Dear Commons Community,

Chris Hughes, a co-founder of Facebook, had a lengthy op-ed yesterday calling for the breakup of Facebook and its subsidiaries namely, Instagram and WhatsApp.  Hughes reviews his relationship with Mark Zuckerberg, the history of Facebook and its recent public relations problems.  He then goes into a description of how to breakup the behemoth company.  He writes:

“Facebook would have a brief period to spin off the Instagram and WhatsApp businesses, and the three would become distinct companies, most likely publicly traded. Facebook shareholders would initially hold stock in the new companies, although Mark and other executives would probably be required to divest their management shares.

Until recently, WhatsApp and Instagram were administered as independent platforms inside the parent company, so that should make the process easier. But time is of the essence: Facebook is working quickly to integrate the three, which would make it harder for the F.T.C. to split them up.”

Some economists are skeptical that breaking up Facebook would spur that much competition, because Facebook, they say, is a “natural” monopoly. Natural monopolies have emerged in areas like water systems and the electrical grid, where the price of entering the business is very high — because you have to lay pipes or electrical lines — but it gets cheaper and cheaper to add each additional customer. In other words, the monopoly arises naturally from the circumstances of the business, rather than a company’s illegal maneuvering. In addition, defenders of natural monopolies often make the case that they benefit consumers because they are able to provide services more cheaply than anyone else.

Facebook is indeed more valuable when there are more people on it: There are more connections for a user to make and more content to be shared. But the cost of entering the social network business is not that high. And unlike with pipes and electricity, there is no good argument that the country benefits from having only one dominant social networking company.

Still others worry that the breakup of Facebook or other American tech companies could be a national security problem. Because advancements in artificial intelligence require immense amounts of data and computing power, only large companies like Facebook, Google and Amazon can afford these investments, they say. If American companies become smaller, the Chinese will outpace us.

While serious, these concerns do not justify inaction. Even after a breakup, Facebook would be a hugely profitable business with billions to invest in new technologies — and a more competitive market would only encourage those investments. If the Chinese did pull ahead, our government could invest in research and development and pursue tactical trade policy, just as it is doing today to hold China’s 5G technology at bay.

The cost of breaking up Facebook would be next to zero for the government, and lots of people stand to gain economically. A ban on short-term acquisitions would ensure that competitors, and the investors who take a bet on them, would have the space to flourish. Digital advertisers would suddenly have multiple companies vying for their dollars.

Even Facebook shareholders would probably benefit, as shareholders often do in the years after a company’s split. The value of the companies that made up Standard Oil doubled within a year of its being dismantled and had increased by fivefold a few years later. Ten years after the 1984 breakup of AT&T, the value of its successor companies had tripled.

But the biggest winners would be the American people. Imagine a competitive market in which they could choose among one network that offered higher privacy standards, another that cost a fee to join but had little advertising and another that would allow users to customize and tweak their feeds as they saw fit. No one knows exactly what Facebook’s competitors would offer to differentiate themselves. That’s exactly the point.”

Mr. Hughes comments are drawing attention.  However, it is difficult to imagine the federal government taking on Facebook.  I see fines coming but not a breakup in the immediate future.

Tony

Dear Commons Community,

Last week, state lawmakers passed the Workforce Education Investment Act, which would raise almost $1 billion over a four-year period with a surcharge on companies that employ highly skilled workers, like accounting, engineering, architecture and consulting firms, and the technology behemoths that operate in the state.   Washington is following the lead from several other states such as New York that have already established free college tuition programs.  As reported in the New York Times and the Seattle Times:

“The bill, which is before Gov. Jay Inslee, a Democrat, would effectively provide free or reduced tuition for lower- and middle-income students attending community colleges and public institutions, provide new funding for strapped community colleges and eliminate wait lists for financial aid beginning in 2020.

“It’s a game changer for the state,” said Michael Meotti, the executive director of the Washington Student Achievement Council, a state agency that focuses on education.

Forty percent of high school students in Washington earn advanced degrees or certifications before age 26, and Mr. Meotti said the measure would “increase college-going success.”

Full tuition support and fees would be available for students from families of four earning about $50,000 a year or less, with partial scholarships for students from households making up to the state’s median income, which is about $90,000 a year for a family of four.

In most cases, people who have lived in the state for at least a year would qualify, as long as the purpose of relocating was not to attend college.

