Verified jobs data released; more confirmation of Walker’s poor “relationship with the truth”

Amidst the media whirlwind surrounding the US Supreme Court decision on the Affordable Care Act, the verified quarterly jobs data was released today by the US Bureau of Labor Statistics (BLS). This data has been highly anticipated in light of Scott Walker’s politicization of it during the recall campaign. As reported on June 8 (“New documents released by DWD prove Scott Walker lied about early released jobs numbers“), the data now released by the BLS concurs with documents obtained by Badger Democracy from Wisconsin DWD – and is further proof of Scott Walker’s poor “relationship with the truth” (as Russ Feingold stated during the campaign).

Walker has been insistent in his jobs claims, especially during the election – citing this exact data (QCEW report) for gains of 23,321 jobs. The verified data shows that Scott Walker overstated the actual job growth by nearly 25%. Wisconsin only gained 19,551 jobs in 2011 – still putting us last in job growth in the US.

All data was retrieved from the BLS QCEW reports on June 28, 2012.

The data released today was very close to the data submitted to BLS by DWD earlier this year (see June 8 Badger Democracy blog for the DWD-submitted data):

QCEW 2010-2011 report:

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual
2010 2554758 2554127 2568348 2618084 2653196 2686827 2632995 2643127 2661328 2681100 2678957 2670014 2633572
2011 2593358 2593428 2610854 2651421 2679706 2712135 2666362 2678997 2701047 2699946 2696251 2689565 2664423

In spite of consistent job growth during 2010, the growth stagnates in May 2011, then retreats in the 4th Quarter of 2011 – the first full quarter after enactment of the Walker Budget. From October – December 2011, Wisconsin lost 10,000 jobs; losing over half its annual gains in one quarter.

Scott Walker’s press release today tried putting a positive spin on this abysmal job performance data:

The federally published BLS jobs total for Wisconsin in December 2011 is virtually identical to the data BLS signed off on last month—a difference of 16 out of a total of almost 2.7 million jobs counted in themonth—reaffirming that Wisconsin added thousands of jobs last year.”

The first section of that statement is patently false. BLS only verified their completion of the verification process – no numbers were verified (statement from Richard Clayton, BLS Chief of QCEW data). The “…difference of 16 out of a total of almost 2.7 million jobs counted…” refers to the difference in what state DWD reported to BLS (see the June 8 blog for comparison) – not what Walker was citing as job gains. In that June 8 analysis, Badger Democracy concluded “…that (number of jobs created from 2010-2011) is only between 19,248 and 19,535.”  The DWD number reported to BLS of 19,535 was only off by 16. Walker’s claim during the campaign was off by 4,000 – nearly 25%.

Continuing with the Walker statement:

“The finalized, federal data clearly shows that Wisconsin gained thousands of jobs in 2011.  This is acomplete turnaround from the more than 100,000 jobs lost in the three years before I took office.”

Since Scott Walker won’t, let’s set the record straight. In 2008 (3 years before Walker took office), the QCEW 2007-2011 report shows Wisconsin peaked at 2.84 million employed in June. In January 2010, that number had dropped to 2.55 million employed. That, Governor, is over 250,000 jobs lost. Laura Dresser from the Center on Wisconsin Strategy has consistently stated that Wisconsin needs 250,000 jobs NOW just to get back to 2007 employment levels. The data confirm this statement.

Scott Walker intentionally overstated (even as he would have known different) the job gains from this report by nearly 4,000 – a significant difference. Had Walker cited the 19,535 number from the preliminary report, that would be an accurate statement. As it stands – his intent was to overstate and deceive.

Scott Walker has intentionally buried the fact that in the 4th Quarter of 2011, Wisconsin lost 10,000 jobs. The media have never once asked that question of the Governor.

The factual nature of this data will be ignored by the Capitol Press, mainstream media, the Walker Administration, and the GOP. The cost – Wisconsin will continue to be plagued by a long-term, persistent unemployment problem. Much of this problem is unreported as people have been unemployed too long to receive benefits, or have dropped out of the system as “discouraged.”

When over 250,000 jobs are needed to get back to 2007 levels – a gain of 19,000 jobs in one year is dismal in the context of such a long-term problem. The recent CES 2007-2012 data  shows little variance from the QCEW data; and worse for Wisconsin, confirms the pattern of stagnation in job growth. If Scott Walker had any real interest in job creation; he would stop staging ideological social warfare, and work with Democrats, Independents, and Progressives to find solutions.

Which proves – the Walker agenda has nothing to do with economic recovery, or job creation.

