Neil Kraus, "The Fantasy Economy: Neoliberalism, Inequality, and the Education Reform Movement" (Temple UP, 2023)
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Welcome to the New Books Network. Okay, welcome to the New Books Network. I'm your host, Tom DeSena, from the Department of Communication, Journalism, and Public Relations at Oakland University. My guest today is Neil Krauss, the author of The Fantasy Economy, Neoliberalism, Inequality, and the Education Reform Movement. In The Fantasy Economy, Krauss challenges the basic assumption of the education reform movement of the last few decades.

The idea that both the education system and labor force are chronically deficient was aggressively and incorrectly promoted starting in the Reagan era when corporate interests and education reformers emphasized education as the exclusive mechanism providing the citizenry with economic opportunity. Krauss insists that education cannot control the labor market and unreliable corporate narratives fuel this misinformation.

Moreover, misguided public policies such as accountability and school choice, along with an emphasis on workforce development and STEM, overbroad liberal arts education have only produced greater inequality. In other words, wage stagnation, growing inequality, and even poverty itself has resulted from decades of neoliberal decision-making and not the education system.

Ultimately, the fantasy economy argues that education should be understood as a social necessity, not an engine of the neoliberal agenda. Krauss's book advocates for a change in conventional thinking about economic opportunity and the purpose of education in a democracy.

My guest, Neil Krause, is professor of political science at the University of Wisconsin, River Falls. He is the author of Majoritarian Cities, Policymaking and Inequality in Urban Politics, and Race, Neighborhoods, and Community Power, Buffalo Politics, 1934 to 1997. Neil Krause, welcome to the New Books Network. Thanks for having me, Tom. Glad to be here.

Before we start on the substance of this book, I'd like to ask you first, what brought you to this project? Why a discussion of this fantasy economy? Sure. You know, about about 10 years ago or so, I was working on some committees on my campus at UW River Falls and.

We were, well, we've kind of been in a state of crisis in the UW system for, I don't know, 12, 14 years now. But at that time, we were

Going through a significant round of budget cuts and the state legislature and Governor Walker had significantly changed tenure, really weakening the taking it out of statute and putting it into administrative rules and basically making it easy to lay off tenure faculty for any reason at all. And I was on a couple of committees on my campus kind of working on some

some things related to these changes. How is our campus going to adjust to some of these really, really significant new policies and budget cutbacks? And so I started to read about the labor market because you hear all these claims about what majors lead to jobs and what majors we ought to then get rid of and so forth. And I just started to read mostly federal data

A lot of it from the Bureau of Labor Statistics, but also from the Department of Ed. And kind of got into it more and more, and I realized that there's this whole sort of universe of data that's driving education reform that's produced basically by foundation-funded researchers, corporate-funded researchers, that stands in stark contrast to a lot of data coming from federal agencies.

And, you know, the politics of higher ed started to make perfect sense to me because

I couldn't quite figure that on one hand, we have this thing, education itself, that presumably everybody needs, right? And yet at the same time, you know, you can cut our budget, you can attack tenure. Now you can go after DEI and so forth. And you tend not to lose any votes, right, with the citizenry. I mean, you might even gain votes depending on the election and the candidates and stuff.

But then I started looking up all these actual numbers about what the labor market is like and the education system. You know, it kind of made perfect sense to me, the politics of education, because it's built around

It's built on just these monumental myths about an inadequate labor force, a labor market full of all these high education, high skill, high wage jobs, which are just demonstrably false. Those things are not true. But yet those myths are really driving the debate. So, you know, stands to reason that the public is going to get

frustrated and blame it or at least not get mobilized in support of spending more money on public higher education when a third of all people that have bachelor's degrees or greater are underemployed. I mean, I would be angry too, right? I would take it out on higher ed as well. So once I started looking up actual data, the politics made perfect sense and one thing led to another and

You know, basically eight years later, so I got the book. So, yeah. So let's get into it. In the introduction to the fantasy economy, you lay out a kind of a structure and define the idea of what you mean by that term. If you would, I'd like to ask you to read from the book, just to start us off, on page two, that first full paragraph. Sure, sure.

The fantasy economy is a misleading articulation of the economy and education system rooted in the economic self-interests of corporations and the wealthy. While its intellectual origins go back much further, I argue that it has been the product of a political campaign that was aggressively initiated during the Reagan administration in the 1980s to justify the neoliberal transformation of the U.S. political economy.

Reflecting its roots in human capital theory, the fantasy economy defines education as the exclusive mechanism providing the citizenry with economic opportunity and intentionally reduces the role of the state in mitigating the effects of the market. Thus, when confronted with the reality of stagnating wages and widening inequality, economic elites inevitably turn the discussion back to the education system

and the qualifications of the workforce. So there's a lot of ideas there and that kind of get unpacked throughout the pages of this book. Sure. And in the first chapter, you identify how this fantasy economy came into being.

Now, there are a lot of pieces to this story, like every chapter has a lot of moving parts to it. Yeah, yeah. And but there are two that seem to stand out to me and that you just talked about in that paragraph I asked you to read. Describe for our listeners the idea of human capital theory and how it fed into neoliberalism.

