Critical Factors in a Child's Academic Success

If we want children to succeed academically, we should focus on the most critical factors in a child's environment:

1. Low child poverty rates (as measured by school lunch subsidies).
2. Low divorce rates, i.e. stable homes.
3. Healthy kids (adequate access to health care).
4. Educated adult populations (which usually leads to higher income levels)

(More here.)

None of the above factors has anything to do with teacher salaries, education funding, testing, evaluation methods, or anything else on the teachers' union's agenda. I'm just sayin'.

Bonus: "For more than 40 years, ever since the publication of the Coleman Report, the key variable when it comes to educational achievement is parental involvement; all other factors--money, class size, choice and competition--are peripheral. Over those same forty years, parents have had to work harder to get by--two, three jobs in many cases--as good paying manufacturing jobs vanished. And, over that same period of time, the impact of crap culture--the Jersey Shore-ization of American Society--has increased exponentially." -- Joe Klein, "School Shock," Time magazine, November 9, 2010

Major City Hell?

This blogger sums up the reasons Gen Y has a harder time reaching the "adult" benchmarks of previous generations:

Boyfriend & I have had many discussions about the fact that New York is a short-term place to live. It's for young singles who like to party. It's for businessmen in their 20s who want to drink and bone and work on Wall Street 14 hours a day. It's for liberal women who have sworn off marriage and kids and simply want to make sweet love to their professions. But as you approach your 30s, you may begin to see New York in a different light. Most people start to see the city as an abusive boyfriend: It treats you like sh*t, steals all your money & wears you down to a little nubbin, but you keep running back because you love it and believe it will change.

More here. When houses in average school districts cost 500K+, it's very, very difficult to think about starting a family. Throw in the fact that money woes are the primary cause of breakups, and we have a perfect recipe for delayed childrearing.

Politics (Total Speculation Edition)

Marco Rubio and Robert Gates. Are they the GOP Dream Team for 2012's Presidential Election?

Total speculation, bonus round: I think Hilary Clinton will be running as the 2012 Democratic nominee for President. One deal might be that if she wins, she would nominate President Obama for the Supreme Court.

Review of SCU Broncos v. CSU Maritime (11/5/10)

I saw the SCU basketball team play an exhibition game against CSU Maritime on November 5, 2010. Here is my review/scouting report:

1. #24 (Julian Clarke) can shoot treys very well; however, like most gifted shooters, he seems too trigger-happy. He also needs to move more on offense instead of setting up in the same spot. Once opposing teams learn about him, his usual moves may not be enough to get him open.

2. #12 (Robert Smith) is an excellent PG, and we are lucky to have him. He is clearly the most talented player on the roster.

3. #3 (Chris Cunningham) is a great inside presence, but SCU's style of play is more up-tempo compared to recent years. As a result, the team had difficulty feeding the ball inside. The failure to utilize #3's skill set was very, very disappointing.

4. Unless #13 was injured or sick, the coach should think about reducing his minutes. He didn't seem comfortable on the floor, and #0 (Evan Roquemore) should be getting his minutes.

5. #10 (Ben Dowdell) hustles. His energetic play, including diving out of bounds for loose balls, seemed to turn things around for SCU.

6. #21 (Kevin Foster) will be the x-factor. He is blessed with an excellent wingspan and incredible athleticism, but seems a little raw.

Overall, we have a good chance of beating Gonzaga this year, as long as we learn to feed the ball inside to the big men, especially #3.

My preferred line-up:

PG Smith (sub: #0 Roquemore)
SG Foster (sub: #24 Clarke)
C Cunningham (sub: #25 McArthur)
PF Trasolini (sub: #10 Dowdell)
SF Troy Payne (sub: #44 Atanga)

California Post-Election Summary

The LA Times' Cathleen Decker writes an excellent post-election summary for California. I've been telling everyone that the GOP cannot appear to be anti-Latino and win any presidential election or any other election that counts California votes. Ms. Decker lays out why the GOP is doomed unless it changes its whitebread ways:

California in 1994 was more white and proportionately less Democratic than it is today, thus more similar to the country today. Nationally, non-whites made up only 22% of the Tuesday electorate; in California they made up 38%. Latinos nationally represented 8% of the national electorate, just shy of a third of their power in California. The California and national exit polls were conducted by Edison Research for a consortium of news organizations, including television news networks and the Associated Press.

Tellingly, Latinos in California had a far more negative view of the GOP than other voters — almost 3 in 4 had an unfavorable impression, to 22% favorable. Among all California voters the view of Republicans was negative, but at a closer 61% negative and 32% positive. Latinos had a strongly positive view of Democrats, 58% to 37%, whereas all voters were closely split, 49% to 45%.

The best part? State Republican Party Chairman Ron Nehring: "The reality is that Democrats have strong relationships with urban and immigration communities that Republicans have not had, and that must change," he said. "It is not only a matter of politics; it is a matter of mathematics." More here.

Bonus: Ken's take on the elections here. An excerpt:

On Russ Feingold: To paraphrase Homer Simpson, I like my beer cold, my TV loud, and my Democrats FLAMING. Democrats ought to distinguish themselves from Republicans by supporting the rights of the accused, opposing military adventurism, and resisting the encroachment of the post-9/11 security state. If they don’t, they are just sh*tty second-rate Republicans with less of a pretense of fiscal responsibility.

On Oklahoma's Sharia Law Stupidity: Oklahomans took a strong stand against having Sharia law imposed upon them. As far as I can figure, the only way you can have Sharia law imposed on you is if at some point you consented contractually to having it imposed on you. Meanwhile, my plaintiff-side clients still routinely get binding arbitration imposed on them, which makes Sharia law look like an appearance before Judge Harry of Night Court. Maybe the idea is you can contract away your right to anything resembling due process only if it’s in front of irritable retired judges in really expensive office suits, not if it involves weird robes and ululating and stuff.

High Unemployment Leads to Pogroms?

"Bear markets of sufficient size appear to bring about a desire to slaughter groups of successful people. In 1793-1794, radical Frenchmen guillotined countless members of high society. In the 1930s, Stalin slaughtered Ukrainians. In the 1940s, Nazis slaughtered Jews. In the 1970s, Communists in Cambodia and China slaughtered the affluent. In 1998, after their country's financial collapse, Indonesians went on a rampage and slaughtered Chinese merchants."

-- Bob Prechter, Wave Principle of Human Social Behavior, p. 270

Do Progressives Believe They are God-Like?

Many modern human beings do not believe in God or disagree with the idea of a higher power who has the ability to change the world. Once someone denies the existence of a higher power, s/he is left to rely on other human beings to implement change. Standing alone, an individual cannot produce wide-ranging, substantial change unless s/he is exceptional (e.g., founders of Google, etc.).

However, most of us are not exceptional. Therefore, most people who do not believe in a higher power rely on groups of people to create change. In practice, groups of people solicit their government to implement change via government programs. In short, modern human beings seem to have replaced God with man-made governments.

The idea of God required humans to be beneath a higher power and to accept certain limitations; in contrast, the idea of government as a change agent places human beings in a similar role as an omniscient or omnipotent God.

David Walker on Unnecessary Spending

David Walker, on the Pentagon's demands for unnecessary military programs:

[M]oney spent on items that represent wants rather than true needs is money robbed from systems that actually are needed.

Too many Americans can't differentiate between "wants" and "needs."

Mr. Walker has a book, Comeback America. The chapter on military spending is a must-read. More on the military here.

Simple Truths: Iran

Truth #1. Why are American troops still in Iraq and Afghanistan? Because if they leave, Iran will fill the vacuum.

The greatest beneficiary of America's war against Iraq has been Iran. We made a mistake attacking Iraq after 9/11, and in doing so, we did Iran a favor by removing Saddam Hussein. Sadly, the invasion did nothing to increase our own safety, because there has never been a substantial connection between 9/11 and Iraq. Thus, the short-term results of Bush II's Iraq war are that thousands of American soldiers have died while Iran's influence has increased; and we have spent trillions of dollars invading a country that did nothing against us. However, we can never admit such profound folly, so the U.S. is determined to ensure that our initial mistake--invading and occupying Iraq--does not compound itself. Allowing Iran to install its own power base in Iraq (or Afghanistan) would compound our initial mistake, and the U.S. is doing whatever it can to stunt Iran's influence. 

