Kasich on economic realities

October 25, 2016 by  
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In an Business Insider interview Ohio Governor Johh Kasich did something almost no politician does today. He clearly states that we can’t go back to a factory-driven economy. Business Insiders writes:

But the notion that states such as Ohio are dependent on manufacturing jobs returning is one with which he vehemently disagrees.

“Manufacturing is still very important to us, but we are much more diversified state,” he said. “And furthermore, anybody that says the steel mills are coming back to Youngstown is not telling the truth. They’re not coming back. You could have some aspects of advanced manufacturing appear. But if you look even at Pittsburgh, where I grew up, you’ve now replaced steel jobs with technology jobs, and they pay better.”

“So, I know that, you know, leaders have to lead,” Kasich continued. “I don’t read polls to decide what I’m going to do. But for the best interest of the people of our state, having a big mix of technology, healthcare, IT, financial services, and manufacturing is the ticket. To put all of your eggs in one basket is silly. We did that for a long time and I don’t think it’s very smart.”

Exactly! Yes it would be better for lots of workers if we could recreate the high paid factory-based economy of decades ago. But we can’t. In part because of globalization, but increasingly due to smart machines doing the work that workers used to. And smarter and smarter machines are going to continuously do more and more of the work required to make products.

So as Kasich states the middle class jobs of today, and even more so tomorrow, are going to be in knowledge-based industries. One can add education and professionals services to his list of technology, healthcare, IT, and financial services.

The lesson we need to  learn, and align with, is that what made us prosperous in the past, won’t in the future. But learning and acting on that lesson is made harder when politicians, of both parties, campaign on bringing back the old factory-based economy. No matter what they promise and no matter what their agenda is manufacturing as a proportion of the American workforce will continue to structurally decline as it has for a half century.

Michigan needs politicians from both parties to have the courage to deliver a message similar to Kasich. Clearly denying the reality that lots of high-paid factory jobs that anchored Michigan’s 20th Century prosperity are not coming back is what many want to hear. But its what we need to hear. So that Michiganders and the state can get on with the difficult transition to a knowledge-driven economy. Its the only path back to a high-prosperity Michigan.


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Michigan State Spartans vs Maryland Turtles

October 22, 2016 by  
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#27 MSU 2-4/0-3. Maryland 4-2/1-2
Sagarin Ratings: MSU #61, Maryland, #71

Saturday, October 22, 2016.
7:30 pm ET.
Capital One Field at Maryland Stadium, College Park, Maryland
Weather: 51 degrees, windy
TV: BTN, should only be on the radio

Line: MSU by 3 (really?)

First - figure out the name to the stadium.  Byrd Stadium?  Capital One Field?  Maryland Stadium?  Gimme a break.

Second - as my buddy Spaz just put it "How much of the Sparty implosion is the delayed impact of Narduzzi leaving?"  Well, no shit.  This season has been an absolute turd on defense; no pass rush and a decimated linebacking corps = no defense.  These guys are so out of position, it's pathetic.

Third, last week, despite the unfortunate events I went through, I did note that coach D put Tyler O'Connor back into the game in the second half.  Why?  Whenever a team throws for 400+ yards, as MSU did vs Northwestern, it means you lose.  Only 51 yards on the ground?  What???  BUT, GIVING UP 54 POINTS IS PATHETIC.  TO NORTHWESTERN?  MSU STINKS.  Happy Homecoming.

This week, we are in College Park, Maryland.  Lovely.  I didn't know I was traveling to white-trash Melvindale.

Lovely College Park, Maryland.

They moved this gem from Dearborn Heights or Melvindale to College Park

Enough. Time for predictions from the Peanut Barrel:

ES - MSU 38, Maryland 31.
Skooz - MSU 41-37
Brock - Mary 66-15
Joe  - MSU 23-17

Lessons from the ITT Tech collapse

October 21, 2016 by  
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CEO of the Michigan Association of State Universities Daniel Hurley’s blog The Closure of ITT Tech and the Crash-Landing of the For-Profit College Industry is worth checking out. It provides a good overview of what led to the closing and more broadly the systemic problems of for-profit colleges, particularly those which focus on occupation training in so-called mid-skill occupations.

