CT Progressive

This story at The Mirror has been kicking around my head for a few days now:

After the Sheff order, dozens of open enrollment magnet schools with themes such as science or the arts opened across the state with the aim of promoting voluntary integration. However, unlike magnet schools, charters did not have specific racial targets and were designed to test innovative approaches to curriculum and teaching. Several of the schools opened in the state’s poorest cities, aimed specifically at disadvantaged students, most of whom are members of minority groups.

In 11 of the state’s 18 charters, minority children account for more than 94 percent of the students.

“The charter school movement has been a major political success, but it has been a civil rights failure,” UCLA Professor Gary Orfield wrote in a foreword to the Civil Rights Project report. Orfield, one of the nation’s leading authorities on school desegregation, was a witness for the plaintiffs in the original Sheff trial.

[...]

“The biggest problem with the report is it ignores student achievement,” Toll said. “It prioritizes integration above everything else.” In too many of the nation’s schools, “many of our minority kids are not getting a quality education,” she said. “That’s the real civil rights issue.”

At schools such as Jumoke, closing the achievement gap is the overriding goal.

Located in a former Catholic school, an aging brick building in Hartford’s North End, Jumoke’s elementary school zeroes in on academics, scheduling lengthy blocks of time each day for reading, writing and mathematics.

The school provides daily enrichment classes for students who meet academic benchmarks and extra help for those who don’t. Children wear uniforms, and the school posts signs such as “Respect Others” and “No Bully Zone” along the walls, part of its effort to emphasize character development.

“We’re bringing in quality teachers … and setting expectations high,” says the school’s principal, Lynn Toper, a former State Department of Education consultant. “Our parents are thrilled to be here. How often do you hear that?”

Both sides of the argument are sympathetic, but after some time thinking about it, I think that what the charter issue really highlights are the limits of using public schools as engines for social change. Schools are one of the best tools we have, but they can’t reverse a slow trend towards “soft” segregation based in tax policy, zoning laws, real estate steering, legacy economic gaps, and social stigmatization of cities among wealthier classes. Integrating our schools can’t, by itself, integrate our society.

What struck me was the quote that “Our parents are thrilled to be here. How often do you hear that?” My concern is that charters, on top of not being as racially diverse as they could be, introduce a class-based division into a larger educational system that was already highly segregated by race. As opt-in institutions, charters will disproportionately attract children whose parents are highly motivated and with the resources (time, transportation) to pursue those opportunities for their kids. Likewise, high-performing students and those with high degrees of parental involvement are drained from public schools, diminishing the variety of experience and background shared with student peers — in both sets of institutions. I see it as potentially being a parent-driven form of tracking for students.

In any case, if the article piqued your interest, it’s worth checking out the entire report [PDF link] — it weighs in at 85 pages before the endnotes and appendices. I haven’t made it all the way through, but I will.

So the text of Dodd and Udall’s post-Citizen’s United Constitutional amendment:

Section 1. Congress shall have power to regulate the raising and spending of money with respect to Federal elections, including through setting limits on—

(1) the amount of contributions to candidates for nomination for election to, or for election to, Federal office; and

(2) the amount of expenditures that may be made by, in support of, or in opposition to such candidates.

Section 2. A State shall have power to regulate the raising and spending of money with respect to State elections, including through setting limits on—

(1) the amount of contributions to candidates for nomination for election to, or for election to, State office; and

(2) the amount of expenditures that may be made by, in support of, or in opposition to such candidates.

Section 3. Congress shall have power to implement and enforce this article by appropriate legislation.

It seems like… less than the occasion calls for, to be honest. For example, if my company wanted to spend half-a-million dollars on each of a dozen candidates for office, what would stop me from filing 100 subsidiaries and giving the legal maximum (2 x $2400) that applies to individuals?

That the proposed amendment doesn’t touch corporations directly is understandable, as broad-based corporate personhood amendment might be a bigger lift than Congress can achieve at this point in time, and a narrower version of that which restricts corporate participation in elections could be read to concede the validity of the corporate personhood concept in every other facet of the law. One quote in the Register piece gets at this:

Quinnipiac Law School professor William Dunlap said Dodd’s proposal is a “straightforward way” of addressing the financing of elections without getting into corporate speech and First Amendment issues.

But he was not sure if it meets the senator’s goal of overruling Citizens United, as the power to regulate election spending is only part of the problem.

“Even if Congress has the power to regulate in a particular area, it still may not do so in violation of some other constitutional provision,” Dunlap said.

“As I read the Citizens United case … it is premised on protecting freedom of speech, not on an absence of congressional authority to regulate elections. A court intent on keeping Congress from regulating in the way it has been may be able to rely on the First Amendment to do so,” Dunlap said.

I wonder if an amendment could be tailored to define the contours of a right to participate in the electoral process, but restrict that right to individuals or citizens.

The more I think about it, a serious hurdle in restricting corporate involvement in elections is the question of how you draw a line that prevents corporations from spending while protecting the existence of PACs. A comprehensive approach that asserts the rights of individuals could very well ban PACs, which is fine with me but might lose it a lot of Congressional support.