(For the record, the Walker administration was twice contacted for comment on this information, no response was received)


Supreme Court decision on the Obama Affordable Care Act…the bottom line

The Supreme Court decision on the Affordable Care Act  came down within the hour. Here is the bottom line on the decision:

The Affordable Care Act, including its individual mandate that virtually all Americans buy health insurance, is constitutional. There were not five votes to uphold it on the ground that Congress could use its power to regulate commerce between the states to require everyone to buy health insurance. However, five Justices agreed that the penalty that someone must pay if he refuses to buy insurance is a kind of tax that Congress can impose using its taxing power. That is all that matters. Because the mandate survives, the Court did not need to decide what other parts of the statute were constitutional, except for a provision that required states to comply with new eligibility requirements for Medicaid or risk losing their funding. On that question, the Court held that the provision is constitutional as long as states would only lose new funds if they didn’t comply with the new requirements, rather than all of their funding.

In addition, because the law as a whole is constitutional, the requirement for insurers to include children up to the age of 25 on their parents’ health plan is upheld.

In the state Medicaid matter, should Wisconsin fall out of compliance with the new law, Wisconsin would lose new funds for those provisions, not all Medicaid funding.

A more draconian issue surrounding the rejection of the Commerce Clause and Necessary and Proper Clause eventually may be interpreted as a major blow to Congress’s authority to pass social welfare laws. Using the tax code — especially in the current political environment — to promote social welfare is going to be very hazardous in the current political climate.

The analysis will continue, but as the mandate was upheld, the law as a whole is Constitutional.

ALEC funding Education Foundations, and the college degree “attainment” myth

The last installment of Badger Democracy’s look into public higher education reform and the changing role of ALEC-funding private foundations – an examination of the fundamental rationale for the agenda being pursued by Lumina Foundation and others. The basic premise Lumina presents to politicians and academia alike goes like this – creating a higher level of degree attainment in the population will lead to greater employment. From their “Impact of Attainment” publication:

We don’t know precisely what percentage of jobs require higher education today, much less what that percentage will be in the future. Lumina is supporting research that is closing in on an answer, however, and we already know the number is considerably higher than the current supply of college graduates. Preliminary research shows that the rate of higher education attainment that the U.S. must reach is at least 60 percent.

The objective of the Foundation’s public policy work is to support policy changes that ensure a greater volume of high-quality degree completion nationwide. Lumina will advocate for the actions it believes are necessary for the nation to reach 60 percent degree attainment.

We need more people with degrees to reach greater employment levels. From the above excerpt – “…the number {of jobs requiring higher education} is considerably higher than the current supply of college graduates.” Therefore, we need MORE degreed citizens to push higher employment in the US. That is the basic premise of Lumina’s pursuit of public policy influence with groups like ALEC.  If that premise holds true, data from the Bureau of Labor Statistics (BLS) should confirm that as the job market requires higher attainment levels, more degree holders should be employed – nearing full employment based on the above statement. The data which Lumina cites also states that “attainment rates have been flat.”

To begin, let it be accepted as fact that a) degree-holders have a higher income level than non-degree holders; and b) degree holders have a better chance of finding a job. What is being questioned is whether more people with college degrees will result in more jobs; in other words, does higher degree attainment result in “job creation”, as Lumina claims.

(All data and spreadsheets are from BLS data retrieved 6/21/12, and applies to the 25 years and older demographic) Lumina bases much of its premise on Unemployment Rates. At first glance, based on that information alone, it would seem to be an accurate equivalency – that more degrees=more jobs. The High School Grad unemployment rate in May 2008 was 5.0%. The current rate (May 2012) is 8.1% – a 3.1% increase.

The Some College unemployment rate in May 2008 was 4.3%. Current rate (May 2012) is 7.9% – an increase of 3.6%. As a stark contrast to the non-degreed population, the College grad unemployment rate in May 2008 was 2.2%. In May 2012, the rate rose to 3.9%. Based on unemployment rate alone – college grads have fared far better in this recession (depression according to Paul Krugman) than those without degrees. Other data show the actual situation is far more complex than that – and may dispute Lumina’s premise.

The HS Grad unemployed level (number of unemployed workers) in May 2008 was 1.92 million. That number has risen to nearly 3 million in May 2012, an increase of nearly 60%. The Some college unemployed level in May 2008 was 1.57 million. In May 2012, that number has risen to 2.92 million – an increase of 1.35 million people, or 86% increase. The College Grad unemployed level in May 2008 was 981,000. In May 2012, that number has risen to 1.88 million – an increase of over 100%. While, as previously stated, college grads have a better chance of finding employment, and less are unemployed overall – this data clearly shows that during the current recession, college grads are becoming unemployed at a higher rate over four years. The question is, are more college grads in the workforce?

The High School Grad civilian labor force in May 2008 was 38.13 million people. In May 2012 the civilian labor force decreased to 36.92 million – a drop of 1.4 million.

The Some College Civilian Labor Force in May 2008 was 36.76 million people. In May 2012, the number rose to 37.08 million – an increase of 300,000 people in the workforce.

