Catholic schools are closing their doors all across America, leaving future generations with nowhere to turn for the high-quality academics and values-based education so many families are seeking. The number of students attending Catholic schools in the US fell from about 5.2 million in 1965 to around two million in 2008.
Pioneer Institute believes these schools are worth preserving. For over a decade, we have raised our voice in support of these excellent academic options, and tools such as tax credit scholarships that would enable more families to attend.
Pioneer has held public forums, published research on the benefits of Catholic education, on successful models such as Cristo Rey, and on policy changes that would stop the Massachusetts education department from depriving religious school students of special needs services and school nurses. The Institute has also convened key stakeholders, appeared in local and national press, filed amicus briefs, produced a feature a documentary film, and much more.
This week on “The Learning Curve,” Gerard Robinson and guest co-host Kerry McDonald talk with Robert Pondiscio, a senior fellow at the American Enterprise Institute. He shares his background working with curriculum expert E.D. Hirsch, Jr., who has emphasized the importance of academic content knowledge in K-12 education as well as civic education to develop active participants in our democracy. They discuss why civics and the study of U.S. history have fallen out of favor over the last several decades, and what that means for the health of our representative government and liberties. Pondiscio explains some of the findings of his book, How the Other Half Learns, on New York’s Success Academy charter schools network, and how the charter movement can overcome growing political obstacles, especially among Democrats. Finally, they explore his recent National Affairs essay on the need to restore trust in the institution of public schooling.
Stories of the Week: The Economist offers a thought experiment: 20 years from now, will children be taught by artificial intelligence-powered personalized learning assistants? America celebrates the 50th anniversary of Title IX, which helped bring about gender parity in sports, the many women whose lives were changed, and the impact on women in leadership roles in corporate America.
Guest
Robert Pondiscio is a senior fellow at the American Enterprise Institute (AEI), where he focuses on K–12 education, curriculum, teaching, school choice, and charter schooling. Before joining AEI, Mr. Pondiscio was a policy analyst and education reform expert at the Thomas B. Fordham Institute, an education policy think tank. He previously worked for the Core Knowledge Foundation and as an adviser and civics teacher at Democracy Prep Public Schools. Mr. Pondiscio became interested in education policy issues when he started teaching fifth grade at a struggling South Bronx public school in 2002. Before that, he worked in journalism for 20 years, including in senior positions at Time and BusinessWeek.
The next episode will air on Weds., June 29th, with a member of the Institute for Justice’s legal team discussing the recent U.S. Supreme Court decision in Carson v. Makin.
Tweet of the Week:
The Supreme Court STRIKES DOWN a Maine education program that provides tuition assistance for students to attend some private schools but excludes schools that provide religious instruction. SCOTUS says the exclusion of religious schools is unconstitutional.
— SCOTUSblog (@SCOTUSblog) June 21, 2022
News Links:
The Economist: “The future of education – How might artificial intelligence change the role of teachers?”
https://www.economist.com/podcasts/2022/06/20/the-future-of-education
AP: “Title IX – 50th anniversary”
https://apnews.com/hub/title-ix
Read a Transcript of This Episode
Please excuse typos.
[00:00:21] GR: Hello listeners. This is Gerard Robinson coming at you from beautiful Charlottesville. Every week, we bring really interesting guests and topics to talk about education at large, but also social science. We talk about economics. We talk about money and other things every now and then we have an opportunity to be blessed by having a guest cohost.
[00:00:41] And today’s one of those days and we have Kerry McDonald, who’s been with us before. Always glad to partner with her. How you
[00:00:50] Kerry: doing Kerry? I’m doing well. Gerard. It’s great to be back with you.
[00:00:53] GR: Yeah, I think the last time we were together, would’ve been early spring. And so this is a good way to, [00:01:00] to move us into the summer.
[00:01:02] And I don’t know what this weather’s like, where you are, but it’s 82. Today’s gonna be nineties plus moving forward. So it’s gonna be pretty humid over the next four or five days.
[00:01:12] Kerry: Yeah, it’s beautiful here in Boston. And I’m heading up to New Hampshire this week for the porcupine freedom festival for some great talks there.
[00:01:23] And I’ll also be recording some episodes of my podcast the liberated podcast, which will be focused on education entrepreneurship, and some innovations in homeschooling and all kinds of good things. So the weather looks great here for.
[00:01:38] GR: Excellent. Well, what story has you excited today?
[00:01:42] Kerry: I’m really interested in an article that was linked to a podcast at the economist this week about the future of learning.
[00:01:50] And it’s always interesting to kind of imagine what education will be like, 10, 20, 30 years from now and in this. [00:02:00] Particular article and episode they were focused on 20 years from now. What would learning look like? And you could tell from the sort of snapshot that they gave the concern was that, , technology was gonna take over, it was going to replace teachers.
[00:02:15] It was going to create sort of this stale stifling kind of learning environment that wouldn’t be serving. Students. Well, and it reminded me a little bit of this fear about new technology or fear about the ways in which technology could negatively impact our lives. That of course has been with us for centuries really.
[00:02:35] And in fact, in my unschooled book, one of my favorite quotes was from a journalist. Who said, speaking about a new piece of technology, this will make us nothing but transparent heaps of jelly to one another. And this was a journalist in the late 19th century talking about the telephone. And so it makes me think a little bit more.
[00:02:59] [00:03:00] Suspiciously about kind of doomsday predictions about technology. And instead recognize that really technology improves our lives in many ways and the same can be true for our learning. So it was worth listening to , the economist podcast did bring in Salcon from Khan academy, who I think offered a more optimistic view of the future of learning and technology.
[00:03:23] But definitely worth listening to, and.
[00:03:26] GR: Got it. It’s amazing how we pick and choose how to be offended when it comes to technology. When it’s technology for us to build a muscle in other right arm, left arm or somewhere else in our body, or it’s AI to actually help us think better, we’re all for it.
[00:03:46] But somehow we don’t think the same AI that helps our body helps our mind that somehow when it’s outside of us, Or if it’s created within the, for profit sector and not per se use solely in the nonprofit that somehow [00:04:00] it’s evil I’m with you and others who say that there is a role for technology, there’s a role for AI and there’s a role for entrepreneurship and investments.
[00:04:09] And so makes a lot of sense to me. None of this means that I’m not aware that there are. Horrible ways in which people have used AI the dark web and some of the things that take place. There is simply one example, but technology and education, it’s here to stay rather than fight against it. I think we need to fight for it fight for it in ways that are smart.
[00:04:30] That are ethical. And then at least we’ll raise some philosophical questions for all of us to answer because our children and grandchildren getting to your point, they’re gonna inherit a very different America than we know today. We don’t know how many amendments will be made to the constitution.
[00:04:46] If one of those amendments in fact will focus on technology and what it means to make us a more perfect union. So I’m glad we’re continuing to have the conversations about uh, technology and education and glad see we’re focused on the future. My. [00:05:00] Article today is a reflection on the past and it goes back 50 years on as many know that on June 23rd, 1972 Congress enacted or basically added title IX to an education amendment.
[00:05:13] And it was signed into law by Richard Nixon. And what it did was to start. A platform, a creative platform in which we can talk about the role of women, not only in American society, not only in sports, but the role of women in the American economy in general. And so we’re celebrating 50 years. And when we think about title IX, understandably, we primarily think about sports because that is one arena.
[00:05:40] Where we put sports under a microscope and began to look at numbers, investments in sports whether or not women were getting equal access across the board. Well, I want to use the sports analogy, but I also want to use it to talk about what women. Did after they played sports. And this is from an AP article [00:06:00] titled title nine, propelled women from college courts to CEO offices.
[00:06:05] And there’s just a few women they highlight. So one is Gail. Boudro. She played basketball at Dartmouth. And in fact, she’s still the school’s career scoring leader and rebound leader. She was three time Ivy league and she moved on to be also earned academic all American status. Now in her business career, she earned actually an MBA from Columbia and that led to several businesses.
[00:06:29] She’s the former CEO of United healthcare and took over as president and CEO of Anthem incorporated, which. Fortune , 500 company in 2017. Another example is Jenny Gilder. She’s a two time Olympian, 1980 and 84. She was the American roarer of the year at Yale in the 1970s. She took that and moved forward.
[00:06:53] Earned an MBA from Washington in 1991. And then she founded Washington works. It’s a Seattle based [00:07:00] foundation which helped women receive public assistance in the 1990s. And later became the CEO and founder of the Gilder office for growth, which was a family and investment office. Closer to home on my neck of the woods is Jackie MC Williams.
[00:07:15] Many of you know, I’m in Virginia. She went to Hampton university. She was a star on Hampton basketball and volleyball team. She helped Hampton win the NCAA division two basketball title in 88. She was also a freshman of the year. She took her progress on the court and then moved it into management.
[00:07:33] She earned a master’s degree from temple. She later coached at Virginia union, an P C U in Richmond, and later became the first female assistant in the central intercollegiate athletic association. Men’s basketball team, which is something we rarely see. And then she moved forward. Ultimately in 2012 becoming the first black female commissioner of the sea.
[00:07:53] I I a and as Meg, Whitman, of course, many of our leaders know who she is across the board, [00:08:00] but these are examples just of four women. There are 400, 4,000 more actually that we can see how they used what they learned playing sports and took that into the field of work, corporate America in the nonprofit sector, fortune 500, as well as small business, also public assistance.
[00:08:17] So 50 years and things are. What are your thoughts?
[00:08:20] Kerry: Yeah. So it’s interesting. The associated press did a nice spread of related articles connected to title IX for this 50th anniversary tribute. And it, I think it’s really interesting Gerard that you and I both sort of gravitated to the articles around some of.
[00:08:39] Women business owners and CEOs who were kind of the pioneers in pushing for title IX years ago and, now have had success in their careers. And of course were instrumental in making women’s sports come to be and able those of us who kind of came after them and participated in both high school and [00:09:00] college sports able to enjoy that.
[00:09:02] So just a wonderful commemoration and again, interesting to see how many of these pioneers turn into entre.
[00:09:10] GR: absolutely. And naturally we also know there’s a great deal of controversy and concern and conversation and applause, as it relates to the role of men who began to transition into women’s sports.
[00:09:23] So, these articles that not focus on that, these are the ones that I read, but it’s also one that’s part of the conversation. All right. Well, as you know, we have great guests. We’re shortly going to be joined by Robert Pondiscio. He is a senior fellow at the American enterprise Institute. He’s also a former journalist with 20 years of experience in the field.
[00:09:45] He’s also the author of a book to help us think seriously about what education looks like. And he’s probably one of a hundred people in the country. Within the school reform segment where people listen to his voice. And so he’s gonna join us soon and look forward to that
[00:09:59] Robert: [00:10:00] conversation.
[00:10:27] Kerry: Welcome back to the learning curve podcast. We are thrilled to be joined today with our guest Robert PIO, who is a senior fellow at the American enterprise Institute, where he focuses on K to 12 education curriculum, teaching school choice and charter schooling. Before joining AAI penici was a policy analyst and education reform expert at the Thomas B Fordham Institute, an education policy think tank.
[00:10:56] He previously worked for the core knowledge foundation and as an [00:11:00] advisor and civics teacher at democracy prep, public schools. Punic became interested in education policy issues. When he started teaching fifth grade at a struggling south Bronx public school in 2002, before that he worked in journalism for 20 years, including in senior positions at time and business week.
[00:11:21] Robert Punic, welcome to the learning curve podcast.
[00:11:24] Robert: Oh, thanks for having me. How do they say it? Longtime listener first time, caller or guest it’s a pleasure to be with.
[00:11:30] Kerry: It’s great to have you here today. I’m gonna ask you a few questions and then Gerard has a few that he wants to ask you, but let’s begin by talking about the fact that you’ve been a protege of the curriculum expert ed Hirsch, Jr.
[00:11:46] Would you share with our listeners why you find his work on K to 12 education, so compelling and why it’s not been more widely embraced among the education establishment?
[00:11:56] Robert: Oh, man. We, could talk about that till the cows come home. That a [00:12:00] long, complicated topic. the short version is and boy I’ve said this a thousand times over the years Don Hurst, the D and ed Hurst stands for Don.
[00:12:08] So, we call him Don. He was the one educational theorist whose work described what I saw in my south Bronx classroom every single day. just to paint the picture for you literally 20 years ago, almost to this day, I started teaching at what was the lowest performing school in the lowest performing district.
[00:12:27] In New York city, PS, 2 77 in the south Bronx and having knocked , set foot in an elementary school since I was myself, an elementary school student, I had virtually no, background in education. I was a, you know, an alternative certification teacher. So, , There was a bit of a willing suspension of disbelief that went into my work.
[00:12:45] In other words, you know, I didn’t know how to teach reading. I, I was a proficient reader and whatnot and, the way I was taught to teach reading to my struggling fifth graders went from willing suspension of disbelief to kind of skepticism, to almost [00:13:00] Milt and anger, because I just realized that the way we were trying to teach kids how to read was just not effective.
[00:13:06] then I discovered ed Hirsch’s work on my own and it. Off like a lightning bolt in my mind, it just described exactly what I was seeing in my classroom every day, kids who could decode, in other words, they could read the words, but they struggled with comprehension and everything that I had been taught as a teacher was that, oh, well, they’re struggling with comprehension because they don’t find it engaging it doesn’t.
[00:13:28] Reflect their experience or interest first was the guy who would say no it’s background knowledge, it’s vocabulary. In other words, if everything we were teaching kids was to read things that were of interest to them that reflected their own experience. what I’ve since come to say, or describe as all mirrors and no windows.
[00:13:46] Well, then that’s going to limit their literacy , , and when I would bring it up in, my ed school classes and my, , professional development, I’d say, Hey, what about this guy? Hirsch? you would always hear some version of, oh, that’s that dead white guy stuff. Nobody takes [00:14:00] that seriously.
[00:14:01] and this is where the skepticism turned to militants and. And anger. So wait, his work is not about that at all. It’s about literacy. It’s about background knowledge. , we’re just giving these kids kind of like starvation ratios of rich curriculum of science and history.
[00:14:14] This is why they’re struggling with comprehension. It’s not that they can’t read. They’re reading out of their depth all the time. I mean, that was the soul of Hersch’s works still is. I became so animated by his work that I. Almost literally ended up knocking on his door to say, Hey, look, this is who I am.
[00:14:29] This is what I do. Let me help you because you’re the guy who’s figured it out. And trust me as a, recent departing teacher, we are not learning what, you know, as, teachers and we need to.
[00:14:40] Kerry: Mm, I love that, that you reached out to him and really wanted to connect , and learn more.
[00:14:45] So, you know, Hearst has been unique in that he’s an academic UVA, English professor who also dedicated much of his intellectual energy and professional time emphasizing academic content knowledge in K to 12 education, which you’ve just talked about. Why haven’t we [00:15:00] seen more higher education figure? in the core academic disciplines, English, math, science history provide leadership in primary and secondary schooling.
[00:15:09] And, and how do you think we could encourage higher quality content experts to lend their voices to school reform?
[00:15:15] Robert: What a fascinating question. And you’d think after 20 years I’d have a good answer for you. it’s almost like there’s this kind of church, state or Chinese wall in between higher ed and K12.
[00:15:26] I mean, for the last 20 years or more in the education reform movement, I don’t think I’m wrong about this. I think we’ve more or less given. Schools of education, a bit of a pass. So, there’s not that much interplay, I think, between higher ed and K12 and look, I mean, it’s just, I, I think, and this is, again, a lot of the stuff that Don Hirsch has written about over the years.
[00:15:45] there’s a lot of kind of, and I don’t wanna be overly dismissive feel good notions about what kids need to learn. In other words, we are more concerned or are often more concerned with kind of. What I would describe as , the Hollies of, K12 education, [00:16:00] as opposed to more the nuts and bolts, the rich content knowledge, the subject matter knowledge.
[00:16:05] and it’s kind of interesting. I, just thinking about how, you know, ed reform, I think has just given a pass to K12 or to, ed schools in reforming K-12 education. It, it continues to astonish me the, the degree to which we just assume that, schools of education are just kind of damaged goods are broken and, really can’t be, fixed or that we can’t uh, As a policy matter exercise, more influence of them having said that, I mean, it’s a lot better off now than it was a few years ago.
[00:16:31] I mean, I just wrote a piece for the Fortive Institute just last week based on Iran report that is noting that there’s this kind of quiet work being done under the gist of a group put together by the, council of, chief state school officers. Where you’ve got about a dozen or so states looking to influence curriculum and instruction.
[00:16:50] and this ran report suggests that they are at the very least changing teacher habits in terms of curriculum adoption and use. mean, that’s the [00:17:00] first steps you really kind of need to get to enthusiastic and, and informed use. So it’s, a long process, so don’t wanna leave the impression that it can’t be done.
[00:17:07] But we need to do more of it. And, those states may be providing some leadership as to how we might go about it.
[00:17:13] Kerry: So let’s switch now to talk about civic education, which has been a topic that you’ve written about in the past, and certainly an element of Hirsch’s work. And I wonder if you could discuss how and why civics and the study of us history have fallen out of favor in so many K to 12 schools over the last several decades.
[00:17:32] And what do you think that means for the health of our representative government civic, mindedness and Liberty?
[00:17:39] Robert: Boy. I hope at some point you ask me a question I can answer in 10 seconds or less. this is gonna be another kind of long that’ll be for dry it’s it’s a great question. And a fascinating one.
[00:17:51] I often joke that that ho man went to his grave without ever having a once uttered the phrase collagen career ready. and what I mean by that joke is that we [00:18:00] had a very. And concept of, schools and you’re right to invoke Hersh again, because he wrote a terrific book a few years ago called the making of Americans, which really unpacked some of the earliest thinking about the purpose of public education in America, even before Homan.
[00:18:16] I mean guys, like, you know, Benjamin Rush and Noah Webster and even the founders, writing the constitution, the Federalist papers who were so concerned about faction , and there was. A surprising amount of content, written by those, in the founding generation that really, thought deeply about education and said, look, you know, schools are the mechanism by which I think it was the Benjamin Rush phrase you create quote, Republican machines, meaning, Ordinary people who were capable of self-government, you know, that was a overriding concern of, thinkers of 250 years ago.
[00:18:50] That means civic education. That means preparation, not for the private ends of, , college and career readiness as we term it now. But preparation for public life or [00:19:00] active participation and civic engagement. and I think it’s, fair to say. We have just drifted. So far from that shore, that now when you, even suggest that to some people, they’re like, well, you know, why would you think that should be a purpose of, schooling now, maybe that pendulum has come back a little bit more in the last couple of years.
[00:19:19] you can’t open a paper anymore without somebody, saying that our democracy is imperiled. So the conditions should be ripe because of that for a return to civic education, the obvious downside. Is I think whenever you say civic education, particularly to those of us who are, right of center we tend to view that as, code for a kind of aggressive activism in civics and civic education, that kinda leaves a bad taste in one’s mouth.
[00:19:45] But there is always going to be that work to be done. Right. I mean, I’ve been spending a lot of time lately thinking about exactly this question , and what is the purpose , , of the school. And, it’s the time to rethink the kind of, you know, social contract, if you’re like that we have between [00:20:00] families and parents and children and the outcomes that we seek in schooling.
[00:20:04] And you can come at this many number of different ways. I don’t think I’m alone in thinking at the kind of technocratic focus on just outcomes while important has been, you know, minimal caloric content as it were. In other words, I’m not sure that things are that much better off than they were say 20 or 30 years ago before we fetishize test scores as kind of the alpha in omega.
[00:20:25] So it’s Long story short. I think the time is long overdue just to kind of rethink that kind of civic function of education. but it’s gonna be di difficult to do that in the, in the current political environment.
[00:20:36] GR: So Robert you’ve written a book, how the other half learns equality excellence and the battle over school choice.
[00:20:44] I’ve got a copy. I’ve read it, loved it. And when I initially saw the title, it reminded me of a book I guess published 129 years earlier called how the other half lifts and Jacob risk book about tenement slums in New [00:21:00] York. Your story. Is about New York. It’s about really the network of charter schools called success academy.
[00:21:08] Eva’s been on our show before, but your story is really just a microcosm of the American story of reform of politics and change. Talk to us about some of the larger lessons that we as listeners should draw from your book, not just from New York, but the broader conversation about let’s the phrase you just used, the social.
[00:21:30] Robert: Thanks Gerard. and by the way, go to the head of the class, you were one, of the few readers who was made that immediate connection that I kind of thought was obvious between my title and the homage to Jacob Reese. I guess I’m a thorough going ed Hershey and, you know, core knowledge guy that I just assumed that was part of everybody’s cultural literacy, but it was not, but you got it.
[00:21:48] So thank you. Yeah, it, it, it’s interesting. I mean, the exact conceit of the book Gerard was exactly that. I mean, if listeners know success academy, then they, know the basic contours of the [00:22:00] backstory, which is that, Eva Moskowitz has succeeded in building something that is literally unprecedented in American education, which is a network of charter schools.
[00:22:09] In which there is quite literally not a bad one and I’m making air quotes around, as I say bad, because I mean, they are good by the standards by which we hold schools accountable. I don’t have the data in front of me, but, the weakest success academy still gets like 80, 90% of their kids passing , the New York state ELA and math test.
[00:22:28] And, and to my knowledge, no other charter network in America has grown to the size. Of hers without at least one or two outliers and sometimes quite a few outliers. So, based on the way we keep score in education and ed reform, she seems to have figured out something that nobody else has managed to figure out.
[00:22:45] So if you’re me, you know, or a guy like me or you, I, so we wanna figure out, okay, what’s going on here. What is she solved and how can we translate that to American education at, at large? So that was the, premise by which I spent a year embedded at a success academy [00:23:00] school.
[00:23:00] And interestingly, it was literally in the same neighborhood where I was a, fifth grade teacher for five years directly across the street, almost from where I was a student teacher, when I started teaching. So I was looking for exactly that, what are the lessons? And, , the bad news I suppose, is I don’t think that there are a lot of lessons.
[00:23:17] And that’s because not only are these schools of choice but they are very demanding schools of choice demanding for families. In other words, it’s just damn hard, frankly, for a family to, Persist at success academy. They, make a lot of demands of families, , read with kids every night.
[00:23:35] be very accountable to the schools. I’ll oversimplify here broadly, but I think the basic idea, what she’s kind of figured out how to do. Is get every adult in a child’s life, basically singing from the same hymnal. And that’s difficult to do in K12 at large. Right? In other words, if you sign up willingly in a school of choice and you sign up for this intensive form of education well then, buying in, you’re a knowing consumer.
[00:23:59] You’re much more [00:24:00] likely to be able to, do that than, in a run of the mill K12 school at a slightly more granular level. The demands are such that, and this is just observation. I always feel the need to point this out. This is not data. This is just kind of a journalistic observation.
[00:24:13] It’s unmistakable that the demands mean it’s a lot easier for a certain kind of families to persist and be successful here. I think this was in the book. At one point I went on a field trip with some second graders, and I think there were more dads chaperoning , that second grade field trip than I had seen in five years of parent teacher conferences.
[00:24:32] So in other words, the school culture kind of valorizes or requires a lot of parental bandwidth. So you end up seeing families who are. Intact employed, ambitious for their kids, religious and spiritual, for example, they have more, a little bit more social capital perhaps than other families in that same neighborhood.
[00:24:49] That’s not a criticism by the way. I mean, I think , some folks, including frankly, some folks at success academy misinterpreted the book of saying, oh, well, you’re saying that we’re just Parents? No, because the point I [00:25:00] made it repeat, made repeatedly in the book is that yes, there’s a certain bar for entry, , you gotta have a certain amount of parental bandwidth to get in there at all.