Yeah. Human capital theory is a theory that was basically created by economists, primarily at the University of Chicago in the 1950s and then 60s, that essentially attributed individuals' income to their formal education level or their skills. It's a little bit more complicated when it comes to skills. And it was a theory that...

was even early on kind of used to explain inequality by economists anyway, in the, in the, in the country. Um, so we start to see as early as the sixties, um, human capital theory being used in a way that, well, of course, you know, uh, low income people are low income because they're, they tend to be lesser educated. Many are didn't complete high school, so on and so forth. Um,

and it seems kind of benign uh on its face and but what happened was in the 1980s uh human capital Theory the use of it by primarily by uh you know business and uh not not exclusively the Republican Party certainly not but um uh really kind of exploded and it became invoked

routinely to explain poverty, to explain, you know, just stagnant wages for so many people. Well, go get more education, go get more skills and that will solve things for you. I mean, that paradigm

really is still with us today. When you ask, if you ask Bill Gates or you ask the CEO of one of the biggest banks in the country or ask any economic elite, what's the solution to economic inequality? They will all say, every single one of them will say education, right? Education. My book is really, I think, a significant counter argument to that, that we can't educate our way

out of poverty and inequality because the labor market is the labor market. And so, but once it took hold in not only among elites, human capital theory, but also really among all of us. I mean, much of my book is a story about how this political campaign I call the fantasy economy was targeted at education itself. So we have teachers at every level

Using this language, using these assumptions that education is the cure for poverty, is the cure for bad wages and getting economic insecurity and so forth. And, you know, this is I understand why that's the case. I mean, there's a, you know, it number one, it reinforces, I think, our belief.

view of ourselves as being meaningful and important, right? So there's something kind of obvious to that. But also, I think it's understandable when you spend as much time as I did researching for this book,

How every single report, every single, you know, foundation, corporate funded, pretty much most, almost all major media coverage exists in these terms, within this language, within these assumptions that education is the key. We have to, you know...

We don't want to talk about unions or the minimum wage or anything else. We want to talk about, you know, so, you know, fixing high poverty schools. And this is why the most strident libertarian voices are funding, you know, all of these education programs. And if you look at and I talk about this a lot in the book, if you if you look at their just their their their approach, their priorities, they're very, very, very adamantly free market, you know, foundations and so forth.

and they want to bring it all back to education, put it on the school. So yeah, I think, and I just want to take a minute too and plug John Shelton's great book, The Education Myth, my UW System colleague, John, because he really goes back and talks a lot more about human capital theory in the 50s and 60s and how it kind of took over elite discourse. I mean, I don't really do much of that. I start, most of my story starts in the 80s, but

So I would definitely recommend John's book too. Yeah, it's, it's I've been in touch with John and it's on my, it's on my list.

And I'm going to try to try to get to that later in the summer, I think. Excellent. Yeah, because, again, this is all, you know, I'm thinking about, you know, you mentioned that, you know, if you ask elites what what the answer to wage inequality is, they're going to come up with education. Yeah. And but also, you know, on the flip side, and this is, you know, interesting.

I have a son who is turning 17. And so we're starting to look at, you know, college, right? Yeah. And and I can tell you among parents of the cohort that he's in, man, there's a lot of anxiety over these issues.

Yeah.

How does it feed into, and this is again, I'm asking, this is a big question, into the idea of neoliberalism? You know, that's the big question. The argument that I end up making in the book is not exactly where it started. Because ultimately the argument I make throughout is that neoliberalism

at its core, is such a fundamentally unpopular set of ideas and policies and customs and practices that it needed a giant distraction in order to be implemented. And, you know, I like to tell the story of, you know, I grew up in Syracuse, New York in the 1980s, 1970s and 80s, and plants were shutting down regularly. And just like much of the Northeast and Midwest and other parts of the country, too.

And, you know, Ronald Reagan was not going to come to Syracuse or any place in upstate New York and in the 1980s and say, here's the plan. We're going to ship all your jobs overseas. We're going to fight unions to the point where we try to get rid of them entirely. We're going to make sure the minimum wage never comes to a vote. We're going to allow corporations to get so big and gobble each other up that they're going to become basically monopolies. Please vote for us.

It's not going to happen. So the whole discussion then, and this is a lot of what the early chapters in the book are about, the whole discussion about economic opportunity and mobility and security and all of that stuff becomes entirely about the education system. And it's all put out. And the magnitude of that

is just, it cannot be overstated. That was literally a paradigm shift that the Reagan administration and its money helped to fund. And it helped to fund at Columbia University. It helped to fund at the Hudson Institute, which I talk about a lot in the book, Workforce 2000. And we're still kind of in that mode that we're trying to get out of. And that's why in so many states,

you know, the last couple of years that have state budget surpluses, public higher ed is being cut. I mean, I, you know, I'm a political scientist. I tell people, you have to understand how meaningful that is. If you're, you're a public agency is, you know, before Trump is getting cut when there's a big state surplus. If we're getting rid of majors, when there's a big state surplus, when there's not a big state surplus, you know, uh, things are going to be cataclysmic. And, um,

So, so, yeah, I mean, I think that the implications of human capital theory kind of taking over the whole discussion about education in the mainstream for, for sure, just are absolutely huge. And we're still, we're still struggling with that.

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That's 1-800-Flowers.com slash Spotify. And the other piece to this, and there's, you know, again, there's a lot of groundwork that you lay in these early chapters. From the ideas of human capital theory, it's a really short walk to the notion that our schools are chronically failing and therefore in need of reform.

So how do you see these ideas about school failure and the corresponding reform movement having insinuated themselves into this economic fantasy land that you talk about?

When you say, how do I see the... What are you getting at in terms of... Again, it's like, how did we come to this idea that our schools are always, always never not failing? Oh, I see. I can remember that from when I was... And there's a whole long discussion to be had here. I can remember that from when I was a kid, right? The schools are failing. The schools are failing. We are failing. I think...