The College Graduate Labor Force in May 2008 was 44.63 million people. In May 2012, the number has risen to 48.23 million – an increase of 3.6 million people. This is important – the number of college graduates in the workforce has INCREASED at a higher rate that the “high school graduate” or “some college” categories. If Lumina’s premise holds true, shouldn’t that translate into more jobs and greater prosperity – not a recession that continues as more workers with degrees enter the workforce? The numbers of employed workers in each category is the most intriguing number.

The High School Grad Employed level (numbers employed) in 2008 was 36.2 million people. In May 2012 that number had decreased to 33.93 million – a drop of 2.3 million employed. Remember – as cited above, there were 1.4 million less HS grads in the workforce. A difference of 900,000 HS grads who didn’t find work in those 4 years.

The Some College employment level in May 2008 was 35.2 million people. In May, 2012 the number had decreased to 34.16 million – a drop of 1.1 million employed. As 300,000 more entered the workforce with some college experience, the jobs were not there to meet the need.

The College graduate employment level in May 2008 was 43.65 million people. In May 2012, that number has risen to 46.36 million people. An increase of 2.7 million. If one merely looks at the unemployment rate and the numbers of employed, the picture for college grads and Lumina’s premise appear very sound. When presented in the context with the other data, the picture is not as clear – or bright. Recall that 3.6 million additional people entered the workforce in the same time frame with college degrees – yet employment has only increased by 2.7 million. That leaves nearly 1 million new college grads in the workforce, without employment – the same number without employment as high school graduates, cited above.

Lumina and other private foundations are using data which favors their agenda to “sell” their plan to public institutions and government officials; and will result in public higher education following the ALEC blueprint of less public funding, more reliance on private foundations (like Lumina) that set the research and policy agenda. The higher attainment of college degrees will not be an economic panacea – especially if the degree is achieved merely for the sake of a degree; at the expense of higher learning and critical thinking. It will merely mean more people with degrees looking for work in a depressed economy – with higher student loan debt.

As Sara Godrick-Rab at UW-Madison has pointed out – public accountability and oversight are necessary for these programs. As this series of blogs has demonstrated, private foundations such as Lumina are dominating the dialog and policy formation in our great public universities; and not for academic purposes. Theirs is an agenda of production and economics – which, if fully implemented, will have a terrible impact on the future of public education. And democracy.

Higher Education reform at a crossroads…democracy hangs in the balance

In response to the previous two Badger Democracy blogs examining the future of higher education (Scott Walker, ALEC, and the future of the UW System; ALEC, Higher Education, and Lumina Foundation); UW Assistant Professor of Education Sara Goldrick-Rab  posted a blog titled “Reflections on Foundations, ALEC, and Higher Ed Reform in Wisconsin.” 

It is clear that Goldrick-Rab has the UW System and students’ best interests at the fore of her research activity. While the politicians and foundations she must work with may have a different policy agenda; she affirms the need for transparency and accountability in the process:

“We must avoid privatization of public education– and we want to educate people while growing and expanding the labor market so there are jobs waiting on the other end.  But the goal of expanding access to a high-quality education while driving down costs is a laudable one– as long as the role of public democratic governance of that education is preserved.”

A recent academic paper presented at the American Educational Research Association (AERA) in April 2012 raises concerns about the changing role of Private Foundations and their influence on Public Higher Education.

“Advocacy Philanthropy” and the Public Policy Agenda was presented by Cassie Hall and L. Scott Thomas of Claremont Graduate University to the AERA annual meeting in Vancouver, Canada. The paper gives a well researched and documented overview of the changing role of private foundations, and how they are changing the face of public higher education.

Early educational philanthropies  were focused on infrastructure, building projects, research, and institutional grants directly to the college or university. Now, these foundations are focused on reform initiatives and hands-on policy work. Lumina Foundation President/CEO Jamie Merisotis stated the vision for Lumina at the 2010 Association for the Study of Higher Education:

We’ve learned very quickly that Lumina is—and must be—more than just a grant-making
organization. We increasingly recognize that, as an independent foundation pursuing a vital mission, we must also be a leadership organization….Yes, we follow the traditional but
extremely important approach of identifying and supporting successful practices and
meaningful research. But we also engage in public policy advocacy, and we use our
communications and convening power to foster partnerships and to build public will for

Three recent trends identified by the study show the evolution of private foundations over the past decade.

1. There has been a significant shift in foundation focus – towards completion, productivity, metrics, and efficiency; and away from academics and institutions. The primary issues are economics and consumer driven, and public policy.

From the Lumina Foundation’s 2011 annual report:

“…as the economic benefits of higher education attainment become more widely recognized, the public, business leaders, and higher education institutions are paying
more attention to the impact that college completion can have on economic development. There is a growing consensus that new models are needed to expand knowledge and strategies to develop the human capital needed for today’s economy” (Lumina Foundation, 2011, Jun 7, para. 1).”

2. The changing role of private foundations is contributing to an increased distrust in higher education institutions’ ability to enact reforms. To that end, more money is going to foundation research and policy organizations to reform policy; as opposed to higher ed institutions.

