Friday, October 30, 2009
Thursday, October 29, 2009
What I Read Today - Thursday - October 29, 2009 - Our Daily Bread
From: Our Daily Bread
Lost And Found
READ: Luke 15:4-24
This my son was dead and is alive again; he was lost and is found. —Luke 15:24A Wall Street Journal article by Jennifer Saranow chronicled the extraordinary efforts of middle-aged American men who are trying to find the favorite car they once owned and loved, but lost. They are searching on-line car ads, phoning junkyards, and even hiring specialists who charge $400 an hour to help them search for an automobile that once symbolized their youth. These men want the actual car they owned, not one just like it.
Some would call their efforts frivolous—a waste of time and money. But the value of a car, like many things, is in the eye of the beholder.
In Luke 15, people who were despised by their society came to hear Jesus. But some religious leaders complained, “This Man receives sinners and eats with them” (v.2). To affirm how valuable these “sinners” are to God, Jesus told three memorable stories about a lost sheep (vv.4-7), a lost coin (vv.8-10), and a lost son (vv.11-32). Each parable records the anguish of losing, the effort of searching, and the joy of finding something of great worth. In every story, we see a picture of God, the loving Father, who rejoices over every lost soul who is found.
Even if you feel far from God today, you are highly valued by Him. He’s searching for you. — David C. McCasland
I once was lost, but now I’m found;
Praise God! Christ died for me;
He valued me, redeemed my soul;
From sin, He set me free. —Sper
Those who have been found should seek the lost.
Lost And Found
READ: Luke 15:4-24
This my son was dead and is alive again; he was lost and is found. —Luke 15:24A Wall Street Journal article by Jennifer Saranow chronicled the extraordinary efforts of middle-aged American men who are trying to find the favorite car they once owned and loved, but lost. They are searching on-line car ads, phoning junkyards, and even hiring specialists who charge $400 an hour to help them search for an automobile that once symbolized their youth. These men want the actual car they owned, not one just like it.
Some would call their efforts frivolous—a waste of time and money. But the value of a car, like many things, is in the eye of the beholder.
In Luke 15, people who were despised by their society came to hear Jesus. But some religious leaders complained, “This Man receives sinners and eats with them” (v.2). To affirm how valuable these “sinners” are to God, Jesus told three memorable stories about a lost sheep (vv.4-7), a lost coin (vv.8-10), and a lost son (vv.11-32). Each parable records the anguish of losing, the effort of searching, and the joy of finding something of great worth. In every story, we see a picture of God, the loving Father, who rejoices over every lost soul who is found.
Even if you feel far from God today, you are highly valued by Him. He’s searching for you. — David C. McCasland
I once was lost, but now I’m found;
Praise God! Christ died for me;
He valued me, redeemed my soul;
From sin, He set me free. —Sper
Those who have been found should seek the lost.
Wednesday, October 28, 2009
More of What I Read Today - Wednesday October 28, 2009
From the WSJ:
Financial Historian on ‘29: ‘Great Crash’ Vs. ‘Break in the Market’.
Today marks 80 years since the best known part of the 1929 stock market collapse, a two-day rout on Oct. 28 and Oct. 29 of that year. The equities crash brought a painful close to the period of unbridled financial optimism that was the 1920s.
To mark the occasion, MarketBeat has been asking financial historians for their thoughts — mini-essays if you will — on how the Great Crash informs the way we think about the current market recovery. Today’s offering comes from Richard Sylla, Henry Kaufman Professor of the History of Financial Institutions and Markets at New York University:
Because their teachers and their history books said so, most people know that the Great Crash of 1929 caused the Great Depression of the early 1930s. I am not one of these people.
What I know is that the Dow Jones Industrial Average closed at 306 the day before Black Thursday, October 24, 1929, and at 199 on November 13, three weeks later. That drop of 35 percent was the Great Crash. I also know that on April 17, 1930, the day before Good Friday, the Dow closed at 294, or 96 percent of its level before Black Thursday. In other words, almost all of the decline of the crash proper had been undone by a recovery of 48 percent in the Dow between Halloween ‘29 and Easter ‘30. Most people don’t know that, or if they ever did they forgot it.
