Education: Societal Asset or Personal Debt

Americans have a strange attitude toward education. On the one hand, we all know that a college degree can significantly increase one’s life chances for achieving, until recently, a middleclass income and a comfortable “lifestyle.” On the other hand, college has become very expensive, as well as intimidating for anyone who has experienced a typical rag-tag urban or rural school-district high school education. Therein lies the personal dilemma.

A societal dilemma may be equally important. But pretense and illusion prevent its discussion in polite company. Education in the U.S.A. has gradually become a second-class institution. Politicians are unwilling to foot the bill for maintaining public higher education at the world-class level that characterized our colleges and universities in the 1950s. Growing costs and dwindling public support forced universities to raise tuition and seek research contracts from corporations and government. The nation’s seats of knowledge and discovery became businesses purveying information to whatever special interest paid the price.

Halcyon Days of Higher Education


In the 1950s, we didn’t have hard hats.

In the early 1960s, I was able to gain a degree from the University of California because I had worked each high-school summer as a construction laborer (at union scale of $3.50 per hour at the time when my friends got 90₵ at the local gas station). I felt pretty flush. In those days, simple manual labor at a union wage allowed a worker to rent an apartment or very small house in Los Angeles and live comfortably without most non-essential “consumer products.”

In the 1950s in Southern California, a (white) high-school graduate could get an entry-level job at an aerospace company, rent a small apartment, buy a car, and party. As a high-school student living at home in 1955, I was able to save enough to buy a scruffy ’51 Ford in my sophomore year, and transform it into a respectable “hot rod” by my senior year. At the same time, I saved money for college. Well, those were the “good old days.”

Rather than accepting the middle management job my father encouraged me to apply for on graduating from the University of California, Santa Barbara, I went off to graduate school, following my curiosity. I worked as a research assistant, then received a National Science Foundation fellowship, partly because the U.S. realized that the Soviets were moving into space full speed ahead with their “Sputnik” satellite while we had failed to support science education.

In 1970, PhD in hand, I began a  career as a professor, then for 35-years I watched from the inide as the California higher education system slide from globally top tier to mid-level mediocrity. Politicians excused the decline in the name of anti-pubic-sector cost cutting and resentment over the moral rebellion of university students of the 1960s.

Conversion of a Societal Asset into Personal Debt

Today, elites and their media mouthpieces treat education as no more than a means to an end. Little or no interest remains in developing the individual and her/his intellectual and moral capacities as a citizen. Higher education became so costly because of the privatization of its finance. Politicians promote the twisted view that its only value was to “train” skilled workers as functionaries in the industrial-consumer economy, even as jobs were automated and outsourced.

Students are “sold” degrees on credit. Privatized student debt has become, just like the private prison business, a huge profit-center for the nation’s financial elite. What should have become an asset for the educated citizen is an extended burden of personal debt constraining civic participation. The neoliberal economy of growth has fully subsumed society and human values beneath its quest for profit.

In that context, it is hardly surprising that the elites who control most institutions along with the economy no longer see the education of the person as an asset to society. Frankly, they don’t give a hoot about the society or its people. Rather, they much prefer to treat education as a commodity for sale and encouraging debt as another profit center. The result is a massive collective student debt that now burdens what might have been our future middleclass. As broad citizen education falters, the backbone of democracy is lost.

Public or Private: It’s Time to Decide

The imminent conversion from fossil-fueled energy production in the U.S. to renewable sources of electricity is quite uneven. In New Mexico, it might be described as bizarre. It is not at all clear what the motivating forces driving the biggest electric utility, Public Services Company of New Mexico (PNM) or the governmental regulatory agency, New Mexico Public Regulatory Commission (PRC), actually may be. But it doesn’t look good.

We PNM “rate-payers” may be excused for feeling a bit dizzy. Each revelation of PNM attempts to avoid its duty as a public utility to serve the public interest, is bad enough. PNM’s private corporate interests prevail, with recurring foot-dragging, mission corruption, and endless corporate spin. The unspoken goal would seem to be to continue down the deadly path of high carbon emissions as long as PNM can get away with it. The falsified analyses of its proposed plan for the pollution-laden San Juan Generating Plant in the Four Corners area, is a case in point. It involves long-term coal commitments that entail huge public liabilities for intolerable carbon emissions at ever-increasing costs. It seeks to keep energy-supply contract decisions secret from the public while negotiating to keep far more coal and nuclear power in “the mix” than is in the public interest. That is simply outrageous.

