It is early July, well before this article goes online, yet the landscape is pretty clear from where I stand. The U.S. and China both raised tariffs on $34 billion worth of goods Friday, July 6. This did not deter the S&P 500 from continuing its charge up to the January 26 all-time high. To boot, unemployment is historically low and the Fed is set to raise rates twice before the year ends - all this amidst a stealth discretionary spending recession.
So, how about that trade war? Let's recap. Most folks would agree that the free trade of goods would be best for all concerned. Goods would be less expensive and those that could not compete on price would do so on quality, leading to a beneficial improvement of goods. All is well and good until protectionism and nationalism rear their ugly heads. Some nations have goods that find it difficult to compete on the basis of price and/or quality. Globally, world leaders of such nations are unapologetic in pursuing their nation's interests at the expense of others. In trying to avoid the image of the ugly American, we have often placed ourselves at a disadvantage. Nowhere is this more evident than in trade were our trading partners often have a clear advantage.
U.S. Census Data shows that we have a trade deficit with every trading region except for South and Central America and Australia/Oceania. At only $33.14 and $14.38 billion, respectively, the last four years and a combined trade of $310.44 billion this pales in comparison with the deficit for the rest of the world, -$844.66 billion, whose combined trade is $3.578 trillion. Below are 2014-2017 averages for most of the world in billions:
Canada: -$20.01
European Union: -$149.61
Asia: -$547.49
Africa: -$2.60
China is a case in point. Aware of the huge financial benefit that comes with their 1.38 billion consumers, they extract huge concessions from their trading partners, including the U.S. When they have not barred certain U.S. business sectors, they restrict or regulate business, place tariffs on goods, or coerce intellectual property release. Note this goes one way; there is no intellectual property sharing.
These noncompetitive business practices are not fair, but until now, U.S. companies have accepted them without much push back as the cost of doing business there. That is until Trump. What Chinese leaders need to realize is that they are not in a good bargaining position and the longer they hold out the more harm will come to their economy.
Here is why. Leaders of the government-run economy are well aware of their history and realize the huge Chinese population is not going to put up with poor conditions forever. To keep discontent at bay, they have a policy of inflated economic growth. According to Trading Economics, they have averaged 11.7% GDP growth for the past 10 years but chinks in their armor are showing. From the 2010-2011 heyday, where GDP grew 19% and 24%, growth has dropped steadily and sometimes precipitously. It was 5.56% and 1.14% in 2015 and 2016, respectively. Little wonder that worried central government figures have made a big push since then for increasing their global exports, including those to the U.S., resulting in a resumption of GDP growth to 9.35% in 2017. The prospect of increased tariffs, which would make their goods less competitive, runs afoul of those plans. China's economy is struggling and their stock market is testament to that. The smaller Shenzhen composite moved into bear market territory in February and the Shanghai composite closed in bear territory on Tuesday, June 27. The indexes went as low as -26.5% and -25.0 on July 5 but have recently recovered to -22.5 and -21.2%, respectively, as global markets have climbed in tandem with U.S. markets. That is still in bear market territory, which will curtail much need foreign investment. Meanwhile, U.S. GDP is growing steadily, the economy seems to be healthy, and the stock market is nearing new heights. Trump can ratchet up the tariff game longer knowing he has more economic wiggle room. Moreover, he can inflict more pain to the Chinese economy than they can to ours.
To see why, let's look at the trade numbers. The trade deficit with China has averaged -$358.68 billion the last four years in a rising trend. While U.S. exports have vacillated between $110-129 billion since 2012, Chinese imports have steadily increased from $315 to 375 billion. Last year the deficit was -$375.58 billion, of which $129.89 billion were U.S. exports to China and $505.47 billion were U.S. Chinese imports. Not only is trade unbalanced, so are tariffs. Prior to this year, U.S. tariffs on Chinese agricultural and non-agricultural goods were 2.5% and 2.9%, respectively, while Chinese tariffs on U.S. goods were 9.7% and 5% for the same. True, these had been going down from a 14.1% average prior to 2001 when China joined the World Trade Organization but that was part of the price and tariffs are much higher for some industries.