The following table demonstrates the majority of foundation grants going to private institutions (The University of California is the only public institution on the list):

Table 9. Top Recipients of Foundation Higher Education Grants, circa 2000-2009
Institution Name                                Years in Top 10
Columbia University NY                 10: 2000-2009
Duke University NC                            8: 2000-2004, 2006-2007, 2009
Harvard University MA                    9: 2000-2008
Johns Hopkins University MD        6: 2000-2004, 2009
Stanford University CA                      9: 2000-2001, 2003-2009
University of California CA               7: 2000-2006
University of Pennsylvania PA       7: 2000-2006
Note: Based on institution being in top 10 of recipients of higher education foundation grants at least five times between
2000 and 2009. (The Foundation Center, 2011)

In 2002, public policy research accounted for $124,500 of Lumina’s grant awards (less than 10% of total awards). In 2010, Lumina awarded over $12 Million in grants to policy research – over 50% of total awards.

3. Direct political engagement, policy, and legislative activities is a dramatic departure from the norm of an intentional differentiation between private foundations and politics.

Lumina’s investment and engagement with ALEC is evidence of this shift since 2008. In a report from the 2010 annual meeting of State Higher Education Executive Officers (SHEEO), the Lumina Foundation:

“…will expand its efforts by convening business leaders, lawmakers, higher-education groups, and faculty members to build consensus on specific policy measures. In addition…Lumina will draft model policies for states, including legislation. The group is already working with the American Legislative Exchange Council, a conservative-leaning organization, to write and introduce bills in state houses. Lumina has also hired a director of state policy to coordinate the foundation’s efforts”

This dramatic shift in foundation practices raises several significant areas of concern.

1. Foundations lack external accountability and are concentrating power away from practice.

One expert interviewed by Hall and Thomas levels the concern:

“…the most disturbing element [of the current approach to highereducation philanthropy] is that, in America, we elect officials to determine the direction of thecountry, yet foundations are working to set the public policy agenda. Foundation officials are notelected, foundations do not pay taxes, and there are no accountability or transparency measures. It’snot that they shouldn’t have a voice, but trying to direct government is another thing; it could be abig misstep on their part, and there could be a backlash” (Anonymous, personal communication,June 23, 2011).”

2. Philanthropies are stifling innovation by promoting large-scale, prescriptive grants.

The foundations are pre-determining what is necessary to reform the higher education system, and selectively researching to promote their desired outcome. This accounting from another Hall/Thomas interview, regarding Lumina’s resource allocation to “intermediaries” (companies and consultants hired by the Foundation for research, policy study, etc.):

“…we have some specific goals and objectives that we want to achieve in this area, and here you go, intermediary, we are going to give you this money and you are going to manage this effort for us—you are going to get us from A to B—and this is what we want you to do with our resources. So it is very explicit, or at least more explicit than it had been, and I think that might be a change in terms of the role of intermediaries” (Anonymous, personal communication, April 12, 2011).”

The consequences of such behavior are limiting the debate on how best to approach higher education in the future:

“…there are an awful lot of ideas that could be out there that never see the light of day now because the competitions of ‘tell us how you would tackle this problem’ and those sort of wide open invitations to send in proposals just are not there. There may be some really good ideas that do not see the light of day anymore, because the ideas in many ways are becoming the purview of the foundation staffs and whoever they bring in or not. So it is being controlled by groupthink more than it used to be” (Anonymous, personal communication, May 19, 2011).”

3. Foundation advocacy and insertion into state/government policies has resulted in an outsized influence on the part of philanthropy.

An expert accounting by Hall/Thomas about this influence:

“ Lumina’s financial size (it has grown to more than $1 billion) as one of the 30 largest foundations in the nation and its aggressive push of its 2025 program have made the Indianapolis-based foundation the buzz of the higher education community. Still, [it is] a smaller being among the cluster of the nation’s bigger and
much older foundations, and some marvel that this midget among giants is moving like an 800-pound gorilla”

This “outsized influence” is coming at a time when all public education is being defunded at the state level, increasing the burden on our institutions of higher learning – one of the pillars of democracy. Institutions are scrambling for funds; which makes the acceptance of private funds to fill the void not only more appealing, but necessary.

The issues at hand are accountability, transparency, and legitimacy to the claim of productivity. The study by Hall/Thomas clearly demonstrates that a public policy agenda is not only present – it is of the highest importance to foundations like Lumina. Absent of public accountability and legislative oversight, the face of the UW System could be drastically altered – and not for the better. Professor Goldrick-Rab and her academic colleagues have their work cut out for them, if they are to work within the system for legitimate reform in the best interest of the University of Wisconsin.

The claim to “job creation” promised by Lumina Foundation as a rationalization for reform will be examined next. The concept that the more people with college degrees translates into more jobs needs to be examined, and will be. Using historical data from US Bureau of Labor Statistics, the next Badger Democracy blog will show that may not really be the outcome. It may, in fact, lead to more people without jobs – and more student loan debt.

