In Monday’s Washington Post, Education Secretary Arne Duncan was confident that the Elementary and Secondary Education Act, now known as No Child Left Behind (NCLB), will be reauthorized this year, arguing that “few areas are more suited for bipartisan action than education reform.”
But Duncan should take a step back and note that there are wildly differing views on exactly how to approach the country’s largest federal education law.
It’s true that voices across the political spectrum and much of the public are dissatisfied with the NCLB status quo. But Duncan shouldn’t count on consensus about the solution just yet, especially not with a new Congress in town. A reauthorization process would provoke a major clash between two very different philosophies about the federal role in education.
As rumors of an NCLB reauthorization float around, the most important question is: What is the proper role of the federal government in education?
One view, held by Duncan and the Obama Administration, is that the federal government can and should play an increasingly large role in American schools. They may have concluded that NCLB is broken, but that doesn’t mean they think the federal role in education is fundamentally flawed.
While the Administration will likely use the language of transparency and flexibility to rally for their reauthorization plan, their current course sets a trajectory for more government involvement in local education.
From Duncan’s point of view, special interest groups such as the education unions should have a place at the bargaining table, despite the fact that they have shown little interest in or willingness to compromise on what’s best for children. Duncan also sees a role for the federal government in what children across the country learn in school and has put federal money behind national standards and tests that would shape curriculum in schools across the land. But such a move would do more to empower bureaucrats in Washington than those closest to children.
The Administration’s philosophical approach to education reform also includes more spending from Washington. This was evidenced by the nearly $100 billion the Department of Education received through the stimulus and the $10 billion public education “edujobs” bailout last year.
The second philosophy believes that in order to help American students realize their education potential, Washington needs to get out of the way and stop trying to act as the nation’s school board. And because educational authority is constitutionally reserved to the states, there is very little the federal government can do to improve local education. The federal government not only lacks the authority to manage local schools but also provides less than 10 percent of school funding, meaning Washington is ill-equipped to serve the diverse needs of 50 million school children across the country.
Restoring federalism in education means moving dollars and decision making out of Washington and putting it back in the hands of state and local leaders. Conservative leaders in Congress have suggested that this will be their approach.
In any debate over NCLB, policymakers should keep two guiding principles in mind:
- Washington-centric education reform has been tried for more than four decades and has failed. More money and more federal programs are not the answer to improving education. The United States spends more than $10,000 per pupil per year, and per-pupil expenditures have nearly tripled since 1970. Yet reading ability has stagnated, achievement gaps persist, and graduation rates have idled. Federal intervention has not improved America’s schools.
- It’s time for a fundamentally different approach to education reform, one that empowers those closest to students. Distant, unelected bureaucrats in Washington are the farthest from students, yet they create much of the red tape local schools have to deal with. Education reform should begin to restore federalism in education by allowing states to bypass federal bureaucracy and use their share of federal education funding to meet their students’ needs and to act as laboratories of reform and innovation.
There is an alternative to NCLB that would go a long way in achieving these conservative principles: the Academic Partnerships Lead Us to Success (A-PLUS) plan, introduced in various iterations in recent years. Such a proposal would promote greater state and local control in education by allowing states to consolidate funding from dozens of federal education programs, bypass all the red tape, and direct resources to the most pressing education needs among their students. The A-PLUS plan also requires accountability through state-level testing and transparency about results for parents and taxpayers.
If this Administration is truly interested in using the reauthorization of NCLB to improve American education, it should back up its talk about flexibility and transparency by allowing states to opt out of burdensome federal mandates and direct money to the education priorities that make the most sense for their students. Coupled with requirements for transparency about results, such flexibility would ensure that the needs of students—not the demands of education unions, special interest groups, Washington bean-counters, and bureaucrats—will be met. Such an agenda is likely to garner broad support.
We don't have enough public market acquirers to sustain the start-up ecosystem.
