EIEIO...Freedom Isn’t Free
“There, I guess King George will be able to read that!” – John Hancock
“A republic, if you can keep it.” – Benjamin Franklin, when asked what type of government will the United States be.
“If you think education is expensive, try ignorance.” – Derek Bok, Retired President of Harvard University
As per our family’s custom, we spent the Fourth of July on the beach in Santa Barbara watching fireworks over the Pacific and marveling at the natural beauty of California.
The annual Independence Day Parade in the adjacent hamlet of Montecito is pure Americana. The streets lined with kids, parents and grandparents cheering as the local fire truck decorated with red, white and blue streamers passes, police cars with their sirens on, the classic cars carrying the mayor, parade Grand Marshall, high school coaches, and other local VIPs…many of whom were dispersing candy to the crowd in a form of popularity peddling. Marching bands marching, cheerleaders cheering all for an event that lasted less than 10 minutes.
While more fun than a barrel of monkeys, I was stunned and saddened to see a statistic that showed 1 in 3 adults in the United States didn’t even know what we were celebrating on July 4th. This troubling report comes on the heels of a recent study, highlighted in this publication, which found that patriotism and the importance placed on family have seen precipitous declines over the past 20 years.
Check out the full EIEIO…Believe In Something here.
Alas, it’s human nature to take things for granted. However, the freedom and liberties along with the sacrifices that accompanied the Declaration of Independence need not be lost in our collective memories.
Two hundred and forty-seven years ago, a group of patriots were so passionate about individual freedom and the rights of every person to life, liberty, and the pursuit of happiness that they were willing to die for these principles…and many did. Of the 56 original signatories of the Declaration of Independence, 5 were taken prisoner, tortured, and subsequently killed; 12 had their homes destroyed; and 9 lost their lives in battle during the Revolutionary War.
These weren’t deadbeats who had nothing to live for. Twenty-four of the fifty-six were lawyers, eleven shop owners and nine plantation owners. Two, John Adams and Thomas Jefferson, went on to be Presidents, and amazingly, both died exactly 50 years after the signing of the Declaration of Independence on July 4th, 1826.
Both Jefferson and Benjamin Franklin were early and vocal advocates for the importance of broad education. Though education was largely informal in the Colonial era, they still recognized that it was essential for self-governance and the preservation of freedom for the general public to be educated and literate.
Horace Mann led the Common School Movement in the 19th Century for free and accessible public education. It became part of the United States secret sauce that public schools were the key for social mobility, economic opportunity and the preservation of democratic values.
The landmark 1954 Supreme Court case Brown v. the Board of Education stated that segregated schools were unequal by definition. However, the traditional structure of public schools assigns students to schools based on their neighborhood, essentially determining kids’ futures based on something completely out of their control – their parents’ zip code..
In 1983, then Secretary of Education Terrel Bell stated in the seminal report “A Nation at Risk, “The educational foundations of our society are presently being eroded by a rising tide of mediocrity that threatens our very future as a nation and people. If an unfriendly foreign power had attempted to impose on America the mediocre educational performance that exist today, we may have viewed as an act of War.”
You’d think that this powerful statement would have woken up a slumbering political class, but it didn’t. Despite studies showing that students of this generation would be less educated than the previous one for the first time in American history, parents did not stage a second revolution with pitchforks to demand change.
However, it wasn’t until 1991 when the first shot was fired in my home state of Minnesota, ironically the land of Lake Wobegon, with the first Charter School passing. My big awakening occurred when I visited a public school in inner city Baltimore managed by Education Alternatives, the first private school operator.
I couldn’t believe schools existed in the United States of America that I wouldn’t even expect in a third world country…dead animals shot for sport in the courtyard, no partisans in the bathrooms, chaos in the classroom. It was no wonder that over 50% of the kids were dropping out.
Take two schools in the City of Chicago for example. At Chicago’s Manierre Elementary School, only 1.3% of students are proficient in math. But 1.6 miles away at Lincoln Elementary school, nearly 70% of students are proficient in math (it’s a sad state of affairs when we’re bragging about only 30% of the kids being not proficient in math).
Tim DeRoche highlighted this example in his recent piece over at The Free Press, where he pointed out that an attendance zone line that runs down the middle of North Avenue, separating the two school communities. The result? Lincoln’s student low-income enrollment is just 12% of its student body, while Manierre’s is a whopping 97%.
Another example of a tale of two schools is Thomas Jefferson High School in Alexandria, Virginia and Washington Memorial in DC. These schools are located 5 miles from each other, separated by the Potomac.
One is rated one of the best in America…the other is one of the worst, and is essentially a “Dropout Factory.” By the way, the amount spent per student at Thomas Jefferson is nearly half as much as it is in Washington DC.
Stanford’s recent charter school study revealed that hundreds of charter schools not only surpassed the performance of conventional public schools, but also significantly significantly boosted the academic achievements of Black and Hispanic students.
In these schools, students excelled in math and reading at levels comparable to, and occasionally surpassing, their white peers. Consequently, the persistent issue of racial learning gaps was effectively eradicated at these "gap buster" charter schools.
There are still plenty of people who view charter schools as segregated places with high levels of racial isolation. The data disagrees.
