Online Instruction, Budget Transparency, and the Cost of Education

For the last ten years, UC-AFT has been fighting a battle with the University of California over budget transparency. One of our main concerns has been how much it actually costs to educate each individual undergraduate student and how much funding does each student generate in state and tuition dollars. So far the Office of the President has refused to make these calculations because they do not think you can or should separate teaching from research and administration, and even though the new rebenching funding model does try to account for the different costs structures related to undergraduate vs, graduate vs. professional education, the university still insists that it would be too costly and time-consuming to really determine the cost of educating different types of students. However, the push for online education should motivate UCOP to change its strategy because the Regents and the state are under the false impression that distance education can solve the university�s fiscal problems.

The main reason why the Regents and the governor are misguided is because they do not know that the highly-impacted, lower-division courses that UC wants to move online may be the only thing that really generates a profit for the university. For example, in looking at my first- and second-year students� transcripts at UCLA, I calculated the average, yearly direct instructional cost for a typical lower-division undergraduate student. I found that since students in their first two years at UCLA tend to take 8 large courses (averaging 200 students) and 2 small classes (averaging 25 students) each year, and half of these courses are taught by lecturers, the total direct instructional cost per year is $1,950 (an if we add 20% for benefits, it costs $2,340). (UC brings in $16,000 per undergrad student in combined tuition and state funds).

Here is how I made this calculation: since the average full-time lecturer salary is currently $60,000 and the full load is 8 courses, each of the courses cost $7,500. If a lower-division student takes four large lecture classes (averaging 200 students) with a lecturer, the cost per student for each course is $37.50. In the case of senate faculty teaching lower-division lecture classes making $100,000 for four courses a year, the cost for the four large lecture classes is $500 per student. If we then do the same calculation for small classes of 25 students, the cost for a course taught by a lecturer is $300 and the course taught by a senate faculty member is $1,000.

One can argue with this methodology, but what should be absolutely clear is that it is virtually impossible for the online program to deliver education for less money. Although the Regents and the Governor bemoan the fact that universities have failed to follow other �industries� by reducing costs through technology, what they do not see is that costs have been reduced by the use of large classes and non-tenured faculty. However, UCOP does not want to make this argument because its entire budgetary structure is based on half-truths and abstract calculations.

Making matters worse is the fact that the UC has already spent a lot of money on the online pilot program, and studies have shown that universities constantly under-estimate the real costs of distance education. For example, in his article �The Costs and Costing of Online Learning,�, Greville Rumble looks at the actual costs of using online courses at research universities. His main finding is that previous research on this topic failed to take into account all of the related expenses: �One of the problems with many of the studies now available is that they report the broad results, not the detail. It is therefore difficult to know what has been included and what excluded, and so whether the costings undertaken are comprehensive. Experience suggests, however, that all figures need to be treated with care. What does seem clear is that the costs of developing a course are being pushed up�and significantly so whenever media are used in a sophisticated way. If so, and if cost efficiency is an important consideration, then savings may need to be looked for in delivery.� Rumble here argues that one of the main cost drivers in online courses is the development of the class material.

In fact, his research shows that if universities want to produce a high-quality educational experience, they have to spend a great deal of money: �The high costs of developing internet courses are confirmed by Saba, who suggests that commercial software companies developing courses for online instruction or publishers are spending at least $500,000 to fully develop a multimedia course.� It is important to note that when universities present the cost of new online programs, they usually do not account for the initial costs of course development.

Rumble also believes that although these new programs are often used to save labor costs and faculty time, the opposite often happens: �A high proportion of the costs of developing materials is labor costs. All the research shows that it takes more academic time to develop media that will occupy a student for one hour, than it takes to develop a one-hour lecture�although how much more time is difficult to quantify. Sparkes reckoned that it took from 2 to 10 hours to prepare a lecture, from 1 to 10 hours to prepare a small group session, and from 3 to 10 hours to prepare a video-tape lecture; however, it took at least 50 to 100 academic hours to prepare a teaching text, 100 hours to prepare a television broadcast, 200 hours to develop computer-aided learning, and 300 hours to develop interactive materials�to which in all cases one needed to add the time of technical support staff.� There are thus a lot of hidden costs involved in developing online courses, and these expenses rarely show up in presentations on the cost-effectiveness of computer-mediated education.

