Tariff Turmoil

In the popular 1986 comedy film Ferris Buehller’s Day Off, Buehller skips high school to spend a day in Chicago with his girlfriend and a pal. One of the funniest parts of the film is an economics teacher’s memorably monotonous lecture about the 1930 Smoot-Hawley Tariff Act.

There was nothing funny about the Smoot-Hawley tariffs. The economy was sinking into depression, and Senators Reed Smoot (pictured) and Willis Hawley, both Republicans, thought 15-18 percent tariffs on a select third of imports would protect U.S. industries from foreign competition. President Hoover signed the bill despite warnings from senior economists. 

The Smoot-Hawley tariffs didn’t cause the Great Depression but certainly made it worse. Within two years, U.S. imports fell by about 40 percent partly because unemployment meant many people didn’t have money to buy much but partly because tariffs made foreign goods more expensive. 

According to Douglas Irwin, perhaps America’s leading expert on trade policy during the Great Depression, the tariff was seen by other countries as a hostile decision that led to resentment and retaliatory tariffs on American goods. Trade with America declined, which seriously delayed a global economic recovery. Tariffs also made domestic goods more expensive because of reduced foreign competition. Generally, tariffs are taxes on consumers regardless of where goods are produced. 

Because the Smoot-Hawley tariffs were such a disaster, the U.S. has preferred free trade and rarely raised tariffs since 1930 until this year. While Smoot-Hawley was passed by Congress, this year’s tariffs were simply proclaimed by the president in response to an ill-defined “national emergency”—a power delegated to presidents by Congress in 1977 but never used until now. They have been repeatedly raised and lowered and even targeted at an Antarctic island inhabited only by penguins. 

Businesses here and abroad require economic stability to make long-term plans, but instability rules the White House. Two federal courts blocked most of Trump’s tariffs last week, followed shortly by another court which temporarily allowed them. Clearly, the future of those tariffs is unclear.

What is clear is the low opinion of tariffs by Warren Buffett, perhaps the most successful American investor of modern times: “Trade should not be a weapon…. I do think that the more prosperous the rest of the world becomes … the more prosperous we’ll become, and the safer we’ll feel, and your children will feel someday.” “[We should] trade with the rest of the world, and we should do what we do best, and they should do what they do best.”

Tariffs turn others, even loyal allies like the EU, Canada, and Mexico, against us. Because we’re the world’s richest country, others wonder if there’s no end to American greed. The obvious play is to retaliate by levying tariffs on U.S. goods; trade becomes a game where everyone loses. 

The president seems to believe that tariffs will bring revenue to the government to cover at least part of the cost of his $3.7 trillion “big, beautiful bill” to cut taxes, nearly all of it for the rich. Here’s a better idea: raise taxes significantly on incomes above half a million and even more on incomes in the top one percent.

A creative idea to raise revenue has been suggested by Joseph Ginocchio of Santa Fe, N.M., in a letter in the April 28 New Yorker. “Why not have corporations that benefit from government intellectual property [including university research funded by federal grants] pay royalties for using it? This would dramatically lighten the tax burden for individuals and small businesses.” Of course, corporations must be prohibited from passing on the cost of royalties to taxpayers, who already paid for the original research.

         Veritas

Veritas is Latin for “Truth,” what universities strive to pass on to their students along with the habits of mind that allow students to question what they learn and, through research, perhaps add to what we know. Veritas is the motto of Harvard and several other universities.

When World War II ended, President Truman’s science advisor, MIT’s Vannevar Bush, issued a report, “Science, the Endless Frontier,” calling basic research “the pacemaker of technological progress.” Bush had seen what wartime government-academia collaboration could accomplish in nuclear energy, radar, and antibiotics. Universities had the research expertise but not the funds to tackle pressing national issues in healthcare, energy, and others, so Bush recommended the government provide competitive grants to universities through a National Science Foundation (NSF) and expanded National Institutes of Health (NIH). 

The NIH is the world’s premier biomedical research agency. Universities have used NIH grants to develop treatments and cures for heart disease, cancer, stroke, and other ills. Between 1971 and 2011, NIH funding developed 153 new FDA-approved drugs and vaccines. 

