What the Republican Budget Cuts Would Mean

After the American Century

According to MoveOn, the political action group, the cuts that Republicans have proposed to the Federal budget would have devastating effects on health and education. I have found their analysis to be generally correct in the past. Their proposals are many, but here are the ten worst ones:

1. Destroy 700,000 jobs, according to an independent economic analysis.

2. Eliminate all federal funding for National Public Radio and public television.

3. Cut $1.3 billion from community health centers—which will deprive more than 3 million low-income people of health care over the next few months.

4. Cut nearly a billion dollars in food and health care assistance to pregnant women, new mothers, and children.

5. Cut funds for Head Start, which would drive more than 200,000 poor children out of pre-school programs that for decades have proven an effective way to improve their chances to do well in school.

6. Cut educational funds, which will force states to fire 65,000 teachers and aides, dramatically increasing class sizes.

7. Cut some or all financial aid for 9.4 million low- and middle-income college students.

8. Slash $1.6 billion from the National Institutes of Health, which would affect investigations into many diseases and force some researchers to stop their work.

9. End the only federal family planning program, including cutting all federal funding that goes to Planned Parenthood to support cancer screenings and other women's health care.

10. Send 10,000 low-income veterans into homelessness, cutting in half the number  who get housing vouchers this year.

The same Republicans, notably John McCain, are calling on President Obama to get involved in Libya, which would further drain the US Treasury and create more veterans.

Danish Politics: The Ministers Have No Clothes

After the American Century

The gap between Danish political rhetoric and Danish lived reality is reaching epic proportions. Assuming the national character has not changed too much, it is no wonder Hans Christian Andersen wrote a famous story called "The Emperor's New Clothes." Readers will no doubt recall that the Emperor thought he was being arrayed in extremely fine clothing, but actually was putting on nothing at all. Even his subjects (or the public) went along with the fantasy, until finally a child pointed out that the King was in fact naked.

Most of the Ministers in Denmark are now similarly naked. The Minister in charge of finance cannot come close to balancing the budget, and yet keeps claiming that the tax reductions for the wealthy put through just two years ago, cannot be the cause of the problem. Rather, he argues, everyone should work longer hours, many public employees should be fired, libraries closed, and retirement laws be changed, so people will work longer. Meanwhile, everyone knows that the nation has a huge problem with black market labor (typically labor in people's homes such as plumbing and electrical work), which the government has not been able to deal with. 

But the finance minister actually has fewer problems than most of the others. The government has continually insisted that its policies will raise the level of the schools and universities, but now everyone can see that in fact schools are closing, faculty are being fired, and the number of hours of teaching received by students has been in decline for years. The Ministry involved now is trying to put the blame on the schools and universities, as if they had cut their own budgets. These politicians are nakedly fools.

Then there is the pathetic figure of the Minister in charge of allowing (well, mostly preventing) immigrants and refugees into the country. She and her predecessors in the post have, for more than a decade, broken the UN guarantees to stateless persons. A whole line of Ministers from this government have consistently misinformed people who had a right to Danish citizenship, people who were born in Denmark, educated in Denmark, and are now adults working in Denmark. These people have been denied citizenship, over and over, illegally. This would seem to be a serious breach of law and call for an investigation. But the same people who broke the law will now "investigate" themselves. A few right-wing politicians are now complaining about the UN, as if it were the problem!

Then there is the pathetic government organization that is supposed to ensure that the banks in Denmark are solvent. This institution decided that the Amager Bank was credit worthy, though in trouble, and lent that bank more than two billion dollars. Given this apparent certificate of good health, many kept their money in that bank, including several local governments. One quarter of a year later, Amager Bank lies in ruins, and those who owned stock in it, and those who had deposits larger than those insured by the  government, have lost their money. The loss is the equivalent of $200 for every man, woman, and child living in Denmark. The failure also weakens the Danish kroner, forcing up interest rates. A fine government, indeed! One mistakenly had thought that a conservative government could at least manage the business side of things.

The list is by no means complete, but how much naked incompetence and mismanagement should one put into a single blog? Suffice it to say that the current Foreign Minister performed so badly that her own party forced her to resign as their leader. But she is still in office.  

Then there is the former Minister in charge of research who intervened, illegally, and leaked confidential documents, in an attempt to help a researcher whom he liked, though it is now clear that her "results" were cooked up, based on non-existent rats in a non-existent Spanish research lab.  So he, too, is naked. But will there be a real investigation?

The list could go on, but how many naked Ministers can one stand to look at?

Governemnt is not a Business, and it should not be allowed to claim bankruptcy

After the American Century

In the US there is suddenly talk of lettering state governments declare themselves insolvent, and go through some form of bankruptcy. This is a very bad idea, and not just, as several people immediately pointed out, because such talk will immediately raise fears on the bond market. States will start to pay a premium in interest to get anyone to buy their bonds, as the New York Times has noted. Such bonds have long been thought to be the epitome of what is safe to invest in. Not much profit, but not much danger either. Take away the security of state bonds, and the markets are going to become restless.