[00:25:08] Because of the hurdles they put in front of families uh, But once they’re there, they are outperforming, literally outperforming the gifted and talented programs in New York city that do in fact hand pick kids. So there’s considerable magic going on there, but it’s a complicated picture of what can be done when you have dedicated employees, a real clear school culture a, a demanding and.
[00:25:30] Program and, high and ongoing levels of, parental bandwidth. All of those things make it phenomenally powerful for low income families, but phenomenally difficult , to apply to K12 at large.
[00:25:42] GR: So let’s stick to New York city again, because it’s another microcosm for a larger conversation about.
[00:25:50] Education and politics in this instance, it’s charter schools. So right now as we speak the bite administration and others are pushing [00:26:00] to really slow down the growth of charter schools. Well, this is 2020 two let’s back up to October 7th. 2015 in New York city, when it estimated 18,500 families children’s and children, educators gathered at the Camden Plaza in Brooklyn under the motto, I fight in equality at that time.
[00:26:19] Democratic mayor bill de Boggio was trying to end. Charter schools, as we know it again, 18,500 families, children, educators, employees gathered to say, no, we don’t want this to happen. Even then within the school reform movement, both public and private school sectors, people began to say, there’s a breach.
[00:26:41] In this social contract and people like NA Democrats have always supported charters. It won’t change well, we’re now in 2022. And when vice president by then was under president Obama, who supported charters, it’s a different place. What have you seen? , not only unfold in New York [00:27:00] city, but just, writ large in our movement.
[00:27:02] Robert: that’s a great question. And I guess I’m gonna run the risk of kind of scooping itself a little bit. I’m actually working on a big piece as we speak for education. Next on almost exactly this question. So I’m here in New York. Just shortly after that rally that you described we ran up against a, a cap in charter schools.
[00:27:22] if you wanna open a charter school in New York state, you literally cannot do it anymore. At least down in New York city. There’s, still some cap space. in upstate New York. but most of the energy and dynamism of charters in New York have, has been in the last couple of decades in New York city.
[00:27:39] I mean, we, mentioned success academy. There’s also uncommon achievement. First Kip democracy prep, where I used to teach and others. These fairly large well established and by any reasonable metrics, successful schools run by so-called CMOs or, charter management organizations. I can’t help, but think in, in a less [00:28:00] polarized time, If education were kind of less of a political football, those of us in New York, we would look at the, at our charter sector in New York city with no small amounts of civic pride and say, look, , , these schools, dozens of them are serving the cause of equity.
[00:28:16] , they are accomplishing and have been for quite some time. the thing that our previous mayor who you just alluded to bill de Blasio. Claim to wanna create with the so-called selective high schools, which is getting large numbers of black and brown students on the path to, college and, career and, and elite educational opportunities.
[00:28:35] Well, well, charters have been doing that for quite some time. But they’re in bad odor. So it’s, bizarre, right? To, in other words, they, all they’re doing is all they’ve been asked to do. And here we are in New York with, you know, a charter cap. We’re not opening any more of them. And when we are opening new charters, they tend to be now those that are still opening upstate New York.
[00:28:55] Kind of little mom and pop charter schools community responsive charter schools, not the, big [00:29:00] CMO schools. Now, meanwhile, parents still are swelling. the waiting list for those, more established CMO network schools. So it’s kind of interesting, no matter how you slice it, it does seem like this is a very hard time to be in the charter community in New York, either you are being thwarted in any attempt to open new schools.
[00:29:19] If you’re opening new schools, well, then you’ve got a lot of work to do because you don’t have the resources of a CMO it’s it almost feels like you’re, back to 25 years ago, when we were opening schools in church basements and whatnot, and everything was being bootstrapped. I’m tempted to suggest that that’s a bit of a bellwether.
[00:29:35] For the way charters are going nationally, where, once that bipartisan coalition that we enjoyed for a couple of decades in the ed reform world, once that fell apart it just became another way to say it is that ed reform sneezed and, and the charter world caught cold.
[00:29:50] GR: Makes a lot of sense. And since we’re discussing charter schools, we wanna say hello to all of our colleagues who are in Washington DC for the national charter school conference [00:30:00] held there for the next few days. So by the time you hear this, you may still be in DC. And those of you who will listen later, thank you for getting together.
[00:30:07] Both folks on the right left, middle, all stripes and everything in between. So here’s my last question for you. You’ve recently wrote. Good piece in national affairs about how to restore trust and public institutions, really public schooling. For some of our listeners, they may not be aware of national affairs.
[00:30:26] Tell us a little bit about that medium and then kind of give us an idea of why you think the topic of public schooling and trust is important at this.
[00:30:35] Robert: Yeah, thanks. It, it just came out today as we’re speaking and it’s the first time I’ve had the opportunity to write for national affairs, which is a, quarterly founded by my AAI colleague.
[00:30:45] Yuva Lev who is maybe the, preeminent public intellectual that we have in this country at this time. So it’s, it’s an honor and a thrill to have anything appear between those covers. reason this interests me. It’s funny. I’ve been accused of being a contrarian and, and [00:31:00] I don’t think I am.
[00:31:01] But maybe I, I dwell in complexity and if you’ve been in the reform world for any period of time and, you know, tell me if you disagree, George, a lot of us who are, and I’m a, you know, school choice, charter school parent advocates. If we think long and hard about our advocacy, we probably recognize a tendency to kind of take advantage of weakness in public education because it creates the conditions, right?
[00:31:27] that further our agenda. To drive demand for school choice. , , both among parents and politically there’s something a little bit unholy about that. Right. and again, I hope my, choice advocate in charter advocate, you know, bonafide are in good order. but I, I always remind my friends in this world that look, the sun will likely go out before we have in America where the majority of kids are not in traditional public schools.
[00:31:54] it’s not because we can’t do anything differently. It’s because it’s a cultural habit. It’s because [00:32:00] we value it. So let’s just kind of tap the breaks before we try to. unseemly advantage of weakness in public education because that’s where the kids go to school. So we need to be no less invested in their outcomes and the quality of education that they receive than we are interested in what happens to kids in schools of choice.
[00:32:20] and as soon as I say that, your then I also wanna make sure this critique applies to the left as well, because the second that you are envisioning your job as a public school teacher or administrator as, Playing a quasi activist role, , viewing schools as, social justice institutions, well, then you’re kind of playing fast and loose with the expectations around public education as well.
[00:32:42] So this long piece, and it’s, it is quite long. It’s about 5,000 words. I think is, is hopefully a reminder to, to partisans of both stripes, to just kind of, again, tap the brakes before you kind of play fast and loose. With damaging this institution that educates the majority of American children and [00:33:00] probably always will be because either you don’t have the permission as a public employee to, impose your social justice agenda or whatever your activist agenda is on education.
[00:33:10] And on the other hand before you really try to take political advantage of, the weakness of public education, let’s remind ourselves that this is where most of the kids go to school and probably always will. So we need to remind ourselves that we have a vested interest in, those kids who will probably be the majority of kids for quite some time to come.
[00:33:29] GR: Robert, thank you for articulating. What many of us in the school reform movement have said for decades? Because we support charter schools, vouchers, ESAs, and everything else homeschooling as well. We realize the majority of our public schools will educate our children and we have to make them work. I’ve also said that, , we should make all the best examples, charter schools alone.
[00:33:49] There’s some great high performing title, one schools in rural areas, in urban areas as well. So thank you for that. Thank you for joining us. Also thank you [00:34:00] for bringing ed Hirsch. So for listeners, after you listen to this podcast, you can also go to our August 18th, 2021 podcast. You can find at the pioneer Institute where we actually interview ed Hirsch on common knowledge, equity and educating citizens.
[00:34:14] So you may find some good things there. Robert, again, keep up the good work. I look forward to reading your article that you just discussed and look forward to seeing you in person at some point when. We’re in the same room together.
[00:34:28] Robert: Here’s hope. And thanks for having me take care.[00:35:00]
[00:35:00] Kerry: So Jared for the tweet of the week, this week, it was a big week at the us Supreme court with the opinion in Carson V Macon. So the tweet of the week is the SCOTUS blog at SCOTUS blog. Talking about the vote being six to three and really a, victory for school choice.
[00:35:17] GR: Absolutely. And in fact next week we’re gonna have someone from the legal team.
[00:35:23] Who represented the family in that case, as our listeners know we’ve had other guests on our show who actually were the name either plaintiff often in the cases. So look forward to that next week uh, bid win for families, for educators, and really for the whole idea of what choice means in American.
[00:35:44] We often focus on it in one aspect and forget that it actually is pretty ubiquitous across American life. So Carrie, with that, thank you so much for joining me. Look forward to us. Tag teaming again in the future.
[00:35:55] Kerry: Great to be with you Gerard this week, and I will be back again next week to join you again.[00:36:00]
[00:36:00] GR: Sounds good. Take care.
Recent Episodes
Suffolk County, Massachusetts consists of the cities of Boston, Chelsea, Winthrop, and Revere. According to the Pioneer Institute’s MassEconomix website, 644,363 people were employed in Suffolk County in 2020. So which industry is the county’s biggest employer?
Since 2004, the first year in the MassEconomix database, the largest industry sector in Suffolk County has been healthcare and social assistance. The U.S. Bureau of Labor Statistics defines the healthcare and social assistance industry sector as trained professionals who work in “establishments providing medical care exclusively, continuing with those providing health care and social assistance, and finally finishing with those providing only social assistance.” In 2010, 122,343 employees worked in healthcare and social assistance, comprising a total of 21.4 percent of the total Suffolk County workforce. By 2020, the number of employees rose to 148,223, or 23 percent of the workforce.
In 2004, the second largest industry sector employer was Finance and Insurance with 69,426 employees. In 2010, Finance and Insurance was still in second place with 69,891 employees, or 12.22 percent of the Suffolk County workforce. After 2010, the number of employees in the sector began to decrease. For example, in 2011 Finance and Insurance lost 995 employees. It lost an additional 2,011 employees in 2012. By 2020, the sector included 67,789 employees, a decline of 10.6 percent since 2008, the highest employment year for the sector.
While the number of Finance and Insurance employees began to decrease, employment in another industry sector – Professional, Scientific, and Technical Services (PSTS) – was increasing rapidly. The examples the U.S. Bureau of Labor Statistics provides for this category range from legal advice to architectural, engineering, and specialized design; computer services, translation and interpretation; and other professional, scientific, and technical services.” In 2010, PSTS. employed 12,696 fewer residents than the Finance and Insurance sector, but from 2010 onward PSTS grew steadily and by 2012 it had 64,442 employees. From 2012 to 2013 the number of employees increased by 6.4 percent to 68,566 employed, surpassing the Finance and Insurance sector by 2,248 employees and making professional, scientific, and technical services the second largest industry employer in Suffolk County.
Figure 1: Employees by Industry Sector in Suffolk County, MA 2010-2020. Source: Pioneer Institute’s MassEconomix website.
From 2010 to 2020, PSTS employees increased by 67.2 percent while Finance and Insurance declined by almost 3 percent. Professional, Scientific, and Technical Services appears to be one of the fastest growing industries in Suffolk County, right behind the healthcare and social services industry. A 2017 WBUR article offers some insight as to why this industry has been growing so rapidly in the past decade. Major technological companies such as PTC, GE, Autodesk, LogMeIn, and Bose have been moving parts of their businesses from suburban areas to Boston. More tech companies, such as Apple, continue to make the move as they plan to add several hundred jobs in the Greater Boston area within the next few years. Amazon plans to add over 3,000 jobs, and Google plans to add over 1,500 new jobs. In the WBUR article, company executives attributed their move to “access to talent, public transportation and a collaborative open-source culture.”
Mitchell Bove is a Roger Perry Government Transparency Intern at the Pioneer Institute for Summer 2022. He is a rising junior at Suffolk University with a major in U.S. History and minors in Media & Film.
Hubwonk host Joe Selvaggi talks with Bloomberg Columnist and National Review Editor Ramesh Ponnuru about the reasons for the sustained spike in inflation, its impact on savers and consumers, the possible policy remedies, and the likely intensity and duration of this cycle.
Guest:
Ramesh Ponnuru is Editor of National Review, where he has covered national politics and policy for 25 years. He is also a columnist for Bloomberg Opinion, which syndicates his articles in newspapers across the nation. He is a visiting fellow at the American Enterprise Institute and he serves as a contributing editor to National Affairs, the quarterly journal of conservative ideas. His articles are frequently published in The Wall Street Journal, The New York Times, and The Washington Post. In 2015, he was included in the “Politico 50,” Politico’s list of “the thinkers, doers, and dreamers who really matter” in American politics. In 2014, Ponnuru contributed to and (with Yuval Levin) edited the book Room to Grow: Conservative Reforms for a Limited Government and A Thriving Middle Class. New York Times columnist David Brooks called the book “the most coherent and compelling policy agenda the American right has produced this century.” Ponnuru was subsequently featured in a New York Times magazine cover story about reform-minded conservatives. In 2013 he was a resident fellow at the University of Chicago’s Institute of Politics. He is a regular speaker on policy, politics, and constitutionalism at the nation’s leading college campuses and law schools. He also appears regularly on television programs about public affairs. He is the author of a book on the sanctity of human life and American politics and of a monograph on Japanese industrial policy. Previously he has been a columnist for Time magazine and WashingtonPost.com. Ponnuru grew up in Kansas City, Kansas, and graduated from Princeton University. He now lives in the Washington, D.C., area with his wife and three children.
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Read a Transcript of This Episode
Please excuse typos.
Joe Selvaggi:
This is Hubwonk. I’m Joe Selvaggi.
Joe Selvaggi:
Welcome to Hubwonk, a podcast of Pioneer Institute, a think tank in Boston. Inflation has eclipsed the COVID epidemic as Americans’ greatest concern. Having not seen an inflationary spike for nearly four decades, many current consumers and market actors are unfamiliar with its causes, its effects and the potential remedies available to policy makers to bring it back under control. Indeed, what had been thought to be a temporary phenomena, attending the aftermath of a pandemic. Now X us daily, as we shop for eggs, gas, or a potential new home, will this ubiquitous rise in the price of everything continue and perhaps accelerate or can policy makers in our us legislature and federal reserve bank slow and reverse this trend with interventions that voters will accept. My guest today is Ramesh Ponnuru, columnist for Bloomberg and editor of National Review. Mr. Ponnuru has written extensively on the causes and risks of inflation and on which politically viable actions policy makers can take to contain the current trend. Mr. Ponnuru will share with us his views on the origins and contributors to our current inflation, who is most likely to suffer from its effects and which potentially painful policy choices are available to cool this overheated economy. When I return, I’ll be joined by columnist and editor Ramesh Ponnuru.
Joe Selvaggi:
Okay, we’re back. This is Hubwonk, I’m Joe Selvaggi and I’m now pleased to be joined by Bloomberg columnist and editor of National Review Ramesh Ponnuru. Welcome back to Hubwonk, Ramesh.
Ramesh Ponnuru:
Thanks for having me.
Joe Selvaggi:
Okay. Now our topic is one that’s at the top of mind for nearly all Americans, we’re gonna be discussing inflation its causes its effects and perhaps give our listeners a sense of how we might plan to address it. But so let’s start at the beginning first for the benefit of our listeners, what is inflation?
Ramesh Ponnuru:
So different people have defined inflation in different ways and sometimes get quite upset with you if you don’t use the term the way they want to. I think the most intuitive and common way is also the most useful. And that is to describe inflation as a general rise in the price level. So if on average prices were at a hundred in 2020, and then they get up to 102 in 2022, assuming in 2021, then you’ve got 2% in place year over year.
Joe Selvaggi:
Okay. Is there a general sense of what it should be? Is there a sort of a, a background of you know, we, we should always have it, but it should be at this level.
Ramesh Ponnuru:
So this too is a source of contention central banks around the world, starting in the late eighties, have largely converged on the idea of 2% inflation each year, being the ideal or the, the target that they ought to be striving for. It’s a little bit arbitrary, but the idea is that that creates a reasonable amount of price stability while also for you allowing for different kinds of adjustment to take place.
Joe Selvaggi:
So in your first answer, you talked about you know, the average price of everything being a hundred is sort of a, an imagine conceptual concept. And now it’s 102. That means it’s essentially a higher price for the same exact basket of goods. And no change such as a commodity, like a gallon of gasoline is a gallon of gasoline from one year to the next, if it costs more that’s inflation, if it, if it’s across the board, right. Now if, if all boats are rising in inflation is increasing the price of everything, wouldn’t, it also affect the cost of labor, which is a the flip side of, of inflation, which would effectively mean my paycheck. Your paycheck would go up by the same amount. Does the rise in the income negate the effect of inflation?
Ramesh Ponnuru:
Yeah. Well, first of all, just to talk about one of the things you said about changes in quality where, you know, so the idea that it’s 2% inflation costing a hundred and then costing a hundred, two assumes, you’ve got the same basket of goods, but of course there can be all kinds of things that change. So if you know, the size of the candy bar you’re buying shrinks basically that’s a kind of hidden kind of inflation, right? If the price is still the same people call it shrink inflation. Sometimes they do try in these statistics to capture that kind of change. Also if the price of apples goes up maybe people switch over to oranges and there are technical disputes about how you correct for that kind of substitution effect. If, if people can avoid some of these price increases, now you’re absolutely right.
Ramesh Ponnuru:
That wages are another price, the price of labor that is affected by inflation. And if you’ve got a steady and predictable 2% inflation year after year after year, the idea is that wage rates will adjust that people who wouldn’t have gotten raises will get a 2% raise people who would’ve gotten a 2% raise will get a 4% raise as sort of it’s everybody in the economy just expects the price level to be a little bit higher next year than it was this year. But of course, that sort of a textbook model of the way inflation works and, and actuality inflation doesn’t work that way, particularly when you’ve got unanticipated inflation, where maybe it takes some time for this inflation to permeate every market, including the labor market. And during that period in between, if you’re a wage earner, you’re finding the purchasing power of your paycheck going down. And of course there are other kinds of there are other things that can happen with inflation that that, that cause the price of the products you buy to rise, but don’t help your wages. And that’s the case with a supply led inflation, an inflation that is caused by a blow to your productivity.
Joe Selvaggi:
I see. So, so inflation doesn’t raise all boats. Sometimes it it’s an uneven rising if you are either let’s say not an income or earlier you’re maybe fixed income retiree you’re a saver your savings don’t grow with inflation. So you may be left behind. Oh, so let’s talk about that. What are some of the primary negative effects of inflation in, in conceptually?
Ramesh Ponnuru:
So the loss of purchasing power of course, is the one that is closest to everybody’s mind, but it also makes the economy less predictable. If you’ve got an unsteady inflation. And so that makes it harder for businesses to make investment plans, for example, or for households to make long term plans. They don’t have that steady backdrop against which they can make the plant. There’s also what’s called menu costs. And just think about it very literally like the the restaurant has to keep changing the menu because prices keep changing. There’s the way that inflation is baked into some taxes now that’s better than it used to be. In the seventies, when we had our last big bout of inflation, the income tax brackets, weren’t indexed for inflation. So people would find themselves paying higher taxes, even when they weren’t getting ahead in real purchasing power of their income. But it’s still part of our tax code and things like capital gains. So you can end up paying a capital gains tax when you haven’t in real terms, made any capital gain and the effective tax rate therefore keeps going up. So there are all kinds of costs that ripple out through the economy.
Joe Selvaggi:
Okay. So let’s ask the, you know, let’s get into the meat of this. We know what inflation is. This is a harder question. What is it that causes inflation? You’ve already mentioned a supply shock but let’s go deeper into that. What, what I’m sure it depends on who you ask, but what causes inflation?
Ramesh Ponnuru:
Well, the typical cause of inflation is an excessive growth in the money supply, but really anything that increases the total level of spending is going to cause a demand side inflation that’s most of what we saw in the 1970s, that’s part of what we’re seeing now, if there’s, you know, the, the, the famous definition of inflation or explanation for inflation is too much money chasing too few goods. Now, the too few goods, that’s the supply side of the problem too much money. That’s the demand side that is the central bank running a monetary policy that is too loose that is leading, you know, to too much currency in circulation. For example would be the very classic case of of how a central bank can go wrong with inflation. And another metaphor people often use for this kind of inflation is overheating the economy.
Joe Selvaggi:
I see. So you’ve mentioned a couple things, I think that you we’re, we’re both a channeling Milton Friedman there with the too, too many, too many dollars chasing too few goods. So let’s analyze that equation. We’ve got too many dollars and too few goods. Let’s start with the too few goods. We all know that we have supply chain issues. We’ve covered that on this podcast in earlier episodes, but let’s, let’s analyze that. Are we still blaming too few goods on supply chain shocks that were a result of our recent pandemic?
Ramesh Ponnuru:
I think that that was a bigger cause of the inflation in the first half of 2021. And it is a, a pretty big cause of the inflation that we’re seeing in Europe. But it’s been less of what has been afflicting us for most of the last year, so still a factor. But but since mid 2021, I would say too much spending has been a bigger part of it. And by too much spending, I mean, really the total level of spending throughout the economy, all spending on consumption and investment public and private and business it’s you know, you want that growing at a steady rate and it hasn’t been a, it dropped substantially at the beginning of the pandemic then it rose sharply. And I think some of that sharp rise is justified as a way of catching up after you had that big drop. But it’s been excessive and and it’s been, I think clearly excessive since late 2021. And the central bank has been, has been too slow to arrest that.
Joe Selvaggi:
I see. So we’re talking about a constraint in supply and then an attending inflow of, of spending. So again we hear a lot about energy constraints price of gas is front top of mind for everyone. I think it’s gone up 50% in the last 18 months. The administration is calling that the Putin price hike and of course energy gas is an input for all other goods. Can we attribute some of this inflation to spike in energy price?
Ramesh Ponnuru:
Yeah. absolutely. We can. It’s, that’s typically the case. But of course gas prices were rising before Putin’s invasion of Ukraine. I think there’s no question that that invasion has made things worse, but we had an inflation problem before it, and the excess spending problem is not a Putin caused problem. It’s you know, that, that is a domestic policy problem. That’s a central bank problem. The, you know, what you, the point you made about gas prices being energy, being an input into almost everything else, that’s a very important point. Because sometimes people will say well, you know, one price goes up. People can just you know, spend more on that and spend less on other things and shouldn’t change the overall inflation rate. And that’s really not true when it comes to some, an input price that has a negative effect on productivity, like an increase in energy.
Ramesh Ponnuru:
It’s like making everything, you know, if you make everything twice as hard to make, like take twice as much labor to produce the same amount of products, you’re gonna have less output and, or higher prices. And there’s not a whole lot that a central bank can do about that. So all just a way of saying that the input price issue is absolutely part of this problem. And we, you know, we just have to be able to hold in our minds that we’ve got both a supply and a demand problem, and, and too often people wanna make it one or the other Democrats typically wanna make it an entirely supply issue as though that absolves them of any responsibility you know, which it actually doesn’t. But it’s also not true. It’s both.
Joe Selvaggi:
So, so, okay. Let’s let’s move off of the supply side and towards the demand side, you’ve already cited the fact that a lot of people through the pandemic were sitting home not spending money. They couldn’t spend money, they were stuck at home perhaps saving and they would naturally want to make up for lost time when when restrictions are lifted and we can all get back out there. So we’ve got that spike in demand as you describe. But there was also of course a stimulation of that spike in demand by the federal government in many ways. It it influenced our ability to spend their direct outlays debt, forbearance, unemployment supplements payment protection programs, all kinds of alphabet soup of stimulus. Of course that’s introducing the idea of far more dollars chasing the same number of goods. Is that to what degree is the federal government’s fiscal policy to, to blame for the stimulation in demand?
