Diane Ravitch v. Bill Gates on School Reform

Ravitch answers Gates

By Valerie Strauss

In a paean to Bill Gates, Newsweek's Jonathan Alter calls Diane Ravitchthe Microsoft founder's "chief adversary."

It's the world's richest (or second richest) man vs. an education historian and New York University research professor.

Gates, through his philanthropic foundation, has invested billions of dollars in education experiments and now has a pivotal role in reform efforts. Ravitch, the author of the bestselling The Death and Life of the Great American School System, has become the most vocal opponent of the Obama administration's education policy. She says Gates is backing the wrong initiatives and harming public schools.

In the Newsweek piece, Gates poses some questions aimed at Ravitch. I asked her to answer them. Below are the questions Gates asked, in bold, and the answers, in italics, that Ravitch provided in an email.

Gates: “Does she like the status quo?"
Ravitch: "No, I certainly don't like the status quo. I don't like the attacks on teachers, I don't like the attacks on the educators who work in our schools day in and day out, I don't like the phony solutions that are now put forward that won't improve our schools at all. I am not at all content with the quality of American education in general, and I have expressed my criticisms over many years, long before Bill Gates decided to make education his project. I think American children need not only testing in basic skills, but an education that includes the arts, literature, the sciences, history, geography, civics, foreign languages, economics, and physical education.

The budget deficit and debt

The Budget Deficit and the Debt
What You Need to Know

 

1. The deficit is the gap between what the government spends and the revenues it collects each year. We didn’t always run deficits. When President Clinton left office, the federal budget was running a surplus of $236 billion, or about 2% of the U.S. economy. And that extra revenue was being used to pay down the national debt. To understand how we moved from big surpluses to a growing deficit, it’s helpful to examine each of the major factors driving our nation’s current deficits.
2. Every million additional jobs we generate reduces the deficit by $54 billion.
3. It’s misleading (and dangerous) to confuse the short-term budget shortfall with the medium-term deficit or the long-term debt. Here’s a way of understanding it:
   1. The Short-Term Recession Shortfall (1-3 years): The Great Recession wasresponsible for 61 percent of the deficit last year.

What Tom Friedman got wrong about schools

What Tom Friedman got wrong [in the NY Times] about schools and why it matters

By Valerie Strauss

November 29, 2010

 

The great New York Times columnist Tom Friedman wrote in a recent piece that if he were a cub reporter today, he’d want to be “covering the epicenter of national security -- but that would be the Education Department.”

Then he goes on to quote liberally from Education Secretary Arne Duncan, taking no account of what veteran teacher Anthony Cody, in a recent piece on his blog, described as a serious mismatch between the secretary's words and actions.

If Friedman the cub reporter had turned this piece in, a veteran education editor would have sent it back, asking him to back up his contentions with research. He’d have a hard time.

Look at just a few things Friedman got wrong. He wrote:

“Duncan, with bipartisan support, has begun several initiatives to energize reform — particularly his Race to the Top competition with federal dollars going to states with the most innovative reforms to achieve the highest standards. Maybe his biggest push, though, is to raise the status of the teaching profession. Why?

“Tony Wagner, the Harvard-based education expert and author of “The Global Achievement Gap,” explains it this way. There are three basic skills that students need if they want to thrive in a knowledge economy: the ability to do critical thinking and problem-solving; the ability to communicate effectively; and the ability to collaborate.

Pedagogy and Politics- Ohanian

Good points on what is wrong with NCLB, Race to the Top, and the Obama-Duncan agenda in education.

Susan Ohanian's session was great.  She did not mince words yet she did not mince them with grace, dignity, and called us all to action.  Her talk is posted on her website at:  http://www.susanohanian.org/show_commentaries.php?id=865

Economic changes leaving U.S. behind

The U.S.  economic crisis was severe in part because of the   growth of finance capital as the  dominant actor  in our economy .  Finance was in crisis first, then the production of goods and services collapsed taking some $13 Trillion out of the  U.S. economy and caused a  $ 34 Trillion loss in the world economy.  The extreme  income inequality produced  by the three-decade rise of the financial industry has significant  societal consequences including fundamental changes in employment  and education opportunities .