Why would Iran care about Iraq, and why would Iraqis care about Iran? Muslims are typically either Sunni or Shiite/Shia. Within Iran, almost all Muslims are Shiite--just like the majority of Iraq's Muslims. Outside of Iran, however, almost all Muslims are Sunni. In fact, Iran is surrounded by Sunni Muslim countries like Saudi Arabia, Pakistan, etc. If Iran is able to extend its influence into Iraq and make Iraq an ally, it would finally have a Shiite neighbor. From an American perspective, the more Iran's neighbors are friendly with Iran, the more difficult it will be to stunt Iran's influence. (Now might be a good time to remind everyone that Iran contains the world's second largest natural gas reserves and third largest petroleum reserves.) 

To minimize Iran's influence, the United States has been helping paint Iran as a rogue nation. Basically, the United States government has been releasing information to create support for an attack against Iran if Iran continues to extend its influence over Iraq. For example, at one point, Yahoo's homepage showed a picture of a new Iranian bomber drone almost the entire weekend. Despite the fact that Iranians are model citizens in the United States (look up who founded eBay), you will almost never see the word "Iranian" in a story without some negative connotation. The media's quest to dehumanize Iranians is in full effect. (One can't have a war without first making the enemy into "the Other.")  

The real issue is the extent to which Iran has the capacity or willingness to attack American soldiers or Americans. A country that has been around for 3000+ years probably doesn't have a death wish. Even if it did, and even if Iran managed to get nuclear weapons, it still needs to transport them effectively. As North Korea's failed missile tests demonstrate, it is much easier to make a weapon than it is to deliver it accurately. Overall, it is hard to believe that the Iranian government would be capable or stupid enough to directly attack any American soldier or civilian. Even when the Iranian government has captured American civilians or possible CIA assets, it tends to return them unharmed. (This pattern holds true in the capture of the American embassy in 1979 as well as the more recent American hikers, who were arrested when they entered Iran without proper authorization.) However, if the current Iranian government extends its influence over Iraq and Afghanistan, it may use sections of these countries as proxies or buffer zones. In other words, doing nothing would allow an extension of a government hostile to American interests, and therein lies the problem. 

Ironically, without Saddam Hussein to keep the Iranian government in check, the Middle East has managed to become more complicated. Under Saddam Hussein's Iraq, the Ba'ath Party dominated politics. The Ba'ath Party was secular, not Muslim. By killing a secular leader, we allowed more religiously-committed factions to spread their influence over Iraq. Any American who thought invading Iraq and toppling Saddam would show "those Muslim terrorists" is misguided. Maybe next time, we'll do more research and question our government when it tells us war is good. 

Bonus: most Americans don't remember the Iran-Iraq War, but back in the 1980's, Saddam Hussein waged a bloody war against Iran and used chemical weapons against Iranians. I bring this up to remind Americans that Saddam Hussein was once our friend--and Iran's worst enemy. By removing Saddam Hussein and not achieving broad consensus on a rebuilding plan (such as the Marshall Plan), we've managed to create more problems, and this time, war won't be quite as simple. Unlike Iran, Iraq was never a tightly-knit, sovereign state. In fact, modern-day Iraq is basically a post-WWI British creation. In contrast, Iran has been together for 3,000 years and has never been occupied by a foreign power. I doubt Bush II's White House properly considered the downsides of invading Iraq. The American people were stunned by 9/11 and needed a show of force. They got one, and we're still dealing with the consequences years later. 

Conclusion: the only way America can claim a victory against terrorists is if it eradicates the Taliban and al-Qaeda. The Taliban and al-Qaeda are in Pakistan, Yemen, Somalia, and parts of Afghanistan. The Iranian spectacle is just a side-show of our own making.

Europe v. America

A European/Belgian friend and I were discussing the lost art of friendly debating. Here are his thoughts on why Europeans are better able to have substantive discussions than Americans:

From my perspective, and based on my experience, Americans tend to be far more focused on judging people than trying to understand and appreciate them. Besides it being an insurmountable threshold to creating a community and meaningful relationships or friendships, it also makes them incapable of discussing any complex issues abstractly, especially if social norms and/or emotional reactions are involved. Furthermore, in the U.S., everything seems to be associated to some form of social norm which basically reduces any interaction to the equivalent of a discussion about the weather.

As I see it, people are isolated here, and incapable of transcending themselves, their relationships and their cultures, virtually creating a prison for themselves. The hole and emptiness this creates inside needs to be reinforced by 'same-minded' people and creates a co-dependent society of 'yes' people where they interchange their sadness by pretending to adhere to social norms for each-other...in other words, our culture is nothing more than a collective delusion creating a sick form of normalcy through a cult-like enforcement of norms and values.

Interesting observations. Cheery fellow, isn't he? :-)

What Governor Schwarzenegger Accomplished

When you vote on November 2, 2010, remember three things: 1) absolute power corrupts; 2) much of our country's success is due to checks and balances; and 3) Governor Schwarzenegger, a Republican, accomplished quite a bit in recent budget negotiations:

It is often said that politics is the art of compromise and, let me tell you, this is exactly what this budget is -- it's compromise, where everyone came together. As you know, that we Republicans wanted to make cuts of more than $12 billion. Democrats were talking about borrowing billions of dollars or raising taxes of billions of dollars. Well, we all gave something up in order to get to that sweet spot of compromise.

Our final budget solution, therefore, can be broken down into three pieces. First of all, let me just go through the numbers:

• $7.4 billion in cuts,
• I will also be using my blue pencil to cut an additional $965 million.
• Then there's $5.4 billion in federal funds,
• $5.5 billion in fund shifting and other revenues.

When it comes to cuts, we were able to protect, of course, some of the key priorities:

• Number one, we protected education, kindergarten through 12th and we funded it at the same level as last year,
• Higher education will actually receive a $1.2 billion increase,
• Number three, we protected the budgets of our public safety men and women,
• We protected foster care services and even extended those services from the age of 18 to 21,
• And we ensured that our most vulnerable citizens can continue to have access to health and human services programs.

What would have happened without the threat of a GOP Governor's veto? How many more billions would we have borrowed?

Jess Walter: Financial Lives of Poets

I usually don't read fiction, but the title of Jess Walter's Financial Lives of the Poets intrigued me. Poetry and finance? I couldn't resist. So far, it's an easy, fun read, and I just wanted to share some fun paragraphs from the book (page 71, trade paper):

At my mid-sized newspaper, the soul-disabled publisher scoured the various newspaper chains until he found the perfect budget-hacking delusional jargon-monkey, a man driven out of every crappy newspaper he ever ruined...

Like any tyrant worth his sadism, M---'s first move was to force out any managers who might disagree with him, and his second move--right out of the Khmer Rouge playbook--was to target and demote any intelligent people left who might question his propaganda...

Oddly, M--- seemed to have no real interest in the city his newspaper was supposed to cover; his only passion was the business itself, a thing he called newspapering, and he constantly made us all uncomfortable by professing a creepy, nostalgic love for this made-up word, a love he seemed to mainly show by wearing a '40s-movie fedora and getting weepy whenever he reflected back on the fourteen months he spent as a libelous reporter waterboarding the English language. "The man loves journalism the way pedophiles love children," we used to say.

Like I said, a nice, quick read.

California Teachers: Do They Make Enough Money?

I am so tired of dealing with Californians who don't know basic facts about their own state. Below is a discussion I've had more times than I'd like to count. It demonstrates the strange situation we have in California, where voters view strong and powerful entities--like government and teachers' unions--as victims in need of more support.

Jason: [makes a pro-Jerry-Brown comment. Mr. Brown is a Democrat in a state where Democrats have controlled an almost uninterrupted majority in the state legislature for decades.]

Lawyer: Voting for Brown means a vote for political uniformity, i.e., Dems in White House, Congress, CA legislature, and CA governor's office. When was the last time total power led to good results? Vote for Meg Whitman and support political diversity. I know she's not anywhere close to perfect, but aren't you concerned about maintaining real checks and balances?

Jason: when has complete gridlock led to anything?