The fund would also apportion about $200 million for community colleges, public four-year colleges and universities, and apprenticeships, according to State Representative Drew Hansen, a Democrat who sponsored the bill.

Counseling and advising services would be expanded to make it easier for students to complete credentials to get into the work force, as would degree programs in high-demand fields such as nursing, computer science and engineering.

“I think it’s going further than virtually any state has to address both the challenge of affordability for students and the underfunding of colleges,” Sara Goldrick-Rab, a professor of higher education at Temple University, said.

Professor Goldrick-Rab said the measure was more flexible than other initiatives, such as New York State’s Excelsior Scholarship program, which requires applicants to reside in the state after graduation and covers only two- to four-year degree programs.

“This is a much more efficient and cost-effective bill,” she said.

Mr. Hansen said the bill was partly designed to help people in their 50s and 60s who have fallen on hard times get better jobs.

Mr. Hansen also noted that Washington’s proposal is more comprehensive than initiatives in other states, such as Tennessee’s Promise program, which offers two years of free tuition at community or technical colleges.

Tennessee’s program is funded by proceeds from the state lottery, but Washington’s will raise funds through a surcharge on “businesses that depend on higher education to survive,” Mr. Hansen said.

The state would place a surcharge on companies in fields such as engineering, accounting and consulting that pay the business-and-occupation tax, which is a tax on gross receipts.

The largest tech firms would pay a higher rate, up to $7 million a year.

Ana Mari Cauce, the president of the University of Washington, told The Seattle Times that the funding would provide a cushion for financial downturns.

 “We talked about the importance of this being the year for higher education,” she said, “and I think the Legislature did that.”

Governor Inslee has, in the past, supported measures to increase funding for financial aid. He is still reviewing the bill, according to a spokeswoman, and could act as soon as next week.”

This looks to be a major win all around for Washington!

Tony

Dear Commons Community,

Following up on the New York Times revelation of Donald Trump’s $1 billion in losses in the 1980s and 1990s, and the fact that he paid no federal income taxes for eight years, Gail Collins has a column this morning where she lays into him and calls him the “King of the Losers” and a “Frisky Little Thousandaire.”   Here are her comments.

“Hard to believe, but it seems Donald Trump was an even worse businessman than we thought.

Thanks to Times reporters Russ Buettner and Susanne Craig, we’ve learned that Trump’s old tax records show that during his “Art of the Deal” era, he was pretty much the national champion for financial underachievers. In 1990 and 1991 he had losses of over $250 million a year — “more than double those of the nearest taxpayers in the I.R.S. information for those years.”

Well, you can’t deny he was a record-breaker.

Trump likes to portray his old financial troubles as a temporary product of a recession. But even back then it was pretty apparent that he wasn’t really, truly all that great at deal-making. At the time, I called him a “financially embattled thousandaire” and he took great offense.

Try that yourselves, people. See how often you can refer to our president as “our world-famous thousandaire.” He seems to have more money now, but it’ll still drive him crazy.

Trump would like us to believe all that red ink was actually a canny business strategy. “You always wanted to show losses for tax purposes,” he tweeted after the Times report, adding that “it was sport.”

On behalf of the millions of Americans who filed their I.R.S. returns last month, I want to say that it is always a treat to hear our president explain how only suckers pay taxes.

However, it’s becoming increasingly clear that even the cynical version of Donald Trump as a businessman — undisciplined self-promoter who bought and sold things just to convince himself he wasn’t a useless nothingburger living off his rich dad’s money — was maybe an overestimation.

Which can be sort of unnerving, given his current job. For instance, just before we got this new batch of information on his failure as an empire-builder, Trump met with Democratic leaders of Congress to discuss — a big, huge building plan.

Infrastructure! In theory, this is the one thing in Washington everybody likes. When Trump was campaigning, he promised a big, exciting $1 trillion agenda for what he would later describe as “gleaming new roads, bridges, railways and waterways.”

Actually what we need most is road repair. Filling potholes is all well and good, but it doesn’t come under the category of “gleaming.”

After he was elected, Trump never went so far as to say “all that stuff I talked about is actually boring.” But when Infrastructure Week rolled round and he was dispatched to Ohio for a speech about waterways, he veered off into an attack on the Democrats for being “obstructionists” on health care. Meanwhile, the James Comey crisis was unreeling in Washington. The whole thing was sort of a disaster.

