David Coates

President Obama and This Generation’s “Sputnik Moment”

The community college in my small North Carolinian city received a  presidential visit on Monday. The President came, spoke and left, in a visit that would have been only locally newsworthy but for the importance of what he said. Barack Obama came to Winston-Salem to celebrate America’s community colleges and to stress their importance in the re-energizing of the American economy. In a characteristically long and carefully constructed speech, the President made the case for greater spending on both education and research as the way to avoid U.S. economic decline – as the way of meeting what he termed this generation’s “Sputnik moment”.

On the possibility of economic decline, he said this[1]

You’ve got a billion people in India who are suddenly plugged into the world economy.  You’ve got over a billion people in China who are suddenly plugged into the global economy.  And that means competition is going to be much more fierce and the winners of this competition will be the countries that have the most educated workers, a serious commitment to research and technology, and access to quality infrastructure like roads and airports and high-speed rail and high-speed Internet.  Those are the seeds of economic growth in the 21st century.  Where they are planted, the most jobs and businesses will take root. Now, in the last century, America was that place where innovation happened and jobs and industry always took root.  The business of America was business.  Our economic leadership in the world went unmatched.  Now it’s up to us to make sure that we maintain that leadership in this century….But as it stands right now, the hard truth is this:  in the race for the future, America is in danger of falling behind.  That’s just the truth.  And when — if you hear a politician say it’s not, they’re not paying attention.  In a generation we have fallen from 1st place to 9th place in the proportion of young people with college degrees.  When it comes to high school graduation rates, we’re ranked 18th out of 24 industrialized nations — 18th.  We’re 27th in the proportion of science and engineering degrees we hand out.  We lag behind other nations in the quality of our math and science education.

On the importance of investment in both education and research as the antidote to decline, he followed with this.

Now, I have no doubt we can win this competition.  We are the home of the world’s best universities, the best research facilities, the most brilliant scientists, the brightest minds, some of the hardest-working, most entrepreneurial people on Earth — right here in America.  It’s in our DNA.  Think about it.  People came from all over the world to live here in the United States.  That’s been our history.  And those were the go-getters, the risk-takers who came here.  The folks who didn’t want to take risks, they stayed back home.  Right?  So there’s no doubt that we are well equipped to win…. The best antidote to a growing deficit…is a growing economy. To borrow an analogy, cutting the deficit by cutting investments in areas like education, areas like innovation — that’s like trying to reduce the weight of an overloaded aircraft by removing its engine.  It’s not a good idea.  There may be some things you need to get rid of, but you got to keep the engine.

The argument is a sensible one. It is also, however, rather a hollow one, given the degree to which we are currently busy doing exactly what we should not: removing the engine.

  • We are removing the engine partly by repeatedly telling ourselves that the aircraft is overloaded, that federal spending is too high and that the federal deficit is unsustainable. As we have argued elsewhere on this website that claim is false;[2] and if my words don’t persuade you on this, try those of Alternet editor and senior writer,  Joshua Holland.

The almost universally held belief that the U.S. faces a deficit problem is wrong, and for two simple reasons. First, we have a very small government compared to the rest of the developed world – between 2004 and 2007, the U.S. ranked 24th out of 26 countries in the Organization for Economic Cooperation and Development (OECD) in overall government spending as a share of our economic output. And we also currently have one of the lowest tax burdens – In 2008, we ranked 26th out of the 30 OECD countries in that category.[3]

Aircraft need fuel to take off. In the midst of a private sector recession caused by banking excess, public spending remains that vital fuel.

  • We are removing the engine too by firing teachers, freezing their salaries and imposing salary furloughs. There was a genuine irony in the President’s choice of venue, for the school board in the Forsyth County in which he spoke is currently more than $3 million in the red, and the state of North Carolina is facing a shortfall of anything between $3billion and $3.7 billion on an annual budget of just $19 billion.[4] Teacher jobs everywhere are at stake,[5] They certainly are in Winston-Salem – both the jobs of existing teachers and those (if any) of new entrants to the profession.[6] The cause of the shortfall in North Carolina, as in virtually every other state of the Union, is a lethal mixture of terminating stimulus money and falling tax receipts – the latter caused by the recession, the former being too small and too brief to end it. Overall, state budgets in the contemporary U.S. are projected to be in deficit to the tune of at least $83.9 billion in fiscal year 2011.[7] The President’s words conjure up the picture of a future America full of high-skilled students called into existence by the professionalism of well-resourced American teachers. But the reality is entirely otherwise. It is of a public school system in freefall nation-wide: one that is currently cutting the quality of its provision of even basic education – laying off teachers and freezing their salaries – because the money to do otherwise is simply not there.
  • The President was right on one thing, however: global competition is intensifying and that the United States is slipping backwards on most of the key indicators of education and skill needed to handle that competition. Just one day after his speech, the Paris-based O.E.C.D. issued the results of its 2009 PISA survey – the now regularly-performed international survey of basic skill capacities in 15 year-olds world-wide. The 2009 results do not make easy reading for U.S. policy-makers, and stand in stark contrast to the underlying optimism of the President’s vision. Indeed his own Education Secretary hailed the PISA findings as “absolutely a wake-up call for America.”[8] Overall, in mathematics literacy, “among all 64 countries [surveyed], 23 had higher average scores than the United States.” In science literacy, 12 of the 33 OECD countries scored higher than the United States.” In reading literacy – the one measure in which the United States reached the OECD average – we were still outranked by Korea, Finland, Canada, New Zealand, Japan and Australia.”[9] This is hardly the stuff on which world leadership can be built or maintained.
  • Perhaps more ominously still for a society whose income distribution is so unequal, the report found a close relationship between academic performance and socio-economic status, and was able for the first time to track the capacity of different economies to generate high-performing students from poor backgrounds. On that key indicator – recording the proportion of students from poor backgrounds scoring at a higher level than you would expect given their poverty – the best performing economies scored in the 70 percentage range while the United States only scored in the 20s.[10] As Michael Davidson, one of the report’s authors, said on NPR on the morning of the report’s publication, “The price of this is huge. We know that under-achievement costs the economy a significant amount of money, and tackling that under-achievement is a priority not just for the education system but for the economy and society at large.”[11]