Below are the top 10 U.S. exports to China in 2017 according to the International Trade Centre Trade Map http://www.intracen.org/marketanalysis:
Aircraft, spacecraft - $16.3 billion
Vehicles - $13.2 billion
Oil Seed - $13 billion
Machinery - $12.9 billion
Electronic equipment - $12.1 billion
Medical, technical equipment - $8.8 billion
Mineral fuels including oil - $8.6 billion
Plastics - $5.7 billion
Woodpulp - $3.4 billion
Wood - $3.2 billion
Total - $97.7 billion
Together they account for 74.8% of all exports that year. Note that except for oil seed, mostly soybeans, the rest are non-agricultural products. But their tariffs are not the same and depend on how strategic the product is. For example, Chinese cars cannot compete with American ones so the latter have duties ranging between 21% and 30%. Compare that to a maximum of 2.5% for Chinese car imports to the U.S.
Therein lies the rub. The Chinese can only raise imports so much more on these goods, some of which have few suppliers outside the U.S. As a result, some of the announced tariff hikes are empty rhetoric with few teeth. Just as an example, China announced 25% tariffs on aircraft, but not all aircraft - just those with an "empty weight" of 15,000 to 45,000 kilograms. While it may seem like China is taking aim at Boeing, it turns out the stipulations only target older 737's being phased out of production, while not touching the larger models comprising the bulk of Boeing's trade. China desperately needs to grow their airline industry. It is estimated 7000 new planes will be needed in the next 20 years. With Airbus working at near full capacity, there is no alternative but to turn to Boeing for the remainder.
The same goes for soybeans, the bulk of Chinese agricultural imports. China is the world's top pork market and they need soybeans for feed. It turns out Brazil and the U.S. are the top two global soybean suppliers. Brazil has been cranking up production for years and now constitutes 57% of Chinese soybean imports. This came mostly at the expense of the U.S., but Brazil does not have the capacity to make up for the remaining 31% in U.S. soybean exports to China. As a result, the planned 25% increase in tariffs will hurt Chinese pork farmers directly.
Ultimately, the sheer size of the trade imbalance will play in Trump's favor. With $500 billion dollars of goods at risk for China vs. only $130 billion for the U.S., China's fate is sealed. That is, provided Trump is persistent in raising the bar while keeping disgruntled American businessmen at bay. Historians may recall a similar unrelenting raising of the bar eventually caused Russia to capitulate during Reagan's tenure. It does not help China that it is already running up against its tariff limit.
We are already seeing that endgame play out. Just four days after both countries raised taxes equilaterally, Trump announced 10% tariffs on $200 billion in Chinese goods. There was no equilateral retaliation China could muster after the late Tuesday, July 10 announcement. Instead, China announced it would hit back in other ways - probably by selling U.S. Treasuries, which would flood the medium- and long-term bond market causing bond prices to fall and yields to rise.
Regarding the latter, Trump's victory will come at a cost. Bolstered by his success with China, Trump will continue to pursue his trade normalization agenda with other trade partners. Although trade is fairly balanced with the U.K., the European Union had a $173.58 billion trade advantage last year on a $839 billion trade. Not only that, but the E.U. has made it a habit to go after American tech giants it cannot compete with. Think Qualcomm in 2018, Google in 2017, Facebook in 2017, Apple in 2016, and Microsoft in 2013. Japan is on the same boat. Our deficit with Japan averaged -$68.59 billion from 2014-2017 and stood last year at -$68.88 billion on a $204 billion trade. Although government regulations have eased under Prime Minister Abe, Japan has a culture of impeding foreign investment, particularly in the financial sector. Moreover, they have high tariffs on dairy (up to 40%) and meat (38.5% on beef) products, which account for $6.1 billion of U.S. exports to the country. Trump has made it clear they are also in play and they have fired salvos in return.
Given the posturing by all parties involved, tariffs will be higher going forward than they were before. This will raise the price of U.S. goods abroad, making them less competitive. This will, in turn, impact earnings for our larger, international firms. Our stock market may be flirting with highs right now, but I believe this will be the catalyst to the market downturn as Investors, looking ahead, bid down these stocks. Moreover, tariffs on imports will inevitably lead to inflation. We are already at the Fed's 2% comfort level so any visibility on higher inflation will incite the Fed to head it off by hiking fed funds rates beyond their current path. Their incentive to do so will be bolstered if China retaliates with a Treasury selling program, as higher 10-year Treasury rates relieve the Fed of yield curve inversion worries.
