Education is not ordinarily thought to be in the purview of a Federal Reserve chairman. So it's striking when Alan Greenspan in his memoir, "The Age of Turbulence," raises the subject.
"Our primary and secondary education system," he writes, "is deeply deficient in providing homegrown talent to operate our increasingly complex infrastructure." The result: "Too many of our students languish at too low a level of skill upon graduation, adding to the supply of lesser-skilled labor in the face of an apparently declining demand."
So if you're concerned about widening disparities in income, Greenspan tells readers attracted to his book by its publicists' promise of criticism of George W. Bush, then what you need to do is to "harness better the forces of competition" in educating kids.
As Greenspan concedes, we have done that to some extent. Governors Republican and Democratic have worked to make public schools more accountable, charter schools provide some needed competition, and the bipartisan No Child Left Behind Act has further prodded states and localities in those directions. But except for a few cities, notably Milwaukee and Cleveland, we have not had school choice programs with vouchers allowing parents to choose private as well as public schools.
Vouchers are adamantly opposed by the teacher unions, which spent millions persuading Utah voters last week to repeal a voucher law passed by the legislature. No one can say for sure how much vouchers would improve education. But they are "forces of competition," as Greenspan puts it, which we're almost entirely prevented from harnessing because of the power of teacher unions -- the power, more specifically, that they wield in the Democratic Party.
I was reminded of this by a recent exchange on theatlantic.com between libertarian blogger Megan McArdle and liberal bloggers Matt Yglesias and Kevin Drum. These are three of the most intellectually interesting and usually independent-minded young liberal bloggers, but on vouchers they advanced one lame argument after another. On this issue, they were playing team ball.
The teacher unions are an incredibly important source of money and volunteers for the Democratic Party -- about one in 10 delegates at recent Democratic national conventions have been teacher union members or their spouses. When they snap their fingers, the Democrats jump. Vouchers threaten to dry up dues money, and that is that.
Teacher unions are not the only public employee unions important to the Democrats -- nearly half the union members in the country are public employees. And you can see their power exerted as well in House Ways and Means Chairman Charles Rangel's tax reform proposal.
Rangel, who deserves credit for raising the issue of broad tax changes, proposes vast tax increases in order to eliminate the Alternative Minimum Tax. The AMT, originally designed to make sure that a few millionaires could not avoid paying income tax, has never been indexed for inflation, and threatens to engulf 20 million taxpayers next year unless Congress passes another one-year "patch" or, as Rangel wants, abolishes it.
The AMT has no deduction for state and local taxes, and tends to hit high earners in high-tax states like Massachusetts, Connecticut, New York, New Jersey, Maryland and California -- heavily Democratic states, you'll notice. These states tend to have highly paid unionized public employees, and their union leaders surely understand that the AMT threatens to create political pressure to lower state and local taxes and therefore spending. If voters can't deduct their state and local taxes, their tax burden will go way up, and they may start a tax revolt. Better not let that happen! So eliminating the AMT is an imperative for Democrats.
Looking ahead to future fiscal burdens, many people understand that Social Security, Medicare and Medicaid threaten to consume an ever-larger share of the economy over the years. But so do state and local governments if public employee unions get their way. And to get it, they rely on taxpayer's funds -- all their dues income comes from the public fisc.
Their goals are to increase pay, which runs counter to taxpayers' interests, and to minimize accountability, which runs counter to citizens'. Republicans are not their reliable adversaries -- union leaders get cozy with Republican legislators when they can, by letting them know they won't oppose them. But the Democrats are, with some few exceptions, their humble obedient servants -- from the young liberal bloggers up to the chairman of the House Ways and Means Committee.
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