If fine words made for fine policy, all would be well. But fine words without fine policy only make matters worse. Less and less is it the case that the United States remains, to quote the President, as “the home of the world’s best universities, the best research facilities, the most brilliant scientists, the brightest minds, some of the hardest-working, most entrepreneurial people on Earth”. Telling Americans that that is still so just helps to prolong delusions. This week Congress is consumed with a debate on tax cutting, fighting itself and others on whether the economy needs tax cuts for the wealthiest Americans or a reduction in the federal deficit. In truth it needs neither. It needs instead a political class that will address, as its top priority, the quality of the social and physical infrastructure on which long-term tax revenues and federal spending depend. It is not mainstream America that needs to wake up. Many people in mainstream America already know what is required. The people who really need to wake up are the representatives we send to govern us in Washington DC.

The President is to be congratulated on at least raising an issue of this importance in the same week as the Republicans forced upon him a tax settlement which, if passed, would actually increase the tax burden on federal employees and the poor [12] and make it more difficult for states to borrow to cover their budget shortfalls.[13] But unless what he said in Winston-Salem becomes what he says with equal clarity and regularity in Washington, the trip south will remain what it felt like at the time – a photo-op without long-term value or significance. The time for platitudes has passed. The time for action is now. The big question, of course, is whether we will get it.

These arguments will be developed more fully in Making the Progressive Case: Towards a Stronger U.S. Economy to be published by Continuum Books in 2011


[1] The full text is at http://www.whitehouse.gov/the-press-office/2010/12/06/remarks-president-economy-winston-salem-north-carolina

[2] See http://www.davidcoates.net/2010/11/14/fiddling-while-rome-burns/ and http://www.davidcoates.net/2010/07/18/the-inmates-and-the-asylum-the-madness-of-cutting-deficits-in-the-depth-of-a-recession/

[3] Joshua Holland, How Our Trillion-Dollar Empire is the Cause of our ‘Deficit Problem’, posted on Alternet.org December 8, 2010 and available at http://www.alternet.org/story/149019/how_our_trillion-dollar_empire_is_the_cause_of_our_%27deficit_problem%27

[4] Data from 88.5 WFDD, NPR News and Triad Arts Station from Wake Forest University, December 9, 2010

[5] As one example from literally hundreds, see Cobb County School Eliminating 734 Jobs, available at http://www.employmentspectator.com/2010/04/cobb-county-schools-eliminating-734-jobs/

[6] Nation-wide, 72,700 education jobs were lost in September 2010 alone. (data in The New York Times, October 8 2010)

[7] The figure comes from the National Conference of State Legislatures, as reported in Nicole Bullock, “States face deficits amid mixed fiscal picture,” The Financial Times, July 22, 2010

[8] “Study Confirms U.S. Falling Behind in Education:, NPR, December 7, 2010: available at http://www.npr.org/2010/12/07/131884477/Study-Confirms-U-S-Falling-Behind-In-Education

[9] These figures are from the NCES Statement on PISA 2009, posted on the Institute of Education Sciences website. Highlights from the full report are also at http://nces.ed.gov/surveys/pisa/

[10] “Poverty, as usual, had a huge impact on PISA reading test scores for American students. American students in schools with less than 10% of students on free and reduced lunch averaged 551, higher than the overall average of any OECD [Organization for Economic Cooperation and Development country. Those in schools with 10% to 25% of students qualifying for free and reduced lunch averaged 527, which was behind only Korea and Finland. In contrast, American students in schools with 75% or more of children in poverty averaged 446, second to last among the 34 OECD countries.” (Valerie Strauss, “The Answer Sheet,” The Washington Post, December 9, 2010: available at http://voices.washingtonpost.com/answer-sheet/research/how-poverty-affected-us-pisa-s.html)

[11] For the stronger performing education systems, “all have well-established educational standards. They have goals everybody aspires to meet; and they also, a  crucial thing – and this particularly true in Finland – they recruit their teachers from the top 5, 6 or 10 percent of graduates each year. They bring the best people into the teaching profession which isn’t true in many countries, indeed most countries…. One of the striking things that comes from the U.S. set of data is the impact that social background has on your success in education within the United States. Something like 20% of the performance differences that we see in the United States is attributed to the social background of the students. That’s higher than across the OECD on average.” (NPR, December 7, 2010, op.cit))

[12] “But more than six million federal, state and local government employees do not pay into Social Security at all. Instead they pay into public pension systems. So if the agreed proposal becomes law, such employees will lose the $400 credit and would not reap any benefit from the payroll tax cut.”  (David Kocieniewski, ‘In Tax Deal, Many Public Employees Will Pay More”, The New York Times, December 8, 2010)

[13] For details of this, see Yves Smith, Trojan Horse in Tax Compromise: GOP Plan to Bankrupt States, Break Unions (Updated); posted on the website ‘naked capitalism’ and available at http://www.nakedcapitalism.com/2010/12/trojan-horse-in-tax-compromise-gop-plan-to-bankrupt-states-break-union.html

David Coates holds the Worrell Chair in Anglo-American Studies at Wake Forest University. He is the author of Answering Back: Liberal Responses to Conservative Arguments, New York: Continuum Books, 2010.

He writes here in a personal capacity.

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