In 1988, the Department of Energy and the NIH invested $3 billion to launch the global Human Genome Project which has led to preventions and cures for a long list of diseases. In 2019, $3.3 billion in federal funds went to genomics research while in the same year genomics businesses employed 850,000 people in the U.S. who paid $5.2 billion in federal taxes. It’s been estimated that every $1 of NIH grants returns $2.46 in health and economic benefits. That’s a remarkable return on investment.

The NSF has funded about 25 percent of non-health university research in science and engineering. A local example is a 2024 grant of $26 million to KU as lead institution with partner universities Notre Dame and four others for research to develop climate-friendly refrigeration technology. Federal money pays for nuclear fusion research that could help power the future. Federal money made possible the internet and today’s trillion-dollar digital economy with its millions of jobs.

Now, however, the Trump Administration, desperate to reduce the federal budget to justify extending large tax cuts for the richest Americans, is canceling billions in research grants to Harvard and other universities across the country. The budget cutters claim to want an efficient government but haven’t done their homework. They seem not to know that university research is a powerful economic engine creating jobs, tax revenue, and countless public benefits. Last fall, The Economist called America’s economy “the envy of the world.” Our universities helped make it so, so why kill the goose that lays golden eggs?

Here's why: Since the 1930s, some conservatives have grown suspicious of universities as hotbeds of “radicalism.” But universities are marketplaces of ideas where students are free to choose from mankind’s accumulated knowledge. If students tend to adopt convictions that conservatives dislike, perhaps conservatives aren’t making their case persuasively or perhaps their convictions are simply unpopular. Or both.

          Mr. Trump is attempting to blackmail universities by demanding control over curricula, admissions, and faculty hiring in return for reinstating grants. When Harvard sued, Trump threatened to cancel its non-profit tax exemption (which he likely hasn’t the power to do). Now, dozens of our greatest universities, public and private, have agreed to develop a common strategy to resist government threats to academic freedom. The most reliable veritas comes from rigorous scholarship, not from the personal opinions of any government official. America’s universities are the jewel in the crown. Let’s preserve and protect them.    

         Never Forget

Hundreds of convicted criminals who attacked the U.S. Capitol and Congress on January 6, 2021, have been pardoned or their sentences commuted. These 1,300 or so rioters are now free to go where they want and do what they want. 

What the rioters wanted on January 6 was to prevent the certification of Joe Biden as president-elect even though he won election by a margin of seven million votes. They failed in that but succeeded in permanently staining the history of the United States and threatening our democracy itself. Like December 7, 1941, it was “a day that will live in infamy.” 

Told by the losing candidate that “if you don’t fight like hell, you’re not going to have a country anymore,” some of the rioters were ordinary citizens who chose to join the mob and march on the Capitol but didn’t participate in attacks on the police or other violence. Found guilty by judges or juries of trespassing or other minor crimes, they received light sentences. 

Others, however, were thugs, many with weapons and criminal records: far-right extremists and neo-Nazi white supremacists. They fought the police then broke into the building and desecrated the People’s House—our House—threatening to harm members of Congress and Vice-President Pence. These thugs were convicted of major crimes ranging from assaulting officers to conspiracy to seditious conspiracy. During the attack, 174 police officers were injured, and one killed; four other officers committed suicide in the following seven months.

The week after being freed, one of the former convicts was pulled over by an Indiana Highway Patrol officer for a traffic violation, had a gun, and was shot and killed by the officer. The same week, another was arrested on a federal gun charge related to domestic violence and resisting arrest. A third rioter is on the run from Texas police because of an arrest warrant for online solicitation of a minor. Yet another freed rioter said that he plans to buy “some m*********** guns.” Great. Just what we need.

There is a scheme afoot to rewrite our history making the attackers appear to be mostly a group of patriots taking a Capitol tour. The pardons and commutations were a first step followed last week by the firing of senior FBI and Justice Department officials involved in the investigations and prosecutions—officials who were just doing the jobs assigned to them: go after the lawbreakers we all saw on TV. Members of the Congressional January 6 Committee who investigated the attack may be the next targets. 