Lawyer: there was temporary gridlock because the Dems wanted to pass a budget without including important reforms. For example, is pension reform important to you? If so, having a Republican in the Governor's office helped reform pensions. See here: http://gov.ca.gov/speech/16158/ [Update: link has expired. Former Governor Arnold Schwarzenegger negotiated pension reforms before leaving office.]

A Republican in the Gov's office means that it may take us longer to pass a budget, but once it passes, the budget is likely to include more spending cuts than tax increases. 

Castagn: "A Republican in the Gov's office means that it may take us longer to pass a budget, but once it passes, the budget is likely to include more spending cuts than tax increases."

So it will take longer to pass an even crappier budget than we usually get? Sign me up. I certainly feel that we need to cut school funding and social services a bit more rather than fund them adequately.

Lawyer: you think 37 to 60 billion dollars each year isn't enough for K-14 funding? (By the way, 80 to 85% of that money goes into the pockets of teachers and other school staff. More here--you need to click on the "Teachers in California" link.) [Note: at some point, the link may become outdated because of updates to the Ed-Data website. As of July 4, 2011, however, the link to the "Teachers in California" January 2010 edition states, "Although there is some variation, expenditures on salaries and benefits for all employees typically make up 80 to 85% of a district’s budget, with the bulk of it going to teachers." Also from the same page: "In 2008-09 California’s teachers were predominantly white (70.1%) and female (72.4%), quite a different look from the student population that was 51.4% male and had major ethnic categories of 49.0% Hispanic, 27.9% white, 8.4% Asian, and 7.3% African-American."]

Also, by law, a set percentage of general fund revenues must go to K-14 education (see Prop 98 and the California Constitution). There is not much either a GOP or Dem governor can do about that percentage. [Update: in 2011-2012, Gov. Brown proposes to spend about 42% of California's entire state budget for K-12 education. That apparently translates into about 55% of general fund revenues, which doesn't include the state's bond/interest payments. It also doesn't include additional funding sources, such as the federal government (11%) and local property taxes (21%). (See here.)] You are entitled to your opinions, but not your facts. To learn more facts, check out this link: http://willworkforjustice.blogspot.com/2010/09/teachers-unions-running-california.html

Jefferson: are you saying that teachers are overpaid? BTW, blogs are not good sources for "facts" as they are one person's opinions.

Billy: [Note: no one responds to this comment] Regarding California's unfunded pension obligations:

http://www.stanford.edu/group/siepr/cgi-bin/siepr/?q=%2Fsystem%2Ffiles%2Fshared%2FGoingforBroke_pb.pdf

This is the same issue that quite a few European govts are grappling with (lately the mess in France has been getting a lot of coverage). Namely, these generous pension systems are unsustainable:

"The study concluded that the state’s unfunded pension liability has topped half a trillion dollars – six times the present state budget.

Put another way, future California taxpayers are going to be on the hook for more than $500 billion simply to make up the difference between the pensions we’ve promised to today's state workers and the money we’ve invested to pay for them.

That’s tax money that will have to be shelled out before a nickel is spent on the public services of the future."

Lawyer: every statement at the link is supported by objective evidence. Once again, you are entitled to your opinions, but not your facts. Fact: "According to the CTA's parent union, the National Education Association, California teachers were the nation's top-paid, with $64,424 average annual salary in 2007-08."

[Update on 6/20/13: according to the non-partisan Legislative Analyst Office  as of 2011, "California has the highest average teacher salary [$66,064 in table for CA; $53,168 for U.S.] of any state in the country but also has among the highest numbers of students per teacher. California ranks 31st in per pupil spending. California ranks almost last in student achievement."]   

After about five years of experience, many--not all--teachers in the Bay Area make around 65K to 70K. In addition to receiving a middle-class salary, most teachers receive generous benefits such as job security and pensions (and in some cases, lifetime medical benefits). Such benefits can add up to hundreds of thousands of dollars over the course of a teacher's career.

New teachers--who have less than five years experience--are underpaid because we spend billions of dollars each year paying teachers who no longer work, i.e., retired teachers. Our current teacher compensation system is back-loaded, where retired and older teachers receive the majority of benefits while newer and younger teachers must wait in line to catch up.

Jefferson: I didn't present any facts, just questioning the neutrality of the source, so please save your 'you are entitled to your opinions, but not your facts' spiel.

I would like to see where your 'most teachers in the Bay Area make 70k after 5 years' claim came from. Your 'factual' blog states, "As a result, many new teachers quit within five years." Why would they quit when they are on the verge of a huge payday? If you stick it out for 5 years you'll be set for life it seems.

Is $64k a year that unreasonable for the California? We have one of the highest cost of living in the nation. Maybe $64k is high for the central valley but it's below median for SF, San Jose, or any larger Cali cities.

Lawyer: 1) the $65 to $70K (approx) annual salary number is based on publicly available information;

2) if the teachers' unions admit that the average salary in the entire state--including data from the Central Valley--was 64K three years ago, it's not difficult to see that COLA would put the average Bay Area teacher's salary around 70K; and

3) I didn't say 64K or 70K was "high." I said it was reasonable, especially when factoring in benefits such as job security, lifetime medical benefits (in some cases), and pensions.

4) the NEA claims that half of all teachers quit within five years: http://www.washingtonpost.com/wp-dyn/content/article/2006/05/08/AR2006050801344.html

The additional and gradual salary increases after five years don't seem to make up for the realization that teachers' unions tend to focus on retired and non-working teachers. As I said before, the teacher compensation system is back-ended, which harms younger and newer teachers. The unions' excuse is that we don't pay teachers enough money, but they are unwilling to sacrifice anything on the back end to help newer and younger teachers. Instead, they want to raise taxes to maintain their back-ended compensation system while using younger and newer teachers as props in budget negotiations.

I also think many teachers go into teaching with unrealistic idealism and are confronted with sobering reality. The reality is that much of academic achievement is based on the kind of parenting received by children before they enter 4th grade, not to mention parental income and education levels.

Jefferson: this is the reply from a friend who IS a teacher in the bay area regarding the claim that 5-year teachers in the bay makes $75k and gets "generous benefits such as job security, pensions, and lifetime medical benefits."

"So NOT true. I get no medical benefits in Fremont. I don't pay into social security so I get no social security benefits when I retire. And I have been working for 10 years in the same district and I still do not make near 75K. Believe me. All of that is b*llshit."  [Note: in some cases, if a California teacher works longer in the private sector than in the public sector, s/he may collect both a pension and Social Security benefits. For example, a teacher could work 10 years in a public school system, then work in a private school for 15 years, eventually collecting both pension and Social Security benefits.]

Lawyer: what school district does she work for, what grade does she teach, what is her education level, and what is her exact job title? Please see below for salary information copied from Fremont's own website:

http://docs.google.com/viewer?a=v&pid=sites&srcid=ZGVmYXVsdGRvbWFpbnxiZXR0ZXJmcmVtb250dW5pb258Z3g6YzZiY2Y1ZjhlYWMyNTU4

Look at salaries for mid-range teachers in Fremont High: $78K.

Jefferson: She works in Fremont, that's all I'll going to say to protect her privacy.

I also have other friends who are bay area teachers. NONE of them live the life that you described ($75k+ salary, lifetime medical benefits, pension, etc.). Besides all that, the work environment sucks. Unlike you and me who answers to one level of management, they answer to administration, parents, students (yes students), and often politicians who have no idea how screwed up education is in this country and thinks they are getting too much money.

Lawyer: as the link above and other publicly available links demonstrate, your basic facts are wrong. Moreover, your unwillingness to share generic information about your friend is strange when she is the sole support for your contentions. If you want to continue discussions, please provide evidence and objective evidence.

Jefferson: Where is the 'lifetime medical benefits, pensions, etc.'?

You're right. It's obviously an overpaid job. Let's cut all teacher salaries in line with janitors, maids, etc. There's an oversupply of teachers anyway, people are just dying to get into the education field. It's so much more lucrative than being an accountant, scientists, engineers, etc.

I'm being sarcastic obviously. If you have to listen to some of the BS teachers face, claiming they are 'well-paid' is an insult.