As a consequence of the last thirty years of  the dominance of finance capital and income stagnation, the U.S. is losing its power in the world economy.

            This is how one author describes the economic shifts,

“The earthquake of the past few years has damaged western economies while leaving those of emerging countries, particularly Asia, standing. It has also destroyed western prestige. The west has dominated the world economically and intellectually for at least two centuries. That epoch is over. Hitherto, the rulers of emerging countries disliked the west’s pretensions, but respected its competence. This is true no longer. Never again will the west have the sole word. The rise of the Group of 20 leading economies reflects new realities of power and authority.” -- Martin Wolf, Financial Times, July 14, 2010 .

            The U.S.  is no longer the  one dominant economic power in the world.  Here is a listing of the major economic powers.

2009.            

Ranking	Country	Approximate GDP- Purchasing Power Parity
1	United States of America	$13,860,000,000,000
2	China	$7,043,000,000,000
3	Japan	$4,305,000,000,000
4	India	$2,965,000,000,000
5	Germany	$2,833,000,000,000
6	United Kingdom	$2,147,000,000,000
7	Russia	$2,076,000,000,000
8	France	$2,067,000,000,000
9	Brazil	$1,838,000,000,000
10	Italy	$1,800,000,000,000

Tea Party activists seeks anti immigrant vote

             Tea Party activists are seeking to qualify an Anti Immigrant initiative in California. The purpose of the effort is to generate fear and bigotry.

Anti Mexican racism works.  Here is how it happened in California in 1994.

 "In the Summer of 1993, a failing economy and governmental retrenchment combined to make Governor Pete Wilson the most unpopular governor in recent history.  By November of 1994 Wilson won re-election with over 56% of the vote.  Two factors combined to deliver victory to Wilson; a mean spirited, divisive, and racist campaign directed against Mexican and Mexican Americans, and an inept campaign by Democratic Candidate Kathleen Brown.

    In 1994 The voters of California voted 62% to 38% in favor of Proposition 187, the Save Our State initiative to restrict illegal immigration.  A number of groups including FAIR, the Republican Party, and the Perot organization worked together to qualify the initiative.

    In 1994 California has a population that is 56.3 % White, 26.3 % Latino, 9.4% Asian, 7.4 % African American, and 0.6% other.  However, according to exit polls, the voters in this election were 80% white, 9% Latino, 7 % African American, and 4 % Asian. Exit polls show that Latinos voted against Prop. 187 by 3 to 1, African Americans split their vote 50 -50, and the Anglo electorate passed the proposition by over 60%.

            If the electorate is primarily older White voters, such as in the November 2020 election, this kind of campaign will work.  If younger people vote- it will fail.

Corporations make record profits

Published on Tuesday, November 23, 2010 by Firedoglake.com

Corporations Show Largest Profits in History Amidst Jobs Crisis

by David Dayen

According to revised statistics, the US economy grew at a faster rate than first expected, up to 2.5%. Earlier growth in Q3 2010 was estimated at 2%. But the entire problem with looking at this topline number is reflected in these three paragraphs:

But the most recent increase in GDP still isn’t strong enough to make a dent in the country’s high unemployment rate, stuck at 9.6% in recent months. Analysts say GDP growth of at least 3% is needed to bring down the jobless figure, but many don’t expect the economy to perform that well in the fourth quarter or early next year.

That’s right. Despite record unemployment, and no hope for reductions clearly in sight, corporations have experienced all-time record profits , the highest since the Commerce Department started tracking the figure 60 years ago. They’ve learned to produce as many or more goods without workers.

