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What the Numbers say about Creating Jobs in America – Part 4/4

02 Mar

The first thing to learn is that the “tax cuts under President G. W. Bush did not spur investment.

“Job growth during the Bush years was one-seventh that of the Clinton years. Nixon and Ford did better than Bush on jobs. Wages fell during the last administration (Bush’s last four years in office). Average incomes fell. The number of Americans in poverty, as officially measured, hit a 16-year high last year of 43.6 million, though a National Academy of Sciences study says that the real poverty figure is closer to 51 million. Food banks are swamped. Foreclosure signs are everywhere. Americans and their governments are drowning in debt.” Source: Tax.com

Meanwhile, the GOP and their supporters such as conservative talk radio hosts like Dennis Prager continue to repeat the myth and the lie that increasing taxes on the wealthiest American will cause job losses in the United States.

To discover the truth, one must learn where the wealthiest Americans put their money.

Professor G. William Domhoff of UC Santa Cruz says, “In the United States, wealth is highly concentrated in a relatively few hands. As of 2007, the top 1% of households (the upper class) owned 34.6% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 50.5%, which means that just 20% of the people owned a remarkable 85%, leaving only 15% of the wealth for the bottom 80% (wage and salary workers)… However, for purposes of studying the wealth distribution, economists define wealth in terms of marketable assets, such as real estate, stocks, and bonds.” Source: Who Rules America?

Since when did investments in real estate, stocks and bonds create jobs? To create a job, a product must be produced and people  must buy that product be it dinner at a local restaurant, clothing at a retail store such as Target or Costco, gasoline to fill a car’s tank, buying groceries so families may eat, buying laptops, iPads, flat screen TVs, DVDs, taking vacations, etc.

In fact, capital investment for new and improved products and services that creates jobs mostly comes from the profits of established businesses and large corporations with money to reinvest. Development money represented about 30% of the economy while 70% of the driving force of economic growth comes from consumer spending, which means when retired teachers spend their monthly check from retirement funds such as CalSTRS, they are supporting and creating jobs.

At 6:02 PM on February 26, 2012, the U.S. Census Bureau’s U.S. & World Population Clocks reported that the U.S. population was 313,087,369 people.

The wealthiest one percent of Americans equals 3.1 million people that control 34.6% of the nation’s privately held wealth, which is mostly invested in real estate, stocks and bonds. The next 19% (59.5 million people) has 50.5% of the wealth.  That leaves 250 million people with 15% of the wealth supporting most of the jobs in the United States.

After all, who buys more gasoline, drives more cars, eats more food, takes more medication, wears more clothes, uses more electricity and natural gas for heating and cooling homes, watches more TVs, uses more computers, logs onto the Internet in larger numbers, etc?

SELECT ONE ANSWER

A. The wealthy 1% equaling 3.1 million people

B. The next wealthiest 19% equaling 59.5 million people

C. The 250 million people earning and spending 15% of the total wealth in America

Remember, individuals and families do not become wealthy spending money on consumer items. Wealth is invested and saved and sits somewhere growing more wealth. Most jobs are created by people that spend money on consumer items.

The fact is that retired public and private sector workers do more to support and create jobs than the one percent of America’s wealthiest that gained the most tax breaks under President G. W. Bush and are still benefiting from those tax cuts.

Did you you know that there are more than 27 million small businesses in the US and that between 60 and 80% of all new jobs created in America can be attributed to small businesses. Source: Get Busy Media.com

However, where did the money come from to start those small businesses? It wasn’t from the wealthy with their money invested in real estate, stocks and bonds.

In fact, in an average ten-year period, 71% of small businesses fail (more than 50% fail in the first five years). Knowing that fact, do you believe the wealthy 1% will invest money in such risky ventures, which explains why the wealthy invests their money in real estate, stocks and bonds—not small businesses with a high risk of failure. Source: Small Biz Trends.com

In fact, Peter Delevett writing for Silicon Valley.com reported, “The trends suggest venture firms are increasingly shying away from companies in the “seed” stage of life. During the second quarter of 2010, for instance, the U.S. venture industry’s average seed investment was $6.8 million, according to the National Venture Capital Association. The following quarter, that number had fallen to $3.5 million.”

The Bureau of Labor Statistics says, “Job openings result from the relationship between the population, labor force, and demand for goods and services… In addition, changes in the demand for goods and services influence which industries expand or contract. Industries respond by hiring the workers necessary to produce goods and provide services.”