The simple story is too many students at for-profit trade schools not completing or completing and getting low-paying jobs. And because the schools have high tuition far too many students end up with college loans that they cannot repay or do repay and end up not able to pay for life’s necessities. Not good for students, taxpayers or the economy.

This is consistent with the findings Susan Dynarksi, professor of education, public policy and economics at the University of Michigan, reported on in the New York Times. Dynarski writes:

the data suggests that many popular perceptions of student debt are incorrect. The huge run-up in loans and the subsequent spike in defaults have not been driven by $100,000 debts incurred by students at expensive private colleges like N.Y.U.

They are driven by $8,000 loans at for-profit colleges and, to a lesser extent, community colleges. Borrowing for both of these has become far more common in recent years. Mr. Looney and Mr. Yannelis estimate that 75 percent of the increase in default between 2004 and 2011 can be explained by the surge in the number of borrowers at those institutions.

It’s not hard to see why. The traditional borrowers from four-year colleges tend to earn good salaries out of college and pay back their loans, even during the recent years of economic weakness. … Borrowers at for-profit and community colleges, by contrast, earn low salaries — a median of about $22,000 for those exiting school in 2010 — and have had difficulty paying their loans.

The terrific book Coming of Age in the Other America puts a human face on who has been most harmed by for-profit trade schools. The book follows over a decade a group of mainly high-potential, high-effort low income youths growing up in Baltimore. The authors write:

As we have shown, a for-profit trade school was the modal option among the youth we studied. The narratives of those who enrolled in these institutions were riddled with examples of programs either not completed or, for graduates, jobs that bore little resemblance to the smiling employee in the well-crafted television ads; moreover, most left these programs with a large load of debt.

… For-profit schools commanded less than one percent of the market in 1967, but roughly 12 percent in 2011. More so than public institutions or even private colleges and universities, for-profit institutions aggressively market their programs to prospective students. Youth like ours, are often their target: in 2008 the average family income for students at for-profit colleges was just under $23,000 … A profit motive may drive these schools to deliver a high-value added product, but it also might motivate some to encourage students to max out on grants and loans without a full understanding of the terms involved––loans that must be repaid even if they do not complete the program. Perhaps for this reason, students at for-profit institutions take out more loans (and end up paying more out of pocket) on average than students at public two- or even four-year schools. Furthermore, students at for-profits––especially those in the shortest programs––have higher loan balances than students at other types of postsecondary institutions. Not surprisingly, they also have lower repayment rates and higher default rates.

The good news in this story is that the closing of ITT Tech was driven by policy changes. Policy that holds colleges accountable for student loan default rates.

Going forward what is needed is far better college counseling for all students. Far better and easier to understand disclosure of student success information for every postsecondary institution. And a system that holds postsecondary institutions, and their management, acountable for completion rates as well as loan default rates.


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What I want from my daughter’s school

October 20, 2016 by  
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My older daughter just started preschool. I’ll tell you what I was looking for in a school—for this year and Kindergarten, and probably at least a few years beyond (I can only see so far!).

  • I want the focus to be on the development of her social skills, confidence, resilience, and self-awareness.
  • I want her to learn how to identify her emotions—along with the emotions she sees other children experiencing. I want her to be encouraged to practice empathy.
  • I want her to learn how to communicate what she is thinking and to ask questions. I want her curiosity reinforced.
  • I want her to be encouraged to make hypotheses about why the world is the way it is, using her own critical thinking (and creativity).
  • I want her imagination to be fully engaged, whether in making up stories or pretending the sandbox is full of hot lava.
  • I want her body to be engaged, sitting still in a seat only when needed, and outdoors as much as possible.

Honestly, I don’t want her to engage in a single activity that she could identify as a “test.” (I hope her educators can assess her without her realizing it. I don’t know if this is true for every 4-year-old, but my daughter seems hypersensitive to the judgment of adults.)

I’m not sure at what age the priorities will change for me; when I might start worrying more about content. I know at some point she needs to formalize her understanding of fractions and the different parts of speech that she is already laying the foundations for through play and conversation (“What does ‘half’ an apple mean?”). But my hunch is that those things will come much more easily if her education is rooted in thinking, questioning, creating, and collaborating.

