Archives for category: Pensions

Over the past generation, Detroit has suffered from de-industrialization, middle-class flight, high poverty, joblessness, and abandonment by the state and civic elites. One reform after another has failed to “save” its schools, because reformers ignored the root causes of poor academic performance.

 

Now, conservative Michigan Governor Rick Snyder plans to get rid of public education and turn Detroit into an all-charter district like Néw Orleans. This is now public officials’ favorite way of getting rid of their responsibility, by handing it off to the private sector.

 

Here is one analysis of the continuing abandonment of the children of Detroit. I don’t usually cite partisan sources but this is as good an in-depth a review as I have seen. If you spot any errors, let me know.

 

It is a sad story. Our nation can’t afford to educate its poorest children. Actually, it can afford to but chooses not to. They need small classes; arts programs; experienced teachers; stability. None of that is part of the plan. We lack the will to help those who most need a good education.

A comment from a reader who signs as M:

 

Contracts are sacred…unless they’re made to a teacher.

 

What is perhaps the most disheartening is that the deformers have identified every crutch that we leaned on for determining education policy and worked in earnest to commandeer them or dismantle them.

 

Education research – let’s hire a bunch of researchers to generate what we want to say

 

Standards – Let’s govern what’s taught in classrooms whether it’s reasonable or not, educationally sound or not (this leads into all the VAMish nonsense)

 

School boards – let’s buy the races or have control seized from them, or both (buy the board then have it turn over power).

 

Money – Let’s find every end run through taxes and otherwise that will take money out of the schools from the students we’re trying to save, and blame that on teachers for being so greedy that they need to accept less – let’s take their money spend it elsewhere then blame them for their bloated pensions too.

 

Purpose of Education – Rather than being student centered it is now job market centered with schools being responsible for generating appropriate human capital (the student matters so much as they need to be come the chattel for said market)

 

I went into teaching to help students and make a living to help support my family. Pretty simple. If you look at the lens of effectiveness through all of these elements and how they’ve shifted over the last 20 years, it’s pretty disheartening.

 

They are succeeding (right now anyway) in turning school from a place of wonder, fun, community, and learning, into a hellish individualistic market centered hell hole focused on prepping each individual student for the test they must pass to be deemed “good product” – that takes away from so much of developing students into the types of neighbors we’d want in society. The message is insanely cynical.

Mike Klonsky updates us on Rahm’s financial hustle. 

Rahm Emanuel, who learned his creative financing tricks, like “scoop and toss” bond financing while working for Bruce Rauner at GTCR, plans to borrow $500M from the Chicago Teachers Pension Fund, one day after paying the Fund $634M in overdue required city contributions.

The real cost of this trickery is felt right in the classroom with 1,400 teachers and staff being hit with lay-off notices yesterday.

That is what is called “chutzpah.” He pays the pension contribution, borrows from the teachers’ pension funds, and lays off 1,400 teachers.

Bruce Rauner never held public office until he ran for Governor of Illinois as a Republican against Democratic incumbent Pat Quinn. Who is Bruce Rauner?

Ken Previti has a word for him: Sociopath. This is his word, not mine. Rauner cuts autism programs to pay for high-priced hires, like the new “education czar,” who will make a quarter million a year. Rauner loves charters. He even has one named for him. Previti quotes a conversation I had with Rauner in front of about a dozen people a few years back. I asked him if it bothered him that charters like his enroll small proportions of students with disabilities or ELLs. He said it didn’t bother him at all. He said that charters were for students who were highly motivated and eager to work hard. When I asked what he thought we should do about those other children, the ones rejected by charters, he said he didn’t care, it was not his problem. I would say Bruce Rauner is heartless. I would say he is indifferent to those he considers less worthy than himself.

Rauner is an equity investor. He made a lot of money managing pension funds for public employees. Forbes says he is worth nearly a billion dollars. That means he is very, very rich. Now that pension funds made him super-rich, he wants to get rid of them. Edward Siedle, who writes about pensions for Forbes, writes:

With an estimated personal net worth of nearly a billion and a stable of high-end residences, managing state workers’ retirement savings for decades– shielded from public scrutiny– has worked out very nicely for private equity titan Bruce Rauner.

