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Cyber schools face funding cuts once again, according to the school aid budgets passed by the House of Representatives and Senate last week. At-risk students who attend online schools may lose out on critical services as a result.

Cyber schools face funding cuts once again, according to the school aid budgets passed by the House of Representatives and Senate last week. At-risk students who attend online schools may lose out on critical services as a result.

While cyber schools – public charter schools that educate their students through internet platforms – risk losing funds, all other public schools will likely receive more money for each student they enroll next year. Gov. Whitmer and lawmakers in both chambers have proposed an increase in the per-pupil foundation allowance. This is the base amount of financial support guaranteed to every school district and charter school in the state, according to Proposal A.

The Executive Budget as well as the budgets passed by the House and Senate all increase the foundation allowance. Whitmer proposed raising the base funding from $9,608 to $9,849 for every student enrolled in public schools. The House’s version recommends that districts receive an extra $217 per student, and the Senate’s version calls for a $302 increase.

But cyber schools will get less money per student, even though these schools already receive less funding than conventional public schools. Unlike conventional districts, charter schools can’t raise local property taxes to supplement their funding. They are therefore limited to the state’s per-pupil foundation allowance and any federal dollars they receive to support their economically disadvantaged students.

Whitmer and the Senate prefer that cyber schools only receive 80% of the foundation allowance that’s allocated to conventional public schools. The House version of the budget is slightly more generous but would still give students in cyber schools less than those in public schools.
One of these students is Anna Dietderich, a 17-year-old who attends Michigan International Prep School – a full-time, K-12 online charter school – instead of a conventional public school in Milford Charter Township, her district of residence. Like many other students who attend cyber schools, Anna transferred to the online school because it provided a refuge from the bullying she endured while enrolled at her district school.

“It was really hard to get into the building… Bullying was such a bad thing… Everyone thinks it’s OK,” Anna said in an interview with Michigan Information and Research Service.

Anna’s story is not unique among students at cyber schools. These schools serve some of the state’s most vulnerable students. In addition to bullying, factors like homelessness, mental illness, health issues, pregnancy and fear for personal safety prevent many students from attending school in a typical, in-person setting.

Compared to the conventional classroom, the online learning environment provides a more flexible platform for engaging with students and giving them the individualized support they need, when they need it. At Michigan International Prep School, each student receives multiple layers of support from a mentor, course instructors, and social workers or other support staff.

When asked about the individualized support she’s received as a student at Michigan International Prep School, Anna said, “If I’m being 100% honest, it has saved my life.”

Amy Dunlap, Director of Family Engagement, Marketing, and Legislative Advocacy at Michigan International Prep School, believes that online learning has a number of advantages over conventional classrooms. In an interview with MIRS, Dunlap explained that students can tailor their experience by engaging in either real-time or asynchronous learning. Teachers can devote more of their attention to students like Anna thanks to the flexibility this type of learning environment affords.

“In the virtual world, I’m able to say, OK, I’m going to focus on Anna for a half hour today, just Anna… You’re able to use small groups, you’re able to take away all those distractions and all those classroom management pieces and really focus on the student,” Dunlap said. “That, to me, was my saving grace in my career.”

Budget cuts targeting cyber schools will make it harder for them to deliver the level of support that’s proven to be a critical lifeline for students like Anna. While online learning isn’t for everyone, it’s an important alternative for students when conventional schooling doesn’t work for them. Lawmakers ought to prioritize – not cut – funding to these schools so the state’s most vulnerable students can continue to benefit from their services.

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Dr. Molly Macek is the director of education policy for the Mackinac Center for Public Policy.

In January 1967, after a gubernatorial election that saw neither candidate gain enough votes to win, the Georgia Legislature was faced with a vital decision: the selection of the state’s 75th governor during the height of the Civil Rights Movement.

(THE CONVERSATION) — In January 1967, after a gubernatorial election that saw neither candidate gain enough votes to win, the Georgia Legislature was faced with a vital decision: the selection of the state’s 75th governor during the height of the Civil Rights Movement.

Legislators chose the candidate who earned the least number of votes and was an ardent segregationist – Democrat Lester Maddox, owner of a chicken restaurant and a perennial candidate.