Ramesh Ponnuru:
Well, here, I think it’s a complicated story and I thought that a lot of the spending that the federal government engaged in in 2020 and particularly in early 2021 with president Biden’s so-called American rescue plan was excessive. And I thought it was excessive for a variety of reasons, mostly having to do with wasting money that could have been more productively spent elsewhere in the economy and creating bad incentives. But I, at the time, you know, even though I was opposed to Biden spending plan, I thought it wouldn’t have a big effect on inflation, partly because changes in spending over the previous decade, hadn’t had a big effect on total spending levels or on inflation because it had been offset. You know, if, so, for example, in early 2013, you’d had some spending cuts from the federal government and some tax increases and the central bank offset that so that so that the overall effect on the economy wasn’t very big this time that didn’t happen because the central bank was simultaneously engaged in a kind of loosening of policy under J Powell you know, partly loosening be, you know, as a, as a response to the pandemic and the effect on the economy, they, they thought it was the right thing to do.
Ramesh Ponnuru:
But the, the combined effect of this fiscal and then monetary loosening was excessive. And and that’s how we got here. And I also think feel permit me a little political digression. One of the reasons that the, the federal reserve let things get out of control in the second half of 2021 was there was uncertainty about the leadership of the federal reserve itself because Biden had not committed to renominating Powell. And there was a great deal of pressure from the left and the left typically doesn’t like monetary tightening likes monetary loosening and the democratic incumbent is definitely going to not want interest rate hikes. And I think that can help explain some of the delay in responding to the clear signs that not only did you have inflation, but this inflation was not transitory. And this inflation was in fact fed by excessive demand, excessive spending.
Joe Selvaggi:
So, I mean, you, you, you say that rates or have a political valence, but I think what you you’re really trying to say is for incumbents, not for left or right. Or Republican or Democrats, right. And all incumbents want low interest rates and a, and a let’s say a, a heated, perhaps not overheated, but a heated economy. Nobody wants to, well, I
Ramesh Ponnuru:
Think, I think it’s
Joe Selvaggi:
Afraid,
Ramesh Ponnuru:
Right? Yeah. I think it’s both in this case. I, I do think presidents just typically they want low interest rates. They don’t wanna have the risk of a recession from an increase in interest rates. President Trump was certainly a low interest rate person which also I think has to do with his background as a real estate developer. But I think that there’s also this additional ideological overlay, which is that the left tends to favor looser policy than the right. And tends, tends to think a little more inflation is more tolerable than the right does. Now I think that this is actually in, particularly in this case, a mistake that Biden and the Democrats would actually be better off if we’d started this tightening cycle in late 2021 and gone a little further in that.
Ramesh Ponnuru:
I think we’ve actually got a pretty strong labor market if you look at vacancies and employment growth and the economy could have withstood that, and you’d be better off as the party in power with inflation under greater control. I mean, you might be facing some losses anyway, because you’re coming into a midterm midterms, typically don’t go well for the party in power. But I don’t think you’d be, you’d be seeing the potential catastrophe that task that Democrats are now seeing, where I think, you know, in a very real sense, inflation is just devouring this presidency.
Joe Selvaggi:
So let’s again, so again, the, the partying power is uncomfortable with the levels of inflation. We’re all seeing right now. It’s not good for their prospects in November, but let’s, let’s dispense with some of the, or not dispense with some of the narratives that are coming from the, the democratic party. A lot of people blame inflation on the exploitation of sellers or
Ramesh Ponnuru:
Oh, right. So called
Joe Selvaggi:
Yes. Breeded of corpor. We have, it’s a our own Elizabeth Warren she’s our Senator, or one of our senators who has a wonderful creative port mano called greed, FL that, that essentially this is suddenly corporations has become greedy just recently. So is there any merit tore inflation?
Ramesh Ponnuru:
Well, I mean, I think you’ve hit on the major problem with it, which is that it, it, it attempts to explain a variable by reference to a constant companies. They’re always trying to maximize their profits. It’s not like we had low inflation for most of the last decade because companies decided, you know, we don’t actually care about making profits anymore. So something has to have changed where a bunch of companies, you know, all through the economy all at once decided that the way to do that was to raise prices. And and I think that once you start thinking in those terms, you, you just see how how pitifully inadequate Senator Warren’s explanation is. You know, she’s, she has responded to this inflation by introducing legislation that would prohibit large companies from, you know, I think the, the phrase is unconscionably excessive price increases.
Ramesh Ponnuru:
Well, what does that mean? Who would define it, how much litigation would be involved in that? But also if you look into that legislation so she’s, she says, you know, you, yeah, you’re allowed, you know, if the bureaucrats decide essentially that you’ve got a supply chain problem then okay, you can raise your prices enough for that. But implicitly, what they’re saying is you can’t raise your prices in response to changes in demand which is nuts. And and, and, you know, local market economy just can’t function. If companies aren’t allowed to set prices in response to changes in both supply and demand in their markets.
Joe Selvaggi:
Indeed. you know, we, we probably could do a whole podcast on the downside of price controls and why, why they lead to bread lines, but let’s move away from that. And talk about the other way the democratic party right now is deflecting from this concern about inflation saying, look, we’ve got inflation, but so does the rest of the world, we’re looking at Europe, they’ve got inflation Biden, certainly hasn’t and affected their policies. How is it that we would be blamed for something that is a universal phenomena?
Ramesh Ponnuru:
So there are two things that bear watching. One is there is, I think just kind of you’ve got some of the same policies being pursued everywhere. So I think European central bank policy was also too expansionary. And I think though we’ve also got a little bit of, of a coincidence because you’ve got a bigger supply problem in Europe right now. And you’ve got a bigger demand problem here in the United States. So you’ve got the same sort of a very similar kind of headline inflation number, but very different causation in both cases and different policy responses are called for in different degrees in each of the cases that was, you may not have sent it up, but that was all explanation one explanation two. I do think there is something to the idea that the United States is the world’s monetary superpower and that if it’s deflationary or inflationary, that tends to get exported to other parts of the world for reasons having to do with, you know, for example, other currencies being pegged to the dollar. But but I think that you know, there’s, there’s something a little screwy about the leadership of the United States saying well, this is a global economic problem. It’s not our responsibility. I mean, we’re the United States.
Joe Selvaggi:
Right, right. Indeed. So, so let’s let’s move away from we’ll accept and stipulate that we do have it. It is here. We do think we can have policy choices that will make differences, but let’s start with we’re coming out of the COVID 19 pandemic. Thank God. And theoretically supply chains will go back to normal will that likely happen and, and be let’s say saluatory to those hoping to reduce inflation. In other words, if we resume our supply, will the demand for that short supply normalize and you know, that will battle inflation.
Ramesh Ponnuru:
Yeah. I think that that as supply chains get UN snarled, I mean, unless there are more shocks, right. Because we, you know, we had the pandemic shock and we had the Russian invasion shock and the world might not be through with shocks. You know, there was concern, I think it basically hasn’t panned out, but there were concerns that the, the resurgence of the pandemic in China would cause big supply problems. And so you, you can’t rule that sort of thing out, but but one of the things about supply shortages is that they should, I mean, there are powerful market forces that act to fix those and that should happen over time and that should reduce that level of or that cause that kind of inflation, but you’ve still got the demand problem and the excessive spending is not something that gets fixed just because supply chains get fixed.
Joe Selvaggi:
So, okay. Then let’s shift it, even if we do have plenty of supply, we’ve got too much money still. Right. I think we have senators mansion and cinema to thank for the fact that we don’t have an additional three or $5 trillion in a build back better that was not passed, but quite a bit of stimulus was in the trillions, I believe another 5 trillion in sort of pandemic stimulus. That’s still filtering down is that stimulating helicopter money going to continue to overstimulate us well into the future. Is it, you know, if we turn off the SPT, how long will it take to again, normalize?
Ramesh Ponnuru:
Well, I think that you know, obviously it takes time for some of these changes, both positive and negative to work their way through the economy. And so, you know, the people call people say that monetary policy has the, the phrase everybody uses who studies this is like long and lagging effects. It’s however, I think some of the effects would be a little faster than that. You know, the signals to financial markets that the fed is serious, if it raises rates enough to give the markets jolt that shows up in you know, as we’ve seen, some of that shows up in asset prices. Some of that shows up in just market expectations of future inflation and when markets don’t expect future inflation to be so elevated in that in itself has a solitary effect because people aren’t trying to raise their prices to keep up with with what they see coming for them. So, so I think that, that a good policy change could have quicker effects than people sometimes think.
Joe Selvaggi:
So we’re talking specifically about monetary policy. We’re talking about the, the fed drone Powell we’re actually recording on June 15th before the two o’clock announcement of rate increases. So we, we can speculate here, but our listeners will know what the outcome was. Well, the, I think odds on favor are for a 75 basis point increase for the benefit of our listeners. How is it that this change in rates could have an effect, hopefully have an effect on dampening inflation? How, how is it effect that we’re making money more, more expensive? How does that filter through the economy and then right. Ultimately tame inflation?
Ramesh Ponnuru:
Well, there’s a mechanical effect. In for example, you know, it cools the housing market if interest rates are higher people are not as, as quick to purchase homes and to bid the prices of homes higher. So there’s that effect on inflation. And then that also affects rents. But I actually think that that the biggest effect is, is, is simply the expectations that when people have confidence that the federal reserve is going to do whatever it takes to get inflation back under control, that’s the most powerful effect that the fed has. And in fact, the more confidence there is the less actual interest rate increases the fed has to engage in. It’s a lot of what the fed has to do is is changing market expectations. It’s just like, sort of, you know the primary way that traffic signals green and red lights work is not through police tickets, right?
Ramesh Ponnuru:
It’s it’s, it’s just changing the way, you know, drivers act and it’s it’s not, self-regulating right, it’s the government setting up those traffic signals. But it’s it’s a kind of nudge to market participants to act in a particular way and to have certain expectations and expectations of what other people are doing on the road. So to here and in a lot of what I think went wrong for the fed last year was that it was sending the wrong signals about its intentions and and how committed it was to keeping inflation from getting out of control in the first place.
Joe Selvaggi:
So I think you’ve anticipated, I was gonna ask how high does the fed have to raise interest rates to essentially tame it, but your, your answer, I think I’m going to guess is it has to raise it a lot less. If everybody accepts the fact that it’ll do anything, it takes to raise interest rates. So if, if you don’t believe, if you believe that the fed is on it, and then they’re doing their job and they plan to do their job expectation for inflation, go down, ergo rates don’t have to go up quite as high as they would otherwise. Is that right?
Ramesh Ponnuru:
Yeah, that’s right. And one of the reasons I think that the fed opts to surprise the markets on the upside, by having a little bit higher of a rate increase than people expect right now is so that they don’t have to keep doing it. So that maybe that, that ends up being enough to convince people that that this is, this is the end or the beginning of the end of this burst of inflation.
Joe Selvaggi:
So we we’re running outta time, but I did, I do wanna get to the sort of historical you you’re trained as a historian. So I thought I’d ask in a historical question, we did reference the seventies and what happened then I’m old enough to remember but I wasn’t buying houses at that time. I was playing on the, you know, schoolyard, but back in the late seventies, early eighties, we had rampant inflation and then chairman Volker came out and essentially tackled a, an extreme bout of inflation with interest rates you know, then double digits. Would we, are you concerned looking back as a historian at that bout of inflation really the last time we, we were here that we will see that kind of pain because of course those kinds of interest rates cause enormous amounts of unemployment and, and recession, are we inclined to have to go that far and be you know, it, will it be that painful going forward if in your view,
Ramesh Ponnuru:
I think we ought to be able to avoid that degree of pain because we gotta remember that the inflation of that period took quite a while to develop. And it took a while for people’s expectations, excuse me, of inflation, to shift upward on a sustained basis. So you started seeing that increased inflation in the late sixties and then policymakers sort of flailed around in response for more than a decade. Right now, if you look at long term inflation expectations, if you look at measures of what the market is expecting inflation to be six to 10 years from now, there’re a little high. I think the fed needs to bring them down, but they’re not wildly high. And if you look at that, which means that the fed doesn’t have to to really upend people’s expectations, it just needs to moderate them, bring them down a little bit, and you combine it with the fact that the labor market’s in, in pretty good shape to start with those things, suggest to me that if the fed does the right thing now we can have, if not the sort of soft landing, we have a tightening cycle that doesn’t result in a recession, but if you do have a recession, maybe it can be mild and short.
Joe Selvaggi:
All right. So we’ve talked about many of the levers that government has to, to combat of inflation. We’ve talked about how it exacerbated inflation, but we’re now trying to turn the ship around in your view, given the government, we have the upcoming midterm elections and, and the policy choices that are on the table for those politicians who wanna remain in, in in office. What other levers do you see that we could be pulling to mitigate the effects of inflation and inflation expectations?
Ramesh Ponnuru:
Well, I think there are an enormous number of government policies that have an effect on productivity and it’s typically a negative effect on productivity. And if you simply lifted some of those burdens you would contribute to the long term productivity of the economy, which is just a good thing to do in general. And that would also put some downward pressure on prices. Not all of it would be quick and immediate but some of it would. So for example, reducing tariffs would particularly if you reduce tariffs on critical inputs like the things you use to make semiconductors that would, I think have a pretty quick effect and put some downward pressure on prices. You know, if you increase domestic energy production, got rid of some of the restrictions on that, that would also have an effect. And maybe some of that would even feed into today’s prices because it would affect people’s expectations of future prices and future supply levels.
Ramesh Ponnuru:
You know, we had this huge infrastructure bill that was supposed to make our economy more, more productive, but there’s language in that bill at the behest of Democrats that prevents you from using any of it to automate the ports, which is something that we ought to be doing to make supply chains more efficient, but that unions naturally dislike. And so Democrats won’t go for the problem that you come up against again, and again, is there’s either an ideological objection or some kind of political interest group objection. And the natural instinct of the democratic party is always restrict supply through regulation, subsidized demand, through spending that’s a recipe for more inflation. And it makes it very, very hard for them to respond to inflation in a way that actually helps solve the problem.
Joe Selvaggi:
So so we can’t blame it all on Democrats, I suppose also Republicans resist Donald Trump in particular was a fan of tariffs you know, and protecting American jobs. What you’re saying is free trade is one of the main remedies for fighting inflation including, you know, facilitating that free trade through ports and, and such, is that what you’re saying?
Ramesh Ponnuru:
Well, I wouldn’t necessarily say it’s one of the main remedies, but it’s one of the, it is a remedy and it is something that could be done. I mean, the president could do a lot of this with a stroke of a pen because a lot of the tariffs were imposed by the stroke of a pen. And so if you really think that inflation is a huge threat, I think you try to attack it on all fronts and you do the things that you can do
Joe Selvaggi:
Indeed. All right. So we’re getting close to the end of the time together. I don’t know if you wanna dust off your crystal ball right here. I’ll ask you the $64,000 question. How high do you think inflation will go? I think we’re looking at headline inflation of 8.6%. That was of Friday last week was what annualized inflation rate how high can it go and how long do you think it’ll last?
Ramesh Ponnuru:
Well, I don’t try to make predictions especially about the future, cause I think Yodi said but I, I, my sense has been that policy has consistently been a little bit too little too late. I would like to be pleasantly surprised, but I think that we are going to have this elevated inflation level for some time. So I, I think we’re gonna have it into 2023,
Joe Selvaggi:
Indeed. Okay. So sort of a grim outlook, but at least it, it is temporary. Depends your timeline. It will end and so you you’ve called it 2023 is when we start to see the light at the end of the tunnel. I’ll I’ll, I’ll take that to the bank. Thank you very much for joining us today. And Hubwonk. Ramesh, you’re always a welcome guest and a font of information. Thank you for joining us.
Ramesh Ponnuru:
You’re most welcome.
Joe Selvaggi:
This has been another episode of Hubwonk, a podcast of Pioneer Institute. If you enjoy today’s episode, there are several ways to support the show. It would be easier for you and better for us. If you subscribe to Hubwonk on your iTunes podcaster, it would be easier for others to find hub won. If you offer a five star rating or a favorable review, we’re always grateful. If you want to share Hubwonk with friends. If you have ideas for me, or suggestions or comments about future episode topics, you’re welcome to email me at Hubwonk@pioneerinstitute.org. Please join me next week for a new episode of Hubwonk.
Recent Episodes
In Massachusetts, the Know-Nothing amendments prevent more than 100,000 urban families with children in chronically underperforming school districts from receiving scholarship vouchers that would allow them access to additional educational alternatives. These legal barriers, also known as Blaine amendments, restrict government funding from flowing to religiously affiliated organizations in nearly 40 states and are a violation of the first and fourteenth amendments.
The U.S. Supreme Court will hear a case this year, Espinoza v. Montana Department of Revenue, that could end these amendments. In 2018, Pioneer produced a 30-minute documentary on the impact of the Blaine amendments on families in Massachusetts, Georgia, and Michigan.
“She’s a good girl. She helps me a lot. She has big, big dreams. I don’t have the money, but she has big dreams. I hope she’s going to get everything, but she works so hard. She works so hard in school.”
“Our family is needing to make some really big sacrifices because we believe this is important, and so, we’re basically going to do whatever it takes… Sometimes we look at each other and go ‘I don’t know if I can do it again another month…’”
“A lot of the families have to sacrifice and work multiple jobs… And just scraping together enough money to just make tuition, just the basics.”
“It is discriminatory, that parents who want to choose an alternative to public school for their children, would not in any way receive any compensation for that, whether it be tax credit, whether it be a voucher…”
In the 1840s, nativist movement leaders formed official political parties and local chapters of the national Native American Party (later the American Party), although they continued to be commonly known as the Know-Nothing Party. Politicians sought to insert provisions into state constitutions against Catholics who refused to renounce the pope. The Know-Nothing movement brought bigotry and hatred to a new level of violence and organization.
The party’s legacy endured in the post-Civil War era, with laws and constitutional amendments it supported, still today severely limiting parents’ educational choices. A federal constitutional amendment was proposed by Speaker of the House James Blaine prohibiting money raised by taxation in any State to be under the control of any religious sect; nor shall any money so raised or lands so devoted be divided between religious sects or denominations. These were then named the Blaine Amendments of 1875.
in recent decades, often in response to challenges to school choice programs, the U.S. Supreme Court has demonstrated great interest in examining the issues of educational alternatives and attempts limit parental options. Massachusetts plays a key role in this debate. The Bay State was a key center of the Know-Nothing movement and has the oldest version of Anti-Aid Amendments in the nation, as well as a second such amendment approved in 1917. Two-fifths of Massachusetts residents are Catholic, and its Catholic schools outperform the state’s public schools, which are the best in the nation.
Help families like the Costons in Michigan to end the bigoted Blaine amendments in their state that are blocking tuition scholarships and other types of financial support that would make it possible for families to send their children to high-quality schools that are best suited for their children.
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This week on “The Learning Curve,” Gerard Robinson and guest co-host Kerry McDonald talk with Robert Pondiscio, a senior fellow at the American Enterprise Institute. He shares his background working with curriculum expert E.D. Hirsch, Jr., who has emphasized the importance of academic content knowledge in K-12 education as well as civic education to develop active participants in our democracy. They discuss why civics and the study of U.S. history have fallen out of favor over the last several decades, and what that means for the health of our representative government and liberties. Pondiscio explains some of the findings of his book, How the Other Half Learns, on New York’s Success Academy charter schools network, and how the charter movement can overcome growing political obstacles, especially among Democrats. Finally, they explore his recent National Affairs essay on the need to restore trust in the institution of public schooling.
Stories of the Week: The Economist offers a thought experiment: 20 years from now, will children be taught by artificial intelligence-powered personalized learning assistants? America celebrates the 50th anniversary of Title IX, which helped bring about gender parity in sports, the many women whose lives were changed, and the impact on women in leadership roles in corporate America.
Guest
Robert Pondiscio is a senior fellow at the American Enterprise Institute (AEI), where he focuses on K–12 education, curriculum, teaching, school choice, and charter schooling. Before joining AEI, Mr. Pondiscio was a policy analyst and education reform expert at the Thomas B. Fordham Institute, an education policy think tank. He previously worked for the Core Knowledge Foundation and as an adviser and civics teacher at Democracy Prep Public Schools. Mr. Pondiscio became interested in education policy issues when he started teaching fifth grade at a struggling South Bronx public school in 2002. Before that, he worked in journalism for 20 years, including in senior positions at Time and BusinessWeek.
The next episode will air on Weds., June 29th, with a member of the Institute for Justice’s legal team discussing the recent U.S. Supreme Court decision in Carson v. Makin.
Tweet of the Week:
The Supreme Court STRIKES DOWN a Maine education program that provides tuition assistance for students to attend some private schools but excludes schools that provide religious instruction. SCOTUS says the exclusion of religious schools is unconstitutional.
— SCOTUSblog (@SCOTUSblog) June 21, 2022
News Links:
The Economist: “The future of education – How might artificial intelligence change the role of teachers?”
https://www.economist.com/podcasts/2022/06/20/the-future-of-education
AP: “Title IX – 50th anniversary”
https://apnews.com/hub/title-ix
Read a Transcript of This Episode
Please excuse typos.
[00:00:21] GR: Hello listeners. This is Gerard Robinson coming at you from beautiful Charlottesville. Every week, we bring really interesting guests and topics to talk about education at large, but also social science. We talk about economics. We talk about money and other things every now and then we have an opportunity to be blessed by having a guest cohost.
[00:00:41] And today’s one of those days and we have Kerry McDonald, who’s been with us before. Always glad to partner with her. How you
[00:00:50] Kerry: doing Kerry? I’m doing well. Gerard. It’s great to be back with you.
[00:00:53] GR: Yeah, I think the last time we were together, would’ve been early spring. And so this is a good way to, [00:01:00] to move us into the summer.
[00:01:02] And I don’t know what this weather’s like, where you are, but it’s 82. Today’s gonna be nineties plus moving forward. So it’s gonna be pretty humid over the next four or five days.
[00:01:12] Kerry: Yeah, it’s beautiful here in Boston. And I’m heading up to New Hampshire this week for the porcupine freedom festival for some great talks there.
[00:01:23] And I’ll also be recording some episodes of my podcast the liberated podcast, which will be focused on education entrepreneurship, and some innovations in homeschooling and all kinds of good things. So the weather looks great here for.
[00:01:38] GR: Excellent. Well, what story has you excited today?
[00:01:42] Kerry: I’m really interested in an article that was linked to a podcast at the economist this week about the future of learning.
[00:01:50] And it’s always interesting to kind of imagine what education will be like, 10, 20, 30 years from now and in this. [00:02:00] Particular article and episode they were focused on 20 years from now. What would learning look like? And you could tell from the sort of snapshot that they gave the concern was that, , technology was gonna take over, it was going to replace teachers.
[00:02:15] It was going to create sort of this stale stifling kind of learning environment that wouldn’t be serving. Students. Well, and it reminded me a little bit of this fear about new technology or fear about the ways in which technology could negatively impact our lives. That of course has been with us for centuries really.
[00:02:35] And in fact, in my unschooled book, one of my favorite quotes was from a journalist. Who said, speaking about a new piece of technology, this will make us nothing but transparent heaps of jelly to one another. And this was a journalist in the late 19th century talking about the telephone. And so it makes me think a little bit more.