I mean, I would argue that, and I think this is still the case politically, the education system in our system of neoliberalism in which, and I'm always reminding my students who are, you know, a lot younger, right? This is not how capitalism was in the middle 20th century. This is most assuredly not how capitalism was. But I think in order to have this system of skyrocketing inequality and inequality

Going after unions, you know, now I think what there's a there's litigation to try to get collective bargaining declared unconstitutional. I mean, it's it's never ending in order to have this highly unequal and increasingly unequal economy and increasingly unstable with job insecurity and without pensions and and precarious health care for a lot of people in order to have all that you need to

Because it's so dreadfully unpopular and by pretty much everybody, really, except for people at the top when you unpack most of it. You need there's the education system and the workforce. If you ask business will never be adequate. It can't be adequate politically. It can't be because as soon as any.

anybody in any chamber of commerce in the United States says out loud that, no, your graduates are great. Our workforce is awesome. The people that are being produced, we're finding all kinds of great employees keep it up. And that's the whole discussion that shifts the whole debate. Now it's like, well, why the hell is everybody so unequal? Why do we have $60,000 in student loans?

Why do you pay people, college graduates, $45,000 a year in 2025? Why can't people afford a house until they're 40 years old? And it becomes an entirely different debate. So it's just politics. It's just politics to deflect. And so business is always going to talk about education because it doesn't want to talk about business. Why would it? Why would it want to talk about

business that's still outsourcing jobs and still fighting wage increases tooth and nail. And those things are not popular. Those things are not sellable. So let's talk about

the English department, do we really need English as a major? I mean, that this is, you know, tax dollars, et cetera, et cetera. Like, do we need to know French? Right. So, I mean, I think it's just, you know, I think some people misunderstand my argument. It's not any sort of conspiracy theory at all. It's just politics. You're, you know,

Economic elites are always going to talk about education because they're never going to talk about themselves and the benefits that they're getting from this system because it's not in their self-interest to do so. And, you know, and it also helps that, you know, educational achievement is directly correlated with poverty, as you know. So if we have high poverty schools, they're they're.

Pretty consistently going to be lower performing than low poverty schools. We've known that for decades and because it's correlated with with poverty, right? Educational achievement, entertainment, both so that that's hard to imagine a world where that's not the case.

Um, because life is hard in poverty and everything is hard. Everything is correlated with poverty, life expectancy. I mean, I mean everything. So, so yeah, I think it's, it's, there are a lot of, uh, the real world reasons. And then there's, uh, political reasons that are, it's just about setting the agenda and framing all the issues and, um,

And, you know, whether or not we're in a state where we're right now kind of the debate is changing a little bit. I'm not I'm not so sure. But no, I'm not sure. And I and I'm just going to, you know, maybe even just to reinforce the idea, like my son goes to a private school.

And still you have these discussions with parents who are paying, you know, a not insignificant amount of money, you know, their kids to attend the school and talking about the inadequacies of the school. Right. Like, you know, like, like schools cannot not fail. Like they have to be seen. You know, that's interesting because I think that that's, that's sort of conventional wisdom. I mean, and, and I talk to reporters all the time and,

You know, I'm not blaming people individually. If if that's the paradigm, if that's all you hear, the shortcomings of when was the last time you saw or I saw an article in a mainstream publication about the shortcomings or even minor, minor failures of business?

I mean, that article doesn't exist. It just doesn't exist in the mainstream. You have to go to select publications that are not corporate publications. But the fact that there's not, you know, there's not enough skilled workers, that's on the news pages. And when I write a piece documenting that, no, there's actually a surplus of skilled workers, that goes on the opinion pages.

You know, so so it's it's even though it's evidence, right? Yeah. Yeah. I mean, it's it's it's kind of the air we breathe, I think I say in the book at one point. And so, you know, but the politics never made sense to me. So I started to look up all these numbers and that's how I got the book. So in the second chapter, you engaged in some of what we're already hinting at here, some much needed reality checks.

Again, there are a lot of moving parts to this argument and, you know, we can't cover all of it. So, you know, go read the book. And because it flies in the face of so much of what we've become accustomed to believe about education. But you argue, in fact, that the education system is not failing, that American citizens are both more and better educated than they ever have been. Walk us through this a little bit, because, again, for a lot of people, it's going to seem really counterintuitive.

Well, the first and most obvious measure is educational attainment. You know, if you look at the number of people that have high school degrees, two-year degrees, four-year degrees, graduate degrees especially today, and compare it to 10, 20, 40, 50, 60 years ago, it's just night and day. It's just night and day. So far more people, I mean, we have essentially...

Age 25 and up today, if you count GEDs, we have very close to universal high school education, 90, 91%, somewhere in that ballpark of people 25 and up have a high school degree or GED. You know, 50, 60 years ago, it was like 50%, something like that, right?

And that's astonishing. Yeah, it is. It is. Because, I mean, you probably remember, I sure remember the campaign growing up about not dropping out of school. It's true. Yeah, absolutely. So and, you know, bachelor's degree holders, same thing. And as I said, graduate degree holders, it stands out dramatically, the number of people who have graduate degrees. So by those measures, there's no question we're better educated.

But also, and I get into this a little bit in the book, and this is definitely a book in and of itself. And so many, as I was writing the book, I thought, boy, there's another book, there's another book, there's another book. You know, Diane Ravitch has talked about, well, a lot of great things. I mean, I cite her throughout the book, but...

The fact that, you know, kindergarten today is much, you know, much higher level than it was when I was a kid, when you were a kid, first grade, you know, second grade, so on and so forth. And there are some there's plenty of evidence that shows that, you know, more kids today, first of all, that the content of the lower grades is more rigorous than it definitely was 30, 40, 50 years ago. There's no question about that.

And there's also a lot of evidence that, you know, more kids in high school take advanced courses than ever before. I mean, you know, my parents are, you know, passed away now. But, you know, in the 1950s, I mean, what was high school math in the 1950s? What was high school math at a good high school? Yeah, it wasn't calculus. I mean, I mean, you know, it did all that kind of stuff. So you could look at the content of education and educational attainment.

