Young NFL 'Veteran' Teaches that Income Minus Spending = Savings Available for Long Term Wealth Creation

We hear lots about professional athletes squandering millions, but at least some have their heads screwed on right when it comes to financial issues.

These spend-less-than-they-earn savers and investors are the smart players focused on the long term. Thus, they exercise good judgment during their limited playing years and while they are making lots of money. And from day one, these long term oriented common sense athletes spend far less than they earn and invest the remainder.

They travel the common sense financial route simply because they know that their financial needs will last for many decades after their 'game is gone' and they are no longer being 'paid to play.'

A good and healthy financial life lesson for one and all is contained in Why NFL player Ryan Broyles lives like he made $60,000 last year, and not $600,000:

"The NFL season started last week, and there’s a player who has been in the news since the preseason because of his relationship to money. This isn’t another tale of a player who made millions and lost it all. It’s about a player who has only been in the league for three years, but regardless of how many more years he plays, he is living a lifestyle that will keep him wealthy for the rest of his life.

Ryan Broyles, who was a wide receiver for the NFL’s Detroit Lions between 2012 and 2014, spoke . . . . about his spending habits, his work ethic and the importance of keeping a budget. . . .

The 27-year-old Broyles made over $2 million from the Lions between 2012 and now. But he keeps to a budget of $5,000 a month in total spending. Of course, that’s a lot of income for most people, but spending less than you earn, if you’re able to, is smart in any income bracket....

When he was a child in Oklahoma, his parents didn’t have a lot of extra money, but he said (his parents) taught him a strong work ethic. He mowed lawns when he was 8 years old to earn money to go on team basketball trips. In high school, he worked at an Albertson’s grocery store as a bag boy and worked as a referee for kids’ sports leagues. “I’ve always worked for my money, and seen it as something I needed to cherish and not take for granted,” he said.

Broyles played four seasons for the University of Oklahoma, and was the NCAA’s all-time leader in receptions when he left for the NFL. He was drafted in the second round by the Detroit Lions, and received a signing bonus of $1.15 million. His salary in 2012 was $390,000. It was $557,000 in 2013, $570,000 in 2014 and would have been $600,000 this year, but before the first game of the season he asked to be released from the team so he could try to play for a team on which he’d play a larger role.

Before leaving the Lions, they paid him a $50,000 workout bonus and a $181,614 reporting bonus that his agent had negotiated for him.

Broyles has had some bad luck with injuries so far in his career. He entered the NFL with a torn ACL in his left knee — an injury from a college game, then tore the ACL in his right knee during his rookie year. He then ruptured the Achilles tendon in his left leg in 2013. He is healthy now and working out and staying fit as he awaits word from his agent about which teams are in the market for a wide receiver.

At his rookie symposium, where the NFL prepares recently drafted players for the life of a professional athlete, he and his fellow players were told about the high number of athletes who eventually go bankrupt. He said a lot of players in the room were thinking about playing football, as he was, but he was also thinking about how to make his signing bonus last.

He said his situation was a little different from other players because of the ACL injury he sustained in college. “A switch went off in my head: An injury can end my career. That triggered me to think about life after football,” he said. . . .

His goal is to spend $60,000 a year, so his monthly budget is $5,000. The budget, which he says is post-tax money, is allocated like this: 50% on fixed expenses like mortgage and car payments; 30% on variable expenses like food and gas; 20% toward savings.

He read that a mortgage should be 28% or less of income, so his is $1,600 — about 30% of the $60,000 budget. . . .

He also has a Trailblazer that’s fully paid for. Add in insurance and a few other expenses, and he’s at a little over $4,000, which gives him some wiggle room in keeping his spending under $5,000 a month.

He and his wife, who have a 3-month-old son, live in a house they had built in Dallas in 2014.

After talking with Broyles for over an hour, it was clear that he and his wife make conscious choices about how they spend.

They eat out at restaurants just once or so a week. . . .

He pays his credit cards off every month."

And so on.

Summing Up

That's a great common sense life lesson from Ryan Broyles, a 27-year-old NFL 'veteran.'

The problem is that common sense isn't very commonly in use these days.

Nevertheless, and despite his youth and perhaps career ending injuries, Mr. Broyles has been diligent about planning and preparing for his family's future financial needs.

Now let's hope his ACL and Achilles injuries don't prematurely end his playing career.

But even if and when his playing days are over, Ryan Broyles will be able to take good care of his family's financially obligations.

Wouldn't it be nice if we all had our financial heads screwed on right from the teenage years forward?

That's my take.

Thanks. Bob.

Last Night's Republican Debate .. A Carly vs Hillary Match-Up in the Making?

Hillary Clinton says it's time for a woman President. She may get her wish as Carly Fiorina looked like a superstar in last night's televised Republican debate.

