California's Education and Pension Costs Out of Control

From AP writer Judy Lin:

Funding for K-12 schools and community colleges accounts for roughly half of annual state spending.

Funny how we haven't gotten smarter, but we've definitely gotten poorer. Meanwhile, California's state worker pension fund--which includes teachers' pensions--is still worth $177.7 billion. (Yes, that's billion with a "b.")

After years of staying mostly neutral, the San Jose Mercury News (July 7, 2009) finally issued an editorial opinion asking Sacramento to enact pension reform:

http://www.mercurynews.com/ci_12772192

The unfortunate truth is that the Democrat-controlled Legislature has been too quick to increase pension benefits and will resist reconsidering them unless it's forced to. Now is the time to do that...

Now, because of stock market declines and rising costs of health care, retirement costs are already siphoning $3.3 billion from the state budget, just when California is facing substantial cuts in education and services to the poor. That cost is expected to rise steeply. [Emphasis added]

By the way, in case you're wondering, state workers get the following benefits: "3 percent of pay for every year worked, up to 90 percent maximum after 30 years for safety officers and 60 percent for other employees." Where can non-government workers get 60% of their salary guaranteed in retirement? If you discover a place that allows non-executives to claim the 60% retirement bracket, let me know. I won't be holding my breath.

Update on July 12, 2009:

For the record, I favor increasing teachers' salaries as long as pension costs are eliminated. Why not replace teachers' pensions with 403b plans (the public-sector equivalent of a 401k)? If a 401k/403b is good enough for a Google/Apple/Target employee, why isn't it good enough for a government employee, too?

The average government worker should not have better retirement benefits than the average non-government worker. Is a secretary or lawyer who works for the government "better" than a secretary who works for Pfizer or Pepsi? I don't think so, especially not when the modern economy is so inter-connected.

Retirement benefits like lifetime pensions and lifetime medical care are inherently unstable because you have to predict how long a worker will live--that's not an easy task. As a result, costs are unpredictable, which makes accurate budget planning difficult. Why not create a budget framework that allows us to definitively ascertain employee costs without worrying about the ticking time bombs of unfunded, unpredictable long-term liabilities?

Good Riddance: Peggy Rips Palin a New One

Someone finally summarizes why Sarah Palin is the wrong choice for the Republican Party...and it's a Republican! I've always liked Peggy Noonan's common sense--it's something the GOP desperately needs right now:

http://online.wsj.com/article/SB124716984620819351.html

[Palin] was not thoughtful...she was out of her depth in a shallow pool. She was limited in her ability to explain and defend her positions, and sometimes in knowing them. She wasn't thoughtful enough to know she wasn't thoughtful enough...[s]he is a ponder-free zone...

For national elections, the Republican Party needs to attract more than just religious conservatives to win. Remember: most Americans now live in large cities, a group that is less Christian and more diverse and not particularly attracted to someone like Sarah Palin.

If the Republican Party wants to have any hope of winning national elections, it should ask Palin to create a religiously-inclined third party or handle Midwestern/Southern GOP fundraising efforts. At the same time, the GOP should cast out anyone within its ranks who does not adamantly support the separation of religion and state. Basically, unless Republicans re-affirm the Goldwater/Eisenhower philosophies--limited government and limited interference in other countries' affairs--it will have a tough time winning over voters in metropolitan areas. With these voters, the GOP cannot win the presidency as long as the electoral college system exists.

Ms. Noonan is trying to help the Republican Party. Republicans disregard her advice at their own risk.

Immigration Laws Provide the Government Too Much Discretion

Ken McLaughlin has written an interesting story (SJ Merc, 7/3/09) about the broad discretion of immigration judges:

http://www.mercurynews.com/ci_12744965?source=rss&nclick_check=1

If the link doesn't work, try googling these words:

When he was 10, Hank Nijmeh moved with his family to San Jose when the Beatles were still together and much of the Santa Clara Valley was carpeted with mustard fields. He was one of five children in a friendly Palestinian Catholic family that established one of the valley's most beloved eateries — the Falafel's Drive-In on Stevens Creek Boulevard...

U.S. Immigration and Customs Enforcement has kept Nijmeh in custody since April 2006, when he tested positive for marijuana while on probation....U.S. Immigration and Customs Enforcement has kept Nijmeh in custody since April 2006, when he tested positive for marijuana while on probation...

Immigration laws may be unevenly applied and enforced because of the wide latitude given to immigration judges. Remember this immigration fiasco, when immigration authorities wanted to deport the widows of American citizens because BCIS delayed processing their citizenship applications? Talk about pouring salt into an open wound...

Blog: Christopher Fountain

I just discovered an interesting blog:

http://christopherfountain.wordpress.com/

Mr. Fountain discovered a website that allows readers to see newspapers all over the world:

http://www.thepaperboy.com/newspapers-by-country.cfm

Disclosure: I don't know Mr. Fountain personally and do not necessarily endorse everything on his website. I do, however, like the fact that he's apparently a former attorney.