[00:02:59] [00:03:00] Suspiciously about kind of doomsday predictions about technology. And instead recognize that really technology improves our lives in many ways and the same can be true for our learning. So it was worth listening to , the economist podcast did bring in Salcon from Khan academy, who I think offered a more optimistic view of the future of learning and technology.
[00:03:23] But definitely worth listening to, and.
[00:03:26] GR: Got it. It’s amazing how we pick and choose how to be offended when it comes to technology. When it’s technology for us to build a muscle in other right arm, left arm or somewhere else in our body, or it’s AI to actually help us think better, we’re all for it.
[00:03:46] But somehow we don’t think the same AI that helps our body helps our mind that somehow when it’s outside of us, Or if it’s created within the, for profit sector and not per se use solely in the nonprofit that somehow [00:04:00] it’s evil I’m with you and others who say that there is a role for technology, there’s a role for AI and there’s a role for entrepreneurship and investments.
[00:04:09] And so makes a lot of sense to me. None of this means that I’m not aware that there are. Horrible ways in which people have used AI the dark web and some of the things that take place. There is simply one example, but technology and education, it’s here to stay rather than fight against it. I think we need to fight for it fight for it in ways that are smart.
[00:04:30] That are ethical. And then at least we’ll raise some philosophical questions for all of us to answer because our children and grandchildren getting to your point, they’re gonna inherit a very different America than we know today. We don’t know how many amendments will be made to the constitution.
[00:04:46] If one of those amendments in fact will focus on technology and what it means to make us a more perfect union. So I’m glad we’re continuing to have the conversations about uh, technology and education and glad see we’re focused on the future. My. [00:05:00] Article today is a reflection on the past and it goes back 50 years on as many know that on June 23rd, 1972 Congress enacted or basically added title IX to an education amendment.
[00:05:13] And it was signed into law by Richard Nixon. And what it did was to start. A platform, a creative platform in which we can talk about the role of women, not only in American society, not only in sports, but the role of women in the American economy in general. And so we’re celebrating 50 years. And when we think about title IX, understandably, we primarily think about sports because that is one arena.
[00:05:40] Where we put sports under a microscope and began to look at numbers, investments in sports whether or not women were getting equal access across the board. Well, I want to use the sports analogy, but I also want to use it to talk about what women. Did after they played sports. And this is from an AP article [00:06:00] titled title nine, propelled women from college courts to CEO offices.
[00:06:05] And there’s just a few women they highlight. So one is Gail. Boudro. She played basketball at Dartmouth. And in fact, she’s still the school’s career scoring leader and rebound leader. She was three time Ivy league and she moved on to be also earned academic all American status. Now in her business career, she earned actually an MBA from Columbia and that led to several businesses.
[00:06:29] She’s the former CEO of United healthcare and took over as president and CEO of Anthem incorporated, which. Fortune , 500 company in 2017. Another example is Jenny Gilder. She’s a two time Olympian, 1980 and 84. She was the American roarer of the year at Yale in the 1970s. She took that and moved forward.
[00:06:53] Earned an MBA from Washington in 1991. And then she founded Washington works. It’s a Seattle based [00:07:00] foundation which helped women receive public assistance in the 1990s. And later became the CEO and founder of the Gilder office for growth, which was a family and investment office. Closer to home on my neck of the woods is Jackie MC Williams.
[00:07:15] Many of you know, I’m in Virginia. She went to Hampton university. She was a star on Hampton basketball and volleyball team. She helped Hampton win the NCAA division two basketball title in 88. She was also a freshman of the year. She took her progress on the court and then moved it into management.
[00:07:33] She earned a master’s degree from temple. She later coached at Virginia union, an P C U in Richmond, and later became the first female assistant in the central intercollegiate athletic association. Men’s basketball team, which is something we rarely see. And then she moved forward. Ultimately in 2012 becoming the first black female commissioner of the sea.
[00:07:53] I I a and as Meg, Whitman, of course, many of our leaders know who she is across the board, [00:08:00] but these are examples just of four women. There are 400, 4,000 more actually that we can see how they used what they learned playing sports and took that into the field of work, corporate America in the nonprofit sector, fortune 500, as well as small business, also public assistance.
[00:08:17] So 50 years and things are. What are your thoughts?
[00:08:20] Kerry: Yeah. So it’s interesting. The associated press did a nice spread of related articles connected to title IX for this 50th anniversary tribute. And it, I think it’s really interesting Gerard that you and I both sort of gravitated to the articles around some of.
[00:08:39] Women business owners and CEOs who were kind of the pioneers in pushing for title IX years ago and, now have had success in their careers. And of course were instrumental in making women’s sports come to be and able those of us who kind of came after them and participated in both high school and [00:09:00] college sports able to enjoy that.
[00:09:02] So just a wonderful commemoration and again, interesting to see how many of these pioneers turn into entre.
[00:09:10] GR: absolutely. And naturally we also know there’s a great deal of controversy and concern and conversation and applause, as it relates to the role of men who began to transition into women’s sports.
[00:09:23] So, these articles that not focus on that, these are the ones that I read, but it’s also one that’s part of the conversation. All right. Well, as you know, we have great guests. We’re shortly going to be joined by Robert Pondiscio. He is a senior fellow at the American enterprise Institute. He’s also a former journalist with 20 years of experience in the field.
[00:09:45] He’s also the author of a book to help us think seriously about what education looks like. And he’s probably one of a hundred people in the country. Within the school reform segment where people listen to his voice. And so he’s gonna join us soon and look forward to that
[00:09:59] Robert: [00:10:00] conversation.
[00:10:27] Kerry: Welcome back to the learning curve podcast. We are thrilled to be joined today with our guest Robert PIO, who is a senior fellow at the American enterprise Institute, where he focuses on K to 12 education curriculum, teaching school choice and charter schooling. Before joining AAI penici was a policy analyst and education reform expert at the Thomas B Fordham Institute, an education policy think tank.
[00:10:56] He previously worked for the core knowledge foundation and as an [00:11:00] advisor and civics teacher at democracy prep, public schools. Punic became interested in education policy issues. When he started teaching fifth grade at a struggling south Bronx public school in 2002, before that he worked in journalism for 20 years, including in senior positions at time and business week.
[00:11:21] Robert Punic, welcome to the learning curve podcast.
[00:11:24] Robert: Oh, thanks for having me. How do they say it? Longtime listener first time, caller or guest it’s a pleasure to be with.
[00:11:30] Kerry: It’s great to have you here today. I’m gonna ask you a few questions and then Gerard has a few that he wants to ask you, but let’s begin by talking about the fact that you’ve been a protege of the curriculum expert ed Hirsch, Jr.
[00:11:46] Would you share with our listeners why you find his work on K to 12 education, so compelling and why it’s not been more widely embraced among the education establishment?
[00:11:56] Robert: Oh, man. We, could talk about that till the cows come home. That a [00:12:00] long, complicated topic. the short version is and boy I’ve said this a thousand times over the years Don Hurst, the D and ed Hurst stands for Don.
[00:12:08] So, we call him Don. He was the one educational theorist whose work described what I saw in my south Bronx classroom every single day. just to paint the picture for you literally 20 years ago, almost to this day, I started teaching at what was the lowest performing school in the lowest performing district.
[00:12:27] In New York city, PS, 2 77 in the south Bronx and having knocked , set foot in an elementary school since I was myself, an elementary school student, I had virtually no, background in education. I was a, you know, an alternative certification teacher. So, , There was a bit of a willing suspension of disbelief that went into my work.
[00:12:45] In other words, you know, I didn’t know how to teach reading. I, I was a proficient reader and whatnot and, the way I was taught to teach reading to my struggling fifth graders went from willing suspension of disbelief to kind of skepticism, to almost [00:13:00] Milt and anger, because I just realized that the way we were trying to teach kids how to read was just not effective.
[00:13:06] then I discovered ed Hirsch’s work on my own and it. Off like a lightning bolt in my mind, it just described exactly what I was seeing in my classroom every day, kids who could decode, in other words, they could read the words, but they struggled with comprehension and everything that I had been taught as a teacher was that, oh, well, they’re struggling with comprehension because they don’t find it engaging it doesn’t.
[00:13:28] Reflect their experience or interest first was the guy who would say no it’s background knowledge, it’s vocabulary. In other words, if everything we were teaching kids was to read things that were of interest to them that reflected their own experience. what I’ve since come to say, or describe as all mirrors and no windows.
[00:13:46] Well, then that’s going to limit their literacy , , and when I would bring it up in, my ed school classes and my, , professional development, I’d say, Hey, what about this guy? Hirsch? you would always hear some version of, oh, that’s that dead white guy stuff. Nobody takes [00:14:00] that seriously.
[00:14:01] and this is where the skepticism turned to militants and. And anger. So wait, his work is not about that at all. It’s about literacy. It’s about background knowledge. , we’re just giving these kids kind of like starvation ratios of rich curriculum of science and history.
[00:14:14] This is why they’re struggling with comprehension. It’s not that they can’t read. They’re reading out of their depth all the time. I mean, that was the soul of Hersch’s works still is. I became so animated by his work that I. Almost literally ended up knocking on his door to say, Hey, look, this is who I am.
[00:14:29] This is what I do. Let me help you because you’re the guy who’s figured it out. And trust me as a, recent departing teacher, we are not learning what, you know, as, teachers and we need to.
[00:14:40] Kerry: Mm, I love that, that you reached out to him and really wanted to connect , and learn more.
[00:14:45] So, you know, Hearst has been unique in that he’s an academic UVA, English professor who also dedicated much of his intellectual energy and professional time emphasizing academic content knowledge in K to 12 education, which you’ve just talked about. Why haven’t we [00:15:00] seen more higher education figure? in the core academic disciplines, English, math, science history provide leadership in primary and secondary schooling.
[00:15:09] And, and how do you think we could encourage higher quality content experts to lend their voices to school reform?
[00:15:15] Robert: What a fascinating question. And you’d think after 20 years I’d have a good answer for you. it’s almost like there’s this kind of church, state or Chinese wall in between higher ed and K12.
[00:15:26] I mean, for the last 20 years or more in the education reform movement, I don’t think I’m wrong about this. I think we’ve more or less given. Schools of education, a bit of a pass. So, there’s not that much interplay, I think, between higher ed and K12 and look, I mean, it’s just, I, I think, and this is, again, a lot of the stuff that Don Hirsch has written about over the years.
[00:15:45] there’s a lot of kind of, and I don’t wanna be overly dismissive feel good notions about what kids need to learn. In other words, we are more concerned or are often more concerned with kind of. What I would describe as , the Hollies of, K12 education, [00:16:00] as opposed to more the nuts and bolts, the rich content knowledge, the subject matter knowledge.
[00:16:05] and it’s kind of interesting. I, just thinking about how, you know, ed reform, I think has just given a pass to K12 or to, ed schools in reforming K-12 education. It, it continues to astonish me the, the degree to which we just assume that, schools of education are just kind of damaged goods are broken and, really can’t be, fixed or that we can’t uh, As a policy matter exercise, more influence of them having said that, I mean, it’s a lot better off now than it was a few years ago.
[00:16:31] I mean, I just wrote a piece for the Fortive Institute just last week based on Iran report that is noting that there’s this kind of quiet work being done under the gist of a group put together by the, council of, chief state school officers. Where you’ve got about a dozen or so states looking to influence curriculum and instruction.
[00:16:50] and this ran report suggests that they are at the very least changing teacher habits in terms of curriculum adoption and use. mean, that’s the [00:17:00] first steps you really kind of need to get to enthusiastic and, and informed use. So it’s, a long process, so don’t wanna leave the impression that it can’t be done.
[00:17:07] But we need to do more of it. And, those states may be providing some leadership as to how we might go about it.
[00:17:13] Kerry: So let’s switch now to talk about civic education, which has been a topic that you’ve written about in the past, and certainly an element of Hirsch’s work. And I wonder if you could discuss how and why civics and the study of us history have fallen out of favor in so many K to 12 schools over the last several decades.
[00:17:32] And what do you think that means for the health of our representative government civic, mindedness and Liberty?
[00:17:39] Robert: Boy. I hope at some point you ask me a question I can answer in 10 seconds or less. this is gonna be another kind of long that’ll be for dry it’s it’s a great question. And a fascinating one.
[00:17:51] I often joke that that ho man went to his grave without ever having a once uttered the phrase collagen career ready. and what I mean by that joke is that we [00:18:00] had a very. And concept of, schools and you’re right to invoke Hersh again, because he wrote a terrific book a few years ago called the making of Americans, which really unpacked some of the earliest thinking about the purpose of public education in America, even before Homan.
[00:18:16] I mean guys, like, you know, Benjamin Rush and Noah Webster and even the founders, writing the constitution, the Federalist papers who were so concerned about faction , and there was. A surprising amount of content, written by those, in the founding generation that really, thought deeply about education and said, look, you know, schools are the mechanism by which I think it was the Benjamin Rush phrase you create quote, Republican machines, meaning, Ordinary people who were capable of self-government, you know, that was a overriding concern of, thinkers of 250 years ago.
[00:18:50] That means civic education. That means preparation, not for the private ends of, , college and career readiness as we term it now. But preparation for public life or [00:19:00] active participation and civic engagement. and I think it’s, fair to say. We have just drifted. So far from that shore, that now when you, even suggest that to some people, they’re like, well, you know, why would you think that should be a purpose of, schooling now, maybe that pendulum has come back a little bit more in the last couple of years.
[00:19:19] you can’t open a paper anymore without somebody, saying that our democracy is imperiled. So the conditions should be ripe because of that for a return to civic education, the obvious downside. Is I think whenever you say civic education, particularly to those of us who are, right of center we tend to view that as, code for a kind of aggressive activism in civics and civic education, that kinda leaves a bad taste in one’s mouth.
[00:19:45] But there is always going to be that work to be done. Right. I mean, I’ve been spending a lot of time lately thinking about exactly this question , and what is the purpose , , of the school. And, it’s the time to rethink the kind of, you know, social contract, if you’re like that we have between [00:20:00] families and parents and children and the outcomes that we seek in schooling.
[00:20:04] And you can come at this many number of different ways. I don’t think I’m alone in thinking at the kind of technocratic focus on just outcomes while important has been, you know, minimal caloric content as it were. In other words, I’m not sure that things are that much better off than they were say 20 or 30 years ago before we fetishize test scores as kind of the alpha in omega.
[00:20:25] So it’s Long story short. I think the time is long overdue just to kind of rethink that kind of civic function of education. but it’s gonna be di difficult to do that in the, in the current political environment.
[00:20:36] GR: So Robert you’ve written a book, how the other half learns equality excellence and the battle over school choice.
[00:20:44] I’ve got a copy. I’ve read it, loved it. And when I initially saw the title, it reminded me of a book I guess published 129 years earlier called how the other half lifts and Jacob risk book about tenement slums in New [00:21:00] York. Your story. Is about New York. It’s about really the network of charter schools called success academy.
[00:21:08] Eva’s been on our show before, but your story is really just a microcosm of the American story of reform of politics and change. Talk to us about some of the larger lessons that we as listeners should draw from your book, not just from New York, but the broader conversation about let’s the phrase you just used, the social.
[00:21:30] Robert: Thanks Gerard. and by the way, go to the head of the class, you were one, of the few readers who was made that immediate connection that I kind of thought was obvious between my title and the homage to Jacob Reese. I guess I’m a thorough going ed Hershey and, you know, core knowledge guy that I just assumed that was part of everybody’s cultural literacy, but it was not, but you got it.
[00:21:48] So thank you. Yeah, it, it, it’s interesting. I mean, the exact conceit of the book Gerard was exactly that. I mean, if listeners know success academy, then they, know the basic contours of the [00:22:00] backstory, which is that, Eva Moskowitz has succeeded in building something that is literally unprecedented in American education, which is a network of charter schools.
[00:22:09] In which there is quite literally not a bad one and I’m making air quotes around, as I say bad, because I mean, they are good by the standards by which we hold schools accountable. I don’t have the data in front of me, but, the weakest success academy still gets like 80, 90% of their kids passing , the New York state ELA and math test.
[00:22:28] And, and to my knowledge, no other charter network in America has grown to the size. Of hers without at least one or two outliers and sometimes quite a few outliers. So, based on the way we keep score in education and ed reform, she seems to have figured out something that nobody else has managed to figure out.
[00:22:45] So if you’re me, you know, or a guy like me or you, I, so we wanna figure out, okay, what’s going on here. What is she solved and how can we translate that to American education at, at large? So that was the, premise by which I spent a year embedded at a success academy [00:23:00] school.
[00:23:00] And interestingly, it was literally in the same neighborhood where I was a, fifth grade teacher for five years directly across the street, almost from where I was a student teacher, when I started teaching. So I was looking for exactly that, what are the lessons? And, , the bad news I suppose, is I don’t think that there are a lot of lessons.
[00:23:17] And that’s because not only are these schools of choice but they are very demanding schools of choice demanding for families. In other words, it’s just damn hard, frankly, for a family to, Persist at success academy. They, make a lot of demands of families, , read with kids every night.
[00:23:35] be very accountable to the schools. I’ll oversimplify here broadly, but I think the basic idea, what she’s kind of figured out how to do. Is get every adult in a child’s life, basically singing from the same hymnal. And that’s difficult to do in K12 at large. Right? In other words, if you sign up willingly in a school of choice and you sign up for this intensive form of education well then, buying in, you’re a knowing consumer.
[00:23:59] You’re much more [00:24:00] likely to be able to, do that than, in a run of the mill K12 school at a slightly more granular level. The demands are such that, and this is just observation. I always feel the need to point this out. This is not data. This is just kind of a journalistic observation.
[00:24:13] It’s unmistakable that the demands mean it’s a lot easier for a certain kind of families to persist and be successful here. I think this was in the book. At one point I went on a field trip with some second graders, and I think there were more dads chaperoning , that second grade field trip than I had seen in five years of parent teacher conferences.
[00:24:32] So in other words, the school culture kind of valorizes or requires a lot of parental bandwidth. So you end up seeing families who are. Intact employed, ambitious for their kids, religious and spiritual, for example, they have more, a little bit more social capital perhaps than other families in that same neighborhood.
[00:24:49] That’s not a criticism by the way. I mean, I think , some folks, including frankly, some folks at success academy misinterpreted the book of saying, oh, well, you’re saying that we’re just Parents? No, because the point I [00:25:00] made it repeat, made repeatedly in the book is that yes, there’s a certain bar for entry, , you gotta have a certain amount of parental bandwidth to get in there at all.
[00:25:08] Because of the hurdles they put in front of families uh, But once they’re there, they are outperforming, literally outperforming the gifted and talented programs in New York city that do in fact hand pick kids. So there’s considerable magic going on there, but it’s a complicated picture of what can be done when you have dedicated employees, a real clear school culture a, a demanding and.
[00:25:30] Program and, high and ongoing levels of, parental bandwidth. All of those things make it phenomenally powerful for low income families, but phenomenally difficult , to apply to K12 at large.
[00:25:42] GR: So let’s stick to New York city again, because it’s another microcosm for a larger conversation about.
[00:25:50] Education and politics in this instance, it’s charter schools. So right now as we speak the bite administration and others are pushing [00:26:00] to really slow down the growth of charter schools. Well, this is 2020 two let’s back up to October 7th. 2015 in New York city, when it estimated 18,500 families children’s and children, educators gathered at the Camden Plaza in Brooklyn under the motto, I fight in equality at that time.
[00:26:19] Democratic mayor bill de Boggio was trying to end. Charter schools, as we know it again, 18,500 families, children, educators, employees gathered to say, no, we don’t want this to happen. Even then within the school reform movement, both public and private school sectors, people began to say, there’s a breach.
[00:26:41] In this social contract and people like NA Democrats have always supported charters. It won’t change well, we’re now in 2022. And when vice president by then was under president Obama, who supported charters, it’s a different place. What have you seen? , not only unfold in New York [00:27:00] city, but just, writ large in our movement.
[00:27:02] Robert: that’s a great question. And I guess I’m gonna run the risk of kind of scooping itself a little bit. I’m actually working on a big piece as we speak for education. Next on almost exactly this question. So I’m here in New York. Just shortly after that rally that you described we ran up against a, a cap in charter schools.
[00:27:22] if you wanna open a charter school in New York state, you literally cannot do it anymore. At least down in New York city. There’s, still some cap space. in upstate New York. but most of the energy and dynamism of charters in New York have, has been in the last couple of decades in New York city.
[00:27:39] I mean, we, mentioned success academy. There’s also uncommon achievement. First Kip democracy prep, where I used to teach and others. These fairly large well established and by any reasonable metrics, successful schools run by so-called CMOs or, charter management organizations. I can’t help, but think in, in a less [00:28:00] polarized time, If education were kind of less of a political football, those of us in New York, we would look at the, at our charter sector in New York city with no small amounts of civic pride and say, look, , , these schools, dozens of them are serving the cause of equity.
[00:28:16] , they are accomplishing and have been for quite some time. the thing that our previous mayor who you just alluded to bill de Blasio. Claim to wanna create with the so-called selective high schools, which is getting large numbers of black and brown students on the path to, college and, career and, and elite educational opportunities.
[00:28:35] Well, well, charters have been doing that for quite some time. But they’re in bad odor. So it’s, bizarre, right? To, in other words, they, all they’re doing is all they’ve been asked to do. And here we are in New York with, you know, a charter cap. We’re not opening any more of them. And when we are opening new charters, they tend to be now those that are still opening upstate New York.
[00:28:55] Kind of little mom and pop charter schools community responsive charter schools, not the, big [00:29:00] CMO schools. Now, meanwhile, parents still are swelling. the waiting list for those, more established CMO network schools. So it’s kind of interesting, no matter how you slice it, it does seem like this is a very hard time to be in the charter community in New York, either you are being thwarted in any attempt to open new schools.
[00:29:19] If you’re opening new schools, well, then you’ve got a lot of work to do because you don’t have the resources of a CMO it’s it almost feels like you’re, back to 25 years ago, when we were opening schools in church basements and whatnot, and everything was being bootstrapped. I’m tempted to suggest that that’s a bit of a bellwether.
[00:29:35] For the way charters are going nationally, where, once that bipartisan coalition that we enjoyed for a couple of decades in the ed reform world, once that fell apart it just became another way to say it is that ed reform sneezed and, and the charter world caught cold.
[00:29:50] GR: Makes a lot of sense. And since we’re discussing charter schools, we wanna say hello to all of our colleagues who are in Washington DC for the national charter school conference [00:30:00] held there for the next few days. So by the time you hear this, you may still be in DC. And those of you who will listen later, thank you for getting together.
[00:30:07] Both folks on the right left, middle, all stripes and everything in between. So here’s my last question for you. You’ve recently wrote. Good piece in national affairs about how to restore trust and public institutions, really public schooling. For some of our listeners, they may not be aware of national affairs.
[00:30:26] Tell us a little bit about that medium and then kind of give us an idea of why you think the topic of public schooling and trust is important at this.
[00:30:35] Robert: Yeah, thanks. It, it just came out today as we’re speaking and it’s the first time I’ve had the opportunity to write for national affairs, which is a, quarterly founded by my AAI colleague.
[00:30:45] Yuva Lev who is maybe the, preeminent public intellectual that we have in this country at this time. So it’s, it’s an honor and a thrill to have anything appear between those covers. reason this interests me. It’s funny. I’ve been accused of being a contrarian and, and [00:31:00] I don’t think I am.
[00:31:01] But maybe I, I dwell in complexity and if you’ve been in the reform world for any period of time and, you know, tell me if you disagree, George, a lot of us who are, and I’m a, you know, school choice, charter school parent advocates. If we think long and hard about our advocacy, we probably recognize a tendency to kind of take advantage of weakness in public education because it creates the conditions, right?