My take is that Carly Fiorina emerged as the debate's clear winner. She came across as a Margaret Thatcher type leader, being tough, sincere and very knowledgeable throughout the evening.

She handled Trump perfectly when questioned about his recent comment concerning her looks. In his feeble response attempting humor, he came across poorly.

Marco Rubio also did very well, and Jeb Bush continued to be a background player, despite trying hard to take charge by smiling and jabbing at Trump.

Chris Christie will move up in the polls after a strong showing, but he and John Kasich each seemed to be trying too hard, even though they both had some good moments --- especially Christie on keeping American safe.

Mike Huckabee and Scott Walker were also trying hard in animated commentary but ended the evening still on the outside trying to get a seat at the inside big guy table.

Ted Cruz is too much of a know it all self centered 'my way or the highway' kind of guy, and Rand Paul should have been embarrassed. He looked to be very much out of his league.

Donald Trump began to reveal more of himself as bombastic, condescending, not very knowledgeable and only a serious showman. His 'trust me because I'm rich' story is wearing thin. I look for that to continue as he may have peaked in popularity.

Ben Carson was sincere but soft spoken. It's hard to see him at the top of the ticket, but his understated manner definitely is attractive, especially compared to Trump. His personal story from poverty to being a world class surgeon has plenty of credibility, and he is obviously a genuinely nice and smart man as well.

Trump is beginning to look vulnerable and Fiorina is beginning to look electable. So is Rubio.

After last evening's proceedings, Fiorina and Carson or Fiorina and Rubio each looks like potentially viable candidacies.

At least that's my take.

What's yours?

Thanks. Bob.

The Seattle Teacher’s Union Ends Its Use of Human Shields - For Three Years Anyway

On September 4, 2015, the Washington State Supreme Court ruled that charter schools were unconstitutional on the basis that they were not “common” schools.  See this post if you happened to miss that story.

Five days after the court ruling, Seattle school teachers went on strike.  Yesterday, after about two weeks on the picket lines, the Seattle Education Association suspended its strike and urged teachers to vote to approve the new three year deal.  See below for a summary of what the SEA negotiated on behalf of its members:

Taken from the Wall Street Journal:

“Details of the agreement include: annual base salary increases over three years of 3%, 2% and 4.5%; 30 minutes of recess for elementary students; new policies to reduce student testing; unlinking test scores to teacher evaluations; and increasing staff to reduce workloads and provide student services.”

Now take a look at what Jonathan Knapp, president of the SEA, had to say about the merits of the new deal:

“We’ve negotiated a pro-student, pro-parent, pro-educator agreement”

So, are we to believe that by not keeping score and by not holding teachers accountable everybody wins?  

It's easy to see how this can be construed as a win for educators, but does anybody see the how this deal is a win for the parents and the students?

And what about the taxpayers - the ones who will have to pony up to pay for the deal?  This hardly looks like a win for them.  Who represented their interests at the negotiating table?

I guess none of that really matters since, as Phylis Campano, vice president of the SEA put it,

“These issues are about…giving our children what they need.”

Either Mrs. Campano thinks what “our children” need are higher future tax bills and a lower quality education than their parents, or she is quite comfortable with using them as human shields.  Who can argue against looking out for the kids after all?

Maybe in three years Washington state will have wised up a bit and reconsidered the constitutionality of charter schools.  The added competition would at least have the potential to create a win for serious students, serious  parents, serious educators, and taxpayers too.

KM

.

The Economy Still Sucks for the Average American ... President Obama Says Things Are Fine ... Accordingly, Tonight's Republican Debate May Shine a Bright Spotlight on the Economy

The economy still sucks for the average American, and poverty rates haven't budged for several years. U.S. Incomes Edged Lower in 2014 says this in part:

"The Census report’s annual snapshot of American living standards offered the latest set of data—on incomes, poverty and inequality—showing how an often-underwhelming recovery has unfolded.

Wednesday’s figures showed little improvement in incomes and no decline in the poverty rate during a year in which the economy added the most jobs since 1999. Around 14.8% of Americans, or 46.7 million individuals, were living in poverty last year, unchanged from 2013.

“Anyone wondering why people in this country are feeling so ornery need look no further than this report,” said Lawrence Mishel, president of the Economic Policy Institute, a left-leaning think tank.

Incomes stood 6.5% below their 2007 level, before the last recession hit, and were 2.3% below their 2009 level, when the recession ended. By contrast, incomes rose 13% in the expansion that ran from 1991 through 2000."

The typical household makes less than it did before the recession offers a solid explanation as to why Bernie Sanders and Donald Trump are leading the polls.

Of course, it doesn't give us any clue whatsoever as to why anybody would prefer Hillary and the Clinton clan.

