What is good for the economy?

I am always impressed by the way common words and phrases prevent substantive discussion of important issues. The phrase that is currently getting on my nerves is “good for the economy.”

What exactly is good for the economy? The economy is after all an abstraction, a way that we describe systems of production and distribution (among other things). How do you know what is good for an abstract system? Commentators who rely on this unfortunate phrase obviously do not mean something so absurd as “good the economy” in a literal sense. But teasing out what they do mean is not always easy.

On television news — especially local news — the state of the economy is always measured by the stock market. If the Dow went up, it was a good day for the economy, or so it is reported. But this makes very little sense. The rise and fall of the Dow is — at least theoretically — only an indicator of investor speculation on the future profitability of corporations within the Dow index. It tells us nothing really about production and distribution right now.

Even if we give some credit to those expectations as reliable indicators of what will happen, it is certainly not clear why rising profitability is “good for the economy.” It is good for investors of course since rising profitability increases dividend payments and the price they can command for their stock holdings. But for those who do not hold much stock, rising profitability means nothing at all, and could even be a bad thing.

For instance, firms can increase profits by driving down wages. The Dow would go up, but only because wages go down. Is this good for the economy? Well, that again goes back to the original question: how can something be good for an abstraction? It is good for certain people who are actors in the economy, at least in terms of their wealth increasing. But it would also be bad for other actors in the economy, namely workers.

More serious commentators seem to describe things as “good the economy” if they cause production to expand and the economy to meet its potential output. This too is a questionable way to talk. As the last 40 years in the United States demonstrates, rising productivity does not necessarily improve the lives of even the majority of the population. When the benefits of increased production almost solely flow to the super-rich, is increased production really “good for the economy?”

What this “good for the economy” discussion does is mask and prevent real discussions about production and distribution. The question is not whether something is “good for the economy,” but whom it is good for? Economic events affect populations — classes — differently.

Suppose for example that economic growth was better maximized by extreme inequality. Would that in and of itself mean that extreme inequality is “good for the economy?” Of course not. We could imagine a world with slightly less growth that is distributed far more equitably such that the overwhelming majority of people are better off than they would be in the extremely unequal maximum-growth economy. So which model then would be “good for the economy?”

That is not to say that everything needs to be couched in terms of how an action affects individuals on a class level. But at minimum, people should say what they mean. If by good for the economy, you mean something generates more economic growth or higher profits, the benefits of which could all flow to the top 1%, then say that. Don’t say “good for the economy.” The phrase has no coherent meaning, and discussions of economic policy and philosophy would be better served if it — and its converse, “bad for the economy” — was annihilated altogether.

Changing my blogging style

So far I have been mainly trying to produce pieces that are consistent with the usual newspaper and magazine styles of opinion writing. I have decided that this style has too much downside and almost no upside. It takes a significant amount of time to stylize it in that manner. Unless you are really interested in the topic, it is pretty boring to read also. I could go on.

Instead of that, I think I am going to move towards the more modern blogging style, i.e. shorter pieces written more quickly that hope to be more interesting to read. I will probably go back to a more polemical style that I have used in other places before. That seems to be more interesting to others and generally amuses me more anyways.

So, be on the look out for that stuff. If you have looked at this occasionally, and liked the ideas, but were a bit bored by the style in which they were conveyed, give it another shot. Get an email subscription, add me to your rss reader, or follow my twitter.

More to come.

On the Education Reform Movement

The Education Reform Movement is hot. Donors have lavished money on projects like Teach For America, including $49 million from the Walton Family Foundation and a $100 million endowment from four other philanthropists. Media outlets and publishers have almost unanimously provided positive coverage and angles for those in the movement, the most notable instance being the film Waiting for Superman. A small industry of writers and producers have seized on the momentum of the movement to provide flattering and supportive articles and books like Steven Brill’s Class Warfare.

The money and media support behind these projects make it difficult for critiques of the movement to gain traction. More than that, I suspect the ideological positioning of the movement shields it from opposition on both sides of the spectrum. The movement appeals to the right-wing because it trashes public schools and teacher unions. According to reformers, bad schools and bad teachers — not economic inequality — are to blame for the achievement gap between rich and poor students. Consequently, reformers think it is possible to create a genuine meritocracy and educational equality without reducing or eliminating economic inequality.

The movement brings in left-wingers because of the constituencies it attempts to help: poor school children and people of color. The left sees those constituencies as victims of oppression and exploitation, and are thus inclined towards movements which seek to help them. A more ideological left might be reluctant to back a movement which has ignored economic inequality in its analysis of educational inequality, but the bulk of the left in the United States is not terribly ideological.

The end conclusion of the positioning of the Education Reform Movement is that both the left and right has things they like about it. This no doubt has helped pave an easy path for its widespread acceptance. Despite its political agreeableness, media support, and donor support, the movement is riddled with problems. I have written many times about those problems before, but I have never put my entire critique together in one place. I do that here.