[00:31:27] that further our agenda. To drive demand for school choice. , , both among parents and politically there’s something a little bit unholy about that. Right. and again, I hope my, choice advocate in charter advocate, you know, bonafide are in good order. but I, I always remind my friends in this world that look, the sun will likely go out before we have in America where the majority of kids are not in traditional public schools.
[00:31:54] it’s not because we can’t do anything differently. It’s because it’s a cultural habit. It’s because [00:32:00] we value it. So let’s just kind of tap the breaks before we try to. unseemly advantage of weakness in public education because that’s where the kids go to school. So we need to be no less invested in their outcomes and the quality of education that they receive than we are interested in what happens to kids in schools of choice.
[00:32:20] and as soon as I say that, your then I also wanna make sure this critique applies to the left as well, because the second that you are envisioning your job as a public school teacher or administrator as, Playing a quasi activist role, , viewing schools as, social justice institutions, well, then you’re kind of playing fast and loose with the expectations around public education as well.
[00:32:42] So this long piece, and it’s, it is quite long. It’s about 5,000 words. I think is, is hopefully a reminder to, to partisans of both stripes, to just kind of, again, tap the brakes before you kind of play fast and loose. With damaging this institution that educates the majority of American children and [00:33:00] probably always will be because either you don’t have the permission as a public employee to, impose your social justice agenda or whatever your activist agenda is on education.
[00:33:10] And on the other hand before you really try to take political advantage of, the weakness of public education, let’s remind ourselves that this is where most of the kids go to school and probably always will. So we need to remind ourselves that we have a vested interest in, those kids who will probably be the majority of kids for quite some time to come.
[00:33:29] GR: Robert, thank you for articulating. What many of us in the school reform movement have said for decades? Because we support charter schools, vouchers, ESAs, and everything else homeschooling as well. We realize the majority of our public schools will educate our children and we have to make them work. I’ve also said that, , we should make all the best examples, charter schools alone.
[00:33:49] There’s some great high performing title, one schools in rural areas, in urban areas as well. So thank you for that. Thank you for joining us. Also thank you [00:34:00] for bringing ed Hirsch. So for listeners, after you listen to this podcast, you can also go to our August 18th, 2021 podcast. You can find at the pioneer Institute where we actually interview ed Hirsch on common knowledge, equity and educating citizens.
[00:34:14] So you may find some good things there. Robert, again, keep up the good work. I look forward to reading your article that you just discussed and look forward to seeing you in person at some point when. We’re in the same room together.
[00:34:28] Robert: Here’s hope. And thanks for having me take care.[00:35:00]
[00:35:00] Kerry: So Jared for the tweet of the week, this week, it was a big week at the us Supreme court with the opinion in Carson V Macon. So the tweet of the week is the SCOTUS blog at SCOTUS blog. Talking about the vote being six to three and really a, victory for school choice.
[00:35:17] GR: Absolutely. And in fact next week we’re gonna have someone from the legal team.
[00:35:23] Who represented the family in that case, as our listeners know we’ve had other guests on our show who actually were the name either plaintiff often in the cases. So look forward to that next week uh, bid win for families, for educators, and really for the whole idea of what choice means in American.
[00:35:44] We often focus on it in one aspect and forget that it actually is pretty ubiquitous across American life. So Carrie, with that, thank you so much for joining me. Look forward to us. Tag teaming again in the future.
[00:35:55] Kerry: Great to be with you Gerard this week, and I will be back again next week to join you again.[00:36:00]
[00:36:00] GR: Sounds good. Take care.
Recent Episodes
Suffolk County, Massachusetts consists of the cities of Boston, Chelsea, Winthrop, and Revere. According to the Pioneer Institute’s MassEconomix website, 644,363 people were employed in Suffolk County in 2020. So which industry is the county’s biggest employer?
Since 2004, the first year in the MassEconomix database, the largest industry sector in Suffolk County has been healthcare and social assistance. The U.S. Bureau of Labor Statistics defines the healthcare and social assistance industry sector as trained professionals who work in “establishments providing medical care exclusively, continuing with those providing health care and social assistance, and finally finishing with those providing only social assistance.” In 2010, 122,343 employees worked in healthcare and social assistance, comprising a total of 21.4 percent of the total Suffolk County workforce. By 2020, the number of employees rose to 148,223, or 23 percent of the workforce.
In 2004, the second largest industry sector employer was Finance and Insurance with 69,426 employees. In 2010, Finance and Insurance was still in second place with 69,891 employees, or 12.22 percent of the Suffolk County workforce. After 2010, the number of employees in the sector began to decrease. For example, in 2011 Finance and Insurance lost 995 employees. It lost an additional 2,011 employees in 2012. By 2020, the sector included 67,789 employees, a decline of 10.6 percent since 2008, the highest employment year for the sector.
While the number of Finance and Insurance employees began to decrease, employment in another industry sector – Professional, Scientific, and Technical Services (PSTS) – was increasing rapidly. The examples the U.S. Bureau of Labor Statistics provides for this category range from legal advice to architectural, engineering, and specialized design; computer services, translation and interpretation; and other professional, scientific, and technical services.” In 2010, PSTS. employed 12,696 fewer residents than the Finance and Insurance sector, but from 2010 onward PSTS grew steadily and by 2012 it had 64,442 employees. From 2012 to 2013 the number of employees increased by 6.4 percent to 68,566 employed, surpassing the Finance and Insurance sector by 2,248 employees and making professional, scientific, and technical services the second largest industry employer in Suffolk County.
Figure 1: Employees by Industry Sector in Suffolk County, MA 2010-2020. Source: Pioneer Institute’s MassEconomix website.
From 2010 to 2020, PSTS employees increased by 67.2 percent while Finance and Insurance declined by almost 3 percent. Professional, Scientific, and Technical Services appears to be one of the fastest growing industries in Suffolk County, right behind the healthcare and social services industry. A 2017 WBUR article offers some insight as to why this industry has been growing so rapidly in the past decade. Major technological companies such as PTC, GE, Autodesk, LogMeIn, and Bose have been moving parts of their businesses from suburban areas to Boston. More tech companies, such as Apple, continue to make the move as they plan to add several hundred jobs in the Greater Boston area within the next few years. Amazon plans to add over 3,000 jobs, and Google plans to add over 1,500 new jobs. In the WBUR article, company executives attributed their move to “access to talent, public transportation and a collaborative open-source culture.”
Mitchell Bove is a Roger Perry Government Transparency Intern at the Pioneer Institute for Summer 2022. He is a rising junior at Suffolk University with a major in U.S. History and minors in Media & Film.
Hubwonk host Joe Selvaggi talks with Bloomberg Columnist and National Review Editor Ramesh Ponnuru about the reasons for the sustained spike in inflation, its impact on savers and consumers, the possible policy remedies, and the likely intensity and duration of this cycle.
Guest:
Ramesh Ponnuru is Editor of National Review, where he has covered national politics and policy for 25 years. He is also a columnist for Bloomberg Opinion, which syndicates his articles in newspapers across the nation. He is a visiting fellow at the American Enterprise Institute and he serves as a contributing editor to National Affairs, the quarterly journal of conservative ideas. His articles are frequently published in The Wall Street Journal, The New York Times, and The Washington Post. In 2015, he was included in the “Politico 50,” Politico’s list of “the thinkers, doers, and dreamers who really matter” in American politics. In 2014, Ponnuru contributed to and (with Yuval Levin) edited the book Room to Grow: Conservative Reforms for a Limited Government and A Thriving Middle Class. New York Times columnist David Brooks called the book “the most coherent and compelling policy agenda the American right has produced this century.” Ponnuru was subsequently featured in a New York Times magazine cover story about reform-minded conservatives. In 2013 he was a resident fellow at the University of Chicago’s Institute of Politics. He is a regular speaker on policy, politics, and constitutionalism at the nation’s leading college campuses and law schools. He also appears regularly on television programs about public affairs. He is the author of a book on the sanctity of human life and American politics and of a monograph on Japanese industrial policy. Previously he has been a columnist for Time magazine and WashingtonPost.com. Ponnuru grew up in Kansas City, Kansas, and graduated from Princeton University. He now lives in the Washington, D.C., area with his wife and three children.
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Read a Transcript of This Episode
Please excuse typos.
Joe Selvaggi:
This is Hubwonk. I’m Joe Selvaggi.
Joe Selvaggi:
Welcome to Hubwonk, a podcast of Pioneer Institute, a think tank in Boston. Inflation has eclipsed the COVID epidemic as Americans’ greatest concern. Having not seen an inflationary spike for nearly four decades, many current consumers and market actors are unfamiliar with its causes, its effects and the potential remedies available to policy makers to bring it back under control. Indeed, what had been thought to be a temporary phenomena, attending the aftermath of a pandemic. Now X us daily, as we shop for eggs, gas, or a potential new home, will this ubiquitous rise in the price of everything continue and perhaps accelerate or can policy makers in our us legislature and federal reserve bank slow and reverse this trend with interventions that voters will accept. My guest today is Ramesh Ponnuru, columnist for Bloomberg and editor of National Review. Mr. Ponnuru has written extensively on the causes and risks of inflation and on which politically viable actions policy makers can take to contain the current trend. Mr. Ponnuru will share with us his views on the origins and contributors to our current inflation, who is most likely to suffer from its effects and which potentially painful policy choices are available to cool this overheated economy. When I return, I’ll be joined by columnist and editor Ramesh Ponnuru.
Joe Selvaggi:
Okay, we’re back. This is Hubwonk, I’m Joe Selvaggi and I’m now pleased to be joined by Bloomberg columnist and editor of National Review Ramesh Ponnuru. Welcome back to Hubwonk, Ramesh.
Ramesh Ponnuru:
Thanks for having me.
Joe Selvaggi:
Okay. Now our topic is one that’s at the top of mind for nearly all Americans, we’re gonna be discussing inflation its causes its effects and perhaps give our listeners a sense of how we might plan to address it. But so let’s start at the beginning first for the benefit of our listeners, what is inflation?
Ramesh Ponnuru:
So different people have defined inflation in different ways and sometimes get quite upset with you if you don’t use the term the way they want to. I think the most intuitive and common way is also the most useful. And that is to describe inflation as a general rise in the price level. So if on average prices were at a hundred in 2020, and then they get up to 102 in 2022, assuming in 2021, then you’ve got 2% in place year over year.
Joe Selvaggi:
Okay. Is there a general sense of what it should be? Is there a sort of a, a background of you know, we, we should always have it, but it should be at this level.
Ramesh Ponnuru:
So this too is a source of contention central banks around the world, starting in the late eighties, have largely converged on the idea of 2% inflation each year, being the ideal or the, the target that they ought to be striving for. It’s a little bit arbitrary, but the idea is that that creates a reasonable amount of price stability while also for you allowing for different kinds of adjustment to take place.
Joe Selvaggi:
So in your first answer, you talked about you know, the average price of everything being a hundred is sort of a, an imagine conceptual concept. And now it’s 102. That means it’s essentially a higher price for the same exact basket of goods. And no change such as a commodity, like a gallon of gasoline is a gallon of gasoline from one year to the next, if it costs more that’s inflation, if it, if it’s across the board, right. Now if, if all boats are rising in inflation is increasing the price of everything, wouldn’t, it also affect the cost of labor, which is a the flip side of, of inflation, which would effectively mean my paycheck. Your paycheck would go up by the same amount. Does the rise in the income negate the effect of inflation?
Ramesh Ponnuru:
Yeah. Well, first of all, just to talk about one of the things you said about changes in quality where, you know, so the idea that it’s 2% inflation costing a hundred and then costing a hundred, two assumes, you’ve got the same basket of goods, but of course there can be all kinds of things that change. So if you know, the size of the candy bar you’re buying shrinks basically that’s a kind of hidden kind of inflation, right? If the price is still the same people call it shrink inflation. Sometimes they do try in these statistics to capture that kind of change. Also if the price of apples goes up maybe people switch over to oranges and there are technical disputes about how you correct for that kind of substitution effect. If, if people can avoid some of these price increases, now you’re absolutely right.
Ramesh Ponnuru:
That wages are another price, the price of labor that is affected by inflation. And if you’ve got a steady and predictable 2% inflation year after year after year, the idea is that wage rates will adjust that people who wouldn’t have gotten raises will get a 2% raise people who would’ve gotten a 2% raise will get a 4% raise as sort of it’s everybody in the economy just expects the price level to be a little bit higher next year than it was this year. But of course, that sort of a textbook model of the way inflation works and, and actuality inflation doesn’t work that way, particularly when you’ve got unanticipated inflation, where maybe it takes some time for this inflation to permeate every market, including the labor market. And during that period in between, if you’re a wage earner, you’re finding the purchasing power of your paycheck going down. And of course there are other kinds of there are other things that can happen with inflation that that, that cause the price of the products you buy to rise, but don’t help your wages. And that’s the case with a supply led inflation, an inflation that is caused by a blow to your productivity.
Joe Selvaggi:
I see. So, so inflation doesn’t raise all boats. Sometimes it it’s an uneven rising if you are either let’s say not an income or earlier you’re maybe fixed income retiree you’re a saver your savings don’t grow with inflation. So you may be left behind. Oh, so let’s talk about that. What are some of the primary negative effects of inflation in, in conceptually?
Ramesh Ponnuru:
So the loss of purchasing power of course, is the one that is closest to everybody’s mind, but it also makes the economy less predictable. If you’ve got an unsteady inflation. And so that makes it harder for businesses to make investment plans, for example, or for households to make long term plans. They don’t have that steady backdrop against which they can make the plant. There’s also what’s called menu costs. And just think about it very literally like the the restaurant has to keep changing the menu because prices keep changing. There’s the way that inflation is baked into some taxes now that’s better than it used to be. In the seventies, when we had our last big bout of inflation, the income tax brackets, weren’t indexed for inflation. So people would find themselves paying higher taxes, even when they weren’t getting ahead in real purchasing power of their income. But it’s still part of our tax code and things like capital gains. So you can end up paying a capital gains tax when you haven’t in real terms, made any capital gain and the effective tax rate therefore keeps going up. So there are all kinds of costs that ripple out through the economy.
Joe Selvaggi:
Okay. So let’s ask the, you know, let’s get into the meat of this. We know what inflation is. This is a harder question. What is it that causes inflation? You’ve already mentioned a supply shock but let’s go deeper into that. What, what I’m sure it depends on who you ask, but what causes inflation?
Ramesh Ponnuru:
Well, the typical cause of inflation is an excessive growth in the money supply, but really anything that increases the total level of spending is going to cause a demand side inflation that’s most of what we saw in the 1970s, that’s part of what we’re seeing now, if there’s, you know, the, the, the famous definition of inflation or explanation for inflation is too much money chasing too few goods. Now, the too few goods, that’s the supply side of the problem too much money. That’s the demand side that is the central bank running a monetary policy that is too loose that is leading, you know, to too much currency in circulation. For example would be the very classic case of of how a central bank can go wrong with inflation. And another metaphor people often use for this kind of inflation is overheating the economy.
Joe Selvaggi:
I see. So you’ve mentioned a couple things, I think that you we’re, we’re both a channeling Milton Friedman there with the too, too many, too many dollars chasing too few goods. So let’s analyze that equation. We’ve got too many dollars and too few goods. Let’s start with the too few goods. We all know that we have supply chain issues. We’ve covered that on this podcast in earlier episodes, but let’s, let’s analyze that. Are we still blaming too few goods on supply chain shocks that were a result of our recent pandemic?
Ramesh Ponnuru:
I think that that was a bigger cause of the inflation in the first half of 2021. And it is a, a pretty big cause of the inflation that we’re seeing in Europe. But it’s been less of what has been afflicting us for most of the last year, so still a factor. But but since mid 2021, I would say too much spending has been a bigger part of it. And by too much spending, I mean, really the total level of spending throughout the economy, all spending on consumption and investment public and private and business it’s you know, you want that growing at a steady rate and it hasn’t been a, it dropped substantially at the beginning of the pandemic then it rose sharply. And I think some of that sharp rise is justified as a way of catching up after you had that big drop. But it’s been excessive and and it’s been, I think clearly excessive since late 2021. And the central bank has been, has been too slow to arrest that.
Joe Selvaggi:
I see. So we’re talking about a constraint in supply and then an attending inflow of, of spending. So again we hear a lot about energy constraints price of gas is front top of mind for everyone. I think it’s gone up 50% in the last 18 months. The administration is calling that the Putin price hike and of course energy gas is an input for all other goods. Can we attribute some of this inflation to spike in energy price?
Ramesh Ponnuru:
Yeah. absolutely. We can. It’s, that’s typically the case. But of course gas prices were rising before Putin’s invasion of Ukraine. I think there’s no question that that invasion has made things worse, but we had an inflation problem before it, and the excess spending problem is not a Putin caused problem. It’s you know, that, that is a domestic policy problem. That’s a central bank problem. The, you know, what you, the point you made about gas prices being energy, being an input into almost everything else, that’s a very important point. Because sometimes people will say well, you know, one price goes up. People can just you know, spend more on that and spend less on other things and shouldn’t change the overall inflation rate. And that’s really not true when it comes to some, an input price that has a negative effect on productivity, like an increase in energy.
Ramesh Ponnuru:
It’s like making everything, you know, if you make everything twice as hard to make, like take twice as much labor to produce the same amount of products, you’re gonna have less output and, or higher prices. And there’s not a whole lot that a central bank can do about that. So all just a way of saying that the input price issue is absolutely part of this problem. And we, you know, we just have to be able to hold in our minds that we’ve got both a supply and a demand problem, and, and too often people wanna make it one or the other Democrats typically wanna make it an entirely supply issue as though that absolves them of any responsibility you know, which it actually doesn’t. But it’s also not true. It’s both.
Joe Selvaggi:
So, so, okay. Let’s let’s move off of the supply side and towards the demand side, you’ve already cited the fact that a lot of people through the pandemic were sitting home not spending money. They couldn’t spend money, they were stuck at home perhaps saving and they would naturally want to make up for lost time when when restrictions are lifted and we can all get back out there. So we’ve got that spike in demand as you describe. But there was also of course a stimulation of that spike in demand by the federal government in many ways. It it influenced our ability to spend their direct outlays debt, forbearance, unemployment supplements payment protection programs, all kinds of alphabet soup of stimulus. Of course that’s introducing the idea of far more dollars chasing the same number of goods. Is that to what degree is the federal government’s fiscal policy to, to blame for the stimulation in demand?
Ramesh Ponnuru:
Well, here, I think it’s a complicated story and I thought that a lot of the spending that the federal government engaged in in 2020 and particularly in early 2021 with president Biden’s so-called American rescue plan was excessive. And I thought it was excessive for a variety of reasons, mostly having to do with wasting money that could have been more productively spent elsewhere in the economy and creating bad incentives. But I, at the time, you know, even though I was opposed to Biden spending plan, I thought it wouldn’t have a big effect on inflation, partly because changes in spending over the previous decade, hadn’t had a big effect on total spending levels or on inflation because it had been offset. You know, if, so, for example, in early 2013, you’d had some spending cuts from the federal government and some tax increases and the central bank offset that so that so that the overall effect on the economy wasn’t very big this time that didn’t happen because the central bank was simultaneously engaged in a kind of loosening of policy under J Powell you know, partly loosening be, you know, as a, as a response to the pandemic and the effect on the economy, they, they thought it was the right thing to do.
Ramesh Ponnuru:
But the, the combined effect of this fiscal and then monetary loosening was excessive. And and that’s how we got here. And I also think feel permit me a little political digression. One of the reasons that the, the federal reserve let things get out of control in the second half of 2021 was there was uncertainty about the leadership of the federal reserve itself because Biden had not committed to renominating Powell. And there was a great deal of pressure from the left and the left typically doesn’t like monetary tightening likes monetary loosening and the democratic incumbent is definitely going to not want interest rate hikes. And I think that can help explain some of the delay in responding to the clear signs that not only did you have inflation, but this inflation was not transitory. And this inflation was in fact fed by excessive demand, excessive spending.
Joe Selvaggi:
So, I mean, you, you, you say that rates or have a political valence, but I think what you you’re really trying to say is for incumbents, not for left or right. Or Republican or Democrats, right. And all incumbents want low interest rates and a, and a let’s say a, a heated, perhaps not overheated, but a heated economy. Nobody wants to, well, I
Ramesh Ponnuru:
Think, I think it’s
Joe Selvaggi:
Afraid,
Ramesh Ponnuru:
Right? Yeah. I think it’s both in this case. I, I do think presidents just typically they want low interest rates. They don’t wanna have the risk of a recession from an increase in interest rates. President Trump was certainly a low interest rate person which also I think has to do with his background as a real estate developer. But I think that there’s also this additional ideological overlay, which is that the left tends to favor looser policy than the right. And tends, tends to think a little more inflation is more tolerable than the right does. Now I think that this is actually in, particularly in this case, a mistake that Biden and the Democrats would actually be better off if we’d started this tightening cycle in late 2021 and gone a little further in that.
Ramesh Ponnuru:
I think we’ve actually got a pretty strong labor market if you look at vacancies and employment growth and the economy could have withstood that, and you’d be better off as the party in power with inflation under greater control. I mean, you might be facing some losses anyway, because you’re coming into a midterm midterms, typically don’t go well for the party in power. But I don’t think you’d be, you’d be seeing the potential catastrophe that task that Democrats are now seeing, where I think, you know, in a very real sense, inflation is just devouring this presidency.
Joe Selvaggi:
So let’s again, so again, the, the partying power is uncomfortable with the levels of inflation. We’re all seeing right now. It’s not good for their prospects in November, but let’s, let’s dispense with some of the, or not dispense with some of the narratives that are coming from the, the democratic party. A lot of people blame inflation on the exploitation of sellers or
Ramesh Ponnuru:
Oh, right. So called
Joe Selvaggi:
Yes. Breeded of corpor. We have, it’s a our own Elizabeth Warren she’s our Senator, or one of our senators who has a wonderful creative port mano called greed, FL that, that essentially this is suddenly corporations has become greedy just recently. So is there any merit tore inflation?
Ramesh Ponnuru:
Well, I mean, I think you’ve hit on the major problem with it, which is that it, it, it attempts to explain a variable by reference to a constant companies. They’re always trying to maximize their profits. It’s not like we had low inflation for most of the last decade because companies decided, you know, we don’t actually care about making profits anymore. So something has to have changed where a bunch of companies, you know, all through the economy all at once decided that the way to do that was to raise prices. And and I think that once you start thinking in those terms, you, you just see how how pitifully inadequate Senator Warren’s explanation is. You know, she’s, she has responded to this inflation by introducing legislation that would prohibit large companies from, you know, I think the, the phrase is unconscionably excessive price increases.
Ramesh Ponnuru:
Well, what does that mean? Who would define it, how much litigation would be involved in that? But also if you look into that legislation so she’s, she says, you know, you, yeah, you’re allowed, you know, if the bureaucrats decide essentially that you’ve got a supply chain problem then okay, you can raise your prices enough for that. But implicitly, what they’re saying is you can’t raise your prices in response to changes in demand which is nuts. And and, and, you know, local market economy just can’t function. If companies aren’t allowed to set prices in response to changes in both supply and demand in their markets.
Joe Selvaggi:
Indeed. you know, we, we probably could do a whole podcast on the downside of price controls and why, why they lead to bread lines, but let’s move away from that. And talk about the other way the democratic party right now is deflecting from this concern about inflation saying, look, we’ve got inflation, but so does the rest of the world, we’re looking at Europe, they’ve got inflation Biden, certainly hasn’t and affected their policies. How is it that we would be blamed for something that is a universal phenomena?
