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Friday, August 23, 2019

What education, grocery stores, and have in common

In August 2017, Amazon entered the retail grocery market. Its goal: transform the economic value chain associated with traditional bricks-and-mortar grocery delivery. Its plan: expand its scope, differentiate its product, cut cost by integrating grocers and customers into its larger e-commerce platform, and lower consumer prices. As Jeff Wilke, CEO of Amazon World Consumer, said, “And this is just the beginning – we will … continuously lower prices as we invent together.”[1] Traditional grocery chains’ market value dropped 8 percent overnight.

Education and grocery stores are different industries, but both have much to learn from Amazon.

Like traditional grocers, public education’s business model is based on a command-and-control, geographically-based, product delivery system that has worked the same for decades.  Both take advantage of technology to improve their business model, but in different ways. Grocers use technology to minimize product delivery cost to the store, squeeze 2% profit margin from high volume sales, and compete on price.  Public education uses technology to expand and enable its administrative state, increase cost, and compete as a geographic monopoly.  A recent study by EdChoice[2] reports that between 1992 and 2015 the number of Virginia K12 students grew 24%, while the number of teachers grew 32% and administrative staff grew 50%.  Over the period 1992 to 2014, Virginia per pupil expenditure (in inflation-adjusted dollars) grew 26% and teacher salaries declined 7%. 

Public education has a lot it could learn from Amazon. But, will they?

Amazon’s disruption of the grocery industry is possible because, in a free market: competitive advantage depends upon product differentiation and the lowest cost to deliver the value proposition; firms that provide complementary or substitute products are allowed; and competitor barriers to market entry and exit are low.  Unlike public education competitors, Amazon entered the grocery industry without being required to build a chain of brick-and-mortar stores, which were required by law to serve a specific zip code, nor were they subject to compliance with ubiquitous and ever-growing requirements imposed upon them by the industry they disrupted. Instead, Amazon bought the physical infrastructure and replaced the entire market channel of delivery with a highly cost-effective e-commerce platform that connects customers directly to differentiated, high-quality products, at a lower cost. 

A similar positive disruption in public education is possible, if the barriers-to-entry are eliminated and parents are allowed to choose their child’s mode of education.  One example is Summit Public Schools, a charter school, founded in California in 2003. Like Amazon, Summit flipped the education business model on its head.  The student is placed at the top of the education model, not the bottom. Administration is automated through a customer resource management (CRM) system. Teachers devote at least 200 hours per year mentoring and coaching, and students’ time is used differently.  Mark Zuckerberg, Facebook’s CEO, not only has invested in the school but partnered with Summit to build the CRM system, which he offers for free to 501c3 organizations interested in starting a school.  Parents, teachers, mentors, and coaches are connected to their student through the CRM and know what is planned and what has been accomplished against mutually agreed goals, at any point in time.  Students spend 16 hours a week building knowledge using online resources.  Students work at their own pace. When they think they have mastered a concept, they take a 10-question self-test.  If they answer 8 questions correctly, they move to the next topic. Knowledge is applied during the week in “project time,” where cognitive skills like problem solving, communication, creative thinking, writing, and speaking are taught through investigation, labs, seminars, papers, and presentations.

The Summit model is scalable, inclusive, and effective. Today, nine schools are in operation, serving 2,500 students in grades 6 through 12.  Eighty percent are non-white; 42 percent are low income; and 12 percent are English language learners.  Per pupil expenditure is $7,000, compared to Virginia’s $11,745[3]. Ninety-six percent of Summit’s graduates are accepted to four-year colleges.[4]

If Virginians want educational outcomes like Summit’s, they must demand that elected representatives remove the barriers to entry for non-traditional educational solutions. One cannot put new wine in old wine skins.  We have two choices: one whose written policies support education innovation and one who thinks more public education spending will produce a different result.  It is time to choose carefully.

Monday, February 10, 2014

Do Educators Wave their Arms, To Make their Case for Educational Reform Grow

Questioning the Case for Nationalized Education Reform

When my daughter was 5-years old, she asked, “How do the trees flap their leaves to make the wind blow?”  She quickly learned that correlation does not mean cause, a lesson the average American politician needs to learn when it comes to promoting the public good, especially education. 