Charters raid money from tax payers

by Michael Hirsch

They said charters would offer needed competition to community schools, but they didn’t say the competition would be about public dollars.  Last week Albany Times Union reported on the city’s Albany Leadership Charter High School for Girls “asking for $15 million in tax-free public financing to buy the brand-new charter high school for girls built by the Brighter Choice Foundation.”
Here’s the cute part. The nonprofit Brighter Choice Foundation, which runs all 11 charter schools in Albany and  erected the building at a cost of some $10.1 million, is directing its Charter Facilities Finance Fund to ask the city to back its selling tax-exempt bonds to investors so it can  buy the school building and — are you ready for this? — lease it back to Brighter Choice.

Forget about whether the deal sounds dodgy, because it does. If the deal also sounds a bit familiar, it may be because Thomas Carroll, the prime mover behind the Brighter Choice charter schools, has been profiting from a similarly questionable real estate tax loophole for the past several years, a story exposed earlier this year by Juan Gonzalez in the Daily News.
Critics say Carroll’s latest charter real estate trick runs counter to the purpose of the city providing tax free bonds, which is to jump-start job creation and promote economic development. No jobs will be created here; the school is already up and running. Where’s the public benefit in financing a project that’s already completed?

Republicans block unemployment benefits - again.

The Republicans in the House voted again to block unemployment benefits for those out of work.
Note: Half of the House members are millionaires.

Allowing Federally Supported Unemployment Insurance Benefits To Expire Would Cost Jobs and Could Endanger the Fragile Recovery Hundreds of thousands of jobless Californians who are struggling to find work in the weakest job market in decades face the prospect of struggling to make ends meet without federally supported Unemployment Insurance (UI) benefits, which will expire just before the holidays unless Congress acts soon. A new CBP analysis finds that allowing emergency UI benefits to expire would deliver a sharp blow to the economy and could endanger the fragile recovery. The analysis concludes that Congress should continue federally supported UI benefits until the job market shows strong signs of recovery. California Budget Project.

What is next ? A progressive agenda. Richard Flacks

What is next? Richard Flacks.

Are you as tired as I am with never-ending critiques of Barack Obama coming from the left as well as the right? Mainstream punditry has decided that he is largely a failed president (never forget that the MSM thought he was a failed candidate before he wasn't). Everyone on the left thinks, as one friend (a committed feminist) said the other night, ‘he has no balls.' The current rage is focused on apparent White House support for some sort of compromise on extending those Bush tax cuts. And there's plenty of other betrayals over which to wring hands and gnash teeth.

Handwringing and teeth gnashing don't bring the needed change, however. Why do we keep playing this blame game?

Let's stipulate, the administration needs to be criticized and pressed to correct course. There's no doubt that the president needs to figure out how to explain his key policies to those whose disapproval seems based on misunderstanding. This seems especially true for health care reform, the complexity of which has been key to its apparent unpopularity (I say this in light of the fact that large majorities approve of most of the specific provisions of the act when these are described). But the demand that Obama become more confrontational in order to challenge the fatuous and foolish GOP in congress isn't good strategic advice for him. The country sees him as trying to solve problems and govern, and sees the GOP already as obstructionist. A significant number of people who once identified as Republican now declare as independents. Here's some recent polling evidence. For us on the left, Obama's reasonableness is frustrating. But it could be his best chance to prevail in terms of policy as well as politics.

But...

As I keep saying in this space, if progressives want to promote real change we can't be waiting for Barry, it's up to us. We should be asking each other, not what should he be doing, but what should we do. Of course it's fine to mobilize for a progressive/populist tax measure in the lame duck congress and to defend social security in the face of the Bowles-Simpson initiative. These very focused issues lend themselves well to on-line actions that will give counter-weight to the rightwing onslaught.

But there are more far-reaching measures we should be figuring out how to mobilize for-measures that might really help the people:

       A new WPA?

In a recent web posting, Jeanne Mirer and Marjorie Cohen, argued that Obama could do what FDR did-create a lot of jobs by executive order:

"Can the President directly create jobs by executive order? The answer is a resounding yes. Remember when the Emergency Economic Stabilization Act of 2008, which created the $700 billion Troubled Assets Relief Program (TARP) was passed, one of the purposes was to preserve homeownership, and promote jobs and economic growth.