But that is not my main argument against this idea. The chief problem is that allowing states to declare bankruptcy allows them to become irresponsible. It allows legislators to start things they cannot finish. It invites them to pass bills, to make promises, to offer pensions to state employees, that are not funded through sufficient taxation. This is the modern form of Greek democracy, and it has been tried already in Greece, and found wanting.

The American people are among the richest per capita on earth. If they do not have enough money in their state budgets, it is because they have resisted paying taxes sufficient to meet their obligations. California is the most obvious example, as its population voted to cap taxation at an unreasonably low level. Their tax revolt in the late 1970s was irresponsible then, it was irresponsible since, and it remains so.

If the Republican Party were really a party of fiscal responsibility, it would oppose this idea with every ounce of its collective energy. Instead, it seems to be part of the problem. Members of both parties are exploring this idea. If it comes to fruition, the United States will have taken a step toward self-destruction. The US will be correctly judged a more dangerous place to invest money. State employees will live with the threat that their pensions may never be paid out. And all citizens will find that the cost of government rises, in the form of higher borrowing rates, while the money available to provide services correspondingly falls.

This may be the worst idea to come along since the courts decided that corporations were "persons." Government is not a business that can periodically fail. It is the foundation of society. It is a contract between the citizens that cannot be broken, not a corporation that can be reconstructed by and for bankers. Talk of letting government fail financially cannot be separated from a more general failure of trust between the citizens. Government is about mutual obligation. It is not an investment that one pulls out of.

Americans have lived with a stable system so long that they have no historical experience of the disasters that come with fiscal irresponsibility. Undermine the state government, and you undermine the dollar itself. I am not talking about the dollar losing a few percentage points against the Euro. I am talking about the Japanese and the Chinese deciding not to buy dollar debt anymore, because it is too risky. For a taste of what that might mean, look at Greece, right now, with the difference that the EU has come along to bail out Greece. But no economy is big enough to bail out the United States.

Merry Christmas, after all

After the American Century

There is, objectively speaking, not so much to be merry about. The weather here in Denmark has been unrelentingly cold and the snow has blocked roads and even made it hard for me to get out of my own street. The Danish government promises endless cutbacks, and makes ill considered reforms. And my mother in law is here for six days, pretending that she is not smoking cigars in the basement, wearing suffocating perfume, and insisting on hearing elevator music on the radio.

Nevertheless, there are reasons to be happy, even if merry is a bit over the top. The US and Russia are reducing their nuclear arsenals. The German and US economies are reviving, and the Chinese and Indians never really faltered in the first place. The Danish stock market went up a whopping 35% in the last year, wiping out the losses of the previous year. 

And on a professional level, I have enjoyed teaching this fall, been invited to more places to lecture than I could accept, and managed to steer a new BA curriculum through four stages of a six stage process needed to get it approved. I have seldom written much here about my personal life - it isn't that sort of column - but I will say that things are good there, too.

So, on the whole, I can say Merry Christmas, too, and hope that 2011 will be an improvement.

PISA test results

After the American Century

The 2009 PISA results can be seen in the table accompanying this article. (For the 2012 results, click here ) Both Europe and the United States must do a better job educating their children if they are to keep up with Asia. On the reading test European countries were not so far apart, and ranged from a low of 483 (Greece and Slovenia) to a high of 508 (Netherlands). That is only a 25 point spread. But the difference between the Netherlands and Shanghai was 48 points, almost twice as much. Well, actually Finland did get 536, far and away the best showing for Europe. The pattern was the same in Science and in Math, where China was by far the best, while the Europeans clustered well behind. The United States was mediocre in all three categories.

Sadly, education budgets are being cut in many European countries, which are not investing in new schools or more teachers. Indeed, Denmark has just decided to let the size of classes in elementary school get larger, a serious mistake. Larger classes tend to be harder to keep focused, and they demand far more of teachers, who can scarcely give individual attention to students who need extra help or those who need extra stimuli.

If you take the three test scores and add them together, this is the result (not all nations surveyed are included in this list).

Shanghai               1731
Hong Kong           1637
Finland                  1631
Singapore              1630
Korea                    1623

Japan                      1588
Canada                   1580
New Zealand         1559
Australia                1556
Netherlands           1556
Switzerland           1552

Estonia                  1541
Germany               1530
Belgium                1528

Poland                   1503
Norway                 1501
Britain                   1500
Denmark               1497

Average Score      1492

France                    1491

United States         1489

Ireland                   1489
Sweden                  1486                

If the future belongs to the best educated, then the future belongs to Asia, Canada, New Zealand, Australia, the Netherlands, and Switzerland. Judging by this list, being a wealthy country helps, but it is not the determining factor. Norway has no national debt and a huge public surplus, yet achieved only average results, while Finland, which has less money per capita than Denmark or Norway, was at the top. And the United States, which for decades was the wealthiest large nation in the world, scores below the average.

