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Global Perspectives: Tom Luce on public service, education reform

Mark A. Wynne

Tom Luce is known in the Texas business community as founding and managing partner of the Hughes and Luce law firm. His legal career centered on corporate law and commercial litigation, and he served as lead attorney on multibillion-dollar mergers and litigation.

He is known to the broader community because of his distinguished public service. It includes appointments to major state positions such as chief justice of the Supreme Court pro tempore as well as member of the Sunset Commission, the Superconducting Super Collider Commission and the Cancer Prevention and Research Institute. He was also chief of staff of the Select Committee on Public Education.

Nationally, Luce was appointed assistant secretary of education by President George W. Bush. He was named to the Library of Congress board by the speaker of the U.S. House of Representatives.

In recent years, he has been the driving force behind Texas 2036. The think tank is dedicated to solving policy questions that need to be addressed to ensure that Texas remains “… the best place to live and work for the next generation of Texans, and the generations after them.”

Recently, the Federal Reserve Bank of Dallas hosted Luce as part of the Bank’s Global Perspectives speaker series. This series was launched at the beginning of 2016 with the objective of bringing leaders from the worlds of business, academia and policymaking to the Dallas Fed to share their insights on global, national and regional developments.

Luce and Dallas Fed President Rob Kaplan discussed his career in law and public service, his decision to become a lawyer and the key challenges facing the U.S. education system. The following are excerpts from their conversation, edited for clarity, and presented by topic.

On becoming a lawyer and starting a law firm:

Luce: I really kind of accidentally bumped into it. I felt like I needed a graduate education. Southern Methodist University had a night law school. SMU did not have a business school at night. I was married when I was 19 had two children by the time I was 21. I said, “You know, I think I’ll get a law degree,” because I could go at night and work in the daytime and support my family.

So, it was a very complicated decision, carefully thought through. And then [in my 30s], I started the law firm. About a year later, a friend of mine recommended to [business magnate] Ross Perot that he interview me for a project, which was an unfortunate project for him. He had invested in what had become the second-largest stock brokerage firm in the country, and it was going under. In 1971, Wall Street was collapsing. Merrill [Lynch] had acquired the third-largest brokerage firm. He was persuaded to acquire the second largest. And then, the oil embargo hit.

He had put $70 million into it [the firm], and he said, “I want to close it and go home, and I’m looking for a lawyer to liquidate the brokerage firm.” He somehow interviewed a New York firm and a Washington firm and chose this five-person, brand new firm in Dallas, which had no corporate clients and no real Wall Street experience to handle the liquidation. That was the break that, obviously, was like a rocket booster to my legal career, and I’m forever grateful to him.

Giving back and creating opportunity:

I’ve tried to explain to my seven grandsons that I could not have been born in a better place, at a better time, than Texas in 1940. For a while, I thought my success was because I’m bright and smart, and all that good jazz. But then I learned I was really bodysurfing on ocean waves that other people had created, and if I had been born in any other place, I wouldn’t have had the same opportunities.

When I was 59 years old, I was very concerned that not as many young people were having the same opportunities that I had. I was raised by a single mother, who did not have a college degree, and had mental health issues. But I got a wonderful public education experience. A lot of people gave me a break along the way. I was a beneficiary of what I later began to call transactional philanthropy—that is to say, people appeared in my life, a surrogate father, or teachers, or coaches, or whatever.

It really became abundantly clear to me, thanks to Ross Perot in the ’80s, that it was time to give back. He volunteered me to serve as chief of staff in an effort to improve Texas public schools, and I traveled all over the state. I saw that literally millions of children were not getting the same opportunities that I had, and that stuck with me and made quite an impact for me. Since I had been very fortunate, I decided it was time for me to leave the law practice and see what I could do to improve opportunities for others.

Improving education standards:

In the ’80s, ’90s, early 2000s—for about 15 to 20 years—we in Texas led the nation in academic improvement of Hispanic and African-American low-income kids. We exceeded every other state in the country. Then in 2005, we decided to lower standards, lower state funding and lower [educational] assessment. We basically said, “Oh well, we don’t need to do it anymore.”

We had moved roughly from about 49th when we started education reform in 1983 to about 25th, and now we’re back in the 40s because we took our eye off the ball. Why? Well, we used to have a little bit more long-term thinking in our politics.

I’m totally convinced that most of the problems that government deals with are just like the ones we’re dealing with in business. We’re dealing with an enormous amount of disruption, social change, systems transformation. That does not occur overnight and does not occur by one election cycle. It occurs when you have a long-term plan, and you’re disciplined about how much the system can take in terms of change.

If you think back to what AT&T has undergone since it was broken up, you could not have transformed or imagined transforming overnight AT&T into what it is today. Well, the same is true of public education. If you look at it as a business enterprise, it has 5.5 million customers, 6,500 business units or campuses and expends billions of dollars, and you want to transform it overnight. It takes a vision, and it takes continuous improvement, and it takes discipline—and our political [leadership] is not very good [at following] those principles today, nor are they using data. I developed a motto of necessity: “Without data, you’re just another person with an opinion.”

States that get education right:

Massachusetts has set the bar, and let me say it folks—they have as much diversity and as much poverty as we do. They set high standards, they held people accountable and they’re doing a good job. Tennessee has also come a long way in the past 15 to 20 years. They’ve had an enormous coalition of business leadership step forward and demand change. [Former Gov.] Jeb Bush did a great job in Florida.

Again, Texas state government is no different than any other enterprise. You have to look out and say, “Here’s who our new competitors are.” We’re now competing increasingly against the North Carolinas, the Tennessees, the Floridas.

We may have gotten everybody out of California who wants to work—I don’t know. The same is true of New York. We’re competing against different competitors. They saw our low-tax environment, our business-friendly environment [and] they’re copying that model. They’re becoming more competitive—but they’re paying attention to their education systems. The fact of the matter is, we’re running out of educated workers in this state. As of today, we have 1.2 million unfilled jobs; we have 500,000 unemployed people. How are we going to expand?

Top priorities for fixing education:

No. 1, every child has to be ready to enter first grade, ready to learn. That means child care must be developmental care. Child care beats no care, so I’m all for child care. But we need developmental care. It really matters how you’ve helped the child get wired from 3 months to 3 or 4 years old.

It’s not only government that has to step up—business has to step up. You won’t have a sufficient workforce unless you can galvanize and activate the female workforce, and child care is the biggest issue that women face.

No. 2, every child has to read at grade level by grade three. Our research shows current literacy rates are awful. We’ve got to do better, and we’ve got to set high standards. Our standards right now are so low that it’s a joke.

Third, in middle school, you have to pass algebra II, not because you’re going to use formulas in your job, but it’s the critical ingredient in critical-thinking skills. We have to raise our horizons and quit arguing about algebra. It’s how you critically think. In high school, we have to set the standards, which are really college ready. The best barometer of that today shows, for instance, that if a Hispanic student passes one AP [advanced placement] national exam in high school—the course does not matter—the college graduation rate goes from 12 percent to 82 percent.

My motto for my grandchildren is, “You’ll never exceed your own expectations.” We do not have expectations that our minority students can and will take and pass an AP exam. The truth of the matter is, even if you don’t pass the national exam, the mere fact you tried and had a more challenging course improves your college success to 65 percent.

About the Author

Mark A. Wynne

Wynne is vice president and associate director of research in the Research Department at the Federal Reserve Bank of Dallas.

The views expressed are those of the author and should not be attributed to the Federal Reserve Bank of Dallas or the Federal Reserve System.