January 2011: Five assumptions to question

A tip of the heavily snow-covered hat to the late, great New York newspaper columnist Jimmy Cannon for borrowing his signature phrase: nobody asked me, but…

French physician and anthropologist Paul Broca once observed that the least questioned assumptions are often the most questionable.

Here are five very questionable assumptions that are overdue for consideration at the start of 2011.

  1. Assumption: Government incentives for green technology will best advance 21st century job growth in the U.S. It’s become conventional wisdom, with President Barack Obama one of its most fervent proponents.

    Reality: Those jobs in wind, solar, and alternative energy technology production appear to be migrating to China faster than state and federal incentives can kick in. The announcement by Evergreen Solar that it was shutting its Massachusetts manufacturing plant, after the state had contributed $58 million in rebates, and moving to China came as an unwelcome wake-up call to those who dream of an American green-collar economy.

    As Peter Brooke, chairman of the private equity investment firm Advent International told the Boston Globe: “It was obvious that production costs in China were declining rapidly, that we wouldn’t be able to match the low-cost labor of the Chinese, and that, in fact, manufacturing would have to be outsourced.’’

    Historically, state and federal officials have a poor track record for “picking winners” through targeted investment. And even if short-term incentives attract start-ups in a given industry (solar, wind, etc.), there’s no guarantee that when these firms reach scale that they won’t off-shore production to lower-cost places.

    A better bet: Reduce the regulatory thicket start-ups often face. Support STEM education through scholarships and grants. Offer a path to citizenship for foreign graduate students in the sciences (a group that has become vital for entrepreneurial innovation). Target federal investment to research and development in university settings. Keep marginal tax rates low. These are the conditions in which innovation has been shown to flourish.

  2. Assumption: Investing in school reform efforts will dramatically improve student performance, especially in troubled urban school districts. It’s the theory behind heavy spending by the Gates Foundation and other social entrepreneurs and the Race to the Top competition pushed by Secretary of Education Arne Duncan and the Obama administration.

    Reality: While some education innovations have shown promise in raising student performance, the record is mixed, as Joanne Barkan notes in her provocative piece “Got Dough? How Billionaires Rule Our School” in Dissent‘s Winter 2011 issue. Barkan’s target is what she sees as the “faith in the superiority of the private business model” in guiding ed reform. What both she, and the well-intentioned reformers, underestimate is the overwhelming importance of culture in the way students approach their education.

    A troubling must-read front-line report on teen pregnancy and its impact on public education from Gerry Garibaldi in City Journal (“Nobody Gets Married Any More, Mister”) focuses on the cultural and social context. Garibaldi argues: “Urban teachers face an intractable problem, one that we cannot spend or even teach our way out of: teen pregnancy. This year, all of my favorite girls are pregnant, four in all, future unwed mothers every one. There will be no innovation in this quarter, no race to the top. Personal moral accountability is the electrified rail that no politician wants to touch.”

  3. Assumption: The bankruptcy of large states like California or Illinois is unthinkable because of the potential negative impact on financial markets.

    Reality: Some in Congress apparently are willing to think the unthinkable. As the New York Times noted in a front-page article, “A Path Is Sought for States to Escape Their Debt Burdens“: “Policymakers are working behind the scenes to come up with a way to let states declare bankruptcy and get out from under crushing debts, including the pensions they have promised to retired public workers.”

    The losers in the bankruptcy scenario: bond-holders and public sector workers and retirees. Charles M. Loveless, legislative director of the American Federation of State, County and Municipal Employees told the Times: “They are readying a massive assault on us. We’re taking this very seriously.”

  4. Assumption: Because of its dominance of search, Google’s market-leading position is secure.

    Reality: Google apparently doesn’t think so. The search giant has changed top management, is worried about retaining its top tech talent, and has sought new revenue streams (thwarted in its attempt to acquire Groupon, it is starting Google Offers as an alternative) largely because of the perceived threat from Facebook.

    In the Wall Street Journal (“Will Google Survive Facebook?“), columnist James B. Stewart argued: “What is shaping up is a monumental Google-Facebook showdown to win the hearts, minds and wallets of Internet users world-wide.”

  5. Assumption: The NFL teams with the best regular season records are sure to advance deep in the playoffs.

    Reality: Tell that to the New England Patriots and Atlanta Falcons, eliminated from the Super Bowl chase in their first, and only, playoff game.

With any re-examination of assumptions, it’s always helpful to remember author Jessamyn West’s warning: “We want the facts to fit the preconceptions. When they don’t it is easier to ignore the facts than to change the preconceptions.” Let’s hope not.


Copyright © 2011 Jefferson Flanders
All rights reserved

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