I will protect your pensions. Nothing about your pension is going to change when I am governor. - Chris Christie, "An Open Letter to the Teachers of NJ" October, 2009

Monday, February 28, 2011

Daily Cerf Report

Seems like the story on Cerf changes with the tide (Get it? See, the tide... Cerf... surf... never mind). Bob Braun's got the latest Cerf report:
NEWARK — Let’s not rush to judgment. Christopher Cerf, chosen by Gov. Chris Christie to run New Jersey education, co-founded a profit-making, private firm hired by a private Newark entity seeking to change Newark’s schools. He worked on the project and Cerf’s firm — how much it was paid is not yet known — produced a document calling for a controversial reorganization of the schools in the state’s largest city.
Looks bad.
So for now, let’s grant him the benefit of that doubt. Maybe something will come out later that wouldn’t justify that, but right now — with the little that’s known both about him, his company called Global Education Advisors (GEA), and the Newark schools plan — let’s take him at his word that he’s not profiting privately from his public position.
Those who believe public education is an enterprise worth saving have something to ask in return. The same thing: Let’s not rush to judgment. Let’s not assume the answer to education’s ills is privatization — charters or vouchers — without a clear-eyed, independent, objective look at all the facts.
"I am so disappointed to hear that Cerf had anything to do with a private firm that might be recommending charters as a solution to problems — or any kind of solution," said Gordon MacInnes, a former assistant education commissioner.
"It just tells us he will not stand up to ideological assault on the public schools."
Stand up to it? Look at his career - he's LEADING the assault.
Some simply don’t have a problem with Cerf at all. "We have every confidence that Chris Cerf can make unbiased decisions that are in the best interest of New Jersey’s children," said Bruno Tedeschi, spokesman for the New Jersey Charter Schools Association.
And Bruno Tedeschi is merely a concerned citizen who just happens to be a professional charter school shill who impugns the integrity of respected scholars at the drop of the hat. But, you know, he vouches for Cerf, so it's cool.
But Paul Tractenberg, a Rutgers law professor and expert on school law, says Cerf’s involvement, whether or not it’s a conflict, shows New Jersey is heading for a privatization of public education. He says many groups and firms pushing for charters and vouchers are run by people with long histories on Wall Street — including hedge fund managers and the like.
"There are two possible narratives here. Maybe, the very wealthy want to help education because they’ve made their fortunes and just want to give something back," said Tractenberg.
"Or, maybe, they’re looking at the $600 billion spent annually on public education in this country and want a big piece of it. Who knows?"
I know.

Blue Jersey/Jason Springer - Mad Props

As the kids say:
It's a kick to read in the Washington Post today that Blue Jersey's made their list of best state-based political tweeters in the country, via Chris Cillizza's political column The Fix. We have our readers and Cillizza's readers at The Fix to thank for that, because he compiled the list after asking for nominations from his ownFixistas and sifted through them all for every state in the country.
The Fix'Best State-Based Political Tweeters for New Jersey:
Rosi, you're doing a great job. You too, Jason. We need you for the hard fight ahead.

Sunday, February 27, 2011

More "Choices"!

Everybody loves a good choice!
NEWARK — Newark Mayor Cory Booker’s promise was simple: No action would be taken on school reform without the support of the community.
But roughly a month before the results of an exhaustive community survey on school reform were set to be released, a plan was obtained by The Star-Ledger detailing significant changes throughout the school system, including a dramatic expansion of charter schools. 
Other recommendations include expanding or opening 11 charter schools inside district schools that have available space. Some of the charter schools would be new and therefore have unproven track records.
Others, like Lady Liberty and Adelaide Sanford, have students who perform little better on state tests than their district counterparts.
Only 31.7 percent of fifth-graders at Lady Liberty show proficiency in language arts on the state standardized test, a figure lower than the district average of 36.7 percent. In math, 35 percent of the charter school’s fifth-grade students are proficient, while the district average is 37.8 percent.
Fifth-graders at Camden Middle School, who will be pushed out to clear space for Lady Liberty, produce average scores that exceed math proficiency among their charter school peers.
The percentage of fourth-graders at Adelaide Sanford proficient in language arts is also lower than Newark’s district average, though the charter school students’ performance in math exceeds the city’s average.
Despite the potential flaws in the plan, proponents say that its basic elements will create more choice for parents and students.
"There are 28,000 students that are in under-performing schools. The plan will create 16 new options for parents," said Mashea Ashton, president of the Newark Charter School Fund, which supports charter school expansion. "There will definitely be challenges, but the challenges are few compared to the opportunities." [emphasis mine]
You can choose to send your kid and your tax dollars to a public school, or to an even worse charter school. It's like Baskin-Robbins, only with education! 31 flavors, and they all suck!

