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The president's student aid reform plan will save tens of billions over the next decade. We'll use these savings to make college more affordable for the next generation of engineers, teachers, and scientists who will become the backbone of the new economy. The House has passed the Student Aid and Fiscal Responsibility Act. This legislation will end bank subsidies and invest in students directly. The Senate is still working on its bill. The House bill will increase Pell Grant scholarships to $5,710 in the next fiscal year. It will guarantee that Pell Grants keep pace with the rate of inflation. It will eliminate unnecessary questions from the financial aid forms, making it faster and easier for students to qualify for federal grants and loans. This legislation also promises an historic investment in community colleges, helping these essential schools take Americans from all backgrounds and equip them to succeed. Finally, it will improve the quality of early learning programs, which are critical to America's educational success. All of this will be possible by eliminating the student loan subsidies. We will end the loans under the Federal Family Education Program and make them directly to students -- just as economist Milton Friedman proposed 50 years ago, and just as the Department of Education has been doing since 1993 through the Direct Loan Program. For future lending, we have hired experienced companies to service all new student loans and collect them for us. We selected these companies through a competitive process. The shift is underway, and it is proving to be a remarkably smooth transition. In the past two years, our Department has issued more than $50 billion in student loans. Over 2,300 colleges and universities participate in the direct lending program -- an increase of 1,300 over the past three years. It's time to do what's right for taxpayers -- move our money from bankers to students.

No silver bullets. This is the simple premise of Diane Ravitch’s new book, “The Death and Life of the Great American School System,” which is being brought out this week by Basic Books. Written by one of our nation’s most respected scholars, it has been eagerly awaited. But it has also been, at least in some quarters, anticipated with a certain foreboding, because it was likely to debunk much of the conventional — and some not so conventional — wisdom surrounding education reform. Click Image to Enlarge

What of the once-great comprehensive high schools, institutions with history and in some cases a track record of success going back generations? As time moves on, it is fast becoming clear that the new small schools, many with inane themes (how about the School of Peace and Diversity?), can never substitute for a good neighborhood high school, which can become a center of communal life and pride. Ms. Ravitch’s report underscores the fact that the trick is to fix the neighborhood schools beset with problems, not destroy them.

It is not only the foundations that Ms. Ravitch blames for the current crisis: government has also failed in the attempt to reform the schools from above, lacking a clear perspective of how schools work on a day-to-day basis. Thus, the major federal initiative, No Child Left Behind, well intentioned as it may have been, ended up damaging the quality of education, not improving it. While the federal government declares schools as “failing” and prescribes sanctions for schools not meeting its goal of “annual yearly progress,” it is the states that are allowed to write and administer the tests. This has led to a culture of ever easier tests and more test preparation rather than real instruction. More ominously, it led to such scandals as the New York State Education Department lowering the “cut scores” that define the line between passing and failing. Ms. Ravitch suggests that the proper roles of the states and federal government have been reversed under NCLB. Maybe the standards for achievement should be set in Washington, which, after all, administers the National Assessment of Educational Progress , and the solutions found at the local level, using the accurate data provided by Washington. Instead of moving in a different direction from the failed NCLB model of the Bush Administration, the Obama administration has adopted and expanded on them.

Today, he is emerging as one of the nation’s archreformers, pushing to impose some of the most stringent new financial regulations in history. And as the head of the Commodity Futures Trading Commission, the leading contender to oversee the complex derivatives contracts that played a central role in the financial crisis and, in turn, the Great Recession, he is in a position to influence the outcome. It may seem an unlikely conversion, but it is one that has won the approval of Brooksley E. Born, of all people, a former outspoken head of the commission. She sounded alarms more than a decade ago about the dangers hiding in the poorly understood derivatives market and was silenced by the same Washington power brokers that counted Mr. Gensler as a member. Mr. Gensler opposed Ms. Born, according to people who worked at the commission in the 1990s, and in 2000 played a significant role in shepherding through Congress deregulation measures that led to explosive growth of the over-the-counter derivatives market. That was then. These days, Ms. Born is convinced of Mr. Gensler’s reformist zeal, as he takes on Wall Street in what is becoming one of the fiercest battles over regulation in the postcrisis era. “I think he is doing very well,” she said in an interview. “He certainly seems to be committed to robust oversight of derivatives and limiting excessive speculation and leverage.” The proposals championed by Mr. Gensler, if adopted by Congress, would substantially alter what is now a largely unregulated market in over-the-counter derivatives, financial instruments used by companies and investors to protect themselves and bet on moves in variables, like interest rates or currencies, and to speculate. The proposals include forcing the big banks that sell derivatives to conduct their trades in the open on public exchanges and clear them through central clearinghouses, so that any investor can see the prices that dealers charge their customers. Today, those transactions are bilateral and private.

In 1982, the top 1 percent of pop stars, in terms of pay, raked in 26 percent of concert ticket revenue. In 2003, that top percentage of stars — names like Justin Timberlake, Christina Aguilera or 50 Cent — was taking 56 percent of the concert pie.

. In an article entitled “The Economics of Superstars,” he argued that technological changes would allow the best performers in a given field to serve a bigger market and thus reap a greater share of its revenue. But this would also reduce the spoils available to the less gifted in the business.

IF one loosens slightly the role played by technological progress, Dr. Rosen’s framework also does a pretty good job explaining the evolution of executive pay. In 1977, an elite chief executive working at one of America’s top 100 companies earned about 50 times the wage of its average worker. Three decades later, the nation’s best-paid C.E.O.’s made about 1,100 times the pay of a worker on the production line.