Contemporary thinking – that is to say Washington “group think” – promotes the notion that for America to be competitive in the 21st century, the Federal Government and the state (translation: “We” the taxpayers) need to heavily “invest” (translation: spend) to “reform” (translation: re-forumulate) American education.  The most recent fad is “Common Core State Standards (CCSS),” which sets the stage for removing control of education from the states, creates a one-size fits all, nationalized American K-12 education system, and will cost billions of dollars to implement.

The fundamental question is: “will greater and greater investment in education drive prosperity in the 21st century or does prosperity create the demand for education?”

The two principal arguments by educational reform proponents are: (a) America’s children are ‘lagging’ behind international peers in terms of academic achievement and (b) the economic vibrancy and the future of the United States relies upon American students outranking their global peers on international tests of academic achievement. These arguments collapse upon examination of peer reviewed, empirical literature, according to Christopher Tienken, editor of the American Association of School Administrators (AASA) Journal of Scholarship and Practice.  Mr. Tienken suggests these are “bankrupt” arguments (Commentary, “AASA Journal of Scholarship and Practice,” v. 7, No. 4, Winter 2011).  Instead, he argues that other factors are more central to economic prosperity than education. For example, he states, “[China’s] continued manipulation of its currency … and iron fisted control of its labor pool, has a greater effect on our economic strength than if every American child scored at the top of every international test…” China’s undervaluation of its currency cost the U.S. almost 1 million jobs, over $200B in lost economic growth, and 1.5% of its Gross Domestic Product in 2010 (Washington Times 2010).  In fact, G20 countries’ economic strength rely more on policy than education achievement.

 To determine if doubling down on education “reform and investment” is prudent, three fundamental questions must be answered: (a) what factors do business leaders believe will drive 21st century prosperity and to what extent does educational achievement play; (b) how does American students’ educational achievement compare to international peers’ performance; and (3) to what extent does education achievement correlate with a country’s economic prosperity, much less cause it?

What Factors Drive Economic Prosperity?

 According to a 2010 Global Chief Executive Study by IMB Corporation, which surveyed 1,500 of the world’s leading corporate CEOs, the authors identified four 21st century business Critical Success Factors (CSFs): (a) creative leadership strategies; (b) global collaboration and cooperation among companies and their customer bases; (c) proposal, product, and service differentiation that flows from operational dexterity; (d) use of complexity to a strategic advantage.

Education is not directly identified by the 1,500 CEOs as a critical success factor.  While one may argue that education is an underlying condition for success (even a necessary condition), it is clear from this list that education is not a sufficient condition.  Clearly other factors, such as collaboration, cooperation, operational dexterity, are at play and the extent to which they interrelate is open for debate.  More important, it is unclear if prosperity drives the market for education or the education market drives prosperity.  Which came first, the chicken or the egg?

How does American Education Performance Compare to its Global Peers?

With respect to standardized international tests, the United States had the greatest number of 15 year old students score at the highest levels on the global triennial 2006 Programme for International Student Assessment (PISA) science test (OECD, 2008). The United States had approximately two-times the number of 15 year-old students who scored at the top levels of the 2006 PISA science test compared to Japan.  The United States accounted for 25% of the top scoring students in the world on the test, even though the United States did not outrank Japan overall.

Over 70% of recent U.S. high school graduates were enrolled in colleges and universities in 2009 (Bureau of Labor Statistics, 2010).  Approximately 30% of U.S. adults between the ages of 25-34 years old hold at least a Bachelor’s degree.  Only six other industrialized nations have a higher percentage of their population holding at least a Bachelor’s degree (OECD, 2009) but their economies pale in comparison to the United States.

 The 2010 World Economic Forum stated that the United States has an outstanding university system.  Eleven of the top 15 universities in the world are located here.  The United Kingdom is next with three out of the top 15 (The Times Higher Education, 2010).  It is illogical that a country with the best university system in the world would have a failing elementary and secondary education system that requires “fundamental” transformation.

Does Educational Achievement Correlate to Economic Prosperity?

The United States ranked either first or second out of 139 nations on the 2010 World Economic Forum’s Global Competitiveness Index (GCI), eight of the 10 years, between 2000 and 2009, and never ranked below sixth place during that period.   No other country matches this record. 