It is also worth noting “that President Obama and Democrats created more jobs in 2012 than George W. Bush did in his eight year reign of economic malfeasance.” Source: Politicus USA.com

Therefore, it is a myth, a lie, that keeping taxes low for the richest Americans creates jobs. Instead, those that have regular jobs and retired Americans are the ones that support and create jobs by spending most or all of what they earn.

In addition, according to seven recent experiments, “The ‘upper class,’ as defined by the study, were more likely to break the law while driving, take candy from children, lie in negotiation, cheat to increase their odds of winning a prize and endorse unethical behavior at work, researchers reported today in the Proceedings of the National Academy of Sciences. Source: Elizabeth Lopatto writing for Bloomberg

If these seven studies are true, why do we reward the wealthiest one to twenty percent with lower taxes when, at most, they only support 100,000 jobs, which is due to consumer spending—not job creation. In fact, the wealthy tend to hoard money while the rest of us spend it on food, clothing, gasoline, etc.

Return to What the Numbers say about Creating Jobs in America – Part 3 or return to Part 1

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Lloyd Lofthouse is the award-winning author of The Concubine Saga. When you love a Chinese woman, you marry her family and culture too. This is the love story Sir Robert Hart did not want the world to discover.

To subscribe to “Crazy Normal”, look for the “E-mail Subscription” link in the top-right column.

 
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Posted by on March 2, 2012 in American Public Schools, Education, government, media, politics, Public School

 

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What the Numbers say about Creating Jobs in America – Part 3/4

01 Mar

My goal in Part Two was to show what caused the national debt, why it keeps growing larger and who bears the most responsibility of that debt.

Now I will return to the CalSTRS “Retired Educator Winter 2012” newsletter, which said, “Statewide, CalSTRS benefit recipients (I’m one of them, and there are more than 200,000) received $6.03 billion in payments in 2006.  The economic ripple effect in the form of job creation as those benefits were spent totaled $9.22 billion, according to a 2007 study by the Applied Research Center at California State University, Sacramento.”

None of this was borrowed money. Educators paid a percentage of their gross earnings into CalSTRS during their working years as I did. This money was invested and earned interest, which was more than $30 billion for 2011. This money does not contribute to the national debt.

In fact, California’s economy gained $6.71 for every single dollar committed to pensions by employees, employers and taxpayers and each dollar also generated 44 cents in government revenues.

Furthermore, according to the Pensionomics: Measuring the Economic Impact of State and Local Pension Plans, these pensions support 2.5 million jobs and $358.6 billion in economic activity.


Does this sound as if the wealthy are funding the start up of small businesses?

For example, in 2006 in California, 976,233 state residents received a total of $23.52 billion in pension benefits from state and local pension plans… The average pension benefit received was $2,008 per month or $24,097 per year… Retiree expenditures stemming from state and local pension plan benefits supported 205,221 jobs in the state. The total income to state residents supported by pension expenditures was $15.1 billion.”  Source: Pensionomics – National Institute on Retirement Security (and this was just public sector pensions)

Then, according to Retirement USA, one in five private-sector workers is covered by a traditional pension while 55% of people 65 or older rely on Social Security for half or more of their income—the median income for older households with Social Security and pension and annuity income was $32,105 in 2008, not including earnings from work.

In addition, CalSTRS ended 2011 with net assets of $155.34 billion and that money isn’t sitting around gathering dust. Those billions are invested and earning money. To earn money off those investments, means someone else made money too and this generated jobs.

The CalSTRS newsletter says 53% of those billions were invested in Global Equities, which is a category of mutual funds in which investments may be made in stocks of corporations throughout the world. A portion of the fund’s assets are usually committed to American markets, although the major portions are held in equities of developing countries

In addition, 17.6% of CalSTRS funds were in Fixed Income accounts, 14.8% in Private Equities, 12.1% in Real Estate, etc.  When CalSTRS earns money from those investments, that means those investments also earned money for businesses and created jobs for Americans and for the citizens of other countries depending on where the money was invested.

However, where do the wealthy that benefited from the Bush tax cut keep most of their money?

Continued on March 2, 2012 in What the Numbers say about Creating Jobs in America – Part 4 or return to Part 2

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Lloyd Lofthouse is the award-winning author of The Concubine Saga. When you love a Chinese woman, you marry her family and culture too. This is the love story Sir Robert Hart did not want the world to discover.