Congressional Republicans have already “forgotten” what the mob was up to and who put them up to it. Brendon Baliou, an experienced Justice Department lawyer who recently resigned, wrote that in 2021, GOP Representative Elise Stefanik said the rioters “should be prosecuted to the fullest extent of the law.” Later, she labelled them “hostages” and has now been chosen our new ambassador to the U.N.; former GOP Senator Kelly Loeffler said, “the violence, the lawlessness and siege of the halls of Congress are abhorrent.” Soon, though, she shifted to calling the House investigation a “sham” and that any indictment “should be dismissed out of hand.” She has been nominated to head the Small Business Administration.

Mr. Baliou emphasized that the rest of us “must keep the horrors of Jan. 6 from being forgotten. Memorialize the day…. Keep it alive in your conversations. Doing so matters. For in a time when many politicians’ careers depend on forgetting, memory itself is an act of resistance.”

If we fail to remember, we won’t have President Lincoln’s government “of the People, by the People, and for the People” anymore. Never forget.

Capitalism for All

Imagine you have a pile of money, and you’d like to have a bigger pile. You learn that the Widget Company has invented a better widget, so you buy shares of Widget stock. The company uses the capital you’ve invested to produce the new widgets. They sell like hot cakes, so more workers are hired, profits roll in, and the value of the stock you own rises. You and the company are richer, more people have jobs, and consumers have better widgets. This is capitalism in action, and so far, so good.

Now imagine that because you’re a big investor who knows how to make a buck, you’re elected to the Widget Company board. You now have a voice in decisions including what to do with the company’s growing profits. Raise your workers’ pay? Upgrade your factory with better machinery? Buy out a competitor so your company will have more of the market? Give larger dividends to investors, including yourself? These are tough decisions, but that’s why you and the company executives make the big bucks.

What to do? You’re a capitalist, after all, so you naturally believe that investors who’ve risked their capital on the company are entitled to first dibs on the profits. They, and you, are in it for the money, so stock dividends and high share prices are top priorities. 

To keep investors happy, you think about how to increase company profits by reducing costs and/or increasing productivity. How about automation? Robots are expensive, but they’ll never want raises, never organize a union to get them (except in science fiction when robots finally become smart enough), and can work 24/7 without tiring. Automation is often a no-brainer.

Other ways to reduce costs include avoiding those tiresome government regulations that require your factory to not foul the air and water and to be a safe workplace for employees, and to avoid taxes in every legal way possible. To dodge these obligations, the company pays lobbyists and contributes to politicians who favor deregulation, restrictions on unions, and lower corporate taxes (and, not coincidentally, lower taxes on wealthy people like yourself). 

Now, forget your imaginary pile of money and consider where capitalism has taken us in this tale. It’s no longer “so far, so good.” It’s too far and too bad for workers who get last dibs on company profits and for all taxpayers who have to make up for what corporations and the rich don’t pay (and some pay no income taxes at all).

Perhaps worse in the long run, the conservative Supreme Court ruled, in 2010, that, as Mitt Romney put it, “corporations are people” entitled to make unlimited political contributions. This gives the small corporate class enormous political clout. It’s extreme capitalism—a beautiful system if you’re one of those few but a deck stacked against you if you aren’t. 

Capitalism is a great engine of prosperity, but without strict regulation and a progressive tax structure, it’s an engine with no train. People who help make the everyday economy work—nurses, truckers, teachers, builders—are left at the station. A healthy economy is a balancing act between private profits and the public good. Today, our economy is unbalanced and unhealthy.

Here’s the cure: We want wealth to flow to the many, not just to the few, so channel excessive wealth to essential public services like education, healthcare, and infrastructure. That’s how we created Social Security, public schools, Medicare, and the original G.I. Bill. It’s how we can provide affordable college/tech schools and universal healthcare. Also, ensure workers have a level playing field by protecting their right to organize and to have significant representation on corporate boards as many other rich capitalist countries do. 