On Good Friday ‘30, the New York Times referred not to the Great Crash, but to “the break in the market last Fall.” The Times that day also noted that the day before, April 17, “average prices worked higher and a few outstanding issues shot up smartly to new high prices for the year to date,” and that “British interests were investing heavily in these issues.”
The Great Depression began sometime after the spring of 1930, most likely when a lot of banks failed late that year. But the so-called Great Crash a year earlier had almost nothing to do with those bank failures, the first of thousands of bank failures that occurred from late 1930 to March 1933.
What’s interesting from the perspective of 2009 is that from September 12, 2008, the Friday before Lehman, to the low of March 9, 2009, the Dow lost 44 percent. The Great Crash of 2008-09 was actually a greater crash than the Great Crash of 1929. And half a year after the crash lows of last March, the Dow again is up about 50 percent, as it was half a year after October 1929.
Is the market’s recovery since March now giving us a better forecast of what lies ahead than it did in April 1930? Let’s hope so. Let’s hope, too, that people stop exaggerating the effects of “the break in the market” in October ‘29.
Financial Historian on ‘29: ‘Great Crash’ Vs. ‘Break in the Market’.
Today marks 80 years since the best known part of the 1929 stock market collapse, a two-day rout on Oct. 28 and Oct. 29 of that year. The equities crash brought a painful close to the period of unbridled financial optimism that was the 1920s.
To mark the occasion, MarketBeat has been asking financial historians for their thoughts — mini-essays if you will — on how the Great Crash informs the way we think about the current market recovery. Today’s offering comes from Richard Sylla, Henry Kaufman Professor of the History of Financial Institutions and Markets at New York University:
Because their teachers and their history books said so, most people know that the Great Crash of 1929 caused the Great Depression of the early 1930s. I am not one of these people.
What I know is that the Dow Jones Industrial Average closed at 306 the day before Black Thursday, October 24, 1929, and at 199 on November 13, three weeks later. That drop of 35 percent was the Great Crash. I also know that on April 17, 1930, the day before Good Friday, the Dow closed at 294, or 96 percent of its level before Black Thursday. In other words, almost all of the decline of the crash proper had been undone by a recovery of 48 percent in the Dow between Halloween ‘29 and Easter ‘30. Most people don’t know that, or if they ever did they forgot it.
On Good Friday ‘30, the New York Times referred not to the Great Crash, but to “the break in the market last Fall.” The Times that day also noted that the day before, April 17, “average prices worked higher and a few outstanding issues shot up smartly to new high prices for the year to date,” and that “British interests were investing heavily in these issues.”
The Great Depression began sometime after the spring of 1930, most likely when a lot of banks failed late that year. But the so-called Great Crash a year earlier had almost nothing to do with those bank failures, the first of thousands of bank failures that occurred from late 1930 to March 1933.
What’s interesting from the perspective of 2009 is that from September 12, 2008, the Friday before Lehman, to the low of March 9, 2009, the Dow lost 44 percent. The Great Crash of 2008-09 was actually a greater crash than the Great Crash of 1929. And half a year after the crash lows of last March, the Dow again is up about 50 percent, as it was half a year after October 1929.
Is the market’s recovery since March now giving us a better forecast of what lies ahead than it did in April 1930? Let’s hope so. Let’s hope, too, that people stop exaggerating the effects of “the break in the market” in October ‘29.
More of What I Read Today - Wednesday October 28, 2009
From the New York Times
Don’t Build Up
By THOMAS L. FRIEDMAN
It is crunch time on Afghanistan, so here’s my vote: We need to be thinking about how to reduce our footprint and our goals there in a responsible way, not dig in deeper. We simply do not have the Afghan partners, the NATO allies, the domestic support, the financial resources or the national interests to justify an enlarged and prolonged nation-building effort in Afghanistan.
I base this conclusion on three principles. First, when I think back on all the moments of progress in that part of the world — all the times when a key player in the Middle East actually did something that put a smile on my face — all of them have one thing in common: America had nothing to do with it.
America helped build out what they started, but the breakthrough didn’t start with us. We can fan the flames, but the parties themselves have to light the fires of moderation. And whenever we try to do it for them, whenever we want it more than they do, we fail and they languish.