ALEC, Higher Education, and Lumina Foundation – policy, money, and setting the agenda

Yesterday’s Badger Democracy blog, “Scott Walker, ALEC, and the future of the UW System” revealed that one of the key players in higher education policy reform (in Wisconsin and nationwide) is a significant sponsor of the American Legislative Exchange Council (ALEC). Lumina Foundation arose from a $1 Billion student loan sale to Sallie Mae in 2000, and has become the nationwide leader in pushing for higher education policy reform focused on degree attainment. Its primary founder, Ed McCabe was Chairman of Sallie Mae at the time of the sale, and came on board with Lumina to steer its conversion to an Education Foundation.

In its early years, Lumina Foundation was focused on accessibility and community colleges; awarding grants directly to institutions and students – especially in underprivileged/minority populations. In 2007, the focus began to change. McCabe stepped down, and Jamie Merisotis took over as CEO. Merisotis is also co-founded the Institute for Higher Education Policy (IHEP), which in addition to disseminating negative “data” regarding public education effectiveness, also founded the “Global Center on Private Financing of Higher Education.”  Merisotis became CEO on January 1, 2008, and explained the new focus of Lumina:

The movement from philanthropy to state policy – more hands-on than federal – is a useful role for the Foundation.”

According to the 2008 Form 990pf filed with the IRS, Lumina moved into the policy arena with a $300,000 Education Grant to ALEC (linked and referenced in yesterday’s blog). That generosity has continued, with Lumina sponsoring the 2011 ALEC Convention in New Orleans as a “Chairman’s Circle” contributor. In exchange for its generosity, Lumina has been at the fore of the ALEC Education Task Force.  Why the interest in public education on the part of ALEC and private foundations? Jonathan Kozol (Harper’s) summed it up well:

“Some years ago, a friend who works on Wall Street handed me a stock-market
prospectus in which a group of analysts at an investment-banking firm known as
Montgomery Securities described the financial benefits to be derived from privatizing
our public schools. “The education industry”, according to these analysts, “represents,
in our opinion, the final frontier of a number of sectors once under public control” that
“have either voluntarily opened” or, they note in pointed terms, have “been forced” to
open up to private enterprise…From the point of view of private profit, one of these
analysts enthusiastically observes, “the K-12 market is the Big Enchilada”

To Lumina, that “Big Enchilada” extends into higher education. The Lumina agenda, simply stated, is greater degree attainment. The rationale of policy that expedites college degree attainment says that more degrees = more jobs. This is how it is packaged and sold to university system officials desperate to fill state and federal funding gaps; and conservative politicians as they continue to cut and slash public education funding. In his July, 2011 address to the Republican Governor’s Association in Salt Lake City, Merisotis began outlining the plan supporting their “Big Goal” – 60% US adult college degree attainment by 2025.

“You, as a governor, can wield tremendous power in the reform effort. For the rest of my time today, I’d like to suggest some practical, concrete ways for you to use that power.

And, make no mistake, reorientation of our higher education system is sorely needed if we hope to reclaim and maintain a thriving economy.

In short, we need a postsecondary system that is far more productive—one that can move quickly to generate millions more graduates with high-quality, workplace-ready credentials. And again, as governors, there are specific steps you can take to help foster this focus on productivity. In fact, let me list four steps in particular”

Lumina’s “Four Steps to Finishing First ” program lays out a plan to achieve their goal of 60% attainment by 2025. Their method – use business type modeling to “increase productivity” (degree attainment); the assumed outcome of which will be more jobs created. The “Four Steps”:

1. Performance Funding – Don’t fund schools in the traditional budgeting process. Tie funding to performance. Legislators should “provide financial incentives to schools that help students clear certain milestones on their academic journeys or finish work toward their degrees or credentials.” More degrees = more money.

2. Student Incentives – Legislate tuition discounts and incentives to students who do not exceed the number of credits required for graduation. Limit financial aid to the required number of credits for graduation. In other words – better not change your major.

3. New Models – Institute low-cost approaches (specifically online degree programs) “substituted for traditional academic delivery whenever possible to increase capacity.” 

4. Business Efficiencies – Implement business practices that “Produce Savings to Graduate More Students.” Part of the plan to be more “efficient” :

“At the state level, policymakers should limit the number of research institutions…research can be a problem at institutions that aspire to attract research funding, because fulfilling these aspirations can increase costs and reduce productivity in terms of serving undergraduate students.”

“Cut athletic funding – Competitive athletic programs almost always require substantial subsidies from colleges and universities that pull money away from academics.”

“Employee contributions to health care and retirement plans also deserve scrutiny and should be measured against other private sector, competitively established contribution and benefit levels.”

The plan cites The University of Maryland as a great success story in controlling costs…students and faculty experiencing the deep program cuts imposed on that institution may disagree.