Much of the TARP money has been repaid and the administration refers to the profit on the payments. If one assumes an average cost of one job is $50,000, 6 million jobs could be immediately created for $300 billion. 12 million jobs could be created for $600 billion. Because this is already appropriated money, Congressional Republicans could not block it""

Such funding could also be used to support state budgets to protect education and public safety, and to promote weatherization and other green economy job creation.

Millionaires for higher taxes

We are writing to urge you to stand firm against those who would put politics ahead of their country.

For the fiscal health of our nation and the well-being of our fellow citizens, we ask that you allow tax cuts on incomes over $1,000,000 to expire at the end of this year as scheduled.

We make this request as loyal citizens who now or in the pastearned an income of $1,000,000 per year or more.

We have done very well over the last several years. Now, during our nation’s moment of need, we are eager to do our fair share. We don’t need more tax cuts, and we understand that cutting our taxes will increase the deficit and the debt burden carried by other taxpayers. The country needs to meet its financial obligations in a just and responsible way.

Letting tax cuts for incomes over $1,000,000 expire, is an important step in that direction.

Sincerely,

DIRK AGUILAR
San Francisco, CA

CYNDA COLLINS ARSENAULT
Superior, CO

DANIEL BERGER
Philadelphia, PA

Dangerous and misguided deficit recommendations

A dangerous approach to deficit reduction

Last week, the co-chairs of the National Commission on Fiscal Responsibility and Reform and the Peterson-Pew Commission on Budget Reform released proposals for reducing the federal deficit. EPI’s analysis shows both are seriously misguided plans that could undermine badly needed job creation, prolong the jobs crisis, and ultimately further weaken the country’s fiscal health.

In response, EPI’s Research and Policy Director John Irons issued a statement that the National Commission on Fiscal Responsibility and Reform “is running seriously off track.” Irons noted that almost half of the adjustments suggested in the Commission’s co-chairs proposal would come from cuts to discretionary spending, a portion of the budget that is not responsible for long-term deficits. At the same time, it proposes little to increase tax revenue and gives barely a nod to the prime driver of longer-term deficits, rising health care costs, suggesting only that lawmakers establish a process to control health care cost growth. The plan’s proposed changes to Social Security would result in reduced benefits for most people, Irons stressed. This initial proposal was drafted by co-chairs Alan Simpson and Erskine Bowles to stimulate discussion. It will be followed on December 1 by a final report.

In a separate response, Irons and Policy Analyst Andrew Fieldhouse called the Peterson-Pew deficit reduction target dangerous and misguided. They stressed that the Peterson-Pew plan, which calls for immediate deficit reduction aimed at reducing public debt to 60% of gross domestic product by the year 2018, “would slow the economic recovery enough to possibly risk a double dip recession.”

EPI believes that the current economic downturn is not a reason to adopt fiscal austerity. Rather it is time to invest in the middle class, create jobs, and spur economic growth. In the coming weeks, EPI, together with Demos and The Century Foundation, will release a Fiscal Blueprint that details the policies we believe will create jobs now and achieve long-run fiscal sustainability.

20 more years of high unemployment?
The Labor Department's November 5 employment report showed a nationwide unemployment rate of 9.6%. Although that report contained the welcome news that 159,000 private-sector jobs were created in October, even that level of job creation is not sufficient to reverse a backlog of 14.8 million unemployed workers anytime soon. Economist Heidi Shierholz, in her analysis of the latest jobs data, said that if the pace of job growth seen in October were to continue going forward, it would take a staggering 20 years to return the country to its pre-recession rate of unemployment.