A stock market downturn will reverse the wealth effect we have been seeing recently on our economy and combined with export losses, this undoubtedly will lead to job losses and higher unemployment. On top of all that, the stealth discretionary recession we have been experiencing, will make itself clearly evident as U.S. peak spender populations continue to decline all the way until 2023. This is not an incident unique to the U.S. World population growth increased from 1946 to 1968, peaking at 2.09% per year that year, coinciding with the bulk of our Baby Boomer bulge. Since then it has been steadily decreasing until it reached 1.09% at the beginning of this year. Peak spenders are those 46-50 years old and if we take 1968 as the mid-point of their population zenith, they topped out in 2016. That is a main reason populous nations, like China, have been concerned with slowing consumerism the past couple of years. The upshot is we will see a global drop in discretionary spending for at least the next five years. This will result in an accelerated global economic downturn for the next five years and plummeting global stock markets for the next few years.
I am an investor, two decades plus student of the market, professor, and author of "And Then the Tempest - The Imminent Financial Meltdown is Real and What to do About it." I was the founder and chairman of the Idaho State University Budget Committee in 2007. As such, I warned the university of the impending recession and real estate crisis and helped steer finances during those tumultuous years. Today, I warn folks of a coming economic storm, indeed, it's already knocking at the door and could prove more catastrophic than the Financial Crisis. Check out my website, http://www.megabearmarket.com, and posts at http://www.stockopedia.com to find out more.
By Karl De Jesus
More Jobs Added, But Unemployment Goes Up? Welcome to Our New Reality
The U.S. economy added 213,000 jobs in June, more than the 195,000 expected. Job numbers for May were revised up to 244,000 from 223,00. How is it then that unemployment jumped from 3.8% to 4.0%?
Welcome to the new reality where job gains are undone by an increase in labor force participation. It stood at 62.7% in May and rose to 62.9% in June. That 0.2% increase amounts to 601,000 folks who decided job prospects had improved enough to make it worthwhile.
What is worrisome is that, although we are close to the average labor force participation rate, it has averaged 62.99% since data compilation began in 1950, levels were much higher until recently. Throughout the 90's and up to 2002, the average was closer to 67% and only dipped slightly, to 66%, with the advent of the Great Recession. Since then, however, labor participation steadily dwindled until plateauing below 63% since 2014. If labor participation was ever to normalize, i.e. get back to pre-Financial Crisis levels, it would mean a jump of 9.6 to 12.6 million new entrants into the job market. At the current job creation rate it would take 4.5 to 6.0 years to assimilate those workers with unemployment rates jumping to 7% in the interim.
So, maybe the job picture is not as rosy as it is currently being painted. Certainly, the wages side of the equation is not that alluring to prospective entrants. Hourly wages only rose 0.2% from the prior month and 2.7% over the year. They rose 0.3% and 0.15% in May and April, respectively, over the previous month and 2.7% and 2.4% over the previous year. If labor markets were tight, as many pundits claim, wage pressures should be much higher. Back in March 2000, for example, when labor participation was around 67% and the unemployment rate stood at 4.1%, average hourly earnings rose 3.6% on a year to year basis. Likewise, in 2008, when the labor participation rate was 66% and unemployment was 4.9%, average hourly earnings rose 3.7%.
While not gangbuster wage growth numbers, however, they should allay the Fed's fears that wage pressures will lead to inflation growth above 2% anytime soon. Nevertheless, the "real" unemployment numbers should give Fed members pause. Maybe the job market and the economy are not as healthy as they surmise and perhaps caution is merited as they consider further rate increases. Instead, the June meeting minutes indicate the Fed considers conditions robust enough to remove accommodative language in their policy statement and that they should continue undaunted in raising the fed funds rate above the neutral level by next year.
About the only concern the Fed had was the flattening of the yield curve. Historically this is a harbinger for recessions, which led to a discussion regarding a recession lurking around the corner and global trade tensions as a potential cause.
Personally, I feel there is some stealthy, nefarious force behind those labor participation and wage numbers. My suspicion is that the demographic forces I have previously written about are at work here. And we should thread carefully on the economy's brake pedal until we can be certain of those forces.