Lawyer: CalStrs ( http://www.calstrs.com/investments/index.aspx) is the teacher's pension fund. It has assets of $138.6 billion (yes, that's billion with a "b"). According to its own website, it is "the nation's second largest public pension fund." [Update: as of 5/31/13, the pension fund is worth $166 billion.]

Your last comment is based on emotion, not logic or facts. I hope you will stop engaging in propaganda and will try harder to use facts and logic to make your case. We already have Glenn Beck and others at Fox News relying on propaganda to make their case :-)

In any case, I am tired of dealing with Californians who lack basic knowledge about the issues and yet believe their opinions should be given any weight. In the future, please use objective evidence and personal knowledge to support your contentions.  

Jefferson: So the pension fund has plenty of assets. [He obviously didn't read Bill's comment. Sigh.] You still have not shown how '5-year teachers receive generous benefits such as job security, pensions, and lifetime medical benefits (worth thousands of dollars)" Which in itself is an emotional argument designed to portray teachers as over-compensated and not based on facts.

But keep up the ad hominem attacks, bud. You seem intelligent enough, I hope you realize the hypocrisy in your last statement.

Lawyer: 1. Public school teachers in California are unionized, which provides them job security. See the chart below, which shows the difference in job security between government workers and private sector workers:

http://1.bp.blogspot.com/_HOMfaLGCZIY/THoXdPJM3TI/AAAAAAAAAdQ/GOFeYbeQrMg/s1600/the_protected_class.png

[The chart is from this link: http://online.wsj.com/article/SB10001424052748703447004575449813071709510.html?mod=googlenews_wsj]

2. The teachers' pension fund is underfunded by around $42 billion. Taxpayers in California are on the hook for the full amount of teachers' pensions [Editor's note: as of 2011, the state teachers' pension fund assumes a 7.75% rate of return on all investments--regardless of actual investment performance.  This means that any shortfall must be made up by taxpayers or by higher contributions by existing teachers, especially younger/newer teachers]. See http://www.businessweek.com/news/2010-01-27/california-teachers-pension-fund-42-6-billion-short-update1-.html

3. After five years, most public employees--not just teachers--are eligible for pensions. For example, after five years of work, a gardener from a local school district may be eligible to receive a pension for the rest of his life.

In any case, information about state workers and their access to pensions, medical benefits, and other benefits is not hard to find. Here's one place to start, on CalPERS: http://ctainvest.org/home/CalSTRS-CalPERS/about-calpers/calpers-retirement-benefit.aspx

I hope you will use this discussion as a starting point to learn more facts about California's public sector unions and teachers' unions.

Jefferson: [people who lack evidence and objective support tend to resort to personal attacks.] I really like how you attacked me for using anecdotal evidence, then provided your own to make your point - "a gardener from a local school district." Guess they don't teach the philosophy of hypocrisy in law school.

Ah, that really explains your assholedness and condescending attitude. Sorry bud, you took the gloves off first. If you really want to change someone to your point of view, try not to be condescending about it, but then again, you're a lawyer. (Apology to all the other good lawyers out there, I'm only referring to this one).

Karena: Here's the salary scale for Palo Alto Unified School District. As you might imagine from the community they're drawing from, these are some of the best-paid teachers in the state of CA. http://www.pausd.org/community/employment/teachers/teacher_salaries.shtml

Even if you have a 30-unit master's degree when you're hired by PAUSD, you're still making just $62,636 at 5 years experience. If you have only a BA, which is more likely, then you're making $55,025 after 5 years. How do you figure the "average" Bay Area teacher is making $70+ a year at the 5-year mark?

Lawyer: almost all of the teachers I know spend their summers taking grad courses. After five years, most of them attain enough units to get close to the $70K mark. For Palo Alto, assuming twelve units every summer, after five years, a teacher would have 60 units and make $69K. That salary figure doesn't include the value of benefits, which are substantial. Also, many teachers work only 180 days a year (i.e., the minimum number of school days required by state law).

Remember: most teachers have summers off and are encouraged to use their time to earn grad degrees. The additional education is what allows many teachers to reach the 65 to 70K (approx) mark after just five years. After a certain point, teachers max out the value of their education and go back to getting three months' vacation a year and numerous paid state holidays.

I hope that makes sense. I mean, think about it--almost everyone in the private sector has to work year-round for the same salary. Thus, when teachers attend school over the summer, they are putting in similar hours as private sector workers. In short, at least initially, more ambitious teachers act rationally and work year-round to maximize their salaries. Such activity means they put in the same time as private sector workers, but receive a guaranteed payoff.

Overall, most Bay Area teachers receive middle class salaries with generous benefits unavailable to most private sector workers. If teachers want higher salaries, they ought to consider switching to 403(b) plans and getting paid more on the front end instead of burdening taxpayers with billion dollar, back-ended pension obligations. Of course, the government unions realize how valuable their pensions are, which is one reason they are sacrificing higher salaries so that retired (aka non-working) teachers can continue getting generous pensions.

I've seen so many private sector workers get fired, it is disconcerting to hear a relatively comfortable, politically-connected group of people complaining about not receiving more money from taxpayers. When you represent people who have little job security, who are poor, or whose only safety net is unemployment insurance, it's tough to sympathize with government employees, who are relatively much better off.

Karena: I'm not going to argue with a lot of the things that teachers unions push, including underpaying younger teachers to pad the pockets of older ones. Still, I do know that all of the under-35s I got to know chatting in the staff room, including myself, either lived with their Silicon Valley engineer SOs, or with their parents. There are plenty of people in this valley who can't make ends meet, and the vast majority can't afford to buy a house. Still, the existence of unemployed and/or downtrodden others doesn't magically make a teacher's lot an awesome one, or cutting funding to schools and teachers a solution to serious structural budget problems in CA.

As we could ask all the other Americans who don't go into teaching, leading to a massive dearth of qualified teachers: if it's such a well-paid, fantastic job, why don't you do it? ;-)

Lawyer: funny you mention this, because I just visited a public elementary school and was surprised by the number of male teachers...I didn't see a single one! I happen to love teaching kids, and I volunteer as a youth basketball coach. I've considered going into teaching, and as a first step, I recently offered to tutor ESL kids at the local school district. (I majored in English and used to tutor ESL college students.)

Bonus I: Antonio Villaraigosa, Mayor of Los Angeles, 12/7/10: “there has been one, unwavering roadblock to reform: teacher union leadership...The teachers unions aren't the biggest or the only problem facing our schools, but for many years now, they have been the most consistent, most powerful defenders of the unacceptable status quo.” More here.

Bonus II: Did you know the average California teacher receives the equivalent--at least as of 2011--of a $500,000 lump sum when s/he retires? Never heard that before, huh? Funny how the teachers' unions don't mention that. More here.

Bonus III: Actually it looks like I may have underestimated the value of teachers' pensions. More here. MyMoneyBlog calculates that as of 3/2011, a $300,000 lump sum would would get you just $1300/mo in annuity payments.

Bonus IV: from Joel Klein, The Atlantic, June 2011:

[C]onsider the financial burden that comes with providing lifetime benefits. Given the time between first putting aside the money to fund such a “long-tail exposure” and having to begin paying it, the amount “reserved” by the employer necessarily depends on a host of imprecise assumptions—about the rate of return that the money invested in the pension fund will earn, about how long employees will live, and even about how much overtime employees will work during their last few years, which is normally included in calculations of the amount of the pension. Each dollar set aside this year to cover the ultimate pension exposure must be taken from what would otherwise be current operating dollars.

Consequently, elected officials have had every incentive to make extraordinarily optimistic assumptions about the pension plan—or to simply underfund it—so they can put as little as possible into the reserve. Unfortunately, but predictably, that’s exactly what has happened: most states “assumed” they would get an average 8 percent return on their pension reserves, when in fact they were getting significantly less. Over the past 10 years, for example, New York City’s pension funds earned an average of just 2.5 percent. Now virtually every pension plan in America that covers teachers has huge unfunded liabilities. A recent study by the Manhattan Institute estimated the total current shortfall at close to $1 trillion. There’s only one way to pay for that: take the money from current and future operating budgets, robbing today’s children to pay tomorrow’s pensions.

