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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

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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 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

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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 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.

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 15, 2011 in American Public Schools, Education, Journalism, media, politics, Public School, Teaching

 

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