In 2018, the president promised “the biggest and boldest infrastructure investment in American history,” to be paid for by, um, persons other than himself. Mostly state and local governments, and tolls on drivers and truck transport. Nothing happened.

When the nation’s builders were once again celebrating Infrastructure Week, press secretary Sarah Huckabee Sanders was asked if the administration planned to submit a bill.

“Ever?” she responded.

And thus it went until last week, when Trump sat down with Nancy Pelosi and Chuck Schumer to discuss a possible plan. Infrastructure was back! And to everybody else’s surprise, the president upped the ante to $2 trillion. Twice what he talked about when he was campaigning and making up promises all over the place.

We’ve yet to find out which Donald Trump was negotiating with the Democratic leaders. Once in a while a Good Donald spirit takes over the president and he suddenly announces he’s going for real immigration law reform, or serious gun control legislation or. … Doesn’t really matter. Experience suggests the Good Donald doesn’t last more than a couple of days. The one who wanted to help those DACA Dreamers wound up shutting down the government over a border wall.

Still, a big-ticket infrastructure program doesn’t require a profile in courage or even a plan. It’s the political equivalent of a litter of puppies, only larger and more expensive.

Except you’d need a real government to carry it out, with smart, disciplined oversight. Otherwise the money would get wasted on pork-barrel projects and endless consulting contracts that turned into extremely expensive plans to nowhere.

Sort of like one big Trump Shuttle.

Lately, there’s been no talk on the presidential side about how to pay for it — that’s coming, ha-ha, later. The Democrats have suggested raising the gas tax or cutting back on those tax cuts for the wealthy. Mitch McConnell has made it clear he won’t let anybody mess with those tax cuts, which will cost the government about $2.3 trillion in revenues over the next decade. Add that to the new $2 trillion in infrastructure spending, you’d have — a bunch of money, right?

Trump seems unworried. “Nobody knows debt better than me,” he said during the campaign. And on this point, I dare say we can all admit he was right. Frisky little thousandaire.”

If this wasn’t so serious especially the federal debt part, it would be funny!

Tony

Dear Commons Community,

The United States Department of Education/Institute of Education Sciences(IES) released a new report yesterday entitled,  Using Technology to Support Postsecondary Student Learning.  The 104-page report  is based on a meta-analysis of the research on online learning in colleges and universities. The authors of the report were a panel of scholars and practitioners in higher education and staff from Abt Associates of Bethesda, Maryland. Here is a blurb from the announcement.

“This practice guide, developed by the What Works Clearinghouse™ (WWC) in conjunction with an expert panel, focuses on promising uses of technologies associated with improving postsecondary student learning outcomes. It provides higher education instructors, instructional designers, administrators, and other staff with specific recommendations for supporting learning through the effective use of technology.

This practice guide makes five evidence-based recommendations (see below) around how to use technology to support postsecondary learning. Each recommendation includes examples of technologies and how to implement them, advice on how to overcome potential obstacles, and a summary of the research evidence that supports the recommendation.

Practice Recommendations:

• Use communication and collaboration tools to increase interaction among students and between students and instructors.
• Use varied, personalized, and readily available digital resources to design and deliver instructional content.
• Incorporate technology that models and fosters self-regulated learning strategies.
• Use technology to provide timely and targeted feedback on student performance.
• Use simulation technologies that help students engage in complex problem-solving.

The research methodology used to gather the evidence for the above followed strictly the protocols established by IES.  As one of the authors of the report, I assure you that anyone interested in the use of technology in postsecondary education will find this guide filled with important insights and suggestions. 

Tony

Dear Commons Community,

I was just made aware that the 5th Annual Disability Pride Parade will take place on Sunday, July 14th.  The theme for this year’s parade is Disability Rights are Civil Rights.

Thank you to  Maryann Polesinelli  (NYCDOE – District 75 Director of ELL/MLL Citywide Programs) for alerting me to this event.

Please consider participating and supporting this worthwhile cause.

Tony

Dear Commons Community,

Goldie Blumenstyk, a senior writer at The Chronicle of Higher Education, interviewed Ranch C. Kimball, a university trustee who has participated in more than 20 nonprofit and for-profit mergers over several decades.  Here is an excerpt from her interview as it appeared in The Chronicle.

“Too often when merger talks begin, colleges “act ashamed about having that conversation,” Kimball told me. “It’s like you’re conducting a clandestine affair.”

