Dr. Pollard, Dr. Rai, distinguished guests, members of the faculty, students, ladies and gentlemen. Thank you for your kind introduction. I want to express my warm appreciation for your generous welcome. It’s a pleasure and honor to be here with all of you in the Montgomery College community to share some perspectives and ideas from my new book, Working the Pivot Points.
As the opening to my presentation, I’d like to provide you with a definition of pivot points. Then, in the body of the presentation, I’m going to look inward, outward, forward, and backward.
In looking inward, I will discuss individual economic well-being. In looking outward, I will discuss global competition. In looking, forward, I will discuss education and innovation. Finally, in looking backward, I will discuss what pivot points have meant in history.
Pivot Points Definition and Context
To start, what is a pivot point and why are pivot points important?
Here’s my definition. A pivot point is: an area that must be leveraged and addressed effectively in order to effectuate change and achieve positive outcomes.
Pivot points are important because they define the character and shape the destiny of a nation and its people. They establish the rules of the game and influence the attitude of the public. They create an upward or downward trajectory and accelerate or decelerate forward movement and progress.
Let me give you an example. The debt ceiling debate in the summer of 2011 – and which we are about to have again this fall – and the manner in which it was handled was a critical pivot point. Although the debate two years ago centered on what in the past had been a minor issue, the nature of the process and the discourse and disgust that it engendered elevated this from a symbolic or ritualistic act in a minor pivot point area to one with significant short term and long term ramifications.
If we have no more than an instant replay of that sad and sorry spectacle this year, our confidence in and respect for the Congress which is already at an all time low will go into the basement. Our elected officials need to and have to do better.
Pivot points can be major, moderate or minor in nature. In my opinion, the major pivot point areas for the United States today include:
- The deficit and debt crisis
- Revenue deficits
- Congressional dysfunction
- Citizenship dysfunction
- Individual economic well being
- Global competition
As I noted, I will devote my talk to: individual economic well being, global competition, education and innovation.
Before I address those areas, let me make draw a critical distinction between pivot points as compared to tipping points, turning points and talking points.
Tipping points and turning points refer to a moment when something changes. Talking points, especially in the political sense, are used primarily for propaganda purposes to make the same argument over and over again to ensure that nothing changes.
The United States as a nation is definitely at a tipping and turning point. And, Lord knows there have been loads of talking points. That’s why we need to think in terms of pivot points.
Because a pivot point implies that we can “work” on that point and be proactive to bring about positive change to address it. We can be participants in the process and not passive bystanders or victims of circumstances. We can be change agents. I’ll come back to that thought at the end of my speech.
Individual Economic Well Being: All Things Being Unequal
Now, let me look at inward at the first pivot point area: Individual Economic Well Being. I’d like to title this part of my talk, “All Things Being Unequal.” That’s because they are.
We are at a crossroads in the United States today. The American economy is restructuring into three groups: The have-a-lot-more, the have-not, and the have-a-lot-less.
During the 2012 election year, over and over again we heard about the 1%, the 47%, and the 99%. For America to be America again, it is essential to ensure equality for the 100%. Unfortunately, for the past few years – and for a much longer period if you look at it closely – we have been headed in the wrong direction.
Inequality has reared its ugly head and no matter how you look at things they do not look pretty. Inequality in the United States today takes many forms.
There is income inequality; health inequality; unemployment and underemployment inequality; generational inequality; gender inequality; and asset inequality. Let me briefly highlight the nature of inequality in a few of those areas.
First, income inequality: The vast gap between income flowing to those at the top and those in the middle and lower income brackets has grown steadily over the past few years. The Center on Budget and Policy Priorities in a recent study reported that the average income of the top 1% rose by nearly 12% from 2009 to 2010 after adjusting for inflation. In contrast, the average income of the bottom 90% remained at its lowest level since 1983 in inflation-adjusted dollars.
That may sound a bit abstract. So, let me put the earnings at the middle to lower rungs of the ladder in more concrete terms. In 2011, the median household income adjusted for inflation, declined for the fourth straight year. The real median household income has fallen 8.1% since 2007.
It gets even worse. Here is a stunning statistic. 50% of U.S. workers earned less than $26,364 in 2010.
