Archives for category: Pensions
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EduShyster: When Public Pensions Are “Reformed,” Pensioners Get Shafted

By dianeravitch
November 27, 2013 //
4

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.

Categories Economy, Pensions

An Apology to John Arnold

By dianeravitch
November 14, 2013 //
26

On October 10, I posted a column about John Arnold, a billionaire who supports charter schools, TFA, and similar projects. I noted that he was giving $10 million to keep Headstart centers open during the government shutdown. In that column, I quoted investigative journalist David Sirota, who said that Arnold was trying to buy good will to divert attention from his efforts to cut the pensions of retirees (aka, pension reform).

A lawyer contacted me on behalf of Mr. Arnold and asked me to correct factual inaccuracies in that post. Arnold did not leave Enron with $3 billion. He left before the firm collapsed with $8 million, which a judge later reduced to $4 million. According to his lawyer, he made $3 billion as a hedge fund investor after he left Enron.

So, I apologize for saying that Arnold left Enron with $3 billion and that he “fleeced” Enron investors. He did not.

We disagree about education reform and pension reform.

I always strive for accuracy and am quite willing to correct any errors I have made.

I am delighted to learn that John Arnold reads my blog and hope that he will continue to do so.

Categories Education Reform, Pensions

“Institutional Investor” Recognizes Randi W. as #1 Leader Fighting to Protect Teachers’ Pensions

By dianeravitch
November 13, 2013 //
50

Institutional Investors is a business magazine that reports on issues for the investment and banking industry.

In its current issue, it identified the top 40 people fighting either to defend defined benefit pension plans or to abolish them.

It selected Randi Weingarten as the #1 figure who is fighting to protect teachers’ defined benefit pensions. That means, to teachers, that they will have a pension when they retire no matter what happens to the market. Critics want teachers and other public employees to be required to adopt defined contribution plans, where teachers choose their investments and take their chances with the vagaries of the market.

Randi opposes the defined contribution plans because it puts the burden of investment on individual teachers, who may make bad choices and see their pensions evaporate, or may be the victims of an unstable market. In the article, she notes that West Virginia tried the defined contribution plan in 1990 but reverted to a defined benefit plan in 2008.

She has also taken the lead in criticizing hedge fund managers who collect fees managing defined benefit plans while supporting right-wing groups that want to dismantle those plans. The AFT has made clear that it will divest from funds that work both sides of the street.

You go, Randi!

Categories Pensions, Unions

Sirota and Taibbi: Is the Pension Crisis Real?

By dianeravitch
October 17, 2013 //
13

Two of the nation’s toughest investigative journalists–David Sirota and Matt Taibbi–join forces to examine the widespread effort to pin the nation’s economic word on public workers’ pensions. If the critics have their way, who wins? One guess.

Categories Pensions

Matt Taibbi: Who Is Looting Your Pension Fund?

By dianeravitch
September 30, 2013 //
49

In this stunning article in Rolling Stone, Matt Taibbi describes the cool deals that have enriched hedge fund managers while the pensions of public employees are whittled away. His article is based on research conducted by investigative journalist David Sirota for the Institute for America’s Future. Read Sirota’s article in Salon here, with a link to the full report. And here.

A sample:

“A study by noted economist Dean Baker at the Center for Economic Policy and Research….reported that, had public pension funds not been invested in the stock market and exposed to mortgage-backed securities, there would be no shortfall at all. He said state pension managers were of course somewhat to blame, but only “insofar as they exercised poor judgment in buying the [finance] industry’s services.”

“In fact, Baker said, had public funds during the crash years simply earned modest returns equal to 30-year Treasury bonds, then public-pension assets would be $850 billion richer than they were two years after the crash. Baker reported that states were short an additional $80 billion over the same period thanks to the fact that post-crash, cash-strapped states had been paying out that much less of their mandatory ARC payments.

“So even if Pew’s numbers were right, the “unfunded liability” crisis had nothing to do with the systemic unsustainability of public pensions. Thanks to a deadly combination of unscrupulous states illegally borrowing from their pensioners, and unscrupulous banks whose mass sales of fraudulent toxic subprime products crashed the market, these funds were out some $930 billion. Yet the public was being told that the problem was state workers’ benefits were simply too expensive.

“In a way, this was a repeat of a shell game with retirement finance that had been going on at the federal level since the Reagan years. The supposed impending collapse of Social Security, which actually should be running a surplus of trillions of dollars, is now repeated as a simple truth. But Social Security wouldn’t be “collapsing” at all had not three decades of presidents continually burgled the cash in the Social Security trust fund to pay for tax cuts, wars and God knows what else. Same with the alleged insolvencies of state pension programs. The money may not be there, but that’s not because the program is unsustainable: It’s because bankers and politicians stole the money.