It is a vicious cycle – with ALEC and Lumina Foundation at the center. ALEC pushes legislation and policy which imposes draconian cuts to public higher education funding. Lumina lends financial and policy support to the agenda – and positions itself to step in with a “Four Step Plan” to fill the void. Lumina offers a brilliant talking point – “follow our plan, and more people will get college degrees, which means more people will get jobs…because (as everyone knows) people with degrees get hired more than people without.”

While these are lofty goals and wonderful ideals (for education is truly the cornerstone of democracy); with Lumina, the devil is in the details. There is a clear push in this agenda to privatize and take an opportunistic approach to a continuing economic recession (or as Paul Krugman more accurately says, depression). Educational Foundations such as Lumina and the Gates Foundation are taking on a greater roll in developing policy, as opposed to direct awards – and it is having an enormous effect, again, because of the draconian cuts being endured by public colleges and universities.

There are two questions to be addressed…first, what does this outsized financial influence by a select few on public education policy mean, and where are they taking us. And second – will more college degrees, as is the goal of Lumina, create more jobs…

Those questions will be addressed in the next edition of Badger Democracy. Stay tuned for part the third…until then,


Scott Walker, ALEC, and the future of the UW System…

On Tuesday, June 6 Scott Walker made a significant announcement in conjunction with the University of Wisconsin System. Walker and the UW System have unveiled an ambitious online degree program titled the “UW Flexible Degree Program.” The program will “…allow students to start classes anytime they like, work at their own pace, and earn credit for what they already know. Students can demonstrate college-level competencies – no matter where they learned the material – as soon as they can prove that they know it.” According to the Walker press kit, the end result will be more jobs, and more people with college degrees – at an affordable price:

“While many Wisconsin citizens are looking for work, many employers are struggling to find qualified workers with the specific knowledge and skills they need to fill tens of thousands of available positions.
To improve Wisconsin’s employment outlook, the University of Wisconsin System, Governor Scott Walker, and others have developed a plan to address these issues”.

Combining promises of accessibility, more bachelor’s degrees and jobs sounds too good to be true. It turns out this program will need careful monitoring and legislative oversight – largely because the “others” referred to in the above statement include an Education Foundation which sponsors and funds ALEC – the American Legislative Exchange Council. 

The media release from Walker’s office and UW reference several studies at the bottom of the online proposal. Four of the references link to the website of the Lumina Foundation and a recent study conducted by Lumina citing population college degree rates.  The data cited is old and incomplete; based on the 2008 US Census survey data, not the more complete and current 2010 US Census. The issue, however, is not with the data – it rests on the actions and agenda of the Lumina Foundation.

The Lumina Foundation came into existence as a result of the largest sell-off of student aid debt in US history. USA Group, Inc. was the largest holder of student loan guarantees, and sold its loan holdings to Sallie Mae in July of 2000 for $770 million. The overall transaction meant that USA Group started its new life as an Educational Private Foundation with assets of $1 Billion. To date, they are second only to the Gates Foundation in higher education awards – and the largest player in higher education policy reform in the nation. As of 2008, Lumina changed its focus away from direct awards to institutions and students; and towards pushing its policy agenda forward through state governments.

As of 2008 Lumina has had a close relationship with ALEC. The Foundation has been pushing policy nationwide to reach their goal of 60% degree attainment in the US by 2025. While this may sound like a lofty goal – the reality of this “attainment goal” has far-reaching (and not always positive) implications for the future of higher education in the US. Beginning in 2008, Lumina has given at least $300,000 per year to ALEC in the form of “Educational Grants” (see page 33 of the Lumina Form 990pf 2008).

In addition to the $300,000 per year in grant money, Lumina was a “Chairman” level sponsor of the 2011 Annual Conference of the American Legislative Exchange Council ($50,000 in 2010) and sponsor of the August 4th, 2011, Plenary Session speech of former West Virginia Governor Bob Wise of the Alliance for Excellent Education. 

In pushing its policy agenda, Lumina works with strategic partners nationwide. One of the largest and most active in working with Lumina is HCM Strategists in Washington, DC. According to the 2008 form 990pf linked above (Statement #24), Lumina granted HCM an award of $2,013,400 in 2008 alone. In addition to high level federal government experience under George W. Bush, one of the “Founding Partners” of HCM has links to Wisconsin.

Terrell Halaska was confirmed by the Senate in 2005 as assistant secretary of education for legislation and congressional affairs. Prior to that, Terrell served as deputy chief of staff at the U.S. Department of Health and Human Services. As a member of Secretary Tommy Thompson’s senior strategic management team, she oversaw policy development on a number of issues. Previously, Terrell directed the state of Wisconsin’s Washington, D.C. office. She was the media manager for the nation’s governors at the National Governors Association and also served as press secretary to Congressman Scott Klug (R-WI).