See also World University Rankings

The Ignoble Cause of the Confederacy

After the American Century

We are on the eve of the 150th anniversary of the Civil War, and the Confederacy is about to be celebrated, strange as that may seem. The American South often presents itself as the victim in the Civil War. This is patent nonsense. The Southern states succeeded from the United States, and they attacked Fort Sumter. They were the aggressors, and they remain aggressive in promotion of themselves as hapless victims of the North. Pathetic nonsense.

This celebration of defeat would merely be sad and pathetic self-delusion if the same people who are gearing up for the 150th anniversary of the Confederacy did not insist on presenting the commemoration in political terms. They will spend millions of dollars in television advertisements that claim the war was about preserving their own freedom. It was  about slavery.

The rebellion of the Confederates was the worst crime ever committed against the United States. Those who fought against the North were traitors, and they got off all too lightly at the end of the war. More than 300,000 men from the North died in that war, and thousands of them were starved to death in the South's inhuman prisoner of war camps. The South committed war crimes against Northern soldiers, notably at Andersonville, where 13,000 men died of malnutrition, disease, and exposure in the 14 months it was open. There is absolutely nothing to celebrate. The Confederacy was an ignoble cause, a delusion.

The Confederacy represents nothing less than treason, torture, and slavery. It was and remains an abomination. There is no reason to celebrate the Confederacy, as many Southerners are about to do with a grand ball in Charleston. Succession was a crime. It should be remembered with memorial services for the dead. Its symbol should be a shroud.

When the South lost the war, some of its "patriots" conspired to assassinate President Abraham Lincoln. Will the people of Charleston celebrate that, too? 

Abandoned plantation house, 1930s

Move Danish Universities Abroad (following Danish corporations)

After the American Century

This is a thought experiment, making logical deductions from recent actions of the Danish government. If there seems to be anything objectionable (or worthwhile) in this proposal, think about what that government has been doing.

In a globalized world, there is no reason why Danish universities should remain in Denmark, if they can educate their students just as well at a lower price in another place. Just as Danish slaughter houses are moving to Germany and Eastern Europe, just as Danish companies seeking assembly line workers move that part of their activity to Asia, so, too Danish universities should consider the option of moving off-shore.

The advantages of this proposal are obvious.

1. Student SU (grants in aid) will buy more goods and services abroad.

2. Books, clothing, food, and computers will be cheaper, as the faculty and students will not need to pay the 25% Danish VAT.

3. University services can be outsourced more cheaply in other labor markets. There is no reason to pay high Danish wages to cleaners, cooks, and maintenance people, who would be much less costly to hire elsewhere.

4. Careful site selection would place the new Danish universities in mild climates, saving on the cost of heating.

5. Recruitment of non-Danish faculty would not be hindered by the complex and ever more stringent regulations for work permits.

6. In a digitized world, the library resources would be on-line, with no need to build up a physical collection of books and journals.

7. Travel to the new universities need not cost any more than the Danish railways charge to commute from Odense or Aarhus to Copenhagen. Indeed, with the proliferation of budget airlines, it may be cheaper to get to the new universities than to the old ones.

8. Housing will also be less expensive, and at the same time thousands of apartments will be made available in Denmark, solving the housing problems of its cities.

9. Foreign language acquisition will be faster and better, as students will be learning a local language through immersion in another culture, as well as in class.

10. Since Danish business is moving abroad, the Danish students trained overseas will be right where they are needed, and available to work at the lower salaries in the wage markets of those nations.

Since the funds available for university teaching and reseach have declined in real terms for years, this proposal is a rational response to the Danish government's cost-cutting.

Initially the BA programs could be sited off-shore, with the more specialized MA and Ph.D. courses remaining in Denmark for a few years of transition. Logically, the programs in Danish history and Danish language and literature might be left behind to thrive in their native environments, but the natural sciences, much of the humanities, and most of the social sciences would benefit from going off-shore. Indeed, there would be useful synergies with local universities in the host nations that could not be achieved through exchange programs.

By 2030 it should be possible to move most of Danish university education to such places as Ireland, Poland, Southern Spain, Turkey, and Thailand. Those who earlier immigrated into Denmark from these countries would become valuable as translators and bridge builders between the Danes and the host countries.

Once business and the universities have moved abroad, it will be time to think about what else to locate overseas. Quite possibly some hospitals and primary schools also could be moved to the new Danish foreign enclaves.  The eventual result would be to empty Denmark of most university students and many workers, while the number of pensioners abroad would certainly increase as well. They would leave behind a smaller population to operate Denmark as a center for high-tech industries and as a theme park for tourists.

Denmark would thereby become the most completely globalized of all nations. There is no time to delay, as other nations that Denmark likes to compare itself to may be the first movers. The best locations and the biggest savings will go to those who seize the opportunity now.