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As School Funds are Slashed, Media Obsesses Over Bankers’ Woes
by Randy Shaw‚
Mar. 25‚ 2008
Based on recent media accounts, it seems that a lot of bankers and hedge fund managers need our help. These poor folks have seen their often multi-million dollar annual incomes slashed due to the nationwide credit crunch, and it is said that the “trickle down” impact of their plight on regular working stiffs could be huge. As Citicorps to Bear Stearns to Countrywide compete for front-page headlines, left to isolated local news stories is the nationwide slashing of public education funding. The “trickle down” impact of failing to properly educate children -- increased incarceration, a growing class-based achievement gap, and the exodus of skilled teachers from the profession -- has gone largely unreported. And this is particularly true in California, where schools face the deepest cuts while Governor Schwarzenegger travels the state vowing not to preserve school funding by raising taxes.
After reading the New York Times this past weekend, it seems we should be organizing bake sales to raise money for those poor bankers now facing tough times. Apparently, the plight of these soon to be unemployed millionaires is everybody’s problem, which is the official explanation for the government bailout of Bear Stearns.
Historians will one day look at this bailout, which progressives contrasted with the government’s failure to prevent thousands from losing their homes due to foreclosure, as the perfect sign of our times. The insistence that the entire U.S. and even the global economy hinged on government subsidizing the reckless rich is the Internet Age equivalent of the classic line from the 1950’s that what is good for General Motors is good for America.
The key difference, of course, is that General Motors’ profits also benefited their unionized workforce. In contrast, the primary impact of Bear Stearns and other once cash-rich but now troubled or failing financial institutions has been to inflate the cost of housing and everything else in New York City and its environs.
While the United States Treasury throws a publicly funded life raft to millionaires, the nation’s economic policymakers ignore the growing school funding crisis. Teacher layoff notices are being handed out, plans are being made for increasing class size, and school districts across the nation are desperately seeking money-saving strategies.
But based on media coverage, one would not think that there is any impact to school cuts. The school funding crisis fits the category of “what else is new,” while the unexpected financial crisis at institutions like Bear Stearns constitutes “news.”
Trickle-down rhetoric aside, most Americans are negatively impacted by school funding cuts than by layoffs of hedge fund managers. But the latter is based in the media capital of New York City, involves an economic class sought by advertisers, and there is an entire financial services media industry to endlessly analyze such events.
The only time the school crisis gets attention is when parents, teachers and public officials hold media events. And these become one-day news stories, most of which assess no specific blame for the shortfall.
If California Governor Arnold Schwarzenegger had mismanaged a hedge fund, bank, or lending company as he has the finances of the state, his incompetence would be daily highlighted in television news, newspapers and magazines. Yet whereas the management of troubled financial institutions typically only hurt investors, the Governor is potentially harming the very futures of millions of California children.
And yet the media looks the other way as the Governor brags to the Howard Jarvis Taxpayers Association that he will not raise taxes, even if necessary to fund education.
The ultimate irony of the media’s linking of the fortunes of the rich to the greater good, and its downplaying of the school funding crisis, is that the failures of Bear Stearns and others sends exactly the opposite message. Hedge fund profits, taxed at a ridiculously low 15%, did little to help schools in their heyday, while their backing of reckless mortgage investments contributed to the current education crisis.
In other words, what has been good for the rich has not been good for the majority of schoolchildren, or for the majority of the nation. Too bad the media is too preoccupied with possible declining real estate values in New York City to make this point.
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May 9, 2008
