While the people were shopping, the bombs were dropping,
while the tanks were rolling, the people were strolling,
while the babies were crying, the people were buying,
while the people were sleeping, the mothers were weeping.
While the people were shopping, the bombs were dropping,
while the tanks were rolling, the people were strolling,
while the babies were crying, the people were buying,
while the people were sleeping, the mothers were weeping.
We have heard much about the relative decline of the American education system over the past decade (or two, or three). While there is much truth to these various assertions and statistics that document the decline, there have been a wide-range of different diagnoses of the root source of this general decline, as well as different proposed solutions. A common political response is broad rhetoric calling for an increase in development of the so-called STEM fields– Science, Technology, Engineering, and Mathematics. The last two American presidents have both specifically cited this solution in their State of the Union addresses, and have both increased funding for organizations and initiatives in these fields. Additionally, work visas for immigrants to the US are more readily available to applicants with a skilled background in the STEM fields. The thinking is that this type of expertise is necessary for innovation, and that this innovation will drive the economy and secure the future for the ‘winners’ of the most well-educated nation competition. All of this information is rather uncontroversial, and I certainly have no problem with more focus and funding for education on any kind, whether it is STEM-oriented or otherwise. An objection I have, however, is that the emphasis on STEM field competition seems to be in danger of becoming a sort of Zero-Sum game, in which a top-down political and corporate mandate for more STEM education means a corresponding decrease of perceived importance or respect for other fields or types of education that may not seem to lead to instant innovation or economic dynamism. I am speaking especially about the cultural fields of education known as the Liberal Arts, or the Humanities.
The Liberal Arts encompass areas such as History, the Arts (Performing and Visual), Literature, Languages, and Philosophy, among many more. If we wanted to compare them with the STEM fields on more equal footing, we would need to call them by an easily-understood acronym– HALP (or perhaps HALLP?). Since this obviously not very appealing, we will stick with either of the classical phrases of Liberal Arts or Humanities. The original Latin meaning of artes liberales signifies what was thought necessary for a free citizen to study. This is exactly the case I would like to make here in regards to the political importance of the Liberal Arts.
I would characterize professional, technical, or vocational curricula as various types of training, with a goal of developing specific skill-sets for a particular employment. The areas of the Liberal Arts, however, lead to a more universal and well-rounded education. In this sense, Education, derived from its original Latin meaning of “leading out of”, is conducted not for any specific end in itself, other than a more general and complete individual intellectual development and understanding of the world. I would argue that a person with this type of education could be taught virtually any skill with a certain amount of training, but that education itself is a more profound and long-term (ideally lifelong) personal development.
Once again, I have no problem at all with the emphasis on the advanced training in the STEM fields, but I am afraid that, in the current social and political environment, this emphasis can lead to a drastic undervaluing of the conception of a more universal education as represented especially through study of the Liberal Arts. The USA is fortunate to have a strong system of universities which still maintain a rich Liberal Arts tradition. I do not think this system can remain strong indefinitely given the social and financial pressures. When I was entering college over a decade ago, I knew that I wanted to do my ‘major’ in History, not because I was planning for any specific future employment but because I liked it and was interested in it (a quick glance at the topics on this website will reveal that I still hold this and other humanistic interests). In a scene that has no doubt occurred to many students countless times over the past decades, I was always asked by acquaintances and interlocutors “what I wanted to do with that degree after I graduated…become a teacher?” It is maintained by many folks that someone who studies history is either unemployable, or can only work as a teacher (in history, of course). The pressure is great to spend the valuable formative years on training that leads to employment, rather than education that is interesting and intellectually and personally fulfilling.
I recently returned to school and earned a Master’s degree, which was quite rewarding for me even if it did not directly lead to new or higher-paying employment, or necessary on-the-job skills. In the United Kingdom, where I studied, I became aware of the fact that upcoming budget cuts from the government would slash and burn a number of departments throughout the university system. My own department of Classical Studies would soon be phased out permanently, as well as several modern language programs and countless others. This is a failure of leadership. In America, while I am happy that STEM fields are apparently receiving better funding and support, I have to take strong issue with the harsh budget cuts at the federal, state, and local levels. For shamefully short-sighted reasons, a number of politicians feel that the best way to make up for their (mostly self-inflicted) budgetary shortfalls is to cut funding for education. It is inconceivable how people could be elected or certainly re-elected who support such measures. Many politicians consider the enormously outsized and wasteful military budget to be sacrosanct, while having no qualms in cutting off any education programs whatever (not to mention the select few who want to eliminate the Department of Education altogether). I would submit that re-allocating even 10% of the monstrous “defense” budget towards education would be a more efficient, forward-looking, ethical, and a valuable use of public funds (and who could disagree that a more well-educated population itself would do more for the ‘defense’ of a country than the newest redundant fighter plane or missile). I will rest my case (and my rant) with the support of the two charts below.