HCM includes Wisconsin for voluntary participation in its “College Productivity Strategy Labs” program. The “College Productivity” project is a joint venture between Lumina and HCM. The focus on the program is based on an efficient, productive, results, and incentive-based education system designed to increase degree attainment; reducing higher education to a business model. HCM has been working on behalf of Lumina with UW and state officials for several years.

A policy staffer for HCM confirmed for Badger Democracy that the online degree program being adopted by the UW System is “the model of what we are working on nationwide. We didn’t work on this specific initiative, but we have been working with officials from Wisconsin on other initiatives, and we applaud the Governor and UW’s announcement.”

A UW spokesperson also confirmed that the UW System has been working with Lumina, and will continue to do so in the future. When asked if the University was aware of the relationship between Lumina and ALEC, the spokesperson stated, “no, I was not aware of that.”

Scott Walker would have been keenly aware of Lumina’s presence, vision, and influence. President/CEO Jamie Merisotis gave one of the key addresses at the annual Republican Governor’s Association Meeting in Salt Lake City, 2011 – which Scott Walker attended. In his speech, Merisotis laid out the plan to the new ultra-conservative governors, and how they could implement Lumina’s ALEC-backed policies:

“First, and perhaps most obviously, you occupy the bully pulpit in your state. More than anyone else, you have the power to direct the state policy apparatus and propose policy, budget, and tax agendas. Your central, visible position also enables you to mobilize and galvanize other political, civic and business leaders.

Second, governors usually appoint the leader of the state budget agency—a person with considerable influence, if not outright control, over higher education budgets.

Third, almost all of you appoint representatives to your state’s higher-ed coordinating agency, which in turn, typically chooses the higher education executive officer, or SHEEO, in your state.

Finally, most of you appoint trustees to the governing boards of state-supported colleges and universities. That gives you a singular opportunity—a chance to choose and encourage leaders who seek to benefit students and the state as a whole, not merely the institutions they serve.

So, that’s my first important message this afternoon: You, as a governor, can wield tremendous power in the reform effort.”

The ALEC and neo-con, corporatic agenda to create a crisis. Defund public education, even higher education, to necessitate systems such as the University of Wisconsin to adopt these “no other option” programs. Programs which have dubious results based on questionable  premises.

Badger Democracy will commit the next two posts to this issue. The second post will be a closer examination of Lumina and its policy agenda; and the premise that higher college degree attainment will increase employment.  The third will examine an academic study on the new role of “Modern Foundations in American Higher Education”, presented at the American Education Research Association meeting in Alberta, Canada in April.

The future of democracy relies on the quality of our higher education system; and the ability of that system to nurture thought, creativity, and deliberation. The activities of organizations such as Lumina Foundation require thorough vetting and public accountability, before their policy agenda is allowed to decide the future of public higher education.

Stay tuned for part the second.

The $3.6 Billion Walker lie continues…all the way to Ireland (pass the potatoes)

Scott Walker made certain the projections were bleak, bordering on the catastrophic, and the media ate it up. In the Milwaukee Journal Sentinel on February 7, 2011 Walker spokesman Cullen Werwie was quoted as saying:

“Bill collectors are waiting at the door of the state Capitol. Without taking action to reduce the deficit in the current fiscal year, thousands of Wisconsin children and families could lose their health care coverage through BadgerCare, and there would need to be even more aggressive spending cuts in the future.”

Before presenting a budget, Walker had succeeded in creating a $3.6 billion deficit panic. The mantra continues today, as it continued on the campaign trail. Even across the border as Walker addressed the Illinois Chamber of Commerce in April.  The Romney Campaign is embracing Wisconsin as the role model for the nation. Scott Walker is the hero that conquered the deficit beast, and America must embrace the austerity measures to save itself – as they have saved Wisconsin.

The entire budgeting premise upon which Walker based his “deficit crisis” was a lie. Having been a legislator in Wisconsin, he would have known this, or he is a complete idiot. We also now know what these “austerity” measures do to a national economy, yet it is being largely ignored by the media. Should the Walker policies continue to expand, and Romney wins the White House in November pass the potatoes – because Wisconsin will look more like Ireland in two years than the state we all know and love. Read on for details.

Walker’s $3.6 Billion deficit was based on the 2011-2013 State Agency Budget Requests . Representative Mark Pocan (D-Madison) received and released a Legislative Fiscal Bureau memo from February 16, 2011 – but no media were paying attention. Scott Walker was intervening in the budget process prematurely – for the purpose of creating a fiscal emergency. As shown in the memo, the final Agency Budgets are never funded at the levels requested by the agencies. There are constant negotiations and compromises in both revenues and expenses during the budget creation process – much of which happens in the Legislature. The 2011-2013 requested increases of 7.2% contributed to much of the reported deficit, and would have been greatly reduced in the legislative budgeting process. The Agency appropriations for 2009-2011 actually received a cut of 2.6% from the baseline, due to one-time federal stimulus payments. This so-called “deficit” existed only on the paper from the Agency Funding Requests.