“Still, the public mostly bought the line being sold by Arnold, Pew and other anti-pension figures like the Koch brothers. To most, it didn’t matter who was to blame: What mattered is that the money was gone, and there seemed to be only two possible paths forward. One led to bankruptcy, a real-enough threat that had already ravaged places like Vallejo, California; Jefferson County, Alabama; and, this summer, Detroit. In Rhode Island, the tiny town of Central Falls went bust in 2011, and even after a court-ordered plan lifted the town out of bankruptcy in 2012, the “rescue” left pensions slashed as much as 55 percent. “You had guys who were living off $24,000, and now they’re getting $12,000,” says Day. Though Day and his fellow retirees are still fighting reform, he says other union workers might rather settle than file bankruptcy. Holding up an infamous local-newspaper picture of a retired Central Falls policeman in a praying posture, as though begging not to have his whole pension taken away, Day sighs. “Guys take one look at this picture and that’s it. They’re terrified.”

And here is more from the article:

“The bottom line is that the “unfunded liability” crisis is, if not exactly fictional, certainly exaggerated to an outrageous degree. Yes, we live in a new economy and, yes, it may be time to have a discussion about whether certain kinds of public employees should be receiving sizable benefit checks until death. But the idea that these benefit packages are causing the fiscal crises in our states is almost entirely a fabrication crafted by the very people who actually caused the problem. It’s like Voltaire’s maxim about noses having evolved to fit spectacles, so therefore we wear spectacles. In this case, we have an unfunded-pension-liability problem because we’ve been ripping retirees off for decades – but the solution being offered is to rip them off even more.

“Everybody following this story should remember what went on in the immediate aftermath of the crash of 2008, when the federal government was so worried about the sanctity of private contracts that it doled out $182 billion in public money to AIG. That bailout guaranteed that firms like Goldman Sachs and Deutsche Bank could be paid off on their bets against a subprime market they themselves helped overheat, and that AIG executives could be paid the huge bonuses they naturally deserved for having run one of the world’s largest corporations into the ground. When asked why the state was paying those bonuses, Obama economic adviser Larry Summers said, “We are a country of law. . . . The government cannot just abrogate contracts.”

Read more: http://www.rollingstone.com/politics/news/looting-the-pension-funds-20130926page=5#ixzz2gLniZOKv
Follow us: @rollingstone on Twitter | RollingStone on Facebook

Categories Democrats for Education Reform, Pensions

Guess Who Is Trying to Gut Your Pension?

By dianeravitch
September 28, 2013 //
33

Educators know that their pensions are under attack. Some policymakers and pundits opine that the fabulous pensions paid to public employees are going to cause our economic system to collapse. You won’t hear them say much about the yawning income inequality gap, the growing share of the nation’s wealth now flowing up to the top 1%, or the disappearance of the middle class, as good jobs are outsourced to low-wage nations by corporations moaning that they can’t find qualified workers. What they really mean is that they can’t find engineers willing to work for sub-minimum wages.

So who is fueling the attack on your pension?

It may surprise you to learn that there is an “unholy alliance” between the far-rightArnold Foundation, created by former Enron trader John Arnold, and the respected Pew Charitable Trust.

When a new law was passed in Kentucky, critics were upset.

“Critics, who include pension-fund experts, lawmakers and AARP Kentucky, claim the new law will hurt workers, taxpayers and retirees. What’s more, they say the law was largely crafted behind the scenes by an unusual alliance between two out-of-state organizations: the Pew Center on the States and the Laura and John Arnold Foundation. Some detractors go further and assert that the Arnold Foundation is using Pew’s sterling reputation for academic integrity as a fig leaf to hide its own free-market agenda.”

And the article adds:

“Pew may be mostly known for its financial support of PBS programs, which has given the foundation the kind of publicity that reflects the self-described “non-partisan and non-ideological” nature of Pew’s work.

“Yet Pew has become a key player in one of America’s most partisan issues as cities and states tackle the complex problems involving public worker pensions. Pension reformers present their cause as a bipartisan good-government crusade, but a visitor landing on the website of nearly any one of this movement’s myriad organizations quickly falls down a rabbit hole of interlocking conservative organizations — whose unifying theme seems to be reflexive hostility toward workplace protections and the union contracts that guarantee them.”

Categories Pensions

How Enron $till Put$ Student$ Fir$t

By dianeravitch
July 23, 2013 //
10

Enron may have gone bankrupt, and its employees may have lost their life savings, but it left some people very rich.

Here EduShyster tells the story of Texas billionaire John Arnold. He is one of the lucky few who managed to walk away from the Enron debacle with more than $3 billion. Some former Enron execs are doing time. Not Arnold. You know he must be smart because he got out before the roof fell in, and the bottom fell out.

