Four Failed Federal Education Reforms

Issue Briefs | EducationScreen Shot 2017-06-13 at 2.48.13 PM

No. 186
Monday, January 25, 2016Screen Shot 2017-06-13 at 2.49.15 PM
by Lloyd Bentsen IV

[Excerpts from Issue Brief, full text on pdf here]

Over the years, federal funding of primary and secondary education has increased, while students’ academic performance has flatlined. For instance, the high school reading and math scores on the National Assessment of Education Progress show that student performance has remained flat for the past 20 years …

Federal Education Funding

Federal education funding comes in several forms. While most federal funds go to the states (a total of $37 billion in 2015) for K-12 school districts, $4 billion is devoted to special projects such as educational reforms through initiatives.1 Though federal money is only 11 percent of total spending on public schools, it comes with a host of strings attached.2

Federal spending on elementary and secondary education more than doubled from 1995 to 2003, with a large increase in funding for initiatives such as No Child Left Behind in 2003 [see Figure II]:

  • Federal funding for elementary and secondary education more than doubled from $15 billion in 1995 to $35 billion in 2003, and education initiative funding more than doubled from $2 billion in 2001 to $7 billion in 2003.
  • Total federal education funding increased from $42 billion a year in 2001 to $63 billion in 2003.3
  • Education initiative spending peaked at 20 percent of total federal spending on elementary and secondary education and dropped to 10 percent by 2015.

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Both overall funding for elementary and secondary education, as well as spending on education initiatives, began to drop after 2005 due to factors such as the Great Recession of 2007.

Four Federal Initiatives

The four most recent federal education reform initiatives include “Goals 2000′′ of the Clinton administration, “No Child Left Behind” of the Bush administration, and “Race to the Top” and “Common Core” of the Obama administration.

Goals 2000. Though Goals 2000 was presented to the states as a program in which they could “voluntarily” participate, opting out meant passing up states lost ground on a couple of goals, including teacher quality and school safety. The program was scrapped by Congress and essentially replaced by No Child Left Behind (NCLB).5

No Child Left Behind. The 2002 reauthorization of the Elementary and Secondary Education Act of 1965, No Child Left Behind, expanded the federal role in public education through further emphasis on annual testing, annual academic progress, report cards and teacher qualifications as well as signi cant increases in funding. …

No Child Left Behind’s reliance on one-size- ts-all testing, labeling and sanctioning schools undermined many education reform efforts. As a result, many schools, particularly those serving low-income students, have become little more than test-preparation programs.

Race to the Top. The federal government has offered grants through Race to the Top (RTTT) or so-called Flexibility Waivers under NCLB, School Improvement Grants and various other programs to push states, districts and schools to line up behind policies that use these same test scores in high-stakes evaluations of teachers and principals, in addition to the NCLB focus on schools.7 …

Common Core’s relationship with the federal government is a result of President Obama’s Race to the Top initiative.10

Common Core. Common Core math and English standards were released in 2010 and implemented by many states in 2014. However, of the states that adopted and have been implementing the standards, 14 are downgrading their participation or withdrawing from national tests designed around the standards. …


Federal education reforms have failed to achieve their goals and failed to have a positive impact on education performance. Perhaps their failure was due to lack of funding or poor execution, but the fact remains that these excuses are made over and over again on both the federal and state level without signi cant improvement. Despite the federal government’s valiant attempts, a universal national curriculum leaves too many students behind. …

For notes and references see full Issue Brief pdf, which includes additional analysis.

NCPA page with “Four Failed Federal Education Reforms” intro  •  Four-page Issue Brief PDF here.

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What the Federal Government Can Do To Improve American Education

Sometimes looking at the past can help us see the present more clearly. And that applies to the 2017-2018 NSDA topic:

Resolved: The United States federal government should substantially increase its funding and/or regulation of elementary and/or secondary education in the United States.

Broken Promises: What the Federal Government Can Do To Improve American Education,” (Brookings Institution, March 1, 2000) is itself 17 years old, and begins with a valuable survey of federal involvement in K-12 education. Brookings is the oldest of public policy think tanks, and known as center or center-left.

From an economist’s perspective, a key insight in the article is the institutional process of federal aid to education. Instead of direct aid to teachers, students, or families, federal funding is filtered through and drained by a series of bureaucracies:

Federal programs typically travel first to the 50 state departments of education, which send them to local school districts, then to administrators at school sites, and finally, perhaps, to classroom teachers. At each stop, money is drained off to support a bureaucracy. Regulations are tweaked and molded to fit local priorities.

The article’s authors note that for most of U.S. history, education wasn’t seen as a federal role, and later federal officials just collected and reported education data from the states. The Eisenhower Administration in 1958, in response to the Soviet’s launch of Sputnik, began federal funding for science education on national security grounds.

The Brookings article outlines federal education funding from 1965 to 2000:

Federal government responsibilities in education have always been limited. The word “education” does not even appear in the U.S. Constitution. States and local school districts have always made the day-to-day decisions about instruction, teachers, textbooks, and the like. For most of the nation’s history, Washington confined itself to collecting data on school systems and disseminating information on the progress of education. Until 1965, when the Elementary and Secondary Education Act was passed, federal support for K-12 education was minimal. Today the federal government foots only about 7 percent of the nation’s K-12 education bill, and its share has never exceeded 10 percent.

And Brookings further notes: “The two largest serve poor (Title I) and handicapped (special education) students.”

Next the article provides evidence (though dated) for the negative:

The public’s desire to improve public schools, though laudable, does not justify expanding the federal government’s role in education. There is scant evidence that existing federal programs are accomplishing their goals; indeed, most evaluations of the major federal categorical programs suggest that they are failing to make a dent in the problems they were designed to solve. Even Head Start, probably the most popular federal initiative, has been unable to close the large gaps in achievement between poor children and their advantaged peers. Yet Congress has been consistently unwilling to overhaul or discontinue any education program, regardless of its lack of effectiveness. Every federal program can mobilize a devoted constituency on its behalf, and even the smallest programs have kept their federal funds flowing.