The Camp David peace treaty was not initiated by Jimmy Carter. Rather, the Egyptian president, Anwar Sadat, went to Jerusalem in 1977 after Israel’s Moshe Dayan held secret talks in Morocco with Sadat aide Hassan Tuhami. Both countries decided that they wanted a separate peace — outside of the Geneva comprehensive framework pushed by Mr. Carter.
The Oslo peace accords started in Oslo — in secret 1992-93 talks between the P.L.O. representative, Ahmed Qurei, and the Israeli professor Yair Hirschfeld. Israelis and Palestinians alone hammered out a broad deal and unveiled it to the Americans in the summer of 1993, much to Washington’s surprise.
The U.S. surge in Iraq was militarily successful because it was preceded by an Iraqi uprising sparked by a Sunni tribal leader, Sheik Abdul Sattar Abu Risha, who, using his own forces, set out to evict the pro-Al Qaeda thugs who had taken over Sunni towns and were imposing a fundamentalist lifestyle. The U.S. surge gave that movement vital assistance to grow. But the spark was lit by the Iraqis.
The Cedar Revolution in Lebanon, the Israeli withdrawals from Gaza and Lebanon, the Green Revolution in Iran and the Pakistani decision to finally fight their own Taliban in Waziristan — because those Taliban were threatening the Pakistani middle class — were all examples of moderate, silent majorities acting on their own.
The message: “People do not change when we tell them they should,” said the Johns Hopkins University foreign policy expert Michael Mandelbaum. “They change when they tell themselves they must.”
And when the moderate silent majorities take ownership of their own futures, we win. When they won’t, when we want them to compromise more than they do, we lose. The locals sense they have us over a barrel, so they exploit our naïve goodwill and presence to loot their countries and to defeat their internal foes.
That’s how I see Afghanistan today. I see no moderate spark. I see our secretary of state pleading with President Hamid Karzai to re-do an election that he blatantly stole. I also see us begging Israelis to stop building more crazy settlements or Palestinians to come to negotiations. It is time to stop subsidizing their nonsense. Let them all start paying retail for their extremism, not wholesale. Then you’ll see movement.
What if we shrink our presence in Afghanistan? Won’t Al Qaeda return, the Taliban be energized and Pakistan collapse? Maybe. Maybe not. This gets to my second principle: In the Middle East, all politics — everything that matters — happens the morning after the morning after. Be patient. Yes, the morning after we shrink down in Afghanistan, the Taliban will celebrate, Pakistan will quake and bin Laden will issue an exultant video.
And the morning after the morning after, the Taliban factions will start fighting each other, the Pakistani Army will have to destroy their Taliban, or be destroyed by them, Afghanistan’s warlords will carve up the country, and, if bin Laden comes out of his cave, he’ll get zapped by a drone.
My last guiding principle: We are the world. A strong, healthy and self-confident America is what holds the world together and on a decent path. A weak America would be a disaster for us and the world. China, Russia and Al Qaeda all love the idea of America doing a long, slow bleed in Afghanistan. I don’t.
The U.S. military has given its assessment. It said that stabilizing Afghanistan and removing it as a threat requires rebuilding that whole country. Unfortunately, that is a 20-year project at best, and we can’t afford it. So our political leadership needs to insist on a strategy that will get the most security for less money and less presence. We simply don’t have the surplus we had when we started the war on terrorism after 9/11 — and we desperately need nation-building at home. We have to be smarter. Let’s finish Iraq, because a decent outcome there really could positively impact the whole Arab-Muslim world, and limit our exposure elsewhere. Iraq matters.
Yes, shrinking down in Afghanistan will create new threats, but expanding there will, too. I’d rather deal with the new threats with a stronger America.
Don’t Build Up
By THOMAS L. FRIEDMAN
It is crunch time on Afghanistan, so here’s my vote: We need to be thinking about how to reduce our footprint and our goals there in a responsible way, not dig in deeper. We simply do not have the Afghan partners, the NATO allies, the domestic support, the financial resources or the national interests to justify an enlarged and prolonged nation-building effort in Afghanistan.
I base this conclusion on three principles. First, when I think back on all the moments of progress in that part of the world — all the times when a key player in the Middle East actually did something that put a smile on my face — all of them have one thing in common: America had nothing to do with it.