 The US workforce is one of the most productive in the world.  Representing approximately five-percent of the world’s population, the U.S. produces 20% of the world’s Gross Domestic Product.  According the U.S. Patent and Trademark Office, (2010) the United States is home to more than 28% of the resident patents granted globally, the largest percentage of any country.  Japan is second with 20%.

 Correlations between student international test rankings and economic strength can be statistically significant and moderately strong when all the small or weak economies like Poland, Hungary, and the Slovak Republic are included in a sample with G20 countries.    For example, if 18 countries are included in the sample, with weak or collapsing economies and whose students have test scores above those of the United States, positive relationship can be shown between test scores and economic growth. (Tienken, 2008). In other words, by using a sample selection that compares academic achievement without any consideration for differences in economic size, is an apples-to-oranges comparison.

Conversely, if the sample includes only the G14 or G20 countries, the relationship between international test rank and economic strength can be non-existent or even negative.  Japan provides an example of this phenomenon.  Japan’s stock market closed at a high of 38,915 points on December 31, 1989.  On October 15, 2010 it closed at 9,500, or approximately 75% lower.  In contrast, Japan has consistently ranked in the Top 10 on international mathematics tests since the 1980s and has always ranked higher than the United States on these tests.  Japan’s economy and stock market have been in shambles for two decades.  Yet, Japan has had national curriculum standards and testing for more than 30 years and consistently outranks most other nations on international math and science tests.

 Compare the United States performance over roughly the same period.  The Dow Jones Industrial Average rose above 1,200 points for the first time on April 26, 1983, the day “A Nation at Risk (National Commission on Excellence in Education, 1983) was released.  On January 4, 2011, the DJIA closed at 11,691 – a ten-fold increase.  The United States consistently outranks Japan on the World Economic Forum’s Growth Competitiveness Index.  Nations like Canada, Australia, Germany, and Switzerland have strong economies, consistently rank higher than the United States on international tests, and do not have a mandated, standardized set of national curriculum standards.


It is clear from this analysis that something other than academic achievement drives prosperity.  A good working hypothesis is that strong moral values, fiscal responsibility, work ethic, constitutional freedoms, dedication to the rule of law, and limited regulation created a culture of entrepreneurship created prosperity, not the United States’ rankings on international math and science tests.  As America prospered, knowledge grew, and so did the market that served it. 

In support of this hypothesis, one only need consult history.  Up until the founding of the American republic, economies were principally agrarian.  Subsequent to the founding, technological innovation and prosperity exploded, especially in America.   My grandmother, born in the 1890s, started her life living on a farm in the country, riding a horse-drawn wagon 20 miles to town, four times per year.  She lived to own a home in the city, with all its conveniences, and to see America put a man on the moon.  Americans in her generation were fortunate if they completed high school.  Yet that generation’s grit, determination, perseverance, and core values were the forbearers of the Greatest Generation.  This generation lived through a depression, won World War II and Korea, put a man on the moon, and left the Baby Boom generation a dominate American economy. Ten percent or less of the Greatest Generation attended college.

Today, 75% of those graduating high-school attend college, yet unemployment of young adults in the 20 to 24 year old range is 11.9 percent. The solution is not doubling down on our investment in education.  The solution is doubling down on those principles that gave us prosperity in the first place.

Friday, January 24, 2014

Red Herring

New Attorney General Mark R. Herring, asserts that Virginia must be “on the right side of history,” and that Virginia’s ban on same-sex marriage is unconstitutional (“AG sparks clash on gay marriage,” Richmond Times Dispatch, January 24, 2014).  Herring said his office no longer will defend the commonwealth's gay marriage ban, which is part of the state constitution, in federal court.

The AG’s statement is simply a red herring: he may want to be on the right side of history, but he is on the wrong side of the law.  As AG, Herring has taken an oath to uphold the Virginia Constitution – all of it.  Until the law is changed through constitutional amendment or is overturned by the United States Supreme Court, he has an obligation to uphold it.  If he does not, all means legally available to the people of Virginia should be pursued to remove him from office.
No matter where one stands on an issue, all must follow the rule of law, especially those who we have been elected to enforce those laws.