The Public Choice perspective is this dynamic of beneficiaries of current federal programs (though who administrate the program at the federal, state, and school district level, and those schools and teachers who receive the grants), who have strong motivations to lobby for keeping the programs going, and the lack of motivation or even information that the wider audiences of other teachers, students, parents, or taxpayers have to advocate or even know about alternatives that could better serve students.

And for affirmatives, the author argue for improving current federal education programs before funding new initiatives:

Before launching bold education initiatives, the federal government should follow a simple rule: improve what it does now before attempting anything new. Even then, Washington should never impose new programs on local authorities without clear evidence that the proposed intervention will improve children’s education.

The two most important federal categorical programs—special education and Title I—need to be overhauled. Both could be changed by the president and Congress in ways that would help the children who are their intended beneficiaries.

This recommendation was ignored or at least not addressed by the George W. Bush Administration as it launched the federal “No Child Left Behind” program. And then the Obama Administration launched “Common Core” and offered school district as waiver from No Child Left Behind regulations in exchange from adopting Common Core standards. From a 2012 study, “No Child Left Behind Waivers
Promising Ideas from Second Round Applications,” (Center for American Progress, July 2012)

The Obama administration has offered states the chance to waive some requirements of the No Child Left Behind Act in recognition that parts of the law are dated. States are required, however, to make specific reforms in exchange for increased flexibility.

The Internet is full for pro and anti Common Core posts and websites, offering a challenge for students to figure out which scholars and organizations are reliable for debate research and cases.
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Diana Ravitch, a coauthor of the 2010 Brookings study quoted from above, was also author of the influential 2010 book: The Death and Life of the Great American School System: How Testing and Choice Are Undermining Education (now in it’s 3rd edition). This July 7, 2016 Washington Post article “A surprising truth about American education,” note Ravitch supported “test-based school reform,” worked for the Bush Administration, and supported No Child Left Behind legislation:

But after seeing the effects of these reforms on students and teachers, Ravitch changed her mind and wrote about her conversion. The book helped start an anti-reform movement of which she has been the titular leader, and which has grown significantly among parents, educators, advocates and others. Now she has updated the book — and changed at least one position she had when she wrote the first edition. 

The book discusses Ravitch’s change in thinking about standards-based education, based in part on the troubled development and implementation of the Common Core State Standards and plenty of other issues. She writes that No Child Left Behind was “the worst education legislation” Congress ever passed because, among other things, it “presumed that Congress knew how to reform schools, which it does not” and “assumed that scores on standardized, multiple-choice tests were the end goal of education, but they are not.”

Here is a chapter by chapter study guide (pdf) for The Death and Life of the Great American School System (not sure which edition). Here is Amazon link to latest edition, with “Look Inside” feature.

And it seems clear from the title of Ravitch’s 2014 book that she is skeptical of some proposed reforms: Reign of Error: The Hoax of the Privatization Movement and the Danger to America’s Public Schools (Vintage; Reprint edition (August 26, 2014)).

Ravitch writes on changing views here: “Why I Changed My Mind About School Reform: Federal testing has narrowed education and charter schools have failed to live up to their promise,” (Wall Street Journal, March 9, 2010). Atlantic article from 2011: “Diane Ravitch: Teachers’ Hero or Education Hypocrite?” and “The Education of Diane Ravitch.”

And from June 2016 Washington Post:Diane Ravitch to Obama: ‘I will never understand why you decided to align your education policy with that of George W. Bush’”

This May 2, 2017 post quotes Ravitch from a  Network for Public Education gathering:

She started out by saying that, “the latest and most serious threat to our public schools is DeVos” and her privatization agenda. The privatization effort she said, has become a “steamroller turning our citizens into consumers.” And like John Kuhn did, she made the point that “we have a culture in our schools now that suppresses the joy of learning and of teaching.” That, “test scores of 15 year olds are not a predictor of either their’s, or our nation’s future.” And that, “the achievement gap construct – created by standardized tests designed for some kids to fail” – does nothing to help them succeed. She also pointed out that “a nation ”that doesn’t trust its teachers’ judgement, will never have a great education system.” 

For the lastest Diane Ravitch ve

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Arrival Cities: Across China and the World

Rural poverty in China, India, Africa, and Latin America is a modern tragedy. Deep poverty seems understandable in 1800 or 1900, but how could so many billions remain poor by 2000 or 2015?

Migration is the fastest, surest path out of poverty. Cubans, Haitians, Mexicans, and Chinese who moved from rural areas in their country to the United States quickly prospered compared to friends and family who stayed home. Marginal Revolution University’s Tyler Cowen explains why in “Wage Gains from Immigration.”

Borders prevent most migration from poor to wealthy countries, but rural migrants can still improve their lives migrating to cities, edge cities (and “shanty towns”) in their own countries.

Arrival City reports on this migration around the world, and the website features a short video from one of China’s arrival cities:Screen Shot 2017-06-10 at 6.07.03 AM

In this multimedia presentation, Doug Saunders and photographer Sun Shaoguang take you inside Liu Gong Li, the haphazard, improvised neighbourhood on the edge of Chongqing that opens the first chapter of Arrival City, and introduce you to some of the book’s personalities.

Arrival City on Amazon (website book link seems broken).

China’s “floating population” of migrant workers still lack rights of other Chinese workers, but as China’s wage levels have increased so have migrant worker’s incomes. “5 Things to Know… About China’s Floating Population,” (Paulson Institute, November 13, 2015) notes:

The composition of China’s floating population, now numbering around 274 million, has changed over the past 30 years. Today, 19.3% have college degrees. With two-thirds of this floating population consisting of people under the age of 35, the floating population has accumulated a larger proportion of millennials, who are earning higher educational degrees and entering a more diverse range of industries and occupations.