You’d think he’d be thanking his lucky stars that public pensions have contributed generously to his lifetime of opportunity.

You’d be wrong.

Today Rauner is using some of the millions he garnered from workers savings to fund a run for governor of Illinois. As the Republican Gubernatorial Candidate he wants to “reform” state pensions and force public workers into the same poorly-designed 401(k)-style plans that have utterly failed to provide retirement security for private sector employees.

After having paid his firm, GTCR, and Wall Street billions in private equity asset-based and incentive fees, Rauner believes Illinois public pensions can’t afford the lavish $2,500 in average monthly benefits promised to workers.

Personally, I have never understood why someone who is “nearly a billionaire” (or in the case of former Enron trader John Arnold, is a multi-billionaire) wants to take away the pensions of working people who barely scrape by. I don’t get their motivation. It baffles me.

Because so mAny hedge-fund managers and corporate chieftains are in the “reform” camp, we Ssume that they must know a lot about financial and managerial matters, even if they are clueless about education and learning.

Jeannie Kaplan, who served two terms on the Denver school board, says that assumption of financial prowess is wrong.

She writes in a comment on the blog:

“Denver has been the victim of both education and financial reform. I have been remiss in not writing about financial failures here because of the complexity of the issue.

“But the bottom line in Denver is in 2008 then superintendent Michael Bennet and current superintendent Tom Boasberg, borrowed $750 million in a risky variable rate swap deal to supposedly fill the unfunded liability in DPS’ pension.

“How has that worked out? UAAL has risen from $400 million to over $700 million and the pension debt has risen from $300 million to $950 million. Yes that’s right, close to one billion dollars.

“The two were somehow able to get the Colorado legislature to write off (they call it an offset) bank and legal payments with the end result being less actual money is being paid into the pension. A legal defunding. Amazing, no?”

Jeannie Kaplan plays the game of “Where’s Waldo?” to describe the curious absences of Denver’s Broad-trained superintendent over the past few months. Crises were handled by subordinates. It turns out that Tom Boasberg was busy lining up votes in the legislatures to reduce funding for the teachers’ pensions.

She writes:

“What was the true importance of this bill? Well, one could always dream it was about restoring the educational opportunities “education reform” has stolen from our kids but in spite of Boasberg’s declaration about two or three more teachers per building, we who have followed this Broad trained superintendent know better. The reality of his appearances at the Capitol and the reality of his lobbying efforts are not really about more teachers. After all, “reformers” don’t believe in smaller class size, so they only mention it when they think it will score points with the public, and obviously politicians. What is and is not important to the superintendent has become abundantly clear in these last months: grade changing, weapons in schools, reorganizations, not so important. Defunding a public pension, politics and winning, pretty important. The reality is if you are a businessman and privatizer masquerading as an educator you really only care about the bottom line. If you can sell paying bankers and lawyers hundreds of millions of dollars instead of putting that money into your company’s pension plan and then sell that scenario to the public and state legislators as somehow having “saved” money, you will be regarded by the business world as a success. Forget about learning, forget about the people, forget about safety, forget about data. Just show me the money. And silly me. I thought the head of a public school district should care about delivering an equitable 21st century education, care about the welfare of his constituents, not just in theory but in reality. This superintendent’s absenteeism and abdication of leadership can now be explained. Who knew that finding Waldo would be easier than finding the DPS superintendent?”

Investigative reporter David Sirota says in Salon that Néw Jersey Governor Chris Christie’s presidential campaign will be derailed not by the George Washington Bridge lane-closing scandal but by a public pension scandal. As usual, follow the money.

Sirota writes:

“At issue are the fees being paid by New Jersey’s beleaguered public pension system to Wall Street firms. In recent years, Christie’s officials have shifted more of the retirement savings of teachers, firefighters, police officers and other public workers into the hands of private financial firms. That has substantially increased the management fees paid by taxpayers to those firms. Indeed, while Christie says the pension system cannot afford to maintain current retirement benefits, pension fees paid to financial firms have quadrupled to $600 million a year — or $1.5 billion in total since he took office in 2010.