Back to the topic at hand, I maintain that education, especially universal liberal education, is necessary for the maintenance of a healthy democratic society. This is exactly the position of American philosopher and educator John Dewey (1859-1952), who was one of the most important and influential theorists and reformers of modern school systems (not only in America, but in Turkey and China). In several books, especially his 1916 Democracy and Education, Dewey describes how education should be a synthesis between the needs of the individual and the society, whose ultimate aim is to teach a person how to live. As a tireless defender of democracy, Dewey knew that a well-educated population was necessary for the survival of an ordered society. For example, without learning how to think independently and use critical judgment, how can a person be expected to choose leaders or public policies? This type of independent and critical thinking, as well as broad cultural and historical perspective, is developed especially through engagement with the Liberal Arts. Dewey’s progressive style of education fell somewhat out of favor during the Cold War, when technological and scientific education was promoted as essential for national survival (e.g.: the “Sputnik” moment and the Space Race). With the political, financial, and rhetorical emphasis now finding favor with the STEM fields, it is, in my opinion, imperative to not lose sight of the importance of liberal, progressive, humanistic studies as well. While better STEM training can lead to technological, industrial, and economical growth and innovation, a more universal Liberal Arts education can lead to a stronger Democracy– that is, a body politic that is curious, cultured, creative, and critical.
(For some further reading, I can endorse these related opinions about justifying culture by Alain de Botton, why knowledge is not about securing a gain on student debt by Emmanuel Jaffelin, and how higher education became corporatized.)
It has been discovered in the last week that the financial firm of JP Morgan Chase & Co. has lost $2 Billion in risky hedge fund trading gone awry. This sum, incredibly, is a mere pittance to the firm’s overall profit margin, but has interesting ramifications. JP Morgan, throughout the financial meltdown, has been portrayed as the most responsible and sensible of the major Wall Street banks. The CEO, Jamie Dimon, has been widely respected for his apparent risk-averse approach, and he has maintained a certain air of being above the fray in relation to the other banks. Consequently, he has been the strongest advocate for minimizing government reforms, oversight, and regulations in wake of the enormous distress to the worldwide economy caused by the actions of financial institutions. Even President Obama said in an interview, after the news of the recent $2 Billion gambling loss by JP Morgan, that that firm was “one of the best managed banks there is” and that CEO Dimon was “one of the smartest bankers we got.” Sadly, there is no doubt that Obama is correct. In order to be a smart banker, and to be a top-notch bank manager, it is necessary to manipulate the government and the media, and to make a profit at all costs. In these cases, JP Morgan & Co. has always been one of the best. (UPDATE, 14 July: the losses are actually three times larger than previously reported, Dimon is still both CEO and board member of the Federal Reserve, and still stridently supports the claim that banks can regulate themselves)
John Pierpont Morgan was born in Connecticut in 1837, to the New England version of the aristocracy. His father, Junius Spencer Morgan, was a wealthy trans-Atlantic banker who enrolled his son Pierpont (as he was called) at the best private schools, and at universities in Switzerland in Germany, before taking a position at one of the Morgan banks in London. Throughout the second half of the 19th century, J.P. Morgan gained power as a crafty financier involved in several industries and banks. During the Civil War, J.P. Morgan paid $300 to avoid serving his draft status in the Union Army, while serving instead as a bank-roller and war-profiteer. There was an incident, for example, in which he was responsible for the sale of 5000 defective rifles for a large profit, which was investigated by the government. Unsurprisingly, there were no charges brought against him.
In contrast with the diverse group of infamous monopolists and ‘robber barons’ such as Commodore Vanderbilt and Jay Gould (railroads), John J. Rockefeller (oil), and Andrew Carnegie (steel), J.P. Morgan was primarily a money-man–that is, an investor of capital rather than an industrialist. In the many conflicts between the nascent railroad and oil industries for control of resources and land, J.P. Morgan showed that the next stage in the development of capitalism was the represented by the power of finance. In the case of the railroads, he could see that the suppression of competition was the most efficient and profitable course of action, and every deal he made multiplied his profits and control over other capitalists. The watershed moment in this history came in 1901, when J.P. Morgan bought out Andrew Carnegie and took control of his steel empire, reorganized it as the US Steel Corporation. Carnegie, who was a self-made man and a pure manufacturer rather than financier, sold for $400,000,000 and became the richest man in history. He spent the next 18 years giving away 90% of his wealth to education, libraries, scientific research, and world peace.