Obama Without Tears

William Greider | November 10, 2010

Given the election results, the question Barack Obama has to decide for himself is whether he really wants to be president in the fullest sense. Not a moderator for earnest policy discussions. Not the national cheerleader for hope. Not the worthy visionary describing a distant future. Those qualities are elements in any successful presidency, and Obama applies them with admirable skill and seriousness.
What's missing with this president is power—a strong grasp of the powers he possesses and the willingness to govern the country with them. During the past two years, this missing quality has been consistently obvious in his rhetoric and substantive policy positions. There is a cloying Boy Scout quality in his style of leadership—the troop leader urging boys to work together on their merit badges—and none of the pigheaded stubbornness of his "I am the decider" predecessor, nor the hard steel of Lyndon Johnson or the guile of Richard Nixon.
Obama has patience and the self-confidence not to insist that his solution is the best and only one. On many vital questions, he went so far as to not even say what his solution was. Such a governing style is too nice for real-life politics, where Boy Scouts get their heads handed to them.
Some politicians may enjoy Obama's generous spirit, but many despise him for it. Washington always takes the measure of a new president and tests him early on. Congress and the surrounding power centers, swiftly reading weakness in this president, decided they would fill the vacuum Obama left for them.
A friend and longtime warrior for liberal reforms described what unfolded in harsh but accurate terms: "First he was rolled by the bankers, then he was rolled by the generals, then he was rolled by the Blue Dogs and other Democrats who had no interest in going along with what he proposed." Obama seemed exceedingly tolerant of resisting forces and even cooperated with them. Or maybe he privately agreed with them. He never made it clear.

Call in for unemployment benefits extension

Hey!  In addition to calling Congress on the National Call-In Action Day there's another way to raise your voice on Tuesday, November 16 for continuing the federal unemployment insurance program.
It's a Blog-A-Thon!
We've teamed up with our friends at MomsRising.org to raise our blogging voices for unemployed workers and their families. MomsRising.org is promoting their own Blog Carnival on the unemployment issue on Tuesday, November 16.  And, in coordination, we're sponsoring a parallel Blog-A-Thon.
Here's how it works:
If you post on a blog, or have your own blog, make Tuesday, November 16 the day you post a blog on the unemployment crisis and the need for Congress to continue the federal unemployment benefits program.  When you post your blog, put the link up in a Twitter tweet -- include the hashtag #blog4ui -- and send it to @laidoffleftout or @MomsRising or better yet both.  We'll be retweeting throughout the day, helping to raise all our blogging voices for unemployed workers and their families.

The deception and failure of "school reform" in New York City

Very well informed analysis of the failure of school “reform” in New York City under Joel Klein.  Listen here.

http://www.leftbusinessobserver.com/Radio.html

Go to the Nov.13. show.

Broadcast over KPFA.

Education element begins at 13;42 minutes.

California crisis at 33:50 minutes.

November 13, 2010 Leonie Haimson of Class Size Matters on the nomination of Cathie Black to run NYC’s public schools, and the whole education reform scam • Richard Walker on California’s crises.

On New York City Schools and Joel Klien. The speaker is a parent advocate in NYC.  Well informed commentary on testing, choice, ( including ELL and Bilingual Students

Fall Foliage- Grass Valley

CSU- Sacramento

The need to end "Free Trade" Globalization

William Greider | November 4, 2010

The Nation. 

The world economy is on the brink again, facing a crisis of epic dimensions for reasons largely obscured by the inflamed politics of 2010. Against their wishes, the United States and China have been drawn into an increasingly nasty and dangerous fight over currencies and trade. American politicians, especially desperate Democrats, have framed the conflict in familiar moral terms—a melodrama of America wronged—and demand retaliation. Other nations, sensing the risk of a larger breakdown, have begun to take protective measures. Every man for himself. The center is not holding.
The political fray obscures the fact that the basic economic problem is larger than any single nation and stalks the global trading system itself. There is a huge hole in the world—a massive loss of demand. Think of the trade wars as the largest producers fighting over an abrupt shortage of buyers. Financial collapse and recession, with falling income, defaulting debt and rising unemployment, made the hole. In other times, Washington would have stepped in to impose policy solutions and create market demand as the global system's buyer of last resort. This time, Goliath is gravely weakened, both in economic strength and political authority.

