issue: Politics

Democracy: A New Kind of Public Works

Posted on by The Progressive Policy Institute

Barack Obama is thinking big as his presidency enters the final stretch. The centerpiece of his last budget, unveiled this week, is a $300 billion plan for a “clean transportation system”—the biggest federal infrastructure push since President Eisenhower launched the interstate highway system. Here at last is a fix that’s equal to the magnitude of America’s immobility crisis. In polarized Washington, however, it’s going nowhere.

Obama’s proposal would effectively double U.S. transportation spending, paying for it with a $10-per-barrel oil tax. There’s no way a Republican-dominated Congress will vote for a new energy tax, even with oil prices down to around $30 a barrel. House Speaker Paul Ryan already has dismissed the plan as “an election-year distraction.” Nor can the White House expect many Democratic candidates to rally around what is essentially a middle-class tax hike.

Obama, the arch realist, knows all this. But he seems determined to ensure that two issues on which he’s made frustratingly little headway—clean energy and infrastructure investment—stay high on the nation’s political agenda. And if his visionary proposal injects these issues into campaign 2016, so much the better.

It’s hard to imagine a more urgent national priority than modernizing America’s decrepit transportation and water systems and updating our energy-wasting electrical grid.

With our economy stuck in low gear six years into “recovery,” making such investments now should be a no-brainer. It’s a proven way to create good middle-class jobs, boost the productivity of U.S. businesses and workers, and lay new foundations for future growth.

The deterioration of our country’s economic infrastructure has long been glaringly obvious, but U.S. political leaders have failed to coalesce behind policies for reversing it. A big reason is that Congress is controlled by a new breed of Republicans who regard all federal spending with kneejerk hostility. Conservative lawmakers seem to have lost the ability to distinguish between investments that generate tangible economic returns to society and spending that fuels present consumption.

Continue reading at Democracy.

Financial Times: Democrats struggle to harness economic feelgood factor

Posted on by The Progressive Policy Institute

Will Marshall, president of the Progressive Policy Institute, said that once Democratic strategists have moved past the primaries and into the general election they will need to portray a hopeful economic picture to voters — learning from the 2014 midterm elections in which he said the party had failed to capitalize on economic improvements under Obama.

The great issue in this campaign remains the great stagnation — the slow growth trends in this century,” he said. “But it is not for a semi-incumbent [like Mrs Clinton] to bemoan how terrible things are. You have to give people a sense of hope that the policies put in place in the last eight years have begun to put the country back on the path of full recovery.”

To read more, go to the Financial Times.

McClatchy: At start of campaign, the last gasp of political parties?

Posted on by The Progressive Policy Institute

David Lightman quotes PPI President Will Marshall about how political parties are losing their grasp on the American political system:

In 2012, average voter turnout for statewide primaries for president, governor and U.S. Senate plunged to its lowest level since the modern primary system became popular in 1972.

“No one likes political parties anymore,” said Jan Leighley, who studies voter behavior at American University, where she is a professor of government.

“They no longer have to work through the political process,” added Will Marshall, president of the Progressive Policy Institute.

It’s a historic change in voter behavior. The Democratic and Republican parties have dominated American politics since the mid-1850s. They grew and prospered as inclusive coalitions that tolerated diverse views for the sake of winning elections and then consolidating power.

Read the article in its entirety at McClatchy.

The Hill: In TPP review, focus on small business and digital trade

Posted on by The Progressive Policy Institute

With the release of the full text of the Trans-Pacific Partnership (TPP) trade agreement last November, the American people and their representatives now have an extensive opportunity to analyze the specific provisions of the proposed deal. In addition, as required by recent trade legislation, the U.S. International Trade Commission (USITC) is conducting a detailed, independent review of the likely economic impact of the TPP on specific industry sectors and the overall U.S. economy.

In recent comments filed in the USITC investigation, the Progressive Policy Institute (PPI) urged the Commission to pay particular attention to the beneficial economic effects of the TPP’s groundbreaking provisions on small business trade, international e-commerce, and the digital economy.