And who's behind all this?
Acting state Education Commissioner Christopher Cerf, who founded the firm that prepared the recommendations, said parents and community members would have roughly a month to evaluate the plan and give input.
Cerf said he severed his relationship with the firm once he was nominated in December for education commissioner by Gov. Chris Christie.
Cerf said the recommendations were designed to provide greater choice. "This is 100 percent about empowering parents," Cerf said. "Nobody’s trying to jam anything here."
Last Wednesday, however, Newark announced that the five new district high schools would be opened inside five existing high schools. The announcement came only a week before the district had to present its budget to the state.
Who would have guessed Chris Cerf would be pushing the privatization of our public schools?

Cerfing USA

More on Cerf from Bill Orr at Blue Jersey:
First Mayor Booker had to find a funder to compensate GEA. The Star Ledger staff by Thursday discovered that GEA's Newark consultancy gig was funded by the Broad Foundation. What I found were ties Cerf had with the Broad Foundation which he has not mentioned publicly. When the Ledger revealed that the work was paid for by a $500,000 grant from Broad, its spokeswoman said she wondered why the grant was kept secret. Perhaps it was kept secret because not only did Cerf have more involvement with GEA than he originally stated, but he also had connections with the Broad Foundation. While Cerf was Deputy Chancellor of NY City Schools the Broad Foundation awarded $2.5 million in grants to  expand charter schools in the city. Cerf's boss Chancellor Joel Klein was effusive in his response: "I want to thank Eli Broad for this generous contribution, which will allow many more families to send their children to these great schools." Joel Klein, as it happens, is also Chair of the Board of Directors of the Broad Center, an educational arm of the foundation. 
So following efforts of Cerf to downplay his role in this Newark Report, it is evident he had a relationship not only with GEA but with Broad, the group which would provide the funds to Mayor Booker to pay GEA. Cerf, of course, was well aware of Broad's support for encouraging more charter schools, and he knew what type of report GEA would produce.

Slicker than a can of Sex Wax - this is how the 'formers ride the wave of privatization.

Just Smell The Money - Murdoch Style!

Because my commenters rock, jcg makes a connection (scroll down) I completely missed:
Wireless Generation is Murdoch's Education Corp. Note the location of their next planning session on opportunities and risks in our latest edu-reform: 

A snippet from the flier:
"Last year, a group of about a dozen education reformers, entrepreneurs and investors met in snowy Sun Valley for a series of discussions on the progress of education reform and the opportunities and risks associated with private sector investment in the space. The result was three days of creative thinking and camaraderie, collaboration and planning. And of course, skiing."
Well, of course there was skiing. It's for the kids...

Wait a minute: Wireless Generation - the company that screwed up NJ's Race To The Top application - is owned by Rupert Murdoch? Of Fox News?

The same Rupert Murdoch
who hired ex-NYC Schools Chancellor Joel Klein to run his new education division?

The same Joel Klein who is Acting NJ Education Commissioner Chris Cerf's former boss?


Rupert Murdoch's News Corp. (NWS) just purchased Wireless Generation for $360 million. Technically it's $360 million for 90% of the company, but either way it's a lot of money.
When a company in your general space gets bought for a huge amount by an unnatural acquirer, it merits some attention. But before I go on, I want to congratulate the Wireless Generation team on the acquisition. Good for all of you!
As Audrey notes, this is on the heels of News Corp appointing NYC Schools Chancellor Joel Klein. So with that hire, and the WG acquisition, it looks like News Corp is getting into education technology in a big way. [emphasis mine]
Whoa, whoa, whoa, WHOA! I can't keep this straight any more! How about we diagram it?

OK, I think I got it. Except... where are the teachers?

I don't know nuthin' 'bout no fancy stock deals, but there are some who can't figure out why Murdoch bought Wireless Generation:

But so much of the above just doesn't make sense. Here's why:
  • A high revenue multiple for a business with tough sales cycles: As of this summer, Wireless Generation was on a $60 million revenue run rate. Given that the News Corp purchase essentially values the company around $400 million, that means News Corp bought the company at a +6.5x revenue multiple. That's crazy. Just one more point of context, Wireless Generation has been around roughly 10 years.
  • Where are the profits? Wireless Generation isn't a wildly profitable company. In 2007, the last year I have detailed financial data on them, they were not profitable and they had about 250 employees. Now they are up to about 400 folks, and perhaps they might be investing in people ahead of growth, but even then I'm not sure that a wildly profitable business will ever be there.
  • Was anyone else at the altar? I had to get on the phone and chat with a private equity guy about this. He agrees with my arguments in this post, and was actually at one of the shops that looked at their business at one point. Let's just say he choked when he saw the purchase price.
  • No unique advantages for News Corp: when an acquirer is looking to make a deal of this size, usually they enjoy some unique advantage. For example, if you are Google and you purchase DoubleClick or YouTube, it fits in very nicely with your core business model. News Corp is a media company. That's film, cable programming, TV, satellite broadcasting, newspapers, magazines, and a small publishing business. Actually, if you dig into their annual reports, education or anything related to education is not one of their core eight operating segments. So where does Wireless Generation fit within their core competencies?
Look at my diagram above if you want an answer. Wireless Generation doesn't have to really produce anything; its value is in its connections.
    I'm very happy for the Wireless Generation team — they pulled a rabbit out of their hat and were a ~10 year overnight success. They sold a non-attractive business at a high revenue multiple. But they just got bought by a company, News Corp, that likely has no clue what to do with them. And just because News Corp has Joel Klein now, it doesn't mean they will know how to manage this kind of business, let alone figure out a way to justify the purchase price.
    It's going to be a tough road ahead for the new Wireless Generation entity.

    Oh, my naive little friend; do you really think Rupert Murdoch is looking at the medium-term profits of a company that will provide consulting for school districts?

    This is not about winning the game; it's about changing the game. We are on the cusp of the most significant transformation of American society since Ike warned us of the military-industrial complex.

    The privatization of the American military continues apace and will be completed very soon. A select privileged few have become very, very rich on the selling out of our national security. Smacking their chops, our corporate titans are looking for the next piece of our society to devour. And education is looking mighty, mighty tasty.

    So Fox News, NBC, and the rest of the corporate media are ginning up a phony crisis in education. Billionaires have installed phony experts who have convinced bought-and-paid-for politicians that the only solution to the low academic achievement of the children of the permanent American underclass is to privatize the entire system.

    Now, using a fiscal crisis created by those very same corrupt overlords as an excuse, they are transforming the greatest education system in the world into a tawdry bazaar, where dubious "solutions" are sold to the public using gobs of money that should be flowing into classrooms.

    Make no mistake: the breaking of the public sector unions is not primarily about keeping taxes low on the wealthy (although, again, that's a nice bonus). No, public unions must be destroyed because they are the last bulwark against the corporate takeover of the very civic institutions that guarantee our freedoms.

    When the last high school is turned over to Halliburton, the public will have given over a vast amount of our economy to a select few aristocrats who have absolutely no interest in a well-educated populace capable of critical thought. And they won't stop at schools. Law enforcement and public safety is sure to be on the agenda.

    I know - I'm crazy. There's just no way this could happen. There's no way the public will stand for 
    privatizing an entire sector of the economy when every other nation has significantly involved the government and kept costs far lower.

    The schools will be fine; you'll see. Everything is going to be just fine...

    Shredding Unions

    Charlie Stile makes an excellent point:
    Governor Christie says he's no Scott Walker, and he's right. Christie has no intention of stripping away labor's collective bargaining rights — he just ignores them. 
    Christie's budget speech Tuesday laid bare his own, "new normal" version of collective bargaining which amounts to bypassing the labor unions. Here is a short version of how it works: Hammer out a compromise with legislative leaders that forces public employees to shell out higher contributions toward pensions and pay 30 percent of their health insurance costs. 
    Odds are that Christie will be successful on this issue — leaders in both parties will round up the votes, pass it and send it to him. Once the new benefits become law, they are a non-negotiable item when and if Christie's lawyers finally sit down around an actual bargaining table to work out the terms of the next state employee contract. The current one expires June 30. 
    A collective bargaining law, who really needs that? Cut out the middleman, the loathsome union leaders with their bullhorns and whistles and the union members with their loud, primary-color T-shirts and all that cash they pour into Democratic coffers. Weaken them. Outwit them at their own game. [emphasis mine]
    Christie has legislated around the collective bargaining process, effectively negating it. Don't be fooled into giving him credit for "not going as far" as Scott Walker up in Wisconsin; in some ways, he's done far worse.

    My 15 Minutes of Blogging Fame

    Very nice of Dennis G at Balloon Juice to send so many folks my way (if you don't read this blog, shame on you). The original post was really the work of StopTheFreezeNJ, who did rhetorical battle with Christie; I just formatted it and added a dash of snark. STFNJ is the hub of anti-Christie/pro-teacher blogging here in the Garden State.