America helped build out what they started, but the breakthrough didn’t start with us. We can fan the flames, but the parties themselves have to light the fires of moderation. And whenever we try to do it for them, whenever we want it more than they do, we fail and they languish.
The Camp David peace treaty was not initiated by Jimmy Carter. Rather, the Egyptian president, Anwar Sadat, went to Jerusalem in 1977 after Israel’s Moshe Dayan held secret talks in Morocco with Sadat aide Hassan Tuhami. Both countries decided that they wanted a separate peace — outside of the Geneva comprehensive framework pushed by Mr. Carter.
The Oslo peace accords started in Oslo — in secret 1992-93 talks between the P.L.O. representative, Ahmed Qurei, and the Israeli professor Yair Hirschfeld. Israelis and Palestinians alone hammered out a broad deal and unveiled it to the Americans in the summer of 1993, much to Washington’s surprise.
The U.S. surge in Iraq was militarily successful because it was preceded by an Iraqi uprising sparked by a Sunni tribal leader, Sheik Abdul Sattar Abu Risha, who, using his own forces, set out to evict the pro-Al Qaeda thugs who had taken over Sunni towns and were imposing a fundamentalist lifestyle. The U.S. surge gave that movement vital assistance to grow. But the spark was lit by the Iraqis.
The Cedar Revolution in Lebanon, the Israeli withdrawals from Gaza and Lebanon, the Green Revolution in Iran and the Pakistani decision to finally fight their own Taliban in Waziristan — because those Taliban were threatening the Pakistani middle class — were all examples of moderate, silent majorities acting on their own.
The message: “People do not change when we tell them they should,” said the Johns Hopkins University foreign policy expert Michael Mandelbaum. “They change when they tell themselves they must.”
And when the moderate silent majorities take ownership of their own futures, we win. When they won’t, when we want them to compromise more than they do, we lose. The locals sense they have us over a barrel, so they exploit our naïve goodwill and presence to loot their countries and to defeat their internal foes.
That’s how I see Afghanistan today. I see no moderate spark. I see our secretary of state pleading with President Hamid Karzai to re-do an election that he blatantly stole. I also see us begging Israelis to stop building more crazy settlements or Palestinians to come to negotiations. It is time to stop subsidizing their nonsense. Let them all start paying retail for their extremism, not wholesale. Then you’ll see movement.
What if we shrink our presence in Afghanistan? Won’t Al Qaeda return, the Taliban be energized and Pakistan collapse? Maybe. Maybe not. This gets to my second principle: In the Middle East, all politics — everything that matters — happens the morning after the morning after. Be patient. Yes, the morning after we shrink down in Afghanistan, the Taliban will celebrate, Pakistan will quake and bin Laden will issue an exultant video.
And the morning after the morning after, the Taliban factions will start fighting each other, the Pakistani Army will have to destroy their Taliban, or be destroyed by them, Afghanistan’s warlords will carve up the country, and, if bin Laden comes out of his cave, he’ll get zapped by a drone.
My last guiding principle: We are the world. A strong, healthy and self-confident America is what holds the world together and on a decent path. A weak America would be a disaster for us and the world. China, Russia and Al Qaeda all love the idea of America doing a long, slow bleed in Afghanistan. I don’t.
The U.S. military has given its assessment. It said that stabilizing Afghanistan and removing it as a threat requires rebuilding that whole country. Unfortunately, that is a 20-year project at best, and we can’t afford it. So our political leadership needs to insist on a strategy that will get the most security for less money and less presence. We simply don’t have the surplus we had when we started the war on terrorism after 9/11 — and we desperately need nation-building at home. We have to be smarter. Let’s finish Iraq, because a decent outcome there really could positively impact the whole Arab-Muslim world, and limit our exposure elsewhere. Iraq matters.
Yes, shrinking down in Afghanistan will create new threats, but expanding there will, too. I’d rather deal with the new threats with a stronger America.
What I Read Today - Wednesday October 28, 2009
SARA'S BIRTHDAY
One of the speakers at the men's conference last week used this parable to make the point that we should be persistent in our faith, persistent in our prayer, persistent in our love for our family.