J.P. Morgan, on the other hand, became the head of the world’s largest, and first Billion-dollar, corporation. US Steel was actually worth $1.4 Billion, and it now controlled a majority of American steel production. This, however, was only one of J.P. Morgan’s diverse business interests. The power he amassed through his monopolistic policies in steel, railroad, banking, and other ventures like newspapers, livestock, and ocean liners, was enough to make him arguably the most powerful man in the world from 1901 to his death in 1913. He was received as a king by Edward VII, Kaiser William, and the Pope. In the Panic of 1907, J.P. Morgan arranged a deal to single-handedly bail out the U.S. government and restore confidence in an economy in crisis. This almost directly led to the Federal Reserve System of 1913, in which politicians and rival bankers wished to prevent one corporation (in this case, one man) from having so much power in the future. In addition, public opinion gradually turned hostile to J.P. Morgan after 1901 due to his anti-competition, monopoly-building practices, and he was often at war with Trust-busting Progressive leaders like Theodore Roosevelt.
Upon his death, this erstwhile king of finance was succeeded to the throne by his son, J.P. Morgan, Jr. His biggest claim to fame came immediately as World War I broke out, when he began financing the governments of Russia, England, and France. J.P Morgan Jr.’s extensive dealings, especially his favoritism towards England, surely played no insignificant part in escalating the war, drawing the U.S. into that destructive and absurd conflict on the side of the Allies, and continuing the Morgan family tradition of war-profiteering. Post-war, J.P. Morgan, Jr.’s notable accomplishments include financing Germany’s unfair reparation payments of the Versailles treaty, giving Mussolini a $100,000,000 loan prior to the Second World War, and fighting tooth-and-nail against President Franklin Roosevelt’s New Deal plan. Fortunately, he was largely unsuccessful in this last endeavor, and many much-needed financial reforms and regulations were enacted in the wake of the Great Depression. One of these pieces of legislation was the Glass-Steagall Act of 1933. One of the main provisions of this Act was the forced separation of commercial and investment banks, which helped to mitigate risk to the national economy due to under-regulated banking conglomerates. Though this Act was imperfect and obviously not a panacea, it represented a positive step towards achieving a better balance of government regulation and free market enterprise. Naturally, it was gradually circumvented and undermined by a series of the “smartest bankers” of the day, who realized that new generations of politicians could be bought and controlled just like the old ones.
Despite 50 years without a financial crisis after the instatement of the Glass-Steagall Act, the weakening of regulation by the time of the Reagan-era 1980’s led once again toward the dangerous path of the consolidation of banking power, along with increasing risk of meltdown. After the formal repeal of the Act in 1999 by Bill Clinton, it was only 7 years before the nearly-fatal event occurred. By 2000, JP Morgan & Co. was back in full force, merging with Chase Manhattan Bank to eventually become the largest bank in the United States by assets, and the largest public company in the world (as of 2011). This is the context in which we find this venerable institution leading the way in the next round of financial wizardry at the public’s expense. How do we feel about this, the “best managed bank there is,” still fighting against needed reforms that will keep its dangerous power in check? Should it be left to its own devices, as CEO Dimon says, or should it, and all similar institutions be broken up so that they cannot willfully cause another meltdown?
I think the answer is self-explanatory. An easy step to take is mustering public opinion toward a reinstatement of an updated Glass-Steagall Act which will force the separation of commercial and investment banks (there are many online petitions calling for this exact thing, and a few progressive politicians leading the way). Likewise for a strengthening of the recent, but too weak (due to immense lobbying pressure from Wall Street), Dodd-Frank Financial Reform Act. In addition, income from financial investments should not be singled out for a preferential tax rate of 15% but should be taxed as any other income. Also, there should be some sort of public ownership and control over at least a part of the enormously powerful financial machine that has been created since the days of the original J.P. Morgan. The rich will still be rich, and no one faults them for that, but they will be prevented from amassing and exerting the type of power which tends to happen when they are given special political privileges. Then, we will have a healthier, less risky, and more sustainable balance of regulated capitalism where many can succeed, and more equal democracy for all.