PRC passivity is no less disturbing. The PRC supposedly “regulates” utility companies in the public interest. As Steve Terrell, columnist for the Santa Fe New Mexican, recently noted, some PRC commissioners and staff have met with a securities analyst, who presumably sought to learn the status of the PNM proposal for the San Juan generating plant. But high-end analyst-PNM executive lunches and private analyst meetings with PRC commissioners and staff? In Jon Stewart’s parting words, “If you smell something, say something.” Three of the five PRC commissioners just voted to drop the attempt to enjoin The New Mexican from publishing relevant documents – a small glimmer of hope.

The PRC should actively pursue the public interest. Yet it seems indifferent to how PNM might ultimately meet the State’s modest requirement for 20% of electricity generation to be from renewable sources by 2020. Why has not the PRC developed a carbon-emissions reduction plan as a baseline for negotiations? PNM should find ways to meet PRC requirements – if the PRC had any. The PRC just waits for a PNM plan it can legally accept. That is not nearly enough. Getting to low carbon-emissions energy production requires a strategy that does not add coal, nuclear, and fracked-gas sources electricity generation. That is precisely the direction that the PNM proposes and the PRC takes seriously. New Energy Economy, A non-profit intervener in the case, offered an economical emissions-reducing alternative to PNM’s financially self-serving plan. Its analysis exposed the faulty calculations and convenient conclusions of PNM’s proposal. Its plan demonstrates the superior cost-effectiveness and sustainability of much greater reliance on renewable energy technologies, while accelerating emissions reduction. PNM’s coal-laden proposal is driven by its own financial interests in direct conflict with the public interest.

PRC Acting Director of the Utility Division told me on the phone that the PRC’s policy criteria for ruling on the PNM proposal for the future of the San Juan Generating Plant is based on New Mexico law, which specifies that electricity generation must be 15% from renewable sources by 2015, for four years, then 20% by 2020. Proposals, objections, and agreements are to be weighed by the commission on that basis in evaluating PNM’s proposed plan. The San Juan Generating Plant and adjacent coal mine, in the Four Corners region now notorious for its atmospheric “methane bubble” visible from space. Navajo health statistics in the area are a disaster.

The Public Interest Deferred

But I think that the law allows for a lot of interpretation as to how its requirements may be met. So far it seems that the PRC is primarily passively responding to interpretations embedded in the PNM proposals rather than pro-actively framing the discussion in the interests of public safety and health as it should. The law does not say “no more than 20%” renewables by 2020. There is no reason why the PRC cannot aim for more than 20% by finding a strategy such as that proposed by New Energy Economy, which leads to the 20% minimum goal while improving the health, safety, and costs for New Mexicans, sooner rather than later.

Now, as if icing on the cake of malfeasance, two alleged clean-energy groups, “Western Resource Advocates” and the “Coalition for Clean Affordable Energy,” which are also interveners in the case, along with PRC Staff Counsel Patrick Lopez and NM Assistant Attorney General, P. Cholla Khoury, have signed a “compromise” deal that would accept PNM’s current plan and leave open the question of whether coal-fired generation at San Juan should continue operations after 2022. The two remaining coal-fired plants would remain open at San Juan through at least 2022. These putative environmental groups have acquiesced to virtually every element of the PNM proposed plan. Western Resource Advocates’ Web site brags that it has achieved a great “victory” for the environment. I guess that is how you spin allowing yourself to become a victim of cooptation by corporate polluters.

New Energy Economy had withdrawn from the negotiations. Perhaps its Director, Mariel Nanasi, smelled something. The strategy of cooptation has worked nationally for polluters in dealing with “Big Green” environmental groups for decades. Naomi Klein, Tim DeChristopher and others have independently documented the corruption of groups like The Nature Conservancy, World Wildlife Fund, and other Big Green groups by the polluters they were trying to work with. They supported climate schemes like carbon trading that gave corporations opportunity to profit from them while dodging real carbon emissions reduction. In the process of such compromises, Big Green “non-profit” organizations’ bank accounts swelled with corporate donations and the planet continued to overheat. This New Mexican “compromise” smells just like the fishy national failure of Big Green environmental groups.