    We are entering a very scary time; as Dennis put it:
    Christie is still the Galtian “it” boy, but Scott Walker is fast on his heels. As the competition for head pats, kind words and warm smiles from their Galtian Overlords heats up, there will be a lot more of these kind of things to document—and fight.
    They really are outdoing themselves in ways I wouldn't have imagined were possible a few years ago. Is it possible that you just can't overreach when implementing the Shock Doctrine? Lord, I hope not.

    With Friends Like These...

    Gee, thanks, fellas...
    Leaders of some of New Jersey's most politically powerful brick-and-mortar unions refused to endorse the organized labor's wall-of-solidarity rally Friday in Trenton.
    Ray Pocino, president of the New Jersey Laborer's Union chose not to encourage his 25,000 members to participate in the rally, fearing that it would turn into an anti-Chris Christie protest rather than a show of support for besieged public workers in Wisconsin. (It was both.)
    "We want to keep that dialogue going with Governor Christie, and we didn't want to be viewed as part of a governor bashing" event, Pocino said.
    So, "rather than risk breaking down that dialogue with the governor, which has been good," Pocino said, the union chose to sit out the protest.
    In other words, Pocino doesn't want to alienate Christie, who rewards loyalty but banishes those who cross him.
    Christie has pledged support, and taxpayer financing, for the stalled $2 billion Revel Casino project and the Xanadu entertainment and retail project in the Meadowlands, which is expected to provide thousands of construction jobs.
    With unemployment among laborers far exceeding the state average, Pocino would rather see his members cheer Christie at his press events — like one in Atlantic City earlier this month announcing the restarting of the Revel project — than slam him at the State House.
    It's about time public workers realized we can't spend any more public money to support jobs; we need that public money to support jobs. Or something - it's confusing...

    Keeping wages decent in the public sector puts upward pressure on wages in the private sector. Ray, your brothers and sisters in the public sector do much more for your members than Christie ever will. You'll find that out soon enough when he rescinds prevailing wage requirements on state contracts.

    Saturday, February 26, 2011

    Our Stupid Education Discourse

    Bruce Baker, who actually knows what the hell he is talking about, writes this:
    We conclude that there is arbitrariness in how research in this area appears to have shaped the perceptions and discourse of policymakers and the public. Methodological complexities and design problems plague finance impact studies. Advocacy research that has received considerable attention in the press and elsewhere has taken shortcuts toward desired conclusions, and this is troubling. As demonstrated by our own second look at the states discussed in Hanushek and Lindseth’s book, the methods used for such relatively superficial analyses are easily manipulable and do not necessarily lead to the book’s conclusions.Higher quality research, in contrast, shows that states that implemented significant reforms to the level and/or distribution of funding tend to have significant gains in student outcomes. Moreover, we stress the importance of the specific nature of any given reform: positive outcomes are likely to arise only if the reform is both significant and sustained.Court orders alone do not ensure improved outcomes, nor do short-term responses.
    As if on cue, "Crazy Uncle" Paul Mulshine then blogs this:
    As the Reason article notes:
    Government at all levels spent an average of $149,000 on the 13-year education of a high school senior who graduated in 2009, compared to $50,000 (in 2009 dollars) for a 1970 graduate.
    Despite the dramatic increase in spending, there has been no notable change in student outcomes.
    In some New Jersey districts, we spend almost third of a million dollars on an education that is crappy any standard, world, country or local. And that money comes overwhelmingly from the income tax dollars of suburban residents who also have to pay the full cost of  their own schools through property taxes.
    We can no longer afford the system. And it's up to the bureaucrats and the union members to explain how we can drastically cut costs while elevating test scores.
    Yet every time I put up a post on this subject I get nothing but excuses from the union members.
    I'm sure they're thinking them up right now.
    When I tweeted this stupidity to Bruce, he immediately pointed me toward this older takedown of the Reason Foundation. Be warned - it ain't pretty.

    Mulshine, like most libertarians, likes to put on wonkish airs. He thinks Reason is a serious source of information and analysis. It is not; it's just another swank dining car on the wingnut welfare gravy train. Peer review is an anathema to these guys, but that's OK with Crazy Uncle Paul, who ain't got no patience for that there fancy book learnin' and whatnot.

    The fact is that funding absolutely matters, and that, given the constraints of poverty and racism, our children are not receiving a "crappy" eduction.