Bonus V: from Michael Podgursky, "Fringe Benefits," Educationnext, Summer 2003 (Vol 3, No 3)

Bonus VI: Lobbying information here: https://www.opensecrets.org/industries/indus.php?ind=L1300 

Magma to Cadence: Bring it On

I attended Magma Design Automation’s (LAVA) annual meeting on September 23, 2010. Over the past year, Magma stock has handily beaten the S&P 500. Since September 28, 2009, the S&P has struggled to break even while Magma's stock has increased around 70%.

Chairman and CEO Rajeev Madhavan handled the formal portion of the meeting, which was uneventful. After the meeting, he generously agreed to allow me to ask him questions one-on-one.

Mr. Madhavan’s energy is palpable. You can almost feel his lava-hot desire to succeed when you hear him speak and move. One gets a sense that Mr. Madhavan is bustling with ideas and can't wait to share them with you.

I expressed my concern that Magma’s general business was becoming commoditized, which usually causes margins to decline. However, Mr. Madhavan told me that Magma had “substantial leadership in the analog area” with several unique, brand-new tools. He said he was “extremely confident” about the new tools. He also indicated Magma’s biggest challenges were internal, i.e., to ensure execution without incurring more expenses.

When I pointed out that Magma was a smaller player in a market dominated by Cadence (CDNS) and Synopsys, Inc. (SNPS), Mr. Madhavan compared Magma to Google's Android, contending that if size mattered, Microsoft should have been able to outcompete Android--which has not proven to be the case. He also said that “Cadence is weakest in [its] technology” and doesn’t offer the “best of anything [in its market].” To put Cadence’s technological issues in context, Mr. Madhavan said that some of Cadence’s products were “three to four times slower” than anyone else’s. When I expressed surprise, Mr. Madhavan’s eyes lit up. He immediately issued a bold challenge to Cadence, saying,“You name it, I’ll take them on anyplace...every couple of weeks or so, we’re winning evaluations against Cadence, and we’re seven to fifteen times faster” in SPICE and several times faster in digital now.

What about Synopsys, I asked? Mr. Madhavan’s tone softened. He said Synopsys is “strongest in terms of numbers” and its balance sheet, and Magma “must continue to differentiate” its own products to compete with Synopsys’ products. [According to Magma, "In SPICE Magma has a tremendous differentiation and we expect to increase our digital differentiation with our upcoming product launches.”]

My impression was that Cadence was expanding in China, so I asked Mr. Madhavan about Magma’s Chinese footprint. Mr. Madhavan confirmed his company also had “sales and marketing in China” but indicated that the industry has yet to do as much business there as in the U.S.

I asked Mr. Madhavan about his biggest challenges going forward. He said that his primary goal was getting “engineers to try” Magma’s products. Once engineers try Magma products, they tend to view Magma as an attractive partner. But Mr. Madhavan admitted that existing business practices--specifically all-you-can-eat deals from other EDA suppliers--encouraged inertia. [Note: EDA is electronic design automation aka electronic computer-aided design.] Because the consequences of missing a deadline can be so severe, most engineers prefer to stay with the more established names rather than switch, even if Magma’s products are better and faster.

Regarding my contention that EDA was becoming more commoditized, Mr. Madhavan expressed disagreement: “The very fact that [other companies] think that their products are commodities is the anti-thesis of Magma...we strive to differentiate--that’s our culture.”

How about it, Cadence? Will you take on Magma in a head-to-head contest? Mr. Madhavan is waiting for you.

Bonus: a review of Magma’s 2009 shareholder meeting is here.

Disclosure: I own a small number of Magma (LAVA) shares. My holdings may change anytime. Also, a Magma employee had the opportunity to review this article and submitted some comments to me. I included some of his comments, including the references to SPICE.

Movie Recommendation: Battle of Algiers (1966)

I've just seen one of the best movies ever made: The Battle of Algiers (1966). It's about colonization, terrorism, and independence. It is stunning to see the potential parallels between America's campaign in Iraq and the French's campaign in Algiers.

Think Corporations Don't Pay Enough Taxes? Joke's on You.

Of course we have to pay taxes. The question is, "What kind of taxes should we impose for maximum efficacy?"

From David Walker's book, Comeback America (hardcover, page 121): "we must realize that corporations don't really pay taxes. Rather, they pass along any tax, in the form of higher prices to consumers, lower wages to workers, and/or lower returns to shareholders."

(And last time I checked, CalPERS and many middle-class Bay Area families were shareholders.)

Random Thoughts

1. If the South had a way to make money without needing to enslave Africans, would we have had a Civil War?

2. The surest path to tyranny is hyperinflation.

3. Public sector compensation and private sector compensation are completely different. Unlike the private sector, public sector compensation usually includes unpredictable long-term structural debt, such as pensions and medical costs. The costs of pensions and medical treatment depend on a person's age and health. If it was so easy to analyze costs relating to a person's age and health, we could all run insurance companies. Moreover, when governments make long term compensation promises, they are using taxpayer money (OPM) and have little incentive to get the numbers right. More here, from a letter to The Atlantic (Nov 2010):

In the final analysis, it doesn’t matter whether you work for GM or N.Y. or U.S.A.; it doesn’t matter if you are in a defined-benefit or defined-contribution plan--your retirement is dependent upon the earnings and productivity of your grandchildren and their friends. All of the pieces of paper in these plans are just proxies: claims on a portion of the labor of future generations. All of these retirement schemes seemed affordable when they were new. We didn’t see why they were inexpensive: because they were built on leverage. They depended upon borrowing against the future growth of the three unsustainable pyramids: economic, population, and credit. None of those can continue forever, and as one fades, the others must take up the slack. But once all three pyramids are played out, the plans face a few stark choices: substantially raise contributions, substantially lower payouts, or go bankrupt.

Steven Flint Manasquan, N.J.

4. People's voting preferences are probably based in large part on whether they have children. Most parents probably favor the status quo. Why? The more society changes, the less knowledge they can pass along to their kids. The parents' economic skills may also decline in value if society changes too much. In contrast, people without kids have more time to adapt to changes and also have a higher incentive to change society to suit their own needs and wants. In conclusion, I bet parents tend to be more "conservative" while childless adults tend to be more "liberal."

5. The S&P 500 is about 1180. The Dow is about 11,142. Perhaps the market is a bit frothy. Markets may be anticipating an extension of the Bush-era tax cuts, which means an assumption of a more politically balanced federal government. But elections can be unpredictable...

Questions re: Charter Schools

1. If charter schools don't have the burden of paying billions of their dollars to retired/non-working school personnel, can't they use more of their dollars to pay newer teachers more and to limit class sizes?

2. If charter schools must compete for students and overcome parental inertia (i.e., most parents will move their kids along in the same school system unless they have a good reason to change), don't charter schools have a greater incentive to provide better services and to be more transparent?

3. Do you believe competition usually leads to better service and products?

4. Do you believe that monopolies usually lead to good service, superior efforts, and superior results for consumers? If not, do you realize that by opposing charter schools, you are supporting the status quo, which is a monopolistic public education system?

5. Most people agree that parental involvement, the level of parental education, and good parenting skills are the primary factors in determining a child's academic success. How does paying teachers more or opposing charter schools solve the problem of uninvolved parents, uneducated parents, or a lack of parenting?

Random thoughts of the day:

1. Competition lowers prices for consumers; monopolies, on the other hand, usually allow entities, whether government or corporate, to increase prices. Right now, public schools have a virtual monopoly on education because most students must attend a school based on where they live rather than other standards, such as test scores, better facilities, better teachers, etc. The more schools must compete for government money (which is related to the number of students attending a school), the more all schools are incentivized to improve services.

2. Re: why privatization will decrease education costs. Again, when you break a monopoly, costs usually go down. Some people appear to be assuming that charter schools will incur the same expenses as public schools, and therefore it will all be a wash. This is incorrect. We know California's public schools are inefficient. They use about 85% of their funding to pay employees and contractors, which means they spend only about 15% of their money on children.

For example, in some California public schools, a gardener, after just 5 years of work, is eligible for a pension of around $1,000/month. It is unclear how paying a gardener a pension after five years of work helps children, but let's set that issue aside. If a charter school hires a gardener but without the burden of a pension, it has more options. It can increase a teacher's salary by $1,000/month, buy laptops for students, or add courses. To make a long story short, the opportunities to game our current education system are enormous. Charter schools, if run properly, can set up systems that are harder to game and that lack long-term structural deficits such as pensions.