The low wages reports at the Chinese shoe supplier for Ivanka Trump (see previous post: “China’s Factory Workers: Exploitation or Escape from Rural Poverty?“), likely reflect the income disparities even among migrant workers.

There is significant income disparity within the floating population, with the top 20% earning 3.8 times more than the bottom 20%. Migrant workers are no longer restricted to the low-end segment of the labor market. And the influence of government regulation on migrant incomes has diminished: migrant income is now more dependent on human capital and social connections.

“Human capital” refers to the skills of individual workers. Growing up in deep poverty in rural China today, as through all time, does not equip young people with skills. Only with they migrate to factory towns or edge cities, or when factories relocate to rural areas, are they able to learn skills to earn higher wages.

The Paulson Institute’s “How to Better Support China’s Migrant Population,” (November 11, 2015) reports on China’s floating population and the government reforms that would improve their lives.

Institutional reform is the key to development. Globalization (access to global capital and markets) can expand opportunities, but only if the local legal systems allow it.

Raluca Șancariuc explains in “State-Building and Breaking,” a review of “Why Nations Fail: The Origins of Power, Prosperity, and Poverty” by Daron Acemoglu and James Robinson:

Their explanation for why some countries are poor while others are prosperous has institutional foundations: it is the quality of the institutions underlying economic and political life that influences wealth accumulation. The authors create a sharp distinction between inclusive institutions, which encourage productivity, education, technical progress, and extractive institutions, which only take wealth away from one part of the society, for the benefit of the other. It is the former type of institutions that support the creation of wealth inside of a nation even beyond the world knowledge frontier. When the country is playing at catch-up growth, extractive institution might see it through to some stage of development, but it will inevitably falter, as true competition and an appropriate supply of public goods comes from inclusive institutions.

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China’s Factory Workers: Exploitation or Escape from Rural Poverty?

U.S. Presses China to Free Activists Scrutinizing Ivanka Trump Shoe Factory,” (New York Times, June 6, 2017) reports on labor activists detained by Chinese authorities and U.S. State Department pressure for their release. U.S. firms purchasing shoes, clothes, and other goods made in China employ third-party certification agencies to insure working conditions are adequate.

How Big Brands Can Cultivate Ethical Suppliers” (Stanford Business Insights, October 31, 2016) notes:

Managing risky suppliers requires the use of multiple tools, Lee says. One is certification — which entails paying a third party to visit the factory and determine whether it meets established quality-management and worker safety standards. Lee cautions, however, that suppliers can temporarily improve conditions to pass the certification, then revert to unsafe practices after inspectors leave.

Another tool is an audit, which is a more in-depth investigation done by a third party, typically performed annually. Lee’s research found that these audits are not to be taken lightly. “If you spend more money, you get more accuracy,” he says. …

Working conditions, hours, and wages across China’s vast manufacturing centers can look tragic to western eyes. Trading Economics reports wage increases for 2016, with one Chinese Yuan equalling 15 cents:

Wages in Manufacturing in China increased to 59470 CNY/Year in 2016 from 55324 CNY/Year in 2015.

So average annual factory wages rose to $8.920 from $8,299. A bar chart shows the astonishing increase in average factory wage rates, with: 41650 CNY ($6,247) in 2012,  26559 CNY ($3,983) in 2009.Screen Shot 2017-06-08 at 1.44.38 PM

Factory Girls: From Village to City in a Changing China, was published in 2009, so it’s sobering stories were of young migrant women working long hours early well below 2009 average wages. The U.S. bureau of labor statistics calculates average Chinese factory wages at $1.60 an hour in 2009.

So it’s good news that average factory wages have more than doubled from 2009 to 2016. But The Washington Post, in “Workers endured long hours, low pay at Chinese factory used by Ivanka Trump’s clothing-maker,” (April 25, 2017) reports wages of just $1 an hour (60 hours to earn $62):

Workers at a factory in China used by the company that makes clothing for Ivanka Trump’s fashion line and other brands worked nearly 60 hours a week to earn wages of little more than $62 a week, according to a factory audit released Monday.

The article reports monthly wages about half current national averages:

The factory’s workers made between 1,879 and 2,088 yuan a month, or roughly $255 to $283, which would be below minimum wage in some parts of China. The average manufacturing employee in urban China made twice as much money as the factory’s workers, or roughly 4,280 yuan a month, according to national data from 2014.

Wages reflect productivity, and as a workers from rural China gain manufacturing skills their pay increases. They transition to more valuable work with higher wages, often by moving to other firms. Factories cutting and assembling shoes, especially low-volume, high-fashion shoes seem slow to adopt automated assembly. In response, many labor-intensive factories are shifting production to countries with larger pools of low-skill, low-wage workers:

Many manufacturers, especially those in the garment, shoe and toy industries, have already relocated from China to smaller Asian countries such as Bangladesh, Cambodia and Vietnam, in many cases replicating the pay and working conditions seen in China a decade ago. (China Labor Bulletin, “Wages & Employment)

The China Labor Bulletin article notes that the low wages, as in the Ivanka Trump supplier, are not unusual for Chinese factories with migrant labor:

The average take-home pay of migrant workers, who are among China’s lowest paid, is often less than half the overall average wage in China’s major cities. A 2015 survey of rural migrant workers showed that their average monthly wage was just 3,072 yuan. The highest-paid sectors for migrant workers were transport and logistics (3,553 yuan per month) and construction (3,508 yuan per month), while those employed in household services, sales, hotel and catering services were the lowest paid, earning just over 2,600 yuan per month.

Leslie Chang, the author of Factory Girls: From Village to City in a Changing China helps put these very low wages in context in her 2012 TED talk (below). Chinese factory conditions and wages are usually a significant improvement from life in the rural villages workers migrate from.