Universities also sometimes underestimate the expenses related to delivering online courses: �In general none of the studies undertaken to date adequately factor in the costs of overheads. Although, the costs of putting in equipment directly associated with the projects (e.g., servers) are usually taken into account, as are the costs of software licenses, college operating budgets do not usually reflect the full costs of maintaining networked services.� It turns out that it is very hard to calculate the total cost of software licenses, network maintenance, and equipment for online programs, so universities simply make a guess and present it as a fact.

Furthermore, universities have a hard time predicting the number of staff and administrators they will need for a new online program: �Much depends on the context�the time spent agreeing that a group of enthusiasts can develop a project will be very different to that required to change an institution�s direction. Indeed, developing an IT [information technology] strategy is likely to be expensive.� One thing that we can be sure of is that the use of online courses drives up the cost of administration and staff while further squeezing instructional budgets. I hope to make this argument to the Regents and Governor Brown to show them the folly of the online fiscal panacea.

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The UC Regents, Governor Brown, and the Online Hail Mary

During the most recent UC Regents meeting, one theme that continued to raise its ugly head was the specter of online education as the great economic cure for all that ails the university. The UCLA Faculty Association blog gives the following summary: �Regents chair Lansing pushed for more progress on online education. Others, including Lt. Gov. Newsom, were also impatient about UC progress on online education. One of the student reps was not so convinced that online education was quite the panacea that some Regents seemed to think . . . Governor Brown reflected on the discussion of online education. Tradition is a Good Thing but UC might be going the way of the Post Office and print newspapers in the face of digital developments. The proposed UC budget would increase by 9% and unless there are tuition increases the state can�t afford such projections. UC has to assume budget squeezes and find new ways to deliver services. Maybe this is more threatening than when the Regents faced Angela Davis teaching on a campus. Why can�t the Regents have experts come and talk about such matters at the next meeting? Lansing agreed to that idea and it was ordered. Lt. Gov. Newsom (if I recognized his voice) seemed to want to help design the session. Provost Dorr was criticized for not moving the online matter along faster. Chancellor Birgeneau of Berkeley said that in fact we are well engaged in online education and that the Regents seem unaware of it. (�We are leading the world.�) Gov. Brown pointed out that the Berkeley examples are not for credit. There was back and forth about what was for credit and what wasn�t. It was decided that the presentation for the next meeting will also include what UC is doing now on online education.� So it looks like the next Regents meeting will contain a presentation and discussion of the current state of the online project and what we can expect in the future for UC digital education.

This push to solve the university�s funding problems through online education needs to be put in a broader context. Recently we have witnessed many of the most elite universities in the United States jumping onto the MOOC (massive open online courses) bandwagon, and we need to ask, why are they doing this? After all, schools like Stanford, MIT, and Harvard are defined by their selectivity and high costs, and so it seems strange that they would want to promote a form of education that is open to the masses for little if any cost. Perhaps, these institutions just feel that more people in the world should be exposed to their expert knowledge, or maybe they are following the new media business model of built it, let them use it, and then charge them once they become hooked.

I would like to pose a more critical and realistic interpretation: elite universities are promoting online education, which will lead other schools to commit financial and educational suicide. To be clear, I am not arguing that this plan is an intentional plot or conspiracy; rather, following the law of unintended consequences, many good intentions can result in a destruction of the common good. Call it the inverted invisible hand: universities and individual faculty members want to do good by making their intellectual property available for free, but the end social result is that the business model for higher education is destroyed.

Just as local newspapers have been undermined by Craigslist and the music industry has been devastated by Napster and iTunes, higher education may be heading down the path of economic self-destruction. By embracing low-cost, high-access instruction, non-elite schools will lose their competitive advantage; moreover, the idea that the masses can be taught online, while the elites continue to receive valued credentials from residential institutions may result in the formation of a digital ghetto for the majority of non-wealthy Americans.

My first piece of evidence of how online education leads to institutional suicide can be found in a recent Chronicle of Higher Education article aptly entitled, �UC Online Strives to Compete in an Era of Free Courses.� In discussing how the University of California system is failing at its attempt to develop an online educational strategy, we are informed that, �Online education was going to revolutionize the University of California system, drawing thousands to the selective institution's online courses and bringing in new revenue to help allay budget cuts. That was the pitch for UC Online, started two years ago with the belief that millions in seed money could easily be raised from foundations or other private sources to get the bold effort off the ground. But UC Online now appears to be struggling, even as other highly selective colleges rush to offer their courses online at no charge (and, unlike the University of California, with no credit).� In the case of the UC system, the move to online courses was seen as a way of dealing with devastating state budget cuts, but after pouring several millions of dollars into this project, the system has still not found a way to cash in on its digital panacea.