Anyway, it’s a real puzzle, and while it’s not the perfect Pony Plan for banning corporate involvement, I do appreciate that Dodd got something out on the table so this conversation can begin in earnest.

Two stories have come out in the last couple days that serve as a reminder that not every business actually desires a functioning free market economy.

Barry Lynn and Phillip Longman talk about the economic consequences of business consolidation, suggesting that the lack of domestic job growth over the last ten years is closely tied to anti-competitive behavior:

It is now widely accepted among scholars that small businesses are responsible for most of the net job creation in the United States. It is also widely agreed that small businesses tend to be more inventive, producing more patents per employee, for example, than do larger firms. Less well established is what role concentration plays in suppressing new business formation and the expansion of existing businesses, along with the jobs and innovation that go with such growth. Evidence is growing, however, that the radical, wide-ranging consolidation of recent years has reduced job creation at both big and small firms simultaneously. At one extreme, ever more dominant Goliaths increasingly lack any real incentive to create new jobs; after all, many can increase their earnings merely by using their power to charge customers more or pay suppliers less. At the other extreme, the people who run our small enterprises enjoy fewer opportunities than in the past to grow their businesses. The Goliaths of today are so big and so adept at protecting their turf that they leave few niches open to exploit.

Over the next few years, we can use our government to do many things to promote the creation of new and better jobs in America. But even the most aggressive stimulus packages and tax cutting will do little to restore the sort of open market competition that, over the years, has proven to be such an important impetus to the creation of wealth, well-being, and work. Consolidation is certainly not the only factor at play. But any policymaker who is really serious about creating new jobs in America would be unwise to continue to ignore our new monopolies.

Their argument touches on manufacturing, where monopoly practices have caused stagnating product development (in many industries, a single manufacturer often produces the products for nearly every “competing” company in the field), to retail, where the market power of large chains causes de facto industry-wide price fixing even in the absence of collusion. The stifling of new inventions would seem to disproportionately impact a knowledge-industry state like Connecticut.

Monopoly power has also become a hot topic in healthcare coverage, as most states are dominated by a small number of providers; this was addressed in part by the creation of exchanges, but national exchanges (and a repeal of the anti-trust exemption for the insurance industry) don’t seem to be on the table at this point. A study cited in the article shows that in 80% of mergers, the new (larger and theoretically more efficient) company raises their prices when faced with less competition.

None of this, of course, is surprising, but somehow the national debate about job creation is hitched to a belief that what we should do what business wants, because what business wants is more and better competition. In a lot of cases, that’s exactly the opposite of what business wants. Competition cuts profits; new products create headaches and unpredictability.

The other story that came out is about our less-than-enlightened business lobbyists here in Connecticut, who see the economic suffering of the state’s residence as a great opportunity to weaken environmental regulations in the state. How lifting a regulation that you can’t dump battery acid in the river (or, as cited in the article, paint into the groundwater) is going to create jobs is beyond me — but it serves as a useful reminder of how cynical the politics around these issues can be.

There seems to be conflicting visions of what our economy is for – not that you’d be able to tell from watching C-SPAN. But the rise of Friedman/Reagan economics wasn’t so long ago that people don’t remember a time before it, and it wasn’t so long ago that we can’t contemplate a different model to follow it.

What’s the purpose of industry? To build useful things? To constantly improve the quality of life in our society? To be a strong component in the fabric of our communities? Too often, the answer is that the purpose is simply to generate capital, that this alone is sufficient to justify the human costs of profit-enhancing decisions; an ethic of ownership over work that trends naturally towards monopolies and rent-seeking over the (imo more desirable) elements of competitive, community-oriented businesses. From the excellent wikipedia description of “rent seeking” (wanted to check that I was describing the right phenomenon):

From a theoretical standpoint, the moral hazard of rent seeking can be considerable. If “buying” a favorable regulatory environment is cheaper than building more efficient production, a firm will choose the former option, reaping incomes entirely unrelated to any contribution to total wealth or well-being. This results in a sub-optimal allocation of resources — money spent on lobbyists and counter-lobbyists rather than on research and development, improved business practices, employee training, or additional capital goods — which retards economic growth.

That seems a pretty tidy description of the situation we find ourselves in right now. And the solution? The big-picture version from Lynn and Longman sounds pretty compelling:

When we get serious about this task, we will find that an entire political economic model lies ready for our use—the one shaped largely by the populists in Congress and the Roosevelt administration during the second New Deal. Before we can make use of this ready-made system for distributing power and opportunity, however, we will first have to break up the intellectual monopoly that has been forged over so much political economic policymaking in Washington today. The generation of political economists who understood the theory and practice of antitrust as devised by the late New Dealers are mostly retired or dead, and the academic economists who today dominate most discussions either have little understanding of the political nature of antimonopoly law or are openly hostile.