That transformation of Maddox from racist, eccentric business owner to governor was a historical note amid a backdrop of Southern politics and the region’s resentment of Black political gains. Southern politics was and is replete with colorful characters, hucksters, showmen and demagogues who managed both to shock and engender fierce loyalty among their followers.

Maddox showed that it was politically profitable to play on the fears and anxieties of white people, who were afraid of the political power of Black voters. And what was true in Georgia in the 1960s turns out to be true throughout the South today, as Maddox’s victory based on racism holds lessons for the 2024 presidential election.

To understand the popularity of Donald Trump and the Republican Party in Southern states such as Georgia, it’s crucial to understand the racial divisions that preceded him.

As a civil rights historian, I believe that Trump can be placed among a long line of demagogues who possess the skills needed to tap into the fears and anxieties of a group of people that perceives itself as marginalized, at risk and not in control.

Maddox was one of the first to do so in his successful gubernatorial campaign in 1966.

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For ‘the little people’

In his book “The Demagogue’s Playbook,” law professor Eric Posner defined a demagogue as a “charismatic, amoral person who obtains the support of the people through dishonesty, emotional manipulation, and the exploitation of social divisions.”

For Maddox, a Democrat in the era when Southern Democrats were the segregationist party, the social division he could exploit was a rapidly changing South, where political and cultural conventions were turned upside down by the successes of the Civil Rights Movement. No longer was the white race the master of the social order.

During his campaign, Maddox used class warfare to frame his GOP opponent, millionaire textile heir Bo Callaway, as an elite integrationist who was out of touch with white voters – or as Maddox called them, “the little people.”

Maddox used newspaper advertisements for his chicken restaurant, the Pickrick, to rant about political grievances and target his political enemies.

But his primary weapon of choice was the race card. He celebrated his aggression toward Black people by brandishing axe handles as he stood in the doorway of his restaurant in downtown Atlanta.

A crass businessman, Maddox called his axe handles “Pickrick Drumsticks,” which he also sold for US$2 apiece.

Such brazen behavior earned Maddox the admiration of many white Georgians uneasy about the pace of racial integration. His popularity was solidified after he refused to allow Black people to eat in his chicken restaurant, as required under the Civil Rights Act of 1964, and literally chased them away from his front door.

At one point during the scuffle, Maddox was heard calling to the Black customers, “You no good dirty devils! You dirty Communists! Get the hell out of here or I’ll kill you.”

When a Georgia court ordered Maddox to obey the Civil Rights Act of 1964, Maddox chose to shut down his business. For him, the issue was a matter of the rights of private property owners.

“This property belongs to me,” Maddox once said, “and I’ll throw out a white one, a black one, a red-headed one or a bald-headed one. It doesn’t make any difference to me.”

Maddox denied being a racist and defended his segregationist views by arguing he believed in separate but equal facilities for white and Black people.

Maddox served only one term as governor because state law prevented any governor serving two successive terms. Instead, he ran for lieutenant governor in 1970 and won.

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Georgia on Trump’s mind

Much like Maddox, Trump has tapped into white resentment and anger to gain popularity in a state that he won in 2016 but barely lost in the 2020 presidential election.

In her book “Demagogue for President: The Rhetorical Genius of Donald Trump,” American rhetoric historian Jennifer Mercieca explains that Trump is “a leader who makes use of popular prejudices and false claims and promises in order to gain power.”

That is an effective strategy, she argued, especially with a frustrated and polarized electorate.

Nowhere is that more evident than in Georgia. In a state that saw nearly 5 million voters cast ballots, Joe Biden beat Trump by only 11,779 votes in 2020.

In a campaign stop in Georgia in March 2024, Trump chose to hold a rally in the small city of Rome, located in the district of one of his most die-hard supporters, Marjorie Taylor Greene, the far-right Republican U.S. representative.

In 2020, voters in the metro Atlanta area and other larger cities voted for Biden. But in more rural areas such as Rome, voters cast their ballots for Trump – and appear in polls to be giving Trump an edge over Biden in the 2024 race.

One of the major issues is U.S.-Mexico border security and Trump’s views on immigration, which critics have characterized as racist.