The Naked Capitalism post “The voices of China’s workers,” (October 16, 2012) has Chang’s TED presentation, and quotes from the transcript discussing how factory workers (again, at 2009 migrant wages) saw their work and opportunities:

[CHANG:] … All of these speakers, by the way, are young women 18 or 19 years old. So I spent two years getting to know assembly line workers like these in the South China factory city called Dong Wan [phonetic]. Certain subjects came up over and over: How much money they made; what kind of husband they hoped to marry; whether they should jump to another factory, or stay where they were. Other subjects came up almost never, including living conditions that to me looked close to prison life. Ten or fifteen workers in one room, 50 people sharing a single bathroom, days and nights ruled by the factory clock. Everyone they knew lived in similar circumstances, and it was still better than the dormitories and homes of rural China.

The post’s comments include a heated debate over Chang’s talk and the ethics of wages and conditions for Chinese workers making goods for U.S. consumers.

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Economic Problems with China’s Forest Plans

The Chinese government has strong incentives to advance environmental goals, from reducing air and water pollution to restoring habitat and ecosystems. “Trees or Shrubs? Study Disputes Success of China’s $100 Billion Forest Effort,” (New York Times, May 3, 2017) challenges UN and Chinese government forest planting claims of: “167,568 square miles of forest, an area slightly larger than California”:

But the newly released study, based partly on an analysis of high-resolution photographs, found that China had gained only about 12,741 square miles of forest over the same period, an area roughly the size of Maryland. And it found that much of the government’s reported new forests were actually just collections of shrubs.

The study’s:

findings were consistent with recent research suggesting that China’s forest resources have not significantly increased despite the government’s extensive tree-planting campaign or its efforts to halt commercial logging in forests.

The article notes there are some 800 different definitions for forest, so much room for confusion in trying to measure forest cover changes.

A 2014 Economist article “Great Green Wall,” (August 23, 2014) reports on China’s diminished forests and grasslands releasing sand to Chinese cities:

Blown from northern deserts and degraded drylands, it coats roads, clogs railways and desiccates pastures. According to Greenpeace, just 2% of China’s original forests are intact. Decades of rampant logging and overgrazing have speeded the degradation of its land and soil; over a quarter of its territory is now covered in sand.

(Maybe all this sand can help address another problem noted by the New York Times: “The World’s Disappearing Sand,” (June 23, 2016), and The New Yorker, “The World is Running Out of Sand,” (May 29, 2017)).

The Economist article notes forest planting projects have gone wrong:

Just 15% of trees planted on China’s drylands since 1949 survive today, estimates Cao Shixiong of Beijing Forestry University. Many died of age, as those grown from cuttings (as most are) only have a lifespan of around four decades. But many were simply unsuited to the soil. Monocultures are prone to disease. In Ningxia, in northwest China, a pest wiped out 1 billion poplar trees in 2000—two decades of planting efforts. In arid areas trees may even aggravate desertification by depleting groundwater and killing grasses that bind the soil.

Economists are not surprised that government forest plans failed since most other centrally-planned industrial and agricultural plans failed as well.

Similar mega-forest plans have failed in Africa, though with some emerging successes. The “Great Green Wall” Didn’t Stop Desertification, but it Evolved Into Something That Might, (The Smithsonian, August 23, 2016) tells of the plan was to plant a forest from Africa’s west to east to stop expanding deserts.

It was a simple plan to combat a complex problem. The plan: plant a Great Green Wall of trees 10 miles wide and 4,350 miles long, bisecting a dozen countries from Senegal in the west to Djibouti in the east. The problem: the creeping desertification across Africa. …

“If all the trees that had been planted in the Sahara since the early 1980s had survived, it would look like Amazonia,” adds Chris Reij, a sustainable land management specialist and senior fellow at the World Resources Institute who has been working in Africa since 1978. “Essentially 80 percent or more of planted trees have died.”

But while the top-down plans to create forests along the edge of African deserts failed, researchers found local farmers are expanding forest and productive agricultural land on their own:

Over two years traveling through Burkina Faso and Niger, they uncovered a remarkable metamorphosis. Hundreds of thousands of farmers had embraced ingenious modifications of traditional agriculture practices, transforming large swaths into productive land, improving food and fuel production for about 3 million people.

“This regreening went on under our radar, everyone’s radar, because we weren’t using detailed enough satellite imagery. We were looking at general land use patterns, but we couldn’t see the trees,” Tappan says. “When we began to do aerial photography and field surveys, then we realized, boy, there is something very, very special going on here. These landscapes are really being transformed.”

Innovative farmers in Burkina Faso had adapted years earlier by necessity. They built zai, a grid of deep planting pits across rock-hard plots of land that enhanced water infiltration and retention during dry periods. They built stone barriers around fields to contain runoff and increase infiltration from rain.

In Niger, Reij and Tappan discovered what has become a central part of the new Great Green Wall campaign: farmer-managed natural regeneration, a middle ground between clearing the land and letting it go wild.

Colonialism played a key role here, as colonial powers disrupted long-standing property rights institutions:

Farmers in the Sahel had learned from French colonists to clear land for agriculture and keep crops separate from trees. Under French colonial law and new laws that countries adopted after independence, any trees on a farmer’s property belonged to the government. Farmers who cut down a tree for fuel would be threatened with jail. The idea was to preserve forests; it had the opposite effect.

“This was a terrific negative incentive to have a tree,” Garrity says, during an interview from his Nairobi office. “For years and years, tree populations were declining.”

Unfortunately, colonial tree policies were kept in place after independence, and continued to damage natural ecosystems:

But over decades without the shelter of trees, the topsoil dried up and blew away. Rainfall ran off instead of soaking into cropland. When Reij arrived in Africa, crop yields were less than 400 pounds per acre (compared to 5,600 pounds per acre in the United States) and water levels in wells were dropping by three feet per year.