Ramesh Ponnuru:
So there are two things that bear watching. One is there is, I think just kind of you’ve got some of the same policies being pursued everywhere. So I think European central bank policy was also too expansionary. And I think though we’ve also got a little bit of, of a coincidence because you’ve got a bigger supply problem in Europe right now. And you’ve got a bigger demand problem here in the United States. So you’ve got the same sort of a very similar kind of headline inflation number, but very different causation in both cases and different policy responses are called for in different degrees in each of the cases that was, you may not have sent it up, but that was all explanation one explanation two. I do think there is something to the idea that the United States is the world’s monetary superpower and that if it’s deflationary or inflationary, that tends to get exported to other parts of the world for reasons having to do with, you know, for example, other currencies being pegged to the dollar. But but I think that you know, there’s, there’s something a little screwy about the leadership of the United States saying well, this is a global economic problem. It’s not our responsibility. I mean, we’re the United States.
Joe Selvaggi:
Right, right. Indeed. So, so let’s let’s move away from we’ll accept and stipulate that we do have it. It is here. We do think we can have policy choices that will make differences, but let’s start with we’re coming out of the COVID 19 pandemic. Thank God. And theoretically supply chains will go back to normal will that likely happen and, and be let’s say saluatory to those hoping to reduce inflation. In other words, if we resume our supply, will the demand for that short supply normalize and you know, that will battle inflation.
Ramesh Ponnuru:
Yeah. I think that that as supply chains get UN snarled, I mean, unless there are more shocks, right. Because we, you know, we had the pandemic shock and we had the Russian invasion shock and the world might not be through with shocks. You know, there was concern, I think it basically hasn’t panned out, but there were concerns that the, the resurgence of the pandemic in China would cause big supply problems. And so you, you can’t rule that sort of thing out, but but one of the things about supply shortages is that they should, I mean, there are powerful market forces that act to fix those and that should happen over time and that should reduce that level of or that cause that kind of inflation, but you’ve still got the demand problem and the excessive spending is not something that gets fixed just because supply chains get fixed.
Joe Selvaggi:
So, okay. Then let’s shift it, even if we do have plenty of supply, we’ve got too much money still. Right. I think we have senators mansion and cinema to thank for the fact that we don’t have an additional three or $5 trillion in a build back better that was not passed, but quite a bit of stimulus was in the trillions, I believe another 5 trillion in sort of pandemic stimulus. That’s still filtering down is that stimulating helicopter money going to continue to overstimulate us well into the future. Is it, you know, if we turn off the SPT, how long will it take to again, normalize?
Ramesh Ponnuru:
Well, I think that you know, obviously it takes time for some of these changes, both positive and negative to work their way through the economy. And so, you know, the people call people say that monetary policy has the, the phrase everybody uses who studies this is like long and lagging effects. It’s however, I think some of the effects would be a little faster than that. You know, the signals to financial markets that the fed is serious, if it raises rates enough to give the markets jolt that shows up in you know, as we’ve seen, some of that shows up in asset prices. Some of that shows up in just market expectations of future inflation and when markets don’t expect future inflation to be so elevated in that in itself has a solitary effect because people aren’t trying to raise their prices to keep up with with what they see coming for them. So, so I think that, that a good policy change could have quicker effects than people sometimes think.
Joe Selvaggi:
So we’re talking specifically about monetary policy. We’re talking about the, the fed drone Powell we’re actually recording on June 15th before the two o’clock announcement of rate increases. So we, we can speculate here, but our listeners will know what the outcome was. Well, the, I think odds on favor are for a 75 basis point increase for the benefit of our listeners. How is it that this change in rates could have an effect, hopefully have an effect on dampening inflation? How, how is it effect that we’re making money more, more expensive? How does that filter through the economy and then right. Ultimately tame inflation?
Ramesh Ponnuru:
Well, there’s a mechanical effect. In for example, you know, it cools the housing market if interest rates are higher people are not as, as quick to purchase homes and to bid the prices of homes higher. So there’s that effect on inflation. And then that also affects rents. But I actually think that that the biggest effect is, is, is simply the expectations that when people have confidence that the federal reserve is going to do whatever it takes to get inflation back under control, that’s the most powerful effect that the fed has. And in fact, the more confidence there is the less actual interest rate increases the fed has to engage in. It’s a lot of what the fed has to do is is changing market expectations. It’s just like, sort of, you know the primary way that traffic signals green and red lights work is not through police tickets, right?
Ramesh Ponnuru:
It’s it’s, it’s just changing the way, you know, drivers act and it’s it’s not, self-regulating right, it’s the government setting up those traffic signals. But it’s it’s a kind of nudge to market participants to act in a particular way and to have certain expectations and expectations of what other people are doing on the road. So to here and in a lot of what I think went wrong for the fed last year was that it was sending the wrong signals about its intentions and and how committed it was to keeping inflation from getting out of control in the first place.
Joe Selvaggi:
So I think you’ve anticipated, I was gonna ask how high does the fed have to raise interest rates to essentially tame it, but your, your answer, I think I’m going to guess is it has to raise it a lot less. If everybody accepts the fact that it’ll do anything, it takes to raise interest rates. So if, if you don’t believe, if you believe that the fed is on it, and then they’re doing their job and they plan to do their job expectation for inflation, go down, ergo rates don’t have to go up quite as high as they would otherwise. Is that right?
Ramesh Ponnuru:
Yeah, that’s right. And one of the reasons I think that the fed opts to surprise the markets on the upside, by having a little bit higher of a rate increase than people expect right now is so that they don’t have to keep doing it. So that maybe that, that ends up being enough to convince people that that this is, this is the end or the beginning of the end of this burst of inflation.
Joe Selvaggi:
So we we’re running outta time, but I did, I do wanna get to the sort of historical you you’re trained as a historian. So I thought I’d ask in a historical question, we did reference the seventies and what happened then I’m old enough to remember but I wasn’t buying houses at that time. I was playing on the, you know, schoolyard, but back in the late seventies, early eighties, we had rampant inflation and then chairman Volker came out and essentially tackled a, an extreme bout of inflation with interest rates you know, then double digits. Would we, are you concerned looking back as a historian at that bout of inflation really the last time we, we were here that we will see that kind of pain because of course those kinds of interest rates cause enormous amounts of unemployment and, and recession, are we inclined to have to go that far and be you know, it, will it be that painful going forward if in your view,
Ramesh Ponnuru:
I think we ought to be able to avoid that degree of pain because we gotta remember that the inflation of that period took quite a while to develop. And it took a while for people’s expectations, excuse me, of inflation, to shift upward on a sustained basis. So you started seeing that increased inflation in the late sixties and then policymakers sort of flailed around in response for more than a decade. Right now, if you look at long term inflation expectations, if you look at measures of what the market is expecting inflation to be six to 10 years from now, there’re a little high. I think the fed needs to bring them down, but they’re not wildly high. And if you look at that, which means that the fed doesn’t have to to really upend people’s expectations, it just needs to moderate them, bring them down a little bit, and you combine it with the fact that the labor market’s in, in pretty good shape to start with those things, suggest to me that if the fed does the right thing now we can have, if not the sort of soft landing, we have a tightening cycle that doesn’t result in a recession, but if you do have a recession, maybe it can be mild and short.
Joe Selvaggi:
All right. So we’ve talked about many of the levers that government has to, to combat of inflation. We’ve talked about how it exacerbated inflation, but we’re now trying to turn the ship around in your view, given the government, we have the upcoming midterm elections and, and the policy choices that are on the table for those politicians who wanna remain in, in in office. What other levers do you see that we could be pulling to mitigate the effects of inflation and inflation expectations?
Ramesh Ponnuru:
Well, I think there are an enormous number of government policies that have an effect on productivity and it’s typically a negative effect on productivity. And if you simply lifted some of those burdens you would contribute to the long term productivity of the economy, which is just a good thing to do in general. And that would also put some downward pressure on prices. Not all of it would be quick and immediate but some of it would. So for example, reducing tariffs would particularly if you reduce tariffs on critical inputs like the things you use to make semiconductors that would, I think have a pretty quick effect and put some downward pressure on prices. You know, if you increase domestic energy production, got rid of some of the restrictions on that, that would also have an effect. And maybe some of that would even feed into today’s prices because it would affect people’s expectations of future prices and future supply levels.
Ramesh Ponnuru:
You know, we had this huge infrastructure bill that was supposed to make our economy more, more productive, but there’s language in that bill at the behest of Democrats that prevents you from using any of it to automate the ports, which is something that we ought to be doing to make supply chains more efficient, but that unions naturally dislike. And so Democrats won’t go for the problem that you come up against again, and again, is there’s either an ideological objection or some kind of political interest group objection. And the natural instinct of the democratic party is always restrict supply through regulation, subsidized demand, through spending that’s a recipe for more inflation. And it makes it very, very hard for them to respond to inflation in a way that actually helps solve the problem.
Joe Selvaggi:
So so we can’t blame it all on Democrats, I suppose also Republicans resist Donald Trump in particular was a fan of tariffs you know, and protecting American jobs. What you’re saying is free trade is one of the main remedies for fighting inflation including, you know, facilitating that free trade through ports and, and such, is that what you’re saying?
Ramesh Ponnuru:
Well, I wouldn’t necessarily say it’s one of the main remedies, but it’s one of the, it is a remedy and it is something that could be done. I mean, the president could do a lot of this with a stroke of a pen because a lot of the tariffs were imposed by the stroke of a pen. And so if you really think that inflation is a huge threat, I think you try to attack it on all fronts and you do the things that you can do
Joe Selvaggi:
Indeed. All right. So we’re getting close to the end of the time together. I don’t know if you wanna dust off your crystal ball right here. I’ll ask you the $64,000 question. How high do you think inflation will go? I think we’re looking at headline inflation of 8.6%. That was of Friday last week was what annualized inflation rate how high can it go and how long do you think it’ll last?
Ramesh Ponnuru:
Well, I don’t try to make predictions especially about the future, cause I think Yodi said but I, I, my sense has been that policy has consistently been a little bit too little too late. I would like to be pleasantly surprised, but I think that we are going to have this elevated inflation level for some time. So I, I think we’re gonna have it into 2023,
Joe Selvaggi:
Indeed. Okay. So sort of a grim outlook, but at least it, it is temporary. Depends your timeline. It will end and so you you’ve called it 2023 is when we start to see the light at the end of the tunnel. I’ll I’ll, I’ll take that to the bank. Thank you very much for joining us today. And Hubwonk. Ramesh, you’re always a welcome guest and a font of information. Thank you for joining us.
Ramesh Ponnuru:
You’re most welcome.
Joe Selvaggi:
This has been another episode of Hubwonk, a podcast of Pioneer Institute. If you enjoy today’s episode, there are several ways to support the show. It would be easier for you and better for us. If you subscribe to Hubwonk on your iTunes podcaster, it would be easier for others to find hub won. If you offer a five star rating or a favorable review, we’re always grateful. If you want to share Hubwonk with friends. If you have ideas for me, or suggestions or comments about future episode topics, you’re welcome to email me at Hubwonk@pioneerinstitute.org. Please join me next week for a new episode of Hubwonk.
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Read a Transcript of This Episode
Please excuse typos.
[00:00:21] GR: Hello listeners. This is Gerard Robinson coming at you from beautiful Charlottesville. Every week, we bring really interesting guests and topics to talk about education at large, but also social science. We talk about economics. We talk about money and other things every now and then we have an opportunity to be blessed by having a guest cohost.
[00:00:41] And today’s one of those days and we have Kerry McDonald, who’s been with us before. Always glad to partner with her. How you
[00:00:50] Kerry: doing Kerry? I’m doing well. Gerard. It’s great to be back with you.
[00:00:53] GR: Yeah, I think the last time we were together, would’ve been early spring. And so this is a good way to, [00:01:00] to move us into the summer.
[00:01:02] And I don’t know what this weather’s like, where you are, but it’s 82. Today’s gonna be nineties plus moving forward. So it’s gonna be pretty humid over the next four or five days.
[00:01:12] Kerry: Yeah, it’s beautiful here in Boston. And I’m heading up to New Hampshire this week for the porcupine freedom festival for some great talks there.
[00:01:23] And I’ll also be recording some episodes of my podcast the liberated podcast, which will be focused on education entrepreneurship, and some innovations in homeschooling and all kinds of good things. So the weather looks great here for.
[00:01:38] GR: Excellent. Well, what story has you excited today?
[00:01:42] Kerry: I’m really interested in an article that was linked to a podcast at the economist this week about the future of learning.
[00:01:50] And it’s always interesting to kind of imagine what education will be like, 10, 20, 30 years from now and in this. [00:02:00] Particular article and episode they were focused on 20 years from now. What would learning look like? And you could tell from the sort of snapshot that they gave the concern was that, , technology was gonna take over, it was going to replace teachers.
[00:02:15] It was going to create sort of this stale stifling kind of learning environment that wouldn’t be serving. Students. Well, and it reminded me a little bit of this fear about new technology or fear about the ways in which technology could negatively impact our lives. That of course has been with us for centuries really.
[00:02:35] And in fact, in my unschooled book, one of my favorite quotes was from a journalist. Who said, speaking about a new piece of technology, this will make us nothing but transparent heaps of jelly to one another. And this was a journalist in the late 19th century talking about the telephone. And so it makes me think a little bit more.
[00:02:59] [00:03:00] Suspiciously about kind of doomsday predictions about technology. And instead recognize that really technology improves our lives in many ways and the same can be true for our learning. So it was worth listening to , the economist podcast did bring in Salcon from Khan academy, who I think offered a more optimistic view of the future of learning and technology.
[00:03:23] But definitely worth listening to, and.
[00:03:26] GR: Got it. It’s amazing how we pick and choose how to be offended when it comes to technology. When it’s technology for us to build a muscle in other right arm, left arm or somewhere else in our body, or it’s AI to actually help us think better, we’re all for it.
[00:03:46] But somehow we don’t think the same AI that helps our body helps our mind that somehow when it’s outside of us, Or if it’s created within the, for profit sector and not per se use solely in the nonprofit that somehow [00:04:00] it’s evil I’m with you and others who say that there is a role for technology, there’s a role for AI and there’s a role for entrepreneurship and investments.
[00:04:09] And so makes a lot of sense to me. None of this means that I’m not aware that there are. Horrible ways in which people have used AI the dark web and some of the things that take place. There is simply one example, but technology and education, it’s here to stay rather than fight against it. I think we need to fight for it fight for it in ways that are smart.
[00:04:30] That are ethical. And then at least we’ll raise some philosophical questions for all of us to answer because our children and grandchildren getting to your point, they’re gonna inherit a very different America than we know today. We don’t know how many amendments will be made to the constitution.
[00:04:46] If one of those amendments in fact will focus on technology and what it means to make us a more perfect union. So I’m glad we’re continuing to have the conversations about uh, technology and education and glad see we’re focused on the future. My. [00:05:00] Article today is a reflection on the past and it goes back 50 years on as many know that on June 23rd, 1972 Congress enacted or basically added title IX to an education amendment.
[00:05:13] And it was signed into law by Richard Nixon. And what it did was to start. A platform, a creative platform in which we can talk about the role of women, not only in American society, not only in sports, but the role of women in the American economy in general. And so we’re celebrating 50 years. And when we think about title IX, understandably, we primarily think about sports because that is one arena.
[00:05:40] Where we put sports under a microscope and began to look at numbers, investments in sports whether or not women were getting equal access across the board. Well, I want to use the sports analogy, but I also want to use it to talk about what women. Did after they played sports. And this is from an AP article [00:06:00] titled title nine, propelled women from college courts to CEO offices.
[00:06:05] And there’s just a few women they highlight. So one is Gail. Boudro. She played basketball at Dartmouth. And in fact, she’s still the school’s career scoring leader and rebound leader. She was three time Ivy league and she moved on to be also earned academic all American status. Now in her business career, she earned actually an MBA from Columbia and that led to several businesses.
[00:06:29] She’s the former CEO of United healthcare and took over as president and CEO of Anthem incorporated, which. Fortune , 500 company in 2017. Another example is Jenny Gilder. She’s a two time Olympian, 1980 and 84. She was the American roarer of the year at Yale in the 1970s. She took that and moved forward.
[00:06:53] Earned an MBA from Washington in 1991. And then she founded Washington works. It’s a Seattle based [00:07:00] foundation which helped women receive public assistance in the 1990s. And later became the CEO and founder of the Gilder office for growth, which was a family and investment office. Closer to home on my neck of the woods is Jackie MC Williams.
[00:07:15] Many of you know, I’m in Virginia. She went to Hampton university. She was a star on Hampton basketball and volleyball team. She helped Hampton win the NCAA division two basketball title in 88. She was also a freshman of the year. She took her progress on the court and then moved it into management.
[00:07:33] She earned a master’s degree from temple. She later coached at Virginia union, an P C U in Richmond, and later became the first female assistant in the central intercollegiate athletic association. Men’s basketball team, which is something we rarely see. And then she moved forward. Ultimately in 2012 becoming the first black female commissioner of the sea.
[00:07:53] I I a and as Meg, Whitman, of course, many of our leaders know who she is across the board, [00:08:00] but these are examples just of four women. There are 400, 4,000 more actually that we can see how they used what they learned playing sports and took that into the field of work, corporate America in the nonprofit sector, fortune 500, as well as small business, also public assistance.
[00:08:17] So 50 years and things are. What are your thoughts?
[00:08:20] Kerry: Yeah. So it’s interesting. The associated press did a nice spread of related articles connected to title IX for this 50th anniversary tribute. And it, I think it’s really interesting Gerard that you and I both sort of gravitated to the articles around some of.
[00:08:39] Women business owners and CEOs who were kind of the pioneers in pushing for title IX years ago and, now have had success in their careers. And of course were instrumental in making women’s sports come to be and able those of us who kind of came after them and participated in both high school and [00:09:00] college sports able to enjoy that.
[00:09:02] So just a wonderful commemoration and again, interesting to see how many of these pioneers turn into entre.
[00:09:10] GR: absolutely. And naturally we also know there’s a great deal of controversy and concern and conversation and applause, as it relates to the role of men who began to transition into women’s sports.
[00:09:23] So, these articles that not focus on that, these are the ones that I read, but it’s also one that’s part of the conversation. All right. Well, as you know, we have great guests. We’re shortly going to be joined by Robert Pondiscio. He is a senior fellow at the American enterprise Institute. He’s also a former journalist with 20 years of experience in the field.
[00:09:45] He’s also the author of a book to help us think seriously about what education looks like. And he’s probably one of a hundred people in the country. Within the school reform segment where people listen to his voice. And so he’s gonna join us soon and look forward to that
[00:09:59] Robert: [00:10:00] conversation.
[00:10:27] Kerry: Welcome back to the learning curve podcast. We are thrilled to be joined today with our guest Robert PIO, who is a senior fellow at the American enterprise Institute, where he focuses on K to 12 education curriculum, teaching school choice and charter schooling. Before joining AAI penici was a policy analyst and education reform expert at the Thomas B Fordham Institute, an education policy think tank.
[00:10:56] He previously worked for the core knowledge foundation and as an [00:11:00] advisor and civics teacher at democracy prep, public schools. Punic became interested in education policy issues. When he started teaching fifth grade at a struggling south Bronx public school in 2002, before that he worked in journalism for 20 years, including in senior positions at time and business week.
[00:11:21] Robert Punic, welcome to the learning curve podcast.
[00:11:24] Robert: Oh, thanks for having me. How do they say it? Longtime listener first time, caller or guest it’s a pleasure to be with.
[00:11:30] Kerry: It’s great to have you here today. I’m gonna ask you a few questions and then Gerard has a few that he wants to ask you, but let’s begin by talking about the fact that you’ve been a protege of the curriculum expert ed Hirsch, Jr.
[00:11:46] Would you share with our listeners why you find his work on K to 12 education, so compelling and why it’s not been more widely embraced among the education establishment?
[00:11:56] Robert: Oh, man. We, could talk about that till the cows come home. That a [00:12:00] long, complicated topic. the short version is and boy I’ve said this a thousand times over the years Don Hurst, the D and ed Hurst stands for Don.
[00:12:08] So, we call him Don. He was the one educational theorist whose work described what I saw in my south Bronx classroom every single day. just to paint the picture for you literally 20 years ago, almost to this day, I started teaching at what was the lowest performing school in the lowest performing district.
[00:12:27] In New York city, PS, 2 77 in the south Bronx and having knocked , set foot in an elementary school since I was myself, an elementary school student, I had virtually no, background in education. I was a, you know, an alternative certification teacher. So, , There was a bit of a willing suspension of disbelief that went into my work.
[00:12:45] In other words, you know, I didn’t know how to teach reading. I, I was a proficient reader and whatnot and, the way I was taught to teach reading to my struggling fifth graders went from willing suspension of disbelief to kind of skepticism, to almost [00:13:00] Milt and anger, because I just realized that the way we were trying to teach kids how to read was just not effective.
[00:13:06] then I discovered ed Hirsch’s work on my own and it. Off like a lightning bolt in my mind, it just described exactly what I was seeing in my classroom every day, kids who could decode, in other words, they could read the words, but they struggled with comprehension and everything that I had been taught as a teacher was that, oh, well, they’re struggling with comprehension because they don’t find it engaging it doesn’t.
[00:13:28] Reflect their experience or interest first was the guy who would say no it’s background knowledge, it’s vocabulary. In other words, if everything we were teaching kids was to read things that were of interest to them that reflected their own experience. what I’ve since come to say, or describe as all mirrors and no windows.
[00:13:46] Well, then that’s going to limit their literacy , , and when I would bring it up in, my ed school classes and my, , professional development, I’d say, Hey, what about this guy? Hirsch? you would always hear some version of, oh, that’s that dead white guy stuff. Nobody takes [00:14:00] that seriously.
[00:14:01] and this is where the skepticism turned to militants and. And anger. So wait, his work is not about that at all. It’s about literacy. It’s about background knowledge. , we’re just giving these kids kind of like starvation ratios of rich curriculum of science and history.
[00:14:14] This is why they’re struggling with comprehension. It’s not that they can’t read. They’re reading out of their depth all the time. I mean, that was the soul of Hersch’s works still is. I became so animated by his work that I. Almost literally ended up knocking on his door to say, Hey, look, this is who I am.
[00:14:29] This is what I do. Let me help you because you’re the guy who’s figured it out. And trust me as a, recent departing teacher, we are not learning what, you know, as, teachers and we need to.
[00:14:40] Kerry: Mm, I love that, that you reached out to him and really wanted to connect , and learn more.
[00:14:45] So, you know, Hearst has been unique in that he’s an academic UVA, English professor who also dedicated much of his intellectual energy and professional time emphasizing academic content knowledge in K to 12 education, which you’ve just talked about. Why haven’t we [00:15:00] seen more higher education figure? in the core academic disciplines, English, math, science history provide leadership in primary and secondary schooling.
[00:15:09] And, and how do you think we could encourage higher quality content experts to lend their voices to school reform?
[00:15:15] Robert: What a fascinating question. And you’d think after 20 years I’d have a good answer for you. it’s almost like there’s this kind of church, state or Chinese wall in between higher ed and K12.
[00:15:26] I mean, for the last 20 years or more in the education reform movement, I don’t think I’m wrong about this. I think we’ve more or less given. Schools of education, a bit of a pass. So, there’s not that much interplay, I think, between higher ed and K12 and look, I mean, it’s just, I, I think, and this is, again, a lot of the stuff that Don Hirsch has written about over the years.