PPI has highlighted in recent reports the transformative role that digital tools—including Internet platforms like eBay—are playing in “democratizing” trade. Increasingly, smaller, digitally enabled American exporters can often sell products and services to customers around the world as easily as their large, established competitors.

But, for the digital economy to continue to transform trade, countries must resist a growing trend toward “digital protectionism.” As PPI’s submission explains, the TPP would support the continued growth of digital trade through groundbreaking rules that would require countries to allow commercial data flows; restrict “data localization” requirements that mandate where data or facilities must be located; and require privacy, consumer protection, and other rules to promote more secure and robust international e-commerce.

PPI’s comments also underscore the importance of the TPP’s many pioneering provisions to help small and medium-sized enterprises (SMEs) to export. These include the creation of a special committee to assure that the agreement works for SME traders; a requirement that countries create user-friendly digital information portals to assist SME traders; and eliminating or significantly reducing high duties, regulatory barriers, and customs delays that the studies by the Commission and others show can place disproportionate burdens on smaller traders.

PPI’s submission emphasizes that these and other TPP provisions have significant potential to support substantial expansion of American SME exports and economic growth that is shared more widely by more Americans. Studies by the Commission and others have found that smaller firms that export are more productive, hire more employees, and pay higher wages than non-exporting SMEs. And PPI’s own analysis shows that woman- and minority-owned firms that export employ three to five times more workers—and pay salaries some 60 percent higher—than their non-exporting counterparts.

In short, TPP points toward the next frontier in international trade—new opportunities to promote digital trade and engage more small firms and entrepreneurs in global commerce. The International Trade Commission should assess the potential of such new forms of trade to reinvigorate U.S. economic growth and competitiveness.

This is cross-posted from The Hill‘s Congress Blog.

The Wall Street Journal: Marshall on Anger with Wall Street

Posted on by The Progressive Policy Institute

In his analysis of how the two parties still do not agree what caused the 2008 financial crisis, Nick Timiraos of The Wall Street Journal quotes PPI president Will Marshall:

Anger at Wall Street among primary voters in both parties illustrates how “extreme antibusiness populism on the left is intersecting with extreme antigovernment populism on the right,” said Will Marshall, president of the Progressive Policy Institute, a centrist Democratic think tank.

Read the article in its entirety at The Wall Street Journal.

PPI to Congress: Scrub the SCRUB Act

Posted on by The Progressive Policy Institute

House Republicans this week are expected to take up the ponderously titled Searching for and Cutting Regulations that are Unnecessarily Burdensome Act (SCRUB) of 2015 (H.R. 1155). The Progressive Policy Institute, a strong advocate for regulatory improvement, urges progressives to oppose this highly partisan bill.

Over the last three years, PPI has worked with reform-minded Democrats and Republicans in Congress, as well as Independent Senator Angus King, to develop a more effective way of dealing with the problem of “regulatory accumulation,” the relentless buildup of rules over time. Sadly, House Republicans have chosen to ignore a bipartisan bill—the Regulatory Improvement Act of 2015 (H.R. 1407)—in favor of the SCRUB Act, a conservative favorite that stands little chance of winning Democratic support.

Both bills have in common the creation of an independent commission charged with winnowing outdated, duplicative or overly burdensome federal regulations. There, the similarities mostly end. And while the House’s latest version of the SCRUB Act clearly has been tweaked in response to criticism from regulatory experts, it still fails on three grounds:

First, the bill caters to conservative demands to roll back existing regulations and make it harder to issue new ones. Rather than mandate careful consideration of rules widely thought to be in need of elimination or improvement, it requires the commission to cut regulatory costs by 15 percent—an arbitrary goal with no clear policy rationale. And while SCRUB’s vague, nonbinding language gives priority to examining “older major rules,” it could open the door to fresh assaults on favorite conservative targets: rules implementing Obamacare, the Dodd-Frank financial reforms, and the Environmental Protection Agency’s Clean Power Plan. The Regulatory Improvement Act, on the other hand, explicitly prohibits consideration of rules less than ten years old by its commission.

