal of exploitation that we can see Google using as well.  Almost all the people in the film are unpaid interns.  They are told that 95% of them will not get a job at Google.  While working as interns, they not only do typical unpaid work such as customer service, but they will also bring in new business for Google by getting new businesses to advertise with Google, and creating new applications for download.  Google will profit from the work of these interns, but the interns will not share in any of the fruits of their labor.  Therefore with the exception of the winning team, there will be no monetary reward for the interns. 

                In addition to the fact that interns are exploited, the film shows presumably how the function of internships has changed.  Internships were originally thought of as a modern day apprenticeship, where people would learn a trade while working.  This is still the norm when talking about skilled careers such as physicians.  However at Google the students come to the internship already fully qualified for a job in the internet technology field.  The internship acts like more of a tryout or audition for a job.  In fact with the exception of Vaughn and Wilson, none of the characters seems to really learn any new skills.  Almost any of the students in the film would probably make good employees, but because of today’s super competitive world, companies like Google can pick and choose from an enormous pool of candidates.  Candidates then have to prepare themselves for forms of mental combat with others (as shown in the quidditch scene of the film) and be prepared to be used however Google feels they are necessary. 

                However, this review is not intended to discourage dreaming or an American way of thinking.  People should be allowed to pursue work that is stimulating and enjoyable to them.  If the American dream of success is to remain, exploitative practices such as the ones practiced in The Internship, need to be changed.  People who contribute to a company’s financial health should be paid fairly.  While exploitation continues in labor, the dreams of many American workers will be deferred, while only nightmares remain. 

               

                

Dealing with Economic Crisis: A Comparison between Obama and Roosevelt

              The year 2008 brought the United States and the world to a place that has not been seen since the 1930’s.  The financial industry completely turned on its head during that year as the world watched in horror at the magnitude of the drops in the world stock markets.  Falls like this had not been felt since the 1930’s which culminated in the worst economic depression the world had ever seen.  In 2008, Barack Obama was elected president to serve over this crisis.  The public had elected him by a wide margin in hopes that he would fix the economic system of the United States much like Roosevelt had done in 1932.  They hoped that he would improve the prospects of those whose lives were greatly affected by the financial crisis.  Since his election though, many of his supporters have become disheartened with his policies and have felt that he has not done enough to improve the economic system of the United States and improve the situation of the middle classes. 

                Many books about the financial crisis have been written since Obama was elected president in 2008.  There has been an upsurge in economics books written by the so called “New Keynesians” who argue for a return to the economic policies promoted by the economist John Maynard Keynes.  These policies were largely followed by President Roosevelt and the presidents who followed him.  Keynes argued that the government could be a great factor in promoting the economy especially in times of crisis.  These economists, such as Paul Krugman and Joseph Stiglitz, believe that in order to improve the economy the government must take a much more active role in the economy in order to create employment and create more financial regulations in order to stop the types of risky behavior that was undertaken by large financial institutions which were the cause of the crisis.  Since becoming president Obama has given some lip-service to these ideas but he has not aggressively tried to promote new regulations.  This has led to many on the left to become discontent with Obama and believe that he has not lived up to his campaign promises.  Many hoped Obama would be another Roosevelt, whereas now many believe that his economic policies do not differ much from Bill Clinton’s or even George W. Bush’s.

                However, the reason Obama has not taken a similar path to Roosevelt does not lie with Obama himself.  It lies with the different historical circumstances that each one of these men faced during their terms as president.  The worlds in which Obama and Roosevelt took over were very different and they affected the ways that they acted as president. 

                When Franklin D. Roosevelt was elected in 1932, the country was suffering from its worst economic depression ever.  In 1929, the Stock Market had its greatest crash ever and things continued to worsen for the United States.  Banks began to fail and unemployment soared.  In addition to this, the Midwestern agricultural regions experienced terrible dust storms which forced thousands to lose their livelihoods.  After being elected Roosevelt immediately took action.  He wanted the people to know that under his tenure the government was going to take radical action to try and fix the economy.  He created a set of plans known as the New Deal.  These plans included regulating the banks, putting people back to work with government agencies, and providing a social safety net for those who could not support themselves.  In short Roosevelt summed up his plans as “Relief, Recovery, and Reform”.  Not only did these plans prove to be immensely popular with the public, but they put the United States on the path to great success.  These economic policies coupled with the United States victory in World War II led the United States to have great domestic and international economic success in the two decades following the Second World War.

