Archives for category: Economy

By now, you may have heard that a federal judge ruled that Detroit’s pensions may be cut during bankruptcy proceedings, even though the Michigan state constitution expressly protects them.

What you may not know is that the average pension is $19,000 a year.

David Sirota is outraged.

Michigan officials say there is no money to pay the $100 million pension gap yet the state can afford $6 billion each year for corporate subsidies.

Nor is anyone deterred from paying more than $400 million in public funds for a new hockey stadium for Detroit.

As Sirota wrote:

“Every now and again there’s a piece of crystal clear evidence left at the scene of a complex financial crime that shows, beyond any reasonable doubt, what went down.

“If future generations want to understand why the current era is sometimes referred to as a new Gilded Age, they need look no further than Detroit. The city’s financial troubles have far more to do with deindustrialization, destructive trade policies, population loss, political mismanagement and Wall Street’s shady municipal rip-off schemes than it does public pension liabilities.

“Yet, as you might have heard, a judge yesterday handed down a landmark ruling allowing Michigan officials who took control of the city to violate the state’s constitution and slash the average $19,000-a-year pensions of Detroit’s municipal retirees. This ruling is already being touted as a precedent setter for places like California, where a pension-slashing ballot initiative campaign is already underway and where some cities are trying to get out of paying the pension promises they made to retirees.”

Maybe the impoverished retirees can sell soda and popcorn at the new hockey stadium.

Like many other states, South Carolina has been wooing foreign corporations, hoping to create new jobs and stimulate the economy.

When a German firm relocated to produce heavy engines, it was unable to find enough skilled workers.

So the company leader “did what he would have done back home in Germany: He set out to train them himself. Working with five local high schools and a career center in Aiken County, S.C. — and a curriculum nearly identical to the one at the company’s headquarters in Friedrichshafen — Tognum now has nine juniors and seniors enrolled in its apprenticeship program.”

“South Carolina offers a fantastic model for what we can do nationally,” said Ben Olinsky, co-author of a forthcoming report by the Center for American Progress, a liberal Washington research organization, recommending a vast expansion in apprenticeships.

“Despite South Carolina’s progress and the public support for apprenticeships from President Obama, who cited the German model in his last State of the Union address, these positions are becoming harder to find in other states. Since 2008, the number of apprentices has fallen by nearly 40 percent, according to the Center for American Progress study.

“As a nation, over the course of the last couple of decades, we have regrettably and mistakenly devalued apprenticeships and training,” said Thomas E. Perez, the secretary of labor. “We need to change that, and you will hear the president talk a lot about it in the weeks and months ahead.”

“In November, the White House announced a new $100 million grant program aimed at advancing technical training in high schools. But veteran apprenticeship advocates say the Obama administration has been slow to act.

“The results have not matched the rhetoric in terms of direct funding for apprenticeships so far,” said Robert Lerman, a professor of economics at American University in Washington. “I’m hoping for a new push.”

“In Germany, apprentices divide their time between classroom training in a public vocational school and practical training at a company or small firm. Some 330 types of apprenticeships are accredited by the government in Berlin, including such jobs as hairdresser, roofer and automobile electronics specialist. About 60 percent of German high school students go through some kind of apprenticeship program, which leads to a formal certificate in the chosen skill and often a permanent job at the company where the young person trained.

“If there is a downside to the German system, it is that it can be inflexible, because a person trained in a specific skill may find it difficult to switch vocations if demand shifts.

“In South Carolina, apprenticeships are mainly funded by employers, but the state introduced a four-year, annual tax credit of $1,000 per position in 2007 that proved to be a boon for small- to medium-size companies. The Center for American Progress report recommends a similar credit nationwide that would rise to $2,000 for apprentices under age 25.

The emphasis on job training has also been a major calling card overseas for South Carolina officials, who lured BMW here two decades ago and more recently persuaded France’s Michelin and Germany’s Continental Tire to expand in the state.”

South Carolina has 28,000 people working for German corporations.

What’s the lure?

“Of course, there are other reasons foreign companies have moved here. For starters, wages are lower than the national average. Even more important for many manufacturers, unions have made few inroads in South Carolina.”

Interesting, since Germany itself has strong unions.

Just as the textile industry fled South Carolina for nations where wages were lower and there were no unions, South Carolina now meets that need for European nations.

Anthony Cody notes that the definition of education has become increasingly utilitarian, thus narrowing what is taught and learned only to the skills that make students college-and-career ready. Joy in learning, aesthetic delight in the arts, the intellectual pleasure of history and literature take a backseat to that which is marketable. Are we all meant to serve the needs of corporate America?