In any event, do political newcomers Donald Trump, Carly Fiorina and Ben Carson have a legitimate chance to win the Republican nomination?

And while we're at it, are Rand Paul, Mike Huckabee, Jeb Bush, Scott Walker, Chris Christie, Ted Cruz, John Kasich, and Marco Rubio already toast?

As we await tonight's sure to be entertaining nationally televised Republican circus, here's the breaking news story that's really not news to most Americans:

"The typical American household, six years after the Great Recession, is still worse off, according to a report released Wednesday.

The Census Bureau reported that median household income was $53,657 in 2014. . . . What is of significance is that, when adjusted for inflation, the median household generated 6.5% less than they did in 2007, the year before the recession.

The declining living standard of the average American goes some way to explain why outsiders like Donald Trump and Ben Carson on the right, and Sen. Bernie Sanders on the left, are shooting up the polls for the presidential nomination. . . .

Other points of interest:

• By region, only the West saw a notable change in 2014, with the real median household income falling 4.6%.

• Family households made more than double nonfamily households, $68,426 compared to $32,047.

• Among racial groups, Asian households had the highest median income in 2014 ($74,297). The median income of non-Hispanic white households was $60,256, and for black households it was $35,398, with Hispanic households making $42,491.

• While income inequality as measured by the Gini index did not change in 2014, it has increased from 1999 levels.

Summing Up

Things are still tough for too many Americans.

Yet President Obama insists that things are just fine. See Obama Accuses GOP Candidates of 'Talking Down America.'

So when President Obama and his political allies say that our economy is strong and getting stronger by the day, consider the source.

That's my take.

Thanks. Bob.

The Biggest Financial Worry of We the People Is Planning, Preparing, Saving and Investing for Retirement ... Helping Each Other

The biggest financial worry of We the People is not paying for college. Neither is it being able to purchase a home.


It's having enough money saved for retirement. And that's exactly the right priority, at least in my view.


This is the biggest money worry in your state has the details:


"The financial worries that keep Americans up at night differ depending on where they live (and sleep).


More than 10,000 Americans were asked to choose their “biggest financial challenge” from seven options: Planning for retirement, saving for a home, saving up an emergency fund, sticking to a budget, building an investment portfolio, paying for higher education, and paying off credit cards. Residents of more than half of all states named retirement planning as the biggest challenge, while one-third of respondents said they struggle most with sticking to a budget . . . .


Around 60% of those surveyed in Western states said they were most concerned with sticking to a budget, while two-thirds of Midwest states said retirement planning is their biggest challenge. Despite multiple reports that housing is becoming more unaffordable due to a double-edged sword of rising home prices and flat wages, saving for a home and building an investment portfolio were not among the biggest concerns for residents of any state.

“We saw a relationship between the biggest financial challenge in a given state and the local economic conditions,” says Casey Bond, editor-in-chief of GoBankingRates.com. “It’s also not a huge surprise that retirement planning is the biggest financial challenge among Americans overall, given near-zero interest rates and ongoing market volatility.” . . .

Around 62% of Americans said they have no emergency savings for things such as a $1,000 emergency room visit or a $500 car repair . . . . And only 39% of respondents reported having a “rainy day” fund adequate to cover three months of expenses . . . . 57% said they’d used up some or all of their savings in the Great Recession and its aftermath."


Summing Up


Over the years, pension plans have been replaced by 401(k) plans and IRAs for most Americans.


Yet most individuals have neither the knowledge nor the confidence to be able to engage in self help planning, saving and investing for their retirement years.


For those who are interested in learning more about the DIY way, we'll keep trying to help.


Thanks. Bob.

Government's Role in 'Encouraging' Excessive Individual Indebtedness for Student Loans ... 'Cost Based Pricing' Plus Government Subsidized Loans for College Harm All Americans, and Especially the Poor and Middle Class

In my opinion, the ongoing American debt debacle impacting individual Americans is profound ways was both encouraged and facilitated, if not created, by misguided government programs and policies.

Free lunches don't exist, no matter what the politicians may say. In the end, somebody always pays, and the ones who pay the most are the intended beneficiaries --- the poor and middle-class.

Let's look at the costly combination of monopolistic 'cost based pricing' and government subsidies today. In a free market based system, 'price based costing' prevails. To stay in business, sellers have to provide both values to their free-to-choose customers and profits to their free-to-choose investors.

In the case of college tuitions, however, it is a cost based pricing environment, and colleges have no incentive to control what they charge. They just add their costs up and pass them on --- to students and government, aka taxpayers. In addition to what the student pays, government grants and guaranteed loans cover the additional charges.

Cost based pricing is how monopolies work, and it's also why the idea of 'free' college is a bad one. Nothing comes free, and cost based pricing makes for a very expensive offering.