Education Reform Efforts Have Failed

Contrary to what well-produced documentaries have led us to believe, the programs of the education reformers have consistently failed. The most notable program in the movement is also the most notably failed: Teach For America. Teach For America recruits college seniors to teach in the poorest areas with the lowest achievement. Participants in the organization are given short training sessions, and then thrust into the most difficult classrooms in the country for a two year teaching stint.

In its two decades of existence, the program has been subjected to dozens of studies with varying results. The biggest study to-date is a Stanford study with a sample of more than 4,400 teachers and 132,000 students. It found that students taught by Teach for America teachers scored worse on all six administered tests than students taught by certified teachers. Other studies show a range of results from TFA teachers being substantially worse than non-TFA teachers to TFA teachers being marginally better.

Of course, these results should be fairly obvious. The notion that new college graduates with no experience and very little training will outperform certified teachers in a way that would significantly close the achievement gap should be absurd on its face. That is, it would be absurd to anyone who did not think — as I suspect many in the Education Reform Movement do — that existing teachers in low-income schools are outrageously incompetent.

Teach For America’s failures are low-hanging fruit, but even the oft-praised charter schools have suffered similar levels of failure. These sometimes public, sometimes private schools are the centerpiece of the Education Reform Movement’s systematic solution. They are typically hostile to teacher unions, include some sort of novelty in teaching approaches, and operate with more independence than traditional public schools.

The biggest study to-date on their efficacy is Stanford’s CREDO Study which included 70 percent of the nation’s charter schools. Of the schools sampled, only 17 percent had academic gains that were significantly better than traditional public schools. Meanwhile, more than twice that many — 37 percent — had academic gains that were significantly worse than traditional public schools. The rest showed no significant difference in either direction. When twice as many charter schools are doing worse than traditional schools than the number that are doing better, it is hard to take the movement seriously. If the CREDO study’s statistics are correct, eliminating all charter schools and replacing them with traditional public schools would be a step in the direction of greater net student achievement.

Some defenders of charter schools do not see any problem with these overall numbers which point towards failure; instead, they emphasize some of the school models that are doing better. After all, overall failure in charter school experimentation is not a problem if some good school models are found in the process which can then implemented on a more widespread basis. However, of the small sliver of charter schools that have performed better, many have done so on dubious bases.

The Knowledge is Power Program is the best example of this phenomenon. KIPP has been held up as a widespread success by the reform movement, and a superficial glance at testing scores appear to confirm the praise. However, detractors of KIPP’s unique approach to raising student achievement have argued that the school’s selection criteria biases the results. According to The Charter School Dust-Up and Diane Ravitch’s The Death and Life of the Great American School System, KIPP schools aggressively screen applicants, selecting only those with high parental involvement. Additionally, teachers who referred students to the school report referring only those who were already performing better than their peers. Lastly, the school’s disciplinarian approach has led to high attrition rates, presumably weeding out poorer performing students.

Only admitting and retaining the best students with the most involved parents is not a model for educational reform as it necessarily leaves out the very students who are actually supposed to be helped by education reform. Sampling the best of the poorest students as KIPP does will obviously indicate improvement, but that model is impossible to implement on a widespread basis.

The Bad-School/Bad-Teacher Hypothesis is Unsupported

The general failure of Teach For America and charter schools to actually improve achievement should call into question the motivating hypothesis of the entire Education Reform Movement. The movement operates off the hypothesis that bad schools and bad teachers are what plagues poor-performing schools. At this point, with hundreds of millions of dollars backing them, these organizations will likely never abandon this hypothesis. Nevertheless, the evidence on the matter does not stack up in their favor.

Debunking this hypothesis is a somewhat difficult thing to do. Even if one shows that hundreds of different school configurations and teachers have not substantially improved achievement outcomes — as is currently the case — reformers can always argue that the next innovative idea that comes forward will be the one that makes the difference. Nonetheless, there is evidence that indicates schools and teachers are not nearly as integral to student success as the reformers suggest.

The first bit of evidence comes from school comparison studies. One telling study was published as a working paper just last month at The National Bureau of Economic Research. In the study, researchers compared the achievement of students in the magnet schools of New York and Boston with the achievement of students in the cities’ non-magnet alternatives. Magnet schools in these cities only admit students who score sufficiently high on an admittance exam. Researchers compared the achievement of those who were narrowly admitted to the magnet schools to those who were narrowly denied admittance. Despite being educated in completely different peer environments, school structures, and by different teachers, researchers found that — with a couple of small exceptions — students in the magnet schools did no better than their non-magnet equivalents.

