What Powerful and Greedy Elites Are Hiding When They Scapegoat the Schools

05/05/2014 02:45 pm ET | Updated Jul 05, 2014
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Our economy is changing in ways that are alarming. Income inequality and wealth inequality are at their highest point in many decades; some say we are back to the age of the robber barons. Most of the gains in the economy since the great recession of 2008 have benefited the 1 percent, or even the 1 percent of the 1 percent. The middle class is shrinking, and we no longer have the richest middle class in the world. The U.S. has the highest child poverty rate of any of the advanced nations of the world (and, no, I don't count Romania as an advanced nation, having visited that nation, which suffered decades of economic plunder and stagnation under the Communist Ceausescu regime).

Forbes reports that there were 442 billionaires in the U.S. in 2013. Nice for them. Taxes have dropped dramatically for the top 1 percent since the 1970s. But don't call them plutocrats. Call them our "job creators," even though they should be called our "job out-sourcers."

Now what caused these changing conditions? My guess would be that unbridled capitalism generates inequality. Deregulation benefits the few, not the many. People with vast wealth give large sums to political candidates, who when elected, protect the economic interests of their benefactors. Anyone who wants to run for president must raise $1 billion or so. Where do you raise that kind of money? You go to the super-rich, who have the money to fund candidates of both parties, as well as an agenda to keep their money and make more.

A recent paper by Martin Gilens of Princeton University and Benjamin I. Page of Northwestern University concludes: "...economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while mass-based interest groups and average citizens have little or no independent influence. Our results provide substantial support for theories of Economic Elite Domination and for theories of Biased Pluralism, but not for theories of Majoritarian Electoral Democracy or Majoritarian Pluralism." Recent decisions by the U.S. Supreme Court removing limits on campaign contributions by corporations and individuals reinforce elite control of our political system. The danger signals for democracy are loud and clear.

We often hear talk of the "hollowing out" of the middle class. We know that many regions in our country are economically depressed because they lost the local industries that provided good jobs for high school graduates. Some of those jobs were lost to new technologies, and some were outsourced to low-wage countries. Free trade sounds good, but did the politicians realize how many millions of jobs and thousands of corporations would move to Mexico, China, Bangladesh, and other countries that do not pay what Americans consider a living wage?

Instead of looking in the mirror, our politicians blame the schools. They say that we lost those jobs because our schools were preparing students poorly, not because the "job creators" wanted to export jobs to countries that pay their workers a few dollars a day.

The politicians say we must send everyone to college so we can be "globally competitive," but how will we compete with nations that pay workers and professionals only a fraction of what Americans expect to be paid and need to be paid to have a middle-class life? How can we expect more students to finish college when states are shifting college costs onto individuals and burdening them with huge debt? How can we motivate students to stay in college when so many new jobs in the next decade -- retail clerks, fast-food workers, home health aides, janitors, construction workers, truck drivers, etc. -- do not require a college degree? (The only job in the top 10 fastest growing occupations that requires a college degree is registered nurse.)

So here we are, with politicians who could not pass an eighth grade math test blaming our teachers, our schools, and our students for economic conditions that they did not create and cannot control.

In a just and sensible world, our elected officials would change the tax rates, taxing both wealth and income to reduce inequality. There is no good reason for anyone to be a billionaire. When one man or woman is worth billions of dollars, it is obscene. A person can live very handsomely if their net worth is "only" $100 million. How many homes, how many yachts, how many jets, does one person need? In terms of income taxes, consider this: under President Dwight D. Eisenhower, the marginal tax rate for the very rich was 91 percent; it is now 35 percent. The tax on long-term capital gains has dropped from 25 percent to 15 percent. No wonder that billionaire investor Warren Buffett famously said that there has indeed been class warfare, and "my class has won." Buffett noticed that secretaries in his office were paying a higher tax rate than he was. He even took to the op-ed page of the New York Times to complain that the tax code unfairly spared the richest Americans.

Will the "job creators" lose all ambition if they can't pile up billions and billions? I doubt it very much. Surely there will be even more people yearning to get very rich, even if their wealth has a limit of $100 million or even $200 million.

We need to spend more to reduce poverty. We need to spend more to make sure that all children get a good start in life. We need to reduce class sizes for our neediest children. We need to assure free medical care for those who have none. We have many needs, but we won't begin to address them until we change our tax codes to reduce inequality.

Diane Ravitch is a historian of education at New York University