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No More Business as Usual

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Originally posted March 15, 2016.

Are there two candidates further apart in this presidential election year than Donald Trump, a billionaire businessman running for the Republican nomination, and Bernie Sanders, a democratic-socialist seeking the Democratic nomination?

What is the appeal of Trump and Sanders to voters who believe that Washington’s economic framework is rotten? NPR answers, “The candidates want to tear it down, and millions of working-class Americans agree.” The electorate is not convinced that the economy is preforming well. Many voters are angry over “how the economy has not performed for them, and their anger is stirred by presidential candidates in both parties.”

For example, according to NPR, annual corporate profits after taxes shot up by about 250%, to nearly $1.7 trillion, from 1999 to 2014. Yes businesses did well, but outside of Washington, many, many Americans are not living in the framework of the “good life.”

They are living in houses that have lost value, in cities where they don’t trust the water pipes and where companies can suddenly announce they are moving jobs to other countries.

With their support of Sanders and Trump, those workers have made it clear they want a new paradigm. Trump talks about building a wall to stop immigrants; Sanders talks about breaking up big banks. So their solutions are quite different, but the message is the same: No more business as usual.

NPR points to Argentina as a warning. A century ago Argentina was one of the world’s richest nations. It declined dramatically after falling behind in technological innovation and education as it increasingly became politically chaotic.

Recently, Becky and E.J. took our oldest grandchild to visit the public high school in Newport, RI, from which I, my sisters, and Matt and Becky graduated. Their review was sad and disheartening. In Florida, after a couple of years of trying the Naples’ school system, Matt and Allison decided they were doing their children a disservice by keeping them in the public schools.

In a PIAAC study (Program for International Assessment of Adult Competencies), which gauges the skills adults need to do everyday tasks, whether at work or in their social lives, U.S. performance was average or well below average in each category.

Overall, Americans’ everyday literacy skills were average. But if you zoom in and focus on just the young adults, a more complex picture emerges.

Americans who went to college and graduate school did well. They scored above their peers with similar degrees in other developed countries.

For young adults with a high school diploma or less, things did not look so good. These Americans performed significantly worse than those in other countries with the same education level.

Postsecondary institutions should be happy. But on the other end of the continuum, we have young people coming out of high school — or not graduating from high school — that are struggling with everyday competencies.

These findings, advises NPR, “should be concerning to everyone, especially leaders in the business community and in the K-12 school systems.” And yet, the politicians rail against income-inequality as they turn a blind eye to our nation’s schools, which are disgracefully failing the middle class, as well as African-Americans.

It’s no secret that Washington, D.C.’s school system is one of the worst in the country. Michael Tanner, senior fellow at the Cato Institute, notes that D.C. schools spend nearly $30,000 per student each year, and yet more than a third of students fail to graduate.

The failure of D.C.’s schools has profound and long-lasting consequences. For example, we know that nearly 29 percent of people aged 25 and over who did not have a high-school diploma lived in poverty in 2014, compared to 14.2 percent of high-school graduates with no college, and just 5 percent of college graduates. And those high-school dropouts will stay poor. With all the talk about poverty and inequality that we hear, let’s remember that a failing public-school system is one of the reasons for those problems.

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Debbie Young

Debbie, editor-in-chief of Richardcyoung.com, has been associate editor of Dick Young’s investment strategy reports for over three decades. When not in Key West, Debbie spends her free time researching and writing in and about Paris and Burgundy, France, cooking on her AGA Cooker, driving her Porsche Boxter S through Vermont and Maine, and practicing yoga.