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? :-)
"And if an epitaph be my story, I'd have a short one ready for my own: I had a lover's quarrel with the world." -- Robert Frost
Saturday, October 30, 2010
Friday, October 29, 2010
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.
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.
Thursday, October 28, 2010
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.
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.
Wednesday, October 27, 2010
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/1
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.
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/gr
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.
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/vie
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/inv
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/THoXd
[The chart is from this link: http://online.wsj.com/arti
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.co
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/
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/commu
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
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/1
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.
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/gr
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.
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/vie
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/inv
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/THoXd
[The chart is from this link: http://online.wsj.com/arti
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.co
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/
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/commu
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
Monday, October 25, 2010
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.
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.
Friday, October 22, 2010
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.)
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.)
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