Bonus: here's another excellent blog:

http://lacunaemusing.blogspot.com

Here are Lacunae Musing's posts on Madoff:

http://lacunaemusing.blogspot.com/2009/01/bernie-reality-show.html [Reality Show?]

http://lacunaemusing.blogspot.com/2008/12/madoff-bailout.html [Bailout?]

Write Your Congressperson about H.R. 2798

It was only a matter of time--Madoff's investors have asked the 111th Congress for a bailout. The House of Representatives has obliged, and the House Committee on Financial Services is currently reviewing H.R. 2798. As of July 10, 2009, H.R. 2798 has not been submitted for a vote. You may write to the House Financial Committee using the following link: http://financialservices.house.gov/contact.html

Here is my letter:

Dear House members:

I am asking that you vote against H.R. 2798 or decline to submit the bill for a full House vote. The proposed bill seeks to bail out Madoff's investors under the guise of shoring up the SIPC. For example, SIPC members will only be expected to pay $1000 annually (up from $150 annually) into the SIPC fund. This amount is stunningly low, given that credit unions have had to pay millions of dollars to shore up their own version of SIPC, called the National Credit Union Share Insurance Fund (NCUSIF). Star One Credit Union, for example, will be assessed a $44.2 million charge to maintain adequate member protection. Thus, a revised annual SIPC fee of $1000 is laughable if consumer protection is the goal.

H.R. 2798 would be even more comedic if the money to expand SIPC protection wasn't coming from taxpayers. Unfortunately, because the SIPC has been woefully underfunded, if Congress passes H.R. 2798, the U.S. Treasury must issue loans to raise the SIPC fund's available credit from one billion dollars to $2.5 billion. As you know, the U.S. Treasury is basically the American taxpayer, so ordinary Americans and their children will be on the hook for this proposed bailout.

Most tragically, H.R. 2798's proposed penalties for white collar crime are too low at five years' jail time and a $250K fine. Such minimal deterrence will not protect the public against a future Madoff. Approving such low penalties post-Madoff may cause voters to wonder if white collar criminals have lobbyists. If I worked in Congress, I would not want my name associated with H.R. 2798 in its current form. Please vote "no" on H.R. 2798.

Sincerely,
Name

French-Algerian Celebrities

Reading some of the anti-Muslim comments French citizens, including Brigitte Bardot, have made, I am struck by how quickly memories fade. The French seem to have forgotten that some of their most famous representatives come from Muslim families. For example, Marcellin "Marcel" Cerdan, Edith Piaf, and Zinedine Zidane are all of Algerian Muslim descent. [It is true that Edith Piaf became Christian, but her maternal grandmother was Aïcha ("Emma") Saïd ben Mohammed (1876–1930).]

Castigating or judging people on the basis of their religion makes no sense. Throughout history, each religion has been persecuted. Clearly, the choice of religious persecution depends on whomever has a population advantage. One day, it might be your turn--unless we work hard to overcome our atavistic tendencies.

Bonus: "The media's primary function [is] to protect the weak from the strong. Now the strong have lost all shame... Every party in any given conflict always has at least some truth on its side, with the weakest party generally holding a little more." -- Leonid Bershidsky

Campbell: Local Fare

1. Anthony Bourdain would like Isabella's. Isabella's Restaurant is located at 70 S. Winchester Blvd., San Jose, California. It specializes in South American cuisine and its chef is Peruvian. The decor is nice--make sure you catch the small wooden sculpture of a soccer player on the left hand side of the restaurant. The location could be better--being next to a hairdresser and across from a nail salon doesn't scream five-stars--but I didn't care about the neighbors once I tasted the food.

I ordered the anticucho de corazon and the tacu tacu. If you like rice dishes, definitely get the tacu tacu--it's a flavorful rice and beans dish. The steak that came with the tacu tacu failed to impress, but I ordered it for the rice portion, so I didn't mind.

The anticucho de corazon was also great. It's basically four skewers of animal heart. What's animal heart? Well, imagine liver, but without the icky texture and aftertaste. Definitely try it--it was the highlight of my dinner.

2. I am always happy when I see an immigrant opening a new store. It reminds me the American Dream is alive and well. A new Ethiopian store, Tana Liquors and Groceries, has opened on 1358 S. Winchester Blvd., San Jose, CA. The store is very small and appears to have opened recently.Their advertising focuses on their imported spices, coffee, and liquor. I also noticed pre-paid phone cards. Right now, the store is new, so it doesn't have tons of products, but I bought and enjoyed a small apricot drink. The store's phone number is 408-871-8199; listed cell phone is 408-373-0606.

3. If you're into veggie food, don't forget Chaat Bhavan.

Disclosure: as of this writing, I have no financial interests in the above establishments and have not received "kickbacks" from them.