Bill Gates in a TED talk about state government spending – watch video
Microsoft's former boss says public spending practices need to change with the times
Bill Gates along with his wife Melinda have become role models for philanthopy, and after shaking up the world with personal computing it seems that the former Microsoft CEO wants to shake up entrenched thinking among politicians and public service workers. It will be interesting to see how viral the ideas Gates proposes in this TED conference talk.
At first blush Gates dissertation might warm the hearts of those education advocates who decry the lack of spending in the education sector. There's no question Bill Gates is arguing for strong and sustained funding for public education by taxpayers. However, Gates does something few advocates in British Columbia try – he looks at the numbers, and explains the challenges without pointing fingers.
Many will remember an early campaign promise by BC Liberal leadership hopeful Kevin Falcon – a proposed plan for merit pay for teachers. The reaction from the teacher's union and other education system critics was we might have guessed. Falcon is an unbridled right wing ideologue! This is unworkable! It didn't go down well in other words.
Well, not only was the merit pay for teachers idea floated by President Obama in his last State of the Union speech, we see now Bill Gates advocating strongly for financial incentives for good teachers as a way to make our education system more efficient. Think the FSA tests, which happen in only two grades (four and seven), are a backhanded way to judge the quality of teaching at a school? Gates goes further by suggesting that we set up cameras in classrooms to study and grade the abilities of teachers.
Gates' broader argument is one that I think we should pay attention to. He says that deficit spending in US states is completely unsustainable. Money alotted to education will inevitably shift to health care mainly because governments are deferring future costs like pension plans for workers, instead of budgeting them as today's cost.
He describes this practice as something that would have made the thieves from Enron blush. He also says that it shifts money we should spend on our youth to our elderly. Or in other words, governments will be unable to invest in the future of their society.
I think Gates diplomatic demeanor during his presentation conveys the seriousness of the crisis he describes. Of fifty US states, according to Gates forty-seven are in deficit. Their budgets are "balanced" in name only. "At least a half dozen" states he says are in a worse financial pickle than California, which is basically broke.
He makes another good point – his most important one of the talk – that we need a more robust debate and a much improved understanding of how these mid and local level governments are spending their budgets. He points out that the State of California spends three times as much as Microsoft, and six times as Google, yet the analysis and critique by financial experts of the State's spending is a fraction of that which occurs for those private companies.
What's Gates' solution to this crisis? He has three broad suggestions.
- Better tools to educate ourselves. Put more data online and use the critical mass of internet to help the public to make better decisions. Better practices from one school district can more easily be adopted by another in this case.
- Use clear and honest accounting. In B.C., GAAP principles were adopted under the BC Liberal government, but what else can we do at the Provincial and local level of government? For example, the City of Vancouver stopped producing its annual budget book after 2008, and frequently posts PowerPoint presentations instead of written reports. These measures make government more opaque and challenging to understand, just the opposite of what we should be doing.
- We need courageous politicians who don't get booted from office by telling the public the truth about budgets. Leadership is a vital and rare commodity. Vision Vancouver and COPE, for example, supported the deferral of school closures until after the 2011 election. It's this kind of politically expedient decision that Gates takes aim at.
To get a better understanding of the political origins of the budget crisis California currently faces I recommend reading Steven Malanga's essay from City Journal, The Beholden State.
UPDATE: Coincidentally, Sunday evening's 60 Minutes program featured a story about a charter school in New York that is attempting some of what Gates proposes. See the follow-up interview with reporter Katie Couric, where she admits the 'jury is still out' on whether this school's approach will work or not.
- post by Mike