Second, the SCRUB Act enshrines a foolishly impractical “Regulatory Cut-Go” mandate. Under this procedure, no federal agency could issue a new rule unless it cut old ones that impose equal “costs” on the economy. The idea is to offset the cost of new regulations by killing old ones. This attempt to make regulation a zero-sum game would create pressures to target cost-effective rules for elimination based on highly imprecise estimates of what a new rule might cost—and with no consideration of the many public benefits of regulation.

Third, the SCRUB Act has zero support among House and Senate Democratic leaders or within the Obama administration. As a conservative “message” vehicle, rather than a serious legislative proposal, the bill will likely die in the Senate before it can be vetoed. In contrast, the House version of the Regulatory Improvement Act introduced by Congressmen Patrick Murphy (D-FL) and Mick Mulvaney (R-SC), has an equal number of Democratic and Republican co-sponsors. Defying the logic of polarization, it builds political support for smarter regulation from the center out.

At the core of this legislation is the Regulatory Improvement Commission—an independent, bipartisan commission under Congressional authority ensuring there is no hidden regulatory agenda. Consisting of nine members appointed by the president and Congress, the commission, after a formal regulatory review, would submit a list of regulatory changes to Congress for an up-or-down vote without amendment. This approach would build political trust and lay the groundwork for further rounds of regulatory review and revision.

Most important of all, the Regulatory Improvement Commission would lift the burden of regulation accumulation from the backs of U.S. workers, businesses, and taxpayers. It would reduce compliance costs and—most crucially—the opportunity costs that accrue when entrepreneurs and business managers spend their energies on complying with unnecessary rules rather than creating value.

PPI urges progressives to support a more politically viable mechanism for improving the regulatory environment for economic innovation and growth—the Regulatory Improvement Act.

Innovation in a Rules-Bound World: How Regulatory Improvement Can Spur Growth

Posted on by The Progressive Policy Institute

Economists and policymakers are always lauding innovation. In its purest form, innovation is like a free lunch: it boosts growth and incomes, creates good jobs, and opens up new possibilities for social reform and social mobility.

Today, innovation is needed more than ever. Productivity growth has been slowing in recent years. The 10-year growth rate of nonfarm business labor productivity is only 1.3 percent in 2015, compared to 3 percent as recently as 2005. A full one percentage point of that 1.7 percentage point decline, or more than half, is due to a slowdown in the growth rate of multifactor productivity, an indicator of innovation. In other words, the economic evidence suggests that this is an era of relatively weak innovation, outside of information technology.

Indeed, encouraging innovation is more essential than ever before. Fortunately, industries such as health care, education, finance, and tech are attempting to adopt new technologies that offer the chance of faster growth and higher wages, desperately needed to overcome years of stagnation.

But regulators, both in Washington, and at the state and local level, struggle with a rapid pace of innovation. Innovation, especially disruptive innovation, embodies unpredictability, change, and the creation of new products and markets. By contrast, regulators thrive on rules and predictability. They maintain a process of identifying an existing market failure and then issuing regulations that aims to make consumers and society better off by correcting that failure. The regulation process is far more straightforward when markets change slowly and predictably.

Download “2015.12-Mandel_Carew_Innovation-in-a-Rules-Bound-World-How-Regulatory-Improvement-Can-Spur-Growth”

WSJ: Small Businesses With a Big Stake in the Pacific Trade Deal

Posted on by The Progressive Policy Institute

During the seven years that the Trans-Pacific Partnership was being negotiated, critics repeatedly claimed that the trade agreement wouldn’t be about trade or cutting tariffs but, instead, would primarily advance the special interests of large multinationals. Economist Joseph Stiglitz, for example, warned that the TPP could “benefit the wealthiest sliver of the American and global elite at the expense of everyone else.”

The negotiations are now over, and the full text of the agreement, released on Nov. 5, tells a different story. Notably, the agreement includes groundbreaking provisions that better enable smaller businesses to prosper by exporting to the 12 countries that are in the partnership. The growing markets in these countries account for some 40% of the global economy.

Ninety-eight percent of America’s 300,000 exporters are small or medium-size enterprises (SMEs)—firms with fewer than 500 employees. Together they account for about a third of the $1.6 trillion in annual goods exports. And because only 5% of SMEs currently export, there’s a significant potential for growth.