Not only has the UC system failed to make money on its online initiative, but we learn that they have actually lost millions: �University of California officials failed to rustle up those private donations and were forced to take out a $6.9-million loan from the system's Office of the President last year to prop up the effort, with strong opposition from faculty members who did not want university money used for the project.� Like so many other institutions of higher education, the faculty are here pitted against an administration that is spending millions on an online initiative while traditional courses are being eliminated and class sizes are being expanded. Instead of using scarce resources to improve the quality of undergraduate instruction, the UC is trying to get non-university students to take expensive online courses: �It needs to attract at least 3,000 non-UC students this year and add 1,000 more each year until it reaches 7,000 non-UC students to pay back its loan on time, said DoQuyen Tran-Taylor, project manager for UC Online.� In other words, as UC students pay more for less education, non-UC students are being recruited to repay the debt of a struggling online project.

The Chronicle points out that one reason why the UC initiative may be failing is that it cannot compete with the elite universities, which are giving their courses away for free: �The pivotal question is whether people will choose to shell out money for UC Online courses rather than for already-established online programs or one of the many free online courses, known as massive open online courses, or MOOC's, offered by a growing number of well-known colleges.� It appears that the answer to this question is that elite universities have successfully used MOOC�s to undermine the competition and prevent cash-strapped public schools from reaping the benefits of the digital gold rush.

Once again, I do not think that this is an intentional strategy, but it reflects the inability of some higher education institutions to consider the total ecology of their economies. Although the UC thought that private high-tech donors would seed their online program, the reality is that the big money has moved to private online ventures: �UC Online has raised only $748,000 in private financing for the project�through a Next Generation Learning Challenges grant by the Gates foundation and the William and Flora Hewlett Foundation. Private companies leading free online-education efforts, meanwhile, have been raking in investment cash. Coursera, for instance, boasts more than $22-million from investors.� In this new form of privatization, private companies are funneling their money to private institutions because they see a much higher potential for large profits; meanwhile, public institutions are scrambling to find ways to monetize their online programs.

Returning to the University of California, we discover that as private seed money is drying up, the costs of developing an online program continue to escalate: �UC Online spent $4.6-million on developing the project in the 2011-12 academic year, and expects to spend about $7-million this year in additional development and marketing efforts, said Shelly Meron, a University of California spokeswoman. An 18-month contract with the course-management software company Blackboard took up a significant portion of that spending�$4.3-million . . .� Thus, at the same moment that the university is facing reduced state funding and swelling enrollments, money that could be used to hire more teachers or house more classes is being sent to a private company to develop online course infrastructure. One has to wonder why the UC system could not have developed its own open source course programs and why the administration is bent on pursuing this high-cost strategy.

On a positive note, the MOOC revolution may force universities to determine what value they actually deliver to students. Instead of joining a race to the bottom, universities like the UC system should defend the importance of the residential educational experience. Not only do students on our campuses learn how to live on their own and navigate through competing social interests, but universities remain one of the few places where our citizens can engage in deep and important conversations concerning the most important aspects of their lives. In contrast to online courses, university classes force students to encounter new ideas and people; however, universities often undermine this experience by not providing a high-quality learning experience. The solution, then, is not to turn to a lower form of social interaction and instruction; instead our universities have to prove their worth by recommitting themselves to undergraduate education.

In short, instead of shifting their resources and attention to a fantasized digital cure, our universities need to focus on providing high-quality instruction to undergraduates. Furthermore, in place of building new entertainment centers and food courts for students, universities should hire more full-time faculty to provide effective in-person learning environments. A real race to the top would mean that we start to engage students in a meaningful life offline and online. As the elite private universities tell the masses that they can settle for an inferior educational experience, our public universities must push for high-quality higher education for all.

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We Won the Battle, Now the War

As Democrats celebrate their hard-earned victories, now is not the time to let down our guard. In the next couple of weeks, there will be tremendous pressure for President Obama to sign a very bad deal. He will be told that the only way he can avoid extending the Bush Tax cuts for the wealthy is if he agrees to severe cuts to social security, Medicaid, and Medicare. He will also be pressured to reduce the scheduled cuts to the defense budget, and thus, he will be asked to repeat Bill Clinton�s famous triangulation that brought us welfare reform, Wall Street deregulation, and NAFTA.