Perhaps these debt driven programs were well intentioned and aimed to help provide all Americans with an affordable way to secure their college degrees. But even if that was the desired outcome, the results have been undeniably negative, and their troublesome aftereffects will be with us for a very long time. See Student Debt Payback Lags for a timely review of the debacle.

In fact, all Americans will be paying the price as widespread debt debacles always harm the performance of the general economy by slowing economic growth. They are never easily or quickly resolved.

Now let's look closer at where we are and how we got here. Facts are stubborn things, but recognizing and accepting them are essential steps to finding real and lasting remedies.

Consider what's happened over the past four decades to American income levels, house prices and college tuition costs. The relevant facts are as follows: since 1974 inflation adjusted median family income has declined by ~20%; home prices have increased by ~67%; tuition for private colleges is a huge three times higher; and tuition charged to attend public colleges has quadrupled.

To repeat, median income is down, but home prices and college costs have skyrocketed. And individual debt burdens are the root cause.

Meanwhile, that debt has fallen primarily on poor and middle-class Americans. And worse yet, that debt was encouraged, facilitated and guaranteed by government, aka taxpayers. Government agencies Fannie Mae, Freddie Mac and the FHA now finance ~75% of home mortgage loans and outstanding student loans are in excess of $1.2 trillion. The vast majority of both these enormous home and student loan balances are underwritten by taxpayers.

That government 'help' doesn't relieve the borrower from personal responsibility to repay the loans. But in this slow growth, high debt and high unemployment economy, good jobs are tough to come by and healthy pay increases are rare. Thus, pay levels are stagnant, and unaffordable debt burdens abound. These factors will cause a slow growth economy to remain in place for the foreseeable future.

But that's not all. In addition to guaranteeing loans, this government encouraged debt created a great deal of buyer demand. In turn this debt enhanced demand caused selling prices to rise to much higher levels than otherwise would have prevailed. As a result, many of the 'government encouraged' buyers became unable to service the debt resulting from these 'government encouraged' high prices. But the price increases kept climbing -- until the bubbles burst.

Now let's look at the high cost of college today and how it's grown over the past forty years. Is College Tuition Really Too High? tells the story:

"To understand the feeling of crisis that many see in higher education right now, it’s useful to start with some figures from 40 years ago. In 1974, the median American family earned just under $13,000 a year. A new home could be had for $36,000, an average new car for $4,400. Attending a four-year private college cost around $2,000 a year: affordable, with some scrimping, to even median earners. As for public university, it was a bargain at $510 a year. To put these figures in 2015 dollars, we’re talking about median household income of $62,000, a house for $174,000 and a sticker price of $21,300 for the car, $10,300 for the private university and $2,500 for the public one.

 

A lot has changed since then. Median family income has fallen to about $52,000, while median home prices have increased by about two-thirds. (Car prices have remained steady.) But the real outlier is higher education. Tuition at a private university is now roughly three times as expensive as it was in 1974, costing an average of $31,000 a year; public tuition, at $9,000, has risen by nearly four times. This is a painful bill for all but the very richest. For the average American household that doesn’t receive a lot of financial aid, higher education is simply out of reach." . . .

But the great national crisis is the fact that too many other young adults are not going to college or, if they do, don’t graduate, in large part because they can’t afford it. Every American benefits when every other American has access to as much schooling as he or she wants. When accessibility to higher education declines, we all end up paying for it.

 

. . . there are the nonselective public, community and private for-profit colleges that admit nearly every paying applicant. A vast majority of people pursuing postsecondary education will start in these schools. They vary greatly in quality. . . . Some of these places, especially the private for-profit ones, seem to be little more than a scam, recruiting students, taking their government-funded loans and offering them a degree of minimal worth. Well more than half of all new students at four-year schools in this segment won’t finish. But still they will be burdened with debt or will default, leaving taxpayers to foot the bill. . . .

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Put simply: Without greater access to higher education, the United States is likely to have even greater income inequality, a huge segment of the population will see its income fall and some of our core assumptions about national identity — ours as a land of opportunity, a prosperous democracy — will be at risk.

 

Since the 1980s, most states have decreased their per-student spending on public higher education, some of them quite substantially. Federal aid has risen, but not enough to make up for the state cuts and significant increases in enrollment. Tuition, meanwhile, has gone up far more than inflation....

 

College aid — all the federal and state grants and subsidies, the various scholarships and aid packages offered by schools and foundations — evolved in piecemeal fashion over decades. Considered as a whole, it is a bizarre system. Students who go to private nonprofit schools, disproportionately children of middle-class and wealthy parents with college educations, receive an average of $25,000 a year in aid. Those who go to less-selective public schools receive an average of $13,500 a year. And students who attend public community colleges, who are most likely to come from disadvantaged backgrounds and parents without college degrees, receive an average of $8,000 a year. In other words, our system gives three times as much aid to the least needy as it gives to the most.