And, you know, there's no question that we're better educated than we were, you know, than we have been 30, 40, 50 years ago. Yeah.

and i would argue that that's why business started to use the word skills and not education there's not an education gap there's a skills gap right um because you can't you just can't make that case very factually at all that there's an education gap it's like wait a minute the the the country's littered with bachelor's degree holders including stem bachelor's degree holders that aren't working in stem fields

So it's pretty tough to make the case that, well, there's a there's a degree gap or an education gap. But skills are so amorphous that, you know, and they're always it's always changing. What what skills are we talking about? And I talk about that a lot in the book. I mean, that's really a lot of what the book is about is just about the colossal myth of the skills gap.

But, but yeah, I mean, I do, I do believe that, that we're better educated today. And are there schools that are, you know, underperforming? Yeah, absolutely. There always have been. And again, weighted with poverty. Yeah, exactly. Exactly. And, you know, there's no question about that. I also want to point out too, I, you know, Tom, I feel it's incumbent upon me. And I always point this out that, look, I'm not suggesting that, you know,

all bachelors, you know, that getting a bachelor's degree or getting a two-year degree or an advanced degree is not to your benefit or anything of the sort. Because on average, of course, on average, bachelor's degree holders do better than, you know, those with lower, less education and so on up the line. That's, I don't dispute that at all. That's also, of course, factually correct on average. That's what keeps students coming to college, right? I mean, if that were not the case,

then we'd have a real problem. But the problem is it's on average, right? On average. So you can't create more degrees for bachelor's degree holders by cranking out more people with bachelor's degrees. That's not how the economy works.

despite I think common assumptions that it, that it is. I mean, you know, we're not going to get rid of the new warehouse that was built 10 miles down the road with 1500 jobs because we crank out a bunch of STEM majors. That's not going to happen. We're just going to have a whole bunch of STEM STEM majors working at the warehouse and they're pissed because they owe a lot of money. And they're like, where's my engineering job. Um, and then they're going to blame you and blame me. And then that's the politics of education right there. Higher ed. Um,

So, yeah, I mean, I think that I do back to your original question. I do think that we are better educated today by certainly and you can look at literacy rates over time, too. You know, there's no there's no question that that's the case. People have to remember, too, that, you know, criticize high school today or high school standards or middle school or whatever. But 50, 60 years ago, I mean, as you know,

you know, the kids going to the average public high school anywhere in the country were, it wasn't everybody, right? There were a lot of students that dropped out. So even in the lowest income neighborhoods, that was absolutely true. So it wasn't, it wasn't a representative sample. And now we have representative samples, primarily because of compulsory education laws. And, you know, so, so there is, there is some truth to it. Well, it's not, you know,

maybe it's not high school graduates are, you know, a bit different than they were 50, 60, 70 years ago. I don't, I think that can be true too, saying that, you know, just because all those decades ago, you know, well, 40% of the kids dropped out and, and, or 30% or 35% or 50% in some schools. So the ones that were left, you

were the better students right and they're the they're the ones teachers saw and principals graduated and stuff like that so and the ones who took the you know the standardized tests for yeah yeah exactly exactly and SATs have you know people point to that as evidence of the failure of the schools when in fact it's really more measure of how many more people are taking the test

Right, right. Exactly. And that, by the way, that the stuff in the book that I point out there that I'm just drawing on what a lot of other people have said for decades. And in that whole chapter, much of the stuff that I draw on is not original. It's just secondary literature. And there's quite a bit. I'm sure, you know, there's quite a bit of research on that stuff, kind of debunking a nation at risk. And and there's almost there's very little debunking Workforce 2000. But it's if you read it today, I'm just it's stunning to me that

that nobody took this apart 30 years ago because it's just it's it's

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But it was gospel, and it's still gospel. I mean, even though nobody refers to it anymore, it helped create. So in the third chapter, you discuss, I think it's fair to say, why so much of this is so common sense.

That is why the fantasy economy seems so much more intuitively true than the reality that we're talking about here. You focus your attention on the creation of what I'm going to reluctantly call alternative facts about education and the economy.

So what are these alternative data and their sources and how did they come to represent something akin to our common sense for thinking about the role of education in the economy? - I mean, the big thing that I found was Georgetown Center on Education in the Workforce came along in 2007, 2008, 2009, and started to put out, I mean, a term that I coined, what I call alternative data.

on the educational requirements of the labor market. And, you know, they put out reports that said flat out the BLS was way off. The Bureau of Labor Statistics was way off. They were substantially underestimating the percentage of jobs in the economy that needed post-high school education.

And it was stunning to me that the Center on Educational Workforce was saying in the neighborhood of two thirds of all jobs will need post high school education. And the federal government was saying it was actually closer to 35 percent or 38 percent or whatever. It changes a little bit depending on the year. Forty percent. When I found that discrepancy, that that's really that day the book was born.

Because that number, that number of two-thirds, and I talk about it in the book how in the Chronicle of Higher Ed made my point for me when they said, if you've been to a conference any time in the last 10 years...

you've heard the claim that about two thirds of all jobs by 2018 or 2020, whatever, are going to require post high school education. I think, and I think the quote is some, she says something like some of us to the point of numbness or something. And I'm like, exactly, exactly. If your numbers are the only numbers, then everybody else's numbers are irrelevant. And

And if people believe, and if the Chronicle of Higher Ed and Inside Higher Ed and everybody in the higher ed universe and every dean and provost and president and chancellor and board member and everybody else believes that two-thirds of jobs require post-high school education, when in fact the federal data says it's closer to 35 or 38 percent,

And the federal data says that 60 percent. Well, at that time, they said the two thirds of all jobs don't require anything more than a high school degree. Right. And right now, that number is about 60 percent right now in 2025. About 60 percent of jobs don't require anything beyond a high school degree. You know, I was absolutely stunned when I found that. And but, you know, the funders of the CW are pretty significant individuals.

funders of all kinds of things, right? And, you know, so I think there's not a big incentive to cite federal data. By the way, this is happening now in the last couple years with the so-called demographic cliff, which is... I was going to bring this up because I...