I met Kimball last week at the P3 (Public-Private Partnerships) EDU conference at George Mason University, where we both appeared on panels about public-private partnerships; I moderated one on risks, and he spoke about P3s and innovation. (I also did a series of quick video interviews [links2.newsletter.chronicle.com] with several college leaders about the pros and cons of P3s. CUNY’s new Chancellor Felix Matos Rodriguez is one of the interviewees).

College mergers aren’t necessarily a sign of something bad. They shouldn’t be seen as just a last-ditch gambit by a college on the brink. In fact, mergers are a tactic that any number of successful colleges should probably think about right now.

That has not been the conventional wisdom about higher-ed mergers. Ranch C. Kimball, a university trustee who has participated in more than 20 nonprofit and for-profit mergers over several decades, says it’s time that changed. I couldn’t agree more.

Too often when merger talks begin, colleges “act ashamed about having that conversation,” Kimball told me. “It’s like you’re conducting a clandestine affair.”

I was eager to sit down with Kimball because I had reviewed his 38-page “How To” guide on mergers for presidents and boards, and found it full of gems. Those include his reasons thriving colleges should consider mergers, such as finding a strong academic program “that could catalyze one of your current departments” or a remote campus that could be an asset for a junior-year away or for its proximity to an attractive industry.

I was also struck by his advice about being realistic. “A merger will not result in a perfect return to a stable past,” he notes at one point. And also this: “‘Loss of control’ means loss of control. If you merge with a much larger partner, you may get a great deal for your institution and your mission, but you no longer call the shots.”

Kimball, who lives in Boston, was a trustee at Wheelock College before and during the merger discussions that brought the college into Boston University, in June 2018. He said timidity and secrecy have no role in a merger discussion. As he told the P3 EDU crowd, “Be bold about the outreach. If you’re not proud of what you’re trying to get done, don’t even start.”

Wheelock’s initial merger process didn’t run that way. In fact, Kimball said it didn’t really have any process at all in 2015, when the first set of merger talks began among members of the Board of Trustees and two local colleges. At the time, the college had a comfortable cushion of $15 million in unrestricted cash, but as he told me, “we knew every enrollment and financial trend was going in the wrong direction.”

By the spring of 2017, when the board’s new strategic-options committee kicked off discussions again, it used a very structured process that included sending letters of inquiry to 60 colleges. Ultimately, eight colleges signed nondisclosure agreements, six submitted proposals, and BU was selected, in September 2017.

Having a process is key, said Kimball, and while there’s no absolute right or wrong way to proceed, he made a good case for avoiding the clubby approach. He also highlighted the importance of monitoring financial warning signs before it’s too late.

I can’t say whether Wheelock made the right choice, and from what I hear, some of its alumni and friends still believe the college should have taken a different path. (“Simmons and Wheelock should have seized the moment,” said James E. Samels, a Boston-area higher-ed consultant I know.)

But what is indisputable is that many other colleges already find themselves where Wheelock was in 2017, in large part because of demographic trends. (Kimball argued that higher ed has 25 percent to 35 percent more undergraduate capacity than it needs, based on real-estate data he’s seen.) And the financial strains many colleges continue to face portend more mergers and collaborations.

Kimball’s advice isn’t secret. It’s all there on his website. Given that, and his experience and new role as a BU trustee, I figured he’d been inundated by calls and visits from college leaders and fellow trustees in the past two years. I figured wrong.

“I’m surprised how few college presidents and chairmen call me,” Kimball told me.”

I think more of our colleges will be considering mergers in the not-too-distant future.

Tony

Dear Commons Community,

According to the The New York Times, Donald Trump’s financial figures show he paid no income taxes for eight years and instead claimed more than $1 billion in business losses.

From 1985-1994, Trump claimed nearly $1.2 billion in business losses, according to the Times’ analysis of the president’s federal income tax information from those years. The loss paints what the Times called a bleak picture of Trump’s businesses, which he has always touted as successful.

The news comes as the president continues to feud with House Democrats over the release of his federal tax returns from 2013 to 2018.

The newspaper noted that it did not obtain Trump’s actual tax returns, and the information it did obtain covers an earlier period of the president’s business career. The Times did get printouts from Trump’s official Internal Revenue Service tax transcripts, with his 1040 federal tax form figures, from a source who had legal access to them.