During the rally, Trump blamed Biden for the death of 22-year-old Georgia nursing student Laken Riley. An immigrant from Venezuela who entered the U.S. illegally has been arrested and charged with her murder.

“What Joe Biden has done on our border is a crime against humanity and the people of this nation for which he will never be forgiven,” Trump said as he promised to start the largest deportation of immigrants in American history.

Such proposed policies – and thinly veiled racist messages – play well in a political district represented by a far-right extremist.

Much like Maddox did nearly 60 years ago, Trump uses fear of other racial groups to gain support among white voters.

Racial demagoguery in the U.S. was once largely limited to Southern politicians who sometimes used their folksy, homespun charms as champions of the little guy to stoke racial and economic grievances. Though Trump is a wealthy businessman, he is able to convince working-class white voters that he is not only one of them but also a victim, too, of the “liberal elites.”

Donald Trump appears to have successfully translated this approach to the national stage.

Joe Biden has pledged repeatedly to go further than any of his predecessors with his support for U.S. labor rights.

(THE CONVERSATION) — Joe Biden has pledged repeatedly to go further than any of his predecessors with his support for U.S. labor rights.

“I intend to be the most pro-union president leading the most pro-union administration in American history,” Biden said at a White House meeting in September 2021 that brought together ordinary workers, labor leaders and government officials.

He has expressed this intention many times, sometimes clarifying his goals.

For example, in 2023 he said in Chicago that his administration was “making it easier to empower workers by making it easier to join a union.”

Based on my research regarding the history of organized labor in America, I would give Biden an A-minus for his record on workers rights. In my view, the man dubbed “Union Joe” has lived up to the claim, with one notable error.

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4 years of sticking to that message

Biden has set many precedents related to organized labor.

In 2021, Biden encouraged workers at an Amazon facility in Alabama to vote in favor of joining a union. In a video message, he asserted that there should be “no intimidation, no coercion, no threats, no anti-union propaganda” from employers toward unionizing efforts.
Although those workers chose not to join the union, this address marked a milestone. No president had ever issued such a statement on behalf of a union during an organizing campaign.

In 2022, Biden used executive orders to improve conditions for work on federal projects, including the use of project labor agreements for federal construction projects, which requires the hiring of unionized workers. His administration also created new rules around pay equity for federal workers.

And a Biden labor task force also released a report laying out 70 policies the government could implement to strengthen labor unions.

In 2023, he became the first president to walk a picket line, which happened during the most effective United Auto Workers strike in decades. The historical record indicates that no prior president had ever even considered taking such an action.

In 2024, the Biden administration has picked up the pace.

In the month of April alone, it banned the noncompete clauses that can stop workers from taking another job in their same line of work if they quit, expanded eligibility for overtime pay to people making up to US$58,656 a year, up from its current cap of $35,568, and pushed pension funds to only invest in companies that adhere to high labor standards.

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Coordinated policy

Under the leadership of Biden’s appointees, the National Labor Relations Board – an independent agency charged with protecting workplace rights – has investigated allegations that Starbucks, the Pittsburgh Post-Gazette and other companies have intimidated their employees to discourage unionization drives.

Biden also supports the Protecting the Right to Organize Act, better known as the PRO Act. Lawmakers have introduced this measure three times since 2019, and the House of Representatives has passed it twice.

Among other things, this bill would impose significant financial penalties on companies that illegally interfere with their employees’ union rights and would speed up the collective bargaining process after workers win a union election.

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Public sentiment

Biden’s administration’s pro-union stance is in tune with public sentiment: Approval ratings for unions are higher than they’ve been in several decades.

About 7 in 10Americans say they support unions, according to polls commissioned by Gallup and the AFL-CIO.

This public support might be buoyed by current events.

High-profile campaigns among workers employed by Amazon, Starbucks, show business studios, hospitals and automakers have kept unions in the news – regardless of what the White House is doing.

A wide array of workers, from strippers to UPS truck drivers, have made big gains in pay and benefits by flexing their collective power.

Teachers were already going on strike before the COVID-19 pandemic. They have continued to assert their right to do so around the country.

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On the other hand …

To be sure, some of Biden’s aspirations to improve the lot of workers remain unfulfilled.