 

This makes no economic sense: Once students drop out of community college, taxpayers will continue to pay their bills. That’s not called education funding; it’s called welfare or criminal-justice or health care expenditures. The difference is significant. In the language of economics, education funding is an investment; it more than pays back its initial costs over time. The other expenses are known as transfer payments; which means they make society poorer. In an economy that demands and rewards education, those who have it will pay the bills for those who don’t."

 

Summing Up

 

Government programs and policies are primarily responsible for the well established and ongoing American debt debacle.

We the People know that there really is no such thing as a free lunch. Meanwhile, our 'helpful' government officials tell us there is, and we act as if we believe them.

Of course, their 'helpful' programs continue to get them elected while continuing to do We the People great harm.

Our national debt disgrace will necessarily take a long time to resolve, simply because it's a biggie and took a long time to unfold.

But the sooner We the People come to fully grasp what's been done to us in the name of 'helping' us, the sooner we will resolve our national debt dependence, both as individuals and as a society.

That's my take.

Thanks. Bob.

 

 

Equality in Educational Opportunity ... Charter Schools, Active Citizens, Teachers Unions and One Green Beret ... The Lousy State of Public Education in Too Many of America's Communities ... The Anaheim Example

We hear much about income inequality today, but government and the public education bureaucracy, and especially the leadership of teachers unions, won't discuss openly and honestly the primary factors which contribute most to that result.

The evidence is clear --- education is the primary differentiator when  it comes to income inequality. Thus, providing our citizens with better and more equal opportunities to pursue the education of their choice would seem to be a no brainer on which we could all agree. Not so.

Of course, even if every citizen has an equal opportunity to receive a good education, not every citizen will take advantage of that opportunity in an equal manner. That's called human nature. Thus, the inevitable result will be income inequality, but the playing field will have been leveled. And that's very much the American way --- except when it comes to the right to pursue and get a solid education.

To repeat, educational achievement is the greatest economic and least discriminatory societal leveler of all. So who can argue with that? Well, the public education infrastructure can --- and does --- very much so.

It's not fair and it needs to change. So let's change it.

Freedom of choice, including the right of parents and their kids to choose to attend charter schools, should be a no brainer, especially when the 'government schools' are underperforming ones. It's simple common sense and an example of American freedom and the pursuit of happiness in action. Besides, education is the answer to global competitiveness, more jobs, a higher standard of living and higher incomes for those who would make the effort to get that solid education.

But teachers unions and their political allies in government make these common sense measures a virtual impossibility.

For far too long, We the People have sat by and ignored the obvious. Maybe some us haven't even seen it. As broadcaster Edward R. Murrow once said, "The obscure we see eventually. The completely obvious, it seems, takes longer." Hence, it's timely to ask ourselves the following question: How much longer?

Because without enough public pressure being applied to alter the status quo, the fundamental right of every American to have the opportunity to pursue a solid education, leading in turn to higher incomes and a better and more just society, won't ever become our American reality. So now let's look at what one Green Beret is making happen in Anaheim, California.

The Education Gangs of Los Angeles is subtitled 'Meet the decorated former Green Beret who is rallying Los Angeles parents to fight the unions and reform the worst public schools, one school at a time:'

"Anaheim, Calif.

When most people think of this quintessential California suburb, the Angels baseball team or Disneyland probably comes to mind. But a five-minute drive from the “happiest place on earth” takes you to Palm Lane Elementary, ground zero in a fight between teachers unions and parents who are trying to fix California’s broken public schools. The conflict—as so often in American education—boils down to unionized teachers trying to stop minority children from attending charter schools.

Ninety percent of Palm Lane students come from low-income families. About 85% are Latino, and more than half aren’t native English speakers. Palm Lane has been on the California Education Department’s list of underperforming schools since 2003. In 2013 a mere 38% of students scored proficient or better in English on state tests. And Palm Lane is hardly an exception in the area: Four other elementary schools in Anaheim rank even lower on the state’s Academic Performance Index.

But Alfonso Flores is leading a grass-roots insurgency against the union-controlled regime at Palm Lane. The former teacher and father of four kids who attend public schools in Hesperia has used the state’s “parent trigger” law, passed in 2010, to force changes at a half-dozen schools in California. The law stipulates that if a majority of parents at a struggling school sign a petition, they can compel changes in school management or personnel. Sometimes, the parents contract with a charter-school operator. In one case, they hired a new principal. . . . The 45-year-old decorated Gulf War veteran has plenty of stories to tell about doing battle with teachers unions that bring heavy artillery to every fight.