That was the real back story that explains why Google failed to close a deal to buy
Groupon. Groupon wanted to
sell to Google for $6 billion. Of course they did, that is a huge amount of money – real cold hard cash – for a 2 year old
venture. Do you really think they turned that down for the vague possibility of
making more from an IPO in the distant future? Yes we all hear the stories of
visionary entrepreneurs who are such bold risk-takers and some of that is true but
most entrepreneurs don’t love risk, they love eliminating risk on the way to
building a venture. The real story is that Groupon only backed off due to worries that the deal
would fall into AntiTrust
hurdles.
If we only have a handful of acquiring companies (basically today it is Google,
Amazon and Microsoft, now that eBay and Yahoo are wounded), the AntiTrust hurdle becomes more real. Even
if there is no AntiTrust
issue, Google, Amazon and Microsoft simply cannot buy all those venture-backed
companies.
So we need Groupon to go public and use their public
currency to buy other ventures working on local advertising/ecommerce. That will be
good news for lots of ventures. And a Groupon IPO success
will spur on other ventures that are getting ready for IPO.
I don’t know if Groupon really have the solid
financials to go public. We won’t know until they issue their prospectus to the
SEC. Until then we only have rumor and speculation. But if I were a betting man, I
would bet on Groupon being able to go public before
Twitter. And, this will be more controversial, before Facebook. But that as they say is another story. I am not trying here
to compile an actual list of ventures that could IPO in 2011. This is more about the
general environment for IPOs.
This has been what Steve Blank calls the “lost
decade” for tech IPOs. So why do I think that 2011 will be the year this
changes? There are 5 reasons:
- Private
markets are under SEC scrutiny. This takes away the easy option of getting
liquidity without either selling or going public. If you have more than 500
shareholders you have to make your financials public, it is the law. - There is a
backlog of great companies that have the financial strength to IPO. The IPO market
has been pretty well closed for a couple of years (some notable exceptions prove the
rule). So the companies that have the potential to IPO have had more time to grow and
get their act together. - Investors
are hungry for growth outside emerging markets. GDP in America and Europe seems to
have a ceiling at 3% and the Chindia and BRIC stories of
emerging markets growing at 8-10% has created too much capital flowing to those
markets (generating fears of a bubble). So investors want companies in the developed
markets that can grow at really fast pace (at least 30%, ideally 60% plus) from a
base of at least $100m revenue for a long time to come. That has to come primarily
from tech/media ventures. - The
macroeconomic picture is improving. Yes, there are always worries and another
crash is always possible, but "markets always climb a wall of worry" and the general
trends seem positive. But cycles don't last forever, so the people making these
decisions (Boards and their Investment Bankers) will look at 2011 as a good window of
opportunity. - The bean
counters have figured out how to live with Sarbox. For a long time, Sarbanes Oxley ("Sarbox") regulatory overhead has been seen as a reason why you cannot
run a public company. Baloney, as they say in Brooklyn. It is a simple bit of
operational overhead, a rounding error for a great company.
IPO is still the golden ticket. Real entrepreneurs want to IPO. Getting acquired
is a great way to build capital, but it is not the dream of the really driven,
talented entrepreneurs. There are logical reasons for this. The valuation at IPO is
usually (not always, plenty of exceptions to this rule) higher than you can get from
an M&A exit. And more importantly for the
entrepreneur, it is actually often easier to manage public market investors than a
bunch of VC with different agendas. But logical reasons be damned, an IPO is simply
the big badge of honor for the entrepreneur and the investors who back him/her.
It is not clear what we will call the decade that starts in a few days time
– the “teens” maybe – but it will possibly be one where we
get a sustainable IPO market for tech ventures. By “sustainable” I mean
that it cannot be a return to the Dot Com bubble years. Only great companies with
really solid financials will get through the IPO gate. And the valuations will have
to remain grounded in reality (short sellers will ensure that is the case).
Here’s hoping. Happy New Year folks.
free rental agreement forms
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