The share of U.S. workers who belong to unions has continued to fall, slipping to 10% in 2023. The buying power of the federal minimum wage, stuck at $7.25 per hour since 2009, has been further eroded due to inflation.

Several states, meanwhile, have weakened their child labor laws even as the numbers of undocumented children and teens holding dangerous jobs that are off-limits for minors rise.

In terms of Biden’s actions, the low point came in 2022, when he used the Railway Labor Act of 1926 to stop the railroad union from striking for better sick leave. Biden officials argued that the economy could not afford a rail shutdown, but political considerations around inflation before the midterm elections probably contributed to the administration’s response.

At the same time, the Biden administration continued working behind the scenes to pressure rail companies to grant the workers their demands, and they largely did. Union leaders credit Biden for helping them get this victory for their workers.

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Congress and the Supreme Court

There is only so much any president can do to promote labor rights. As with any other cause, they’re limited by the broader political climate and economic realities.

Given the generally weak track record of his predecessors going back to the late 1940s, I would argue that Biden is the most pro-union president since Franklin D. Roosevelt.

FDR, however, had enormous majorities in Congress when he signed into law two measures that safeguard U.S. labor rights to this day: the National Labor Relations Act, which protects the right of private sector workers to organize unions without fear of retaliation, and the Fair Labor Standards Act, which established a minimum wage and made most child labor illegal.

Biden, in contrast, has had to contend with a narrow Democratic majority in the Senate throughout his presidency, and the Republicans gained a slim House majority in the 2022 midterm elections.

He’s also seeking to expand labor rights at a time when the Supreme Court’s conservative majority has been consistently ruling against unions.

To be sure, there are several significant labor cases that could potentially land on the Supreme Court’s docket. It will take time to see if unions become more powerful thanks to Biden’s actions and their own organizing, or whether the court continues to erode labor laws.
That’s because, historically, U.S. judges have had at least as much say in determining labor rights as presidents.

President Joe Biden might not appear on the November 2024 presidential ballot in Ohio.

By Jonathan Entin
Case Western Reserve University

(THE CONVERSATION) — President Joe Biden might not appear on the November 2024 presidential ballot in Ohio. Ohio law requires that presidential candidates be certified – that is, the state must be notified that presidential candidates have been officially nominated – 90 days before the general election in order to get on the ballot. That is the earliest deadline of any state.

But the Democratic National Convention that will formally nominate Biden won’t open until nearly two weeks after Ohio’s Aug. 7 deadline. The Republican National Convention will wrap up nearly three weeks before the deadline, so Donald Trump won’t have a problem getting on the ballot.

The 90-day deadline has often caused trouble since its adoption in 2010. Only in 2016 did both parties’ conventions take place before the Ohio cutoff date. Both conventions took place after the deadline in 2012 and 2020, and legislators extended the deadline both times. This is the first time that only one convention comes too late, but Republicans could well be affected in the future.

There are ways to resolve this problem, as two other states with early deadlines have already done. Washington state officials said they will accept a provisional certification of Biden’s nomination before the convention. And Alabama’s Legislature shortened its deadline so that Biden could qualify for the ballot there.

Neither solution seems likely in Ohio, where Republicans may be seeking to make life harder for the Democrats’ presidential nominee. The attorney general says the state can’t accept a provisional certification. And the Legislature couldn’t come up with a timely fix to the law.

Ohio laws generally take effect 90 days after passage. So a change to the deadline had to pass by May 9, but the Legislature wound up doing nothing. Here’s how that played out.

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Divided GOP controls Statehouse

Republicans have supermajorities in both houses of the Ohio Legislature, yet they couldn’t agree on how to proceed.

The Ohio Senate passed a bill, but only after adding what Democrats viewed as a poison pill that would have banned foreign nationals from contributing to campaigns for or against ballot measures. Republicans objected to a Swiss national’s rumored contributions to a successful campaign last year in which voters approved a reproductive-rights amendment to the state constitution.

The House had planned to consider a different proposal but never voted on anything before leaving town on May 8 for two weeks.