He writes:

“One of the undercurrents fueling concerns about the Common Core is the relentless focus on preparation for “college and career.” Education has always had dual aspirations – to elevate mind and spirit, through the investigation of big ideas, and the pursuit of fine arts and literature, and the service of the economic needs of individuals and society. What we are feeling in our modern culture is the absolute hegemony of commercial aims, as if every activity that does not produce profit is under assault.

“And in our classrooms there is a parallel assault on activities that do not “prepare for college and career,” which has been redefined, in practical terms, as preparation for the tests that have been determined to be aligned with that goal. Preparation for college and career has begun to feel more and more like “preparation to make yourself useful to future corporate employers.”

Cody finds that Mario Savio’s famous rant in 1964 against the ties between the university and the corporations presaged what is happening today. Savio might as well have been speaking for the moms and dads of today when he said fifty years ago:

“There’s a time when the operation of the machine becomes so odious, makes you so sick at heart, that you can’t take part! You can’t even passively take part! And you’ve got to put your bodies upon the gears and upon the wheels…upon the levers, upon all the apparatus, and you’ve got to make it stop! And you’ve got to indicate to the people who run it, to the people who own it, that unless you’re free, the machine will be prevented from working at all!”

Cody adds:

“In our classrooms, the use of standardized tests to measure and monitor learning, and the imposition of ever-more tightly managed and even scripted curricula, make teachers and students feel as if we are part of a machine. The canaries in the coal mine are the students who do not fit in. But our modern system has a pharmacological answer for that, as this recent New York Times magazine article reported that more than one in ten children between ages 4 and 17 are now diagnosed with ADHD, and many of them are medicated daily. That is 6.4 million children. Before the early 1990s, this number was less than 5%. What has changed? According to the report,

“During the same 30 years when A.D.H.D. diagnoses increased, American childhood drastically changed. Even at the grade-school level, kids now have more homework, less recess and a lot less unstructured free time to relax and play. It’s easy to look at that situation and speculate how “A.D.H.D.” might have become a convenient societal catchall for what happens when kids are expected to be miniature adults. High-stakes standardized testing, increased competition for slots in top colleges, a less-and-less accommodating economy for those who don’t get into colleges but can no longer depend on the existence of blue-collar jobs — all of these are expressed through policy changes and cultural expectations, but they may also manifest themselves in more troubling ways — in the rising number of kids whose behavior has become pathologized.”

“Our education system, in attempting to make everyone fit the same standardized mold, so as to be of maximum usefulness to future employers, is medicating those who don’t fit the mold.”

Cody ends with a veiled prediction that spring 2014 may see the biggest effort ever by parents to remove their children from standardized testing.

Mazinger G, a member of the unaccredited EduShyster Academy, here explains what happened in Rhode Island when a “reformer” took control of the state’s pension funds.

What happened when the state treasurer Gina Raimondo adopted a new strategy of investing the state’s pension funds into “alternative” investments?

“There has been much hullabaloo about Gina’s investing Rhode Island’s $7 billion state pension fund she manages into her *own* firm, just because it charges enormous fees and has no public track record. OK—so it’s true that in the finance industry it is considered somewhat unseemly to directly pocket the assets one is paid to manage. One is supposed to set up a far more discrete screen of consultants, firms, friends, relatives and a complex kickback structure. But that is exactly why people like Gina are such a breath of fresh air: innovative, disruptive and unconcerned with backward and fuddy-duddy notions like *self-dealing* and *conflict of interest.* If she didn’t have serious cred, would out-of-state hedge fund managers have spent big to sweep her into office? Besides there is proof that Raimondo’s cookie-jar-dippery has been perfectly ethical: there’s been no criminal investigation—at least so far!”

This post explains it all. Almost. All except why the governor and legislature sit idly by.

Edward F. Berger has published an excellent post about the hostile takeover of American democracy by a small number of people with a great deal of wealth.

Read it all. He begins:

“A majority of those who hold the power and wealth of our nation run their coercive top-down empires as personal wealth and power generators. They see themselves as decision makers who should shape the world (i.e., similar to the ‘rule of the few’ model used in China). They believe in their system of unquestioned force-based rule. They believe that that the American Constitutional system of governance, law, and elected representatives interferes with their perceived ‘right’ to rule.

“Their use of power and their control of resources, dictate government and economic policies. Their present approach is to take over any government (County, State, and Federal) that has goals other than their own. For example, turn public lands including national parks over to them and let them exploit the resources. Turn the schools over to them and let them limit education and profit from the money taxpayers pay for public education. Privatize every aspect of government, including prisons, for profit. Appoint czars to run cities, schools, and public services. Reject elected officials.