[00:15:45] there’s a lot of kind of, and I don’t wanna be overly dismissive feel good notions about what kids need to learn. In other words, we are more concerned or are often more concerned with kind of. What I would describe as , the Hollies of, K12 education, [00:16:00] as opposed to more the nuts and bolts, the rich content knowledge, the subject matter knowledge.
[00:16:05] and it’s kind of interesting. I, just thinking about how, you know, ed reform, I think has just given a pass to K12 or to, ed schools in reforming K-12 education. It, it continues to astonish me the, the degree to which we just assume that, schools of education are just kind of damaged goods are broken and, really can’t be, fixed or that we can’t uh, As a policy matter exercise, more influence of them having said that, I mean, it’s a lot better off now than it was a few years ago.
[00:16:31] I mean, I just wrote a piece for the Fortive Institute just last week based on Iran report that is noting that there’s this kind of quiet work being done under the gist of a group put together by the, council of, chief state school officers. Where you’ve got about a dozen or so states looking to influence curriculum and instruction.
[00:16:50] and this ran report suggests that they are at the very least changing teacher habits in terms of curriculum adoption and use. mean, that’s the [00:17:00] first steps you really kind of need to get to enthusiastic and, and informed use. So it’s, a long process, so don’t wanna leave the impression that it can’t be done.
[00:17:07] But we need to do more of it. And, those states may be providing some leadership as to how we might go about it.
[00:17:13] Kerry: So let’s switch now to talk about civic education, which has been a topic that you’ve written about in the past, and certainly an element of Hirsch’s work. And I wonder if you could discuss how and why civics and the study of us history have fallen out of favor in so many K to 12 schools over the last several decades.
[00:17:32] And what do you think that means for the health of our representative government civic, mindedness and Liberty?
[00:17:39] Robert: Boy. I hope at some point you ask me a question I can answer in 10 seconds or less. this is gonna be another kind of long that’ll be for dry it’s it’s a great question. And a fascinating one.
[00:17:51] I often joke that that ho man went to his grave without ever having a once uttered the phrase collagen career ready. and what I mean by that joke is that we [00:18:00] had a very. And concept of, schools and you’re right to invoke Hersh again, because he wrote a terrific book a few years ago called the making of Americans, which really unpacked some of the earliest thinking about the purpose of public education in America, even before Homan.
[00:18:16] I mean guys, like, you know, Benjamin Rush and Noah Webster and even the founders, writing the constitution, the Federalist papers who were so concerned about faction , and there was. A surprising amount of content, written by those, in the founding generation that really, thought deeply about education and said, look, you know, schools are the mechanism by which I think it was the Benjamin Rush phrase you create quote, Republican machines, meaning, Ordinary people who were capable of self-government, you know, that was a overriding concern of, thinkers of 250 years ago.
[00:18:50] That means civic education. That means preparation, not for the private ends of, , college and career readiness as we term it now. But preparation for public life or [00:19:00] active participation and civic engagement. and I think it’s, fair to say. We have just drifted. So far from that shore, that now when you, even suggest that to some people, they’re like, well, you know, why would you think that should be a purpose of, schooling now, maybe that pendulum has come back a little bit more in the last couple of years.
[00:19:19] you can’t open a paper anymore without somebody, saying that our democracy is imperiled. So the conditions should be ripe because of that for a return to civic education, the obvious downside. Is I think whenever you say civic education, particularly to those of us who are, right of center we tend to view that as, code for a kind of aggressive activism in civics and civic education, that kinda leaves a bad taste in one’s mouth.
[00:19:45] But there is always going to be that work to be done. Right. I mean, I’ve been spending a lot of time lately thinking about exactly this question , and what is the purpose , , of the school. And, it’s the time to rethink the kind of, you know, social contract, if you’re like that we have between [00:20:00] families and parents and children and the outcomes that we seek in schooling.
[00:20:04] And you can come at this many number of different ways. I don’t think I’m alone in thinking at the kind of technocratic focus on just outcomes while important has been, you know, minimal caloric content as it were. In other words, I’m not sure that things are that much better off than they were say 20 or 30 years ago before we fetishize test scores as kind of the alpha in omega.
[00:20:25] So it’s Long story short. I think the time is long overdue just to kind of rethink that kind of civic function of education. but it’s gonna be di difficult to do that in the, in the current political environment.
[00:20:36] GR: So Robert you’ve written a book, how the other half learns equality excellence and the battle over school choice.
[00:20:44] I’ve got a copy. I’ve read it, loved it. And when I initially saw the title, it reminded me of a book I guess published 129 years earlier called how the other half lifts and Jacob risk book about tenement slums in New [00:21:00] York. Your story. Is about New York. It’s about really the network of charter schools called success academy.
[00:21:08] Eva’s been on our show before, but your story is really just a microcosm of the American story of reform of politics and change. Talk to us about some of the larger lessons that we as listeners should draw from your book, not just from New York, but the broader conversation about let’s the phrase you just used, the social.
[00:21:30] Robert: Thanks Gerard. and by the way, go to the head of the class, you were one, of the few readers who was made that immediate connection that I kind of thought was obvious between my title and the homage to Jacob Reese. I guess I’m a thorough going ed Hershey and, you know, core knowledge guy that I just assumed that was part of everybody’s cultural literacy, but it was not, but you got it.
[00:21:48] So thank you. Yeah, it, it, it’s interesting. I mean, the exact conceit of the book Gerard was exactly that. I mean, if listeners know success academy, then they, know the basic contours of the [00:22:00] backstory, which is that, Eva Moskowitz has succeeded in building something that is literally unprecedented in American education, which is a network of charter schools.
[00:22:09] In which there is quite literally not a bad one and I’m making air quotes around, as I say bad, because I mean, they are good by the standards by which we hold schools accountable. I don’t have the data in front of me, but, the weakest success academy still gets like 80, 90% of their kids passing , the New York state ELA and math test.
[00:22:28] And, and to my knowledge, no other charter network in America has grown to the size. Of hers without at least one or two outliers and sometimes quite a few outliers. So, based on the way we keep score in education and ed reform, she seems to have figured out something that nobody else has managed to figure out.
[00:22:45] So if you’re me, you know, or a guy like me or you, I, so we wanna figure out, okay, what’s going on here. What is she solved and how can we translate that to American education at, at large? So that was the, premise by which I spent a year embedded at a success academy [00:23:00] school.
[00:23:00] And interestingly, it was literally in the same neighborhood where I was a, fifth grade teacher for five years directly across the street, almost from where I was a student teacher, when I started teaching. So I was looking for exactly that, what are the lessons? And, , the bad news I suppose, is I don’t think that there are a lot of lessons.
[00:23:17] And that’s because not only are these schools of choice but they are very demanding schools of choice demanding for families. In other words, it’s just damn hard, frankly, for a family to, Persist at success academy. They, make a lot of demands of families, , read with kids every night.
[00:23:35] be very accountable to the schools. I’ll oversimplify here broadly, but I think the basic idea, what she’s kind of figured out how to do. Is get every adult in a child’s life, basically singing from the same hymnal. And that’s difficult to do in K12 at large. Right? In other words, if you sign up willingly in a school of choice and you sign up for this intensive form of education well then, buying in, you’re a knowing consumer.
[00:23:59] You’re much more [00:24:00] likely to be able to, do that than, in a run of the mill K12 school at a slightly more granular level. The demands are such that, and this is just observation. I always feel the need to point this out. This is not data. This is just kind of a journalistic observation.
[00:24:13] It’s unmistakable that the demands mean it’s a lot easier for a certain kind of families to persist and be successful here. I think this was in the book. At one point I went on a field trip with some second graders, and I think there were more dads chaperoning , that second grade field trip than I had seen in five years of parent teacher conferences.
[00:24:32] So in other words, the school culture kind of valorizes or requires a lot of parental bandwidth. So you end up seeing families who are. Intact employed, ambitious for their kids, religious and spiritual, for example, they have more, a little bit more social capital perhaps than other families in that same neighborhood.
[00:24:49] That’s not a criticism by the way. I mean, I think , some folks, including frankly, some folks at success academy misinterpreted the book of saying, oh, well, you’re saying that we’re just Parents? No, because the point I [00:25:00] made it repeat, made repeatedly in the book is that yes, there’s a certain bar for entry, , you gotta have a certain amount of parental bandwidth to get in there at all.
[00:25:08] Because of the hurdles they put in front of families uh, But once they’re there, they are outperforming, literally outperforming the gifted and talented programs in New York city that do in fact hand pick kids. So there’s considerable magic going on there, but it’s a complicated picture of what can be done when you have dedicated employees, a real clear school culture a, a demanding and.
[00:25:30] Program and, high and ongoing levels of, parental bandwidth. All of those things make it phenomenally powerful for low income families, but phenomenally difficult , to apply to K12 at large.
[00:25:42] GR: So let’s stick to New York city again, because it’s another microcosm for a larger conversation about.
[00:25:50] Education and politics in this instance, it’s charter schools. So right now as we speak the bite administration and others are pushing [00:26:00] to really slow down the growth of charter schools. Well, this is 2020 two let’s back up to October 7th. 2015 in New York city, when it estimated 18,500 families children’s and children, educators gathered at the Camden Plaza in Brooklyn under the motto, I fight in equality at that time.
[00:26:19] Democratic mayor bill de Boggio was trying to end. Charter schools, as we know it again, 18,500 families, children, educators, employees gathered to say, no, we don’t want this to happen. Even then within the school reform movement, both public and private school sectors, people began to say, there’s a breach.
[00:26:41] In this social contract and people like NA Democrats have always supported charters. It won’t change well, we’re now in 2022. And when vice president by then was under president Obama, who supported charters, it’s a different place. What have you seen? , not only unfold in New York [00:27:00] city, but just, writ large in our movement.
[00:27:02] Robert: that’s a great question. And I guess I’m gonna run the risk of kind of scooping itself a little bit. I’m actually working on a big piece as we speak for education. Next on almost exactly this question. So I’m here in New York. Just shortly after that rally that you described we ran up against a, a cap in charter schools.
[00:27:22] if you wanna open a charter school in New York state, you literally cannot do it anymore. At least down in New York city. There’s, still some cap space. in upstate New York. but most of the energy and dynamism of charters in New York have, has been in the last couple of decades in New York city.
[00:27:39] I mean, we, mentioned success academy. There’s also uncommon achievement. First Kip democracy prep, where I used to teach and others. These fairly large well established and by any reasonable metrics, successful schools run by so-called CMOs or, charter management organizations. I can’t help, but think in, in a less [00:28:00] polarized time, If education were kind of less of a political football, those of us in New York, we would look at the, at our charter sector in New York city with no small amounts of civic pride and say, look, , , these schools, dozens of them are serving the cause of equity.
[00:28:16] , they are accomplishing and have been for quite some time. the thing that our previous mayor who you just alluded to bill de Blasio. Claim to wanna create with the so-called selective high schools, which is getting large numbers of black and brown students on the path to, college and, career and, and elite educational opportunities.
[00:28:35] Well, well, charters have been doing that for quite some time. But they’re in bad odor. So it’s, bizarre, right? To, in other words, they, all they’re doing is all they’ve been asked to do. And here we are in New York with, you know, a charter cap. We’re not opening any more of them. And when we are opening new charters, they tend to be now those that are still opening upstate New York.
[00:28:55] Kind of little mom and pop charter schools community responsive charter schools, not the, big [00:29:00] CMO schools. Now, meanwhile, parents still are swelling. the waiting list for those, more established CMO network schools. So it’s kind of interesting, no matter how you slice it, it does seem like this is a very hard time to be in the charter community in New York, either you are being thwarted in any attempt to open new schools.
[00:29:19] If you’re opening new schools, well, then you’ve got a lot of work to do because you don’t have the resources of a CMO it’s it almost feels like you’re, back to 25 years ago, when we were opening schools in church basements and whatnot, and everything was being bootstrapped. I’m tempted to suggest that that’s a bit of a bellwether.
[00:29:35] For the way charters are going nationally, where, once that bipartisan coalition that we enjoyed for a couple of decades in the ed reform world, once that fell apart it just became another way to say it is that ed reform sneezed and, and the charter world caught cold.
[00:29:50] GR: Makes a lot of sense. And since we’re discussing charter schools, we wanna say hello to all of our colleagues who are in Washington DC for the national charter school conference [00:30:00] held there for the next few days. So by the time you hear this, you may still be in DC. And those of you who will listen later, thank you for getting together.
[00:30:07] Both folks on the right left, middle, all stripes and everything in between. So here’s my last question for you. You’ve recently wrote. Good piece in national affairs about how to restore trust and public institutions, really public schooling. For some of our listeners, they may not be aware of national affairs.
[00:30:26] Tell us a little bit about that medium and then kind of give us an idea of why you think the topic of public schooling and trust is important at this.
[00:30:35] Robert: Yeah, thanks. It, it just came out today as we’re speaking and it’s the first time I’ve had the opportunity to write for national affairs, which is a, quarterly founded by my AAI colleague.
[00:30:45] Yuva Lev who is maybe the, preeminent public intellectual that we have in this country at this time. So it’s, it’s an honor and a thrill to have anything appear between those covers. reason this interests me. It’s funny. I’ve been accused of being a contrarian and, and [00:31:00] I don’t think I am.
[00:31:01] But maybe I, I dwell in complexity and if you’ve been in the reform world for any period of time and, you know, tell me if you disagree, George, a lot of us who are, and I’m a, you know, school choice, charter school parent advocates. If we think long and hard about our advocacy, we probably recognize a tendency to kind of take advantage of weakness in public education because it creates the conditions, right?
[00:31:27] that further our agenda. To drive demand for school choice. , , both among parents and politically there’s something a little bit unholy about that. Right. and again, I hope my, choice advocate in charter advocate, you know, bonafide are in good order. but I, I always remind my friends in this world that look, the sun will likely go out before we have in America where the majority of kids are not in traditional public schools.
[00:31:54] it’s not because we can’t do anything differently. It’s because it’s a cultural habit. It’s because [00:32:00] we value it. So let’s just kind of tap the breaks before we try to. unseemly advantage of weakness in public education because that’s where the kids go to school. So we need to be no less invested in their outcomes and the quality of education that they receive than we are interested in what happens to kids in schools of choice.
[00:32:20] and as soon as I say that, your then I also wanna make sure this critique applies to the left as well, because the second that you are envisioning your job as a public school teacher or administrator as, Playing a quasi activist role, , viewing schools as, social justice institutions, well, then you’re kind of playing fast and loose with the expectations around public education as well.
[00:32:42] So this long piece, and it’s, it is quite long. It’s about 5,000 words. I think is, is hopefully a reminder to, to partisans of both stripes, to just kind of, again, tap the brakes before you kind of play fast and loose. With damaging this institution that educates the majority of American children and [00:33:00] probably always will be because either you don’t have the permission as a public employee to, impose your social justice agenda or whatever your activist agenda is on education.
[00:33:10] And on the other hand before you really try to take political advantage of, the weakness of public education, let’s remind ourselves that this is where most of the kids go to school and probably always will. So we need to remind ourselves that we have a vested interest in, those kids who will probably be the majority of kids for quite some time to come.
[00:33:29] GR: Robert, thank you for articulating. What many of us in the school reform movement have said for decades? Because we support charter schools, vouchers, ESAs, and everything else homeschooling as well. We realize the majority of our public schools will educate our children and we have to make them work. I’ve also said that, , we should make all the best examples, charter schools alone.
[00:33:49] There’s some great high performing title, one schools in rural areas, in urban areas as well. So thank you for that. Thank you for joining us. Also thank you [00:34:00] for bringing ed Hirsch. So for listeners, after you listen to this podcast, you can also go to our August 18th, 2021 podcast. You can find at the pioneer Institute where we actually interview ed Hirsch on common knowledge, equity and educating citizens.
[00:34:14] So you may find some good things there. Robert, again, keep up the good work. I look forward to reading your article that you just discussed and look forward to seeing you in person at some point when. We’re in the same room together.
[00:34:28] Robert: Here’s hope. And thanks for having me take care.[00:35:00]
[00:35:00] Kerry: So Jared for the tweet of the week, this week, it was a big week at the us Supreme court with the opinion in Carson V Macon. So the tweet of the week is the SCOTUS blog at SCOTUS blog. Talking about the vote being six to three and really a, victory for school choice.
[00:35:17] GR: Absolutely. And in fact next week we’re gonna have someone from the legal team.
[00:35:23] Who represented the family in that case, as our listeners know we’ve had other guests on our show who actually were the name either plaintiff often in the cases. So look forward to that next week uh, bid win for families, for educators, and really for the whole idea of what choice means in American.
[00:35:44] We often focus on it in one aspect and forget that it actually is pretty ubiquitous across American life. So Carrie, with that, thank you so much for joining me. Look forward to us. Tag teaming again in the future.
[00:35:55] Kerry: Great to be with you Gerard this week, and I will be back again next week to join you again.[00:36:00]
[00:36:00] GR: Sounds good. Take care.
Recent Episodes
Professional, Scientific, and Technical Services on the Rise in Suffolk County, MA
/0 Comments/in Blog: Transparency, News, Transparency /by Mitch BoveSuffolk County, Massachusetts consists of the cities of Boston, Chelsea, Winthrop, and Revere. According to the Pioneer Institute’s MassEconomix website, 644,363 people were employed in Suffolk County in 2020. So which industry is the county’s biggest employer?
Since 2004, the first year in the MassEconomix database, the largest industry sector in Suffolk County has been healthcare and social assistance. The U.S. Bureau of Labor Statistics defines the healthcare and social assistance industry sector as trained professionals who work in “establishments providing medical care exclusively, continuing with those providing health care and social assistance, and finally finishing with those providing only social assistance.” In 2010, 122,343 employees worked in healthcare and social assistance, comprising a total of 21.4 percent of the total Suffolk County workforce. By 2020, the number of employees rose to 148,223, or 23 percent of the workforce.
In 2004, the second largest industry sector employer was Finance and Insurance with 69,426 employees. In 2010, Finance and Insurance was still in second place with 69,891 employees, or 12.22 percent of the Suffolk County workforce. After 2010, the number of employees in the sector began to decrease. For example, in 2011 Finance and Insurance lost 995 employees. It lost an additional 2,011 employees in 2012. By 2020, the sector included 67,789 employees, a decline of 10.6 percent since 2008, the highest employment year for the sector.
While the number of Finance and Insurance employees began to decrease, employment in another industry sector – Professional, Scientific, and Technical Services (PSTS) – was increasing rapidly. The examples the U.S. Bureau of Labor Statistics provides for this category range from legal advice to architectural, engineering, and specialized design; computer services, translation and interpretation; and other professional, scientific, and technical services.” In 2010, PSTS. employed 12,696 fewer residents than the Finance and Insurance sector, but from 2010 onward PSTS grew steadily and by 2012 it had 64,442 employees. From 2012 to 2013 the number of employees increased by 6.4 percent to 68,566 employed, surpassing the Finance and Insurance sector by 2,248 employees and making professional, scientific, and technical services the second largest industry employer in Suffolk County.
Figure 1: Employees by Industry Sector in Suffolk County, MA 2010-2020. Source: Pioneer Institute’s MassEconomix website.
From 2010 to 2020, PSTS employees increased by 67.2 percent while Finance and Insurance declined by almost 3 percent. Professional, Scientific, and Technical Services appears to be one of the fastest growing industries in Suffolk County, right behind the healthcare and social services industry. A 2017 WBUR article offers some insight as to why this industry has been growing so rapidly in the past decade. Major technological companies such as PTC, GE, Autodesk, LogMeIn, and Bose have been moving parts of their businesses from suburban areas to Boston. More tech companies, such as Apple, continue to make the move as they plan to add several hundred jobs in the Greater Boston area within the next few years. Amazon plans to add over 3,000 jobs, and Google plans to add over 1,500 new jobs. In the WBUR article, company executives attributed their move to “access to talent, public transportation and a collaborative open-source culture.”
Mitchell Bove is a Roger Perry Government Transparency Intern at the Pioneer Institute for Summer 2022. He is a rising junior at Suffolk University with a major in U.S. History and minors in Media & Film.
Taxation Without Legislation: Exploring Inflation’s Causes, Curses & Cures
/in Economic Opportunity, Featured, Podcast Hubwonk /by Editorial StaffHubwonk host Joe Selvaggi talks with Bloomberg Columnist and National Review Editor Ramesh Ponnuru about the reasons for the sustained spike in inflation, its impact on savers and consumers, the possible policy remedies, and the likely intensity and duration of this cycle.
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Joe Selvaggi:
This is Hubwonk. I’m Joe Selvaggi.
Joe Selvaggi:
Welcome to Hubwonk, a podcast of Pioneer Institute, a think tank in Boston. Inflation has eclipsed the COVID epidemic as Americans’ greatest concern. Having not seen an inflationary spike for nearly four decades, many current consumers and market actors are unfamiliar with its causes, its effects and the potential remedies available to policy makers to bring it back under control. Indeed, what had been thought to be a temporary phenomena, attending the aftermath of a pandemic. Now X us daily, as we shop for eggs, gas, or a potential new home, will this ubiquitous rise in the price of everything continue and perhaps accelerate or can policy makers in our us legislature and federal reserve bank slow and reverse this trend with interventions that voters will accept. My guest today is Ramesh Ponnuru, columnist for Bloomberg and editor of National Review. Mr. Ponnuru has written extensively on the causes and risks of inflation and on which politically viable actions policy makers can take to contain the current trend. Mr. Ponnuru will share with us his views on the origins and contributors to our current inflation, who is most likely to suffer from its effects and which potentially painful policy choices are available to cool this overheated economy. When I return, I’ll be joined by columnist and editor Ramesh Ponnuru.
Joe Selvaggi:
Okay, we’re back. This is Hubwonk, I’m Joe Selvaggi and I’m now pleased to be joined by Bloomberg columnist and editor of National Review Ramesh Ponnuru. Welcome back to Hubwonk, Ramesh.
Ramesh Ponnuru:
Thanks for having me.
Joe Selvaggi:
Okay. Now our topic is one that’s at the top of mind for nearly all Americans, we’re gonna be discussing inflation its causes its effects and perhaps give our listeners a sense of how we might plan to address it. But so let’s start at the beginning first for the benefit of our listeners, what is inflation?
Ramesh Ponnuru:
So different people have defined inflation in different ways and sometimes get quite upset with you if you don’t use the term the way they want to. I think the most intuitive and common way is also the most useful. And that is to describe inflation as a general rise in the price level. So if on average prices were at a hundred in 2020, and then they get up to 102 in 2022, assuming in 2021, then you’ve got 2% in place year over year.
Joe Selvaggi:
Okay. Is there a general sense of what it should be? Is there a sort of a, a background of you know, we, we should always have it, but it should be at this level.
Ramesh Ponnuru:
So this too is a source of contention central banks around the world, starting in the late eighties, have largely converged on the idea of 2% inflation each year, being the ideal or the, the target that they ought to be striving for. It’s a little bit arbitrary, but the idea is that that creates a reasonable amount of price stability while also for you allowing for different kinds of adjustment to take place.
Joe Selvaggi:
So in your first answer, you talked about you know, the average price of everything being a hundred is sort of a, an imagine conceptual concept. And now it’s 102. That means it’s essentially a higher price for the same exact basket of goods. And no change such as a commodity, like a gallon of gasoline is a gallon of gasoline from one year to the next, if it costs more that’s inflation, if it, if it’s across the board, right. Now if, if all boats are rising in inflation is increasing the price of everything, wouldn’t, it also affect the cost of labor, which is a the flip side of, of inflation, which would effectively mean my paycheck. Your paycheck would go up by the same amount. Does the rise in the income negate the effect of inflation?