Small businesses account for almost two-thirds of America’s net new jobs and—according to economists—are essential building blocks for economic mobility. Smaller firms that export are especially prolific creators of good jobs for diverse groups. Census Bureau data show that the average American women-owned exporter, for example, employs five times more workers and pays an average salary almost $17,000 more than women-owned non-exporters. Similarly, minority-owned exporters employ three times more workers and pay nearly $16,000 more.

Continue reading at the Wall Street Journal.

RealClearPolitics: What Obama Must Do in Syria

Posted on by The Progressive Policy Institute

Syria has become Barack Obama’s Iraq—a foreign policy debacle rooted in faulty assumptions about the utility of American power. Where George W. Bush overstated what U.S. military intervention could achieve in Iraq, Obama has underestimated the risks and costs of non-intervention in Syria.

The analogy will rankle many progressives, as well as conservative “realists” who have praised Obama’s doctrine of U.S. restraint. But any administration’s policies must be judged by their results, not the elegance of their conceptual underpinnings. And the results of Obama’s decision to stand aloof from the Syrian crisis have gone from bad to worse.

Despite declaring early on that Syrian dictator Bashar al-Assad must go, Obama in 2012 overruled his national security team — including then-Secretary of State Hillary Clinton — which urged him to train and equip moderate Syrian rebels not allied with jihadists groups. Having decided the previous year to pull all U.S. troops out of Iraq, Obama was not about to get sucked into Syria.

But power vacuums invite trouble, especially in the combustible Middle East. The Syrian caldron soon boiled over, morphing into a regional conflict as Iran and Hezbollah rushed to Assad’s rescue, while Saudi Arabia and Arab states came to the aid of Sunni rebels. Then came the hard-core Islamists of al-Qaeda and the even more fanatical spinoff, the Islamic State (commonly called Daesh), which proclaimed a new caliphate centered in Raqqa.

Continue reading at RealClearPolitics.

The Trans-Pacific Partnership and Small Business: Boosting Exports and Inclusive Growth

Posted on by The Progressive Policy Institute

With the release of the full text of the Trans-Pacific Partnership (TPP), America now has an important—and extensive—opportunity to review the agreement’s actual terms. Critics are certain to reprise old arguments, including those that blame trade for economic disruptions whose origins often lie elsewhere. And they’ll offer newer criticisms, including the claim that TPP isn’t really about trade or cutting tariffs but, rather, is a scheme to advance the agenda of large multinational corporations.

This latest charge will likely be news to the hundreds of thousands of small and mid-sized American firms that currently export—and the growing numbers of small entrepreneurs who are seeking greater opportunity through trade. America’s smaller exporters will note that the TPP has made small business trade a key point of emphasis, and that it includes groundbreaking provisions to boost their ability to export to key TPP markets.

Increasing exports by U.S. small business can also be a vital opportunity to promote stronger—and more inclusive—economic growth. Small and medium-sized enterprises (SMEs) that export have higher sales, hire more employees, and pay higher wages than non-exporting SMEs. And because exporters account for only about one percent of all U.S. SMEs, America has significant untapped potential to support growth, good jobs, and economic mobility through increased small business trade.

But to meet this potential, it’s vital for the United States to reduce the extensive and often onerous foreign trade barriers that often keep SME traders on the sidelines. High duties and costs, customs red tape, unnecessarily complex regulations, and other barriers negatively impact American exporters of all sizes, but they can loom particularly large for small entrepreneurs that lack the resources, personnel, contacts, and extensive support networks of bigger competitors.

In this policy brief, we first review the TPP agreement and explain how it would eliminate significant trade barriers to U.S. small business and enable more American SMEs to prosper by exporting to fast-growing Asia-Pacific markets. We then highlight how the TPP’s support for small business trade can play a vital, broader role, helping to boost the overall economy and “democratizing” trade by assuring that trade’s significant benefits are shared more widely by more Americans.