The greedy will no doubt call this cure—or any cure—“socialism.” I call it having a social conscience. It’s capitalism that works for We the People.

When Schools Went Wrong

Sherlock Holmes called public schools “Lighthouses, my boy! Beacons of the future! Capsules, with hundreds of bright little seeds in each, out of which will spring the wiser, better England of the future.” Americans have cherished similar hopes but have too often been disappointed, leading over the past century to a series of school reforms that shaped today’s schools—for better and for worse.

Historians trace much of the “worse” to a small red pamphlet published in 1918, Cardinal Principles of Secondary Education, that called for replacing, for most students, the traditional European liberal arts and sciences curriculum with seven student goals: health, command of fundamental processes, worthy home membership, vocation, citizenship, worthy use of leisure, and ethical character.

The reform’s purpose was to keep more youngsters in school by making it easier and more immediately practical. Academic subjects like history, biology, and algebra would remain as a parallel track for the fewer than one in ten who were college-bound. For the majority, social studies replaced history, geography, economics, and government; general science replaced biology, chemistry, and physics; and practical math and language arts covered “fundamental processes.”

The Cardinal Principles was composed by a committee of the National Education Association chaired by a manual training teacher and including administrators and a professor of education. The authors were driven by the need to assimilate millions of immigrant children, many knowing no English and with little experience of democracy, by the demand for industrial workers, by severe health and social problems including the deadliest influenza epidemic of modern times, and by fear of political unrest in the wake of the Great War. The business community applauded the emphasis on vocational training and lobbied states to adopt the new goals. Over the next decade, they became the norm in much of the country.

The shift from mastery of academic subjects to what reformers saw as meeting children’s “needs” was politically popular. Teaching kids hygiene, marketable skills, and citizenship was hard to criticize, especially when it made success in school easier. Parents liked their children succeeding, and politicians and business leaders liked that such studies made it easier—and cheaper—to train and hire teachers.

The academic community opposed the Cardinal Principles, so much so that schools of education became intellectually divorced from the universities of which they were a part. Teachers became increasingly isolated from scholarship in arts and sciences disciplines. Thousands of experienced teachers resisted the reform, and many were fired.

Making matters worse, the trauma of the Great War led America to adopt an isolationist attitude through the 1920s and 30s. Why bother with the rest of the world and its troubles when the U.S. could withdraw behind its moat of oceans and rely on its own plentiful resources? This further distanced schools from fertile centers of serious thought in Europe and elsewhere. One result that troubles us still was that many fewer students learned foreign languages.

While other countries were improving schools with added rigor and sharper focus on academic disciplines, America chose to ask less of its students and teachers. This continued through the 1950s when complaints about semi-literate graduates and the shock of Sputnik prompted a new round of reforms with increased academic content.

Cardinal Principles had some positive results, recognizing the importance of motivation and of children’s developmental stages among them. But its low expectations and short-term goals in place of deep knowledge and disciplined thinking poisoned American schools for decades. To some degree, it still does. The Sputnik reforms of the 1960s, the Nation at Risk reforms of the 80s and 90s, No Child Left Behind, and now the Common Core have all been attempts to right the wrong course our schools took after 1918. History matters.

Schools Travel a Bumpy Road

As described in the previous column, American schools were harmed for decades by low student expectations and shallow curriculum prompted by the 1918 booklet Cardinal Principles of Secondary Education. Recovery began in the 1950s, thanks partly to World War II veterans who had noticed a higher level of education common in Europe and whose own expectations had been raised by G.I. Bill college study. Too, a best-selling book, Why Johnny Can’t Read, helped focus the nation’s attention on the troubled schools.

But just when a drive to enhance academic offerings was gathering steam, schools were overwhelmed by the postwar baby boom. Thousands of new schools were hurriedly built and new teachers hurriedly trained. States and school districts had all they could handle coping with expansion; academic quality took a back seat and fewer than two-thirds of students finished high school.