                So if Roosevelt’s policies seemed to be so effective why has Obama not followed the same path?  The answer lies with the different worlds in which each of the presidents lived in.  Roosevelt became president a little over a decade after the most destructive conflict the world had ever seen to that point in World War I.  One of the most significant results of the First World War was the establishment of the Soviet Union.  World War I had completely destroyed the Russian economy and eventually led to the Russian Revolution.  After a series of power battles in 1917, the Communists emerged victorious.  The Communists were committed to a much different type of economic system.  They were completely dedicated to the overthrow of the Capitalist system.  In the Soviet Union all private property was seized by the state and the country was thrown into a period of forced industrialization.  Although these policies resulted in the deaths of millions due to forced starvation and massive imprisonments, for the surviving populations it created something that millions in the United States (and in the rest of the world) wanted desperately during the Great Depression: full employment. 

                After the Russian Revolution the idea of communism spread rapidly to countries all over the world.  Almost all countries developed strong Communist Parties which were committed to starting revolutions in their countries to overthrow the capitalist system.  The United States was not immune to this.  The American Communist Party became a large force in American society during the Great Depression.  Communists got involved the struggle for racial equality, workers unions, and held massive political meetings.  In addition to the Communist Party, the United States had two other leftward factions during the Great Depression.  The first was Socialist Party which had existed in the United States since the early 20^th century.  The Socialists argued for a similar economic program as the Communists but they generally wanted to go about it more gradually.  The Socialist Party candidate for president in 1932, Norman Thomas, garnered almost a million votes.  Lastly, the 1930’s was a period of great unionization in the United States.  Labor unions, began to organize much more aggressively during the depression and they began conducted large scale strike actions.  Many who worked in labor unions became radicalized by the ideas of Socialism and Communism and urged workers to take more aggressive strike actions. 

                These three factions of American society put a tremendous amount of pressure on Roosevelt.  During the years of the 1930’s Roosevelt saw the type of class conflict that was starting in Europe and that beginning in the United States.  Communism had already a major victory in Russia and had significant impact in many of the countries of continental Europe.  Roosevelt knew that if he did not act to address the economic problems of the United States many more would turn to the ideas of communism and they might have more chance of creating a successful revolution in the United States.  So because of this, Roosevelt chose to follow the ideas of Keynes and try to use government intervention in order to save the capitalist system of the United States.

                That brings us to the presidency of Obama.  Since the 1980’s the ideas of Keynes have gone largely out of favor in economics.  Many economists during this time began to believe in the ideas of the Chicago School of Economics which believes in a laissez-faire economy where the government takes a little of a role as possible.  This type of economic thinking has led to enormous prosperity in some cases but it also played a great role in the current economic crisis.  Since the government took no action to regulate the practices of banks and Wall Street Investment firms, they began to take larger and larger risks to make great profits.  In many cases these risks paid off during the economic booms of the 1990s and from 2002-2007.  However, it also has led to more frequent economic crashes, the most severe of which is continuing now. 

                Obama, like his predecessors cannot help but have been influenced by these ideologies.  The Democratic Party has largely followed a plan of deregulation and less government intervention since the 1990s.  When Obama was elected he appointed Larry Summers to lead his economic recovery team.  Summers served as Secretary of the Treasury under former President Clinton, and is a great champion of deregulation and less government. 

                In addition to this, there is no major competing vision for the economies of the world now.  With the exception of Cuba, Communism is no longer practiced in any countries of the world.[1]  All governments around the world during the 1990s began to believe that capitalism was the only economic system which should be followed.  Because of this, Obama does not feel the same pressure that FDR felt because there is no country that others can look to as an alternative.  In addition to the lack of any strong leftwing alternatives in the United States, labor unions have become much weaker.  They no longer have the strength that they once had and in some states unions are almost non-existent. 

                Lastly, the world has become a much different place in the last 30 years.  The phenomenon known as globalization has created massive multi-national corporations, many of which are in the financial industry.  Although there were these types of firms during Roosevelt’s day, they did not have the same type of global reach and wealth as they do today.  Obama won his election largely with the help of corporations such as Goldman Sachs and JP Morgan and Company.  However, even the talk of reform of the financial industry has led some such as Jaime Dimon, CEO of JP Morgan, to publicly disagree with Obama, and has led others such as Goldman Sachs to begin supporting  Mitt Romney in 2012.  In today’s world, a President of the United States just cannot survive without the assistance of multi-national corporations. 