Over time, as more students attend charter schools, the state may eventually be able to force teacher unions and public schools to eliminate their own long term structural deficits and to adopt student-centric teaching and evaluation methods. In time, we may even be able to amend the state Constitution to divert education-earmarked money to services that benefit all state residents. Even if we fail to divert money to non-education services, competition alone and the battle for students/state money will improve education for all students, which is the ultimate goal.

Are State Pensions Sustainable?

"There seems to be a high likelihood that future generations will have to bear the substantial burden of making up pension benefits for previous generations of state employees. While citizens of states that are particularly hard-hit by the pension crisis may be able to escape to other states, an acceleration of this demographic phenomenon would leave a dwindling taxpayer base behind in the states facing the largest liabilities. This would increase the likelihood of a federal taxpayer bailout in which taxpayers in all states would bear the burden of the states in default. The problem of state and local pension liabilities is therefore a problem for all U.S. taxpayers, not just those in the states with the largest deficits." -- Joshua Rauh

More here. Scroll all the way to the bottom to see your state's ranking. The lower your state's ranking, the better.

It's not pretty if you live in Illinois, Connecticut, Indiana, or New Jersey.

It's much better if you live in North Carolina, New York, or Nevada.

How to Help Poor People

The best thing anyone can do is make a poor person self-sufficient and/or independent.

Welfare and charity do not make a poor person self-sufficient because they regard the poor person as a passive recipient of benefits rather than someone with under-utilized skills.

A job allows a person to become self-sufficient.

To give someone a job, corporations and small businesses must grow and make higher profits so they can afford to expand.

For businesses to grow and make higher profits, they must sell more products.

Therefore, the goals of any fiscal policy ought to be 1) increase public demand for products by ensuring a fluid money supply; and 2) maintain the purchasing power of the currency.

The Federal Reserve's monetary policy seeks to promote "maximum" sustainable output and employment and to promote "stable" prices. More here.

Thought of the Day

California's public K-12 schools: billion dollar babysitting boondoggles?

Sounds like a harsh question until you realize we currently have no objective way of measuring teacher performance. Consider this paragraph--about another topic but also relevant here--from David Walker's book, Comeback America (hardcover, page 164):

Without any standards of measurement, all definitions of "success" and "failure" devolve to the political arena. If your party enacted the new housing stimulus program, then you can make a dozen claims to support its success. But your opponents, at the same time, can point out as many claims of its failure. We ordinary taxpayers who footed the bill can only hope something good came out of the exercise--but we can't tell either. This is simply unacceptable and must change.

Our schools have no real standards to measure the effectiveness of teachers. Unions resist testing and making teacher evaluations public. Meanwhile, kids move along within the system, and it's hard to tell whether they succeed based primarily on the school they attend or their parents' involvement.

On California Education

Three must-read links on education:

Grand Theft Education [Warning: PDF] (Hat tip to Jon.)

Reason.com: "The two largest teachers unions, The American Federation of Teachers and the National Education Association, overwhelmingly supported Obama with their votes and their contributions. Some 95 percent of the groups' campaign contributions go to Democratic candidates and the NEA, spends more money on elections that Microsoft, ExxonMobil, Walmart, and the AFL-CIO combined. No wonder Obama's big talking point is that he wants to add 10,000 more teachers to public payrolls despite the fact that there are already more teachers per student than ever.

Reforming education may not be politically easy, but the solution is pretty simple: Give parents and students more ability to choose - and exit - schools. This works for every other sort of business and it works for higher education, too. There's no reason to think it wouldn't work for K-12 education."

Economist blog: "America's public-sector unions...have an extraordinary power to force the state to dance to their tune, squashing innovation, reducing productivity and undermining competitiveness."

"With poor prospects in the ultra-competitive private sector, government work is increasingly desirable for those with limited skills; at the opposite end of the spectrum, the wage compression imposed by unions and civil-service rules makes government employment less attractive to those whose abilities are in high demand..."

Bonus: more facts here.

Leon Panetta Speaks at SCU

Leon Panetta, Director of the CIA, spoke at Santa Clara University last week (October 8, 2010). He was entertaining and clearly proud of his Italian heritage. In one of his best moments of the night, he told a story about the necessity of fighting for your beliefs:

A priest and a rabbi want to learn more about each other's beliefs, so they attend a boxing match. One of the boxers goes to the corner and makes the sign of the cross. The rabbi sees this and asks the priest, “What does that mean?” The priest responds, “Not a damn thing, if he can’t fight.” (It’s much funnier when spoken.)

Overall, Panetta said all the right things. He is against “enhanced interrogation techniques” aka torture (he said the CIA uses the Army Field Manual on interrogations). He thinks the media is doing Americans a disservice through its soundbite-style reporting (and even took a jab at Fox news, saying that the media panders to the lowest common denominator because they don’t want to be “outfoxed.”) In any case, here are the highlights of Panetta's speech as I saw them:

In D.C., “gridlock is the order of the day.”

Panetta singled out Yemen, Somalia, Afghanistan, Iraq, and Pakistan as hotbeds of terrorism. He said that Pakistan had nuclear weapons and Al-Qaeda leaders.

He said India was an emerging power but will have to deal with its poverty problem [which may limit its ascendancy].

He said, “My job is to tell the truth,” whether they [the White House and Congress] like to hear it or not.

The CIA has four basic missions: counter-terrorism (CT); counter-proliferation; cyber-security; and minimizing the risk of surprise.

One interesting quote: “We are conducting a war within Pakistan.”

“Security and stability are our top priorities.”

On nuclear proliferation, “all we need is a nuclear arms race in the Middle East,” he said with an exasperated tone.

He singled out North Korea as an active proliferator that shares nuclear technology with other countries. He also mentioned Iran's nuclear program, but didn't provide much detail other than mentioning it as a potential catalyst for a nuclear arms race.

On cyber-security, Panetta singled out China and Russia as potential threats. He said the “next Pearl Harbor could be a cyberattack” that shuts down our power grid or financial system. He said we experience hundreds of thousands of cyberattacks each year.

Panetta also went on several tangents, mentioning the Mexican drug cartels, which have killed 15,000 people, and the rising power of Brazil and India.

He told us that “we do not have to choose between law and security,” but “at the same time, we cannot be free unless we are secure.”

Panetta said the CIA’s budget has “tripled” since 9/11, which was cause for concern. He said such growth and unchecked expenditures “frankly scared the hell out of” him. (Prior to becoming Director, Panetta spent years on the House Budget Committee trying to balance the federal budget.)

Panetta has reduced the CIA’s reliance on outside contractors (I believe he said the CIA has reduced its reliance on contractors by around "20%," but I couldn't quite make out the specific context, and I'm sure there are many different kinds of contractors, so the 20% number may not be very helpful to anyone).

Panetta has made knowledge of a foreign language a requirement to advance within the CIA. His goal is to “be diverse,” and he wants to increase the CIA’s overall diversity from 23% overall to 30%.

Panetta said the CIA’s basic goal is “convincing people to risk their lives to give us information–that is what it is all about.” If we can’t protect them [the assets], he said, no one will want to work with us (later, he criticized WikiLeaks because some of the documents released contained names).

Panetta also said the President of the United States signs off on all covert operations, and the CIA's decisions are also reviewed by the Attorney General as well as overseen by Congress [see Senate Select Committee on Intelligence and the House Permanent Select Committee on Intelligence]. He went out of his way to say that the CIA keeps the President and Congress apprised of all operations.

He said that over half of the CIA’s workforce was hired post-9/11.

During the short Q&A session, Panetta criticized the media, saying its quality has declined because of soundbites and increased competition (this is where he made the comment about the general media not wanting to be “outfoxed”).

Panetta said the CIA had no excuse for not having oversight over [outside] contractors. He also said that certain security details were outsourced because certain agencies don't have designated security personnel. (I think he mentioned protection for certain Afghan politicians and State Department personnel, but don't quote me on this.)