I am an investor, two decades plus student of the market, professor, and author of "And Then the Tempest - The Imminent Financial Meltdown is Real and What to do About it." I was the founder and chairman of the Idaho State University Budget Committee in 2007. As such, I warned the university of the impending recession and real estate crisis and helped steer finances during those tumultuous years. Today, I warn folks of a coming economic storm, indeed, it's already knocking at the door and could prove more catastrophic than the Financial Crisis. Check out my website, http://www.megabearmarket.com, and posts at http://www.stockopedia.com to find out more.
By Karl De Jesus
Welcome to the new reality where job gains are undone by an increase in labor force participation. It stood at 62.7% in May and rose to 62.9% in June. That 0.2% increase amounts to 601,000 folks who decided job prospects had improved enough to make it worthwhile.
What is worrisome is that, although we are close to the average labor force participation rate, it has averaged 62.99% since data compilation began in 1950, levels were much higher until recently. Throughout the 90's and up to 2002, the average was closer to 67% and only dipped slightly, to 66%, with the advent of the Great Recession. Since then, however, labor participation steadily dwindled until plateauing below 63% since 2014. If labor participation was ever to normalize, i.e. get back to pre-Financial Crisis levels, it would mean a jump of 9.6 to 12.6 million new entrants into the job market. At the current job creation rate it would take 4.5 to 6.0 years to assimilate those workers with unemployment rates jumping to 7% in the interim.
So, maybe the job picture is not as rosy as it is currently being painted. Certainly, the wages side of the equation is not that alluring to prospective entrants. Hourly wages only rose 0.2% from the prior month and 2.7% over the year. They rose 0.3% and 0.15% in May and April, respectively, over the previous month and 2.7% and 2.4% over the previous year. If labor markets were tight, as many pundits claim, wage pressures should be much higher. Back in March 2000, for example, when labor participation was around 67% and the unemployment rate stood at 4.1%, average hourly earnings rose 3.6% on a year to year basis. Likewise, in 2008, when the labor participation rate was 66% and unemployment was 4.9%, average hourly earnings rose 3.7%.
While not gangbuster wage growth numbers, however, they should allay the Fed's fears that wage pressures will lead to inflation growth above 2% anytime soon. Nevertheless, the "real" unemployment numbers should give Fed members pause. Maybe the job market and the economy are not as healthy as they surmise and perhaps caution is merited as they consider further rate increases. Instead, the June meeting minutes indicate the Fed considers conditions robust enough to remove accommodative language in their policy statement and that they should continue undaunted in raising the fed funds rate above the neutral level by next year.
About the only concern the Fed had was the flattening of the yield curve. Historically this is a harbinger for recessions, which led to a discussion regarding a recession lurking around the corner and global trade tensions as a potential cause.
Personally, I feel there is some stealthy, nefarious force behind those labor participation and wage numbers. My suspicion is that the demographic forces I have previously written about are at work here. And we should thread carefully on the economy's brake pedal until we can be certain of those forces.
I am an investor, two decades plus student of the market, professor, and author of "And Then the Tempest - The Imminent Financial Meltdown is Real and What to do About it." I was the founder and chairman of the Idaho State University Budget Committee in 2007. As such, I warned the university of the impending recession and real estate crisis and helped steer finances during those tumultuous years. Today, I warn folks of a coming economic storm, indeed, it's already knocking at the door and could prove more catastrophic than the Financial Crisis. Check out my website, http://www.megabearmarket.com, and posts at http://www.stockopedia.com to find out more.
By Karl De Jesus
A Population Denied
As with all things seasons come and go and we all get old. Some age with dignity and grace while others succumb to illness or injury. It is these poor souls who suffer a more debilitating fate. In this the spring of 2018 when science and medicine have reached new heights there still remains an overwhelming urgency to stem the rising tide of all the inflections of so many.
In an age of unprecedented change the United States remains the last hold-out that will not provide adequate health insurance for all. Health insurance that secures the health and stability of a nation. If you are one of the overwhelming majority of impoverished the cold reality today is akin to a famous line from Charles Dickens " Scrooge." The life saving drugs, treatments and operations that should be available to all are reserved for those fortunate few that can afford them.
