Education, Taxes and the Meaning of Prosperity

Posted on 19. Oct, 2009 by in Uncategorized

“Welcome to Lake Wobegon, where all the women are strong, all the men are good-looking, and all the children are above average.” – Garrison Keillor

In his first editorial for this class, good old Michael Preston lambasted California’s Proposition 13, a 1978 ballot initiative that froze the property tax on homes in the Golden State. The law succeeded in its proposed goal of increasing home-ownership, but has come with unintended, far-reaching consequences, most notably the gutting of California’s once-stellar public school system.

The Daily Beast, an august online publication that features prominent, intelligent writers, recently ranked America’s smartest cities. One of the first things that jumps out from the results is that the cities at the top (Raleigh-Durham, San Francisco, Boston) have also proven to be, if not recession-proof, at least recession-resistant. San Francisco’s unemployment rate is even with the national average at present, but ran below it for most of the year, and continues to outperform the unemployment rate in California as a whole. Boston is nearly two points below the national average. Moreover, wages in cities with high education investment are higher.

Is it therefore fair to assume that Keillor’s satirical take on his fictional Minnesota hometown could actually be made a reality? That with investment in education there is a natural tendency towards success and above-average achievement and prosperity? The answer, as usual, is that it depends. Educating children is incredibly expensive and there is no way that the schools can make any of the money back. Unlike mass transit, for example, there is no ability to charge fares or nab advertising dollars (scoreboards at high-school football stadiums are one exception, along with vending machine contracts). So the cost is shouldered entirely by taxpayers, whether through property taxes (the most common method) or municipal debt (which is how San Francisco has managed to keep its schools in good shape despite the restrictions of Prop 13).

These high taxes, as any Republican or Libertarian will be happy to inform you, are onerous to businesses and anathema to the American philosophy that individual achievement should lead to individual rewards. They will provide counter-examples from both ends, noting that not all cities with higher tax rates have highly educated tax bases (see Michigan, Detroit), that not all cities with a highly educated populace have particularly high taxes (see Colorado, Denver), and that not all cities with high wages have either well-educated citizens or high taxes (see Texas, Houston). All of these statements are true, and all of them ignore the larger trend. Those government bodies that do not have high education budgets, whether municipal (Fresno, CA, to take one example that hits close to home) or state (Alabama) find themselves prone to bigger, more sustained busts when the economy goes through a down cycle, and even during bull markets have lower wages than cities that re-invest their capital to sustain future prosperity.

Two weeks ago, I made my case that education metrics were flawed, since their whole purpose is to assign numbers to human beings and expect human beings to respond to those numbers rather than a more holistic method of encouraging excellence from teachers and students. Now I’m citing a whole litany of numbers to make my case that a strong culture of education makes for more prosperous people. Is this hypocritical? I hope not, and my reason for believing it to be so is the Keillor quote up top. We know that not everyone can be above average. Metrics permit an average, and there will be people who fall below that average and people who rise above it. But, when populations get grouped together, it can be said that an entire city or state or even country is above average. Much is made of the math and science scores of our children and young adults falling behind those of other industrialized nations. Yet universities like Harvard, the University of California – Berkeley, Duke and, of course, CUNY, still attract high numbers of students from other industrialized countries. It follows that not all of the United States is below average, and that a mass of high education attracts ever more educated people, those who are best prepared and positioned to safely navigate an economy through stormy seas.

Follow low taxes and you will absolutely be able to keep a higher percentage of whatever wealth you secure. Follow a good education and the odds immediately improve that you will be more prosperous than if you had not. And while you may pay higher taxes, in so doing you will secure similar blessings for your brethren. And don’t you want the best for the children? Won’t someone please think of the children and redefine prosperity as better odds of a good life rather than the ability to hang on to a larger share of the table scraps?

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