This reflects the Ohio GOP’s bitter divisions. The House speaker won his position with support from only a minority of his caucus. The Senate president will switch to the House next year because of term limits and has hinted he will challenge the speaker.

The Legislature could still pass an emergency law to change the deadline, but emergency laws require a two-thirds vote in both houses. The chances of that happening are uncertain at best.

So, Democrats might have to file a lawsuit to get Biden on the ballot.

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What’s the precedent?

As a constitutional law scholar, I believe Democrats would have a strong argument that using an arbitrary and unusually long deadline to bar a major-party presidential candidate violates voting and associational rights under the First and 14th amendments. But success is not guaranteed.

Such a lawsuit would rely on two U.S. Supreme Court cases that rejected state efforts to bar presidential candidates from the ballot.

A 1983 decision struck down Ohio’s old law that required independent candidates to qualify more than six months before the election. And a March 2024 ruling rejected Colorado’s effort to exclude former President Donald Trump from its primary ballot.

Those cases may be helpful in making the Democrats’ case, but they don’t dictate a win. The 1983 decision overturned a law that treated independent presidential candidates much less favorably than party candidates. Ohio’s 90-day deadline treats all candidates the same.

And the Colorado case involved the state’s unilateral determination that Trump was ineligible for office as an insurrectionist under the 14th Amendment. Ohio’s 90-day rule says nothing about whether a candidate is constitutionally disqualified.

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‘Nobody seems to know why’

Those differences might not matter. Even if they do, a lawsuit still could win.

Ohio’s 90-day deadline is not only arbitrary, I believe that it is irrational. Nobody seems to know why the state extended the deadline from 60 to 90 days in 2010. The change came in an obscure provision of a 341-page bill.

The 90-day deadline has been a problem in almost every presidential election since then. The Legislature waived the deadline in 2012 and 2020, when both parties’ conventions fell after the cutoff date, and those elections ran smoothly.
So the state can’t justify sticking with the 90-day rule this year when only one party is holding its convention after the deadline.

Biden probably won’t carry Ohio in any event. But having both major-party candidates on the ballot is necessary for a fair presidential election.

Everyone involved keeps saying that Biden will appear on the November ballot. But, at least for now, the law says otherwise.

There’s no denying that the current Congress has been one of the most chaotic in recent memory.

(THE CONVERSATION) — There’s no denying that the current Congress has been one of the most chaotic in recent memory. The paralysis in 2023 and 2024 over the selection of the speaker of the House helped lead to one of Congress’ most unproductive years in history.

And although House Speaker Mike Johnson, a Louisiana Republican, survived an effort on May 8, 2024, by far-right members of his conference to oust him, the attempt is a signal of the dysfunction in Congress. It’s also a prime example of why so few Americans have a favorable view of the job Congress is doing.

For many Americans, the solution to this dysfunction is clear: Institute limits on the number of terms members of Congress can serve. If voters use term limits to “throw the bums out” and replace them with a new crop of elected leaders, the reasoning goes, the result will be a more effective and perhaps less polarized Congress.

According to recent surveys, 80% or more of the American people are in favor of congressional term limits. You’d be hard pressed to find another policy that more Americans from both sides of the aisle agree on.

Yet there’s a problem: Most political scientists agree that term limits are a bad idea. The evidence suggests that term limits create more problems than they solve and could even accelerate the polarization that’s been hobbling Congress for over a decade.

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The value of long incumbencies

Advocates of term limits often point to a striking statistic to support the reform: the consistently high reelection rates of congressional incumbents. Current members of Congress enjoy a strong advantage from their status as an elected representative – that is, more name recognition and campaign resources than their challengers. Advocates for term limits say they are necessary to cut long-term incumbents’ service short in favor of new blood.

But term limits, often set at eight years in state legislatures, undervalue the benefits of representatives who have been serving in office for a long time. These members have had more time to gain knowledge and experience about Congress as an institution; develop policy expertise in issues important to their districts; and cultivate working relationships with fellow members that help them make policy more effectively.

Data from the Center for Effective Lawmaking, a research center with the University of Virginia and Vanderbilt University, which tracks members’ success rates for legislation they sponsor, strongly supports this perspective: The longer members serve, the more effective a lawmaker they are likely to become.

