Cash for Clunkers

As I write this from a condo at Kona, Hawaii, I feel the good fortune to be able to travel to Hawaii during a recession. There are pundits that say the recession is over, but the fundamental problems that led to the recession are still with us. The banking crisis was caused by greed. The mortgage industry was unteathered property ownership from the ability to pay. They did it because they were paid to sell mortgages. Their companies sold those mortgages to others, and now, unfortunately, the taxpayer is footing part of the bill. The government may have fixed this part of the recession (easy lending standards have been tightened), and the "junk-mortgage" market has been fixed (hopefully), but that still doesn't solve the fundamental problem in the United States. The country does not have enough middle class jobs to support the population.

Of all the ideas that Congress is concocting to fix the economy, the best idea is the "Cash for Clunkers" bill that pays a premium for their old cars so that people can exchange them for cleaner, more fuel-efficient, new cars. It stimulates automobile production so that middle class jobs are protected, and helps clean the environment. Good idea, right? The problem is that government is essentially helping people buy cars. People like me can turn in cars as old as 1984 (like mine) and get up to $4500 toward the purchase of a new car. That isn't how the system is supposed to work. Yet, let's be realistic, this is a time of crisis, and in times of crisis you must act in a desperate fashion. Though unlikely to have a significant effect in reducing global emissions, Cash for Clunkers will help keep the American automobile industry afloat.

The problem is that America is being thrust into a world economy in which we cannot compete economically (due to high costs of living and labor). People that are going to succeed in the United States will either be entrepeneurs or highly educated creators of new ideas and technologies. Our workforce is full of people that are obsolete, but we have an education system that has not improved its capacity to produce workers. In 2005, Bill Gates identified a major problem with the United States. He said that our education system cannot succeed as it tries to fulfill its missison. What Gates' referred to, I believe, is a system that depend more on demographics (parental income and education) than the inherent abilities of the education system itself.

Over the last two years, I investigated Gates' claims and found them to be true. The book Improving the Odds: A basis for long-term change (Rowman and Littlefield) shows that the public education system needs to be revised so that better teaching and learning can occur. Although many of his assumptions about why education has failed are fundamentally flawed, his premise about the education system is absolutely true. Congress can pass bills like "Cash for Clunkers" and look for short term solutions, but we need to reform our country to meet a changing world economy. We need to find the best way to get resources into the classroom to give everyone a chance. The "clunkers" that come out of our classrooms live in our society for a long time.