Since the 1980s local farmers have been restoring trees and, for example: aerial images show: “Niger’s Zinder Valley had 50 times more trees than it did in 1975.”

Africa’s green wall lessons can apply in China. Local farmers and land owners have strong incentives to discover ways to maintain and restore grasslands and forests.

A Michigan State University article claims: “China’s Efforts to Restore Forests are Working,” (MSU Today, March 18, 2016):

The MSU scientists examined the big-picture view of NASA’s Moderate Resolution Imaging Spectroradiometer annual Vegetation Continuous Fields tree cover product, along with high spatial resolution imagery available in Google Earth. Then they combined data at different scales to correlate the status of the forests with the implementation of China’s program.

And, as the Chinese government has contended, the initiative is working and forests are recovering, with about 1.6 percent, or nearly 61,000 square miles, of China’s territory seeing a significant gain in tree cover. In comparison, 0.38 percent, or 14,400 square miles, experienced significant loss.

The claimed forest gain here is five times that cited in the first article above. A Stanford News article “China’s environmental conservation efforts are making a positive impact, Stanford scientists say,” (June 16, 2016), also claims positive results:

By 2000, China developed the Natural Forest Conservation Program and the Sloping Land Conversion Program, $50 billion projects aimed at reducing natural disaster risks by restoring forest and grassland, while also improving life conditions for 120 million poverty-stricken farmers.

However, this seems more a report on the intentions of the Chinese government than a report on actual progress. (More details in the article.)

The problem with economic planning…

At the center of economics are two sets of challenges: knowledge problems and incentives problems. The Chinese government recognized significant environmental problems caused by deforestation:

Officials in China began considering significant environmental reform following a series of natural disasters in the late 1990s that were exacerbated by human activities. In particular, in 1998, massive deforestation and erosion contributed to devastating flooding along the Yangtze River. Thousands of people were killed, and more than 13 million people were left homeless following $36 billion in property damage. (Stanford News)

But recognizing problems is a far cry from solving them. Central plans face challenges, even when they can pour $100 billion into planting trees. What trees and where? Who will water the trees?

Economist Lester Thurow, in a 1986 New York Times book review, observed:

Government ownership of all the means of production fails because it cannot answer a simple question: Who should stay up all night with a sick cow? In capitalism the answer is clear: the owner. In socialism the answer is not clear, and too often it is: no one.

Market economies with property rights and rule of law make clear who owns cows, cars, farmland, and trees. Across the U.S., privately-owned, state-owned, and federally-owned forests are managed differently. “Divided Lands: State vs. Federal Management in the West,” (March 3, 2015) contrasts state management where forest revenue often supports public schools, with federal forests. Alston Chase’s classic Playing God at Yellowstone focuses on incentives and park management challenges. Forest management benefits from market-generated information as well as property ownership-generated incentives.

From Incentive Problems to Information Problems…

The division of labor and expanding scope of trade allow people and companies to gain specialized knowledge and skills to better produce goods and services. In modern society, we benefit each day from a wide range of goods that we would have no idea how to produce.

For example, we benefit the mobility cars provide without knowing how to build or repair them (and benefit from trains, buses, Uber, and Lyft, even if we don’t know how to drive). We consume a wide range of foods without knowing how to farm or even much about cooking. People and firms that have this knowhow can be nearby or far away, which allows us to focus on producing other goods and services.

The knowledge problem follows from no single person or group having enough knowledge to produce all the goods and service they consume each day, week, or month. The “I, Pencil” story explains that no one in the world even knows how to make a pencil all the way from tree to writing.

Here are three “I, Pencil” YouTube videos: One, Two, Three, and an NPR story/segment: “Trace The Remarkable History Of The Humble Pencil” (plus “I, Smartphone” video from 2012).

F.A. Hayek’s famous journal article “The Use of Knowledge in Society,” (American Economics Review, 1945) takes a deeper look at how knowledge is divided around the world through international trade, mobilized by markets, with production coordinated by prices. Hayek offers the example of a copper ore mine flooded in Chile. Through the weeks after, reduced supplies of copper ore force copper refineries to scramble for other supplies, bidding up ore prices and encouraging other mines to expand production (usually with higher costs).

Copper refiners dealing with these higher prices in turn raise their prices, so companies producing pots, pans, jumper cables with copper search for substitutes, and raise their prices to consumers. Next, millions of consumers find higher prices for copper pans in Target, Walmart, and higher prices for copper jumper cables at Autozone. Higher prices signal some consumer to buy substitute goods (aluminum pans or jumper cables), or to put off buying until later.

Copper consumers have no knowledge of the flood reducing copper ore mining in Chile, but signals from higher prices encourage reduced of copper consumption by consumers as well as increased copper ore mining by producers. And higher prices boosts copper recycling (and, unfortunately, encourages thieves to steal even more copper wires (“Copper theft ‘like an epidemic’ sweeping US,”, July 30, 2013)

Markets and changing prices are sending millions of signals each day about shifts in the supply and demand of goods and services. Forests in China and the United States would benefit from better legal institutions and incentives to maintain and expand ecosystems. “China’s Reforestation Programs: Big Success or Just an Illusion?,” (YaleEnvironment360, January 17, 2012), looks at the debate of China’s efforts multi-decade reforestation effort:

…informally called the “Great Green Wall” — was designed to eventually plant nearly 90 million acres of new forest in a band stretching 2,800 miles across northern China.

That could make it the largest ecological restoration project ever accomplished. But some scientists who have examined long-term trends suggest this large-scale tree-planting campaign is far less than the miracle it appears to be. Indeed, Jiang Gaoming, an ecologist at the Chinese Academy of Sciences, has characterized it as more of a “fairy tale.”