Fresh perspectives in Congress are important, which is why the U.S. has elections. But term limits would stifle members’ lawmaking careers just as they’re getting off the ground. Even worse, losing well-seasoned members with issue expertise would leave inexperienced lawmakers vulnerable to influence from lobbyists and special interest groups that would highlight their own expertise and seek to influence legislation in their favor.

This is precisely what has happened in state legislatures that instituted term limits around the turn of the century.

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Term limits don’t solve extremism

Term limits are also unlikely to make Congress less ideologically extreme.

Judging from statements they’ve made, many of the more tenured members who are retiring at the end of the current Congress are the ones lamenting extremism and partisanship, often citing these trends as the reason they’re leaving.

Meanwhile, many of the most polarizing and best-known representatives in Congress – think Georgia’s Marjorie Taylor Greene, a Republican; Matt Gaetz of Florida, also a Republican; and Democrat Ilhan Omar from Minnesota – are newer members with less apparent interest in compromise and achievement of long-term policy goals. The data reflects this: The average long-serving member of Congress nearly always has lower ideological extremism scores than the average congressional newcomer, based on roll call votes on policy issues.

Vast majorities of Americans say they prefer a Congress that compromises to get things done. Term limits would almost certainly fail to achieve this.

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Congressional ‘senioritis’

But this isn’t the only negative impact of term-limits reform.

Research by political scientist Gerald Wright suggests not only that term limits for state legislators were ineffective at reducing polarization, but that term-limited lawmakers – those legally prevented from running for reelection – tend to exert “decreased legislative effort” and missed roll call votes compared with their colleagues who are up for reelection.

In other words, members in their legally mandated final term in office enjoy a kind of “senioritis” – the apathy that can hit students in their last term of high school or college – in their legislatures because they don’t have to face the voters again at the ballot box.

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Elections: The ultimate term limits

Most political scientists agree that high incumbent reelection rates are mainly the result of highly partisan districts and voters, not corrupt incumbents advantaged by years of service. The voters already have a say in primaries and general elections to vote out incumbents.

But they largely choose not to.

It is likely that very loose term limits – say, 20 years of service –could help prevent aging incumbents such as Mitch McConnell or the late Dianne Feinstein from serving well past their prime. But as a method for depolarizing Congress and making it effective again, the evidence is thin.

Cory Doctorow, Canadian journalist, and co-editor and of the off-beat blog Boing-Boing, is an activist in favor of liberalizing copyright laws and a proponent of the Creative Commons non-profit organization devoted to expanding the range of creative works available for others to build upon legally and to share. Doctorow and others continue to write prolifically about the apocalyptic changes facing Intellectual Property in general and the music industry in specific.

By Dr. John F. Sase
With Gerard J. Senick
Contributing editor

‘The whole point of digital music is the risk-free grazing.’
— Cory Doctorow

Cory Doctorow, Canadian journalist, and co-editor and of the off-beat blog Boing-Boing, is an activist in favor of liberalizing copyright laws and a proponent of the Creative Commons non-profit organization devoted to expanding the range of creative works available for others to build upon legally and to share. Doctorow and others continue to write prolifically about the apocalyptic changes facing Intellectual Property in general and the music industry in specific.

In this month’s column, we will explore the cataclysm facing U.S. industry through the portal example of the music industry, a simple industry in comparison to those of automotive or energy. However, in the simplicity of this example we may uncover some lessons that apply to all industries.

In his web-article, “The Inevitable March of Recorded Music Towards Free,” Michael Arrington tells us that music CD sales continue to plummet alarmingly. “Artists like Prince and Nine Inch Nails are flouting their labels and either giving music away or telling their fans to steal it…. Radiohead, which is no longer controlled by their label, Capitol Records, put their new digital album on sale on the Internet for whatever price people want to pay for it.” As many others have iterated in recent years, Arrington reminds us that unless effective legal, technical, or other artificial impediments to production can be created, “simple economic theory dictates that the price of music [must] fall to zero as more ‘competitors’ (in this case, listeners who copy) enter the market.”

