U.S. progressives have lionized Senator Elizabeth Warren as champion of the 99 percent against the powers of Wall Street. But how many have looked up her views on education? They should, because she is equally right on that subject.
Progressives take note: Elizabeth Warren wants school choice, in other words vouchers, for 100% of American public school students. She calls for a system where “parents, not bureaucrats, would have the power to pick schools for their children” 1 — more or less pure Milton Friedman.
In Warren’s analysis, school choice is not just about education. She sees vouchers as a key lever for society to hold down housing costs, revive our inner cities, help the middle class boost its standard of living, and more.
Warren came to this stance through her research into consumer finance, her original field of legal expertise. Her thesis about the link between school choice and the economy is laid out in her 2003 book, The Two Income Trap. 2
Her argument goes like this. For the past half-century or so, Americans have perceived suburban schools to be better and safer than those in cities; and schools in towns with more expensive homes, better than those in less-wealthy towns. Perception is reality, and this perception led us to a real crisis, for both schooling and housing.
The crisis was spurred, Warren explains, by an under-appreciated 1975 law, the Equal Credit Opportunity Act (ECOA). This was a progressive step then, but it carried unintended consequences.
The ECOA outlawed the practice, then standard, whereby banks disregarded a woman’s income when when judging a couple’s ability to repay a home loan. The idea at the time was that a wife’s income was unreliable, because she was likely to quit her job to stay home with kids.
But according to ECOA, that was sex discrimination, and it became illegal. The incomes of both spouses now had to be counted for loan qualification.
Presto, under ECOA, two-earner families could qualify for larger mortgage loans, because both incomes were considered for repayment ability. And thus two-earner couples could buy more expensive homes, in supposedly better school districts.
The result, Warren says, was a “bidding war in the suburbs” as millions of parents stretched for the best houses — and thus the best perceived educational opportunities — that they could afford for their children. As housing prices shot up in response to the bidding war, two incomes became a necessity, rather than an option, for families who wanted their children in so-called good schools.
Warren calls this “the housing trap.” Today, two-income families may be working harder than ever, but in terms of housing, they’re more-or-less just keeping up with where they were on a single 1975 income, because of the housing trap.
Of course, house prices were driven even higher by the easy-credit bubble until that burst in 2008. Prices slid in the recession but have climbed again in the recovery, so that we essentially are back in the same crisis that Warren saw in 2003, when she published her analysis.
To escape the housing trap, should we undo the ECOA, which more broadly outlaws discrimination, sexual and otherwise, in lending practices? That’s not the answer, obviously.
“At the core of the problem,” Warren says, “is the time-honored rule that where you live dictates where you go to school.”3 In our system, “a bureaucrat picks a child’s school, not a parent.” (Could Milton Friedman have said it any better?)
Although Warren calls initially for a “public school voucher program,” ultimately, she says, “an all-voucher system would diminish the distinction between public and private schools.”4
More importantly, Warren says, with an all-voucher system, “the U.S. housing market would change forever.”5 Housing prices across the board would come down (or at least not rise as much) as families no longer feel the pressure to buy more expensive houses for the sake of their children’s education. And with schooling no longer tied to your zip code, middle class people would be willing to move back to the urban cores, helping to revitalize our cities.
A voucher system also would benefit low-income families, who would be able to choose the schools best for their children, instead of putting up with whatever perhaps failing institution happens to be in their neighborhood.
Let me add that the millenial generation, as they start families in the years ahead, might benefit most of all. They now are plunging into the housing trap with less ability to afford it than their parents, as house prices get bid up well beyond inflation, while middle-class incomes turn south. (Are you with me, millenials?)
To all liberals and progressives, I say: If Elizabeth Warren is your champion on financial issues, she deserves to be your education champion also. I’m referring to the Elizabeth Warren of 2003! She hasn’t said anything publicly about this, to my knowledge, since entering politics!
Opponents of school choice invariably trot out cliches about public schools being a foundation of our society. “But who are we kidding?” Warren says in the book. “Schools in middle-class neighborhoods may be labeled ‘public,’ but parents have paid for tuition by purchasing a $175,000 home within a carefully selected school district.”6 (The price has gone up since she said that.)
Could Warren’s school choice vision really come to pass? It’s a long shot, obviously. Although educational policy in our country fundamentally is determined at the state and local level, the federal government wields much influence with its education aid dollars. Thus perhaps Senator Warren will find an opportunity to influence policy in this area. But her Democratic party, with its over-reliance on support by teachers’ unions, almost certainly will never allow this debate onto its agenda.
If Warren remains true to her teachings about the housing trap, obviously she will need to team up with Republicans on this issue. We need to be careful, however, of alternatives that may be advanced by Republicans, who are overly susceptible to being co-opted by corporate interests. We have seen this play out in the scandalous case of for-profit colleges, whose main mission is milking cash from federal educational grants and loans, while delivering worthless degrees and saddling students with debt.
I would favor requiring all schools to be run by non-profit organizations. These could be religious groups, as long as religious instruction is kept distinct from secular classes; vouchers subsidize only the latter; and students can opt out of the former.
Of course, under school choice there still will be a role for governments to set educational standards, and to evaluate school performance and student achievement. This is a challenging issue, as it is today for public schools. There’s no reason it should be any more challenging with a voucher system.
In any case, the battle for school choice will be a fragmented one, taking place separately in each state. A path to universal school choice most likely would be realized by vastly expanding the charter school movement. Today, charters essentially are a scarce commodity, who choose their students rather than vice-versa (or in some cases there’s a lottery). To turn this equation around will essentially mean converting every school into a charter school. In some places, expanding choice will require extending options across school districts, so that the very significance of a school district becomes moot.
Opponents will point to some existing charter schools that have not performed well in standardized tests or other kinds of evaluations. But under what Warren calls an “all-voucher system,” which we essentially have never seen in this country, parents will be able to switch schools, creating competitive pressure for the lower-performing schools to improve or close.
In 2016, progressives and the libertarian right found common cause with presidential candidate Donald Trump in opposing the Trans-Pacific Partnership trade agreement. In that spirit, I urge liberals and progressives to seek alliances with the libertarian wing of the Republican party on education. In this way might there come about the political will to bring into reality Elizabeth Warren’s sensible libertarian vision.