To subscribe to “Crazy Normal”, look for the “E-mail Subscription” link in the top-right column.

 
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Posted by on March 1, 2012 in American Public Schools, government, media, politics, Public School

 

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What the Numbers say about Creating Jobs in America – Part 2/4

29 Feb

It is a tragedy how fast most Americans forget the root causes of the current financial challenges in America.

Three lawmakers, all Republicans, introduced the Gramm-Leach-Bliley Act to the U.S. Senate.  During the debate in the House or Representatives, a democrat from Michigan argued that the bill would result in banks becoming “too big to fail” (sound familiar). At first, most democrats were against the bill but eventually, due to compromises, the effort of corporate lobbyists and deal making, many democrats were won over to vote for it.

Keep in mind that the Republicans won a majority position in both houses of Congress in the elections of 1994, and controlled both houses until 2006—except the Senate for most of 2001 and 2002, when the Democrats held the majority in that one House of Congress.

Therefore, in 1999, Republicans were the majority in both houses of congress. When the final Gramm-Leach-Bliley Act passed in the Senate, the vote was 90 to 8 (92%) and in the House 362 to 57 (86.3%)

Even if President Clinton had wanted to veto it, which he didn’t, he wouldn’t have succeeded since a two-thirds majority vote (66%) in both Houses of Congress is required to override a presidential veto. Since the Gramm-Leach-Bliley Act arrived at the White House for President Clinton to sign with more than a two-thirds majority vote in favor, there wasn’t much he could have done if he had wanted to.

Then, during the Bush years (2001 – 2009), the United States launched three expensive wars: The Iraq War—based on false claims of Weapons of Mass Destruction—the war in Afghanistan, which was mostly neglected under Bush, and the global war on terrorism.

Due to these wars and the Bush tax cuts for the wealthiest Americans, the national debt exploded.

I’m sort of going off topic with this paragraph, but I saw “Act of Valor,” which is about the Navy Seals and the CIA fighting the global war on terror. I recommend “Act of Valor”. The acting may be a bit stiff but that is not the point. The realism makes this movie worth watching. This is no Rambo or Mission Impossible. “Act of Valor” is closer to the reality and what America’s Navy Seals face as they fight to protect America. Politicians and corporate lobbyists might be corrupt and greedy for power and money, but America’s men and women mostly from the working class serve in the military out of patriotism.

Back on topic—President G. W. Bush, with help from the GOP majority in both Houses of Congress, lowered taxes for the wealthiest Americans (the lowest rate in almost 80 years—the last time the rate was this low was before the Great Depression and experts say this contributed to that economic collapse).

On February 9, 2012, the official debt of the US government had reached $15.4 trillion—an increase of $5.9 trillion since President Obama moved into the White House. While the GOP blames Obama for that debt during an election year, we must not lose focus on how much Obama inherited when he was elected president.

According to the Huffington Post, lowering taxes for the wealthy costs the U.S. Treasure $11.6 million every hour.

Total, the cost of the Bush tax cut for the top 5% of income earners since 2001 is more than one trillion dollars, which is about $100 billion annually. Source: Cost of Tax Cuts.com

Interest from the national debt, which President Obama inherited from Presidents Reagan, H. W. Bush and G. W. Bush is about $400 billion annually. Source: US Debt Clock.org

On top of that $500 billion annually, the wars G. W. Bush started has cost more than $1.3 trillion since 2001—that’s another $130 billion. Source: Cost of War.com

However, the cost was more than just money. According to the Congressional Budget Office, since combat is being financed with borrowed money, the price tag for these wars is not over, and if Bush had not gone to war over false claims of weapons of mass destruction  in Iraq, 4,482 Americans would not have been killed; more than 32,000 would not have been wounded (medical care for these wounded combat veterans will costs hundreds of millions in the decades to come); about 114,000 Iraqi civilians would still be alive and Iraq has cost more than $800 billion so far.

In addition, CalSTRS probably would still be funded close to 100%, as it was in 2001, for future obligations to its 856,360 members, while the 429,600 active members paid about $3 billion dollars into the retirement fund in 2011—money taken from monthly paychecks of working educators.