Unless sovereign governments that subscribe to the Universal Copyright Convention take drastic measures, such as the proposed mandatory music tax to prop up the industry, there virtually exist no economic or legal barriers to keep the price of recorded music from falling toward zero. In response, artists and labels will probably return to focusing on other revenue streams that can, and will, be exploited. Specifically, these include live music, merchandise, and limited-edition physical copies of their music.

According to author Stephen J. Dubner, “The smartest thing about the Rolling Stones under Jagger’s leadership is the band’s workmanlike, corporate approach to touring. The economics of pop music include two main revenue streams: record sales and touring profits. Record sales are a) unpredictable; and b) divided among many parties. If you learn how to tour efficiently, meanwhile, the profits —including not only ticket sales but also corporate sponsorship, t-shirt sales, etc., — can be staggering. You can essentially control how much you earn by adding more dates, whereas it’s hard to control how many records you sell.” (“Mick Jagger, Profit Maximizer,” Freakonomics Blog, 26 July 2007, http://freakonomics.blogs.nytimes.com).

In order to get a handle on the problems brought about by digital media in the music industry, we turn to the data most relied upon by the industry. This data comes through Neilsen SoundScan (http://en-us.nielsen.com), which operates a system for collecting information and tracking sales. Most relevant to the topic of this column, SoundScan provides the official method for tracking sales of music and music video products throughout the United States and Canada. The company collects data on a weekly basis and makes it available every Wednesday to subscribers from all facets of the music industry. These include executives of record companies, publishing firms, music retailers, independent promoters, film entertainment producers and distributors, and artist management companies. Because SoundScan provides the sales data used by Billboard, the leading trade magazine, for the creation of its music charts, this role effectively makes SoundScan the official source of sales records in the music industry.

Quo Vadis? According to Neilsen SoundScan, “2009 music purchases in the U.S. were up 2.1% over 2008 figures, marking the second year in a row that sales exceeded 1.5B units sold according to Nielsen SoundScan.” However, according to its data the growth driver for this record-breaking year was digital downloads as music fans purchased 1.16 billion digital tracks (up 8.3% from the prior year) and 76.4 million digital albums (up 16.1%). Furthermore, re-mastered tracks from the catalogs of Michael Jackson, Taylor Swift, and The Beatles really fueled the overall growth in sales. (“A Big Music Year for Jackson, Boyle, Swift, Digital Downloads… and Vinyl?” 7 January 2010, blog.nielsen.com.)

As Al Tompkins of Poynter Online commented, “What does it say about music today that the best-selling albums of 2009 did not consist of new music? Album sales dropped last year despite the ease with which fans can buy and download what they want. It was the eighth such drop in U.S. album sales in nine years. You can’t just blame it on the economy. Concert sales rose in 2009; so, did movie ticket sales.” (“U.S. Album Sales Continue to Tumble,” 13 January 2010, www.poynter.org.)

Stephen J. Dubner sums up the mess quite well. “It strikes me as ironic that a new technology (digital music) may have accidentally forced record labels to abandon the status quo (releasing albums) and return to the past (selling singles). I sometimes think that the biggest mistake the record industry ever made was abandoning the pop single in the first place. Customers were forced to buy albums to get the one or two songs they loved; how many albums can you say that you truly love, or love even 50% of the songs — 10? 20? But now the people have spoken. They want one song at a time, digitally please, maybe even free.” (“What’s the Future of the Music Industry? A Freakonomics Quorum,” 20 September 2007, http://freakonomics.blogs.nytimes. com).

Like many of the attorneys whom I, Dr. Sase, serve, I also have worked as a musician/producer/engineer/indie label owner releasing esoterica since the 1960s. While occasionally making an adequate living off my music, I also developed my talents as an economist, earning a doctorate in that field. Therefore, I comment from this dual perspective of an economist/musician.

The post-future, as many music pundits call it, does not really differ that much from the past. How and why folks obtain their music continues to reflect at least three related decision drivers. We can summarize the three most relevant as 1) Content, 2) Durability, and 3) Time-Cost. Let us explain further.