“In recent months, details have emerged showing that Christie officials have directed lucrative pension management deals to some financial companies whose executives have made contributions to Republican groups backing Christie’s election campaigns. Additionally, Christie’s officials have admitted that they have not been fully disclosing all the fees the state has been paying to private financial firms.”

Ken Previti reports that the Illinois Supreme Coutrt unanimously struck down the law cutting teachers’ pensions. See:

“Justice Lloyd Karmeier writing for the court. ‘It is our obligation, however, just as it is theirs, to ensure that the law is followed. That is true at all times. It is especially important in times of crisis when, as this case demonstrates, even clear principles and long-standing precedent are threatened. Crisis is not an excuse to abandon the rule of law.’
(This) violates the state’s constitutional clause that pension benefits ‘shall not be diminished or impaired,’ the Supreme Court affirmed Friday.”

– “Pensions & Investments Online”

Open the link to see a picture of Ken and his wife celebrating.

This just in:

http://davidsirota.com/

** March 24, 2015
————————————————————

FYI:

I just wanted to share the good news – International Business Times’s investigative work has this morning been named the winner (http://www.ithaca.edu/news/releases/independent-journalists-naomi-klein-and-david-sirota-share-annual-izzy-award-39431/#.VRGM-VwxF5j) of this year’s Izzy Award, given out by Ithaca College’s Park Center for Independent Media. The award honors IBTimes’ pension-themed reporting about, among others, New Jersey Gov. Chris Christie, Chicago Mayor Rahm Emanuel, Rhode Island Gov. Gina Raimondo, Illinois Gov. Bruce Rauner and Social Security Commission chair Erskine Bowles.

The award judges named myself and journalist Naomi Klein the winners of the annual award this morning in a press release, which you can read here (http://www.ithaca.edu/news/releases/independent-journalists-naomi-klein-and-david-sirota-share-annual-izzy-award-39431/#.VRF03Ye9KrX) .

This prestigious award is named for investigative journalist I.F. Stone. Past winners include Glenn Greenwald, Jeremy Scahill and other investigative journalism icons. This is an amazing honor specifically for IBTimes and also generally for the kind of difficult, time-consuming and labor-intensive investigative work that too often goes unrecognized in today’s media environment.

Thanks to so many of you for doing that kind of work – and to those who have been so supportive of our work over this last year. As you well know, this kind of reporting often engenders hostility – and my hope is that this award offers some encouragement to everyone working in the trenches of investigative journalism.

D

P.S. To follow IBTimes growing newsroom and investigative unit, I encourage you to follow these folks on Twitter: @PeterSGoodman (https://twitter.com/petersgoodman) ,

@NancyCooperNYC (http://www.twitter.com/nancycoopernyc) ,

@MarkFBonner (https://twitter.com/markfbonner) ,

@ThinkSimons (http://www.twitter.com/thinksimons )

, @MattCunninghamC (http://www.twitter.com/mattcunninghamc) ,

@AndrewPerezDC (https://twitter.com/andrewperezdc) ,

@ChristopherZara (http://www.twitter.com/ChristopherZara) ,

@of_davis (http://www.twitter.com/of_davis) ,

@GingerGibson (http://www.twitter.com/gingergibson) ,

@ColeStangler (http://www.twitter.com/colestangler) ,

@Learmonth (http://www.twitter.com/learmonth)

Bloomberg News reports that Néw York City’s public employees’ pension fund is considering an investment in a hedge fund managed by one of Eva Moskowitz’s key backers.

“The board of the $54 billion pension for civil employees, including lunchroom workers and other school aides, plans a vote Tuesday on whether to invest in Joel Greenblatt’s Gotham Asset Management LLC, according to a copy of the executive agenda. Greenblatt is co-founder of Success Academy, New York’s biggest charter-school network. Its director, Eva Moskowitz, a former city councilwoman, helped block Mayor Bill de Blasio’s bid to cut aid to charter schools.”

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