With the Republican mindset of today with too many elected officials still beholden to the insurance lobby our for profit health insurance policies have only put this nations health in grave jeopardy. When a nations health is as sick as ours while millions of dollars keeps flowing into the campaign coffers of our elected officials continues to be a recipe for disaster. It is a known fact that the United States spends billions of dollars in health care but, is by far one of the least healthiest nation. The death care policies of today has only shortened life spans for both men and women. Other countries especially Sweden or Norway have one of the healthiest populations in the world and spend far less than the United States.
It is unconscionable that millions of Americans continue to languish in dire need of medical or dental care. Health care that not only would greatly add to the quality of life but would produce economic results beneficial to the stability and growth of this nation. Too many times a bill has come before Congress that outlines Universal Health Care. From Truman to Ted Kennedy the passage of Universal Health Care that they so valiantly tried to pass died a tragic death on the floors of Congress. When Obama passed the Affordable Health Care Act in 2010 was a small step in the right direction but failed to adequately provide health insurance for all Americans. All that bill did was fatten the insurance companies wallets while depleting what ever disposable incomes too many Americans have.
The travesty in America today is that our elected officials no longer see themselves as employees of the public but see the public as their employees. And, as such the public continues to be denied the opportunities to lead richer and fuller lives. When the soap opera in the White House finally reaches the final act, I hope very soon, makes it essential that Congress passes Senator Sanders Medicare For All, a Universal Health Care bill.
The United States can no longer sit idle and let this country as sick as it is remain the only country that does not take care of all it's citizens. We have to always remember the health, vitality and stability of a nation depends on the health and vitality of all it's citizens. Only in this way can this nation have a longer and more productive future.
By Dr. Tim G Williams
In an age of unprecedented change the United States remains the last hold-out that will not provide adequate health insurance for all. Health insurance that secures the health and stability of a nation. If you are one of the overwhelming majority of impoverished the cold reality today is akin to a famous line from Charles Dickens " Scrooge." The life saving drugs, treatments and operations that should be available to all are reserved for those fortunate few that can afford them.
With the Republican mindset of today with too many elected officials still beholden to the insurance lobby our for profit health insurance policies have only put this nations health in grave jeopardy. When a nations health is as sick as ours while millions of dollars keeps flowing into the campaign coffers of our elected officials continues to be a recipe for disaster. It is a known fact that the United States spends billions of dollars in health care but, is by far one of the least healthiest nation. The death care policies of today has only shortened life spans for both men and women. Other countries especially Sweden or Norway have one of the healthiest populations in the world and spend far less than the United States.
It is unconscionable that millions of Americans continue to languish in dire need of medical or dental care. Health care that not only would greatly add to the quality of life but would produce economic results beneficial to the stability and growth of this nation. Too many times a bill has come before Congress that outlines Universal Health Care. From Truman to Ted Kennedy the passage of Universal Health Care that they so valiantly tried to pass died a tragic death on the floors of Congress. When Obama passed the Affordable Health Care Act in 2010 was a small step in the right direction but failed to adequately provide health insurance for all Americans. All that bill did was fatten the insurance companies wallets while depleting what ever disposable incomes too many Americans have.
The travesty in America today is that our elected officials no longer see themselves as employees of the public but see the public as their employees. And, as such the public continues to be denied the opportunities to lead richer and fuller lives. When the soap opera in the White House finally reaches the final act, I hope very soon, makes it essential that Congress passes Senator Sanders Medicare For All, a Universal Health Care bill.
The United States can no longer sit idle and let this country as sick as it is remain the only country that does not take care of all it's citizens. We have to always remember the health, vitality and stability of a nation depends on the health and vitality of all it's citizens. Only in this way can this nation have a longer and more productive future.
By Dr. Tim G Williams
The Danger of Losing Hope for Public Education
Currently, equitable education is not provided on a worldwide scale. Furthermore, the socioeconomic achievement gap is becoming wider apart than ever, leaving many bright minds undiscovered. This inequity in education is unacceptable, as it infringes not only on individual rights but also on society's morality and progression as a whole.