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1) Content

When I started to record music in the early 1960s, the market was filled with “one-hit wonders.” It was the age of AM (amplitude modulation), DJ radio. It was also the age of the 45 RPM record with the hit on the A Side and usually some filler cut on the B Side. It was not uncommon for anyone with a 2-track reel-to-reel to “download” the one hit desired from their favorite radio station. There were a few groups that offered entire twelve-inch LPs with mostly great songs. The first such LP that I purchased was Meet the Beatles by those four lads from Liverpool.

During the late 1960s, the industry turned more to “Greatest Hit” collections by groups that had previously turned out a string of AM hits and to “concept” albums. During this golden age of LP sales, the Beatles, the Stones, the Grateful Dead, the Yes, King Crimson, and numerous other groups released albums filled with solid content. Bottom line: consumers don’t mind paying for a product if they feel that they are receiving value.

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2) Durability

Why would someone buy a twelve-inch LP when they could borrow a copy and tape record the songs to a reel-to-reel or, later, to a compact cassette? The answers at that time were simple. First, it was “cool” to have a great album collection, especially one that a member of the opposite gender could thumb through in one’s dorm room. Let us simply say that one’s album collection could inform another party about one’s tastes and possible sub-culture and personality. Therefore, an attractive collection provided a certain degree of social currency.

The second part of the equation came in the form of actual product durability. Like current downloads, self-recorded reel-to-reel and cassette tapes generally suffered from some loss of fidelity in the transition. More importantly, the integrity and permanence of the media also left something to be desired. Thirty to forty years ago, tape would flake, break, and tangle around the capstan. Unless one backed up their collection to a second-generation tape, many of one’s favorite tunes could be lost.

Today, computer hard drives still crash. Without the expense of an additional hard drive and the time involved in making the transfer, the same durability issues ensue. What about CDs? As most of us who use CD-Rs for multiple purposes know, the technology that instantly burns an image leaves a product that remains more delicate and subject to damage in comparison to a commercially fabricated CD, stamped from a metal master.

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3) Time-Cost

This third element basically reflects the old “tape is running/time-is-money” economic argument and may explain why younger music-listeners prefer to download songs either legally or illegally. It echoes the same economics that led listeners in the 1960s to record their favorite hits from the radio. The substance of the argument has to do with how an individual values his/her time. If music-lovers work for a low hourly wage (or often no income at all), they will value the time spent downloading, backing up, and transferring cuts in terms of what they could be earning during the same time. Let us consider the following example.

If twelve downloads or a comparable CD costs $12, a baby-sitter earning $6 per hour could afford to spend as much as two hours of time ripping music to achieve the same value. However, someone with a skilled trade or a college degree may be earning $24 or more per hour. Spending more than one half hour at ripping would exceed the value derived. The counterargument of the time-cost of travelling to a brick-and-mortar music store gets offset by a person’s ability to log-on to Amazon or elsewhere in less than a minute and possibly receive free shipping. The market will always change as the primary market demographic ages. It happened with the Baby-Boomers of the 1960s and 1970s and it will happen with Generation X, Y and Z in the current century.

The bottom line of all this debate rests in the fact that a consumer will choose the mode of deliverable that optimizes his/her bundle of values. This bundle includes quality and quantity of content, durability, and time-cost effectiveness. These remain the lessons that music makers and music deliverers must understand to survive. The more things change, the more they stay the same.

“When I’m drivin’ in my car, and that man comes on the radio, He’s tellin’ me more and more, about some useless information, supposed to fire my imagination, I can’t get no, oh no, no, no.” — Michael Philip Jagger, British economist, with formal roots from the London School of Economics (Note: Though currently holding wealth of $500 million, 81-year-old Jagger continues to perform music every day.)

In conclusion, we recognize that certain values motivate consumers as well as businesses. These values include content, durability, and time cost. It does not matter whether the good or service under consideration exists in the form of real, personal, or intellectual property. The premise remains the same for making music, building automobiles, teaching economics, and providing legal services.

The British economist Adam Smith summarized this phenomenon more than a hundred years ago in his concept of an invisible hand at work in the marketplace. In effect, markets work because all market participants seek to optimize their own self interests. As long as both parties involved in a transaction perceive that they will emerge better off after consummating the transaction, they will participate. If one (or both parties) does not share this perception, no music, automobile, education, nor legal services will change hands. In effect, the market fails to produce a satisfactory outcome.