“It’s grass-roots,” he says of parent-trigger efforts, “and that’s what scares the teachers unions.”

Mr. Flores, a self-described “anchor baby” of Mexican immigrants, knows firsthand the value of escaping bad schools. As a child in the 1970s, he spent three hours daily on a bus trekking to and from a school in the San Fernando Valley under the Los Angeles Unified School District’s desegregation plan. Busing to achieve racial integration is hardly optimal, but Mr. Flores says it did allow him to avoid the horrendous schools in the Los Angeles inner city.

As a senior in high school, he signed up with the U.S. Army and after graduating served tours in Colombia, the Persian Gulf and Somalia. . . . In 10 years the Green Beret earned a Silver Star and two Purple Hearts, and he lost a kidney after being wounded in the 1993 rescue mission in Mogadishu, Somalia, that was depicted in the movie “Black Hawk Down.”

During his military service, Mr. Flores says, he was struck by his fellow soldiers’ deficient educations. They had to “redo grammar school” because they “couldn’t write a simple report,” he recalls. “The Pentagon has complained about high-school kids not able to pass the ASVAB”—the Armed Services Vocational Aptitude Battery.

After an honorable discharge in 1998, he got his teaching credential from California State University at Dominguez Hills. His first teaching job was at Normandie Avenue, one of the worst elementary schools in L.A. . . . A new principal tried to raise standards, he says, but if she entered a classroom without the teacher’s permission, she would get slapped with a union grievance.

In 2007, after being named a district teacher of the year, Mr. Flores was hired as the founding principal of the Global Education Academy, a charter school in South Los Angeles with an almost entirely black and Latino student population. Although most teachers were young and inexperienced, the charter far outperformed neighboring public schools. In 2008, 88% of its students scored proficient or advanced in math, compared with 37% districtwide.

The key to improving student performance, Mr. Flores says, was engaging parents. At most public schools, “parents are treated with hostility,” but at charters, administrators and teachers tend to “embrace parents as partners.” Teachers unions and their liberal allies blame poverty for bad schools, but Mr. Flores calls that an insult to good teachers who are helping poor children succeed: “Poverty is not an issue.”

In 2011 Mr. Flores joined the . . . campaign, at McKinley Elementary in Compton. McKinley parents wanted a high-performing charter operator to take over the failing school but were stymied by the teachers union, which had joined forces with the school district. . . .

“Before you begin a petition drive, you have to start a parent organization,” Mr. Flores says. Parents “have to be aware of how the system works and how the system is broken.”

For instance, “parents are unaware that principals don’t have power to dismiss or even hire their own staff. Districts do a really good job of keeping parents away from all of this information,” Mr. Flores notes. “Once they learn, it agitates them even more.”. . .

In 2014 he . . . got a call from Gloria Romero—the former Democratic state Senate majority leader, who co-authored the parent-trigger law—about organizing a campaign at Palm Lane in Anaheim.

Palm Lane had cycled through five principals in three years. Mr. Flores says the catalyst for the petition drive at the school was the removal of a principal who had “started making teachers accountable” by taking steps like requiring them to assign homework. Teachers howled, and soon the school board reassigned the principal—to work as a teacher at another school.

Parents went public with their outrage. Ms. Romero proposed that Mr. Flores help mobilize them for a petition drive. When presented with various trigger options, parents chose to go for a charter-school conversion. . . .

Once again, the union pulled out its playbook. . . . The matter moved to the courts, and in July a state superior court judge reprimanded the district’s conduct as “unreasonable, arbitrary, capricious and unfair” and ordered the school board to accept the petition.

The school board has appealed and doubled the contract for its legal firm, to $678,000. The fight has garnered plenty of headlines in California, but state leaders like Gov. Jerry Brown and Superintendent of Public Instruction Tom Torlakson have been notably silent.

Mr. Flores notes that the Democrat-dominated legislature in Sacramento has made a point of spending big on schools with a high concentration of disadvantaged students, with little to show for it. “You could throw millions of dollars into these schools,” he says, “and if there is no accountability, you have the same situation.”

When it comes to education reform, Mr. Flores says, . . . sometimes “you have to force change.”"

Summing Up

Accountability is the key, but none exists when teachers unions and the public school bureaucracy are in control.

Active hands-on leadership by private citizens and parental involvement are required to bring about needed change and provide a more equal educational opportunity for kids living in 'challenged' public school districts.

The evidence is overwhelmingly clear. No real and lasting improvement will ever come from a failed system which perpetuates the status quo. And the status quo absolutely stinks in far too many of our very expensive yet poorly performing public schools today.

It's definitely a fight worth having, and it's very much a necessary and long overdue fight to have --- for both today's kids and America's future.

Freedom and equal opportunity go together.

That's my take.

Thanks. Bob.