                In closing there is no reason why Obama would or even should for that matter follow the same types of policies of FDR.  If he goes that route it will inevitably lead to him undoubtedly being a one term president and probably lead to him being crucified by a great number of the U.S. media outlets.  History has shown that leaders only try to embark on economic policies that attempt to create greater equality when they are faced with the possibility of their current system being overthrown by an alternative.  Without that alternative now, there is little chance of any great change in the United States.                 

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[1] It should be added that even Communist Cuba has been considered many capitalist reforms and more many years has been running a very successful international tourist business.

Should Everyone Go to College?

Should Everyone Go to College?

By Matthew Dunn

                During this week and next, students, educators, and parents will be worrying about standardized tests being given throughout New York State.  Although these tests have given anxiety in the past, the tests given to Middle and Elementary school students have taken on a new flavor this year.  This year the tests will be based on the Common Core Standards for English Language Arts and Mathematics.  These standards were designed because of the poor performance of American college students.  By implementing these standards, schools are supposed to be positioning students for college and careers and preparing them to better compete in the global economy.[1]

                New York State changed the tests to comply with the Common Core Standards as part of the Race to the Top Initiative put forward by the Obama Administration.  The Race to the Top Initiative put forward by the Department of Education is designed to improve the quality of public schools, increase the amount of choice that parents have in choosing a school, and to make sure that students are prepared by schools for the world of college and careers.  State education departments choosing to take part in Race to the Top, would have to submit their plans to the Department of Education explaining how they planned to implement the different aspects of Race to the Top.  States which won the competition which be granted additional funds for education.[2] New York State was one of the winning states in the competition and therefore it needed to implement the Common Core Standards on its state assessments in reading and mathematics. 

                The Common Core Standards and the Race to the Top Initiative are two of the more recent efforts to improve America’s schools.  Since 2001, with the passage of the No Child Left Behind law, there has been an ongoing effort by the government to implement reforms of the educational system of the United States.  It had been said for years before that, that schools were not adequately  educating students in the United States, and the United States was quickly falling behind other nations in terms of educational abilities.  Critics have and continue to argue that if The United States does not improve its educational programs, then we will fall behind other nations in the new global economy.  In order to improve educational programs the government is now putting more focus on the quality of schools, and schools which are said to not measure up to standards can be closed.  Therefore schools now have more pressure to perform well on state assessments. 

                In addition to the actions of the government, there have been many investigative reports as well as some high profile documentary films that have exposed how the educational system of the United States is failing.  Many of the writers and producers of these films seem to agree to some major points, that U.S. schools are not properly preparing students for the world of the 21^st century.  Because of this they advocate for more accountability and choice in America’s schools.  They believe that a more educated workforce is needed to meet the demand for high skill occupations which have become the dominant professions of today.

                However, while the critics of the American educational system seem to have the admirable goals of creating an educational system where every American student can go to college and then find a successful career, there is another side to their story.  In fact the story is much more complicated than schools, and requires a close look at what the United States is like today. 

                Jonathan Alter a senior editor of Newsweek magazine says in the film Waiting for Superman “ Nowadays if you don’t go to college in America, you’re kind of screwed.  And America’s kind of screwed.”[3]  This comment follows an animation discussing how most public schools were designed with the idea that most students would not go to college during the Post-War era, and that most would go into manufacturing and agriculture.  However, now we have an economy which has many high skill jobs many of which cannot be filled because of lack of an educated workforce. 