    This part of Mulshine's argument is especially nuts:
    Let us consider where New Jersey would fit on the international scale of value-per-dollar in education spending:
    At the very bottom.
    Our average per-pupil spending is $18,000 annually. Multiply that in your head (public school grads can use their calculators) by the nine grades in question and you see that Jersey spends $162,000 per pupil over the same time period.
    That's almost three times as much as Finland spends, which seems to be about $60,000 total over the same time period (Note: The graphic in question refers to  K-12 spending, but it seems to apply to the nine years in question).
    Now compare what the schools in the districts to which the state Supreme Court sends you hard-earned tax dollars. Newark spends about $24,000 a year. That adds up to an incredible $216,000 for nine years. Yet Newark's test scores would be at the bottom of any world ranking system.
    So stupid, and on several levels:

    - A moderately bright high school student will tell you you cannot use different sets of data to compare costs without looking at how the criteria for collecting those data differ. You can't use NJDOE data and OECD data interchangeably. This is so basic that it's enough to discount any further argument Mulshine may make.

    - As I've noted many times before - and believe me, it's hardly an original argument - the OECD data is hardly apples-to-apples when comparing countries. If, for example, the US adds costs for teacher health insurance to its expenditures for education, but Finland does not as it has universal health care - well, that's hardly a fair comparison, is it?

    - The US is an economically, demographically, ethnically, and racially diverse country; most European countries are not. When you control for this, the US does very, very well in educating its kids.

    - Even taking all this into account: when looking at education spending as a percentage of GDP, the US is hardly at the top of the food chain:

    You mean Finland spends more of their economy on education than we do? I'm just shocked...

    Crazy Uncle Paul ends on this note:
    We can no longer afford the system. And it's up to the bureaucrats and the union members to explain how we can drastically cut costs while elevating test scores.
    "We" can no longer afford "our" taxes, but the very wealthy, who've made all of the money over the last 30 years, can easily afford to pay more - and they should.

    We can also drastically cut costs by emulating Mulshine's beloved Finland and implementing a universal health care system.

    Somehow, I don't think Crazy Uncle Paul will go for that.

    Hiding From Teachers

    Don't hold your breath, pal:

    I would like to challenge Governor Christie to a publicly broadcast debate about the educational issues concerning New Jersey. Really, a Seton Hall-educated lawyer should not be afraid of a middle school teacher with a bachelor's degree.
    Looking forward to hearing from you, Chris.
    Robert Walsh
     The guy won't even have a town hall when school is out.

    Just Smell the Money!

    Delaware has that delicious aroma for education contractors!
    The state Department of Education awarded an $8.3 million contract to a New York company to help teachers in public schools learn how to use data from math and reading assessments to guide classroom instruction.
    The data coaches are a key component of the state's $119 million Race to the Top education reform plan.
    The state selected Wireless Generation to help hire, train and deploy its data coaches.
    The company faced criticism last year for its work in New Jersey, which lost its bid for a Race to the Top grant because of a technicality.
    Wireless Generation has worked with schools in many states, but is best known for its efforts to foster data-driven instruction in New York City schools.
    The company faced a firestorm after it worked with New Jersey on its failed Race to the Top grant application. The application was found to have a clerical error in it -- information for the wrong budget year was included.
    Some politicians blamed Wireless Generation for not catching the error and asked the company to return the $500,000 fee paid for technical assistance on the application. 
    The Delaware Department of Education did not look at the New Jersey situation when it selected Wireless Generation for the data-coach grant, said Dan Cruce, the state's deputy secretary of education. Cruce said even if the state had been aware of the controversy, it would not have been an issue because the state was hiring the company for a different function.
    Data coaches are educators who use data to help teachers figure out ways to boost struggling learners or fine-tune schools that already excel. The first five data coaches will be in classrooms as soon as next month, and the state plans to eventually have 29 of these experts in Delaware's districts and charter schools.
    Yeah, you wouldn't want to put that money into the classroom or anything.

    Funny how the same players keep showing up in this twisted little school reform drama.

    Why We Are In This Mess

    Take a look at what Sue Urahn, an expert on the subject at the Pew Center on the States, has to say about this when describing the $1 trillion gap that existed between the $2.35 trillion states had set aside to pay for employees’ retirement benefits and the $3.35 trillion price tag of those promises.at the end of 2008-
    To a significant degree, the $1 trillion reflects states’ own policy choices and lack of discipline:
    • • failing to make annual payments for pension systems at the levels recommended by their own actuaries;
    • • expanding benefits and offering cost-of-living increases without fully considering their long-term price tag or determining how to pay for them; and
    • • providing retiree health care without adequately funding it
    That is the point. While the governor of Wisconsin is busy trying to shift the blame to the workers in an effort to put an end to collective bargaining, the reality is that it was the state who punted on this – not the employees.
    Further, by the state employee unions agreeing to the deal proposed by Walker on their benefits (as they have despite Walker’s refusal to accept it) they are taking on much  - and possibly all – of the obligation out of their own pockets.
    As a result, the taxpayers do not contribute to the public employee pension programs so much as serve as insurers. If their elected officials have been sloppy , the taxpayers must stand behind it. But if the market continues to perform as it has been performing this past year, don’t be surprised if the funding crisis begins to recede. If it does, what will you say then?
    The real question - the one even so called "liberals" seem loathe to ask - is why the states punted on collecting enough revenue to fund these obligations.