Big Green Fails Again

The problem with Big Green groups in New Mexico is the same as with the national Big Energy and Big Environmental groups. Their deals are all about economics and politics – most of it self-serving. But Mother Nature doesn’t make deals. Anything short of rapid transition away from fossil fuels will accelerate the devastating climate disruptions already occurring. The convoluted legal “stipulation” filed with the PRC as a “compromise” with PNM, was also signed onto by PRC “Staff” – a peculiar element in itself. The “agreement” between PNM and the Big Green interveners kicks the emissions-can quite a ways down the regulatory road riddled with loopholes for PNM to wiggle through. I read it and found nothing that commits PNM to do any more than what it had already proposed. It’s a not-all-that-clever shell game, sufficiently convoluted as to deter all but the most persistent citizen from seeing the game for what it is.

Some PRC commissioners are happy with the compromise. Instead, the commissioners should demand robust compliance with the New Mexico State renewable energy goals set years ago then largely abandoned. We need serious emissions-reduction targets for New Mexico energy producers, not compromises that push solid climate action down the road.

Photo-voltaic Sun Tracker Generating Electricity at Home.

Photo-voltaic Sun Tracker Generating Electricity at Home.

PNM has severely reduced and eliminated incentives for citizens installing solar-electric equipment that would reduce fossil-fuels use – but not add to PNM’s profits. Citizen-owned distributed generation adds electricity to the grid without adding emissions, but does not add to PNM’s cost-basis for its profits. This leads PNM to discourage the very technology that is best for the public. The PRC appears oblivious to the urgency of the renewable-energy production transition, as the crisis of climate disruption accelerates. As Peggy O’Mara pointed out in last Sunday’s The New Mexican, the race for renewable energy has already passed a turning point. Continued reliance on coal is now a high financial risk as well as environmentally stupid. The PRC also has a fiduciary responsibility to the public to protect it from undue costs and financial risk. PNM’s plan would introduce new coal and nuclear health and liability risks to New Mexicans. On the other hand, the history of regulation in the U.S. is one of corporate control over agencies ostensibly meant to regulate them.

Public Rights or Private Privilege

This whole mess revolves around an “unmentionable” flaw in the way energy is supplied to the public – through a faux public utility. The goals of a public utility should match the public interest. The goals and actions of PNM as a privatized “public utility” – an oxymoron of sorts – do not. Its obvious schemes to increase profits at the expense of the public interest should be offensive to its customers. At a deeper level, its guaranteed monopoly profits based on its capital investments and operating costs, give incentive to create investments and costs to justify rate-increase demands – and increased profits.

This setup reminds me of those corrupt “cost plus” Defense Department contracts that enrich the likes of Boeing, Northrup-Grumman, and others with “cost overruns” at the tax-payer’s expense. Without real public oversight, it’s a never-ending cycle of gouging the public for private corporate profit. Unlike some investor-owned public utilities that are moving expeditiously to solar and wind, PNM is regressive in the extreme. New Mexicans simply cannot afford the wasted water, methane pollution, coal-dust diseases, nuclear liabilities, and profligate profiteering of PNM. Now if the PRC were to really do its job…

Certainly, converting from a privatized energy supplier like PNM to a publicly owned and operated public utility is complicated. Nevertheless, PNM and PRC failures to move quickly toward significant carbon-emissions reduction and affordable energy in ways that serve the public interest would make it well worth the effort in the long run. It is time for the people of New Mexico to look after their own interests and pressure the State to change the way it does the people’s business, especially where energy and a healthy environment are concerned.

Public Renaissance: What Ebola, Ferguson, and Finance Can Tell Us

Public concern over the possible spread of the Ebola virus epidemic from West Africa to the U.S. is growing. While the Centers for Disease Control (CDC) is taking various precautions, the situation is nevertheless of sufficient complexity to warrant concern. The outrage over the police killing of unarmed black teenager Michael Brown continues as a grand jury takes its time mulling over evidence. The Wall Street pundits on CNBC and the corporate economists claim the economy is turning around, yet most people are having trouble feeling it. What do these seemingly disparate events have in common?