The 1957 launch of the Soviet Sputnik I satellite shocked America. The Eisenhower administration and Congress pumped millions into upgrading curricula, classroom equipment, and teacher training, especially in math and the sciences. New textbooks were written, including a biology text so good that updated versions are still used today. History and other subjects were emphasized as part of what came to be called “Sputnik reforms.”

With The Sixties came two of the schools’ greatest successes: supporting national efforts to ensure minority rights and women’s rights. Schools came to be judged by their “holding power” and graduation rates improved significantly. As desirable careers beyond teaching, nursing, and secretarial work opened to educated women, schools did their part. When I graduated in 1961, able girls interested in healthcare were counseled into nursing; when I returned as a teacher eight years later, many were aiming to become physicians.

Ironically, these successes hurt schools. A well-intentioned desire to keep kids in school led to fragmented curriculum in the name of “relevance” and to “social promotion” regardless of learning, both of which discredited schools in the eyes of the public and especially of employers. Financially attractive career opportunities meant the loss to teaching of many of America’s brightest women who had long formed the backbone of school faculties.

Soon, falling test scores (partly due to students from deeper in the talent pool taking ACT and SAT tests) and the post-Watergate suspicion of all things government led to another wave of school criticism. A 1983 blue-ribbon commission report, A Nation at Risk, asserted "If an unfriendly foreign power had attempted to impose on America the mediocre educational performance that exists today, we might well have viewed it as an act of war."

The authors called for a longer school year on a par with other developed nations, more academic course requirements, higher student expectations, making teaching a more attractive career, and much else. A Nation at Risk became the most influential call for reform since 1918 and led to needed improvements, though mostly the least expensive.

The No Child Left Behind law of 2001 wasn’t a “reform” as much as an effort to make schools accountable by publicizing test scores in basic skills. Funding was inadequate and one lasting effect was to focus attention on math and language skills at the expense of other learning. Relentless testing soon made it unpopular.

Now comes Common Core, a promising effort begun by nearly all state governors to raise achievement nationwide to global standards. It’s a complex project criticized by many educators for having too much input from for-profit corporations, but promising nonetheless.

Sadly, the Kansas Senate recently voted to not fund Common Core implementation. Any hint of nationwide standards offends conservative ideology, for many senators a higher priority than student learning. I suspect that if Eisenhower’s Interstates were proposed today, Kansas conservatives would object: roads, like schools, convey outside ideas and tie the state to the larger world. Risky business, no? No.

Spying on Schools

Searching for the secrets of high-achieving schools, and aware that inside information is hard to come by, journalist Amanda Ripley (Time, The Atlantic) recruited spies—American exchange students from schools in Oklahoma, Minnesota, and Pennsylvania—who attended ordinary high schools in Finland, South Korea, and Poland, countries where students do exceptionally well on international measures of learning. The result is Ripley’s recent book The Smartest Kids in the World and How They Got That Way (Simon and Schuster, 2013).

Much writing about schooling has adult political agendas that detract from achievement issues. Ripley’s book is an exception: a secret agent story where the spies—Kim, Eric, and Tom—are normal teenagers alert to the attitudes and behaviors of their overseas classmates and refreshingly open to comparing their exchange experiences with those of their hometown schools.

Kim’s story is especially compelling. A bright girl from Oklahoma, she yearned for a bigger, more promising world. Her local school had limited curricula, low expectations, a vague focus on academics, and little encouragement from the state legislature. Three times, legislators mandated student achievement standards and tests—routine in high-achieving countries—and three times, legislators backed off at the last minute fearing criticism of poor test scores.

Kim’s school district was one of 530 in Oklahoma and, with only four schools, had ten district administrators and directors as well as principals. Ripley calls this “hyperlocal control, hardwired for inefficiency.” Costly, too.

Kim’s modern high school was not hardwired for scholarship. Its “jewel” was the basketball court, not the library or science labs. Parents were involved in booster clubs and the PTA, but in little related to academic achievement. The principal told Ripley his biggest problem was “expectations.” He said they were “too high.” Really? Half the graduates went on to Oklahoma’s public colleges, but more than half of those were placed in remedial classes.