Panetta lamented the state of modern politics, indicating that the goal ought to be consensus, but now politicians care more about surviving in office. Panetta said we can “govern by leadership or [by] crisis,” and right now, we are governing by crisis.

As I left the speech, I realized I had listened to a series of bromides. For example, Panetta left out the CIA’s role in extraordinary renditions. While Panetta said we should not look backwards to the Bush administration’s mistakes, he also didn’t say anything about how the CIA sought to avoid similar debacles. My own personal experience regarding FOIA requests was markedly different with the CIA than it was with the FBI–even though both were providing me information pursuant to the exact same federal law.

At the end of the day, Mr. Panetta is just one individual, just like President Obama is just one individual. My feeling is that Americans keep looking for one person to change things, but our form of government is anti-royalty and therefore one person’s power–though vast–is still limited. We need to move away from a "single individual" mentality and try to elect people who are comfortable delegating power and who will create changes from the bottom up. If this decade is any indication, it appears that one person can make a difference on the negative side, but not so much on the positive side.

Bonus: Audio of Speech.

Bonus: from Robert Scheer's They Know Everything about You (2015):

The DMV: How to Improve It?

I recently had a terrible experience with the DMV. I brought my cousin for his driving test, and the driving testers were rude and unsympathetic to my cousin's ESL situation. One tester had an accent so thick, I had no idea what he was saying. This unattractive, short, and fat male tester clearly reveled in the little power his job provided him. Meanwhile, the top manager told me she had only 2 driving testers for 40+ people that day. When I asked, "Why do you only have two people? Did a bunch of people call in sick?" the manager remarked, "That's not your business. I don't need to explain our procedures to you."

To be fair, the highest-ranking DMV local executive, the Administrative Director, treated us well, but even he managed to foul up--he cited a non-existent Vehicle Code section (VC 4008) when explaining why I had to follow a certain procedure.

Anyway, I was so frustrated with my experience at the DMV, I spent all day and night thinking about how we could improve the DMV's service. Regarding the driving testers, you can't measure performance based on pass rates or complaints for obvious reasons (e.g., all of the rejected applicants will complain, etc.), so you have to have some competition to establish objective benchmarks.

Here's what I came up with: if an applicant fails, he should be given an opportunity to go to a private, non-DMV tester. If he passes the non-DMV, private driving test and has no traffic infractions for one year, the DMV should assign its tester a point. After 25 points, the DMV should re-assign its employee with 10% lower pay. (I chose 25 points, but the appropriate number should reflect our intent to achieve a balance between fairness and competence--you don't want DMV testers being afraid to fail bad drivers.)

At the same time, if the private (non-DMV) tester passes someone, and the driver gets a moving violation (not a parking ticket or other minor infraction), then the private DMV provider should pay a fine into California's general fund. The amount of the fine should be adjusted for inflation and should be significant enough for the private testing agency to evaluate its own testers and testing process after 25 fines. (There must be a built-in incentive to discourage the private competitor from passing everyone or having lax standards.)

[Update: a friend says it's unfair to penalize the private corporation for at-fault accidents or moving violations because too many unpredictable, untestable factors are involved. I explained the private corporation must have some check against passing everyone. Moreover, if the private corporation gets fined enough times, it will fine-tune its testing process (I assume the corporation will have access to the general nature of the violations). Also, the goal is to provide incentives for improving the testing process and checks against exclusive government power--not to create a perfect system, which is impossible.]

Now that we've imposed checks on the DMV and its competitor, we also need a check on the driving applicants themselves. This issue is simple to resolve: if a driving applicant wants a non-DMV test after failing the DMV test, then s/he should pay a small, nonrefundable fee to the DMV. A small fee would discourage bad drivers from wasting people's time and would not prevent good drivers from opting for a second opinion.

The issue of improving government services is complex. It took me the entire day to come up with the idea of an objective secondary evaluation. (Once I thought about FMLA and the employer's option of sending the employee to another doctor for a second opinion, the solution became clear.) I've concluded you must have competition and/or the threat of wage/job loss to promote customer service and performance. Once you realize competition and incentives are linked to superior customer service and performance, ideas flow more easily (and one begins to see why government unions are terrible for everyone but themselves).

In any case, creating a fair system that encourages responsive government employees is certainly possible. It irks me when people say, "The government is different from private industry; therefore, you cannot apply similar standards to both." Really? What's the alternative? Terrible customer service and higher taxes for life?

Note: the major problem with the above scenario is the cost of setting up a competitor. Who is going to pay for the private competitor? If the drivers themselves pay, we have a conflict of interest. Perhaps the public would be willing to divert some of its existing taxes in the form of a grant to private competitors, which would be set up as non-profits.

Frederick Douglass on Freedom

‎"If there is no struggle, there is no progress. Those who profess to favor freedom, and yet depreciate agitation, are men who want crops without plowing up the ground. They want rain without thunder and lightning. They want the ocean without the awful roar of its many waters. This struggle may be a moral one; or it may be a physical one; or it may be both moral and physical; but it must be a struggle.

Power concedes nothing without a demand. It never did and it never will. Find out just what any people will quietly submit to and you have found out the exact measure of injustice and wrong which will be imposed upon them, and these will continue till they are resisted with either words or blows, or with both. The limits of tyrants are prescribed by the endurance of those whom they oppress." -- Frederick Douglass

Funny Stuff My Family Sez

I come from a family of immigrants. Learning a new language is hard, but it creates some hilarious moments. On Facebook, I posted the following status update:

David Walker: "Even if they [interest rates] don’t go up, the single largest line item in the federal budget within 12 years will be interest on the federal debt -- larger than defense, larger than Medicare, larger than Social Security. And what do we get for that? Nothing."

Below it, I said, "This Halloween, I'm thinking about going as the federal debt."

A friend of mine, Ziem, responded, "Don't. You'll be gang-raped by people dressed as special interests."

I read his comment while my family and I were dining in a semi-formal restaurant with my 21 year-old cousin, my aunt, and my uncle, who were visiting from Iran. The following transcript doesn't do the scene justice, but it's the best I can do. I hope you'll be entertained as much as we were:

Me: [cracking up]

Everyone: "What's so funny?"

Me: "Um, how do I explain this? Well, let's see if he [pointing to my cousin] can understand this, because it's complicated, but at least we can test his English."

"Do you know what a budget is?

Cousin: "No."

[Parents explain what it is, he gets it]

Me: "What about a deficit?"

Cousin: "No."

[Parents explain what it is, he gets it]

Me: "Do you know what "special interests" are?"

Cousin: "No."

Dad: "We don't have those in the Iranian political process, so he won't know what that is." [Tries to explain "special interests" to my cousin]

Cousin: [smiles] "Ah, you mean like the mullahs?" [religious leaders]

Me: "Yes! Good job!" [I tell him about my status update and Halloween costume proposal]

"Do you get it?"

Cousin: "Yes."

Me: [I repeat Ziem's comment, but use "hit" instead of "g*ng r*pe."]

[Everyone laughs]

Me: "I told you 'hit,' but it's even funnier with the actual word my friend used."

Everyone: "What word did your friend use?"

Me: "Think of a word that's worse than 'hit.'"

Mom: Does it start with the letter, "f"?

Me: [caught off-guard, but manage to shake my head]

Dad: "Kill"?

Uncle: "I think I know what it is." [Turns out later that he didn't.]

Cousin: "What letter does it start with?"

Me: "Hmm, well it's two words. I don't think you'll get it, but I'll try anyway. It starts with an 'r.'"

Cousin: "R*pe?"

Me: "Yeah, but it's worse than that. Think multiple people."

Cousin: [confused] "What's the other letter?"

Me: "It starts with a 'g.'"

Cousin: "G*ngb*ng"?

Me and Dad: [start laughing hysterically]

Mom: [looks confused, turns to my cousin and asks] "What's a 'g*ngb*ng'?"

Cousin: [looks at me, starts cracking up]

Me: [I can't stop laughing and leave the table for the next 10 minutes. When I come back, no one mentions the conversation, but people are smiling.]