Luke 18:1-8 (The Message)
The Story of the Persistent Widow
1-3Jesus told them a story showing that it was necessary for them to pray consistently and never quit. He said, "There was once a judge in some city who never gave God a thought and cared nothing for people. A widow in that city kept after him: 'My rights are being violated. Protect me!'
4-5"He never gave her the time of day. But after this went on and on he said to himself, 'I care nothing what God thinks, even less what people think. But because this widow won't quit badgering me, I'd better do something and see that she gets justice—otherwise I'm going to end up beaten black-and-blue by her pounding.'"
6-8Then the Master said, "Do you hear what that judge, corrupt as he is, is saying? So what makes you think God won't step in and work justice for his chosen people, who continue to cry out for help? Won't he stick up for them? I assure you, he will. He will not drag his feet. But how much of that kind of persistent faith will the Son of Man find on the earth when he returns?"
One of the speakers at the men's conference last week used this parable to make the point that we should be persistent in our faith, persistent in our prayer, persistent in our love for our family.
Luke 18:1-8 (The Message)
The Story of the Persistent Widow
1-3Jesus told them a story showing that it was necessary for them to pray consistently and never quit. He said, "There was once a judge in some city who never gave God a thought and cared nothing for people. A widow in that city kept after him: 'My rights are being violated. Protect me!'
4-5"He never gave her the time of day. But after this went on and on he said to himself, 'I care nothing what God thinks, even less what people think. But because this widow won't quit badgering me, I'd better do something and see that she gets justice—otherwise I'm going to end up beaten black-and-blue by her pounding.'"
6-8Then the Master said, "Do you hear what that judge, corrupt as he is, is saying? So what makes you think God won't step in and work justice for his chosen people, who continue to cry out for help? Won't he stick up for them? I assure you, he will. He will not drag his feet. But how much of that kind of persistent faith will the Son of Man find on the earth when he returns?"
Tuesday, October 27, 2009
What I Read Today - Tuesday October 27, 2009
From: Our Daily Bread
“Light” Of Creation
READ: Job 37:1-18
[God] does great things, and unsearchable, marvelous things without number. —Job 5:9Among the wonders of Jamaica is a body of water called Luminous Lagoon. By day, it is a nondescript bay on the country’s northern coast. By night, it is a marvel of nature.
If you visit there after dark, you notice that the water is filled with millions of phosphorescent organisms. Whenever there is movement, the water and the creatures in the bay glow. When fish swim past your boat, for example, they light up like waterborne fireflies. As the boat glides through the water, the wake shines brightly.
The wonder of God’s creation leaves us speechless, and this is just a small part of the total mystery package of God’s awesome handiwork as spelled out in Job 37 and 38. Listen to what the Lord’s role is in nature’s majesty: “Do you know how God controls the clouds and makes His lightning flash?” (37:15 niv); “What is the way to the abode of light? And where does darkness reside?” (38:19 niv). God’s majestic creations—whether dazzling lightning or glowing fish—are mysteries to us. But as God reminded Job, all of the wonders of our world are His creative handiwork.
When we observe God’s amazing creation, our only response can be that of Job: These are “things too wonderful for me” (42:3). — Dave Branon
All things bright and beautiful,
All creatures great and small,
All things wise and wonderful;
The Lord God made them all. —Alexander
When we cease to wonder, we cease to worship.
“Light” Of Creation
READ: Job 37:1-18
[God] does great things, and unsearchable, marvelous things without number. —Job 5:9Among the wonders of Jamaica is a body of water called Luminous Lagoon. By day, it is a nondescript bay on the country’s northern coast. By night, it is a marvel of nature.
If you visit there after dark, you notice that the water is filled with millions of phosphorescent organisms. Whenever there is movement, the water and the creatures in the bay glow. When fish swim past your boat, for example, they light up like waterborne fireflies. As the boat glides through the water, the wake shines brightly.
The wonder of God’s creation leaves us speechless, and this is just a small part of the total mystery package of God’s awesome handiwork as spelled out in Job 37 and 38. Listen to what the Lord’s role is in nature’s majesty: “Do you know how God controls the clouds and makes His lightning flash?” (37:15 niv); “What is the way to the abode of light? And where does darkness reside?” (38:19 niv). God’s majestic creations—whether dazzling lightning or glowing fish—are mysteries to us. But as God reminded Job, all of the wonders of our world are His creative handiwork.