Another study conducted by the Center on Education Policy (pdf) compared the achievement of similar students at private and public high schools. The study found that when controlling for achievement trends prior to high school, socioeconomic status, and parental involvement, students at private schools fared no better on achievement tests in math, reading, science, and history than their public school peers. As with magnet schools, the reason private schools appear to instruct students better is that they have a higher percentage of students whose background predisposes them to superior achievement in any environment.

If students at praised magnet and private schools are performing no better than similar students at traditional public schools, it is hard to believe that novel school structures like those charters implement are going to make a significant difference for student achievement. Coupled with the evidence mentioned above that charter school structures have not in fact made a significant difference, it is hard to take the bad-school hypothesis seriously.

Efforts to demonstrate the impact teachers have on student performance is equally troubled. One way in which it is troubled is that the method of evaluation favored by the education reformers — high-stakes testing — has proven difficult to successfully implement. Cheating scandals have surfaced in school district after school district that has implemented high-stakes testing regimens. The most notable scandal so far was in the Washington DC public schools while headed by reform superstar Michelle Rhee. Cheating scandals also plagued schools in Atlanta, Indiana, New Jersey, Pennsylvania, and Texas. Many districts plagued by these scandals have also failed to take efforts to prevent future cheating, further casting doubt on any student achievement statistics they might generate.

With that said, the statistics that do exist on teacher performance are problematic for the bad-teacher hypothesis of the reformers. To counteract some of the problems of cross-teacher comparisons, reformers have wisely adopted value-added methods of evaluation which measure how much a student has improved while being instructed by a specific teacher. The value-added methods avoid the year-to-year variability inherent in measurements of the absolute skill-level of students. If teachers do really have a significant impact on students, you would expect the improvement statistics of their students to be roughly the same year-to-year. Their students’ absolute skill-level might vary based on the skill-level they had at the beginning of the course, but their level of improvement should be same.

This, however, is not what happens. An Economic Policy Institute paper notes that

One study found that across five large urban districts, among teachers who were ranked in
the top 20% of effectiveness in the first year, fewer than a third were in that top group the next year, and another third moved all the way down to the bottom 40%. Another found that teachers’ effectiveness ratings in one year could only predict from 4% to 16% of the variation in such ratings in the following year. Thus, a teacher who appears to be very ineffective in one year might have a dramatically different result the following year. The same dramatic fluctuations were found for teachers ranked at the bottom in the first year of analysis. This runs counter to most people’s notions that the true quality of a teacher is likely to change very little over time and raises questions about whether what is measured is largely a “teacher effect” or the effect of a wide variety of other factors.

Unless teachers’ quality radically changes year to year — something that would still be problematic for the reformers — the only thing that can account for these variations are things outside of the classroom.

Poverty is the Real Culprit

If teachers and schools are not primarily to blame, then what is? The obvious answer is poverty, or more specifically economic inequality. The achievement gap is really a wealth/income gap. In fact, that is one of the ways it is defined: the gap in achievement between poor and rich children.

Proving that poverty is the real culprit is a bit difficult, but I think you can arrive at the conclusion through a process of elimination. There are only so many variables to consider when determining what is responsible for the achievement gap. Poor students and rich students have different teachers, different schools, and different lives outside of their school. If teachers and schools are not the culprit — as was argued above — then life differences is the only plausible variable left to explain the gap.

Poor children simply lead different lives than rich children due to their differential access to economic resources. Poor children have worse health and are more likely to experience negative neighborhood effects like exposure to drugs, violence, and crime. Further, their parents are more likely to work multiple jobs or irregular hours which reduces the amount of time they are able to spend with them. Poverty also increases stress both on the parents and the children. These are just a few of the consequences of economic inequality, all of which plausibly impact student success at school.

Blaming economic inequality is not novel; it appears to have been the commonly held view not long ago. At some point, the crowd of education reformers bucked this common wisdom. Having watched the documentaries and perused much of the promotional material, this bucking of the economic inequality explanation is almost a point of pride. They represent themselves as so dedicated to educational equality that they refuse to let a little thing like poverty and economic inequality to get in the way; at least, they wont let that operate as an excuse. Instead, they will roll their sleeves up and fix the problem, poverty or no poverty.

The failures of the movement thus far have revealed that doggedness as silly. Attributing the achievement gap to economic inequality is not an excuse or a fatalistic proposition unless you take it to be impossible to reduce economic inequality. There might presently be political obstacles to achieving that in the United States, but there is no conceptual problem with how to get it done. Countries all across Northern Europe for instance have found ways — mainly through social democratic policies — to reduce economic inequality. Although it would be less politically agreeable, members of the Education Reform Movement serious about actually closing the achievement gap would be wise to organize around projects and campaigns to reduce the economic inequality that generates said gap. Doing so wont win them $100 million endowments, but it at least has a chance at success, something the current movement does not.