    The nonsense answer being pushed by the right-wing these days is that unions have bought and paid for the state legislatures, and demanded unsustainable compensation (I refuse to call it "benefits" anymore). Sorry, but if that were true, public workers wouldn't be making less than similarly experienced and educated private workers. 

    No, there are three main reasons why the states and localities didn't collect enough:

    1) Health insurance costs have been allowed to skyrocket with absolutely no checks. We pay two to three times what every other industrialized nation pays for health care and we get worse results. Solving this outrage alone would probably have been enough to fix our current fiscal nightmare in the states, and would have gone a long way toward solving our federal mess as well.

    But that would mean less money for the health care industry, which gives tons of money toward political campaigns.

    2) The wealthiest 1% of Americans have basically taken all of the economics gains made over the last 20 years. Raising revenues means taxing them, not the middle class. Yet they are overwhelmingly represented in our "democracy":

    There's simply no way we will raise taxes on the rich - who have all the money - if they are the ones who control our government.

    3) The push away from pensions - defined-benefit plans - and toward defined-contribution plans (401k's, IRA's, etc.) is all about enriching Wall Street:
    Individually managed accounts like 401(k)s violate a basic tenet of economics – specialization increases economic gains. That is why the average investor makes much less than the market return, studies by Morningstar show.

    This goes to Adam Smith's famous insight in 1776 about specialization increasing wealth: when pins were made in full by each worker each could make only a few each day, but when one person draws the wire, another cuts, another fashions the point, etc., the output rises to tens of thousands of pins and their price falls from dear to cheap.

    Expecting individuals to be experts at investing their retirement money in defined contribution plans -- instead of pooling the money so professional investors can manage the money as is done in defined benefit plans -- is not sound economics. 

    The concept, at its most basic, is buying wholesale instead of retail. Wholesale is cheaper for the buyers. That is, it saves taxpayers money. 

    The Wisconsin State Investment Board manages about $74.5 billion for an all-in cost of $224 million.

    That is a cost of about 30-cents per $100, which is good but not great. However it is far less than many defined contribution plans, where costs are often $1 or more per $100.
    And who gets that extra 70-cents? Duh.

    Wall Street, the health care industry, and the wealthiest individuals have all benefitted enormously from the fiscal mess the states are in. If they get away with this attack on public workers, no one will have any incentive to work in the public sector anymore. It may take a few years, as the barriers to entry in fields like teaching are very high, and there will be some teachers who choose to stay in the profession and adjust their lifestyles to make up for the massive loss in compensation they will be taking.

    But that can't be sustained. Public education will die, which is fine by the rich, as they will move their kids into private schools that don't use standardized tests and have small class sizes and lots of curricula in subjects other than reading and math and many, many co-curricular opportunities.

    Everyone else will be trapped in schools with underpaid teachers who are the slaves of standardized testing. But you know what?

    Even then, the states' fiscal crises won't be solved. Taxes will still be regressive, health care will still cost more than the middle class can afford, and retirements will be mean and brutal.

    Does it have to get that bad before people wake up?

    Time To Change the Frame

    Every teacher - every public worker - pays 100% of the costs of their benefits.

    Simple. The pension plan is the direct result of deferred compensation- money that employees would have been paid as cash salary but choose, instead, to have placed in the state operated pension fund where the money can be professionally invested (at a lower cost of management) for the future.
    Many of us are familiar with the concept of deferred compensation from reading about the latest multi-million dollar deal with some professional athlete. As a means of allowing their ball club to have enough money to operate, lowering their own tax obligations and for other benefits, ball players often defer payment of  money they are to be paid to a later date. In the meantime, that money is invested for the ball player’s benefit and then paid over at the time and in the manner agreed to in the contract between the parties.
    Does anyone believe that, in the case of the ball player, the deferred money belongs to the club owner rather than the ball player? Is the owner simply providing this money to the athlete as some sort of gift? Of course not. The money is salary to be paid to the ball player, deferred for receipt at a later date.
    It is time to hammer this point home again and again and again: "benefits" are not gifts, they are compensation. When you "ask for employees to contribute more to their benefits," you are really demanding pay cuts - period.