Continued on March 1, 2012 in What the Numbers say about Creating Jobs in America – Part 3 or return to Part 1

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Lloyd Lofthouse is the award-winning author of The Concubine Saga. When you love a Chinese woman, you marry her family and culture too. This is the love story Sir Robert Hart did not want the world to discover.

To subscribe to “Crazy Normal”, look for the “E-mail Subscription” link in the top-right column.

 
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Posted by on February 29, 2012 in American Public Schools, government, media, politics, Public School

 

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What the Numbers say about Creating Jobs in America – Part 1/4

28 Feb

Since I’m a member of the California State Teachers’ Retirement System (CalSTRS), I receive the “Retired Educator,” a quarterly newsletter.  The topic of this series of posts was motivated by the 2012 Winter edition.

To earn my monthly CalSTRS check, I first had to work thirty years as a classroom teacher in California’s public schools while 8% of my monthly paychecks went into CalSTRS to help fund that retirement system, which proves that it is not an unearned entitlement as some might want the nation to believe.

In fact, according to the 2011 Summary Report in the newsletter, contributions from members, the State of California and the federal government, which is why we cannot collect Social Security, was almost $6 billion in 2011. About half came from working members.

In addition, I do not earn an annual six-figure income through CalSTRS. In fact, when I left teaching in 2005, I took a 40% pay cut, as most teachers do, and lost my medical plan, because I could not afford the cost of COBRA, which was more than $1,000 a month.  Add another 14 years working outside education, and the total number of years I worked for a pay check was forty-five.

I discovered from that “Retired Educator” newsletter that CalSTRS lost $53.95 billion between 2007 – 2009 while President G. W. Bush still lived in the White House, but earned back $36.92 billion (2009 – 2011) with President Obama.  Note: CalSTRS did not receive bail out money from the federal government. That money mostly went to big private sector banks—not retirement programs such as CalSTRS.  If you want to know where the money went and how much, CNN.com shows you.

I’ve read that total losses globally were in the trillions. One financial Website set the total at more than $60 trillion US dollars. In China, alone, about 20 million people lost manufacturing jobs leading to labor unrest in 2008 and 2009. In the US, that number of job losses was about nine million.

Even though the CalSTRS newsletter didn’t say so, I learned that the wealthy do not create most jobs as Republicans claim—the working class creates most jobs by spending what little they earn, while the wealthy hoard most of their money in safer investments than those needed to create jobs as you shall learn from this series of posts.

However, I have an old friend that keeps telling me we cannot raise taxes on the wealthy one percent and/or the top twenty percent (those earning $55,000 or more annually—6.24% earn more than $100,000), because it will stop job growth.  He also happens to be a neoconservative-libertarian, evangelical Christian.  He despises liberal and progressive politics and policies.  He has said more than once that he believes G. W. Bush may have been America’s greatest president, and if anything bad happens in America, it is the fault of those evil liberal-progressive Democrats.

It doesn’t matter what the facts reveal. Anything that does not match his opinions/beliefs are liberal lies. He also listens faithfully to the conservative  Dennis Prager radio talk show and belongs to and attends Dennis Prager Fan Club meetings.

Conservative talk radio in the United States is a phenomenon that got its start in the 1980s when the Fairness Doctrine was allowed to expire under President Reagan (he vetoed it after both Houses of Congress voted it into law). This veto then allowed broadcasters to present a political opinion or point of view or pundit (mostly lies, exaggerations and misinformation) without being required to allow equal time for alternative views or rebuttals. The ideology that benefited the most from the loss of the Fairness Doctrine was conservative talk radio shows such as Dennis Prager’s.  See Prager’s Parrots to learn more.

My old friend and Prager fan has also said that he wouldn’t mind if Social Security were repealed as long as the government refunded him the money he paid into the system—and this comes from a guy that lost a half million dollars in the stock market after saving that money in tax sheltered retirement accounts. Later, he had to do battle with the IRS for years because they came for their share of that tax-sheltered money that he borrowed from his tax shelter and gambled away.

No matter what this old friend believes and preaches as if it were one of the Gospels, I’ve learned that what put America on the road to ruin causing the 2007-2011 global financial crises has more to do with the Gramm-Leach-Bliley Act repealing the Glass-Steagall Act of 1933 (this was the final nail in the coffin), which deregulated banking, insurance, securities, and the financial services industry, allowing financial institutions to “grow very big”.