As someone who has been watching (usually from the bleachers) the trends affecting public education over the last decade, I have wondered why the play-based education I want for my own kids doesn’t seem to be on the menu for those with fewer advantages. Instead, they are offered “drill and kill” test prep and lose arts, physical education, music, etc. It seemed possible to me that the achievement gap had less to do with poor kids being offered less content and more to do with them being offered fewer opportunities for social-emotional development.

So I read with interest a post by the authors of Becoming Brilliant, which surveys a range of research suggesting that all kids need a “cognitive and social diet” that includes training communication, critical thinking, confidence, collaboration, creativity, and, yes, content (the “6Cs”). The research they cite also pokes significant holes in the idea that the brains of low- and middle-income kids somehow learn differently. In fact, research even suggests that improvements in the performance of low-income kids may be largely due to programs that help their parents engage with them in a way that supports their brain development—singing, reading, talking, and playing, all in the context of a meaningful social relationship.

As the daughter of two college-educated, middle class parents, my girl has many advantages other children don’t. But a wildly different set of educational opportunities shouldn’t be one of them. If we design it right, Michigan’s system of public education could help put all of our children on more equal footing.


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Michigan charter schools: Ensuring success or replicating failure?

October 19, 2016 by  
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A couple weeks ago, U.S. Secretary of Education John King paid a visit to Detroit, during which time he offered some advice to Michigan education leaders in an interview with Chalkbeat: stop shuttering failing schools, because the schools we’re replacing them with are no better. He went on to question the effectiveness of charter schools in Michigan, which are generally called upon to replace failing district schools.

It should be noted that King is no opponent of charter schools. Prior to serving as New York’s education commissioner and U.S. Secretary of Education, he founded one of Boston’s most successful charters, Roxbury Prep, and was then a leader at Uncommon Schools, one of the highest performing charter networks on the east coast.

Instead, King is a proponent of good charters, and was calling for greater quality control in Michigan’s charter sector, citing Massachusetts as an example of a state with the proper checks in place.


The charter school laws in Massachusetts couldn’t be more different than Michigan’s. Massachusetts places a cap on the number of charter schools that can exist in a district, such that charter spending doesn’t exceed a certain percentage of overall district funding. This type of cap prevents the type of over-penetration of charter schools we’ve seen in cities like Detroit (Michigan has no cap), that has contributed to the financial decline of DPS and created a school system with far more school seats than children to fill them. Having a cap ensures that the rapid growth of charters won’t negatively impact district finances such that existing public schools (not to mention existing, quality charters), and all the students that remain in them, are shortchanged.

Massachusetts has allowances to their cap, particularly in the state’s lowest performing districts, but only proven providers are allowed to open the schools that push charter penetration over the legislative cap. A proven provider could be a current charter network with a track record of success looking to expand, or a separate school set up by someone who’s worked in a management or leadership role in a successful school.

This type of quality control means that while Detroit charters have mostly earned a lousy reputation, charters in urban areas of Massachusetts like Boston have a great reputation. University of Michigan economics professor Susan Dynarski recently wrote a post for Brookings advocating for raising the charter cap in struggling urban districts in Massachusetts. In the post, she summarizes a series of rigorous studies (several done by her) showing that Boston charters deliver better outcomes for students than comparable traditional public schools, as measured by test scores, AP course participation, and college attendance. These studies utilize the “natural experiments” presented by charter school lotteries in which some students receive the treatment (charter school attendance) and others the control (traditional public school attendance), allowing researchers to account for both observable and unobservable student characteristics.

Confident in these results, and the fact that new schools must come from a “proven provider,” Massachusetts voters can be reasonably sure that raising the cap won’t lead to a drop in quality.

Despite all that, Massachusetts is still in the midst of an acrimonious battle on whether or not to raise the cap. As they should! Because the expansion of charter schools surely has costs. The district will lose students, and it’s likely these students will, on average, come from more educationally motivated families. So both financially, and in the composition of their student body, district schools are sure to be made at least somewhat worse off by charter expansion. Voters need to decide if the benefits to more charters outweigh those costs.