I was the chief negotiator for our collective bargaining agreement over the summer with our administration. Yeah. I can't tell you how many of our our talks like, you know, to talk about, you know, to the point of delirium, having something repeated to you. But it's like, yeah, you know, we're we don't have any money. Demographic cliff. Yeah. Yeah. You can't pay you anything. Demographic cliff. Yeah.

Like over and over and over again. So let's, you know, talk about the demographic cliff. Yeah, I mean, yeah, you know, I mean, Nathan Graw, you know, who I believe still calls himself a labor economist, which is curious to me, a labor economist, creates his own model of, you know, of post high school education demand, right?

That's out of the reach of almost everybody, including myself. I don't know. I don't know econometrics. I don't know advanced math. And his his, you know, that there's going to be, you know, some sort of demographic cliff.

and I trace the origins really to actually Earth Workforce 2000. I mean, there's been a, it turns out, Tom, I don't know if you knew, there's been a crisis of young people and an aging population since forever, if you ask business, right? People are always getting too old and young people are always going to disappear, right? But, you know, Grau,

writes this book and it becomes the Bible in higher ed. It becomes gospel. And every administrator has it on their shelf. You know, we have to get ready for something. And by the way, this is a point I make in the book. I mean, it keeps getting pushed back. 2026 was the year, the original year of the, at least of a lot of the demographic cliff literature. That was the year that

all hell was going to break loose and nobody's going to go to college anymore. And we, but therefore we better cut all the liberal arts meters. And, and while we're at it, let's just put stuff online and be done. Right. But, you know, there's an article in the New York times a few weeks ago, and they did not have a citation for,

I assume it's a federal number. They didn't cite anything or, but you know, I pretty sure it's still up. I don't think it's been taken down making the point that in 2025, it's the biggest high school class ever or something like that. Like just this year, right. It's going to be a graduating class. Like, wait, I thought it was a demographic cliff, you know, and it's used as justification for everything, as you say. Yeah.

And I have found, I have found that it really is in many circles in higher ed. It's like faith. It's like faith. You can't look at numbers. You can't cite evidence or you can't cite sources or talk about that. If you don't believe in the resurrection, there's the door, you know, and you can go start your own church because that's our dogma.

And, you know, it's kind of sad that this is happening at institutions that are run by mostly PhDs, right? Not run by people that don't have a lot, run by an awful lot of people that have a lot of notoriety in their fields. I mean, all I did was look up federal numbers and put some politics together here, you know? Yeah.

Yeah, that's interesting. Although I'm thinking about it in the, you know, again, having these discussions over about the contract over the summer. And this is, you know, this is a different question. And I've done a podcast about this, about, you know, university administrators. They're not all PhDs.

And I think there's a level of credulity that sometimes, you know, and not to say that, you know, everyone with a PhD is a genius by any stretch of the imagination. Like we can be flim flammed as well as anybody else. But not all of the people running higher education are necessarily cut from the same cloth. No, that's true. And I think it's more true at bigger universities, I want to say, people with MBAs and JDs who are presidents and stuff like that.

Ours is an MD, so... Oh, okay. Yeah, yeah. But I think certainly deans and provosts and things like that, I think are still pretty universally PhDs. But it's, you know, people get very angry, it turns out. Yeah. I'm...

The reaction that I have received in some cases, it's stunning to me. You're getting angry, getting upset because I'm suggesting, you know, and I'm not suggesting anybody lied. I'm not suggesting anybody made stuff up. I'm suggesting Nathan Graw is is just read his book.

He is immersed in human capital theory. He believes in a mythical labor market, and he has no labor market data in the book. He is totally immersed in that world. And so he comes to the table with the higher ed is failing, K-12 is failing. And then his second book is really...

All about that, right? All about this is what we ought to do. I mean, the funniest thing, Tom, about the demographic cliff, like we could, let's for a minute stipulate that there actually is a demographic cliff. Let's say that there is one. There's no necessary response if we actually supported public policy.

higher education, well, we better invest more because we're going to have fewer students, right? I mean, it's amazing to me that people don't even see their own assumptions. I mean, you know, we could do whatever we wanted if we actually supported what we do here, right? And, you know, in the case of Michigan, in the case of, you know, talk to some

Great people in New Hampshire and other parts of the country. You know, here's what I'm sure you see this all the time. Well, enrollment went down 8%. Therefore, there's demographic cliff, right? There is no demographic cliff nationally. There's absolutely not, right? There are some, you know, places in the country that are that are

very, very slowly and in a few instances declining objectively. Um, but you can't, you know, this is like a, a business owner saying, well, we have this one job that's been vacant for six months. Therefore there's a skills gap, right? Um, because it's being used, you know, it's being used everywhere, including in States that are booming. Um,

in the Sun Belt well there's demographic cliff it's maybe just push back to 2035 or something I mean I saw something by a consultant the other day I mean they're just digging in their heels now there are actually two demographic cliffs you know and there's and that anybody can say with a straight face that anybody can say with a straight face about what's going to happen in 2035 or 2037 and I've I've read some of that stuff recently that's laughable that's laughable um

the federal government scaled back its projections to eight years, years ago, years ago, because eight was as far as you could go. And you still, you can't go to eight years really. Cause there's so many moving parts. I'm not an expert on projections, but I've looked at so many of them. And then I've looked at, okay, in 1980, the projection was this for 1988 or 1990. Now let's look at the numbers in 1990. You know, I've looked at that sort of analysis over and over and over again.

