My background is in private equity, so I know very little about education policy, theory, or practice. But I've always found education a deeply fascinating case study from a management perspective. I often delve into issues of organizational behavior, in attempt to understand a firm's performance, its weaknesses, and the incentives that implicitly motivate each cog of a complex system. It seems to me that our public education system, as endemically flawed and woefully un-postured as it is, needs similar perspective and insight. There is nothing herculean or insurmountable about these challenges--they are eminently solvable, under the right leadership with the right priorities. Keynesian economics—while a convenient logic for liberals trying to increase the size and scope of the welfare state—it is far too simplistic a theoretical paradigm for the current geopolitical environment, and lessons learned in the context of the 1930s are not contextually relevant comparisons to contemporary economic challenges. Nobel laureate and New York Times columnist Paul Krugman argues that massive increases in federal spending will create jobs, and that austerity is a bad economic policy that will result in a “lost decade” similar to Japan’s economic malaise following the Asian Financial Crisis of 1997/98. But Krugman’s argument is flawed.
Improving public education: No issue is more entrenched in the wild and unruly machinations of New York State’s politics, nor is any issue more central to our economic recovery and our ability to be competitive in the global marketplace. The quality of public education is, indeed, the civil rights issue of our time. But day after day, year after year, the Buffalo Public School system is failing generations of young people who will not have access to the jobs and opportunities that they deserve because we’ve failed to equip them with the skills that they need. The same tired excuses that are cited as the culprits of these horrific graduation rates are rooted in a soft bigotry that aims to justify low expectations. Today, students are victims of a culture of complacency. They’re victims of teachers unions who would rather protect this systemic mediocrity than implement the performance and incentive based systems that could improve the quality of instruction. They’re victims of administrators who are too timid or exhausted or without the drive to innovate with the programming, curriculum, operations, and student services that their schools offer. This has been the status quo year after year because no lobby is stronger—or more central to Albany’s Democrat-led machine—than the teachers’ unions. In 2010, the New York State Pension Fund had over $21 billion invested in international equities (aka, literally sending jobs to Brazil, Russia, India, and China rather than investing here at home). They had another $12.7 billion invested in privately held equities. How much of that was invested in Upstate and Western New York? Next to nothing. A major contributor to Buffalo’s decline has been the lack of venture capital and private equity investment in the region. Why would the Comptroller prefer to invest in China rather than Buffalo? Apparently the New York State Pension Fund, one of the largest institutional investors in the world, isn’t willing to take a risk on Western New York either. At the very least, shouldn’t we be willing to invest in ourselves? If we’re not willing to mobilize capital to invest in our own economic recovery, who would? I crave good government. I yearn for competent elected officials. I hope that the devastating leadership void in our region that has left our governmental apparatus impotent, unwieldy, and poorly configured will cease sooner rather than later. Our government--the City of Buffalo--has been an ineffectual and complacent failure for at least the last three decades. Enough is enough, and few would argue that an overhaul is long overdue. But like every other progressive effort that this City undergoes, the vision will only come from the bottom up. I'm tired of a City government that exacerbates rather than solves problems. I'm sick of elected leaders who don't understand where we're going, how to get us there--and as a result make horrible decisions, the consequences of which the entire region endures. Rather than continuing to engage in quantitative easing, I urge you to instead give public transit authorities access to a special long-term discount window, through which they can borrow capital to finance infrastucture projects at a below-zero interest rate (which would monetize a portion of the infrastucture's construction cost). Such a lending program would allow the Federal Reserve to mobilize resources directly towards investment with an immediate impact on job creation. Our current monetary policy has become ineffective in the context of globally integrated financial markets in which capital outflows have fueled extraordinary foreign direct investment abroad, using essentially free capital from the Federal Reserve, while current monetary policy leaves our domestic economy stagnant. |