That’s why our first step must be to repopulate our discussions of political economics with the voices of the people who actually make our economy go. After all, real entrepreneurs and real scientists and real executives and real bankers and real farmers and real software engineers and real venture capitalists tend to understand quite well how real power is used against them. Just as it is they who know better than anyone else what freedoms they require to go about the task of putting their fellow Americans back to work.

Wow, now that’s a headline you don’t want to see about your Governor: “49 Governors Meet on Health Care, Education, Economy; Rell Stays Home.”

In other news, “Connecticut leaves 120 blanks in Race to the Top application.”

In Rell’s defense, maybe she didn’t miss the meeting, but instead simply turned back when she realized she’d look rude for arriving at a meeting with the President several days after it ended.

Battling through the ages.

I have to say, I’m really glad to not be living in California.

The average cost of an American gubernatorial election has never been as low as the proposed funding levels for the 2010 election. The average amounts for an open-seat race are even higher.

(Click for larger version)

Looking at the pattern of races where there’s an incumbent victory, most (the non-competitive races) are below the average, with a very few (the competitive races) above it. Races where the incumbent lost are, by definition, competitive, and incumbent losses below the “pink line” average are exceedingly rare. Ultimately, it looks like the Democrats would have been doomed in 2006 from an inability to reach the public regardless of who the candidate was.

(Data from the excellent Gubernatorial Campaign Expenditures Database hosted by UNC and compiled by USC.)

Bysiewicz’ court case is good politics: if she loses, then she wasn’t ever going to be AG anyway. If she wins, her first act on the campaign will be beating Blumenthal (charged with defending the statutes for the State) in court.

I hate this:

The Finance, Revenue, and Bonding Committee voiced its approval Wednesday for a tax incentive package that gives up to $90 million to Starwood Hotels and Resorts up for relocating its headquarters from White Plains, New York to Stamford, Connecticut.

The deal which took more than three years to structure will bring 813 new jobs to the state and is expected to generate far more revenue than the tax credit the state is offering, state officials said. [...]

According to Starwood executives, the median compensation for its employees is $114,000.

813 employees x $114,000 salary x 5% income tax x 10 years = $46,341,000

That doesn’t mean that the project is a bad idea or shouldn’t be approved, but let’s be honest: it will be a long, long time before this deal is a positive on state tax rolls. And in year 11, what will we do if Starwood says “extend our credit, or we’re moving”?

In the news:

Federal and state officials, many facing record budget deficits, are starting to aggressively pursue companies that try to pass off regular employees as independent contractors. [...]

Companies that pass off employees as independent contractors avoid paying Social Security, Medicare and unemployment insurance taxes for those workers. Companies do not withhold income taxes from contractors’ paychecks, and several studies have indicated that, on average, misclassified independent workers do not report 30 percent of their income.

Not having unemployment insurance also means that you lose the safety net that keeps you from economic ruin when your job disappears (do they give pink slips to independent contractors?) The article goes on to mention that independent contractors can’t form unions, and generally don’t receive overtime. Misclassification is a tool that’s used to isolate people from their co-workers and the protections of labor law. It’s arguably the crown jewel in a range of modern abuses in the private sector, including elimination of breaks, tip garnishment, coercing workers not to file for worker’s comp, off-the-clock work, and illegal deductions from paychecks (also known as straight-up “stealing”). There’s a great and extensive report on how widespread these problems are for working-class Americans here. (PDF link)

One thing that jumps out from the article:

“This denies many workers their basic rights and protections and means less revenues to the Treasury and a competitive advantage for employers who misclassify,” said Jared Bernstein, who as executive director of Vice President Joseph R. Biden Jr.’s Middle Class Task Force has helped orchestrate the administration’s campaign against misclassification. “The last thing you want is to give a competitive advantage to employers who are breaking the rules.”

I’d argue that you’d actually want to provide a competitive disadvantage to employers that engage in these kinds of practices: businesses that cheat their workers as a matter of course weaken the fabric of our entire society and pull the quality of life downwards for everyone, not just those working at their firm. The cost of shoveling risk onto the rest of society should be priced into the economic and regulatory systems in which these companies operate; as it stands, the enforcement effort is merely seeking lost wages and back taxes, so there’s no financial incentive for companies to proactively correct these issues. Serious penalties (or, at the extreme, a corporate three-strikes law) would provide a stick; using those penalties to provide a credit or benefit to companies that follow best practices could be a worthwhile carrot.

Finally, in the category of “accidentally sharp critique of capitalism:”

“The goal of raising money is not a proper rationale for reclassifying who falls on what side of the line,” said Randel K. Johnson, senior vice president with the United States Chamber of Commerce.

Yes, it’s true that making an extra buck isn’t a moral rationale for screwing with your workers, though I’m not sure Randel really thought that through before giving a quote to the paper of record.

If this comes to pass, then maybe I’d say that we should have trusted the Senate Democrats and all of their manuevering this whole time.

That’s a big if. But progressives are due a pleasant surprise by now, don’t you think?