And how does he spend his vast wealth?

He does what canny investors do: he pours millions into the struggle to privatize American public education. He has given millions to KIPP, StudentsFirst, and TFA. And he has a special interest in making sure that teachers don’t have pensions.

Billionaires have a hard time understanding why anyone needs a pension. They don’t need pensions. Why should teachers get them?

Categories Charter Schools, KIPP Charter Schools, Luna, Tom, Pensions, Privatization, Rhee, Michelle, StudentsFirst, Teach for America TFA, Teachers and Teaching

TeacherKen: Is There a Pension Crisis?

By dianeravitch
July 21, 2013 //
30

TeacherKen, aka our friend Kenneth Bernstein, who often comments here, reflects here on “the great pension scare.”

Ken reflects on a blog post by Paul Krugman, the Nobel-winning economist and regular writer for The New York Times. Krugman says the scare is vastly exaggerated.

The topic is particularly timely because pensions are under attack in several states and in Detroit, following the declaration of bankruptcy by Governor Snyder.

There is something unseemly about the sight of bankers and others, paid more in a year than most teachers earn in ten years, determined to cut the pensions of public servants who collect–in many states–barely $40,000 a year for a lifetime of dedicated, ill-paid service. They seem to be hankering to return us to a century ago, when teachers lived lives of genteel poverty and worked until they died.

Categories Pensions

The Game in Detroit: Pensions

By dianeravitch
July 19, 2013 //
31

In a series of legal maneuvers, Governor Snyder of Michigan and his emergency manager rushed to plunge Detroit into a historic bankruptcy. The judge was not pleased.

“Prior to her ruling on Friday, she criticized the Snyder administration and Attorney General’s Office for what appeared to be hasty action to outflank pension board attorneys.

“It’s cheating, sir, and it’s cheating good people who work,” the judge told assistant Attorney General Brian Devlin. “It’s also not honoring the (United States) president, who took (Detroit’s auto companies) out of bankruptcy.” […]”

Categories Detroit, Michigan, Pensions

When Your Best Is Never Enough

By dianeravitch
February 6, 2013 //
12

Diana Rogers, a regular reader of the blog, writes about her experience and her school:

I’ve worked for twenty years in a district that has a wonderful staff. There have been a few unsuitable teachers throughout the years, and the administration had no trouble identifying them and getting rid of them; a few others who just needed a bit of guidance were mentored and became better teachers.

I know I have become a better teacher each year, and I have worked hard at becoming better–taken 65 semester hours of post-graduate work, attended numerous workshops and seminars, read professional books and journals. But more important, I learned from my students and their parents, and from my colleagues. I did not “peak” after a few years, but got better and better each year at understanding my students, being able to explain material to them in ways they could grasp and retain, and at knowing how to bring parents into the teaching team as their children’s biggest supporters.

I have done everything I have been asked to do. And so have the other teachers I know. I don’t see all these “bad” teachers that are always being talked about in the media. But in recent years we have been asked to do not only the stupid, but the downright impossible, and even the harmful. Yes we are getting demoralized, attacked from all sides by non-educators who think they understand education better than professional educators. On the whole, teachers are idealistic strivers who try to do everything they can to help their students succeed. I see this every day.

And now we have to waste time on endless testing, data compilation, test preparation, and changing our curriculum to align to the Common Core.

We have to worry about our contracted pensions being taken away from us.

We have to spend enormous amounts of time assembling a portfolio of evidence to prove that we are good teachers, and are even told not to expect to be rated as excellent as we were in the past and as our administrators know we are.

This time could certainly be better spent polishing and improving our lessons, researching materials and methods, or giving feedback to students. Even though I take stacks of work home nightly and spend a huge chunk of the weekend and much of my vacation time on grading, preparation, and other school-related work, there are still only so many hours in a day, and they are not enough to do what I am required to do without adequate resources or support.

The conditions teachers work under are not the fault of school administrators any more than that of the teachers. Administrators endure the same unreasonable pressures of impossible demands, unfair evaluations and limited resources as teachers do. They are caught up in the same effort to do what is being asked of them when what is being asked is not reasonable or right.

Schools will not become better if people like me and the many fine, experienced teachers I know are driven out by impossible demands, abuse, and loss of job and retirement security.

I want to believe that sensible thinkers will prevail and that the tide in this insidious madness of false “reform” will turn.

I cannot understand why there is not recognition and enormous public outcry against the dismantling of public education in our country.

I’m hoping that the harm being done by those whose interests are not the welfare of our country and its children will finally be understood and that people of good faith in the general public and in our government (if there are any left there who are not controlled by big money) will do what is needed to save public education before it is too late.

Categories Pensions, Privatization, Teacher Evaluations, Teacher Tenure, Teachers and Teaching, Testing, U.S. education
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