The repeal of the Glass–Steagall Act of 1933 effectively removed the separation that previously existed between investment banking, which issued securities, and commercial banks, which made money through deposits.

The deregulation also removed conflict-of-interest rules that had prevented investment bankers from serving as officers of commercial banks.

It was the repeal of these prohibitions that was later claimed by many to have contributed to the 2007 global financial crises by allowing depositors’ money to flow into risky investments, and according to the Huffington Post, in the first 15 months after the start of the 2007 global financial crises, American Retirement Accounts Lost $2 Trillion and the federal government did nothing to slow the tide of those losses as they bailed out banks and the auto industry.  By the middle of 2009, those losses may have climbed as high as $4 trillion, which is much more than the $54 billion CalSTRS lost.

Continued on February 29, 2012 in What the Numbers say about Creating Jobs in America – Part 2

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Lloyd Lofthouse is the award-winning author of The Concubine Saga. When you love a Chinese woman, you marry her family and culture too. This is the love story Sir Robert Hart did not want the world to discover.

To subscribe to “Crazy Normal”, look for the “E-mail Subscription” link in the top-right column.

 
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Posted by on February 28, 2012 in American Public Schools, government, Public School

 

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The Private-Sector, Jealousy-Misery Media Factor – Part 5/5

19 Dec

I’m impressed when a reporter does his or her job properly and balances the news instead of feeding the mob that bellies up to the slop-trough of Yellow Journalism, which is based on sensationalism and crude exaggeration.

Don Thompson’s misleading AP piece, Public retirement ages come under greater scrutiny did not impress me.

However, Kevin G. Hall did.  Hall writes for the The McClatchy Company, the third-largest newspaper publisher in the United States with 31 daily newspapers in 15 states. Hall provided a more realistic, honest balance of Why employee pensions aren’t bankrupting states.

In his piece, Hall wrote, “From state legislatures to Congress to tea party rallies, a vocal backlash is rising against what are perceived as too-generous retirement benefits for state and local government workers. However, that widespread perception doesn’t match reality.”

According the Hall, “Pension contributions from state and local employers aren’t blowing up budgets.” They amount to just 2.9 – 3.8 percent of state spending, on average.

In addition, Hall says, “Nor are state and local government pension funds broke. They’re underfunded…”

With those facts, we should ask what is the real reason to turn on public-worker sector pension plans.

The answer may be Wall Street and US bank private-sector greed, the same greed that caused the 2008 global economic crises.

According The Council on State Governments, in 2006 before the crash, the total amount of money held by these federal, state and local public-pension plans was almost $6 trillion dollars, and greed, it seems, has no limits.

If you do not believe me, ask people such as Bernard Madoff [$50 billion], Scott Rothstein [$1.2 billion], Tom Petters [$3.7 billion], Allen Stanford [$8 billion], March Dreier [$400 million], Lou Pearlman [$500 million], Michael Kelly [$428 million], the Greater Ministries International church [$500 million], Scientology minister Reed Slatkin [more than $600 million], and Nicholas Cosmo [$370 million].

Return to The Private-Sector, Jealousy-Misery Media Factor – Part 4 or start with Part 1

______________

Lloyd Lofthouse is the award-winning author of The Concubine Saga. When you love a Chinese woman, you marry her family and culture too. This is the love story Sir Robert Hart did not want the world to discover.

To subscribe to “Crazy Normal”, look for the “E-mail Subscription” link in the top-right column.

 
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Posted by on December 19, 2011 in American Public Schools, Education, government, Journalism, media, politics, Public School, Teaching

 

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The Private-Sector, Jealousy-Misery Media Factor – Part 4/5

18 Dec

It is a fact that misery loves company and when the accountants, carpenters, clerks, plumbers, reporters, salesmen, and secretaries and many other professions in the private sector read the Yellow Journalism in Don Thompson’s Associated Press [AP] piece, Public retirement ages come under greater scrutiny, many of these people in the private sector will say, “It isn’t fair. If we have to work longer and suffer, so do they.”

In fact, that is already happening. Due to pressure from the private sector, this has led to: “Earlier in New Jersey, part of a legislative deal struck between Democrats and Republicans raised the normal retirement age from 62 to 65,” AP’s Thompson wrote.