And, you know, it's very hard to project out seven, eight years. It's very, very hard. It's not just about birth rates. I just want to get that point in and then we'll move on. It is absolutely not just about birth rates, right? You can have a lower birth rate in a population that's twice as big and the population still grows. I'm not a mathematician, but I know that much, right? Obsession with birth rates. This is also a business narrative. Goes back decades. Right.

not enough people, not enough workers. Wait, the birth rate went down. Yes, the birth rate went down, but there's 340 million people in the United States. There's 338 in 1950 and 1960 and 1980, there were a hundred million less or whatever, you know, or two, 150 million. I mean, I can't believe the analysis just disintegrates the way it does quite often. Um,

But anyway, so that's a few thoughts on the demographic cliff, which, but it's like, it's like, you know, I'm a Buffalo Bills fan. It's a permanent prediction, you know, can't be wrong, right? Bills are going to win the Super Bowl at some point. And right now, Tom, that cannot be proven false because next year will come and they won't win it. I'll say, well, it's going to happen at some point. Can't be wrong.

You're speaking to a Lions fan, so... So you understand, you understand, yeah. So in the fourth chapter, you turn your attention to the educational accountability movement. What is this movement and how does it represent what you call the overarching goal of the fantasy economy? Yeah, that's the chapter really that told the story of No Child Left Behind, which is something that, you know, you and I lived through and...

I remember, you know, at the time watching No Child Left Behind get I was, you know, I was teaching in higher ed at that time, right after 9-11. And I thought it was a little bit odd that it was a sweeping education overhaul, but nobody was really talking about it at the time, given that 9-11 went on, you know, that sucked up all the oxygen for a couple of years, basically. Yeah.

So I tried to, I always wondered about the politics of No Child Left Behind. I always wondered about Education Trust. Where did they come from? You know, and I did a lot of research on a lot of groups, including them, the Citizens Commission on Human Civil Rights, because they were always the two groups cited as the two liberal groups, right? The liberals support it, therefore everybody has to support it. And, you know, I tell the story of...

goes way back. That's one that does go back to the 60s. The American Association for Higher Education really split off from one of the national teachers unions because of this, you know, striking school teachers. And they became, you know, their own thing. And they eventually helped to create education trust. So there was a long story there that nobody, to my knowledge, had told.

And one of the things I talk about in the book, and I document that all the people involved in No Child Left Behind, the big players, they talked publicly. They talked at Education Week about how, hey, the public doesn't like standardized tests. What do we do here, right? We can't, you know, they're not going to be able to sell an overhaul of education on the implement standardized tests.

by using that public campaign. So it became about the achievement gap, right? Which is of course true, right? We have an achievement gap, a racial achievement gap, an economic achievement gap. And so the whole campaign became about the achievement gap. And then, and standardized tests were hardly mentioned really at all during the late nineties and early two thousands. And president Bush ran on it basically, uh, George W. Bush. And then, uh,

You know, the loss got proposed and was in conference committee and then 9-11 happened. And, you know, John Shelton and I were talking recently and he said, yeah, he read a lot of stuff that I didn't read. I mean, he and I read kind of different things and he he read a lot of the debates leading up in the congressional debates. He and he's arguing that, yeah, it would have happened anyway without 9-11. He may be right on that. But but how it came out, though.

with this really, really systematic testing regimen that was part of federal funding now, you know, might have looked very different had it not been for 9-11 and this huge, huge distraction. And, you know, the analogy I make today is that standardized tests, I mean, no one supports them except for testing companies, really. I mean, teachers don't, researchers that are not funded by vested interests, I mean, it's very hard to find researchers

Researchers who are, yeah, No Child Left Behind has been great for public education in the United States. Very hard to find people that will make that argument. Teachers hate them. Parents hate them. Principals and teachers have used this language to me. They've said when parents complain, well, they're a necessary evil, standardized tests. Like we have to do that. We have no choice.

And but once they're in place, this is I compare it to online ed. Once standardized tests are in place and they've been in place now for 23 years or so, very hard politically to undo. Very, very hard. And that's that's what all the online education people, which basically is almost all almost all interests in higher ed now are pushing online education, seems to me. That's what they know very well.

that once we impose online in a big way, that'll be that. And it would be virtually impossible to undo. And so you'll create this sort of very clear, even more, you know, unequal education system where certain kids will have to do online to go to college and privileged kids will get to go sit in classrooms and stuff. So, yeah, it was an interesting chapter to do. And I found...

A lot of tax return data and some other stuff in there. It was all in the public domain. It's not like, you know, it's all public stuff. You know, didn't have to interview anybody or anything like that. It was just stuff that, you know, I guess a lot of people didn't look at, including people who have written books on No Child Left Behind. So, yeah. Yeah.

Thank you.

So I'm speaking to you today, as I said, from Michigan, where the DeVos family, most notably our former Secretary of Education, Betsy DeVos, is a very important figure in the health and safety of our country.

has been deeply invested in what might be the clearest expression of the merger of the fantasy economy and the education system school choice. Yeah. So how does the movement towards charter schools and vouchers factor into, into the story you're telling? You know, I think, um, and I talk a lot about the, the history there as well. Um,

It really the movement for charters and vouchers is so it's just part of this whole story. And that is the story of, you know, there's all these high skill, high wage jobs out there. There's not enough skilled workers. It's the school's fault. These kids in low income schools are are.

performing badly. Therefore, we have to have charter schools and vouchers, right? And because the myth of the labor market is so pervasive, right? And because of the myth of the skills gap is so pervasive, it's allowed vouchers and charters to really kind of take hold

And to, to, you know, a fairly significant degree. I mean, one of the points I make in the book is that they've been very careful with their language. And I, I think I documented in detail to, you know, to talk about public charter schools and to not use the term voucher to use, you know, opportunity scholarships. And because when you add, you know, people are not, they're not in support of privately run publicly funded schools, right. If you, you know, yeah.

the average voter out there, even including a lot of informed voters, doesn't, if you ask them what a charter school is, they might not know, right? Unless their kid goes to one or unless they read a lot, a lot of stuff about education. But when you tell them, and I talk about this in the book, when you tell them these are publicly funded schools, but privately run and there's no oversight and they will take money and students from your district. Wait a minute, I'm not in support of that, right?