It’s really quite simple. Each of these situations represents a larger problem that pervades our society. Ever since the Reagan presidency, well, ever since the economic reforms following the Great Depression, the power elites have tried to wrest economic and political control from the citizenry. The push to privatize public functions has succeeded in reducing the public interest in social and economic conditions to an afterthought. Importantly, these are only three examples among many. The corporate controlled political culture has carefully failed to recognize the public interest as a legitimate concern for citizens. Meanwhile, the cult of “free market” extractive economics has raised the specter of private greed to a nearly religious status.

Privatizing Public Health
The interest in public health as a concern for the entire society is almost universally recognized bymost nations, even those unable to provide adequate health resources. Universal healthcare is found in nearly every ‘advanced’ industrial nation, except in the U.S.A. With far lower costs, Europeans produce far better health outcomes for their citizens than we do and nobody is excluded. On many indicators of health and well being, we are down toward the bottom of the rankings. Further, in the interest of privatizing every public function imaginable, our politicians have been cutting budgets for the CDC and other public health institutions. But wait, there’s more.

Since the entire U.S. medical sector is organized around private profit for doctors, hospitals, insurance companies, and the pharmaceutical industry, only drugs deemed able to garner very high prices are developed. Flu vaccines are widely available in the U.S., since they are promoted by every medical institution and drugstore in the nation, subsidized by the federal government and profitable for Big Pharma. Ebola has been around for years. Some effort was made to develop a vaccine, but it was abandoned; little profit was projected. Public policy has not been driven by the public interest.

Jim Crow Law Enforcement
Ferguson is a symptom of a national failure to shape law enforcement policy in the public interest. Similar situations abound nationwide. Several trends converge to implement a destructive pattern resulting in what is best described as Incarceration Nation. The New Jim Crow, as aptly described by Michele Alexander, has created a caste of economically exiled men of color. The so-called war on drugs has been a war on young people of color prosecuted by increasingly militarized police targeting vulnerable neighborhoods.

Police no longer serve the public interest; they serve their interests in gaining funding and military equipment useful only for controlling an enemy population. The citizen is the new enemy and the police are the occupying force, as SWAT teams even serve minor warrants by heavily armed home invasion – innocents die. The bifurcation of police and public is palpable. Only a massive reorganization of police from top administration to recruitment, education, training and strict accountability of officers can come to serve the public good.

The Banksters and the Booty
The history of money is a mystery to most Americans. So is its current incarnation. But the essence of money is its function as a public medium of exchange. In societies where money is/was issued by the government to facilitate exchange of goods and services, economies have operated with stable prices and little taxation. Where money creation has been handed over to privately held central banks, governments have gone deeper into debt and taxes have grown to pay this arbitrary public debt.

The Federal Reserve Act of 1913 put the U.S. on the path of a debt-based money system. Instead of issuing money for public purposes, the government still borrows money from the central bank it authorized to issue money. There are many other absurdities in the U.S. debt-driven economy, but the basic problem is the same. A fundamental public function – issuing and managing the money supply for the nation – was given to a privately held central bank, which extracts booty in the form of interest and fees for the money it is allowed to create from nothing in its electronic accounts. Only public banks will manage money to serve the public interest.

Public Institutions for the Public Interest
Health, law enforcement, and the economic policies, among others, are three core elements of society that are inherently public functions. Their ‘privatization’ incurs extra costs and destabilizes the economy. In each of these areas, and others, we need public control over decisions in order to serve the public good. Until these important functions are returned to the people and their government, the plundering of the commons will continue.

Why Is Social Security So Insecure?

We all know that politics is rife with deceit of the public and deception of the self.  Claims as to the reasons a senator or congressman supports or opposes a bill or a policy are often merely “cover stories” hiding the widespread real reason the politicians vote the way they do – money.  The conflation of the financial status of Social Security with the problems of the national debt and the annual fiscal deficit of the U.S. is a case in point.  Much money is at stake, but rarely is the real issue directly faced.