“Representative Democracy is an irritant to this loosely affiliated oligarchy. They do whatever it takes to control those elected and get them to do their bidding. They subvert the Democratic system and stop citizens from organizing, voting, or questioning them. An educated populous must be dumbed-down, and public comprehensive education must be disrupted. An example is what they have already accomplished in Red States – states that have the worst education, medical care, women’s rights, work opportunities, freedom, and obviously, representation.”

Can we save our democracy?

This is a sad story, and there is a warning here for us.

College graduates in Europe are having a hard time finding jobs.

The story in the New York Times begins like this:

“Alba Méndez, a 24-year-old with a master’s degree in sociology, sprang out of bed nervously one recent morning, carefully put on makeup and styled her hair. Her thin hands trembled as she clutched her résumé on her way out of the tiny room where a friend allows her to stay rent free.

She had an interview that day for a job at a supermarket. It was nothing like the kind of professional career she thought she would have after finishing her education. But it was a rare flicker of opportunity after a series of temporary positions, applications that went nowhere and employers who increasingly demanded that young people work long, unpaid stretches just to be considered for something permanent.

Her parents were imploring her to return home to the Canary Islands to help run her father’s fruit business. It was a sign of the times, though, that even her own father probably would not be able to afford to pay her.

“We’re in a situation that is beyond our control,” Ms. Méndez said. “But that doesn’t stop the feelings of guilt. On the bad days, it’s really hard to get out of bed. I ask myself, ‘What did I do wrong?’ ”

Samuel Aranda for The New York Times

Alba Méndez, 24, preparing for a job interview in Madrid.

 

The question is being asked by millions of young Europeans. Five years after the economic crisis struck the Continent, youth unemployment has climbed to staggering levels in many countries: in September, 56 percent in Spain for those 24 and younger, 57 percent in Greece, 40 percent in Italy, 37 percent in Portugal and 28 percent in Ireland. For people 25 to 30, the rates are half to two-thirds as high and rising.

Those are Great Depression-like rates of unemployment, and there is no sign that European economies, still barely emerging from recession, are about to generate the jobs necessary to bring those Europeans into the work force soon, perhaps in their lifetimes.

This link should direct you to the graph comparing unemployment rates among youth in different countries.

Let me say upfront that I think anyone who wants to go to college should be able to do so.

The best way to make that happen is to lower the cost of college.

That won’t happen by collecting data about college costs and completion rates, but by public subsidies to make college affordable.

President Obama has set a goal that by 2020, the U.S. would have the highest college graduation rate in the world.

But why?

The Bureau of Labor Statistics has projected that two-thirds of the new jobs created between 2008 and 2018 would not require a college degree.

They will require on-the-job training, as well as responsibility and character, with such traits as showing up for work every day on time.

These are jobs in the construction trades, health aides, fast-food workers, customer-service agents, retail clerks, etc.

It is interesting to note in the New York Times graph that Germany, whose college graduation rate is far lower than ours, has one of the lowest youth unemployment rates in Europe.

Why? They have not outsourced their manufacturing base; they have high quality school programs for students who do not want to go to college. They have good jobs and a strong economy.

What is the lesson here?

Some of us are old enough to remember a different America. We remember neighborhoods and communities where the shopkeepers knew our names and called to tell our mothers if we got into trouble. Then the big chains moved in and put those shops out of business. Then the big box stores moved in and killed off the chains. The people who used to run the mom-and-pop stores became greeters at the big box stores. Then Walmart moved in, and we lost most of the big box stores. Now Internet businesses are squeezing out the big box stores.

A reader had similar thoughts:

“Growing up, there was a little convenience store in my home town. It was “Chris’s Sack and Save”. It’s where my friends and I would buy our soda’s, chocolate, and chips to energize us to ride our bikes back to our homes, or to our “wherevers”.

When I was around my 11th or 12th grade year, this little convenience store got sold. Not only did the name change (to what, I really do not recall – it’s been changed quite a bit throughout the years), but I no longer got to see the smiling face of the owner, greeting me when I paid for my goodies (nor him giving me the extra change to pay for my mom’s cigarettes). It just didn’t feel the same. It was kinda sad.

This is what happens when charter schools, education management companies, and any other capitalistic change enters our community-owned, public school system. The names are not the only things that change. The people change. The values change. Who is served changes.

