Questioning some of the main *educational* assumptions in Cochrane’s Piece

Note: I changed the title to clarify that the majority of this post questions the main educational assumptions of his piece, and that my focus is to spend more time in this writing about issues that are more related to the education portion of his argument (which is a large portion that drives his assumption, so still important). I realize that I do not write sufficiently to argue about other arguments he explains so, as to not mislead, I made it clear that my main concern is what he says about education and how he uses this to frame his overall opinion, with which I ultimately disagree.

Critiquing: What the Inequality Warriors Really Want

I am going to go through this piece and comment on it where I see fit.

“But why is inequality itself an economic problem?”

I agree. Inequality in itself is not necessarily a problem. It is the design of a capitalist system. However, widespread poverty is a major problem. It leads to a number of social ills. If we consider ourselves moral beings in this world we have to do whatever we can to get rid of poverty.

“A big reason: awful public schools dominated by teachers unions, which leave kids unprepared even to enter college.”

Flawed assumption warning! A common, major finding in education research is that social and demographic factors are the highest predictors of difference in academic success. As Sean Reardon at Stanford succinctly puts it “Education is a key to becoming wealthy, and the wealthy are very good at education” (I paraphrased a bit). Kids in poverty do poorly in school for a number of reasons, but the main is poverty. I side with historian Michael Katz in saying that schools are important and can improve, but if we want to fix social problems we have to find ways to fix the actual social problems. Lumping all the problems onto schools and expecting them to fix the problems on their own is a false hope that we should not have in schools. Quality schools are only part of the solution.

Here is one of Reardon’s pieces

“Americans stuck in a cycle of terrible early-child experiences, substance abuse, broken families, unemployment and criminality represent a different source of inequality. Their problems have proven immune to floods of government money. And government programs and drug laws are arguably part of the problem.”

What, then, is his solution? Ignore these life circumstances and offer these kids a dream of rags to riches without any support to help them achieve it? Come on.

“These problems, and many like them, have nothing to do with a rise in top 1% incomes and wealth.”

That’s fine. But we still need to solve these problems and it takes money to solve them. Where shall we get this money? I would also like to point out that the rich won’t be able to stay rich for long if the society around them crumbles…

“I see. A fry cook in Fresno hears that more hedge-fund managers are flying in private jets. So he buys a pickup he can’t afford. They are saying that we must tax away wealth to encourage thrift in the lower classes.”

No, but if there is less money pumped in the actual transactional portion of the economy (sorry I know that’s not sophisticated terminology) the fry cook and others would have more money available to them to snatch up through their labor. It seems ironic to talk about this idea of thrift in lower classes when just over 5 years ago the largest banks in the world needed a lesson in thrift (so much so that it almost destroy our financial system). Cochrane obviously has no idea of the tough choices and sacrifices low-income earners have to make. Choosing between saving for college and eating tomorrow is a choice that low earners make, undercutting his human capital assumptions/arguments (ie. often people have to choose between investing in skill and feeding and housing themselves, so it is difficult to pull themselves out of their situation).

“Is eliminating the rich, to eliminate envy of their lifestyle, really the best way to stimulate savings? Might not, say, fixing the large taxation of savings in means-tested social programs make some sense? If lifestyle envy really is the mechanism, would it not be more effective to ban “Keeping Up With the Kardashians”?”

The assumption is that people are poor because they do not try hard enough or are motivated solely by envy. These are highly questionable assumptions.

“here is a lot of fashionable talk about “redistribution” that’s not really the agenda. Even sky-high income and wealth taxes would not raise much revenue for very long, and any revenue is likely to fund government programs, not checks to the needy.”

This is a fair point. I’d have to see the line items and the plan, though.

“They think money is corrupting politics, and they want to take away the money to purify the politics.”

It is and they should.

The smartest claims he makes come at the end of the argument:

“A critique of rent-seeking and political cronyism is well taken, and echoes from the left to libertarians. But if abuse of government power is the problem, increasing government power is a most unlikely solution.

If we increase the top federal income-tax rate to 90%, will that not just dramatically increase the demand for lawyers, lobbyists, loopholes, connections, favors and special deals? Inequality warriors think not. Mr. Stiglitz, for example, writes that ‘wealth is a main determinant of power.’ If the state grabs the wealth, even if fairly earned, then the state can benevolently exercise its power on behalf of the common person.

No. Cronyism results when power determines wealth. Government power inevitably invites the trade of regulatory favors for political support. We limit rent-seeking by limiting the government’s ability to hand out goodies.

So when all is said and done, the inequality warriors want the government to confiscate wealth and control incomes so that wealthy individuals cannot influence politics in directions they don’t like. Koch brothers, no. Public-employee unions, yes. This goal, at least, makes perfect logical sense. And it is truly scary.”
I should make a caveat that I don’t hate teachers unions, but I understand his point. However, the union issue is clearly a sideshow to the real problems, which include issues like student poverty. If we want to get rid of unions, ok. But guess what? I believe and have evidence to suggest that education won’t improve if you get rid of unions. My argument here tends to focus on looking at states throughout the US who have teacher unions and those who do not. Bruce Baker does a good job covering this topic (through his peer-reviewed academic research) as summarized in Washington Post where in the conclusion it states, “So, while nothing in this post puts to rest the big – unanswerable – questions of the overall equity and quality effects of teachers unions on our supposed monolithic American public education system, these analyses do at least raise serious questions about the notion that teachers unions are the scourge of the nation and the cause of all of the supposed – also unfounded – ills of American public schooling.” Look at the data. It shows overall that when you take unions away it does not necessarily improve education.

This addressing of the counterfactual to Cochrane’s argument at least shows that unions seem not to even be the main problem. We can debate about the efficacy of unions, but there is an entire field of evidence to show that the main problem with education equity tends to be outside factors. We need to work on these outside factors in addition to improving schooling.

This opinion piece may sound intelligent and I am sure he is a smart guy, but his arguments – especially those that relate to education – are not smart. They are built on superficial claims that lack empirical data.

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