To be sure, trees have been planted, with millions of seeds dropped from airplanes and millions more small seedlings manually planted. But in an extensive analysis of such “afforestation” efforts published last year in Earth Science Reviews, Beijing Forestry University scientist Shixiong Cao and five co-authors say that on-the-ground surveys have shown that, over time, as many as 85 percent of the plantings fail.

Screen Shot 2017-05-31 at 9.30.40 PMOverview article: “China is building a Great Green Wall of trees to stop desertification,” (Plaid Zebra, February 16, 2016):

In an effort to combat the loss of its grassland to the Gobi Desert, the Chinese Government started the Three-North Shelterbelt Project, also known as the Great Green Wall in 1978.

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U.S. China Trade War: Raising Costs for U.S. Manufacturers

William Perry’s May 25, 2017 US China Trade War newsletter writes:

We are representing auto parts companies, which have warned the US International Trade Commission (“ITC”) if they go affirmative and find injury in the case, in all probability the companies will close their US operations and move offshore. The US producers bringing the petition want to force auto parts companies to buy their commodity mechanical tubing, which is sold to the oil & gas industry and goes down a hole. The auto industry needs made to order mechanical tubing as their raw material because of the advanced designs and safety requirements in the United States.

If the United States is going to block raw materials, US downstream industries will have no choice. They will move offshore to obtain the high quality raw materials they need to not only be competitive but also produce high quality safe auto parts. In this first article below, one can read directly the public statements of these auto parts producers to the ITC.

Screen Shot 2017-05-26 at 11.09.39 AMThe above quote is from beginning of newsletter, this April 21 US Trade War website post reports imports from China will be hit, but the impact will especially harm downstream US manufacturers who rely on these materials to manufacture finished goods:

On April 19, 2017, ArcelorMittal Tubular Products, Michigan Seamless Tube, LLC, PTC Alliance Corp., Webco Industries, Inc., and Zekelman Industries, Inc. filed major Antidumping and Countervailing Duty cases against hundreds of millions of dollars of cold-drawn mechanical tubing from the six countries in 2016.  The petition alleges antidumping duties ranging as follows:

China: 88.2% – 188.88%

India: 25.48%

Italy: 37.23% – 69.13%

Germany: 70.53% – 148.32%

Republic of Korea: 12.14% – 48.61%

Switzerland: 40.53% – 115.21%

Automotive News (May 16, 2017) in “Commerce Dept. investigates steel imports used in auto parts,” explains:

In the auto industry, cold-drawn mechanical tubing is used to make stabilizer bars, shock absorbers and struts, trailer suspensions, axle shafts, half shells, spacers, steering columns and gears. Tubes also help reduce the number of welds, saving manufacturers time and money, while strengthening the structure and reducing overall vehicle weight.

The article notes over 150 other trade restrictions on steel imports are in place:

As of April 19, the Commerce Department has 152 anti-dumping and countervailing duty orders in place on steel from 32 countries. Twenty-eight of the 152 orders, or 18 percent, are on steel products from China.

American steel producers, associations, and lobbyists have added The steel orders represent almost 40 percent of all anti-dumping and countervailing duty orders in place. There are also 25 investigations underway for steel products.

U.S. Steel Giants Warn Foreign Imports Imperil National Security claims to economic damage claims, “U.S. Steel Giants Warn Foreign Imports Imperil National Security,” (Bloomberg Politics, May 24, 2017):

Chief executive officers of America’s largest steelmakers said global overcapacity of the metal is at crisis levels as they urged the U.S. to determine that cheap steel imports are a threat to national security.

The story also reports:

China’s steel exports to the U.S. have declined by more than 67 percent since September 2015 and the U.S. has enough domestic supply to meet its own needs, Yu Gu, first secretary at China’s Ministry of Commerce, said at the hearing.

Similar national security/trade restrictions are in store for aluminum imports, according to the Financial Times: “US launches national security probe into aluminium imports,” (April 27, 2017):

The US has launched a national security investigation into imports of aluminium, warning that its capacity to domestically produce the metal needed for fighter jets and armour plating has collapsed in recent years. 

Daniel Griswold of the Mercatus Center, in “A Matter of Steel Industry Security,” (, April 28,2017), counters that the U.S. is still a steel industry power, producing all the military could possibly need:

Steel imports are no more a threat to U.S. national security than imported sugar or lumber or tulips. While it’s true that steel imports have risen to about a quarter of U.S. consumption, domestic steel output remains robust. During the past decade, according to the World Steel Association, annual output at U.S. steel mills has been trending slowly downward but it was still an impressive 78 million tons in 2016. That ranks the United States as the world’s fourth largest steel producer.

Domestic steel production far exceeds any foreseeable need by the U.S. military, which is a relatively small customer for domestic steel. The American Iron and Steel Institute reports that, in 2015, national defense and homeland security accounted for only 3 percent of domestic steel consumption. The Pentagon still needs steel for ships, tanks, and warplanes, but the demand has been flat or trending down for years. …

The 2001 report found that the Department of Defense’s annual requirements for steel “comprise less than 0.3 percent of the industry’s output by weight (i.e., 325,000 net tons of finished steel per year).” It also found that the steel that was imported came mostly from a diverse and “safe” list of foreign suppliers, such as Canada, Mexico, and Brazil.

Higher tariffs on imported steel and aluminum will drive prices even higher and further hurt U.S. manufacturers, especially those using imported steel and aluminum in the goods they export to the world.