But at least one can make a strong case that Boston charter schools have produced great outcomes for their students. And while there are certainly good charter schools in Detroit, no one could or should make the claim that Detroit students would be better off with more charter schools. We should listen to the Secretary King’s advice, and craft charter school laws that ensure each new school brought into our cities will produce success, rather than replicate failure.




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Talent, not low taxes, delivers prosperity

October 18, 2016 by  
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Terrific Inc. column by University of Michigan Ross Business School professor Jeff DeGraff entitled It’s the Talent Stupid. DeGraff makes the case that low tax states and regions do not have the best economies. Rather it is those who have the best talent.

We are now living in an economy where talent is the asset that matters most to enterprise success. And that enterprises increasingly locate and invest in those communities which have the greatest human capital.

DeGraff writes:  The traditional argument is that lower tax rates attract the best companies. But the numbers suggest otherwise.

The states with the highest amount of venture capital per person, which is an indicator of growth potential, are California, Massachusetts, and New York. These are also among the top tier of places with the biggest state and local tax rates. So why are all these giant, multinational companies with tons of moving parts and pieces moving to these expensive locales?

It turns out that all three states are also among the very top tier of higher education rates. The people who live in these places are more likely to have graduate degrees than their peers elsewhere, and the states themselves are abundant with elite research universities and institutes. Additionally, they have diverse and multi-cultural populations with global perspectives on all issues. This is becoming especially important because these multinational companies are making more and more of their profits in countries outside of the U.S.

The trend goes beyond these three states. Forbes’ list of the most-educated American cities are disproportionately college towns with significantly higher employment rates and far better paying jobs than the rest of their surrounding regions. While some of these jobs are associated with academic institutions, most of them are with companies that have built around these areas to get talent.

It’s an indisputable fact: organizations locate in places where top talent is readily available. People want to live in these areas because of access to culture and education. Furthermore, these spots are typically more inclusive than other locales because they’ve historically welcomed people from all over the world and embraced a multiplicity of worldviews.

Ann Arbor, by the way, is ranked #1 on the Forbes list.

As we have written frequently (see this 2010 post and this from 2014) what matters is what you get from higher taxes. The places with the strongest economies are those that combine high quality education systems and high quality of place that retains and attracts mobile talent. (And, as DeGraff mentions, they are also welcoming to all.) Both education and placemaking require public investments.

That is why Michigan Future’s first ever policy agenda will emphasize building and investing in a education system from birth through higher education that will prepare all Michigan kids for a 21st Century economy and building and investing in high-amenity, welcoming communities that are places where talent wants to live and work.


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Institutional Racism at MSU Homecoming

October 16, 2016 by  
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This post is different.  I'm sorry.  This is the worst post I have ever made.  I will discuss this publicly all week to share because it is too important. My buddies (Sloth, Bob, Rick, Joe, etc)  who were here this weekend understand.


I have never, EVER, been so disappointed in my alma mater than this weekend.  Michigan State athletics decision-making was racist on Saturday, and it had nothing to do with football.

I met a friend last year, he has become one of my absolute best friends, he is from the Middle East.  Just a fun guy.  Let's call him Brian.   Well, Sloth gave Brian a ticket to the game.  His #1 goal in life is to be an American.  After this weekend at MSU, I wonder why he would want to be American.

Brian is an amateur photographer. Luckily for him, he has a beautiful system with a 12" lens, etc.  That likely is what threw the MSU staff off-kilter.  So, he went from one gate to the next at Spartan Stadium to ask about the credential necessary. He stated everyone was very friendly, yet it got to the point when one individual denied him entry because of his camera.  And then the police were involved. This is what happened, it is unacceptable behavior unless you are [I removed this per the request of that individual involved].   From Brian's account:

I told her multiple times about my intentions, and was understanding and willing to cooperate (not challenge them to get in), but was simply trying to understand the reasoning behind it, and get a full explanation. She repeatedly told me that “the lens is too big, that’s all you need to know, I do not need to explain any further and this conversation is over”. When I told her that “Well, that doesn’t help me understand why?”, she got intimidated, the first guy that came downstairs reached to his radio, and she started threatening me. "I will call the police if you don’t leave," and the police actually showed up in seconds. She recognized me from Gate G/H, she did not do anything to me, but simply escorted me from the lobby area.

