In response to:
The Thirty Days of Barack Obama from the March 26, 2009 issue
To the Editors:
In “The Thirty Days of Barack Obama” [ NYR, March 26], Elizabeth Drew observes that some programs in Obama’s stimulus package do not appear to offer much immediate impact, noting in particular the increase in Pell Grants for college education, saying: “but it was hard to argue that they’d have an immediate stimulative effect.”
As the president of a rapidly growing college of music in downtown Saint Paul, Minnesota, I know that Pell Grants not only serve long-term economic goals by providing a more educated workforce, but also have immediate and positive economic impact. Thus, while I found much to admire in Ms. Drew’s analysis, I disagree with her assessment of the economic effectiveness of increasing Pell Grants.
McNally Smith College of Music employs about 150 artist/educators and talented administrative professionals, and will have over six hundred students next fall. Over 80 percent of McNally Smith students receive financial aid, much of it derived from federal programs.
Today more than ever, students need loans to go to college. Many parents who would normally be able to help their kids now need help themselves. The tight lending in fall of 2008 meant some students could not return to or begin their college education, and our budget immediately shrank.
Educational institutions provide a powerful economic engine to support local business. We eat, we pay rent, and we spend lots of money in our communities in many ways. Almost every dollar in our budget of $12 million goes straight into the economy through salaries and purchases, not to mention the significant additional spending of our students. More student loans mean more students able to attend college, which means more positive economic impact on the community in important, immediate ways.
Money for education is well spent by our government since it addresses critical long- and short-term goals. Please do not make the mistake of assuming that just because education has great long-term economic value it is lacking in short-term economic benefit as well.
McNally Smith College of Music
Saint Paul, Minnesota
Elizabeth Drew replies:
With all respect, Mr. Chalmiers makes my basic point about the thorny question of which programs deserved immediate, extra federal funds: that one can easily justify—or rationalize—all sorts of programs as stimulative. But that wasn’t even the real issue: the real issue was, given limited resources, which programs would be most effective in stimulating the economy by providing jobs (or preventing layoffs) and by tiding people over who had lost their jobs. Throughout the long debate, the general assumption was that the most effective such programs were those that built infrastructure, provided aid to the states (to prevent layoffs of teachers, firemen, etc.), or expanded unemployment compensation.
The Pell Grant provision was added to the stimulus bill by House Democrats who support federal assistance for needy college students and saw an opportunity to enhance that assistance—similar additions occurred in the case of several other federal programs. Increasing Pell Grants, it was argued, will help produce a better-educated and -trained society over the long run, making America more competitive. (I didn’t hear such an argument made for music schools.)
Beyond that, the rationale for the Pell Grants providing short-term stimulus becomes pretty thin: if the students don’t eat in St. Paul, they will, presumably, eat somewhere else. In fact, expanding the food stamp program, so that people could eat at all, was considered one of the most effective stimulus provisions—on the theory that money given to the neediest was the most likely to be spent quickly. But in the theory of stimulus, all manner of institutions added to a community will bring in revenue. If I opened a grocery store in St. Paul, I’d stimulate the economy, but would federal money be more effectively spent on helping me do that or on making sure more bridges don’t collapse, as occurred in Minneapolis?
When it came to the question of which programs would produce the greater relative yield to the economy, most particularly in the short run, at a time of serious crisis and limited resources, the argument in favor of the Pell Grants was among the weakest.