I find the issue of education especially personal, as public education was how I overcame my adversities, I grew up in a financially insecure, immigrant family in which I had many household responsibilities. I translated constantly for my parents, and I was expected to pay for my own financial expenses. However, as soon as I poured my energy into school work, I learned that knowledge was an equal playing field. It didn't matter who I was but only what I knew.
My free twelve years of schooling has allowed me to become a leader, serve others, and find my voice. I keep this constantly in mind, understanding I am beyond lucky to have had a public education. Without this education, I wouldn't be a Northwestern student. I would be a high school dropout, driving for Uber or working at a fast food restaurant like my parents who could not get a privilege to receive public education.
Because education is so important, students of all backgrounds should be able to attend school. Specifically, more focus should be on underprivileged school districts. Furthermore, it is essential to reinstate authority back to the teachers and students. This is to ensure that administrators spearhead education policy instead of uninformed government leaders. What is best for our students should no longer be overshadowed by politics. By listening to the people our legislation most affects, we can make better law.
According to The Atlantic, educators have criticized Trump administration's budget proposal detailing over $9 billion in education cuts, including slashes to funds for after-school programs that serve mostly low-income students. Moreover, these cuts came along with increased funding for school-privatization efforts such as school vouchers. United States Secretary of Education, Betsy DeVos has repeatedly gestured her support for school choice and privatization, as well as her disdain for public schools, describing them as a "dead end".
Such cynicism suggests there is no hope for public education. However, this mindset is demonstrably false and even dangerous. Current discussion repeatedly ignores public schools' victories by trivializing their civic role. Our public-education system is about much more than personal achievement; it is about preparing people to work together to advance not just themselves but the whole society. Unfortunately, the current debate's focus on individual rights and choices has distracted many politicians and policy makers from a key stakeholder: our nation as a whole.
The Founding Fathers understood that a healthy democracy required education. Thomas Jefferson, among other historical titans, believed that a functioning democracy required an educated citizenry. Importantly, he viewed education as a public good to be included in the "Articles of public care," despite his personal preference for the private sector in most matters. John Adams, another advocate of public schooling, urged, "There should not be a district of one mile square, without a school in it, not founded by a charitable individual, but maintained at the expense of the people themselves."
In the centuries since, the courts have consistently affirmed the momentous status of public schools as a cornerstone of the American democratic project. In its vigorous defense of students' civil liberties, the Supreme Court has always held public schools to an particularly high standard precisely because they play a unique role in fostering citizens.
This role is not limited to civics instruction; public schools also provide students with crucial exposure to people of different backgrounds and perspectives. Americans have a closer relationship with the public-school system than with any other shared institution. But in the past few decades, we have allowed school system to grow more segregated, both racially and socioeconomically through privatization of such institutions.
Diane Ravich, an esteemed educational policy analyst, writes that "one of the greatest glories of the public school was its success in Americanizing immigrants." At their best, public schools did even more than that, integrating both immigrants and American-born students from a range of backgrounds into one citizenry. As an immigrant who moved to U.S without any prior exposure to its language or culture I can certainly affirm that my public education was a major factor that helped me to become a part of this society.
During times when our media preferences, political affiliations, and cultural tastes seem more disparate than ever, abandoning this amalgamating factor is a real threat to our future. And yet we seem to be headed in just that direction. The story of American public education has generally been one of continuing progress, as girls, children of color, and children with disabilities (among others) have redeemed their constitutional right to push through the schoolhouse gate.
Particularly, the courage that Ruby Nell Bridges displayed as the first black child to attend a white school continues to inspire people. During the process of racial desegregation in the 1960s, this six year-old activist became the first African-American student to integrate a white Southern elementary school, escorted to class by U.S. marshals due to violent mobs. It is noteworthy that the white school Ruby attended for her continued Civil Rights action was a public school. Out of all the school choices she had - charter school, magnet school, private school, or even homeschool - she chose a public school as a battleground to grant equitable education to everyone. This further emphasizes that public schools do not only foster youth to become responsible citizens or forge a common culture from a nation of immigrants; they also play a significant role at reducing inequalities in American society.
In conclusion, in this era of growing fragmentation, we urgently need a renewed commitment to the idea that public education is a worthy investment, one that pays dividends not only to individual families but to our society as a whole.