Download “2015.11-Gerwin_The-Trans-Pacific-Partnership-and-Small-Business_Boosting-Exports-and-Inclusive-Growth”

 

Agenda 2016: Reviving U.S. Economic Growth

Posted on by The Progressive Policy Institute

The Progressive Policy Institute (PPI) teamed up with Columbia University’s Richard Paul Richman Center for Business, Law, and Public Policy to co-host a compelling symposium Nov. 6-7 in New York on revitalizing the U.S. economy. The event featured a distinguished roster of Richman Center economists and scholars, as well as PPI analysts and special guests, and more than two-dozen top policy aides to Members of Congress, Governors, and Mayors.

Held on Columbia’s Manhattan campus, the symposium examined the U.S. economy’s recent performance, as well as the causes of the long-term decline of productivity and economic growth. Against the backdrop of the 2016 election debate, the participants grappled with specific ideas for unleashing more economic innovation, modernizing infrastructure, reforming taxes, improving regulation, expanding trade and reducing inequality by ensuring that all children have access to high-quality public schools.

The discussions, which were off-the-record to encourage maximum candor, featured the following speakers and topics:

  • An overview of the U.S. economy’s recent performance by Abby Joseph Cohen, President of the Global Markets Institute and Senior Investment Strategist at Goldman Sachs.
  • A roundtable on key elements of a high-growth strategy, led by Michael Mandel, Chief Economic Strategist at PPI, Andrew Stern, former head of the Service Employees International Union and now Ronald O. Perelman Senior Fellow at the Richman Center, and
Philip K. Howard, Founder of Common Good, a nonpartisan reform coalition. The conversation touched on ways to improve the regulatory environment for innovation, including reducing regulatory accumulation and requiring faster permitting for big infrastructure projects, as well as a lively debate on the future of work in a tech-driven knowledge economy.
  • An insightful macroeconomic analysis of why productivity and economic growth have slowed, by Pierre Yared, Associate Professor at the Columbia Business School and Co-director of the Richman Center. Yared highlighted three potential contributors to the slowdown: labor demographics and participation; “capital intensity” or business investment; and the “production efficiency” of U.S. companies.
  • A detailed examination of the impact of energy innovation—from the shale boom to renewables and the construction of a new, “smart” grid—on jobs and economic growth. Leading this segment were Jason Bordoff, formerly energy advisor to President Obama and Director of Columbia’s Center on Global Energy Policy, and Derrick Freeman, Director of PPI’s Energy Innovation Project.
  • A dinner conversation at the Columbia Club with Edmund Phelps, the 2006 Nobel Laureate in Economics and Director of Columbia’s Center on Capitalism and Society at Columbia University. Drawing on his recent book, Mass Flourishing: How Grassroots Innovation Created Jobs, Challenge and Change, he stressed the importance of indigenous innovation in creating the conditions for broad upward mobility. He also emphasized the crucial role of “modern” or individualistic cultural values in sustaining the mass innovation and entrepreneurship America needs to flourish again.
  • A detailed look at business taxation and reform as a potential driver of economic growth. It featured Michael Graetz, Alumni Professor of Tax Law at Columbia Law School, David Schizer, Dean Emeritus and the Harvey R. Miller Professor of Law and Economics at the Columbia Law School and Co-director at the Richman Center, as well as PPI’s Michael Mandel. The discussion ranged widely over global tax frictions, including the OECD’s new “BEPS” project; the need for corporate tax reform; “patent boxes” and mounting U.S. interest in consumption taxes.
  • A roundtable on trade and productivity growth with Ed Gerwin, PPI Senior Fellow for Trade and Global Opportunity and the versatile Michael Mandel. Noting President Obama’s controversial call for a Trans-Pacific Partnership, Gerwin stressed the agreement’s potential for “democratizing” trade by making it easier for U.S. small businesses to connect with customers abroad. Mandel underscored another PPI priority: raising awareness among policymakers of the growing contribution of cross-border data flows to growth here and abroad, and the need to push back against proposals that would impede “digital trade”
  • A luncheon presentation on “financial regulation after the crisis” by Jeffrey Gordon, Richard Paul Richman Professor of Law at Columbia Law School and Co-director of the Richman Center. Gordon described the new regime put in place by Dodd-Frank and other rules to guard against “systemic risk” of another financial meltdown, and suggested its “perimeter” may been to be expanded beyond banks.
  • The symposium’s final panel featured a vigorous discussion on K-12 education reform and the economy. The discussants were Jonah Rockoff, Associate Professor at the Columbia Business School and David Osborne, who directs PPI’s Reinventing America’s Schools Project, and is a co-author of the seminal “Reinventing Government.” Rockoff highlighted research showing that the returns to school improvement are enormous, and recommended reforms that could increase school quality. Osborne traced the evolution of school governance in America, and offered detailed looks at new models emerging in cities like New Orleans and Washington, D.C., both of which are leaders in the public charter school movement.