Becoming a Millionaire ... How $3 Saved Becomes $128 or Even $256 Over Time ... Regular Savings + Investing in Blue Chip Stocks = Long Term Wealth Creation

Almost anyone with a solid education can become a millionaire over time. It's not that hard to do, although admittedly it's far too seldom done. Here's how to do it.

When we're young, we simply need to substitute most of the dollars we pay in servicing our debts (excessive student loans, credit card loans, auto loans) with dollars that we can save and invest for the long haul. That means delayed purchases and perhaps some we don't ever make.
Because in order to save and invest, we first need some money.

In order to save money, of course, we need a paycheck. And by earning a solid education, we can help ourselves make that paycheck a substantial one.

After that, we need to set aside a portion of that paycheck in the form of savings. Next we invest those savings in blue chip stocks for the long haul. That will create wealth well beyond our dreams and expectations.

401(k) contributions aren't taxed when earned. Thus, assuming for the sake of simplicity a marginal income tax rate of 25% (state and federal combined), $1 of each $4 contributed to our 401(k) isn't then taxed. We keep that money and invest it for our long term financial needs. In addition to the $1 government 'loan,' the other $3 is invested as well, and the initial $4 savings and investment will grow to a total ~$128 over 45 years, assuming an average annual rate of return of 8%. And if there are company matching funds available to help the individual investor's 401(k) balance grow, that $3 (net of avoided taxes) initial investment will grow to ~$256.

So why doesn't everybody participate to the fullest extent possible in this very simple and effective wealth creation formula? Beats me.

1 in 10 American workers not saving for retirement says this in part:

"One in 10 American workers isn't saving for retirement . . . and their numbers are increasing, even though the economy has improved. . . .

A persistent concern among many Americans is whether they'll be able to retire. . . . And retirement researchers have pointed out that the decline of pension programs, the anticipated increase in medical expenses and a rising cost of living could make retirement more of a privilege than an expectation in the future.

The National Institute on Retirement Security reported in July that Americans in almost every state won't meet their financial needs in retirement. In a separate report, the group estimated that the median retirement account balance for all households near retirement was $14,500. For all households, it was a meager $2,500. . . .

• The youngest age group in the survey, adults age 18 to 29, was the most likely not to be contributing to a retirement fund. . . .
• Financial planners agree that saving sooner is the key because the money will compound over a longer time period, resulting in a bigger nest egg.
• For example, an investor who puts away $5,000 a year from age 25 to 65 at a compounded rate of 8% will amass almost $1.3 million over those 40 years, says Gilbert Armour, a financial planner with SagePoint Financial. "Their friend, who procrastinates and starts 10 years later and has only 30 years, will reach $566,416 at age 65 -- less than half of their forward-thinking friend," he says."
  

For those who may be thinking that saving anything is impossible, consider the following simple example in How My Mother Turned $8 into a million:

"In 1969, my mother landed in New York with $8, a suitcase, and the sari on her back. She left India after receiving a scholarship to the physical-therapy program in Warm Springs, Ga. The fact that she left familiar surroundings for an unknown world was remarkable. But even more remarkable were the simple lessons on money that made her a millionaire and will impact our family for generations.

My parents were part of a community that followed two principles on money:

1) Avoid things you don’t understand.
2) Spend less than you make.

As an immigrant, the first principle eliminated most financial products. In their early years, my parents simply didn’t understand credit, insurance or investing. . . .

My mother was the model of saving. At restaurants, she ordered water, lemons and sugar instead of the $2 lemonade. . . . In fact, every expense she made was filtered for how she could spend less. It was second nature. It was her way of life. It was done in a way that didn’t deprive the family. And it significantly reduced her financial stress.

By following principle No. 2, my mom had a foolproof plan where she was in complete control. She wasn’t dependent on market returns or a pending bonus for financial security. She didn’t lose sleep over her lack of financial knowledge because she was investing in herself. Sure, in hindsight, she didn’t maximize her portfolio, but that was far less important than the daily feeling of empowerment she gained from following the two principles. . . .

No matter what your broader financial strategy includes, you can all apply the two principles. You have the ability to spend less than you make. You can avoid things you don’t understand or take the time to learn them. You can develop a deeper relationship with your money that creates a burning desire to keep it. And in the process, you can pass down more than money. You can pass down the principles that protect that money for generations to come."

Summing Up

The frugal and smart lady from India turned $8 into $1 million by spending less than she earned. And $1 million is a whole lot more than the $14,500 median 'piggy bank' for households with soon-to-be retirees.

And had that same frugal and smart lady been taught the basics of investing in blue chip stocks for the long haul, the $8 that became $1 million would have ended up being several million dollars more.

In any event, the basics are not difficult to learn and apply, and long term wealth creation isn't difficult.

