< meta name="DC.Date.Valid.End" content="20050825"> Amendment Nine: Greenspan and Education

Wednesday, July 20, 2005

Greenspan and Education

Just now, Barney Frank missed the point. He grilled Greenspan on the wage gap problem (or what Greenspan calls a "bi-variate" wage system). The problem is an oversupply of skilled jobs and an undersupply of skilled workers. Result is skilled workers currently making a disproportionately high income as unskilled workers make almost nothing. Frank wanted to go the other way and say this means doom and gloom for American economy (we can't afford anymore tax cuts then right?). What he missed though is the silver bullet. The way to get out of a split level economy is to make education free. The longer skills acquisition remains a privilege, the smaller the middle class. When skills acquisition becomes free (take a look at Ireland if want a recent example), the middle class flourishes and the economy expands. There's a downside politically to this. Current highly skilled employees will experience significant wage pressure from increased competition (my doctor complains of this constantly). Greenspan even went so far as to say we aren't moving kids through high school and through college quickly enough. If Democrats want to start winning elections, they can start here. The way to expand economic success is to expand skills acquisition by making it free. I would also argue, and may do so at a later time, that the only way for the American economy to continue to prosper as globalization continues is to make college education virtually free.

UPDATE: House Democrats on the Financial Services Committee are incredibly clueless. Can't they afford some halfway decent staffers to brief them correctly? Maloney is an embarrassment and her questions make me want to watch CNBC! Maybe Alan should draw them pictures?