    Chris Christie and Scott Walker want to severely cut teacher pay, even while they give huge tax gifts for businesses and the wealthy. There is no other honest way to say this.

    Cerf's Family Business

    Acting NJ Education Commissioner Chris Cerf is having problems with the family business:
    The chief financial officer of Sangari Education and the brother of Acting Education Commissioner Chris Cerf, Randy Cerf toldPolitickerNJ.com he had no knowledge of Global Education Advisors, a company his brother founded, which undertook a $500,000 contract to examine the potential for charter school education in the City of Newark.
    "Until I got your email, I had never heard of Global Ed Advisors nor have I been their CFO at any time," said Randy Cerf of Seattle in an email. "Nor do I have nor have I had any business relationship with my brother while he has served as acting  education commissioner." 
    Prior to his appointment as acting education commissioner last month, Christopher Cerf was the chief operating officer of Sangari Global Education. 
    That company's website lists his brother, Randy Cerf, as chief financial officer.
    Every family business goes through this...

    You broke my heart, Randy.

    Friday, February 25, 2011

    Every Teacher Pays 100% Of His Benefits!

    David Cay Johnston, one of our best journalists, explains why:
    The fact is that all of the money going into these plans belongs to the workers because it is part of the compensation of the state workers. The fact is that the state workers negotiate their total compensation, which they then divvy up between cash wages, paid vacations, health insurance and, yes, pensions. Since the Wisconsin government workers collectively bargained for their compensation, all of the compensation they have bargained for is part of their pay and thus only the workers contribute to the pension plan. This is an indisputable fact.

    Not every news report gets it wrong, but the narrative of the journalistic herd has now been set and is slowly hardening into a concrete falsehood that will distort public understanding of the issue for years to come unless journalists en masse correct their mistakes. From the Associated Press and The New York Times to Wisconsin's biggest newspaper, and every broadcast report I have heard, reporters again and again and again have written as fact what is nonsense.

    Compared to tax, this economic issue that reporters have been mishandling is simple. But if journalists cannot grasp the economics of this issue, then how can we hope to have an intelligent debate about tax policy?  [emphasis mine]
    This is the fundamental problem with the entire debate: the media willingly swallows the frameworks the right-wing gives them.

    Whenever someone says they want "public workers to contribute more toward their benefits," they are using Orwellian language to avoid saying what they really advocate: cutting public workers' pay.

    Chris Christie wants every teacher in NJ to take a pay cut of 12% to 20%. He - and his acolytes in the press - may try to tell you it's all about "rich benefits" and "bringing things in line with the private sector" and "taking a pay freeze AND contributing more toward benefits," but that's just hogwash.

    Christie wants to severely cut teacher pay. And the pay of cops and firefighters and all other public employees. Period.

    Mallomar Update

    Haven't checked in for a while on the soft, squishy center that is Al Doblin:
    Lonegan once drove through The Record’s Hackensack parking lot in a vehicle towing a large fake pig. The pig symbolized excessive government spending. If he brings the pig down to a rally peppered with Wisconsin natives sporting foam cheddar hats, it could be ham and cheese for all.
    Can you believe he gets paid to write stuff like this?
    No doubt some of the anti-union gubernatorial actions are designed not to reduce budgets as much as to destroy unions. But for all of Christie’s anti-union bluster, he is advocating for reasonable reforms. 
    “I propose that by 2014, the state should pay 70 percent of the cost of employee health benefits, and the employee should pay 30 percent,” Christie said Tuesday.
    Is it "reasonable" to ask every teacher in the state to take a 12% - 20% pay cut? Because that's what we're talking about here, Al. Let's not hide behind the term "benefit reforms" - these are teacher pay cuts, straight up.

    All across America, anti-unionism is growing. Some of it is pure envy. More Americans are finding themselves without pensions and affordable health care. They want what public workers have and if they can’t have that, neither should public workers. But some of the push-back isn’t petty. It’s math. 
    Property taxes, as they say in New York, are “too damn high.” Whether pension and health benefits for public employees are too generous or not does not matter. They are financially unsustainable. That’s the essence of Christie’s speech. 
    Dear lord, that's such a shallow understanding of this entire issue. Americans are paying historically low taxes, but the middle class is still getting squeezed because all of the gains of the past 20 years have gone to the top 1%. Basing so much of our revenue stream on property taxes feeds into this, because property taxes are so regressive.

    The "essence" of Christie's speech fails to address these very basic facts. You would think a journalist like Doblin would believe that part of his job is to inform his readers of these facts so they can make informed decisions about the merits of Christie's plan.