The school no longer belongs to the community. There is a new line of segregation: “us” and “them”. The ballpark is renamed. Corporate sponsors come in and the teachers and administrators behave differently: Maw-Maw called it, “putting on airs”. Even the teachers we saw as second mothers or grandmothers or uncles are gone.

The heart and soul is gone.

What made that school ours is gone.

Sure, there is money to be made with change. But does it help us as human souls to nurture that sense of “belonging” Maslow told us was so important in development of the self?

Sometimes the more things change, the less they stay the same.”

President Obama has often said that American workers are the most productive in the world. In his 2011 State of the Union address, he said: “Remember -– for all the hits we’ve taken these last few years, for all the naysayers predicting our decline, America still has the largest, most prosperous economy in the world.  (Applause.)  No workers — no workers are more productive than ours.  No country has more successful companies, or grants more patents to inventors and entrepreneurs.

Others agree: This came from a UN organization in 2009:

American workers stay longer in the office, at the factory or on the farm than their counterparts in Europe and most other rich nations, and they produce more per person over the year.

They also get more done per hour than everyone but the Norwegians, according to a U.N. report released Monday, which said the United States “leads the world in labor productivity.” Norway’s productivity is based on its vast oil wealth extracted from the sea.

Each U.S. worker produces $63,885 of wealth per year, more than their counterparts in all other countries, the International Labor Organization said in its report. Ireland comes in second at $55,986, ahead of Luxembourg, $55,641; Belgium, $55,235; and France, $54,609.

Yet the OECD put out a report saying that our population is actually quite dumb and is losing ground to other nations. The OECD report garnered headlines across the nation, because it reinforced the common but erroneous narrative that we as a nation are entering into a steep economic decline, all of which can be blamed on our faltering public schools.

Let me point out that this is the same refrain we have heard since the days of the Puritans. The younger generation is no good, we are going to hell and damnation, and soon comes the apocalypse, all the result of our sins (or in modern terms, our public schools). Since neither voucher schools nor charter schools outperform our public schools, this refrain is getting tiresome yet it persists.

It is also false.

As I explain in “Reign of Error,” these scare reports are wrong. First, they say that our college graduation rates are falling behind those of other nations, and we should be very, very upset. They never point out that our college graduation rate is almost double the college graduation rate of Germany, which is the most dynamic economy in Europe.

Then, they say that the jobs of the future will demand a huge increase in college graduates, but that is not what our own Bureau of Labor Statistics projects. The BLS projected that two-thirds of the jobs available between 2008 and 2018 would not need any post-secondary training. Most would require on-the-job training. Jobs for computer engineers and nurses require college degrees. But the larger number of jobs for home health aides, customer service agents, fast-food workers, retail salesclerks, construction workers, and truck drivers do not require college diplomas. (See pp. 88-89 of “Reign of Error” for citations.)

If we really want more college graduates, we should make all community colleges free to students. Our society, if it truly cares, should shoulder the burden of college costs so that more students can get the education they want but can’t afford. Colleges won’t get cheaper for students by producing data about cost and outcomes. They will get cheaper if more of the cost of attending college is assumed by government, not students.

For many years, there were free community colleges. Now there are few. Why?

Don’t complain about the college graduation rate unless you are willing to make the cost far, far lower to students.

And don’t believe for a minute that standardized tests are accurate measures of productivity. In 1964, our students scored last on the world’s first international test of mathematics, and we went on to outperform the other 11 nations that took the same test.

What we need more of is independent thinking, divergent thinking, innovation, ingenuity, responsibility, dedication, creativity–none of which is measured by the ability to check the right box on a standardized test.

Wendy Lecker is an attorney for the Campaign for Fiscal Equity project at the Education Law Center.

In this article, she argues that the STEM crisis is overblown because there are more STEM graduates than there are jobs for STEM graduates.

She does not argue against teaching math, science, and engineering. She worries that our undue emphasis on standardized testing is crushing the spirit of inquiry and the innovative thinking that our future scientists and engineers need.

She concludes:

Yet our policies in recent years are moving us away from that creative culture of learning toward a system that produces compliant, conventional thinkers seeking the one right answer. Our leaders are singularly focused on increasing test scores as a measure of student, teacher and school success. This obsession has forced schools across the country to eliminate arts, music and physical education and drastically reduce subjects like social studies. It has forced teachers to teach from a pacing guide or script and use rubrics. And it has ignored the importance of diversity, so that more and more children are attending highly segregated schools.