There has been much news coverage in the last 24 hours about the just-released figures from the Congressional Budget Office regarding change in income for each economic group over the last 30 years. Basically, the top 1% of income-earners have seen their incomes grow 275% over that time, and everyone else has either seen only minimal gains (the top 20% or so) or completely stagnated (the bottom 80%). I have already seen numerous charts, graphics, blog entries, and opinions on the internet talking about this statistic–one of the most comprehensive seems to be here. Let me add one more to the mix.
The phenomenon has been commented on by some astute observers previously. Last year, Bill Moyers gave a speech called “Welcome to the Plutocracy” that charts the long process of growing inequality, something he has talked about at other times in the past. It is rather long, but well worth the read:
Nevertheless, it is an interesting and positive development how much coverage this issue is receiving at this moment, exactly when there is so much public and popular backlash about inequality, rapacious banks financing corrupt politicians, a general sense of injustice, and the rise of the Occupy Wall Street movement. It is also a bit ironic that this study was done at the behest of a bipartisan request of Congress, and was conducted by the non-partisan CBO. Given the results of the findings, it will only help to advance the Democratic platform, and weaken the Republican one. This does not follow automatically, but only because Democrats, by default, are the only party that supports anything like a progressive tax policy, whereas the Republicans have regressed from any earlier forms of progress they might have once embraced, however tentatively, in order to cling to what can only be described as “survival of the richest, and screw the rest.” I don’t think I am exaggerating, as I have been observing and trying to understand the political situation for some time, and can come to no other conclusion about the regressive intransigence of the Republicans.
Is it important to understand the source of the growing inequality over the last 30 years? Yes, it can be considered a recent historical trend that did not develop in a vacuum. It also helps us to understand the current situation of our national financial system, deficit, budget, political system, etc. We must first consider that these figures are so alarming to many people not because of the percentage itself, but because of the overall progression of inequality. For example, we know that there has always been a huge disparity between ‘haves’ and ‘have nots’, and that the richest 1% took home a similar percentage of income even at the time before the Great Depression. Thanks to a series of regulations, union growth, and progressive taxation, the disparity between super-rich and everyone was gradually lessened throughout much of the 20th century. ‘Trust-busting’ of huge monopolies used to be enforced by the government, and companies were not allowed to become what we now call ‘too big to fail’. For several decades, the richest earners paid income taxes much higher than today, but this not only did not hinder their success, but it helped everyone else to prosper as well.
So when did the trend of growing prosperity end and growing inequality reassert itself? The best (or at least simplest) answer is clear: the Reagan presidency. Multiple tax cuts for the top earners were coupled with an overall lessening of financial regulations, and refusal to enforce even existing regulations. All the charts and the figures involved clearly show the pattern of gross financial abuse of the system gaining considerable force during the Reagan years, while the simultaneous rejection of progressive policies on all accounts have led to stagnation for everyone else. I know that this is an over-simplication, but it remains true nonetheless. And during this time, the US has gone from being a sort of ‘beacon’ of freedom and equality, to a place that now ranks in the same sterling group of countries as Rwanda and Uganda–last in the world in income equality!
So what does this mean? I admit that higher tax rates for millionaires will not cure all of our problems, and in fact, will do very little in the big scheme of things. But that is beside the point. Allowing the Bush tax cuts to expire next year would automatically set the highest tax rate back up to 39.6% from the 35% of the last 9 years. This is the first step in a series of symbolic, but meaningful, steps to adjust the role of government back towards the successful progressive role it maintained in the recent past. Taxing the rich directly is the most effective single way to mitigate inequality, provide more means of assistance to the bottom 20% in poverty, and make way for a more just society. I always thought Robin Hood was a popular character for all time because he did what is intuitive to us all–robbed the rich to feed the poor. The difference with these tax rates is that no one is getting ‘robbed’–the rich will hardly notice the difference, and the extra revenue will make a world of difference to supporting programs such as education that help even the poorest citizens to have more control over their own ability to rise out of poverty. A full two thirds of millionaires have no disagreement with this same argument, agreeing with Warren Buffett that the rich should, in fact, pay more taxes. There is obviously much to say and many vociferous disagreements on these issues, especially regarding the rival political philosophies of liberalism and libertarianism. I will discuss those points in a later post. The most basic thing we must ask ourselves, however, is what kind of society we want to live in…one in which everyone has a possibility to attain a prosperous existence, or one in which the richest minority writes it own rules at the expense of the majority.