Second, health inequality: In January, 2013, the Institute of Medicine and National Research released a report on the state of American health care that compared health outcomes in the United State to those in 16 other rich countries. The report revealed that in terms of life expectancy over the past 30 years American men ranked last and women second to last and also had much higher rates of disease. Factors that contributed to the sorry state of our health care outcomes included poverty, educational level, and a lack of health care coverage
Third, generational inequality: The lack of job turnover has frozen the labor market especially for those newer to the work force. In 2012, on average there were about 23.4 million Americans un- and under-employed. According to the Economic Policy Institute, “41% of those individuals (9.5 million) were under 30 compared to their labor force share of 27%.” The Institute says that “fully one fifth” of those individuals who are working are underemployed.
These inequalities and others in some ways impact almost all Americans. But, they impact those on the middle and bottom rungs of the ladder most severely.
They are the causes for a shrinking middle class and create the conditions for a lack of mobility and potential permanent underclass. Let me turn my attention there.
In August 2012, the Pew Research Center released a report with the telling title and subtitle, The Lost Decade of the Middle Class: Fewer, Poorer, Gloomier.
The Pew report found that the middle income tier constituted 51 % of all adults compared to 61% in 1971. In this same time frame, the upper income tier rose to 20% from 14% and the lower income tier rose to 29% from 25%.
In 2012, the Brookings Institution also released a report on the middle class titled Pathways to Middle Class: Balancing Personal and Public Responsibilities. The Brooking study was somewhat encouraging. It showed that children born into middle income families have a “roughly even chance of moving up or down once they become adults”.
On the discouraging side, however, the Brookings study reported that “those born into… poor families have a high probability of remaining… poor as adults.”
The chance for a child born into a family in the bottom quintile to move into one of the top three quintiles is only 30 percent.
That’s a depressing number. And, those on the lower rungs of the ladder are feeling more depressed.
Finally, according to the Pew survey, “many in the lower class see their prospects dimming.” About three quarters (77%) say it’s harder now to get ahead than 10 years ago; only half (51%) say hard work brings success; and a full 35% say they think their children will be worse off than they are.
Taken in the aggregate, as I look inward, the breadth and depth of inequality is a cause for concern and a certain level of pessimism. As I look outward, at the United States and our nation’s status in terms of global competition, I have reasons for confidence and guarded optimism.
Global Competition: We’ve Only Just Begun and The Sun Will Come Out Tomorrow.
I’ve given two titles to this next section of my speech: We’ve Only Just Begun and The Sun Will Come Out Tomorrow. I have to confess that when I was here on April, 2011 to speak about my first book, Renewing the American Dream: A Citizen’s Guide for Restoring Our Competitive Advantage, I was not nearly as positive in my assessment and perspective.
At that time I said, “Where do we stand in the international arena today? We are running into a BRIC wall. That’s Brazil-Russia-India and China.”
These nation states have already become much fiercer economic competitors than any we faced in the last quarter of the twentieth century and will be even tougher competitors in the 21st century.”
Well, I’m here today to report that I was wrong then – at least for the time being and foreseeable future. For most of 2009 and 2010, all the Brazil, Russia India and China seemed to be outperforming us substantially in economic development terms. Then, in 2011 and 2012, the BRIC wall countries hit a wall of their own. And, now as we move toward the final quarter of 2013, the BRIC wall appears to be collapsing as each of these countries is having much tougher economic times and social problems.
The World Economic Forum produces an annual report on global competitiveness. Its new report should be out shortly. In the Report for 2012-2013 which covered the year of 2011 and came out in September of 2012, the United States fared very well in comparison to the four BRIC wall nations. Given the performance of these countries compared to the U.S., I expect we do even better in the new rankings.
In the 2012-2013 Report, the overall competitiveness rankings were:
- United States -7th
- China – 29th
- Brazil -48th
- India – 59th
- Russia – 67th
The only nations ranked ahead of the U.S. were much smaller than United States: Switzerland, Singapore, Finland, Sweden, Netherlands and Germany.
The Forum’s Report provided a detailed analysis of the strengths and weaknesses of the U.S. versus the BRIC Wall nations. Based upon my review of that data and rankings, the United States is in a very strong position compared to the BRIC wall countries.
For a variety of reasons, China still appears to be a contender over the long run and Brazil could be an up and comer – although events in 2013 such as the nationwide strikes and economic downturn create substantial doubt about that. India is falling back into the pack and Russia probably never belonged in the mix at all. Ruchir Sharma, head of Emerging Markets and Global Macro at Morgan Stanley wrote an article titled “Broken BRICs” for the November 2012 issue of Foreign Affairs that supports my assessment.
In contrast to the declining performance of the BRICs, the United States continues to do okay economically – not great but extremely well in comparison to most of the nations in the world (except for the smaller ones) who I don’t really see as direct competition for us.