                This part of the film, which is one of the central points of the educational reform movement today both omits and distorts information about the United States economy.  The film makes the point that the world has changed and that our economy is no longer based on manufacturing.  However, this is not just some force of nature as the film shows.  Since the 1970s the United States has become a de-industrialized nation.  This did not happen because the work force of the United States was lacking but in fact was a conscious effort by multinational corporations to save money on labor costs.  As almost all of us know when we look at our consumer products almost none of them say made in the USA anymore.  Corporations have outsourced, downsized, and relocated their labor forces to other countries around the world, where there are almost no labor protections and no trade unions, so they can pay near slave wages.  The critics of education should take these facts into account and if they are looking to reasons for unemployment, they should look at the organizations which have caused much of the unemployment.[4] 

                However, the critics of education like to point to one industry which seems to be thriving in well paying jobs.  The computer technology sector.  Bill Gates, the founder of Microsoft, has emerged as a leader in criticizing the current educational system, as well as the leading funder of alternative educational models.  He asserts that the United States does not have a well educated workforce and that they are not prepared for the work of the 21^st century.  Because of this, technology companies like Microsoft have had to import workers from other parts of the world.[5] (Ironically as Gates and his foundation fund push college readiness, Gates and a slew of other technological innovators did not graduate from college.  Besides Gates, his former partner at Microsoft Paul Allen, Oracle’s Larry Ellison, Apple’s Steve Jobs, and Facebook’s Mark Zuckerberg and Sean Parker have all either dropped out of college or never attended in the first place.  If we follow the example of these technological innovators, it seems as if college is not necessary.)

                While indeed computer companies and the media would have us believe that working at a technology company is one of the best jobs there is, where you have great bosses, and get to play video games all the time, this is far from the truth.  It is well known that the technology bubble burst in 2000.  Since then employment in the technology sector has neither been as profitable or as stable.  In fact Microsoft itself has been well known for hiring temporary workers and for outsourcing many of its key functions to other companies, so it keeps the least amount of people possible on its payroll.[6]  One wonders with only a highly select few programmers and most of its actual production pushed to low wage countries, what are these great jobs that they talk about so much.[7] Like Henry Ford in the early 20^th century, technology magnates believe that technology is here to solve all of our problems.  However, they fail to discuss how technology and automation make so many human positions unnecessary for major corporations.

                In addition to the myth of employment from college education, an issue that rarely is discussed by educational reformers is if more people are expected to be going to college, who is going to pay for it.  According to the New York Federal Reserve, student debt is now higher than auto loans, credit card loans, and home-equity debts as more and more students have gone to college in recent years.  As more students go to college, tuition rises and therefore so does the amount of loans that students have.[8]  In New York State tuition at state colleges in 2003 was $3400 per year for undergraduates.[9]  In 2013, it was $5570 approximately at 64% increase in 10 years.[10]  If tuition continues to increase at this rate for another ten years than tuition at state colleges and universities in New York for undergraduates will be over $9000 in 2023.  Also this is also only undergraduate tuition.  Many college careers now require graduate degrees, for which the tuition is substantially higher.  In addition to this colleges have numerous fees as well as various expenses for students.  These figures also do not take into account what exclusive private colleges and university costs are, so of which are near $60,000 per year.[11]

                What might be at work if even more students started going to college would be a law of unintended consequences.  More students would attend and accumulate even more debt.  Economists have already stated that student debt is preventing many younger Americans from accumulating material items such as houses and cars which are seen as bedrock of being middle class in America.  Some have even predicted that a student debt bubble similar to the housing bubble is developing in the United States.  Even if all students who went to college found good jobs after college, it seems as though because of the high cost of college, the costs might outweigh the benefits in some situations. 

                Perhaps what is most misleading about the facts and figures that are promoted by educational reformers is how the U.S. economy has ceased to be an economic powerhouse and that our financial and unemployment problems are the result of the failure of the unemployment crisis.  In a debate about inequality in America  in 2011, economist Allan Meltzer of Carnegie Mellon declared “Income distribution is spread because of the failure of the education system.”[12]  Statements such as this lie about the impact that educational achievement can have on a nation’s economy.  Finland is often one country whose education system is thought to be one of the best in the world.  It has a rigorous curriculum, and its students have very high rates of achievement.  However, even with its marvelous education system, Finland currently has an unemployment rate of 8.1%.[13]  At the current time the U.S. unemployment rate is 7.6%.[14]  So if we are to believe the rhetoric of the reformers, than why, even though the United States has a poor educational system, do we have lower levels of unemployment, than Finland, one of the best educational systems in the world? 