The newspaper’s analysis of the tax information includes how Trump was already deep in financial trouble in 1987 when he published his book “The Art of the Deal,” a bestseller that focused on his business career as a so-called self-made billionaire. In 1985, his core businesses apparently reported a loss of more than $46 million and carried over a $5.6 million loss from earlier years. The president has long blamed his first round of business reversals and bankruptcies on the 1990 recession, but the Times analysis shows that his fortune was already on its way down much earlier.

The tax results also show that Trump appears to have lost more money during that decade than nearly any other individual taxpayer, according to the Times. His core businesses reportedly lost over $250 million each year in 1990 and 1991, which the Times said is more than double those of the nearest taxpayers in its sampling of high-income earners for those years. 

Notably, the investigation reveals that the president did not pay federal income taxes for eight out of the 10 years analyzed. Business owners can use their net operating losses to avoid paying taxes on future income. The new tax information reportedly shows that Trump’s net operating losses reached $418 million in 1991, which was 1% of all the losses the IRS said was declared by individual taxpayers that year.

The analysis notes that Trump at one time tried to delay his collapse by playing the role of a corporate raider, in which he would acquire company shares with borrowed money, publicly announce he was contemplating a takeover and then quietly sell his shares on the resulting stock price bump. According to the Times, Trump declared $67.3 million in such stock gains from 1986 through 1989, but he ultimately lost most of it after investors stopped taking his takeover announcements seriously.

The Trump administration continued to refuse to release his federal tax returns this week, with the Treasury Department announcing Monday that it will not comply with House Democrats’ request for the president’s tax returns, openly defying federal law. The New York Senate is on the verge of passing a bill that would allow Congress to view Trump’s state tax returns, which are expected to have much of the same information as his federal returns.

Rep. Bill Pascrell (D-N.J.), who serves on the House Ways and Means Committee working to get Trump’s tax returns, said in response to the Times report that the president’s “entire tenure is built upon the most colossal fraud in American political history.”

“As these records make clear, Trump was perhaps the worst businessman in the world. His entire campaign was a lie,” Pascrell said in a statement Tuesday night. “He didn’t pay taxes for years and lost over one billion dollars ― how is that possible? How did he keep getting more money and where on earth was it all going? We need to know now.”

The lawmaker stressed that Congress must still see Trump’s actual tax returns and that the IRS is legally obligated to hand them over.

“We now have another part of the truth,” Pascrell said. “We need a lot more.”

Trump will pooh-pooh this as “fake news” or as nothing really new. 

Tony

Dear Commons Community,

While giving an address at the Education Writers Association conference in Baltimore yesterday, Secretary of Education Betsy DeVos said:

“I don’t enjoy the publicity that comes with my position…I don’t love being up on stage or on any kind of platform. I’m an introvert.” 

She said she also believes the media uses her “name as clickbait.”

“As much as many in the media use my name as clickbait or try to make it all about me, it’s not,” she said. “Education is not about Betsy DeVos nor any other individual.”

It was DeVos’ first time appearing at the Education Writers Association annual national seminar, although she had been invited to it since taking office. Former President Barack Obama’s two education secretaries attended the event every year.

DeVos used the speech to promote her signature priority: the expansion of school choice programs. She pushed her proposal for Education Freedom Scholarships, which has been bolstered through legislation led by Sen. Ted Cruz (R-Texas) and would incentivize states to create programs that would subsidize individual scholarships for school choice.

Under this piece of legislation, individuals and businesses could receive tax credits for donating to organizations that grant scholarships. These organizations could then provide scholarships to students to help them pay for education-related costs, like private school.

It would be up to states, though, to shape what exactly their program would look like.

“While it is true that 90% of students today are enrolled in traditional public schools, it’s also true that 60% of their parents say they would prefer something different if only they had the freedom to choose,” DeVos said in her speech.

During a question-and-answer session that followed the speech, DeVos noted that she was talking to both Democrats and Republicans about supporting the proposal.

Opponents have called the proposed scholarship an attack on public education that is designed to push students to private schools. DeVos previously has pushed back on such criticism, calling it “fake news.” 

DeVos, who has spent more than two years on the job, has been one of Trump’s longest-lasting Cabinet secretaries. But when asked whether she would stay on for four more years if Trump is re-elected, she joked that she’s not sure her husband would sign on for it.

Let’s hope she does not have to make the decision!

Tony