Social Security is not part of the federal budget.  It is a self-funding program that provides very modest old-age and other benefits to those who have contributed to it during their working lives, and to certain dependants.  As they try to cut back benefits and destroy Social Security, politicians make disingenuous claims that they want to “protect the integrity” of Social Security.  They know that most Americans like the program and want it to survive.  In an economic environment where almost all private pension systems have been plundered by the corporations that administered them for the employees who contributed to them over entire careers only to lose it all at retirement, Social Security has become the de facto fall-back retirement system, despite it’s poverty level “benefits.”

Powerful forces, such as the national financial elite and extreme anti-government political ideologues, bent on destroying Social Security (and Medicare/Medicaid too, of course) don’t always have the same motivations.  The financial elite wants Social Security funds diverted into “private retirement savings accounts” to be managed by, you guessed it, their very own stock market brokerage firms.  What a windfall of commissions and fees that would be for the most powerful economic class!  And what a high-risk future for retirees!

But the growing insecurity of Social Security is a serious political problem simply because the corporate and financial elites and their congressional agents want it to be.  There is just too much money to be made for them to leave it alone.  Several simple changes in the system designed to compensate for both class injustices in the contributions of wealthy high-income employees versus average workers, and for generational changes in the demographics of employment and aging could easily be made without major problems of implementation.  However, those who would profit – either politically or financially – by the privatization/destruction of Social Security, carefully avoid the easy solutions to any long-term cash flow problems because they either want to take over the huge money flow involved or because they are politically opposed to any government social program that assists those in need.  The first group could be called the “Jackals of Wall Street” while the second group consists of extreme right-wing ideologues who oppose government no matter what.

But what’s the real issue?  Simply put, Social Security was originally conceived as an insurance program, meant to help those elders whose employment failed to afford them an adequate pension or life savings, to see them through after they could no longer work.  But with the corporate plunder of pension systems, Social Security became the default retirement system for most American workers.  Now, with the reduction of the vast majority of the middle class to near-poverty or poverty status, with personal life-savings virtually impossible for many to accumulate, and pension systems no more, Social Security is very often the last defense against homelessness and destitution.  If the Social Security payroll tax were applied to all personal income, including the millions of dollars in “executive compensation” in its many forms such as salaries, stock options, “incentive pay,” and bonuses of top CEOs, the fund would be sufficient to support the small “benefits” far into the foreseeable future for those who need it.

So, the real issue is whether the American people will tolerate the plunder of the Social Security system as they did corporate pensions, or whether they will demand that what was intended as a social insurance scheme actually be implemented as such.  That’s where the tricky language often applied to the Social Security debate needs to be overcome.  Insurance works on the basis of every “insured” person contributing and those who suffer losses collecting the benefits.  Simply put, if Social Security were actually implemented as a social insurance program rather than as a last-ditch inadequate retirement system –  and certainly not as a privatized “retirement savings account”  subject to the whims of the stock market – several principles would have to be invoked in order to make it work quite effectively.  They are:

  •  All personal income must be subject to the Social Security Payroll Tax.  Who has ever gotten fire insurance without paying the premium?  Why should high income earners not pay the premium on all their income?
  • Social Security benefits would be dispensed on the basis of need.  Who has ever collected on her/his fire insurance when there was no fire?   Why should wealthy retirees collect benefits from an insurance scheme designed to protect against the lack of income or loss of wealth in old age?
  • If one were so lucky as to have benefited from a prosperous pension system, then any Social Security benefit would be adjusted down on that basis.  And a formerly wealthy man who lost his fortune (stocks, bonds, dividends, buyouts, bonuses, “incentive pay”), would also draw the maximum Social Security benefit.  What’s wrong with that?
  • The net effect of the system should be that everyone could retire with assurance that they can live in at least modest comfort in their final years without fear of economic and social deprivation.

In an economic and social environment where so much income and wealth has been redistributed from the middle and lower classes of workers to the very top 0.1% of privileged Americans, only some form of re-redistribution can at this point re-establish a semblance of balance to the economy and stability to the society.  A real social security system would still be little more than a small compensation to those who have lost the most over their working lives to the insatiable greed of the financial elite.