Random Thoughts: On Elitists and Inflation

"Liberals" and Democrats like to argue that poorer Americans vote Republican because they are misled by rich people and corporations. (See Frank Thomas's What's the Matter With Kansas, which argues that conservatives have manipulated poor people into voting for the GOP and against their own self-interests.) This smug, self-serving thesis puts liberals in a position to "help" the poor, usually through more government programs.

In reality, poorer people vote based on their economic circumstances and tend to focus on economic issues because they know the value of a dollar. In contrast, rich people's life experiences tell them that money is abundant and can be spent and created again. For example, blue state residents tend not to be offended when the federal government prints money and puts their grandchildren in debt. Unsurprisingly, West/East coast liberals (blue states) have higher salaries and earnings than Midwestern and Southern conservatives (red states).

The problem is that the perception of money as an easily renewable resource leads to inflationary policies that create higher costs of money for those on the lower end of the income scale who tend to be net borrowers of money, not lenders or large savers. (Printing more money also causes the devaluation of the dollar, decreasing the purchasing power of the poor, but that's a separate and more complicated issue).

Also, poorer people intuitively understand that injecting more money into something causes inflation. For example, if you pay LeBron James more, the cost of NBA tickets increases, because the owners have to make more money, and most businesses make more money by raising prices. For poorer people, inflation tends to show up in higher prices, making it more difficult for them to buy things (like a good seat in an NBA game).

Another example: it's much easier for poorer people to buy a decent house in a decent neighborhood if a house costs 100K and the median price is 150K, than if a house costs 400K in a neighborhood where the median price is 600K. Think about why house prices tend to be so much higher on the coasts compared to the Midwest and South, and why someone in the Midwest or South wouldn't want his/her children to pay 400K to live in a decent neighborhood. (Why increase the cost of living in a decent neighborhood if you don't have to?)

Rich people, unlike poorer people, tend to be the beneficiaries of inflation--when it happens, their salaries go up along with prices, so they notice no changes or believe they are doing even better. (Think about it: 80% of Americans would never pay $650,000 for a 4 bedroom, 2 bathroom house in a so-so school district, but rich people in the Bay Area do this all the time and rely on continued inflation to increase their home's value.)

Bottom line: if you don't have much of something, it becomes more precious to you, and you can't stand to see too much of it being used or spent. Generally speaking, abundance mitigates caution and tends to cause inflation. Inflation tends to be bad for poorer people and good for some people, especially educated and affluent people. Therefore, poorer people tend to vote for fiscally conservative candidates because they want to keep their costs low, and they intuitively understand that more money tends to lead to higher prices.

Bonus: historically, the Democrats have favored bigger government. Well, big government costs money, and paying government workers higher salaries and expensive benefits costs money, and they both cause inflation. Inflation hurts poor people. Ergo, in most blue states where Democrats have controlled the legislature for long periods of time, it is harder for poor people to buy homes, afford to live in decent neighborhoods, etc. It's really interesting that anyone would actually think that the Democrats help the poor when it's harder in most blue states for a family making 30K to buy a home and be debt-free than it is for the same family in most red states.

Idiocracy

California-based voters who focus on social issues are like students who study hardest for the class in which they already have an A- (sociology) while ignoring the class in which they are failing (economics).

Thank You, Gov. Schwarzenegger

From SF Gate, October 4, 2010, by Bob Egelko: "The state Supreme Court upheld Gov. Arnold Schwarzenegger's furloughs of 200,000 state employees today, saying the Legislature had ratified his decision to order workers to take three days off each month without pay." See Professional Engineers in Cal. Government v. Schwarzenegger.

From the Gov: "Today's ruling [authorizing government employee furloughs] upholds the state's actions to protect taxpayers and ensure we live within our means."

Governor, you deserve so much more credit than you have been given. When you realized the Democratic state legislature wouldn't work with you, you went to the people via the initiative process--but we failed you. Now, you are doing the best you can to prevent the unions from destroying California. You have saved us $1 billion. Thank you.

Despite this victory, I am not entirely optimistic. I know your power has limits--as it should. The Court ruled that only the Legislature can authorize the governor to cut employee pay and workweeks. I predict the Democrats will pass a law limiting your power to furlough employees in the future. More details from the decision below, courtesy of the DFEH and Director Phyllis Cheng:

On December 1, 2008 — faced with (1) a large current state budget deficit that was projected to grow to more than $40 billion by the end of the 2009-2010 fiscal year, and (2) the very serious prospect that by as early as February 2009 the state would run out of cash to pay its ordinary expenses — the Governor of California declared a fiscal emergency, called the Legislature into special session, and submitted to the Legislature a comprehensive plan to address the budget problem. The Governor’s budget plan included, among many other cost-saving features, two proposed statutory provisions that would direct the Department of Finance and the Department of Personnel Administration to implement, for the remainder of the 2008-2009 fiscal year and for the entire 2009-2010 fiscal year, a mandatory one-day-a-month unpaid furlough of most state employees employed by the executive branch, a proposal that would save the state approximately $37.5 million per month by reducing by approximately 5 percent the wages paid to each of the affected employees.

Two and one-half weeks later, on December 18, 2008, the Legislature passed its own proposed comprehensive budget legislation, comprising 15 separate budget-related bills. Among many other differences from the Governor’s proposal, the Legislature’s alternative plan did not include the Governor’s recommended furlough provision.

On December 19, 2008, the Governor issued the executive order that lies at the heart of the present litigation, instructing the Department of Personnel Administration to implement, beginning on February 1, 2009, and continuing through June 30, 2010, a mandatory two-day-a-month unpaid furlough of most state workers employed in the executive branch.

Shortly after the Governor’s issuance of this executive order, a number of employee organizations — the recognized, exclusive bargaining representatives of a majority of the workers employed by the State of California — filed three separate, but similar, lawsuits, contending that the Governor lacked authority to implement unilaterally an involuntary furlough of represented state employees that reduced such employees’ hours and earnings by approximately 10 percent. The trial court, acting on an expedited basis, treated the three cases as related, heard argument in the cases together, and thereafter issued a single ruling rejecting the broad attacks made by the employee organizations on the executive order and concluding that the Governor possessed the authority to impose the furlough in response to the fiscal emergency facing the state.

The employee organizations (hereafter sometimes referred to as plaintiffs) appealed from the trial court’s ruling. After briefing in the Court of Appeal was completed and the three cases were consolidated for purposes of oral argument and decision, but before the Court of Appeal set the matter for oral argument or issued a decision, we exercised our authority pursuant to article VI, section 12, subdivision (a) of the California Constitution to transfer the consolidated matter to this court for oral argument and decision.

For the reasons explained below, we conclude that, under existing constitutional provisions and statutes, the Governor on December 19, 2008, possessed authority to institute a mandatory furlough of represented state employees, reducing the earnings of such employees, only if specifically granted such unilateral authority in an applicable memorandum of understanding entered into between the state and the employee organization representing the affected employees. Although there is considerable doubt whether the applicable memoranda of understanding granted the Governor such authority, we further conclude that even if the Governor lacked authority to institute the challenged furlough plan unilaterally, plaintiffs’ challenge to the furlough plan now before us must be rejected. In mid-February 2009 — shortly after the furlough program went into effect — the Legislature enacted, and the Governor signed, legislation that revised the Budget Act of 2008 (2008 Budget Act) by, among other means, reducing the appropriations for employee compensation contained in the original 2008 Budget Act by an amount that reflected the savings the Governor sought to obtain through the two-day-a-month furlough program. The February 2009 legislation further provided that the specified reduction in the appropriations for employee compensation could be achieved either through the collective bargaining process or through “existing administration authority.” That phrase, in the context in which the revised budget act was adopted and in light of the provision’s legislative history, reasonably included the furlough program that was then in existence and that had been authorized by the current gubernatorial administration. In particular, the bill analyses considered by the Legislature made specific reference to furlough-related reductions of employee compensation costs. Under these circumstances, we conclude that the Legislature’s 2009 enactment of the revisions to the 2008 Budget Act operated to ratify the use of the two-day-a-month furlough program as a permissible means of achieving the reduction of state employee compensation mandated by the act.

Accordingly, we conclude that the 2009 budget legislation validated the Governor’s furlough program here at issue, and reject plaintiffs’ challenge to that program.

http://www.courtinfo.ca.gov/opinions/documents/S183411.PDF