                Public schools have long been a point for debating in the United States.  What should be taught and how it should be taught have been questions that academics have been trying to answer since the idea of public schools came into being.  Now, educational reformers argue that all students need to be ready for college level work, because if they are not than the U.S. economy will suffer.  To achieve these goals they advocate for more accountability in schools in terms of test results and teacher evaluations, and the creation of more choice of schools for parents and students.  However, where is the choice in the statement that all students need to be prepared for college.  College is supposed be an exploratory time in a person’s life when they learn and discover more about themselves and what kind of adult they want to be.  It is not simply 13^th grade where they learn how to do a job.  Moreover, as college is still an individual choice, schools should not push agendas on students.  Our schools are not laboratories where new theories about the American capitalist system need to be tested.  Students in schools are not supposed be soldiers in America’s economic battle with the rest of the world.  Rather it should be a place where they can interact with older and more educated members of society, learn a diverse curriculum, make friends with their peers, and learn about themselves.  When we put so much emphasis on how schools and students need to contribute to the global economy, than we ignore one of the main reasons why public schools were started in the first place: to make good citizens. 

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[1] National Governors Association Center for Best Practices, Council of Chief State School Officers.  Common Core Standards.  National Governors Association Center for Best Practices, Council of Chief State School Officers, Washington D.C. 2010.  http://www.corestandards.org/.

[2] U.S. Department of Education.  “Race to the Top Overview.”  http://www2.ed.gov/programs/racetothetop/performance/new-york-year-2.pdf.

[3] Alter, Jonathan.  Waiting for Superman.  Directed by Davis Guggenheim.  Los Angeles: Paramount Vantage, 2010. 

[4] This fact has been pointed out in numerous publications and films since the 1980s and has been a well known aspect of life for many Americans who have suffered due to the lack of good available work for the last two decades. 

[5] Gates, William III.  Waiting for Superman.  Ibid. 

[6] Klein, Naomi.  No Logo.  New York: Picador, 2000.  This book has multiple examples from Microsoft’s labor practices as well as the labor practices of multinational firms around the world. 

[7] For another example of how the technology industry inflates itself go to www.code.org, where they talk about learning the skill of coding, and how so many wonderful jobs in America are not being filled because schools don’t teach this valuable skill. 

[8] Brown, Meta and Sydnee Caldwell.  “Young Borrowers Retreat from Housing and Auto Markets.” Federal Reserve Bank of New York.  http://libertystreeteconomics.newyorkfed.org/2013/04/young-student-loan-borrowers-retreat-from-housing-and-auto-markets.html.  (Accessed April 17, 2013).

[9] Smith Matt.  “Activists tell Albany:  Freeze SUNY Tuition.”  The Daily Star Newspaper.  http://old.thedailystar.com/news/stories/2002/12/06/ons.html.  (December 6, 2002)

[10] Stony Brook Tuition and Fees schedule.  http://www.stonybrook.edu/bursar/tuition/tuition-and-fee-rates.shtml.  ( Accessed April 19, 2013).

[11] Accessing the website of any elite college will explain what tuition costs are.  For example the University Registrar at Stanford explains that tuition is $13,750 a quarter, three times yearly.  I chose Stanford University for search because of its close proximity to Silicon Valley.  http://studentaffairs.stanford.edu/registrar/students/tuition-fees_12-13.

[12] Meltzer, Allan.  RT Crosstalk.  http://www.youtube.com/watch?v=wq88v-VAN4M.  (10/3/2011).

[13] Eurostat Statistics.  http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&language=en&pcode=teilm020&tableSelection=1&plugin=1.  (Accessed 4/19/2013)

[14] Bureau of Labor Statistics Economic Release.  http://www.bls.gov/news.release/empsit.nr0.htm.  (Accessed 04/05/2013).