Can the United States remain the leader globally? I believe so
The United States remains the primary safe haven for international investments. We already see off-shored jobs coming home. Over the next 30 years as the multinationals achieve targeted market penetration and the wage differentials between presently developing nations and the developing nations shrink, the primary drivers for off-shoring of American jobs will disappear. Finally, there is the virtually unrivalled natural resources of the United State – vast expanses of habitable land, tillable soil, large bodies of fresh water, oil and natural gas – and the absolutely unrivalled and unparalleled diversity of the country’s human resource base.
These should be the sources of our future competitive advantage. Our ability to harness the country’s natural and human resources through innovation helped make America what it is today and should enable us to prosper tomorrow.
I should stress there is no guarantee of that, however. As I see it the only one who can defeat the United States in global competition is the United States by not taking care of things here at home.
Richard Haass, President of the Council on Foreign Relations, makes a similar point in his new book: Foreign Policy Begins At Home: The Case for Putting America’s House in Order.
Education and Innovation: Bringing It All Back Home
Let me turn my gaze from looking inward and outward, to looking forward… Two of the keys for bringing it all back home are education and innovation. I’ll talk about education first.
Let me begin with an observation. We are fortunate here in the United States to have the greatest higher educational system in the world. It is unparalleled and unrivalled. People come from all around the world to study in our institutions of higher education because they are the very best. I came here from India and stayed and became a citizen to pay back on the investment this country made in me. And, in spite of problems and wide variability in results, overall our primary and secondary education is good.
Still, numerous studies have disclosed that there is a need and numerous opportunities for improvements at all levels. I want to focus on two that are central the issue of individual economic well being that I discussed at the beginning of my talk.
First, and in my opinion, most critically, we need to implement a more systematic nationally- supported approach to early childhood education. The research clearly shows that early childhood education is what matters in closing achievement gaps between children from different socio-economic categories.
Yet, at the beginning of 2013, only eight states provided pre-K education to more than half of their 4-year olds. President Obama called for a cost-sharing partnership between the federal government and the states to expand high quality publicly supported preschool programs in his State of the Union address. I am in complete agreement with the President on the need for that expansion.
Let me shift from pre-school to higher education. There are numerous things that could be done there including enhancing teacher preparation, and improving graduation rates. The overriding issue for higher education is to improve its value proposition.
I recently wrote a blog for the Huffington Post titled “Students Alone: Under Utilized, Under Paid and Under Water.” In that blog I noted that, in spite of Congress passing a bill that finally rationalized the student loan process and gave students certainty on the rates they will pay, the students still remained alone on a number of issues that affect them and their future. These include: the increased cost of a college education; decreased financial assistance; reduced employment opportunities; and/or underemployment upon graduation.
If we want to begin to reduce inequality in all its forms, we need to start early with pre-school education and carry through with higher education that is accessible, and affordable. That will require initiative and innovation.
When you say innovation most people probably think of technology, manufacturing and laboratories. Indeed, that is where much of our innovation must take place. I’d like to expand that viewpoint, however.
In the United States today, we have three industries – health care, government and education – that are consistently ranked as our least productive. Each should be an industry target for innovation. We should discover and implement innovative techniques to reduce the costs and improve the quality in those industries.
What would innovation in those areas look like? How about cutting the length of law school from three years to two years? That’s something that the President recommended recently. Or, what about writing a better education law that actually puts the states and the federal government into a symbiotic partnership to create a flexible but fair educational process that produces better results for students? That’s something that Secretary of Education Duncan called for in a recent Washington Post op-piece.
Those are just the tip of the iceberg. In my opinion, we need put on our thinking caps and apply American ingenuity and creativity to innovate in the delivery of health care, government and educational services.
Another target for innovation should be repairing America’s crumbling infrastructure. Early this year, the McKinsey Global Institute issued a report entitled: Infrastructure Productivity: How to Save $1 Trillion A Year. A trillion may not sound like a lot to lawmakers on Capitol Hill but it’s real money to me. Moreover, money spent to save money on the infrastructure would go a long way to creating good paying jobs in the construction industry which has rebounded a little since the end of the Great Recession but still has a long way to go. That’s why it seems to me that there’s a big opportunity to address the infrastructure in an innovative fashion.