In addition, “An initiative circulating for California’s 2012 state ballot seeks to increase the minimum retirement age to 65 for public employees and teachers and to 58 for sworn public safety officers.” [California’s teachers may retire at 55 now but those that retire early also will earn about 30% of gross pay and most will have to go without medical coverage.].

I know where the money comes from that funds CalSTRS. Part of it was from the monthly contribution from my paycheck for thirty years and when I retired, the taxpayer money that was used to pay me as a teacher stopped.

Moreover, I was a public school teacher in California for thirty years but I do not qualify for Social Security.  I also retired without medical benefits because I was unwilling to pay $1,400 a month for COBRA insurance until I qualified for Medicare.


“The Teacher Pension Blues” tells the story AP’s Don Thompson did not!

On the other hand, when given a choice, many private sector employees do not save toward retirement other than Social Security. Many do not put money into 401k plans or pay into tax deductable IRAs.  Many that own homes take out equity loans to finance vacations, purchase new cars, pay off credit card debts, or to have money to go on spending sprees.

The result is that the average family in America cannot afford to retire as early as many public employees that paid into employer-based defined benefit pensions.

For example, total U.S. consumer debt was $2.43 trillion as of May 2011. Average credit card debt per household with credit card debt: $15,799. Average total debt in 2009 (including credit cards, mortgage, home equity, student loans and more) for U.S. households with credit card debt: $54,000. Source: Credit Card.com

As for me, instead of paying into Social Security while I taught, I paid 8% of my gross monthly pay for thirty years into CalSTRS, and the school district where I taught contributed a matching amount of about 8%.

To force public educators in California to work more years may cost more than it will save.

When I retired, the school district stopped paying me and saved the tax payers money since most teachers that retire after teaching 30 years or more are replaced by younger teachers that are paid much less.

Keeping older, higher paid teachers longer will only cost the taxpayer more in the long run since those same teachers that are working longer will end up with a larger monthly pension check since the longer a teacher spends in the classroom, the larger the pension.  [Note: Part 1 explains how this works.]

In fact, I know three teachers that worked more than 42 years in the classroom and all three retired with a raise, while my annual retirement is about half of what it was the last year I taught.

Continued on December 19, 2011 in Part 5 or return to The Private-Sector, Jealousy-Misery Media Factor – Part 3.

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Lloyd Lofthouse is the award-winning author of The Concubine Saga. When you love a Chinese woman, you marry her family and culture too. This is the love story Sir Robert Hart did not want the world to discover.

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Posted by on December 18, 2011 in American Public Schools, Education, government, Journalism, media, politics, Public School, Teaching

 

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The Private-Sector, Jealousy-Misery Media Factor – Part 3/5

17 Dec

Another example of how misleading Don Thompson’s AP piece, Public retirement ages come under greater scrutiny, was: “With Americans increasingly likely to live well into their 80s, critics question whether paying lifetime pensions to retirees from age 55 or 60 is financially sustainable. An Associated Press survey earlier this year found the 50 states have a combined $690 billion in unfunded pension liabilities and $418 billion in retiree health care obligations.”

What Thompson doesn’t mention is that some states managed their pension funds better than others did.

A March 2011 report on the Best and Worst State Funded Pensions by Adam Corey Ross of The Fiscal Times offers a more balanced picture.

Ross writes, “State pension programs across the country have undergone a major transformation, as more and more of them are cutting back the amount of money they set aside for retired workers, gambling that they can meet their obligations through investments instead of savings…”

In fact, Ross lists the best fully-funded state pensions, which are: New York, Wisconsin, Delaware, North Carolina, Washington, South Dakota, Tennessee, Wyoming, Florida and Georgia. He also lists the worst state pensions where the gamble did not pay off.

California falls between the two lists and is struggling to fill the funding gap. The following video explains why.

In addition, nowhere does Ross or Thompson mention that California has two state pension plans.  There is CalPERS and then there is CalSTRS.

The California State Teachers’ Retirement System [CalSTRS], with a portfolio valued at $148.2 billion as of October 31, 2011, is the largest teacher pension fund and second largest public pension fund in the United States. CalSTRS administers a hybrid retirement system, consisting of a traditional defined benefit, cash balance and defined contribution plan, as well as disability and survivor benefits. CalSTRS serves California’s 852,000 public school educators and their families from the state’s 1,600 school districts, county offices of education and community college districts.

How well funded is CalSTRS to meet its future obligations?