Kim, Eric, and Tom studied overseas in 2011-2012. Through thousands of emails and phone calls as well as on-site visits, Ripley picked the brains of her spies and their friends and met with school officials and testing experts here and abroad. She found some things much the same here and there, including electronic youth culture. Schools, though, were dramatically different.

The most obvious difference, in every country, was a total focus on academic learning. Schools had no other purpose. Sports and other activities were mostly outside school, sponsored by community organizations.

The spies found less testing overseas, particularly in Finland, but the major nationwide tests were serious business. Students studied for months, and scores could determine their future learning and career opportunities. In South Korea, airports rescheduled flights to avoid jet noise near schools on test days.

Teachers in host countries were drawn from the top of the talent pool, rigorously trained (often at public expense) and influential. Teaching was a prestigious profession.

In no subject were differences as clear as in math. Math is critical as a system of logic that trains young minds to think straight, not to mention as the key to the sciences and to desirable careers. As early as third grade, American kids have easier math assignments then lose time every fall reviewing what they’ve lost over their long summer breaks. More than other subjects, math builds on what is learned before, so early weakness compounds with time.

The overseas students overwhelmingly attributed success to hard work, not to inbred talent as  Americans tend to believe.

Host schools used little technology compared to schools here. No interactive white boards, no “clickers,” often no calculators.  

The New York Times calls Ripley’s a “masterly book,” but wonders if it “can also generate the will to make changes.” It can only if concerned citizens read it and act on it.

Teachers: Glamour Everlasting

Describing Our Miss Brooks, the popular 1950s TV program starring Eve Arden as a witty, sarcastic English teacher beloved by her students, The Kansas City Star recently noted that Arden portrayed “an intelligent woman in an unglamorous profession.” I suppose glamour, like beauty, is in the eye of the beholder. What could be more glamorous than passing on the wonders of nature and civilization to the next generation while helping them learn to think rigorously and live well, thereby strengthening our country and helping ensure a better future?

I mention this because of the importance of improving our schools. Recent studies of successful school systems around the world confirm what we’ve known all along but haven’t acted on: that teaching in those places is viewed as a glamorous profession or, if not glamorous, certainly prestigious. In the high-achieving countries of East Asia and Europe, teachers enjoy a status similar to that of physicians and judges here. The contrast with the American tradition is sharp, and the negative impact on our children clear.

In How the World’s Best-Performing School Systems Come Out on Top, a two-year study of twenty-five systems including ten of the best, McKinsey & Company, the gold standard of global management consultants, concluded that most attempts to improve low-performing systems—restructuring, reducing class sizes, charter schools, and the like—make little or no difference. What makes a difference is teachers: “The quality of an education system cannot exceed the quality of its teachers.”

All the best-performing systems select teachers from the top third or higher of college students: the top 5 percent in South Korea, 10 percent in Finland, 30 percent in Singapore and others. Most do this by limiting the number of teacher-training slots and admitting only those who score well on tests of literacy, numeracy, and problem solving, and who demonstrate outstanding communications and interpersonal skills. (In Finland, only one in ten applicants is admitted.) Once selected, students receive intensive training under master teachers, often at public expense including paid internships.

Such careful selection and early rewards elevates respect for teaching and helps attract the best applicants. Top countries also sweeten the pot by paying beginning teachers roughly equal to the average of other demanding fields. In addition, top-performing systems typically have strong teacher unions with a major voice in school standards and operations.

In America, prospective teachers tend to come from the lowest third of college students. Admission standards to teacher-training programs are generally low, tuition is high, internships are short and unpaid, and beginning salaries below average. The inevitable result is the Star’s “unglamorous profession” where thousands who train to teach never do and nearly half of those who do teach leave within five years. Aside from the waste of public resources and of these graduates’ investments, the public perception—and children’s perception—is that teaching—and, therefore, learning—isn’t important; it’s seen as a job for those with few other options.

Compounding the error, politicians in some states have been cutting school resources, attacking teacher unions, and insisting that teachers be accountable for better results while paying no attention to the compelling evidence for how to get those results. We need good teachers, and we need good politicians to create a system to attract more of them.

February 3, 2012