The symposium gave the policy professionals who participated a rare opportunity to delve deeply into complicated economic realities, guided by presenters of extraordinarily high caliber. The conversations were highly illuminating and will inform PPI’s work on Agenda 2016—a new blueprint for reviving U.S. economic dynamism and opportunity.

The Guardian: ‘New Democrats’ sound alarm over Sanders and Clinton’s leftward march

Posted on by The Progressive Policy Institute

PPI President Will Marshall was quoted in a piece by The Guardian addressing the 2016 Democratic presidential candidates and the party’s shift to the left:

At Columbia University in New York this weekend, the Progressive Policy Institute, which helped Bill Clinton and Tony Blair pioneer so-called third way politics in the 1990s, held a closed-door strategy session for congressional staffers that was designed to find ways of promoting growth.

“There is no question that the prevailing temper of the Democratic party is populist: strongly sceptical of what we like to call capitalism and angry about the perceived power of the monied elite in politics,” said PPI president and founder Will Marshall.

“But inequality is not the biggest problem we face: it is symptomatic of the biggest problem we face, which is slow growth.”

Continue reading at The Guardian.

CNN: What Democrats should talk about Friday

Posted on by The Progressive Policy Institute

Compared to the Republicans’ presidential cattle calls, the next Democratic debate will be an intimate affair, since the field has shrunk to just three candidates. They will gather in South Carolina Friday for a “candidate forum” moderated by MSNBC’s uber-progressive Rachel Maddow.

That sounds like a recipe for another rousing round of populism, business-bashing and exhortations by Sen. Bernie Sanders to Americans to stop worrying and learn to love democratic socialism. If so, it will spell trouble for the candidate everyone expects to emerge with the prize — Hillary Clinton.

After their first debate in Las Vegas, Democrats congratulated themselves on having been more substantive than the Republicans. True enough: No sentient viewer could confuse the GOP Gong Show with the PBS NewsHour.

But amid all the wonkery, something big was missing — a sense of economic optimism, buttressed by fresh ideas for stimulating innovation and growth. Working Americans want to know how they and their children can find opportunities and win in the global knowledge economy. Instead, Democrats dwelled at great length on how badly they are losing. They had plenty to say about inequality, but almost nothing about how to create new jobs, enterprises and wealth.

Continue reading at CNN.

RealClearWorld: Does Labour Have a Death Wish?

Posted on by The Progressive Policy Institute

All political parties struggle to reconcile their core convictions with their desire to win elections. But apparently there’s one party so pristinely principled that it despises its own electoral successes.

I refer, of course, to Britain’s Labour Party. In choosing as its new leader Jeremy Corbyn, a long-time fixture of the hard-left fringe, the party has emphatically repudiated the winning ways of “New Labour.”

Corbyn is a throwback to the doctrinaire socialism of the 1970s and 1980s, which became linked in the public mind to crippling strikes by imperious labor unions, economic stagnation, welfare dependence, reflexive anti-Americanism and enthusiasm for “revolutionary” forces around the world. An iconic image of the era: the actress and prominent “Trot” Vanessa Redgrave holding a Kalashnikov aloft while dancing with PLO gunmen.

The party’s thralldom to the “looney left” paved the way for Margaret Thatcher’s ascension and kept Labour out of power for 18 long years. Finally, in the early 90s, a band of young reformers led by Tony Blair and Gordon Brown jettisoned the party’s tired collectivist dogma and launched a drive to modernize the party’s image and governing philosophy. Inspired by Bill Clinton’s success here, they borrowed heavily from his “New Democrat” playbook.