So I think the whole, you know, mythical skills gap and fantasy economy narrative has been absolutely central to vouchers and charters. And if we only put these kids in different schools, privately run schools, because look, we have all this evidence that the high poverty schools are not

performing well, which is not untrue. Of course, a lot of researchers now, and I'm sure you're aware of this, have really demolished the notion that voucher programs, there's so much, and I touch on this somewhat in the book, there's so much research that undermines voucher programs in charter schools, right? Lots and lots and lots. And I talk about some of it, but there's a lot more.

It doesn't matter because... Really, you know that it's not real because there's not a lot of people, there are no people in well-off school districts who are aching to send their kids to charter schools. Yeah, yeah, exactly, exactly. And I don't blame parents in low-income districts. I don't blame them. I mean, I'm not...

you know this is not about the schools themselves i mean there's some great charter schools right there's some they're small and and you know there's some bunch that have been closed down too right and spent money incorrectly and um it's not about that though it's about what kind of education system we want and ultimately what kind of economy actually exists um and uh so i certainly don't blame parents for wanting the best education for their kids it makes perfect sense

So in the conclusion, you summarize the work, but also extend some of your arguments and suggest some of the implications for what happens when we continue along this current trajectory. You also identify some ideas on how to resist some of what's happening. Once again, I'd like to ask you to read from your work, if you would, from page 197.

Sure. Ultimately then, to get beyond the fantasy economy, the multiple roles for education must be re-established, which mandates removing education from the stultifying confines of human capital theory and reframing economic opportunity. I suggest that Hochschild's and Skowronik's 2003 characterization of public opinion regarding the purposes of education remains accurate today.

In fact, I argue that this is precisely why education reformers have engaged in a decades-long effort to change public opinion in a continuous attempt to implement unpopular and largely ineffective policies and priorities. Americans want a multifaceted, democratically run, well-funded, face-to-face public education system. Citizens appreciate the human relationships between educators and their students that technology can never replace.

learning about a wide range of fields and developing diverse skills, including social skills. The public well understands that educators help students in a multitude of ways beyond simple content delivery. Citizens clearly prefer a publicly funded, democratically run school system in which policymakers are accountable to voters, which is why public support for charter schools and vouchers has always been inherently limited.

The public also strongly desires an affordable, publicly funded system of higher education, as evidenced by the growing push for free public higher education and student loan forgiveness in recent years. I just think that's a beautifully put passage, and I want to thank you for it.

I'm also going to just take a minute and plug a couple of other of my podcast episodes. Last month, I did an episode with Chris Higgins, who talks about the idea of transformative higher education that I think fits nicely into what you've said there. And also a couple of years ago, a piece on the Autocratic Academy about how universities are being run today.

The second book, the author, I know, I can't remember his name now. Tim? Tim. Kaufman Osborne, right? I think. Yeah, yeah. Okay. Yeah, no, I know that book. I know that book. Yeah, yeah.

No, that's great. I'm not familiar with the first one. I'm going to check it out. Again, you know, so the epilogue, you kind of, you know, again, this was an eight year project, you said, right? And so in this epilogue, you catch us up on some of the events that have occurred since you started it.

including the pandemic that upended so much of what we thought about education, as well as accountability in higher education and the idea of good jobs. So as we start to wrap up, can you describe a little bit of this for our listeners? Yeah, sure. I mean, the pandemic, I was kind of finishing the book during the pandemic or not quite finishing, but getting close to the end. And I noticed, first thing I noticed right away, I mean, we're talking April of 2020, right?

an immediate massive push to shift education online forever. It would, you know, I saw this in the university of Wisconsin system, which put out this report that was, you know, we must, I mean, it was just, it's embarrassing to read now. And this is like four weeks after three weeks after the, the four weeks after whatever, maybe it was may, it was right after in May, 2020. Um,

The country shuts down. And then, you know, I talked a little bit about the Gates Foundation partners in New York State and, you know, Andrew Cuomo just reads talking points of, you know, why we ought to have online education everywhere. It was pretty brazen. It was pretty brazen and...

And I'm looking at the pandemic at that time, and I'm thinking about the chapter I just wrote on 9-11. And I'm thinking the pandemic is like 9-11 on steroids, right? So I'm like, whoa, wait a minute. And I wrote a bunch of opinion columns during that time. So there was that push that was overwhelming in K-12 and in higher ed from foundations, from corporations, from business interests. It was also the Trump thing kind of,

you know, center on educational workforce was, uh, you know, decided to, I think with JP Morgan chase put out some stuff about, um, good jobs, right. Good jobs. There's still, you know, cause Trump in part, this is anything he's moved away from this rhetoric, but in part, and when he was initially elected, it was, you know, there aren't very many good jobs anymore. He was somewhat critical. And I'm thinking, does he know what he's saying here? Um,

And so then there was I argue that that was a direct response to Trumpism. And no, there really are a lot of good jobs. But then the consultants that I cite and, you know, McKinsey, I mean, they define good jobs. It's stunning. The salary levels. Right. Utterly. Yeah. It's really easy to count zillions of new jobs when you define them. The wage so low that, you know, where do they live?

Yeah, yeah, exactly. Exactly. And, you know, so I started looking up a lot of that stuff. And, you know, it was it was it's always going to be.

kind of happening I mean the fantasy economy what I what I call a fancy economy is a political campaign it's it's not going to stop anytime soon uh it can't stop business it just in self-interest it's it would be like you know you know the oil companies coming out in support of of not consuming oil anymore in our economy it's just it's just not going to happen

And there's a long tradition of this way back, you know, 100 years to 120, 140 years, always find fault with the schools and never the economy. Right. Certainly never business. So, yeah, I saw a lot of that stuff happening in real time. And it was and because I was so immersed in the research, I was looking at it very differently than I think most people are.