60% of charter school students are poor enough to qualify for free or reduced price lunch
33% of charter students are Hispanic, 25% Black, <30% White
The typical Black student learns 40 days more worth of reading at a school in a year at a charter school compared to traditional public school
As John Hage put it at the Mission Summit, “65 million students in this country go to schools. 90% of them still go to public schools okay that's only changing by incremental efforts but at some point it's going to have a massive like turn. . .and it's not an anti-public School, charter schools are public schools. No one pays tuition to go to those schools, but at the end of the day – the private and public sector together can do things that a traditional public sector simply cannot.”
With the advent of generative AI and its brand ChatGPT, the 70 year old debate of whether the “Machine” will replace “Man” and humankind will be reduced to eating grapes all day wondering what the weather is going to be. Reid Hoffman did a very clever conversation with ChatGPT about AI in the Classroom, along with the point that Kurt Vonnegut’s first novel Player Piano predicted many of these issues (and this was written in 1951).
As Viktor Frankl theorized, humans seek a life of purpose which they find thru learning and meaning thru work.
Freedom doesn’t come from not working - it comes from the opportunity to pursue one’s purpose and potential. Accordingly, I believe the “Machine” can be a radical enabler to achieve impact, accelerate and accentuate a person’s purpose.
When you analyze the rise and fall of nations, there is no law that says a country will continue to thrive into perpetuity. In fact, history is littered with booms and bust from the Romans, thru the Ottomans, to the British Empire, and many, many others.
Universal access to great schools is one of the most important lines of defense to ensure that the United States doesn’t fall into the graveyard of history. The core fabric of our democratic society is at risk of unraveling due to unequal access to education.
The entrenched status quo says “give us more time and give us more money”. The good news the American Public has said 247 years is long enough, we need change today.
While it took thirty years, a Waiting for Superman movie, numerous studies and a pandemic, school choice is an unstoppable force today. Charters, virtual charters, micro-schools and home schools are flourishing with an overwhelming support from parents and students. This is great news for students, freedom and the future of America.
Free Public Schools, Freedom of Choice of Schools, Free Speech, Freedom of Religion, Freedom of Assembly, and Freedom of Expression are the pillars of which give everybody the potential to have life, liberty and the pursuit of happiness…and participate in the future.
In what was for many a week off from the Market, stocks also took a break with the Dow down 1.9%, the S & P 500 declining 1.2% and the NASDAQ falling .9%. Even in an overall down week, Apple managed to become the first $3 trillion dollar company in history.
NASDAQ had its best six month opening in forty years, with it advancing 31.7%. The S & P had its best first half since 2019 with it up 15.9%.
Jobs which have been robust still increased 209K during June but was below expectations and the three year trend. Also, out of Washington DC, the Supreme Court by a vote of 6 to 3 said the Biden Administration didn’t have the right to eliminate $430 billion of student debt…only Congress could do that.
In other interesting events, Toyota announced a “breakthrough” battery technology for electric vehicles being half the size and half the cost. NYC pushed an $18 an hour minimum wage which means the DoorDash, Uber and Lyft drivers could get the double benefit of cheaper cars and higher pay…unless they lose their jobs because the Market won’t support it.
The good news on the Start-up front was that Global Funding of $481.5 million was up 55% from the first quarter. The bad news is that’s still down 72% from last year.
Our BULLISH view of stocks played out well with the first half performance of NASDAQ up over 30% and the GSV portfolio up 27.6%. We remain cautiously optimistic based on the persistent “Wall of Worry” stocks like to climb and relatively favorable valuations for growth companies vis a vis their prospects.
Need to Know
READ: How to Read an S-1
WATCH: 2040s: A Lookback | Khosla
GSV’s Four I’s of Investor Sentiment
GSV tracks four primary indicators of investor sentiment: inflows and outflows of mutual funds and ETFs, IPO activity, interest rates, and inflation. Here’s how these four signals performed last week:
#1: Inflows and Outflows for Mutual Funds & ETFs
#2: IPO Market
The IPO Market continued its rise from the ashes over the past few weeks. Shein is rumored to have filed for an IPO, while Savers Value Village (a for-profit thrift store operator) popped 37% in its trading debut last Thursday. L Catterton is also considering an IPO for the Birkenstock brand at a $6 billion plus value.
Source: Renaissance Capital
#3: Interest Rates
Chair Powell voiced an optimistic message about the U.S. economy before the holiday, yet warned that consecutive rate hikes later this year are not off the table. Meanwhile, all 23 US banks that were in the Fed’s annual stress test survived, underscoring the strength of the banking system.
Source: Atlanta Fed
52% of Americans participating in a USA TODAY/Suffolk Poll said that the United States is too expensive to live in, and 7 in 10 Americans said that inflation and the economy are the nation’s top problems.
Chart of the Week
Chuckles of the Week
Entrepreneurship: 2 minutes and 24 seconds – average time spent on a pitch deck by investors (Source)
Innovation: 50% – percent of unicorns in 2023 that are AI startups (Source)
Education: 11 – states with education savings accounts (ESA) programs (Source)
Impact: 14% – percent of Gen Z that wants to work for the government (Source)
Opportunity: 74% – percent of Americans that think public colleges and universities should not be able to use race as a factor in college admissions (Source)
Connecting the Dots & EIEIO…
Old MacDonald had a farm, EIEIO. New MacDonald has a Startup…. EIEIO: Entrepreneurship, Innovation, Education, Impact and Opportunity. Accordingly, we focus on these key areas of the future.
One of the core goals of GSV is to connect the dots around EIEIO and provide perspective on where things are going and why. If you like this, please forward to your friends. Onward!
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