Blair led Labour to a smashing victory in 1997, and went on to win two more elections. He and Brown served as Prime Minister for 13 years — Labour’s longest run in government ever.

While popular with British voters, New Labour’s attempts to define a modern and pragmatic progressivism were anathema to the party’s left. They disdained Blair as a glib and soulless centrist willing to sell out Labour’s socialist ideals for a mess of electoral pottage. That disdain curdled into intense hatred when Blair later supported George W. Bush’s invasion of Iraq.

Continue reading at RealClearWorld.

A Tale of Two Systems: Education Reform in Washington D.C.

Posted on by The Progressive Policy Institute

An important contest is taking place in Washington, D.C.—a race between two vehicles designed to carry children into the future with the habits and skills they need to live productive, meaningful lives.

The older of the two, the District of Columbia Public Schools (DCPS), uses a “unified governance model” that emerged more than a century ago, in which the district operates all but one of its 113 schools and employs all their staff, with central control and most policies applied equally to most schools. Since 2007, when Michelle Rhee became chancellor, DCPS leaders have pursued the most aggressive reform effort of any unified urban district in America.

Racing against them—and carrying 44 percent of D.C. public school students—is a very different vehicle, designed and built largely in this century. This model does not own or operate any schools. Instead, it contracts with 62 independent organizations—all of them nonprofits—to operate 115 schools. It negotiates contracts with operators, lets parents choose their schools, shuts down those that repeatedly fail to achieve their performance goals, and replicates those that are most effective. We know these as charter schools, authorized by the Public Charter School Board (PCSB), which Congress legislated into existence in 1996. Like DCPS, the Charter Board is a leader in its field, considered by experts one of the best authorizers in the nation.

Under both models, student performance is improving. Comparisons are tricky, because their demographics are different. DCPS students are not as poor: 75 percent qualify for a free or reduced price lunch, compared to 82 percent in charter schools. DCPS has more white students: 12 percent compared to charters’ 5 percent. And DCPS schools get $7,000 to $9,000 more per student each year than charter —particularly for their buildings and pensions.

On the other hand, all charter families make an active choice of schools, while only about half of DCPS families do, so some believe charter students are more motivated. Most experts agree that DCPS has more students “in crisis”—homeless, coming out of jail, former dropouts, and so on—because families in crisis don’t usually make the effort to apply for charters. And many charters don’t accept students midway through the school year or “backfill” seats after students leave, while most DCPS schools do. Far more students leave charters for DCPS during the school year than the reverse, and sometimes the new entrants set back schools’ test scores, graduation rates, and attendance rates.

It is hard to say just how these realities balance out. Fortunately, there are two independent studies that try to compensate for student demographics (but not for other factors). Stanford University’s Center for Research on Education Outcomes (CREDO) is a respected academic organization that has published extensive studies comparing charter and traditional public school performance on standardized tests. Its methodology compares charter students to demographically similar students in traditional public schools who have had similar test scores in the past.

Download “2015.09-Osborne_Tale-of-Two-Systems_Education-Reform-in-Washington-DC”

 

Washington Monthly: How New Orleans Made Charter Schools Work

Posted on by The Progressive Policy Institute

Last year 2.9 million children attended 6,700 charter schools in America—public schools independent of districts and free of many bureaucratic constraints. Since charters were invented in Minnesota twenty-four years ago, they have become the subject of intense battles between supporters and detractors.

Supporters point out that charters receive 28 percent less money per child, on average, but still have higher graduation rates and send a higher percentage of graduates to college than traditional public schools with similar demographics. Detractors counter that charters often push out the hardest-to-teach students, and, citing a national study published in 2013 by Stanford University’s Center for Research on Education Outcomes (CREDO), they report charters barely, on average, outperform those traditional schools on standardized tests.