President Obama has already shown that he would go for the �Grand Bargain,� and after his electoral victory, he may sign off on a deal that will accomplish some of the most desired goals of the Republican party. To fight this quick move to the Right, go to:
http://www.couragecampaign.org/page/s/tell-president-obama-to-end-the-bush-tax-cuts.

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On the Props: Education Instead of Incarceration

This November 6th, California voters will have the opportunity to make some important choices. One vital decision regards the future of education in the Golden State and another related issue concerns the high cost of the prison-industrial complex. According to the recent report �Winners and Losers: Corrections and Higher Education in California� by California Common Cause: �After adjusting for inflation, higher education in 2011 received 13% less State funding than it did in 1980. Corrections, on the other hand, expanded its share of the State�s General Fund by 436%.� These statistics mean that not only are we spending more money incarcerating our citizens than educating them in public higher education, but the general defunding of all levels of education has pushed more people into the criminal justice system.

This movement of state funds from schools to prisons is the direct result of two previous decisions by Californian voters; the first concerns Prop 13 and the loss of needed tax revenue for schools, and the other is the Three Strikes law that has rapidly increased the number of prisoners in this state. Luckily, there are three important ballot propositions that can start to reverse both of these trends.
Prop 30 will help to close the state budget deficit as it sends up to $9 billion a year to K-12 and higher education. Meanwhile, Prop 36 revises the Three Strike law and Prop 34 repeals the death penalty. In the case of Prop 36, the new law would stop the costly and odious practice of counting minor offenses as the third strike against offending individuals and thus would reduce the number of people receiving life sentences in California. Since it now costs more money to imprison people than to send them to college, by reducing the number of life sentences, we can free up money for higher education. Likewise, through the repeal of the death penalty, California can reduce the high cost of maintaining prisoners on death row.

It is important to stress that as our prisons have become full of people of color arrested for minor offenses and drug charges, the schools and colleges serving brown and black students have been underfunded and understaffed. These trends can only be turned around if Californian voters reverse their previous bad decisions.

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What Jerry Brown is Really Thinking

The LA Times Blog has a long unedited, monologue by Governor Jerry Brown that gives a great deal of insight into this complicated figure. In terms of the University of California, one issue that is discussed is why he has not appointed three regents. Brown has the following to say on this important topic: �I haven�t appointed anyone to the regents yet. Well, who should I appoint? That�s a good question. What are they going to do? I�ve appointed some people to the Cal State and I�ve appointed some interesting people on the state board and I�m looking, but what impact does that make? If you want to make change, can the state board make an impact? Can the Cal State make an impact? Things are very conservative in how they run. Before when I used to go to the regents, I�d go armed and I was attacking. But it�s totally marginal. You can�t influence ... So now it takes more time, you�ve got to be more subtle, you need more allies. You need a long-term game plan.� In short, Brown seems to be saying that he has not appointed anyone since the board is so conservative or insulated from any influence, including the influence of the governor.

Brown adds that it is hard to make any choices because of the need to cater to so many interest groups means that the effects are always watered down: �I also know these boards are not affected by one or two people, so there�s no rush. There are a lot of people I know. Blum I know, the lady who�se the president, she was the president of one of the movie studios. They�ve got people there. But I�m looking for different � But I know that three appointments can�t make (a difference). It really takes ten. But by the time you get to ten, and you listen to this group and that group, and I gotta take care of that and you have diversity and this influence person � by the time you get your ten people, they�re so different that you have no impact anyway. So this idea that you can influence by your appointees, you have to take care of all your various constituencies and then you end up replicating what is. And that�s why things don�t change very much. . . If you want to do something that you know is good but is different, the last place you�re going to get it done is UC. The second to last place you�re going to get it done is Cal State. And the place more likely would be the community colleges, because they�re more flexible.�

Not only does the governor think that appointing three new regents might have no real effect, but he also wonders if ten new regents would change anything.
It should be clear that someone has to convince the governor about the importance of having regents who actually know about universities and higher education. However, Brown does not seem motivated to change things even though he realizes that there are many problems with the current higher ed system.