The Reagan Babies: The Story of Millennials

By Matthew Dunn
     
        Every generation has its unique defining characteristics. For those born during the early part of the 20th century there was the Great Depression and the Second World War. For the baby boomers there was the post-war prosperity, the new waves of pop culture, and the rebellions of the youth. The generation which has now termed "millennials" would have a defining characteristic. This defining characteristic would be neo-liberalism.
         Neo-liberalism is an economic philosophy which was created in the post-war years by very prominent economists from the Universities of Chicago and Vienna. These economists basically argued that the state was an inefficient at conducting business. They believed that the private sector could run things more efficiently, and that everything should be run for profit. This eventually would lead to greater wealth for all. With the exception of some experiments in Latin America during the 1970s neo-liberalism was not really considered a viable solution for the world economies.  Most of the developed nations of the world developed mixed economies with private business along with government involvement with strong regulations.
          However, the recessions of the 1970s promted some people to believe that all was not well with the current way of doing things. It was just at the end of the 1970s that Ronald Reagan became president. Reagan and his staff were great supporters of neo-liberalism. They made it their goal to try and institute the philosophies of the neo-liberal economists onto the United States, as well as the rest of the world.
          Reagan often pointed to making life better for consumers and giving people more choice. Many people of the baby boom generation began to rally around the philosophy of neo-liberalism. New markets and products began to be created that were marketed to people. One of the particular markets that sprang up was the rebellion market. Rebellion and individuality some of the core values of the 60s counterculture became ways to market products. It was at this time that the baby boomers began to give birth to the millennial generation.
         These millenail children were born around the years of Reagan's presidency would experience a world filled with neo-liberalism. As people became consumed with making more profits and becoming more and more concerned with only themselves, a fundamental shift began in the class system of the United States. The middle class began to dwindle and the upper classes became even more wealthy. Labor unions, once very powerful organizations which had the power to crush companies with strikes, were either crushed by the national administration (as in the case of the striking air traffic controllers) or saw their jobs exported to developing countries (as in the case of auto workers and textille workers).
          For children born during this time it seemed almost magical at times. The most important of the new products, the PC and the internet, made it possible to be entertained all of the time. It seemed as if boredom slowly was vanishing and we literally had the entire globalized world at our fingertips. We naturally had been raised in this neo-liberal environment of choice and we sincerly believed that we could do anything that we put our minds to. Millennials also began to question the traditional norms and morals of the existing culture, such as relationships, and believed that they needed to all live their own personal journeys of self-discovery. Millennials were taught and began to believe that they could have whatever we wanted, as long as we kept our dreams alive.
          In this new world of choice and individuality we had plenty of model portrayed for us on television and in the media. First we had Jerry Seinfeld and his friends who never seemed to have a job, and never really had any real concerns. They seemed to go through life without a concern for the well being of anyone but themselves and seemed perfectly happy. They had no greater purpose in life and it was actually advertised in the theme of the show because it was a "show about nothing". We also ha had Howard Stern on the radio, who has made us laugh at his degenerate cast of the handicapped, drug addicts, and other social outcasts. In addition to this, he has helped a whole generation of men become turned on listening to his interviews of naked women. In contrast to Stern's male dominated audience, women were given Sex in the City, in which four women tried to reconcile being career driven but also obsessed with relationships with men. Carrie, Miranda, Charlotte, and especially Samantha, made it socially acceptable for women to be single, promiscious, and prosperous. In the world where these ladies live there are no great tragedies for women except when the department store is sold out of our favorite pair of Jimmy Choo's. And lastly our generation experienced the wonders of MTV, which made music a visual art form and created reality television which showed us that people with no exceptional talents could be stars.
         However, under the mystiques of Jerry, Howard, Carrie, and the Real World, the Reagan babies have become increasingly insecure. Fantastical desires are now able to be met at anytime, but millennials increasingly feel under pressure in their daily lives. They feel as though we must maintain a level of comfort that they have grown accustomed to, in a world that income inequality increasingly dominates. Debt seems to be a feature of the millennial generation, that drives their decisions in family and work.
          Neo-liberal economics have created the world of the Reagan babies. The philosophy has become part of each and everyone of our lives. We have an incredible amount of choice in what we can purchase, but that choice has come at a price. Many millennials will have to work harder than their parents, and will face a very uncertain future, with the safety net increasingly under threat. It seems as though millennials live from crisis to crisis.  Millennials as a group are always mentioned as having very little retirement savings, but even those who do are constantly forced into boom and bust market cycles. Millennials have had a hard time in the job market.  Many families used to be able to make it on one salary alone, but families today, seem to need to need two salaries at the minimum.  The neo-liberal revolution promised infinite choices to millennials but it seems to gives millennials plenty of choice of things to be stressed over.
           Millennials are frequently the targets of outrage from older generations.  They are portrayed as nihilistic, narcissist, and tech obsessed.  These are the things that they have been instructed to be by the world of choice and individuality that was promoted to them.  However, we now see the millennial generation, starting to break away from these ideas.  They are beginning to see the power of social solidarity and how collective action can improve their lives.  It is up to them now, to make the choice as to what kind of future, they wish to see.