CalSTRS makes it clear that “It’s important to understand that the risk of facing depleted assets exists approximately 30 years from now versus actually facing insolvency today.”

Note: Due to losses from investments during the 2008 global financial crises, the CalSTRS retirement “fund took an enormous hit to its stock portfolio when the market plunged during the heart of the recession, losing nearly $43 billion — roughly 25 percent of its value — from June 2008 to June 2009.”

Continued on December 18, 2011 in The Private-Sector, Jealousy-Misery Media Factor – Part 4 or return to Part 2

______________

Lloyd Lofthouse is the award-winning author of The Concubine Saga. When you love a Chinese woman, you marry her family and culture too. This is the love story Sir Robert Hart did not want the world to discover.

To subscribe to “Crazy Normal”, look for the “E-mail Subscription” link in the top-right column.

 
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Posted by on December 17, 2011 in American Public Schools, Education, government, Journalism, media, politics, Public School, Teaching

 

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The Private-Sector, Jealousy-Misery Media Factor – Part 1/5

15 Dec

During my full-time university days on the GI Bill [1968 – 1973] before I graduated with a BA in journalism, I learned how easy it was for the media to make mistakes while practicing what is known as Yellow Journalism to boost profits.

And Yellow journalism [based upon sensationalism and crude exaggeration] is what Associated Press [AP] did when it ran Public retirement ages come under greater scrutiny by Don Thompson on December 14, 2011.

For example, how would you feel if you read, “Patrick Godwin spends his retirement days running a horse farm east of Sacramento, Calif., with his daughter? His departure from the workaday world [he worked thirty-six years in public education and was the superintendent of one of California’s 1,600 school districts] is likely to be long and relatively free of financial concerns, after he retired last July at age 59 with a pension paying $174,308 a year for the rest of his life.”

That previous quote was in the second paragraph of Thompson’s AP news piece and it is extremely misleading because of what it doesn’t say.

How many in public education do you think will earn that kind of money in retirement?

What AP doesn’t tell us is that in 2010 the average member-only benefit for retired public school educators in California was $4,256 a month before taxes [less than a third of what Godwin earns in retirement] and that only 16% of educators that retired in 2010 worked as long as Patrick Godwin did.  The median years of service was 26.6.

For example, if you were one of the educators that retired after 26.6 years of public service [the median] and was only 55 years old [the earliest you may retire and collect], using the CalSTRS retirement calculator, that person would earn about $2,130 a month before taxes—much less than the $14,525.66 that Godwin earns each month.

I calculated once that if a public school teacher in California taught for 42 years or more, his annual retirement income would equal what he earned the last year he worked.  In public education, less than 4% retire in the 100% category.

In fact, 9% retired in 2010 with 10-15 years of service in public education, 11% with 14-20 years, 15% with 20-25 years, 12% with 25-30 years, 23% with 30-35 years, and 16% with 35-40 years. Source: CalSTRS

The reason that AP’s Don Thompson ran with Patrick Godwin’s retirement income as his example is called sensationalism designed to cause an emotional response so people will talk about it. Word of mouth attracts readers and an audience.

In addition, Godwin was a school district superintendent at the top of the public education pay scale, which represents about 0.2% of the total.  That means 99.8% of public educators in California do not earn as much as Godwin did while working as a school district superintendent.

The result is that many readers may believe that most public educators in California will retire with Patrick Godwin’s annual retirement income.  However, this is far from the truth since most will not come close, but Thompson’s piece doesn’t say that.

The reason AP’s Thompson distorted the facts so much is because of audience share, which determines how much a media source [TV, newspaper, talk show, magazine, Blog, etc] may charge to advertisers, and balancing the news and telling the truth often does not achieve this goal because profits are the foundation of the private sector media.

It’s a simple formula: if you don’t make a profit you go out of business and everyone working for you loses his or her job so almost everyone plays the same Yellow Journalism game, and then there is the politics of money.

To understand why Thompson wrote such a misleading news piece, it helps to understand the trend away from private-sector pensions that were once similar to current public sector-pensions and the answers are in the numbers.

Continued on December 16, 2011 in The Private-Sector, Jealousy-Misery Media Factor – Part 2

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Lloyd Lofthouse is the award-winning author of The Concubine Saga. When you love a Chinese woman, you marry her family and culture too. This is the love story Sir Robert Hart did not want the world to discover.