Part of Brown�s reluctance to appoint new UC regents can be traced to his post-ideological view of government: �you have one group that says the answer is to see government as the problem and block it and try to reduce it as much as you can. And the other says the problem is the accumulation of capital and the power of corporations and what we need to do is strenghthen the hand of government and make it more intrusive, more invasive and more impactful so as to achieve more well being. And that�s really the choice�� By tying the liberal view of government to the idea that government is perceived as being intrusive and invasive, Brown shows how many contemporary Democrats have bought into the conservative demonization of �big Government.�

Yet, Brown is also aware of how misinformed citizens are about the ways governments spend their money: �What makes the choice hard is there is this zone of government waste which I have seen polling suggest people think is 40 percnet. Well, 40 perent of a 90 billion general fund is 36 billion. So there is a 36 billion dollar bank of waste that the public wants us to spend before we cut universities, elderly, roads police, all other stuff. Because of that relatively widespread belief � people say why should I pay for a tax even though it is not on me or it is very little when we have this bank we can go to. Go spend the waste bank. And the problem is the waste bank is not available. It�s window is not open in a way that I can access.� From his pragmatic perspective, Governor Brown realizes that people think there is a huge pool of hidden or wasted resources, which the government can use if it wants to.

While Brown knows that the populace is misinformed, he does not appear to be willing to use his position to educate the people of California and let them know the truth about the state�s finances. Just as in the case of the University of California, this is where we need real, bold leadership to clarify the truth and to propose an effective alternative. At one point, in this interview, he does show a recognition about some of the problems facing the university, but he soon backs away by returning to the issue of governmental waste: �I think they can do it more efficiently at the university. I�ve got a whole book showing how the university is spending money it doesn�t have to. Certain kinds of research, sports, gardeners, a lot of things. But there isn�t a waste bank of 36 billion in California. Not even close.� This is a strange free association: the governor jumps from discussing how the university spends its money to the question of perceived government waste as if the two are the same thing. He appears to be saying that since rumors of government waste are wrong, then the analysis of how universities spend money on expensive side-projects must also be wrong.

In another discussion of university spending, Brown repeats his conflicted sense of spending and waste: �Does a chancellor need 350,000? 500,000? I don�t think you do. Well is that a waste? Well if you paying more than you need, it is a waste. But then they say the market is that and if we don�t pay it, we don�t get it.� While Brown clearly sees the problem with paying administrators excessive salaries, he also entertains the university�s claim that they can only attract and retain excellent people by offering them market value. What Brown does not ask here is why it is only star administrators who are deemed worthy of market-based salaries. Like so many contemporary Democrats, Brown has internalized both the free market rhetoric of the Right and the liberal discourse of a meritocracy where only the elites are entitled to a good wage.

In some ways, Brown is too aware of how some people view the government, and his concern for these views limits his political vision: �Everywhere you go human institutions have flaws. But here is the relevant point here: government is perceived as unique in the flaws that it has. And there is a certain hostility. Government has become the object people can look to as the source of our suffering and our problems and in that context it is hard to get people to say gee give more money to this entity you see as the cause of suffering or dysfunction.� While it is clear that the forty-year effort of the Republicans to demonize the government has been very effective, shouldn�t someone like Governor Brown work to counter this narrative?

It is clear that Brown is plagued by his acute awareness of how competing interests block any real change in politics: �There is no procedural quick fix�We don�t live in some immaculate world with no stain of interest. Everybody is interested. ..Everybody looks to see how the rules favor their interest. So there is no neutral grouping here. Not like constitutional convention of our founding fathers. We have a constitution. We have a legislature. We have tens of thousands of laws and practices. You can only make a few changes. Any change you make, if you go one way maybe trial lawyers like it. If you go one way, maybe insurance companies and doctors like it. There is no quick easy big fix. It is incremental. Step by step.� Perhaps this pragmatic approach is appropriate for �normal� times, but in our current crisis, we need something on the order of FDR�s New Deal to really make a difference.

In one of his most telling free associations, Brown discusses his central thinking about education: �One thing, well it�s not like, for example, lets take STAR tests. Steinberg doesn�t like it. Wants to reduce the STAR test. So in one way I like the STAR test because the kids gotta know arithmetic, they have to know how to write, they gotta know some English, they have to know science. So that�s somewhat mechanical. But on the other hand, every individual has different interests. I think it�s important that people go to school and they learn history, they learn philosophy, they learn music. They don�t get trained, but they get exposed to a much bigger world. So this is an issue: How much should be training, lockstep, standardization, fill in the blank and anyone who deviates from that is bad. There�s a bit of that coming out of Washington. On the other hand if you�re so lax and you just chit-chat in class, that�s bad too.� Once again, the governor is conflicted over the main competing narratives that surround education in the United States. While he is rightly critical of standardized tests and standardized teaching, he also wants to make sure that students learn the basics and that teachers do not spend their time simply free associating in class.