By Esther S Park
I find the issue of education especially personal, as public education was how I overcame my adversities, I grew up in a financially insecure, immigrant family in which I had many household responsibilities. I translated constantly for my parents, and I was expected to pay for my own financial expenses. However, as soon as I poured my energy into school work, I learned that knowledge was an equal playing field. It didn't matter who I was but only what I knew.
My free twelve years of schooling has allowed me to become a leader, serve others, and find my voice. I keep this constantly in mind, understanding I am beyond lucky to have had a public education. Without this education, I wouldn't be a Northwestern student. I would be a high school dropout, driving for Uber or working at a fast food restaurant like my parents who could not get a privilege to receive public education.
Because education is so important, students of all backgrounds should be able to attend school. Specifically, more focus should be on underprivileged school districts. Furthermore, it is essential to reinstate authority back to the teachers and students. This is to ensure that administrators spearhead education policy instead of uninformed government leaders. What is best for our students should no longer be overshadowed by politics. By listening to the people our legislation most affects, we can make better law.
According to The Atlantic, educators have criticized Trump administration's budget proposal detailing over $9 billion in education cuts, including slashes to funds for after-school programs that serve mostly low-income students. Moreover, these cuts came along with increased funding for school-privatization efforts such as school vouchers. United States Secretary of Education, Betsy DeVos has repeatedly gestured her support for school choice and privatization, as well as her disdain for public schools, describing them as a "dead end".
Such cynicism suggests there is no hope for public education. However, this mindset is demonstrably false and even dangerous. Current discussion repeatedly ignores public schools' victories by trivializing their civic role. Our public-education system is about much more than personal achievement; it is about preparing people to work together to advance not just themselves but the whole society. Unfortunately, the current debate's focus on individual rights and choices has distracted many politicians and policy makers from a key stakeholder: our nation as a whole.
The Founding Fathers understood that a healthy democracy required education. Thomas Jefferson, among other historical titans, believed that a functioning democracy required an educated citizenry. Importantly, he viewed education as a public good to be included in the "Articles of public care," despite his personal preference for the private sector in most matters. John Adams, another advocate of public schooling, urged, "There should not be a district of one mile square, without a school in it, not founded by a charitable individual, but maintained at the expense of the people themselves."
In the centuries since, the courts have consistently affirmed the momentous status of public schools as a cornerstone of the American democratic project. In its vigorous defense of students' civil liberties, the Supreme Court has always held public schools to an particularly high standard precisely because they play a unique role in fostering citizens.
This role is not limited to civics instruction; public schools also provide students with crucial exposure to people of different backgrounds and perspectives. Americans have a closer relationship with the public-school system than with any other shared institution. But in the past few decades, we have allowed school system to grow more segregated, both racially and socioeconomically through privatization of such institutions.
Diane Ravich, an esteemed educational policy analyst, writes that "one of the greatest glories of the public school was its success in Americanizing immigrants." At their best, public schools did even more than that, integrating both immigrants and American-born students from a range of backgrounds into one citizenry. As an immigrant who moved to U.S without any prior exposure to its language or culture I can certainly affirm that my public education was a major factor that helped me to become a part of this society.
During times when our media preferences, political affiliations, and cultural tastes seem more disparate than ever, abandoning this amalgamating factor is a real threat to our future. And yet we seem to be headed in just that direction. The story of American public education has generally been one of continuing progress, as girls, children of color, and children with disabilities (among others) have redeemed their constitutional right to push through the schoolhouse gate.
Particularly, the courage that Ruby Nell Bridges displayed as the first black child to attend a white school continues to inspire people. During the process of racial desegregation in the 1960s, this six year-old activist became the first African-American student to integrate a white Southern elementary school, escorted to class by U.S. marshals due to violent mobs. It is noteworthy that the white school Ruby attended for her continued Civil Rights action was a public school. Out of all the school choices she had - charter school, magnet school, private school, or even homeschool - she chose a public school as a battleground to grant equitable education to everyone. This further emphasizes that public schools do not only foster youth to become responsible citizens or forge a common culture from a nation of immigrants; they also play a significant role at reducing inequalities in American society.
In conclusion, in this era of growing fragmentation, we urgently need a renewed commitment to the idea that public education is a worthy investment, one that pays dividends not only to individual families but to our society as a whole.
By Esther S Park
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