Friday, November 8, 2013

Rosy employment picture ... don't hold your breath

The real story in the WSJ article,In October Jobs Report, U.S. Hiring Picks Up Strongly – Three-Month Average Tops 200,000 Jobs Added” (WSJ November 8, 2013), is in the last paragraph:
"Still, the latest data show 11.3 million Americans who wanted a job and were looking couldn't find employment in October. In addition, many workers could only obtain part-time jobs. A broader measure of unemployment that includes discouraged workers and those working part-time, but who want full-time employment, rose to 13.8% from 13.6% in September."
Maybe it's time for Waylon Jennings to come out with a re-make, "looking for jobs in all the wrong places."

When the economy went in the toilet in 2008 - 2009, I did some research and came up with  my own back of the envelope calculation about hiring and the projected recovery (  Written in January 2010, it stated that recovery would take between 58 and 91 months, depending upon one's assumptions and how one chose to place the blame: on Bush or BO.
Looks like I may be an idiot savant, which probably qualifies me for a government job.

Lie, Deny, Apologize

·       Now that Obamacare is failing to deliver on its promises, let's see if the Grand Old Party can take advantage of the broken promises of a corrupt administration and successfully articulate the threats of a large, centralized, out of control federal government led by a national socialist.

Now that the conservatives' concerns about ObamaCare's cost and efficacy are coming to pass, maybe the clueless GenXers and Millennials will wake up after they find out nationalized healthcare will be paid for by them, while at the same time canceling or reducing the scope of their coverage. They are about to get the education they should have received in college and did not. Except, if they thought their progressive college education was expensive, wait until they see what progressive healthcare costs them over their most-likely shortened life spans

Like cancer, socialism requires a healthy organism to exist and thrive. Barack Obama has found it. He should be impeached.

Now that the grand experiment is failing, the WSJ reports:

"Mr. Obama said he had intended to make good on his pledge but the administration wasn't as clear as it should have been in describing the changes the new health law would bring. Now, facing a chorus of complaints as many people receive notice that their plans have been canceled, Mr. Obama signaled he was open to some kind of relief, although he didn't give specifics."

He never gives specifics. Only empty promises.

 In the midst of Obama's grand experiment's failure, the Wall Street Journal reports:

 "Mr. Obama said he had intended to make good on his pledge but the administration wasn't as clear as it should have been in describing the changes the new health law would bring. Now, facing a chorus of complaints as many people receive notice that their plans have been canceled, Mr. Obama signaled he was open to some kind of relief, although he didn't give specifics."

He never gives specifics. Only empty promises.  Like cancer, socialism requires a healthy organism to exist and thrive.  Barack Obama has found one in the United States of America.  He should be impeached.