Lots of domestic and imported steel are used by foreign automakers exporting cars from the U.S.  “Trump Reportedly Wants to Stop Germans From Selling So Many Cars Here, Where They’re Made,” (, May 25, 2017) reports:

In 1994, BMW opened a plant in Spartanburg, South Carolina. Having invested $7.8 billion in the plant, BMW now boasts that it is the company’s largest single facility in the world. And it has spurred investments by a range of suppliers throughout the state. The cars made in Spartanburg there include the EX3 and X5 Sports Activity Vehicle, and the X4 and X6 Sports Activity Coupe. Last year, Spartanburg produced a record 411,171 vehicles, about 34,000 per month. According to BMW, it sells about 26,000 cars per month in the U.S. Now, not all the cars BMW sells in the U.S. are made here. Some are shipped in from overseas. And many of the vehicles made in South Carolina—287,700 last year, or 70 percent—are exported to points around the world.

Mercedes and Volkswagen also have huge U.S. manufacturing operations, as do Japanese and South Korean carmakers:

IAMA , the trade group for Asian automakers in the U.S., said its members last year produced 4.6 million cars between them, equal to 40 percent of all U.S. vehicle production, at some 300 facilities.

As earlier Debate Central posts have noted and many online articles have argued, steel and aluminum imports help U.S. manufacturers. “U.S. Steel Tariffs Create a Double-Edged Sword,” (WSJ, May 31, 2016) as higher steel prices raise costs of US manufacturing:

Duties on steel products from China, Brazil, India, Japan and other countries have contributed to the U.S. benchmark hot-rolled coil index rising more than 60% this year to $615 per ton, after falling 33% last year. In Europe, the benchmark index is up by 34%.

The article quotes U.S. challenged by import restrictions that have raised prices:

Some manufacturers are pushing back. In a letter to the Department of Commerce requesting an exemption, Steelcase Inc. Chief Executive James Keane said a tariff on a special kind of Japanese steel could cost one of his subsidiaries $4 million to $5 million a year.

The subsidiary, Polyvision, makes whiteboards for schools at a plant in Oklahoma, where it employs about 50 people. “If nothing changes, we would have to close our Oklahoma plant,” he wrote. “Schools can’t afford to pay more for these whiteboards, so if we raise prices to our customers they will use lower quality substitutes that are likely not made in the U.S.”



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Not One Less and Bring your Five-year-old to Work Day

For NSDA debaters transitioning from the China topic to federal K-12 funding and regulatory reform, consider the connection between child labor, education, and income inequality.

Steve Mariotti, the founder of the Network for Teaching Entrepreneurship, tells the story of his first year teaching at a New York City high school. After success in retail, Mariotti switched to teaching a remedial class of inner-city students. Not surprisingly he had a hard time managing the classroom and was unable to teach effectively. As the end of the school year he asked his unhappy students if there was anything he had taught that they enjoyed or learned from.

Student answers focused on his discussion of business and how he had made money in retail. Mariotti was astonished students remembered details from a talk months earlier of his business buying wholesale, marketing and distribution, sales and income, etc. From there Mariotti shifted his classroom teaching to weaving course materials with practical instruction on Screen Shot 2017-05-22 at 8.36.33 AMstarting and running a business.

Through the following years Mariotti developed NFTE into a nationwide entrepreneurship program that has helped hundreds of thousands improve reading and math skills as they develop business enterprises. Here is a 2010 BBC News segment on Steve Mariotti and NFTE. Here is page on Ten9Eight, a documentary on teens competing. Here is trailer on YouTube.


Young people growing up in low-income households are motivated to find and follow paths out of poverty. Teachers can encourage studying in classes through high school and then college. But many struggle to see success down that path. Opportunities to earn income, even as elementary school students, can serve as learning experiences.

A number of education organizations offer opportunities for students to learn and earn. The Children’s Business Fair opens doors for students to become entrepreneurs and gain enterprise experience.

For over seventy years DECA has helped high school students develop practical business skills:

DECA prepares emerging leaders and  entrepreneurs for careers in marketing,  finance, hospitality and management  in high schools and colleges around  the globe.

Junior Achievement, another nonprofit, has long worked with high schools to help students gain business and enterprise experience.

Can you really teach entrepreneurship?,” (Washington Post, March 23, 2014) discusses both NFTE and JA programs:

“Many young people naturally have an entrepreneurial spirit, and many of them have great ideas, but what they don’t have are the technical skills,” Tricia Granata, executive director of the District’s Network for Teaching Entrepreneurship, part of a national nonprofit, said. “We can teach them things to make sure that innate entrepreneurial spirit doesn’t get wasted.” 

Where should those skills be taught? Edward Grenier, president of Junior Achievement of Greater Washington, the local chapter of a national nonprofit organization that teaches financial literacy and entre­pre­neur­ship to students in kindergarten through high school, argued that entrepreneurship education must move beyond the classroom.

Learning practical business skills may seem too materialistic or distractions from mathematics, literature, civics, and history. But poverty is a distraction too, and early work opportunities can provide new motivations to pursue a solid education.

Screen Shot 2017-05-22 at 9.06.31 AMConsider the compelling movie of rural China, Not One Less (link to Amazon page). Like Horatio Alger novels based on true stories of city and rural poverty in the U.S., Not One Less gives a glimpse of real-world city and rural poverty in China.

Many young people prefer seeking opportunities in cities over poverty in the countryside. Economic freedom includes the freedom to move, and around the world hundreds of millions have moved to shantytowns surrounding fast-growing cities of the developing world. Edward Glaeser notes in his book Triumph of the City:

Urban poverty should be judged not relative to urban wealth but relative to rural poverty. The shantytowns of Rio de Janeiro may look terrible when compared to a prosperous Chicago suburb, but poverty rates in Rio are far lower than in Brazil’s rural northeast. The poor have no way to get rich quick, but they can choose between cities and the countryside, and many of them sensibly choose cities. (from excerpt in Scientific American, April 17, 2011)

The kid that runs away to the city in the movie Not One Less seems a lot like the kids who ran away to New York City in the mid to late 1800s as told in dozens of Horatio Alger novels. These entertaining and educational stories are available free online.