The reason why she said "this conversation is over? I will call the police..."  My friend has a funny accent; he is from the Middle East.  RACIST.

Brian sent me a text message when I was in my seats, MSU up 14-7, stating he was "not allowed in."  I couldn't believe it.  He shared his reasons and I went downstairs to talk to an assistant for Spartan Stadium administration, "Kevin."  I was very, very angry. I informed Kevin of my disappointment at how Spartan Stadium staff marginalized my friend. My friend sent me a text message in the middle of our conversation, of which I shared with Kevin; he read it and appreciated the conversation.  I told him I was "extremely pissed off and disappointed."

My friend left and went to a local pub and sent me text messages as he was crying. Crying?  He wants to be an American. Notably, he does not want me to share this because he is afraid of repercussions. It's sad. I have informed him he should sue MSU.

What you are reading above about MSU is called institutional racism.  It is absolutely unacceptable and embarrassing.  This is a travesty.  I am appalled.


You know what also sucks?  Is when your beloved city (City of East Lansing) tickets everyone who drives in to town because of "homecoming."  Big Bob and Michelle each received $35 tickets for driving up and spending their time and money watching the Spartans lose.  This is everything that is wrong about East Lansing.  What kind of welcome is a parking ticket?  It's cold.

Welcome to the People's Republic of East Lansing.

I HATE THIS CITY.  Complete lack of respect by decision-makers.  And racism to boot.  I need to leave the People's Republic.

Spartan vs Wildcats predictions

October 15, 2016 by  
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Gotta go 'gate with the boys and girls!  ES ugly prediction:

MSU finally wins, 22-20, on a safety in the 4th quarter. Brock sez NW, 31-17.


MSU vs Northwestern: Homecoming!

October 14, 2016 by  
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Nothing to report.  Nothing to say here.

Will provide unworthy comments between 8-11 am before this shit-heap tomorrow.

Cars as a service

October 14, 2016 by  
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One of the new realities is that we are now a service-providing rather than a goods-producing dominant economy. And that high-paying work is now knowledge-based rather than factory-based. These are realities that politics/policy can’t change. Those individuals and communities that align with, rather than resist, will do best.

Lyft co-founder John Zimmer in his Third Transportation Revolution essay we explored in my last post writes about transportation becoming primarily a service. He writes:

A full shift to “Transportation as a Service” is finally possible, because for the first time in human history, we have the tools to create a perfectly efficient transportation network. We saw this potential in 2012 when Lyft became the first company to establish peer-to-peer, on-demand ridesharing, which is now what the world knows simply as ridesharing. What began as a way to unlock unused cars, create economic opportunities and reduce the cost of transportation, has today become the way millions of Americans get around.

Ridesharing is just the first phase of the movement to end car ownership and reclaim our cities. As I mentioned before, the shift to autonomous cars will expand dramatically over the next ten years, transforming transportation into the ultimate subscription service.

This service will be more flexible than owning a car, giving you access to all the transportation you need. Don’t drive very often? Use a pay-as-you-go plan for a few cents every mile you ride. Take a road trip every weekend? Buy the unlimited mileage plan. Going out every Saturday? Get the premium package with upgraded vehicles. The point is, you won’t be stuck with one car and limited options. Through a fleet of autonomous cars, you’ll have better transportation choices than ever before with a plan that works for you.

In Zimmer’s vision the goods-producing industry––motor vehicles––that was at the core of the America’s––and even more so Michigan’s––20th Century prosperity will transition to a service-based industry. The manufactured product––the car––becomes a commodity that is primarily used to provide a service. The industry becomes mobility not autos.

The main economic value add will be both in the engineering and design of autonomous vehicles and the ability to get to customers the best––quality and cost––on-demand service to get from point A to point B. Talk about disruptive change!

Most of us continue to believe that service jobs are low paying and goods-producing jobs are high paying. No more. Those who engineer and design autonomous vehicles (engineering and design are services) and those who design and execute systems that best get you where you want to go quickly, safely and at low cost are typical of the workers now, and even more so in the future, that will earn high wages.

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