Tax Cuts for Teachers (Jan. 11, 2009)

“You see, even before the current financial crisis, we were already in a deep competitive hole—a long period in which too many people were making money from money, or money from flipping houses or burgers, and too few people were making money by making new stuff, with hard-earned science, math, biology and engineering skills.” Yes, there were probably too many people in finance, and flipping houses crashed once house prices started going down. But what does Friedman have against flipping burgers? These are entry level, high turnover, minimum wage jobs for high school students and recent grads. Should they be denied jobs? They’re producing something that people—worldwide—want to buy and eat. McDonald’s is the most successful restaurant chain—this is a product of the free market. (Yes, one can argue about the healthiness of their food, but a lot of their demand has shifted to chicken from burgers.) While it’s clever on a superficial level to write “flipping houses or burgers,” it makes no sense. As far as “too few people were making new stuff with hard-earned science, math, biology, and engineering skills,” this is an assertion totally unsupported with any figures. Is he alluding to the fact that the majority of graduate students in the sciences and engineering come from other countries? If so, about 65,000 H-1B visas are given to foreign math and science grads every year, though Friedman would have to fight the nativists like Lou Dobbs to keep this going. If he’s saying more Americans should graduate with science and engineering degrees, he should state this, explain why it’s not happening, and what he proposed to do to increase the number. He would need to explain why the free market doesn’t work.

“[O]ur stimulus needs to be both big and smart…It needs to be able to produce…more Google-ready jobs and Windows-ready and knowledge-ready workers.” What does Google-ready or Windows-ready mean? Is this supposed to mean high-tech jobs? (Since Windows is losing market share to Linux and Macintosh, this may not be the best terminology.) How many more jobs? Is the free market (graduates’ choice of career, colleges and universities, firms in all industries that employ knowledge workers, and the venture capital industry) failing once again? How much money should the government spend? Friedman goes on to write “[i]f we spend $1 trillion on a stimulus and just get better highways and bridges—and not a new Google, Apple, Intel or Microsoft—your kids will thank you for making it so much easier for them to commute to the unemployment office or mediocre jobs.” How should they spend it— scholarships, tax incentives, etc? Should the government get into the venture capital business? By the way, there are plenty of good jobs that aren’t high tech. As far as “knowledge-ready,” I presume this also is supposed to mean high-tech. But if we really want the best economy, many workers besides those with high-tech jobs, including blue collar workers, have knowledge that can improve products and services. The Japanese practice “kaizen,” according to Wikipedia, means “[w]hen applied to the workplace, Kaizen activities continually improve all functions of a business, from manufacturing to management and from the CEO to the assembly line workers.”
“Maybe rather than just giving everyone a quick $1,500 to hit the mall to buy flat-screen TVs imported from China, or creating those all-important green-collar jobs for low-skilled workers—we should also give everyone who is academically eligible and willing a quick $5,000 to go back to school.” Five thousand dollars is virtually nothing compared to what college costs; it will encourage few to go back to school. And I thought Friedman wanted to encourage technology jobs—if so, why subsidize every field when you could, with the same total dollars, give a decent subsidy to those who major in technology? But, again, is this fair?

“My wife teaches public school in Montgomery County, Md., where more and more teachers can’t afford to buy homes near the schools where they teach…” Really? Aren’t home prices declining? Of course, getting a mortgage isn’t easy, especially as house prices are going down. “One of the smartest stimulus moves we could make would be to eliminate federal income taxes on all public schoolteachers so more talented people would choose these careers.” Is this fair to everyone else, especially the working poor? And isn’t this a slippery slope—won’t other professions want tax-free income? And if this were enacted, financially squeezed school districts all over the country would try to cut the salaries of teachers on the ground that they don’t need nearly as much pretax income. Friedman shows his ignorance of economics. Wouldn’t it make more sense to expand programs like Teach for America? “I’d also double the salaries of highly qualified math and science teachers…” Again, is this fair? Why double? Friedman should make the case for merit pay, but this is a controversial topic. And who’s going to pay more for teachers? How about encouraging students to pursue lower-paying careers by allowing them to pay off their school loans over a longer period of time? “… [S]taple green cards to the diplomas of foreign students who graduate in math or science—instead of subsidizing their educations and then sending them home…” As mentioned, there is a program to do this, called H-1B visas. But the quota is decided by a political process—the number is not up to Friedman. And nativists are against H-1B visas.

“A student who normally would not be interested in science but gets stimulated by a better teacher or more exposure to a lab, or a scientist who gets the funding for new research, is potentially the next Steve Jobs or Bill Gates.” Presumably, if there are more good science teachers, more students will be inspired to study science, which means that there could be more Steve Jobs or Bill Gates. But these two are one-in-a-million (probably much less frequent) geniuses. I partially agree with Friedman’s earlier proposal that [he]’d “offer full scholarships to needy students who want to go to a public university or community college for the next four years.” But why exclude them from private colleges? Unfortunately, needy students tend to have had poor educations prior to college. As a society, we should not allow this, but this is an enormously complex problem that needs to be addressed.