Friday, November 1, 2013

Virginia at a Crossroads

The race for cash has turned into a rout in the final days of the contest for Virginia governor, with front-runner Terry McAuliffe exponentially outraising Ken Cuccinelli II — particularly from companies that have legislative interests in Richmond. ( ). Why is so much money required?  For paid advertising of course.   And McAuliffe needs a lot of advertising to cover up the scandals that plague his career.  But it is not as though he has not been helped by the Main Stream Media, who refuses to give equal coverage to both sides of the contest.
In case you have not had the time to evaluate the mainstream media coverage given to the two gubernatorial candidates, the following summarizes the coverage and identifies some concerns which have received little or no coverage.  Please read and then share with your friends, as appropriate.
According to Media Research Center from June 12 through August 31st
“Although all the local newspapers have written negative ads about both candidates for governor.  Ninety-one (91) news stories and 61 editorials and columns mentioned or discussed Cuccinelli ethics, most prominently questions surrounding belated disclosure from Jonnie Williams.  In contrast, 48 news stories and 27 opinion pieces talked about McAuliffe’s ethical problems, most about Green Tech, which is currently under federal investigation by the Securities and Exchange Commission.  Overall, readers saw 152 stories about Cuccinelli’s ethics vs. 75 about McAuliffe, a greater than two-to-one disparity… the Virginian-Pilot and Roanoke Times papers dogged Cuccinelli on his ethics and seemed less interested in digging through McAuliffe’s dirty laundry.”
The Richmond Times Dispatch decided to wash its hands of the gubernatorial race and not endorse either candidate.   Newspapers have continually printed more negative information about Cuccinelli then McAuliffe even though McAuliffe’s scandal-ridden and questionable unethical past far exceeds Ken Cuccinelli’s.  Furthermore, McAuliffe’s background should have received much more scrutiny and investigative reporting so that voters could make an informed decision --- but that has not been done!
Not only has there been a lopsided barrage of ethical issues, it is the way the newspapers labeled and put a spin on their reporting that borders on unethical, based on their code of professional responsibility to their subscribers.
According to Media Research Center, "there were 26 ‘conservative’ labels attached to Cuccinelli in news stories and editorials, but not any of the four newspapers could even muster a single ‘liberal’ label for McAuliffe even though McAuliffe is a Washington insider, a big spender, and a scam artist. The democrat’s strategy was to claim that McAuliffe was in the center and they were not going to use or employ the ‘liberal’ label and reporters obliged -- even using mainstream and McAuliffe in the same sentence.  In contrast Cuccinelli was wrapped in one label after another to deflect on McAuliffe's left-wing progressive and extreme ideology.”  
The Democrats strategy playbook is to deny, delay, and distract and the newspapers have worked together to mislead and manipulate the voter.
Scandals involving Ken Cuccinelli
1.) $18K in gifts from Johnny Williams – cleared of any wrong doing, but raised the money and donated it to charity.
Scandals involving Terry McAuliffe
1.) Prudential Insurance and a quasi-government agency leasing agreement investigation
2.) Illegal campaign contribution swap scheme between the Democratic National Committee and the Teamsters
3.) Investigation into an International Brotherhood of Electrical Workers Real Estate Deal
4.) Criminal investigation while McAuliffe was Chairman of the Federal City National Bank that was cited for “unsafe and unsound banking practices”
5.) Green Tech – McAuliffe received $5 Million taxpayer dollars and refuses to account for the money
7.) Refuses to return donations from Jeffrey Thompson who illegally supported Hillary Clinton’s campaign
The following link is to Ken Cuccinelli’s web site where you will find numerous articles on the issues that Mr. Cuccinelli has tried to bring to the voters, but for the most part the newspapers have blocked his message.

Wednesday, October 23, 2013

Shutdown or Shut-up?

Republicans have been accused by the President and Democrat party leaders of “shutting down the government.” I reject the Democrats’ deliberate and untruthful misrepresentation of the facts.

First, the Constitution establishes the executive, legislative, and judicial branches of government as co-equals.  In this framework, the House has the sole right to grant or withhold money. All spending bills must originate in the House, which means that the House – in its sole discretion – proposes whether or not money should be spent on a particular government activity. If one wants further proof, read Federalist 58, written by James Madison, which states in part:

“The House of Representatives cannot only refuse, but they alone can propose, the supplies requisite for the support of government … This power over the purse may, in fact, be regarded as the most complete and effectual weapon with which any constitution can arm the immediate representatives of the people, for obtaining a redress of every grievance, and for carrying into effect every just and salutary measure.”

Second, the Republican-controlled House – elected by the people of the United States, just like the President, who continually reminds us elections have consequences –   voted for a bill that would fund all aspects of the government except for the Patient Protection Affordable Care Act.   This is a fact, documented in the Congressional Record, and is not a matter of opinion. 

Therefore, whether one favors or does not favor the healthcare law, the House of Representatives – by its constitutional authority – can determine what it wants to fund or not to fund.   It is the Senate’s prerogative to accept or reject the House’s proposal.  Differences are supposed to be worked out in conference, the bill amended and agreed by both bodies, and sent to the President for signature or veto.   This is a fact, not a matter of opinion.

The current unpleasantness arises because the Senate and the President – the Democratic party controlled branches of government – have refused to engage in their constitutionally mandated duty to bring the House’s bill to the Senate floor or negotiate a resolution. Instead, Harry Reid and President Obama decided that it was in their political advantage to do nothing. 

So, if you think talk is cheap, then apparently not talking is very expensive, and in this case, the cost can be laid at the feet of President Barack Obama and Senator Majority Leader Harry Reid.

Remember ...

"You're entitled to your own opinion, but you're not entitled to your own facts," Sen. Daniel Patrick Moynihan.

"Against public stupidity, the gods themselves are powerless." Schiller.

“Who controls the past controls the future. Who controls the present controls the past.” – George Orwell, 1984

"Statistics are no substitute for judgement," Henry Clay

"The problem with socialism is that you eventually run out of other peoples' money," Margaret Thatcher