The Deficit Commission Proposals to cut social security

Washington, D.C.- Dean Baker, Co-Director of the Center for Economic and Policy Research (CEPR) released the following statement on the proposals offered by Erskine Bowles and Alan Simpson, co-chairs of the President's deficit commission: "Senator Alan Simpson and Erskine Bowles appeared to have largely ignored economic reality in developing the proposals they presented to the public today. "The country is suffering from 9.6 percent unemployment with more than 25 million people unemployed, underemployed or who have given up looking for work altogether. Tens of millions of people are underwater in their mortgage and millions face the prospect of losing their home to foreclosure. "This situation is not the result of government deficits, contrary to what Mr. Bowles seemed to suggest at the co-chairs' press conference today. The downturn was caused by the bursting of an $8 trillion housing bubble. This bubble was the basis of the construction and consumption demand that drove the economic expansion through 2007.  "The large government deficits are the only factor sustaining demand following the loss of this bubble wealth. If today's deficit were smaller, we would not be helping our children; we would just be putting their parents out of work. Simpson and Bowles somehow think they have covered this concern by delaying their cuts until fiscal year 2012, 11 months from now. Virtually all projections show the unemployment rate will still be over 9.0 percent at the point when the Simpson-Bowles cuts begin to slow the economy further. This leaves the economy like a plane with one engine already out and Simpson Bowles prepared to knock out the other engine as well.

Budget Crisis to damage schools- again

The state  has a budget crisis again this year- the third year in a row.  As a result, the schools will again have a budget crisis.

California faces chronic challenges – an outdated tax system and a two-thirds vote requirement for passing  any tax increase.  Recent tax cuts  result in  that the state  not  bringing  in enough revenue to support its schools, universities and other public services.

The  current economic crisis that began in 2007 has made matters worse. This crisis was created by finance capital and banking, mostly on Wall Street ie. Chase Banks, Bank of America, AIG, and others.   Finance capital produced a $ 2 trillion bailout of the financial industry, the doubling of U.S. unemployment rate and the loss of 2 million manufacturing jobs in 2008. The crisis took over 12 Trillion $ from the economy.   Fifteen million people are out of work.  You and I, and college students did not create this crisis.  Finance capital stole the future of many young people.

California Budget problems grow !

Legislative Analyst’s Office;  Budget Projections

$25 Billion Budget Problem Needs to Be Addressed in Coming Months
Our forecast of California’s General Fund revenues and expenditures shows that the state must address a budget problem of $25.4 billion between now and the time the Legislature enacts a 2011–12 state budget plan. The budget problem consists of a $6 billion projected deficit for 2010–11 and a $19 billion gap between projected revenues and spending in 2011–12.

2010–11 Deficit. We assume that the state will be unable to secure around $3.5 billion of budgeted federal funding in 2010–11. This assumption is a major contributor to the $6 billion year–end deficit we project for 2010–11. We also project higher–than–budgeted costs in prisons and several other programs. In addition, our forecast assumes that passage of Proposition 22 will prevent the state from achieving about $800 million of budgeted solutions in 2010–11.

2011–12 Deficit. The temporary nature of most of the Legislature’s 2010 budget–balancing actions and the painfully slow economic recovery contribute to the $19 billion projected operating deficit in 2011–12. This gap is $2 billion less than we projected one year ago. Actions taken during the 2010–11 budget process to reduce Proposition 98 education spending are a major contributor to the decline.

