Sacramento Corruption?

Sacramento politicians gave $8.7 million to a private medical program that no longer functions. Yes, you read that right.  From Dan Walters: "The Assembly's budget writers wanted to give Drew $12.7 million, even though the Legislature's budget analyst, in a private memo, noted that Drew's medical-residency program no longer exists since its affiliated hospital, King/Drew Medical Center, lost its accreditation."

It gets better. The person in charge of the defunct medical residency program at Charles Drew University is a former Sacramento politician. Best line of the article: "the conference committee unanimously appropriated that [$8.7 million] amount this week without discussion." [italics mine]

Read more here.

[Note: this article has been updated since its original publication.  Outdated links to the Sacramento Bee were replaced.]  

John Wooden's Wisdom

"Be more concerned with your character than your reputation, because your character is what you really are, while your reputation is merely what others think you are." -- John Wooden

Are You Smarter than a 7th Grader?

Are you smarter than a 7th grader? Here is a letter from a 7th grader to the CBO, the federal budget oversight office:

http://cboblog.cbo.gov/?p=1045

How will budget deficits affect people under the age of 18?

When the federal government borrows large amounts of money, it pushes interest rates higher, and people and businesses generally need to pay more to borrow money for themselves. As a result, they invest less in factories, office buildings, and equipment, and people in the future--including your generation--will have less income than they otherwise would. Also, the government needs to pay interest on the money it borrows, which means there will be less money available for other things that the government will spend money on in the future.

Kudos to the CBO for publishing the letter.

Downtown SJ

In City Hall, there is a model replica of the city of San Jose. I've spent most of my last eight years working in this particular slice of San Jose.

California Education Spending: Just the Facts

"In 2007, more than four-fifths (82.9 percent) of statewide spending for schools went to pay for the salaries and benefits of teachers and other staff."

From a California Dept of Education affiliated website (Jan 2010): "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." More here.

The California Teachers Association has been the largest lobbyist in California over the last decade and has spent more than $200 million on campaign contributions and lobbying efforts.

Teachers' unions have also been effective lobbyists at the federal level. Unions have received federal money for 400,000 jobs. According to the White House, "Additional federal aid targeted at preventing [teacher] layoffs can play a critical role in combating the [economic] crisis. Such aid would be very cost-effective. There are no hiring or setup costs...The American Recovery and Reinvestment Act of 2009 included some of this aid for 2009 and 2010. The recipient reports filled out by states and school districts show that, last quarter, Recovery Act funds supported more than 400,000 education positions. (White House blog, June 12, 2010)

For more on California politics and government unions, click HERE (Troy Senik, Fall 2009).

Update on June 2012: for a more detailed post on teachers' unions, click HERE.

Update on April 2017: "61 percent of budgetary expenses are related to instruction, followed by 35 percent for support services, 4 percent for food services, and less than 1 percent for enterprise operations. Trying to infer salaries... is tricky, because salaries and benefits will be reflected across the categories, appearing in instruction, support services and enterprise operations. Generally speaking, a school district spends between 80 and 85 percent of its entire budget on salaries and benefits, meaning only 15 to 20 percent remains to address all of the rest of the budget’s priorities and needs... Salaries account for 67 percent of the budget, followed by 22 percent for employee benefits, meaning that school districts have spent close to 90 percent of their instructional budget on staff and benefits."  From https://www.aasa.org/uploadedFiles/Policy_and_Advocacy/files/SchoolBudgetBriefFINAL.pdf

Richard Fisher on Banking

Richard Fisher once again proves he's one of the few honest government officials left:

http://www.ritholtz.com/blog/2010/06/financial-reform-or-financial-dementia/

My message to you tonight is to remember where we have been. We have collectively been to hell and back. Let’s not go there again. Let’s remember that bankers should never succumb to what is trendy or fashionable or convenient but should instead focus on what is sustainable and in the interest of providing for the long-term good of their customers...

This leaves us with only one way to get serious about TBTF [too big to fail]--the “shrink ’em” camp. Banks that are TBTF are simply TB—“too big.” We must cap their size or break them up--in one way or another shrink them relative to the size of the industry.

Ah, common sense. Capitalism can't survive without it.

PG-13 Moment of the Day

From my friend, Nader A.:

Putting bankers and corrupt politicians in the same room is like putting a bunch of drunk sailors in a whorehouse...someone is gonna overpay, and someone is gonna get screwed in more ways than one!

'Nuff said.