[Congressional Record Volume 153, Number 131 (Thursday, September 6, 2007)]
[Extensions of Remarks]
[Pages E1814-E1815]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




            A SENIOR AMERICAN CEO GETS THE PRIORITIES RIGHT

                                 ______
                                 

                           HON. BARNEY FRANK

                            of massachusetts

                    in the house of representatives

                      Thursday, September 6, 2007

  Mr. FRANK of Massachusetts. Madam Speaker, David D'Allesandro was a 
very successful CEO of one of America's leading financial institutions, 
the John Hancock Company. Mr. D'Allesandro consistently demonstrated 
during his tenure as the leader of this important corporation that 
social responsibility and successful activity in the private sector are 
fully compatible. In the Boston Globe on September 3rd, he published an 
article that exemplifies the thoughtful and constructive approach he 
brought.
  Madam Speaker, I believe that the most important thing we can do 
domestically is to demonstrate that understanding and support of a 
prosperous private sector is not only consistent with support for a 
vigorous and well funded public sector, but in fact benefits from such 
an approach. As he says, ``If we are going to be globally competitive 
and continue to attain record profits in this ever-evolving competitive 
globalization, that same corporate America has to `cough up' and take 
more financial responsibility for our greatest asset: our children and 
their education.''
  Noting the great wealth that is being created by pools of private 
capital America, he asks pointedly, ``If there is that much money 
running around, why does the National Education Association report that 
we are facing a potential nationwide teacher shortage with more than a 
million teachers retiring in the near future and the need for more than 
2 million teachers in the next decade? . . . Among the reasons for this 
turnover is inadequate pay compared to other professions with the same 
training requirements.''
  Madam Speaker, David D'Allesandro is asserting a point that other 
corporate leaders must understand in their own interests and in the 
interests of a more equitable society. I ask that this very thoughtful 
article be printed here because it makes such an important contribution 
to our national debate.

                        (By David D'Allesandro)

                Economy Thrives, but Schools Go Begging

       Starting tomorrow, traffic in and around every major city 
     including Boston will once again be congested due mainly to 
     two seasonal phenomena: school buses packed with

[[Page E1815]]

     children and cars of executives back from vacationing through 
     the lazy days of August.
       But something is different this year. Very different. The 
     children are returning to many public school systems that are 
     strapped for cash, and the executives are returning to 
     businesses that are overflowing with cash.
       As a capitalist, I believe in free markets, reasonable tax 
     rates, competition, high compensation for performance and I 
     am all for businesses being incredibly successful. But there 
     is something disturbing--really disturbing--that while 
     Treasury Secretary Henry Paulson recently said, ``This is far 
     and away the strongest global economy I've seen in my 
     business lifetime,'' our public school systems are suffering 
     beyond comprehension.
       Business, particularly large corporations and private 
     equity funds, will spend billions each year on reinvestment 
     in products, technology, distribution, advertising, and an 
     endless array of tools. Yet, they are not directly assessed 
     to subsidize their overwhelming reliance on our education 
     system to feed them high quality, educated adults who will 
     fuel their growth.
       Their counterargument is that part of their personal and 
     business taxes find their way back to schools. And, or course 
     they will quickly point out ``this or that'' voluntary 
     corporate public education initiative. But the growing 
     disparity between their growth and schools' budget problems 
     seems particularly and fundamentally wrong.
       Let us consider just a few indicators: Despite some recent 
     credit market issues, the Dow Jones Industrial Average hit 
     record levels over 13,000 this year. And even touched 14,000 
     in contrast to bottoming at less than 7,300 just five years 
     ago. Record profits the last few years have been a big 
     driver.
       Goldman Sachs recently stated in US News and World Report: 
     ``If we and the consensus are correct, then the period 2003-
     2008 will have been one of the most powerful periods of 
     economic growth globally since accurate data bas been 
     collectible for much of the world.''
       Armed with hundreds of billions of dollars, private equity 
     firms have been dominating the acquisition landscape. They 
     have scooped up thousands of companies including many high 
     profile ones like Hertz, Toys R Us, Neiman Marcus, Metro 
     Goldwyn Mayer to name a few. Their capital, combined with 
     considerable tax breaks, have created enormous wealth for 
     these private firms.
       So, if there is that much money running around, why does 
     the National Education Association report that we are facing 
     a potential nationwide teacher shortage with more than a 
     million teachers retiring in the near future and the need for 
     more than 2 million teachers in the next decade? As alarming 
     as that is, the NEA says 50 percent of new teachers leave 
     within five years. Among the reasons for this turnover is 
     inadequate pay compared to other professions with the same 
     training requirements.
       Why, according to a 2007 Boston Globe examination of 
     property tax rates in 298 Massachusetts cities and towns, has 
     the average homeowner's tax bill gone up 49 percent since 
     2000?
       Why are so many communities being forced to consider 
     overrides to improve school buildings, provide basic 
     services, and maintain after-school and sports activities? 
     When towns like Stoneham are almost forced to eliminate all 
     competitive sports activities, there is something terribly 
     wrong.
       While the politicians debate options from ``cheeseburger 
     taxes,'' increased highway tolls, casinos, and Governor 
     Patrick's new bond debt proposals, both the federal and state 
     governments need to rethink who are the true benefactors of 
     our education system. In all fairness, if businesses are 
     being properly assessed for these windfalls, then more 
     current tax dollars should find their way to education. If 
     not, then the government should step up and fix it.
       Naturally, corporate America will say that the problem is 
     inefficient school systems. And while that may very well be 
     correct, most corporations are not particularly efficient 
     either. This is primarily a diversionary tactic to shift 
     focus away from the corporate coffers.
       Corporate executives will also contend that reinvesting 
     large profit sums in public education would not be in the 
     direct interests of their investors. Well, they would be 
     wrong. A highly educated American work force ready to compete 
     with the emerging economies of countries like India and China 
     is very much in the interests of shareholders.
       If we are going to be globally competitive and continue to 
     attain record profits in this ever-evolving competitive 
     globalization, that same corporate America has to ``cough 
     up'' and take more financial responsibility for our greatest 
     asset: our children and their education.

                          ____________________