Additional Savings From Proposition 98 [ Schools] Will Be Very Difficult

Our forecast indicates that General Fund revenues and transfers will decline by over $8 billion in 2011–12 due to the expiration of the temporary tax increases adopted in 2009. Because the Proposition 98 minimum school funding guarantee is affected by this drop, our budget forecast already reflects a $2 billion fall in the minimum guarantee between 2010–11 and 2011–12. This reduction would come at the same time that school districts exhaust the billions of dollars of one–time federal money they have received through the stimulus program and other legislation. For these reasons, it may be very difficult to achieve substantial additional budget reductions in Proposition 98 in 2011–12, compared to the levels already reflected in our forecast. In other words, if the Legislature funds schools at our projected minimum guarantee in 2011–12, it would mean billions of dollars in programmatic cuts to education but not contribute a single dollar to closing the $25 billion budget problem.

California School Achievement-

By Peter Schrag

John Mockler has rarely been timid in his opinions about education policy. But he’s never been more in-your-face than in his blasts at what he’s been calling “the California Schools Suck Industry” and the “statistical pornography” of the business groups, foundations, politicians and journalists who are its principal members.

Late last month, in a teleconference run by Steve Rees and his School Wise Press, he went at it again, contending, with a fusillade of numbers, that California schools were doing a lot better than most of us were being told. They were not categorically failing, were not deeply flawed, and that anyone who claimed otherwise was peddling “drivel.”  

Mockler probably has more “formers” strung after his name than anyone in California education: former school lobbyist and consultant to unions and school districts, former executive director of the state Board of Education; former interim secretary of education; author of Proposition 98, the state’s minimum school funding law, and on.

But in what he sometimes insists is his retirement, he’s also become the chief critic and tormentor of the retailers of the conventional wisdom and accompanying rhetoric about failing schools.

At a time when there seems ever more unquestioning acceptance of that conventional wisdom, both in California and nationally, and when a film like Davis Guggenheim’s public school bashing film “Waiting for Superman” becomes a media favorite, Mockler’s loud demurrer becomes more important than ever.

Wall Street wins again- Surprise!

Wall Street Wins Again

Posted on Nov 8, 2010 By Nomi Prins

The Republicans may have stormed the House, but it was Wall Street and the Fed that won the election. Regardless of party power plays and posturing, there are two constants that remain unaltered after the election. First, Wall Street will continue on with business as usual while shifting its campaign and lobbying dollars to the new winning team. And second, the Fed will keep on pretending to prop up the economy by buying more U.S. debt, thereby keeping interest rates low, the dollar weak and money cheap for the banking system to inhale. This fictional boosting of the financial economy, absent the real boosting of the general economy, will march on sans debate, inspection or restriction.
In the wake of the election, the Fed pulled off a move detected only by downtown Manhattan. It quietly announced a purchase of $600 billion in Treasury securities (read: our debt) while pundits on the left and right were dissecting the role of the tea party in political life as we know it, the Obama dissatisfaction quotient, and the chance of Sarah Palin heading for the White House in 2012.

Making the economy worse- Robert Reich

Next time you hear an economist or denizen of Wall Street talk about how the "American economy" is doing these days, watch your wallet.

There are two American economies. One is on the mend. The other is still coming apart.

The one that's mending is America's Big Money economy. It's comprised of Wall Street traders, big investors, and top professionals and corporate executives.

The Big Money economy is doing well these days. That's partly thanks to Ben Bernanke, whose Fed is keeping interest rates near zero by printing money as fast as it dare. It's essentially free money to America's Big Money economy.

Free money can almost always be put to uses that create more of it. Big corporations are buying back their shares of stock, thereby boosting corporate earnings. They're merging and acquiring other companies.

And they're going abroad in search of customers.

Thanks to fast-growing China, India, and Brazil, giant American corporations are racking up sales. They're selling Asian and Latin American consumers everything from cars and cell phones to fancy Internet software and iPads. Forty percent of the S&P 500 biggest corporations are now doing more than 60 percent of their business abroad. And America's biggest investors are also going abroad to get a nice return on their money.

So don't worry about America's Big Money economy. According to a Wall Street Journal survey released Thursday, overall compensation in financial services will rise 5 percent this year, and employees in some businesses like asset management will get increases of 15 percent.