Ramesh Ponnuru:
Yeah. Well, first of all, just to talk about one of the things you said about changes in quality where, you know, so the idea that it’s 2% inflation costing a hundred and then costing a hundred, two assumes, you’ve got the same basket of goods, but of course there can be all kinds of things that change. So if you know, the size of the candy bar you’re buying shrinks basically that’s a kind of hidden kind of inflation, right? If the price is still the same people call it shrink inflation. Sometimes they do try in these statistics to capture that kind of change. Also if the price of apples goes up maybe people switch over to oranges and there are technical disputes about how you correct for that kind of substitution effect. If, if people can avoid some of these price increases, now you’re absolutely right.
Ramesh Ponnuru:
That wages are another price, the price of labor that is affected by inflation. And if you’ve got a steady and predictable 2% inflation year after year after year, the idea is that wage rates will adjust that people who wouldn’t have gotten raises will get a 2% raise people who would’ve gotten a 2% raise will get a 4% raise as sort of it’s everybody in the economy just expects the price level to be a little bit higher next year than it was this year. But of course, that sort of a textbook model of the way inflation works and, and actuality inflation doesn’t work that way, particularly when you’ve got unanticipated inflation, where maybe it takes some time for this inflation to permeate every market, including the labor market. And during that period in between, if you’re a wage earner, you’re finding the purchasing power of your paycheck going down. And of course there are other kinds of there are other things that can happen with inflation that that, that cause the price of the products you buy to rise, but don’t help your wages. And that’s the case with a supply led inflation, an inflation that is caused by a blow to your productivity.
Joe Selvaggi:
I see. So, so inflation doesn’t raise all boats. Sometimes it it’s an uneven rising if you are either let’s say not an income or earlier you’re maybe fixed income retiree you’re a saver your savings don’t grow with inflation. So you may be left behind. Oh, so let’s talk about that. What are some of the primary negative effects of inflation in, in conceptually?
Ramesh Ponnuru:
So the loss of purchasing power of course, is the one that is closest to everybody’s mind, but it also makes the economy less predictable. If you’ve got an unsteady inflation. And so that makes it harder for businesses to make investment plans, for example, or for households to make long term plans. They don’t have that steady backdrop against which they can make the plant. There’s also what’s called menu costs. And just think about it very literally like the the restaurant has to keep changing the menu because prices keep changing. There’s the way that inflation is baked into some taxes now that’s better than it used to be. In the seventies, when we had our last big bout of inflation, the income tax brackets, weren’t indexed for inflation. So people would find themselves paying higher taxes, even when they weren’t getting ahead in real purchasing power of their income. But it’s still part of our tax code and things like capital gains. So you can end up paying a capital gains tax when you haven’t in real terms, made any capital gain and the effective tax rate therefore keeps going up. So there are all kinds of costs that ripple out through the economy.
Joe Selvaggi:
Okay. So let’s ask the, you know, let’s get into the meat of this. We know what inflation is. This is a harder question. What is it that causes inflation? You’ve already mentioned a supply shock but let’s go deeper into that. What, what I’m sure it depends on who you ask, but what causes inflation?
Ramesh Ponnuru:
Well, the typical cause of inflation is an excessive growth in the money supply, but really anything that increases the total level of spending is going to cause a demand side inflation that’s most of what we saw in the 1970s, that’s part of what we’re seeing now, if there’s, you know, the, the, the famous definition of inflation or explanation for inflation is too much money chasing too few goods. Now, the too few goods, that’s the supply side of the problem too much money. That’s the demand side that is the central bank running a monetary policy that is too loose that is leading, you know, to too much currency in circulation. For example would be the very classic case of of how a central bank can go wrong with inflation. And another metaphor people often use for this kind of inflation is overheating the economy.
Joe Selvaggi:
I see. So you’ve mentioned a couple things, I think that you we’re, we’re both a channeling Milton Friedman there with the too, too many, too many dollars chasing too few goods. So let’s analyze that equation. We’ve got too many dollars and too few goods. Let’s start with the too few goods. We all know that we have supply chain issues. We’ve covered that on this podcast in earlier episodes, but let’s, let’s analyze that. Are we still blaming too few goods on supply chain shocks that were a result of our recent pandemic?
Ramesh Ponnuru:
I think that that was a bigger cause of the inflation in the first half of 2021. And it is a, a pretty big cause of the inflation that we’re seeing in Europe. But it’s been less of what has been afflicting us for most of the last year, so still a factor. But but since mid 2021, I would say too much spending has been a bigger part of it. And by too much spending, I mean, really the total level of spending throughout the economy, all spending on consumption and investment public and private and business it’s you know, you want that growing at a steady rate and it hasn’t been a, it dropped substantially at the beginning of the pandemic then it rose sharply. And I think some of that sharp rise is justified as a way of catching up after you had that big drop. But it’s been excessive and and it’s been, I think clearly excessive since late 2021. And the central bank has been, has been too slow to arrest that.
Joe Selvaggi:
I see. So we’re talking about a constraint in supply and then an attending inflow of, of spending. So again we hear a lot about energy constraints price of gas is front top of mind for everyone. I think it’s gone up 50% in the last 18 months. The administration is calling that the Putin price hike and of course energy gas is an input for all other goods. Can we attribute some of this inflation to spike in energy price?
Ramesh Ponnuru:
Yeah. absolutely. We can. It’s, that’s typically the case. But of course gas prices were rising before Putin’s invasion of Ukraine. I think there’s no question that that invasion has made things worse, but we had an inflation problem before it, and the excess spending problem is not a Putin caused problem. It’s you know, that, that is a domestic policy problem. That’s a central bank problem. The, you know, what you, the point you made about gas prices being energy, being an input into almost everything else, that’s a very important point. Because sometimes people will say well, you know, one price goes up. People can just you know, spend more on that and spend less on other things and shouldn’t change the overall inflation rate. And that’s really not true when it comes to some, an input price that has a negative effect on productivity, like an increase in energy.
Ramesh Ponnuru:
It’s like making everything, you know, if you make everything twice as hard to make, like take twice as much labor to produce the same amount of products, you’re gonna have less output and, or higher prices. And there’s not a whole lot that a central bank can do about that. So all just a way of saying that the input price issue is absolutely part of this problem. And we, you know, we just have to be able to hold in our minds that we’ve got both a supply and a demand problem, and, and too often people wanna make it one or the other Democrats typically wanna make it an entirely supply issue as though that absolves them of any responsibility you know, which it actually doesn’t. But it’s also not true. It’s both.
Joe Selvaggi:
So, so, okay. Let’s let’s move off of the supply side and towards the demand side, you’ve already cited the fact that a lot of people through the pandemic were sitting home not spending money. They couldn’t spend money, they were stuck at home perhaps saving and they would naturally want to make up for lost time when when restrictions are lifted and we can all get back out there. So we’ve got that spike in demand as you describe. But there was also of course a stimulation of that spike in demand by the federal government in many ways. It it influenced our ability to spend their direct outlays debt, forbearance, unemployment supplements payment protection programs, all kinds of alphabet soup of stimulus. Of course that’s introducing the idea of far more dollars chasing the same number of goods. Is that to what degree is the federal government’s fiscal policy to, to blame for the stimulation in demand?
Ramesh Ponnuru:
Well, here, I think it’s a complicated story and I thought that a lot of the spending that the federal government engaged in in 2020 and particularly in early 2021 with president Biden’s so-called American rescue plan was excessive. And I thought it was excessive for a variety of reasons, mostly having to do with wasting money that could have been more productively spent elsewhere in the economy and creating bad incentives. But I, at the time, you know, even though I was opposed to Biden spending plan, I thought it wouldn’t have a big effect on inflation, partly because changes in spending over the previous decade, hadn’t had a big effect on total spending levels or on inflation because it had been offset. You know, if, so, for example, in early 2013, you’d had some spending cuts from the federal government and some tax increases and the central bank offset that so that so that the overall effect on the economy wasn’t very big this time that didn’t happen because the central bank was simultaneously engaged in a kind of loosening of policy under J Powell you know, partly loosening be, you know, as a, as a response to the pandemic and the effect on the economy, they, they thought it was the right thing to do.
Ramesh Ponnuru:
But the, the combined effect of this fiscal and then monetary loosening was excessive. And and that’s how we got here. And I also think feel permit me a little political digression. One of the reasons that the, the federal reserve let things get out of control in the second half of 2021 was there was uncertainty about the leadership of the federal reserve itself because Biden had not committed to renominating Powell. And there was a great deal of pressure from the left and the left typically doesn’t like monetary tightening likes monetary loosening and the democratic incumbent is definitely going to not want interest rate hikes. And I think that can help explain some of the delay in responding to the clear signs that not only did you have inflation, but this inflation was not transitory. And this inflation was in fact fed by excessive demand, excessive spending.
Joe Selvaggi:
So, I mean, you, you, you say that rates or have a political valence, but I think what you you’re really trying to say is for incumbents, not for left or right. Or Republican or Democrats, right. And all incumbents want low interest rates and a, and a let’s say a, a heated, perhaps not overheated, but a heated economy. Nobody wants to, well, I
Ramesh Ponnuru:
Think, I think it’s
Joe Selvaggi:
Afraid,
Ramesh Ponnuru:
Right? Yeah. I think it’s both in this case. I, I do think presidents just typically they want low interest rates. They don’t wanna have the risk of a recession from an increase in interest rates. President Trump was certainly a low interest rate person which also I think has to do with his background as a real estate developer. But I think that there’s also this additional ideological overlay, which is that the left tends to favor looser policy than the right. And tends, tends to think a little more inflation is more tolerable than the right does. Now I think that this is actually in, particularly in this case, a mistake that Biden and the Democrats would actually be better off if we’d started this tightening cycle in late 2021 and gone a little further in that.
Ramesh Ponnuru:
I think we’ve actually got a pretty strong labor market if you look at vacancies and employment growth and the economy could have withstood that, and you’d be better off as the party in power with inflation under greater control. I mean, you might be facing some losses anyway, because you’re coming into a midterm midterms, typically don’t go well for the party in power. But I don’t think you’d be, you’d be seeing the potential catastrophe that task that Democrats are now seeing, where I think, you know, in a very real sense, inflation is just devouring this presidency.
Joe Selvaggi:
So let’s again, so again, the, the partying power is uncomfortable with the levels of inflation. We’re all seeing right now. It’s not good for their prospects in November, but let’s, let’s dispense with some of the, or not dispense with some of the narratives that are coming from the, the democratic party. A lot of people blame inflation on the exploitation of sellers or
Ramesh Ponnuru:
Oh, right. So called
Joe Selvaggi:
Yes. Breeded of corpor. We have, it’s a our own Elizabeth Warren she’s our Senator, or one of our senators who has a wonderful creative port mano called greed, FL that, that essentially this is suddenly corporations has become greedy just recently. So is there any merit tore inflation?
Ramesh Ponnuru:
Well, I mean, I think you’ve hit on the major problem with it, which is that it, it, it attempts to explain a variable by reference to a constant companies. They’re always trying to maximize their profits. It’s not like we had low inflation for most of the last decade because companies decided, you know, we don’t actually care about making profits anymore. So something has to have changed where a bunch of companies, you know, all through the economy all at once decided that the way to do that was to raise prices. And and I think that once you start thinking in those terms, you, you just see how how pitifully inadequate Senator Warren’s explanation is. You know, she’s, she has responded to this inflation by introducing legislation that would prohibit large companies from, you know, I think the, the phrase is unconscionably excessive price increases.
Ramesh Ponnuru:
Well, what does that mean? Who would define it, how much litigation would be involved in that? But also if you look into that legislation so she’s, she says, you know, you, yeah, you’re allowed, you know, if the bureaucrats decide essentially that you’ve got a supply chain problem then okay, you can raise your prices enough for that. But implicitly, what they’re saying is you can’t raise your prices in response to changes in demand which is nuts. And and, and, you know, local market economy just can’t function. If companies aren’t allowed to set prices in response to changes in both supply and demand in their markets.
Joe Selvaggi:
Indeed. you know, we, we probably could do a whole podcast on the downside of price controls and why, why they lead to bread lines, but let’s move away from that. And talk about the other way the democratic party right now is deflecting from this concern about inflation saying, look, we’ve got inflation, but so does the rest of the world, we’re looking at Europe, they’ve got inflation Biden, certainly hasn’t and affected their policies. How is it that we would be blamed for something that is a universal phenomena?
Ramesh Ponnuru:
So there are two things that bear watching. One is there is, I think just kind of you’ve got some of the same policies being pursued everywhere. So I think European central bank policy was also too expansionary. And I think though we’ve also got a little bit of, of a coincidence because you’ve got a bigger supply problem in Europe right now. And you’ve got a bigger demand problem here in the United States. So you’ve got the same sort of a very similar kind of headline inflation number, but very different causation in both cases and different policy responses are called for in different degrees in each of the cases that was, you may not have sent it up, but that was all explanation one explanation two. I do think there is something to the idea that the United States is the world’s monetary superpower and that if it’s deflationary or inflationary, that tends to get exported to other parts of the world for reasons having to do with, you know, for example, other currencies being pegged to the dollar. But but I think that you know, there’s, there’s something a little screwy about the leadership of the United States saying well, this is a global economic problem. It’s not our responsibility. I mean, we’re the United States.
Joe Selvaggi:
Right, right. Indeed. So, so let’s let’s move away from we’ll accept and stipulate that we do have it. It is here. We do think we can have policy choices that will make differences, but let’s start with we’re coming out of the COVID 19 pandemic. Thank God. And theoretically supply chains will go back to normal will that likely happen and, and be let’s say saluatory to those hoping to reduce inflation. In other words, if we resume our supply, will the demand for that short supply normalize and you know, that will battle inflation.
Ramesh Ponnuru:
Yeah. I think that that as supply chains get UN snarled, I mean, unless there are more shocks, right. Because we, you know, we had the pandemic shock and we had the Russian invasion shock and the world might not be through with shocks. You know, there was concern, I think it basically hasn’t panned out, but there were concerns that the, the resurgence of the pandemic in China would cause big supply problems. And so you, you can’t rule that sort of thing out, but but one of the things about supply shortages is that they should, I mean, there are powerful market forces that act to fix those and that should happen over time and that should reduce that level of or that cause that kind of inflation, but you’ve still got the demand problem and the excessive spending is not something that gets fixed just because supply chains get fixed.
Joe Selvaggi:
So, okay. Then let’s shift it, even if we do have plenty of supply, we’ve got too much money still. Right. I think we have senators mansion and cinema to thank for the fact that we don’t have an additional three or $5 trillion in a build back better that was not passed, but quite a bit of stimulus was in the trillions, I believe another 5 trillion in sort of pandemic stimulus. That’s still filtering down is that stimulating helicopter money going to continue to overstimulate us well into the future. Is it, you know, if we turn off the SPT, how long will it take to again, normalize?
Ramesh Ponnuru:
Well, I think that you know, obviously it takes time for some of these changes, both positive and negative to work their way through the economy. And so, you know, the people call people say that monetary policy has the, the phrase everybody uses who studies this is like long and lagging effects. It’s however, I think some of the effects would be a little faster than that. You know, the signals to financial markets that the fed is serious, if it raises rates enough to give the markets jolt that shows up in you know, as we’ve seen, some of that shows up in asset prices. Some of that shows up in just market expectations of future inflation and when markets don’t expect future inflation to be so elevated in that in itself has a solitary effect because people aren’t trying to raise their prices to keep up with with what they see coming for them. So, so I think that, that a good policy change could have quicker effects than people sometimes think.
Joe Selvaggi:
So we’re talking specifically about monetary policy. We’re talking about the, the fed drone Powell we’re actually recording on June 15th before the two o’clock announcement of rate increases. So we, we can speculate here, but our listeners will know what the outcome was. Well, the, I think odds on favor are for a 75 basis point increase for the benefit of our listeners. How is it that this change in rates could have an effect, hopefully have an effect on dampening inflation? How, how is it effect that we’re making money more, more expensive? How does that filter through the economy and then right. Ultimately tame inflation?
Ramesh Ponnuru:
Well, there’s a mechanical effect. In for example, you know, it cools the housing market if interest rates are higher people are not as, as quick to purchase homes and to bid the prices of homes higher. So there’s that effect on inflation. And then that also affects rents. But I actually think that that the biggest effect is, is, is simply the expectations that when people have confidence that the federal reserve is going to do whatever it takes to get inflation back under control, that’s the most powerful effect that the fed has. And in fact, the more confidence there is the less actual interest rate increases the fed has to engage in. It’s a lot of what the fed has to do is is changing market expectations. It’s just like, sort of, you know the primary way that traffic signals green and red lights work is not through police tickets, right?
Ramesh Ponnuru:
It’s it’s, it’s just changing the way, you know, drivers act and it’s it’s not, self-regulating right, it’s the government setting up those traffic signals. But it’s it’s a kind of nudge to market participants to act in a particular way and to have certain expectations and expectations of what other people are doing on the road. So to here and in a lot of what I think went wrong for the fed last year was that it was sending the wrong signals about its intentions and and how committed it was to keeping inflation from getting out of control in the first place.
Joe Selvaggi:
So I think you’ve anticipated, I was gonna ask how high does the fed have to raise interest rates to essentially tame it, but your, your answer, I think I’m going to guess is it has to raise it a lot less. If everybody accepts the fact that it’ll do anything, it takes to raise interest rates. So if, if you don’t believe, if you believe that the fed is on it, and then they’re doing their job and they plan to do their job expectation for inflation, go down, ergo rates don’t have to go up quite as high as they would otherwise. Is that right?
Ramesh Ponnuru:
Yeah, that’s right. And one of the reasons I think that the fed opts to surprise the markets on the upside, by having a little bit higher of a rate increase than people expect right now is so that they don’t have to keep doing it. So that maybe that, that ends up being enough to convince people that that this is, this is the end or the beginning of the end of this burst of inflation.
Joe Selvaggi:
So we we’re running outta time, but I did, I do wanna get to the sort of historical you you’re trained as a historian. So I thought I’d ask in a historical question, we did reference the seventies and what happened then I’m old enough to remember but I wasn’t buying houses at that time. I was playing on the, you know, schoolyard, but back in the late seventies, early eighties, we had rampant inflation and then chairman Volker came out and essentially tackled a, an extreme bout of inflation with interest rates you know, then double digits. Would we, are you concerned looking back as a historian at that bout of inflation really the last time we, we were here that we will see that kind of pain because of course those kinds of interest rates cause enormous amounts of unemployment and, and recession, are we inclined to have to go that far and be you know, it, will it be that painful going forward if in your view,
Ramesh Ponnuru:
I think we ought to be able to avoid that degree of pain because we gotta remember that the inflation of that period took quite a while to develop. And it took a while for people’s expectations, excuse me, of inflation, to shift upward on a sustained basis. So you started seeing that increased inflation in the late sixties and then policymakers sort of flailed around in response for more than a decade. Right now, if you look at long term inflation expectations, if you look at measures of what the market is expecting inflation to be six to 10 years from now, there’re a little high. I think the fed needs to bring them down, but they’re not wildly high. And if you look at that, which means that the fed doesn’t have to to really upend people’s expectations, it just needs to moderate them, bring them down a little bit, and you combine it with the fact that the labor market’s in, in pretty good shape to start with those things, suggest to me that if the fed does the right thing now we can have, if not the sort of soft landing, we have a tightening cycle that doesn’t result in a recession, but if you do have a recession, maybe it can be mild and short.
Joe Selvaggi:
All right. So we’ve talked about many of the levers that government has to, to combat of inflation. We’ve talked about how it exacerbated inflation, but we’re now trying to turn the ship around in your view, given the government, we have the upcoming midterm elections and, and the policy choices that are on the table for those politicians who wanna remain in, in in office. What other levers do you see that we could be pulling to mitigate the effects of inflation and inflation expectations?
Ramesh Ponnuru:
Well, I think there are an enormous number of government policies that have an effect on productivity and it’s typically a negative effect on productivity. And if you simply lifted some of those burdens you would contribute to the long term productivity of the economy, which is just a good thing to do in general. And that would also put some downward pressure on prices. Not all of it would be quick and immediate but some of it would. So for example, reducing tariffs would particularly if you reduce tariffs on critical inputs like the things you use to make semiconductors that would, I think have a pretty quick effect and put some downward pressure on prices. You know, if you increase domestic energy production, got rid of some of the restrictions on that, that would also have an effect. And maybe some of that would even feed into today’s prices because it would affect people’s expectations of future prices and future supply levels.
Ramesh Ponnuru:
You know, we had this huge infrastructure bill that was supposed to make our economy more, more productive, but there’s language in that bill at the behest of Democrats that prevents you from using any of it to automate the ports, which is something that we ought to be doing to make supply chains more efficient, but that unions naturally dislike. And so Democrats won’t go for the problem that you come up against again, and again, is there’s either an ideological objection or some kind of political interest group objection. And the natural instinct of the democratic party is always restrict supply through regulation, subsidized demand, through spending that’s a recipe for more inflation. And it makes it very, very hard for them to respond to inflation in a way that actually helps solve the problem.
Joe Selvaggi:
So so we can’t blame it all on Democrats, I suppose also Republicans resist Donald Trump in particular was a fan of tariffs you know, and protecting American jobs. What you’re saying is free trade is one of the main remedies for fighting inflation including, you know, facilitating that free trade through ports and, and such, is that what you’re saying?
Ramesh Ponnuru:
Well, I wouldn’t necessarily say it’s one of the main remedies, but it’s one of the, it is a remedy and it is something that could be done. I mean, the president could do a lot of this with a stroke of a pen because a lot of the tariffs were imposed by the stroke of a pen. And so if you really think that inflation is a huge threat, I think you try to attack it on all fronts and you do the things that you can do
Joe Selvaggi:
Indeed. All right. So we’re getting close to the end of the time together. I don’t know if you wanna dust off your crystal ball right here. I’ll ask you the $64,000 question. How high do you think inflation will go? I think we’re looking at headline inflation of 8.6%. That was of Friday last week was what annualized inflation rate how high can it go and how long do you think it’ll last?
Ramesh Ponnuru:
Well, I don’t try to make predictions especially about the future, cause I think Yodi said but I, I, my sense has been that policy has consistently been a little bit too little too late. I would like to be pleasantly surprised, but I think that we are going to have this elevated inflation level for some time. So I, I think we’re gonna have it into 2023,
Joe Selvaggi:
Indeed. Okay. So sort of a grim outlook, but at least it, it is temporary. Depends your timeline. It will end and so you you’ve called it 2023 is when we start to see the light at the end of the tunnel. I’ll I’ll, I’ll take that to the bank. Thank you very much for joining us today. And Hubwonk. Ramesh, you’re always a welcome guest and a font of information. Thank you for joining us.
Ramesh Ponnuru:
You’re most welcome.
Joe Selvaggi:
This has been another episode of Hubwonk, a podcast of Pioneer Institute. If you enjoy today’s episode, there are several ways to support the show. It would be easier for you and better for us. If you subscribe to Hubwonk on your iTunes podcaster, it would be easier for others to find hub won. If you offer a five star rating or a favorable review, we’re always grateful. If you want to share Hubwonk with friends. If you have ideas for me, or suggestions or comments about future episode topics, you’re welcome to email me at Hubwonk@pioneerinstitute.org. Please join me next week for a new episode of Hubwonk.
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