Though frowned upon as unrealistic by critics, it turns out many of Alger’s characters and events reflect true stories from personal interviews and reports in the New York Times. Some sixty thousand children lived and worked on the streets of New York selling newspapers, smashing (carrying) luggage, selling apples, delivering messages, working retail, and dozens of other low-paying tasks.

Nonprofit organizations provided inexpensive housing and many were sent to live safer lives in the country. Still, over time these young “street arabs” gained job skills to raise their incomes. Alger’s “rags to riches” stories emphasize honesty, thrift, and saving, are the keys to success, along with getting an education and working hard.

Stefan Kanfer in “Horatio Alger: The Moral of the Story,” (City Journal, Autumn, 2000) notes the popularity and influence of Alger’s novels:

Horatio Alger Jr. was the biggest American media star of his day. Though nineteenth-century best-seller lists were impressionistic—and the sale of 10,000 volumes was deemed a publishing triumph in those days—readers bought at least 200 million copies of his books…

Alger was at the forefront of a phenomenally successful experiment in social reform and improvement, a broad movement that inspired poor kids to take advantage of America’s social mobility and that led tens of thousands of New York’s post-Civil War juvenile delinquents into productive lives…

New York City then was as poor at the booming cities and shantytowns across China and the developing world today:

The New York City street urchin entered the national consciousness in those years. More than 60,000 neglected or abandoned kids ran unsupervised in the streets, partly because of the fallout from the tremendous wave of immigration from Ireland and continental Europe that was taking place. With immigration came a social pathology of maladjustment to the New World: families that fell apart; alcoholism and drug abuse (opium could be purchased across the counter); out-of-wedlock pregnancies and, inevitably, neglected children…

Horatio Alger writes, in the preface to Rufus and Rose: Or, The Fortunes of Rough and Ready:

… Several of the characters are drawn from life, and nearly all of the incidents are of actual occurrence. Indeed, the materials have been found so abundant that invention has played but a subordinate part.     The principal object proposed, in the preparation of these volumes, has been to show that the large class of street boys—numbering thousands in New York alone—furnishes material out of which good citizens may be made, if the right influences are brought to bear upon them. In every case, therefore, the Screen Shot 2017-05-22 at 12.01.15 PMauthor has led his hero, step by step, from vagabondage to a position of respectability; and, in so doing, has incurred the charge, in some quarters, of exaggeration. It can easily be shown, however, that he has fallen short of the truth, rather than exceeded it. In proof, the following extract from an article in a New York daily paper is submitted:—     “As a class, the newsboys of New York are worthy of more than common attention. The requirements of the trade naturally tend to develop activity both of mind and body, and, in looking over some historical facts, we find that many of our most conspicuous public men have commenced their careers as newsboys. Many of the principal offices of our city government and our chief police courts testify to the truth of this assertion. From the West we learn that many of the most enterprising journalists spring from the same stock.”

Poor children today in America’s cities and countrysides are better fed than street children of the late 1800s New York City. But in protecting children from employment, few in poor families have the opportunity to begin earning their way out of poverty until their teens or longer. Young people in middle-income and wealthy families on the other hand, participate in many organizations and activities that teach key life and job skills, from scouting to summer camps, speech and debate, volunteer work, and part-time business tasks for friends and relatives.

Low-income children today lack many of the employment and income opportunities of children much poorer “enjoyed” in the 1800s. Blocking young people from income-earning, skill-building activities frustrates their natural urge to get ahead, as well as cuts off an avenue for gaining additional income for their family. And nearly everyone in the world was poor just a century ago. Nearly all children worked to help their families.

Maybe it was unfair and inequitable that so many children were so poor in American cities in the late 1800s. And it’s similarly unfair that so many hundreds of millions of young people in rural China and India are still poor. So many around the world today live in similar poverty in the cities and countrysides of India, China, Indonesia, Brazil, the Middle East, and across Africa. (On the positive side, the World Bank reports poverty rates around the world to be the lowest ever: “World poverty rate to fall below 10% for the first time,” CNN, October 5, 2015)

Poverty is a problem, but so are regulations that prevent young people from working legally at jobs that are safe and within their abilities. Why have adults cleaning tables at restaurants, if children and young people could do the same work safely? We wouldn’t want children working ten, twelve or sixteen-hour days, as many did in the 1800s. But what about a four-hour day that comes with a free meal, after school at a nearby restaurant? Would that be the end of the world or the thin edge of the wedge to sending children back to dark and dangerous factories? Or might working in a neighborhood restaurant be both a learning and earning experience for young people?

Here is sample from an video featuring economist Hernando de Soto:

Poor people are migrating to the world’s cities in astounding numbers, embracing globalization despite the risks, and when the laws they encounter don’t work for them, they create their own.

The poor kid in Not One Less (trailer) wanders the city taking in sights and sounds until he get hungry. He tries taking some leftover food from a sidewalk restaurant, but is caught. The restaurant owner gives him some food and lets him clean tables. Later the kid is”rescued” and taken back to his village in a car full of reporters eager to tell his story. “How was life alone in the city?” they ask. He replies with a big smile: “The city was great!”

Another youth enterprise story from China is in this viral video of a five-year old eager to play (or work?) with his father’s machinery. (My nephew at the same age would have jumped at an opportunity to learn these skills.)

More on this story: “He’s an old hand at this! Chinese boy, 5, drives digger on building site” (Daily Mail, November, 2012)

Wang Shuhan, from Wuhan, in central China’s Hubei Province, is only five-years-old yet he’s already an expert at operating building site machinery.

The youngster was taught by his father Wang Xuebing, who videoed him calmly driving the digger around and using its scoop to pick up and move sand.

According to Xuebing he regularly brings his son to work with him and gradually the youngster grew interested in the machine he operated.

Xuebing said: ‘I sometimes explained to him the functions of the gears within the compartment, and when he was three he asked me to have a try. Amazingly he did it.’

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