Experienced teachers see the change in our children. My son’s fifth-grade teacher once said that by the time they got to her, after several years of CMTs and an increasing barrage of district-wide assessments, students were following her around, asking if they had the right answer. She saw that as a habit of which she needed to gently break them. In her class, free-flowing ideas led to creative connections. One morning the class was studying equilateral triangles. In the afternoon, their social studies textbook showed a diagram of a triangle with the three branches of government on each side. All she had to do was ask the class what an equilateral triangle meant and the children embarked on a robust discussion of the balance of powers.

Epiphanies do not exist inside rubrics and scripts. It is in the spaces in between subjects that innovation occurs. Therefore, if our leaders are truly trying to create the next generation of creative thinkers who will restore vitality to our stagnant democracy and economy, they must allow the “messiness” of learning back into our schools.

 

Mayor Bloomberg responded to the latest reports about rising poverty in New York City with a plea for more billionaires to move to the city. Presumably that would create new jobs for chauffeurs, maids, gardeners, personal chefs, butlers, and others to serve the needs of the powerful and wealthy. They might even endow some more of the charter schools that are on the drawing boards in the waning days of the Bloomberg administration.

Remember the poem by Emma Lazarus that is mounted on a plaque inside the Statue of Liberty. It is called “The New Colossus,” and it says, in part,

“Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.
Send these, the homeless, tempest-tost to me,
I lift my lamp beside the golden door!”

Bloomberg thinks that Lazarus got it wrong. Send us the billionaires!

Here is the article as it appears in the Wall Street Journal:

  •  
  • September 20, 2013, 9:26 p.m. ET

Mayor Says More Billionaires Would Ease City’s Economic Situation

Mayor Says Increase in Wealthy Residents Provides Tax Revenue to Benefit the Poor

Billionaire Mayor Michael Bloomberg said Friday it would be a “godsend” if every other billionaire around the globe moved to New York City, a clarion call for the rich just days after new U.S. Census figures showed an increase in the city’s poverty rate and a wide gap between the wealthy and poor.

On his weekly radio show, Mr. Bloomberg, who has been accused over the years of being out of touch, suggested New Yorkers would benefit if the income gap were even wider because the wealthy pay for a big portion of city services.

ReutersMichael Bloomberg said billionaires in the city are why there is such a sizable gap between the rich and poor.

Related

 

Mr. Bloomberg said his administration has spent most of the past 12 years trying to help decrease poverty in the city. But he suggested New York could benefit if the income gap grew even more, saying the problem isn’t at the low-end.

“The reason it’s so big is at the higher end we’ve been able to do something that none of these other cities can do, and that is attract a lot of the very wealthy from around the country and around the world,” Mr. Bloomberg said.

“They are the ones that pay a lot of the taxes. They’re the ones that spend a lot of money in the stores and restaurants and create a big chunk of our economy,” he said. “And we take tax revenues from those people to help people throughout the entire rest of the spectrum.”

Mr. Bloomberg said billionaires in the city are why there is such a sizable gap between the rich and poor. But “if we could get every billionaire around the world to move here it would be a godsend—that would create a much bigger income gap.”

Forbes recently estimated Mr. Bloomberg’s net worth at $31 billion. Mr. Bloomberg’s 12-year tenure at City Hall ends Dec. 31.

According to new Census figures, the city’s poverty rate rose to 21.2% last year, up from 20.9% in 2011 and 20.1% in 2010. The figures also showed the mean household income of the lowest fifth at $8,993, compared with $222,871 for the highest fifth.

Income inequality in the city has become a flashpoint in the race to succeed Mr. Bloomberg. Bill de Blasio, the presumptive Democratic nominee, has said addressing the gap will be a centerpiece of his administration. He’s repeatedly described New York as a “tale of two cities.” Mr. Bloomberg and GOP mayoral nominee Joe Lhota have accused Mr. de Blasio of engaging in class warfare.

Mr. de Blasio said the city welcomes “everyone” but that city government needs “to focus not on the few but on the many.”

“The mayor needs to understand that beyond his social circle are millions of New Yorkers who are struggling and are looking to contribute to this economy if they could only get a job to contribute to it with,” he said.

Mr. Lhota said the conversation needs to be about creating jobs. “Jobs are the only way known to mankind that will deal with income inequality,” he said.

City Comptroller John Liu—who ran for the Democratic nomination for mayor and lost to Mr. de Blasio—said it would “only be a godsend” if the city’s wealthiest residents paid an equitable income tax rate. He pointed out that families making $50,000 are paying the same rate as a family making nearly $50 million.

“The mayor’s comment shows once again just how out of touch he is with the average New Yorker,” Mr. Liu said.

—Andrew Grossman and Joe Jackson contributed to this article.Write to Michael Howard Saul at michael.saul@wsj.com