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Posted by on December 15, 2011 in American Public Schools, Education, Journalism, media, politics, Public School, Teaching

 

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America’s Lost Work Ethic and the Future Fate of the United States – Part 5/5

21 Nov

In China, those that work harder and do a better job, regardless of self-esteem or happiness, tend to prosper. in fact, Asian-Americans have the lowest self esteem in the United States.

Gallup studied China’s work ethics. Not surprisingly, the credo “work hard and get rich” is by far the most popular choice, selected by 53% of respondents. About one in four Chinese (26%) opt for “don’t think about money or fame, just lead a life that suits your own tastes,” while less than a tenth of Chinese identify with all the other responses. Perhaps most telling: Only 2% of Chinese choose the collectivist exhortation to “never think of yourself, give everything in service to society.”

In short, it would appear that the country’s commitment to material self-betterment through hard work is firmly rooted and unchallenged.

However, in the United States, a Yahoo.com, ABC News piece said, “Between 1979 – 2007, the income of the top 1% of Americans increased by 275%. For the other 99% of Americans, income only increased 29%.”

The problem is that when prices of everyday items such as food goes up due to inflation, many people cannot afford to buy them. In addition, equity in homes, where most of middle class wealth is, lost value.

Studies also show that countries that have a large income gap such as the US, also have high numbers of unemployed, incarceration, teen pregnancy, poor health and lower life expectancy.

In fact, prison inmates by race breaks down to: White 58.6%, African American 37.9%, Latino/Hispanic 34.3%,  and Asian 1.7%.  That’s right. For Asians it was one “point” seven percent and Asian-Americans graduate from high school and college in the highest ratios.


Chinese Education: Social Life and Work Ethic

In addition, the King’s College of London’s World Prison Population List reports, “The United States has the highest prison population rate in the world,” while China doesn’t even make the top sixteen list.

The US has about 2.3 million people behind bars at 756 per 100,000 people, and China has 1.56 million at 119 per 100,000.

It may not surprise you that Chinese-Americans, which includes all Asian-Americans, have the lowest teen pregnancy rate too.

U.S. Birth Rates for women  aged 15-19 in 2009 by Race/Ethnicity was 70 per 1,000 for Hispanic;  59 per 1,000 for Black/African-American; 24 per 1,000 for White non-Hispanic,  and 14 per 1,000 for Asian-American/Pacific Islander.  Source: cdc.gov

Since the lack of an education often lands Americans in prison, low paying jobs or unemployed, one would think that working hard to earn an education would be popular in the US, but it isn’t.

Instead, in the US, it is the old blame game. “It’s the teacher’s fault that  I earned a failing grade or the class was boring.” It doesn’t matter if the child does homework, studies for tests or reads, it’s still the teacher’s fault.

The Wall Street Journal in From College Major to Career says, “Choosing the right college major can make a big difference in students’ career prospects, in terms of employment and pay… Some popular majors, such as nursing and finance, do particularly well, with unemployment under 5% and high salaries during the course of their careers.”

In addition, the attitude of America’s Baby Boomers is not much better than the children they raised that are now having trouble finding jobs because they did not take earning an education seriously as most Asian-Americans do.

The next question should be, “How long will the United States hold onto global super-power status with attitudes such as these?”

Return to America’s Lost Work Ethic and the Future Fate of the United States – Part 4 or start with Part 1

_______________________

Lloyd Lofthouse is a former U.S. Marine and Vietnam Veteran,
who taught in the public schools for thirty years (1975 – 2005).

His third book is Crazy is Normal, a classroom exposé, a memoir. “Lofthouse presents us with grungy classrooms, kids who don’t want to be in school, and the consequences of growing up in a hardscrabble world. While some parents support his efforts, many sabotage them—and isolated administrators make the work of Lofthouse and his peers even more difficult.” – Bruce Reeves

lloydlofthouse_crazyisnormal_web2_5

Lofthouse’s first novel was the award winning historical fiction My Splendid Concubine [3rd edition]. His second novel was the award winning thriller Running with the Enemy. His short story A Night at the “Well of Purity” was named a finalist of the 2007 Chicago Literary Awards. His wife is Anchee Min, the international, best-selling, award winning author of Red Azalea, a New York Times Notable Book of the Year (1992).

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Posted by on November 21, 2011 in Education, family values, Parenting, Public School

 

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