How to Increase U.S. Competitiveness (High Education Spending/Low Results)

In his recent bestseller, "The World Is Flat," Thomas Friedman warned Americans about the challenges of an era of increased globalization and international competition. In an ever "flattening" world, many jobs can easily be outsourced to skilled, lower-cost workers in other countries. Today, American workers have to compete against workers from around the world.

Friedman explained what this should mean to American students by recounting a warning he offered his daughters: "Girls, when I was growing up, my parents used to say to me, 'Tom, finish your dinner. People in China and India are starving.' My advice to you is: Girls, finish your homework. People in China and India are starving for your jobs."

Too few American students are heeding this advice. The Department of Education released a report last week on American students' and adults' performance on international tests. The findings of this report, "The Condition of American Education 2006," are not inspiring: American students rank in the middle or low end of the pack.

For example, American students scored below average on math and science tests administered to students in OECD countries. In math, U.S. 15-year-olds ranked 21st out of students from 28 countries. In science, U.S. students ranked 16th.

American students fared somewhat better on reading exams; U.S. 15-year-olds scored at the average of OECD countries. That's still too low.

Thomas Friedman isn't alone in recognizing the challenge facing Americans in the increasingly competitive global economy. President Bush focused on this looming problem in his State of the Union address when he unveiled his American Competitiveness Initiative. "We must continue to lead the world in human talent and creativity," the President said. "Our greatest advantage in the world has always been our educated, hardworking, ambitious people -- and we're going to keep that edge."

Everyone can agree with that goal. But what can policymakers do to help Americans keep their edge? President Bush proposed a series of new federal programs to improve American students’ performance in math and science, including plans to train 70,000 high school teachers for math and science advanced-placement courses and to encourage 30,000 math and science professionals to become classroom teachers.

This Band-Aid approach is unlikely to deliver results. Already, more than a hundred math and science programs are scattered across more than a dozen agencies in the federal government. If teacher training programs were the solution, we'd have already solved the problem. Before financing another program, taxpayers deserve to know why the existing programs aren’t making a difference.

More broadly, taxpayers should question why the $66 billion the federal government currently spends on K-12 education has failed to deliver meaningful results. Long-term assessments of National Assessment of Educational Progress test scores show that student achievement has remained flat since the early 1970s. Over this period, federal education spending has increased dramatically.

The real challenge in American education is getting more out of our already considerable investment. According to the OECD, the U.S. spends much more per student than most other developed countries. For example, the U.S. spends more per pupil for primary education than the United Kingdom, Germany, France, and 22 other OECD countries. Only Luxembourg spends more than the U.S.

In all, Americans spend more than $500 billion annually on K-12 education-nearly 5 percent of the entire U.S. economy. A student enrolled in public school from kindergarten through 12th grade can expect local, state, and federal taxpayers to invest more than $100,000 on his or her education. Students in emerging economies like India and China-our competitors in Thomas Friedman's flat world-certainly don't have this advantage.

So how can we get more out of our investment in education and make American students more competitive? One answer is to introduce competition into American education. We should allow families to control that $100,000 by choosing their child's school.

For too long, politicians and bureaucrats have controlled America's schools, and the result has been a lack of innovation and steadily rising costs. But student-centered educational reform is beginning to change this.

Just in the past fifteen years, American families now have unprecedented flexibility and choice about how to educate their children, thanks to the spread of charter schools and scholarship programs. The result has been innovation as schools compete to attract students with promising new learning models. Unfortunately, we've only seen a glimpse of what could be possible if families had full control over the $100,000 invested in their child's education.

Thomas Friedman argues that a key to succeeding in the new "flat" world economy is making oneself irreplaceable. "You have to constantly upgrade your skills," he writes. "There will be plenty of good jobs out there in the flat world for people with the knowledge and ideas to seize them."

Families deserve the opportunity to help their children acquire the knowledge and skills to compete in the world economy. School choice policies can give them this freedom. The byproduct will be widespread innovation in our schools-an important key to increasing American competitiveness.

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I would question his understanding of politics - after the fall of Florence in 1530 he had to hide for his life till he was pardoned, and he got pardoned by Clement VII only on account of his genius - he was needed to do what nobody else could. Regular rules are for regular mortals, and this probably is a large part of genius' appeal - to transcend the rules and to be able to disregard them. Most of poor wannabes fall woefully short in the genius department, though.

Point well taken, however if you look at the S&P500 vs. the inflation rate, you will see that equities always do better over time. Because of the magic of compound growth, over a lifetime, you are dramatically way ahead. I invite you to do a job that most Americans won't do - plug my Conservative estimates into a financial calculator, adjusted for inflation. Then try numbers that are even more realistic, such as the true per pupil spending in the average school district ($8,000).

The reason that my proposal will not work is not because my insights are wrong. These are some of the same arguments on the social security debate. The problem is that too many liberals (and people who don't think of themselves as liberal) will have to give up too much power, too many cherished delusions, and subject their lives to the insecurities of the market for their ideas, and products.
But it is fun to hit the same old suspects with "outside the box" thinking, and watch them squirm. Counter arguments will revolve around increases in juvenile labor law violations, juvenile crime and illiteracy rates, incomplete "socialization" of the child, etc. The problem for the liberal is that these worst case hypotheses about the result of redirecting education dollars, assumes that people are basically stupid and incompetent, which is contrary to the goodness in mankind that liberalism ostensibly posits.

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