When we observe God’s amazing creation, our only response can be that of Job: These are “things too wonderful for me” (42:3). — Dave Branon
All things bright and beautiful,
All creatures great and small,
All things wise and wonderful;
The Lord God made them all. —Alexander
When we cease to wonder, we cease to worship.
Wednesday, October 21, 2009
More of What I Read Today - Wednesday October 21, 2009
Let me know what you think of Tom's ideas about education in our country and education reform is important to the economic recovery.
From the New York Times
Op-Ed Columnist
The New Untouchables
By THOMAS L. FRIEDMAN
Last summer I attended a talk by Michelle Rhee, the dynamic chancellor of public schools in Washington. Just before the session began, a man came up, introduced himself as Todd Martin and whispered to me that what Rhee was about to speak about — our struggling public schools — was actually a critical, but unspoken, reason for the Great Recession.
There’s something to that. While the subprime mortgage mess involved a huge ethical breakdown on Wall Street, it coincided with an education breakdown on Main Street — precisely when technology and open borders were enabling so many more people to compete with Americans for middle-class jobs.
In our subprime era, we thought we could have the American dream — a house and yard — with nothing down. This version of the American dream was delivered not by improving education, productivity and savings, but by Wall Street alchemy and borrowed money from Asia.
A year ago, it all exploded. Now that we are picking up the pieces, we need to understand that it is not only our financial system that needs a reboot and an upgrade, but also our public school system. Otherwise, the jobless recovery won’t be just a passing phase, but our future.
“Our education failure is the largest contributing factor to the decline of the American worker’s global competitiveness, particularly at the middle and bottom ranges,” argued Martin, a former global executive with PepsiCo and Kraft Europe and now an international investor. “This loss of competitiveness has weakened the American worker’s production of wealth, precisely when technology brought global competition much closer to home. So over a decade, American workers have maintained their standard of living by borrowing and overconsuming vis-à-vis their real income. When the Great Recession wiped out all the credit and asset bubbles that made that overconsumption possible, it left too many American workers not only deeper in debt than ever, but out of a job and lacking the skills to compete globally.”
This problem will be reversed only when the decline in worker competitiveness reverses — when we create enough new jobs and educated workers that are worth, say, $40-an-hour compared with the global alternatives. If we don’t, there’s no telling how “jobless” this recovery will be.
A Washington lawyer friend recently told me about layoffs at his firm. I asked him who was getting axed. He said it was interesting: lawyers who were used to just showing up and having work handed to them were the first to go because with the bursting of the credit bubble, that flow of work just isn’t there. But those who have the ability to imagine new services, new opportunities and new ways to recruit work were being retained. They are the new untouchables.
That is the key to understanding our full education challenge today. Those who are waiting for this recession to end so someone can again hand them work could have a long wait. Those with the imagination to make themselves untouchables — to invent smarter ways to do old jobs, energy-saving ways to provide new services, new ways to attract old customers or new ways to combine existing technologies — will thrive. Therefore, we not only need a higher percentage of our kids graduating from high school and college — more education — but we need more of them with the right education.
As the Harvard University labor expert Lawrence Katz explains it: “If you think about the labor market today, the top half of the college market, those with the high-end analytical and problem-solving skills who can compete on the world market or game the financial system or deal with new government regulations, have done great. But the bottom half of the top, those engineers and programmers working on more routine tasks and not actively engaged in developing new ideas or recombining existing technologies or thinking about what new customers want, have done poorly. They’ve been much more exposed to global competitors that make them easily substitutable.”
Those at the high end of the bottom half — high school grads in construction or manufacturing — have been clobbered by global competition and immigration, added Katz. “But those who have some interpersonal skills — the salesperson who can deal with customers face to face or the home contractor who can help you redesign your kitchen without going to an architect — have done well.”
Just being an average accountant, lawyer, contractor or assembly-line worker is not the ticket it used to be. As Daniel Pink, the author of “A Whole New Mind,” puts it: In a world in which more and more average work can be done by a computer, robot or talented foreigner faster, cheaper “and just as well,” vanilla doesn’t cut it anymore. It’s all about what chocolate sauce, whipped cream and cherry you can put on top. So our schools have a doubly hard task now — not just improving reading, writing and arithmetic but entrepreneurship, innovation and creativity.