    Instead, he fills his column with this tripe:
    Americans have heard governors speak. They have heard unions speak. They have not heard themselves. As the debates spread from state to state to state, it is time for all the people who are not governors, legislators, union leaders, public employees or relations of the brothers Koch to realize they, too, have a voice.
    Wow - the people should realize they have a voice. What an insight...

    Al Doblin (staff photo)

    Thursday, February 24, 2011

    I Hate the T@x Foundation

    They really do suck:
    TRENTON — Gov. Chris Christie has pledged to change New Jersey’s reputation for high taxes. Judging by a report released Wednesday by the Washington, D.C.-based Tax Foundation, the state has a long way to go.
    New Jersey residents were the highest-taxed in the country in 2009, giving 12.2 percent of their income to state and local taxes. 
    Deborah Howlett, president of New Jersey Policy Perspective, a left-leaning think tank in Trenton, said the foundation’s ranking is flawed. "They have a clear agenda," said Howlett, a former communications director for Corzine. "It’s anti-tax and anti-government."
    For example, she said, New Jersey has high property taxes but one of the lowest gas taxes. She also pointed out that the ranking focuses on how much residents pay, not the state’s policies. So when New Jersey residents pay income taxes in New York because they work on Wall Street, the Tax Foundation still counts that against the Garden State even though it doesn’t set the rates or see any of the money. [emphasis mine]
    According to the Center for Budget and Policy Priorities,  NJ ranks 31st in total state and local taxes collected from our own revenues as a percentage of personal income.

    According to the Milwaukee-Wisconsin Journal-Sentinel, NJ's rank in spending burden - the total state and local government spending as a share of total state personal income - is 40th.

    We are a bedroom community. NY and PA take a lot of our citizens' money, and we have no say in the matter. That is a legitimate issue that should be addressed.

    It has nothing, however, to do with our state's current tax policy. The T@x Foundation is simply feeding into Christie's garbage.

    (Why do I call them the T@x Foundation? Click and see!)

    Why Rhee's Lies Matter

    Bob Somerby sums it up quite nicely:
    First, there has been an educational consequence. There’s no need for serious education reform if you believe such miracle tales. Low-income children deserve intervention from the earliest years of their lives. They also deserve to go to schools with careful, well-designed instructional programs—programs carefully designed for kids who may be years behind traditional grade level. But why bother planning piffle like that if you believe Rhee’s miracle tales? It’s so simple! You just wait till the children are in the third grade! At that time, you give them a teacher from Cornell and watch all the flowers bloom! 
    serious search for real reform is undermined by Rhee’s glory tale.
    The second major societal consequence involves Rhee’s endlessly noxious message about teachers and teachers unions. 
    We’re sure that such unions have been wrong many times, as almost everyone else has been. Beyond that, we would agree that some of Rhee’s basic ideas make perfect sense; if some teacher can’t or won’t teach, he shouldn’t keep his job for the next forty years. But few people have aimed so much venom at teachers and their infernal unions as Rhee has done in the past few years. Rhee is weirdly unbalanced—unhinged—on such matters. She has helped advance a noxious attitude about unions in general, a message which extends well beyond the narrow educational focus.

    Your "Liberal" Media

    So very "liberal":
    UPDATE: Several sources have told The Huffington Post that in addition to Christie, "Meet the Press" has preliminarily booked Wisconsin Gov. Scott Walker (R) and "Fox News Sunday" has booked Indiana Gov. Mitch Daniels (R). These bookings are not final and could still be changed. There are also still open slots for other guests on the shows.
    WASHINGTON -- Though thousands of Americans have turned out this week to show solidarity with Wisconsin's public employees and oppose a threat to their collective bargaining rights, union officials say they have not been able to place a labor voice on this Sunday's editions of the weekly public-affairs TV shows. The shows' producers, they complain, are shutting out the workers' perspective.
    A union official told The Huffington Post that when none of the Sunday shows' producers reached out to them to book a labor representative this week, several unions started to pitch the shows with affected workers and local and national leaders who they felt could discuss the protests. The official said the response from the shows was essentially "thanks, but no thanks."
    "If you're a Sunday show and there are labor fights going on for two weeks, if you can just book ... Chris Christie, why would you actually go out and get somebody who is actually involved in this? That would be work!" snarked the official, adding, "Everybody's been pushing, and everybody's been shut down."
    Gosh, I just can't understand why Disney-owned ABC, GE-Comcast owned NBC, National Amusements-owned CBS, or Newscorp-owned Fox would deny labor a chance to be heard...