The history of innovation in the United States has always been an interdependent one between the public and private sector. The government has provided funding and in some cases taken the lead in developing new initiatives that move the country and the economy forward. Think about: The Erie Canal, Lincoln’s support of the transcontinental railroad, the Panama Canal, bringing electricity to rural America and Eisenhower support of the interstate highway system. Add to the list: WPA projects, NASA and its satellites used for weather forecasting, communication and GPS, the internet.
As we go forward, the government needs to be a major investor in Research and Development for America to win the R&D race. But, the private sector needs to put its money where its innovation mouth is as well.
Pivot Points in History: Being and Becoming
Now, let me take a second and look backward at what pivot points have meant in American history in this section of my speech titled “Being and Becoming”
I hinted at that just earlier by talking about the transcontinental railroad, the Panama Canal, and the interstate highway system. The United States as a nation is only 237 years old. Over the short history of our country, there have been scores of major pivot points which have determined the economic and social terrain for the nation and its citizens. For example, consider:
- The Constitutional Convention
- The Bill of Rights
- The Civil War
- The Morrill Act which gave us our higher educational system
- Teddy Roosevelt’s Trust Busting
- The Passage of Social Security
- The GI Bill
- The Civil Rights Act of 1964
- Medicare Legislation
Now, consider for a moment, what might have happened if the results or resolution of those pivot points might have been different. Pivot points matter. They have, are, and will shape the stream of American history and the nation’s destiny. How we handle our current pivot points will speak volumes about who we are as a people and send a message that will resonate throughout the world.
Pivot points treated properly should not be about endings or beginnings but about being and becoming. They should be about listening and learning. They should be about realizing the full potential and possibilities for America and Americans.
I have looked inward, outward, forward and backward. So, that means my speech is through. Right? No. With your permission, I would like extend my remarks just a little.
Look around this auditorium. What do you see?
I’ll tell you what I see. I see our next generation of leaders. I see a group of individuals who because of the special role that community colleges and community college students are assuming in today’s society can and will be leaders in helping us address the pivot points of income inequality and global competition.
While one of the functions of the community college should be to educate students so they can go on and get a four year or advanced degree, the most important one is to equip students with the skills required to enter the workforce, to earn a good living, and to make their contribution to sustaining the American dream.
In 2010, President Obama announced the launch of an initiative titled Skills for America’s Future as a means to bring industry and community colleges together to create the 21st century work force. The members of this work force are our leaders and will enable us to compete in the global economy. They will fill the “middle skills” gap in our employment pool.
Filling this gap is essential to the future success of the nation. Research done by the Organization for Economic Cooperation and Development (OCED) for its Skills Beyond School project shows that a decade from now one in three American jobs will require a Career and Technical Education credential of some type.
Community colleges are uniquely positioned to provide those credentials. By earning those credentials, community college students will become leaders.
It is said that leaders are born not made. I don’t believe that. Leaders come in all shapes and sizes and from all walks of life. They are individuals who are properly prepared and able to fill the gaps and address the needs that exist.
Community college students with the right heads and hearts meet that definition. That’s why they deserve and will be among our next generation of leaders.
Tom Brokaw wrote a book about the World War II generation titled The Greatest Generation. I believe that you students in this audience here today have the opportunity to earn that title. So, as I close my comments, let me speak directly to you and make a request of you.
We are not in a World War today. But, we are in a war on the home front that has many dimensions and pivot points. We need to win that war for America to be America.
Too many Americans are becoming cynical and tuning out or dropping out of the political and pivot point process. This allows a minority or fringe group determine our future. We can’t allow that.
That is why I am asking you to pick a pivot point that matters to you as a citizen and get involved. Don’t sit on the sidelines or be an armchair quarterback. Roll up your sleeves and get out on the playing field.
Become a “pivot person”. Commit yourself to work on that point until the necessary and desire outcome is achieved.
I must caution you, however, that working and moving forward on a pivot point is a long hard slog. It is a marathon and not a 100 yard dash. It requires patience and persistence and the ability to come back again and again after defeats.
In this regard, let me share the words Winston Churchill spoke to the school boys at Harrow School in 1941 near the beginning of World War II. Churchill said, “Never give in. Never give in. Never, never, never, never – never give in, except to convictions of honor and good sense.” That was good advice more than seventy years ago. It is good advice today as we work to win the pivot point war.
It may not be this year. It may not be the next. It may take till the end of this decade – and maybe even longer. Eventually it will be done because time is on the side of those with the patience, persistence and principles to work the pivot points to make America work again.
Thank you for listening to me today. I look forward to joining you in working those pivot points.
God bless you.