Bottom line: We’re not going back to the good old days without fixing our schools as well as our banks.
From the New York Times
Op-Ed Columnist
The New Untouchables
By THOMAS L. FRIEDMAN
Last summer I attended a talk by Michelle Rhee, the dynamic chancellor of public schools in Washington. Just before the session began, a man came up, introduced himself as Todd Martin and whispered to me that what Rhee was about to speak about — our struggling public schools — was actually a critical, but unspoken, reason for the Great Recession.
There’s something to that. While the subprime mortgage mess involved a huge ethical breakdown on Wall Street, it coincided with an education breakdown on Main Street — precisely when technology and open borders were enabling so many more people to compete with Americans for middle-class jobs.
In our subprime era, we thought we could have the American dream — a house and yard — with nothing down. This version of the American dream was delivered not by improving education, productivity and savings, but by Wall Street alchemy and borrowed money from Asia.
A year ago, it all exploded. Now that we are picking up the pieces, we need to understand that it is not only our financial system that needs a reboot and an upgrade, but also our public school system. Otherwise, the jobless recovery won’t be just a passing phase, but our future.
“Our education failure is the largest contributing factor to the decline of the American worker’s global competitiveness, particularly at the middle and bottom ranges,” argued Martin, a former global executive with PepsiCo and Kraft Europe and now an international investor. “This loss of competitiveness has weakened the American worker’s production of wealth, precisely when technology brought global competition much closer to home. So over a decade, American workers have maintained their standard of living by borrowing and overconsuming vis-à-vis their real income. When the Great Recession wiped out all the credit and asset bubbles that made that overconsumption possible, it left too many American workers not only deeper in debt than ever, but out of a job and lacking the skills to compete globally.”
This problem will be reversed only when the decline in worker competitiveness reverses — when we create enough new jobs and educated workers that are worth, say, $40-an-hour compared with the global alternatives. If we don’t, there’s no telling how “jobless” this recovery will be.
A Washington lawyer friend recently told me about layoffs at his firm. I asked him who was getting axed. He said it was interesting: lawyers who were used to just showing up and having work handed to them were the first to go because with the bursting of the credit bubble, that flow of work just isn’t there. But those who have the ability to imagine new services, new opportunities and new ways to recruit work were being retained. They are the new untouchables.
That is the key to understanding our full education challenge today. Those who are waiting for this recession to end so someone can again hand them work could have a long wait. Those with the imagination to make themselves untouchables — to invent smarter ways to do old jobs, energy-saving ways to provide new services, new ways to attract old customers or new ways to combine existing technologies — will thrive. Therefore, we not only need a higher percentage of our kids graduating from high school and college — more education — but we need more of them with the right education.
As the Harvard University labor expert Lawrence Katz explains it: “If you think about the labor market today, the top half of the college market, those with the high-end analytical and problem-solving skills who can compete on the world market or game the financial system or deal with new government regulations, have done great. But the bottom half of the top, those engineers and programmers working on more routine tasks and not actively engaged in developing new ideas or recombining existing technologies or thinking about what new customers want, have done poorly. They’ve been much more exposed to global competitors that make them easily substitutable.”
Those at the high end of the bottom half — high school grads in construction or manufacturing — have been clobbered by global competition and immigration, added Katz. “But those who have some interpersonal skills — the salesperson who can deal with customers face to face or the home contractor who can help you redesign your kitchen without going to an architect — have done well.”
Just being an average accountant, lawyer, contractor or assembly-line worker is not the ticket it used to be. As Daniel Pink, the author of “A Whole New Mind,” puts it: In a world in which more and more average work can be done by a computer, robot or talented foreigner faster, cheaper “and just as well,” vanilla doesn’t cut it anymore. It’s all about what chocolate sauce, whipped cream and cherry you can put on top. So our schools have a doubly hard task now — not just improving reading, writing and arithmetic but entrepreneurship, innovation and creativity.
Bottom line: We’re not going back to the good old days without fixing our schools as well as our banks.
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