This conflicted view of education is matched with Brown�s awareness of how learning and teaching involve so much more than memorizing and testing: �I had a teacher, Mr. McCurdy he later joined the Jesuits. One of his questions on one of our exams was, I want you to write your impression of a green leaf. OK. I wrote something pretty banal. And I�ve been thinking every time I walk out here and I look at these green leaves, what�s my impression? Am I just dead? What can I feel? So he created a thought about imagination, impression, you can�t put that on a STAR test.� Here, Brown shows himself to be a deep and creative thinker who has profited from a creative and independent teacher.

Perhaps what we learn from this gubernatorial free association is that the governor is a non-ideological politician who is both open to competing discourses and crippled by his awareness. We also know from the way that students and unions pushed his tax initiative in a much more progressive direction that collective action can promote positive social change. It is clear that if we want something to change in this state, we will have to be the motivating force.

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Regents Retreat

One of the most remarkable aspects of the recent regents� discussion of the future of the university was the lack of discussion of the quality of instruction. While there was some statements that students are still happy with their education and the university is doing a good job at graduating students in a timely fashion, the quality of education was rarely brought up. Instead, the main focus was on how the UC can continue to do what it is doing by moving money around and engaging in some creative financing.

Some possible solutions suggested are to sell off parking and lease it back and reduce the university�s support for healthcare for its employees. There is also the idea to increase nonresident enrollments significantly and to charge different tuition rates for different degrees. The most creative and threatening suggestion was �Eliminate some or all State funding for a few campuses and socialize savings to others, resulting in no restrictions on tuition or nonresident enrollment for campuses with reduced State funding.� The final suggestion means total privatization for the elite campuses, while the other campuses are left to fight over diminished state funds. In reality, the current policies of letting campuses keep their tuition dollars and distributing state funds according to a formula that favors the campuses with medical students and doctoral students moves the UC in the direction of the privatization for the elite campuses and socialization for others model.

While the regents stressed the decreases in state funds, we have recently learned that UC payroll has gone up 29% in the last six years, so the loss of public support has been coupled with a major expansion of the university, especially in the medical area. In fact, there are now many more high-paid employees, but there are fewer faculty and more students. According to the retreat PowerPoint, the state now funds just 11% of the budget, but 97% of the faculty are supported by core funds. This would appear to mean that faculty now are only supported by state funds and tuition, which begs the question of where does all of the money generated from grants, endowments, medical services, and auxiliaries go?

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Pension Politics

It looks like the legislature and the governor are close to a deal on pensions. While they have decided to exclude the University of California from the reforms, everyone inside and outside of the UC system should be concerned about the politics behind this move to rein in public pensions. First of all, one of the main motivations to make this deal now is that many Democrats feel that the best way to coax voters to support the governor�s tax initiative is to show citizens that the Dems are serious about controlling future governmental expenditures. Also, many Democrats in the legislature believe that they can win a super-majority in both houses, and so they are going after seats in swing districts.

However, there are several broad issues concerning this pension reform that we should consider. First of all, what does it say about unions and the Democratic party when they lead the way in reducing benefits for future workers. In the proposed new system, many workers will have a hard time waiting until 65-67 to retire, and the change in retirement age will reduce their retirement checks by a large amount (during a time when retiree healthcare costs will continue to increase). While it looks like the Dems are being responsible, who is protecting the most vulnerable workers? Another major problem is that the deal undermines collective bargaining and the ability of workers to trade wage increases for retirement security.

What the current discussion of pension reform fails to mention is that the major cause for the underfunding of pension plans is investment losses, and this reform puts all of the blame on the cost of benefits. What we need is real Wall Street reform, which would protect pension funds against huge losses. It also does not help that the Fed is keeping interest rates so low that pension funds have to move almost all of their money from bonds to stocks and other higher risk asset classes. Moreover, the recent Libor scandal shows that pension funds have lost significant value because banks have manipulated interest rates.

History may remember this period as a time when all of the major liberal institutions�unions, the Democratic party, and public employees�accomplished the goals of the conservative revolution. While it may seem that we are only trying to show the public that we are fair and rational, we are actually feeding the Romney-Ryan rhetoric that the only solutions to our problems is to cut the benefits of the next generation.

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