But that average masks the reality more than reveals it. In truth, we have forty-four different charter school laws and systems in this country. A close look at the CREDO study shows that in states where charters are rarely forced to close when their students are falling behind—in Arizona, Texas, Ohio, and others—charter students do underperform their socioeconomic peers in traditional public schools on standardized tests. In states where charter authorizers close failing charters, however—in Massachusetts, New York, Indiana, the District of Columbia, and others—charters outperform traditional public schools.

The truth is that charters have lived up to their billing in some places and been a disappointment in others. In one city, however, they have fulfilled the vision of even their most ardent supporters: that chartering would not only raise student achievement, but gradually replace the old system.

Ten years after Hurricane Katrina, 92.5 percent of public school students in New Orleans attend charters. The Tulane University economist Douglas Harris, who leads a research team focused on education reform, calls it “the most radical overhaul of any type in any school district in at least a century.”

In Katrina’s wake, a governor and legislature frustrated with New Orleans’s chronic corruption and abysmal public schools placed all but seventeen of them into its new Recovery School District (RSD), created just two years before to take over failing schools. Gradually, the RSD converted them all into charters. Today it oversees fifty-seven charters in the city, while the old Orleans Parish School Board (OPSB) oversees fourteen charters and operates five traditional schools. (The city also has four charters authorized directly by the state board of education and one independent state school.)

The city’s two districts, unlike traditional districts, do more overseeing than operating; they steer more than they row. They authorize schools, negotiate performance contracts (charters), measure results, and close schools whose students are lagging behind. Not all the schools succeed; educating poor, minority students in the inner city is extremely challenging. But on a variety of measures, New Orleans is improving faster than any other district in the state, if not the nation. Indeed, it may soon surpass its state on many metrics, a rare feat for a major American city.

Before Katrina, most public schools were terrible. In 2005 the city ranked sixty-seventh out of sixty-eight districts in Louisiana, itself a low performer compared to other states. Last year, New Orleans was forty-first out of sixty-nine school districts in Louisiana.

Before Katrina, some 62 percent of students attended schools rated “failing” by the state. Though the standard for failure has been raised, only 7 percent of students attend “failing” schools today.

Before Katrina, only 35 percent of students scored at grade level or above on state standardized tests. Last year 62 percent did.

Before Katrina, almost half of New Orleans students dropped out, and less than one in five went on to college. Last year, 73 percent graduated from high school in four years, two points below the state average, and 59 percent of graduates entered college, equaling the state average.

And according to a 2015 CREDO study, between 2006 and 2012 New Orleans’s charter students gained nearly half a year of additional learning in math and a third of a year in reading, every year, compared to similar students in the city’s non-chartered public schools.

Because the OPSB was only allowed to keep schools that scored above the state average, the failing schools were all in the RSD. In the spring of 2007, the first full school year after Katrina, only 23 percent of RSD students tested at or above grade level. Seven years later, fully 57 percent did. As Figure 1 shows (page 68), RSD students in New Orleans have improved almost four times faster than the state average.

Little of this appears to be the result of demographic changes. In the 2012-13 school year, 84 percent of public school students qualified for a free or reduced-price lunch, compared to 77 percent before Katrina. And census data tells us that poverty among residents younger than eighteen rose from 32 percent in 2007 to 39 percent in 2013, approaching pre-storm levels. Some of the improvement could reflect a small increase in white students, who rose from 3 to 7 percent of the total over the past decade. But African Americans still make up 85 percent of the city’s students (down from 93 percent). And they have made the greatest gains relative to their counterparts statewide, no doubt because the RSD schools, which have improved the most, are 91 percent black. If one counts only African Americans, New Orleans had the lowest test scores in the state before Katrina, 8 percentage points below the state average. Last year the city’s African American scores exceeded the state average by five points.

If anything, today’s students may be more disadvantaged than they were before Katrina, because they lived through the hurricane and the subsequent spike in violent crime. A survey of more than 1,000 youths aged ten to sixteen, taken from 2012 to 2014, found that nearly 20 percent showed signs of post-traumatic stress, four times the national rate.

In short, a radically new governance model—a recovery district that converted all of its schools to charters—has produced what some experts believe to be the most rapid improvement in American history.

Continue reading at the Washington Monthly.