On January 31, 2011 (before the Walker “deficit emergency” took hold in the media) the Legislative Fiscal Bureau (LFB) sent a memo to Joint Finance Chairs Robin Vos and Alberta Darling. Based on the 2009-2011 Doyle budget in place, the LFB forecast a year-end SURPLUS of over $56 Million. This had actually been a revision of the Doyle Administration’s earlier forecast of a $112 million surplus due to several reasons:

1. Lower tax collections.

2. Debt payments being made in 2010-2011.

3. Budgeted Minnesota reciprocity lapse payment.

4. Some increase in department revenue and lapses.

That’s right citizens – before Scott Walker took office, Wisconsin had a budget surplus. In addition, the Agency appropriations had not been addressed as part of the budgeting process. The truth is, the $3.6 Billion “deficit” was only on paper – it was not functional. The lie persists; the result being an affirmation of Walker’s austerity measures. Where has that gotten us? On a road paved with intended and known consequences – known because we have an economic precedent.

The February 9, 2012 LFB memo submitted to Vos and Darling on  shows the effects of austerity. Unlike any DOA or DOR analysis, the LFB is the only truly non-partisan budget analysis taking in factors from all fiscal agencies, and using a consistent measure. Wisconsin is now faced with a $208 Million + deficit by the end of 2013. The memo specifies the effects of laws enacted in 2011 to decrease revenue, and increase the burden of state expenditures on a shrinking middle class. The memo also cites the decrease in tax revenue being collected and pursued from large corporations; a function of greater loopholes and deregulation of corporate taxes and collections.

As the GOP has already indicated, the answer to this decrease in revenue will be to cut, cut, cut – more austerity. A word of warning, which, based on the recall election may be too late. Wisconsin’s economy is only being bolstered by a slightly improving national economy. While we rise in the “business friendly” and “economic freedom” indicators of the Heritage Foundation, there are severe consequences for the policies we are pursuing. In the absence of any stimulus, Wisconsin would have gone from stagnant to depressed. The model exists for Wisconsin under Scott Walker and a potential Romney presidency. It is Ireland.

In an interview on the Colbert Report, June 18 2012, Paul Krugman put the Ireland economic example in perspective. In response to the suggestion by Colbert that electing Mitt Romney president would solve our economic problem, Krugman sates:

“Ireland is Romney economics in practice. They’ve laid off a large portion of their public workforce, they’ve slashed spending, they’ve enacted extreme austerity programs, they haven’t raised taxes on corporations or the rich at all. They have 14% unemployment, 30% youth unemployment. Ireland is what the US economy would be under Romney.”

In 2008, Ireland was ranked as the 3rd best economy in the world for “economic freedom” by the Heritage Foundation. Low corporate taxes, little regulation, the “Celtic Tiger” was a model capitalist state – having achieved its economic freedom and prosperity over a decade of free market growth. By 2009, the economy was in shambles, and Ireland was the first and most aggressive European nation to adopt austerity measures. In April 2009, Paul Krugman sounded the warning to us and Europe:

Unfortunately, we didn’t save for a rainy day: thanks to tax cuts and the war in Iraq, America came out of the “Bush boom” with a higher ratio of government debt to G.D.P. than it had going in. And if we push that ratio another 30 or 40 points higher — not out of the question if economic policy is mishandled over the next few years — we might start facing our own problems with the bond market.

Not to put too fine a point on it, that’s one reason I’m so concerned about the Obama administration’s bank plan. If, as some of us fear, taxpayer funds end up providing windfalls to financial operators instead of fixing what needs to be fixed, we might not have the money to go back and do it right.

And the lesson of Ireland is that you really, really don’t want to put yourself in a position where you have to punish your economy in order to save your banks.”

That is precisely what we are doing – the overall economy is suffering to save the banks, multinational corporations, and wealthiest among us. While Euro-zone leaders hail Ireland’s continued austerity, the people are suffering – 14% unemployment, wage cuts, healthcare cuts, public services slashed, and nearly 40,000 have left the country for greener pastures. On June 17, 2012, Paul Krugman addresses the “success” that the International Monetary Fund considers Ireland:

“…this was a statistical illusion, reflecting the fact that very capital-intensive industries, especially pharma, had weathered the crisis better than labor-intensive sectors. Meanwhile, the real thing — slight wage decline in Ireland while wages rise in Germany — has been proceeding at a relatively glacial pace. And the promised payoff in increased market share is still invisible.”

Continued austerity will have the same effect here – decreased wages, high unemployment, decreased revenues, the list goes on. So does the GOP austerity train…

The lie of the deficit emergency, if allowed to persist as the greatest threat to our state and nation, will have dire consequences for the ever-shrinking middle class. Either Scott Walker, Paul Ryan, Mitt Romney and the GOP powers know and want this – or they are idiots.

Stock up on corned beef, cabbage, and potatoes. Pass the Jameson. We’ll need good whiskey for the revolution.