And what happened in the pandemic, I think, isn't that surprising with regard to, you know, I remind students of this all the time in our hyper polarized political system. We actually we actually agree. We being most of us actually agree on a lot of things. You know, I think we agree on a lot of things with regard to education. I think there are, you know, online education is very limited demand. I think that that unites people.

black, white, poor, middle-class, wealthy, Hispanic, et cetera, et cetera, parents. And most students has, it has had limited demand since it appeared in around 1990 or so. So it has to be imposed basically. I'm not saying we ought to get rid of it. Not never suggested that, but I know where this is headed and, or could head. And I do think, and I, and I think that, you know,

Nobody wants to borrow $50,000 to go to a public university, but they have to, right? That's a political choice of legislatures and how they're taxing and spending decisions. There's no necessary reason for that. That's been a gradual...

defunding of public higher ed, right? Which has caused the student loan crisis, just to be clear. Young people today, even a lot of middle-aged people today have no idea that 60, 70 years ago, public higher ed was almost free. They have no idea. This has been just written out of history, you know?

No reason why we couldn't go back to a model. That's just a political choice, you know, that model. So just not to interrupt, but again, we did a, I did a podcast episode guy by the name of Charlie Eaton. His work, his book is called bankers in the ivory tower or yeah, bankers in the ivory tower. And, and he describes exactly what you, what you just said. Yeah. In, in a considerable amount of detail.

Yeah, no, I'm familiar with the book. Yeah, I haven't read it, but I'm familiar with it. Yeah. Yeah. So yeah, and then pandemic ended. And, you know, the, it's so funny, the foundations were upset. We don't want to go back to usual because, because higher ed is not providing social mobility. No, it can't, it can't create jobs and give people raises. Yeah.

You know, it's always the framing is always anti-education has to be has to be. You can't put political pressure on something by acknowledging it's doing anything good. I mean, I was a little stunned at the over the top rhetoric going after higher ed that I think I end the book on.

Link it like George Floyd linking it's higher ed's fault that I mean, it was just it's embarrassing to read that stuff today. Right. And I'm sitting here thinking, boy, that's not the higher ed I've been involved with for 25 years. That's not those aren't the colleagues and friends and and academics who spent their careers writing about and documenting inequality and trying to overcome racism and sexism and so on and so forth. I mean, this is a joke that this stuff is being cranked out of places like Georgetown, you know.

But boy, if you're if you're in a defensive posture like higher education has been for a long, long, long time, then it's like, OK, OK, we'll change. We'll change whatever you want. We'll do it. We know we suck. We'll do it. You know, and it's and now more than ever. Right. They're they're they're almost preempting like Michigan is preempting the discussion about DEI by just sort of giving in right at the outset.

Yeah, no, and that's happening essentially in Wisconsin as well. It's happening all over the place. So, yeah, I think within a new paradigm of economic opportunity, I think we can start talking about education and thinking about education in a very different way and really start talking about economic opportunity. It's not that education is not related to it, but, you know, at the end of the day, employers, policymakers create opportunities

Most of the rules that affect jobs and wages, most of the laws, most of the business practices and higher ed not only doesn't do that, but can't do that, can't do those things. And I think I'll just end on an upbeat note. I think I think the public gets that. I really do. I think at one level, the public gets it. I think the hardest audience I typically face is inside education, which you wouldn't think that.

But John Shelton and I have talked about that an awful lot. Our heart, you know, his book's called The Education Myth. My book's called The Fancy Economy. It's like getting through to a lot of our colleagues, many of whom were to the left of us, I think, in my opinion, is harder. I understand that because I read the literature and I wrote a whole book about it, you know, about how we're failing and the public's losing confidence in us and everything else. But at the same time, I think it's,

it's, you know, we're making some progress there too. And, you know, it's easy. You talk to somebody in business in the outside world, they're like, yeah. Oh yeah. You're writing a book. What's it about? I tell them, I say, oh yeah, I guess there aren't a lot of great jobs either. It's not a stretch for them. You know? Um, oh yeah, I guess if Mike Basser's degree doesn't guarantee anything. Oh yeah. You know, they'll tell you about their 20 year, 28 year old daughter or something. I mean, it's not a stretch. It's not a stretch. Um,

So I'm hopeful. I am hopeful. I'm critical, but I'm hopeful. Good stance to be in. Well, Neil Krauss, thank you for your time today. I do have one last question that I always like to pose to authors. So what's next? You know, that's a great question. I have ideas about a book, kind of sort of the...

at least in its idea stage, the sort of attacks on educators and all the different things, policies that have really kind of de-professionalized teaching as a profession over decades. And

That's kind of a loosely formulated thought. A lot of it will come from stuff that I discovered during the research for this book. But I'm active in AFT Wisconsin, in Wisconsin. I'm president of our local chapter, United Falcons, on campus. We don't have collective bargaining, but we are an active group that lobbies and works very, very hard on behalf of the UW system.

to, to, we, we lobby the UW system, right? We push back. We're the only organization that I know that's pushing back hard on austerity. That saying out loud over and over again, that this is a political choice, especially when there's a budget surplus. So I'm very active in that as is John Shelton, who's the president now of, of the, of AFT Wisconsin. So that takes up a lot of my time these days, but I do want to write another book. So.

All right. Well, good. Best of luck to you. Thank you. Once again, my guest today has been Neil Krauss, the author of. Oh, my gosh, I wrote the wrong thing. The author of The Fantasy Economy, Neoliberalism, Inequality and the Education Reform Movement from Temple University Press. My name is Tom Desen and you're listening to the New Books Network. Hear that?

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