But a lifetime habit of living from paycheck to paycheck and spending more than you earn by borrowing won't make it happen.

Following the simple formula of regular savings + investing in blue chip stocks = long term wealth creation is a dream fulfiller.

It's intended for those interested in having plenty of money for the use of themselves and their families in both the short term and over the long haul as well.

If you can dream it, you can do it. But it's the doing that counts the most.

That's my take.

Thanks. Bob.

More on 'Do-Gooder' Government and Personal Freedoms ... The Nanny State Is Here ... Let's Kill It

We wrote earlier today on 'The American Nanny State' regarding our individual responsibilities concerning adequately saving and investing for the retirement years.

It's about freedom and self reliance, as well as a let's not allow the government do for us that which we can better do for ourselves.

Freedom is a somewhat unique, precious and wonderful right we enjoy as American citizens. Let's not unwisely and unintentionally forfeit any part of it to all the government 'helpers' who enjoy being in control of today's ever growing Nanny state.

Indeed, over the past several years, things have changed dramatically and not for the better. And for the sake of comparison, please consider what a Democratic abolitionist said in 1834. It's subtitled 'A Democrat's warning about government favoritism:

"William Leggett, a Jacksonian Democrat and abolitionist, writing in the New York Evening Post, Nov. 21, 1834:

Whenever a Government assumes the power of discriminating between the different classes of the community, it becomes, in effect, the arbiter of their prosperity, and exercises a power not contemplated by any intelligent people in delegating their sovereignty to their rulers. It then becomes the great regulator of the profits of every species of industry, and reduces men from a dependence on their own exertions, to a dependence on the caprices of their Government. Governments possess no delegated right to tamper with individual industry a single hair’s-breadth beyond what is essential to protect the rights of person and property.

In the exercise of this power of intermeddling with the private pursuits and individual occupations of the citizen, a Government may at pleasure elevate one class and depress another; it may one day legislate exclusively for the farmer, the next for the mechanic, and the third for the manufacturer, who all thus become the mere puppets of legislative cobbling and tinkering, instead of independent citizens, relying on their own resources for their prosperity. It assumes the functions which belong alone to an overruling Providence, and affects to become the universal dispenser of good and evil."

Summing Up

Nearly 200 years later, what Leggett said still makes sense to me.

How about you?

So despite the overwhelming odds against us, let's continue the fight to preserve our individual freedoms and work hard to achieve a less intrusive government.

That's my take.

Thanks. Bob.

The American Nanny State .... For Individuals Saving and Investing for Retirement, Government 'Help' Isn't the Answer .... Instead Self Help Is the Solution .... We the People Need to Save and Invest More for Retirement

The term 'Nanny state' is of British origin and describes a government whose policies are overprotective or interfering unduly with personal choice. It's a government playing the role similar to a nanny in raising a child. That sounds a lot like present day America to me. And that's a very bad thing as the rapidly growing American Nanny state is doing great harm to both the children and adult citizens of this free, great and most prosperous nation on earth.

As evidence that the American Nanny state is at it again, we'll describe the severe shortage that exists with respect to adequate savings and investment by individuals for their retirement years. And then we'll lay out a plan urging what We the People should do to correct that admitted widespread national retirement savings shortfall.

Is it true that We the People simply can't be trusted to do the necessary work by ourselves?  Or is the government Nanny state simply overreaching again? You be the judge.

Several individual states are now offering a 'helping nudge' intended to assist citizens with avoiding taking individual responsibility to plan and prepare for their future retirement income needs. And since the federal government's Social Security benefits don't provide a secure retirement income, individual states are now riding to the rescue --- albeit very modestly initially and only by using the money earned and invested by individual earners, of course.

In other words, they're planning to help us with our own money. And since the Nanny state 'knows' that we can't be trusted, our ever vigilant government officials are going to do for us that which we won't do for ourselves. At least that's the idea. It seems that growing socialism is very much a big part of American life these days. And the Nanny state is getting bigger by the day.

We have had a pay-as-you-go underfunded (and now soon-to-be unfunded) national Social Security program) since 1935. And now we continuously are being bombarded with news of severely underfunded pension plans at both the state and municipal levels. That's doesn't add up to a good track record for government 'help,' I would argue.

So is it a good idea to trust government officials to take care of the retirement planning, savings and investing for us instead of trusting ourselves? No, it's not.

Many of us still don't enroll in the many currently available 401(k) and IRA individualized savings and investment plans. That needs to change.

How to Help Your 401(k) Balance Grow Faster offers this sound 'self-help' advice for making our 401(k) accounts grow:

"- Increase your contributions every year. Many 401(k) participants cannot start with the maximum level of savings. Every year, you should work hard to increase your contribution level by at least 1% until you reach the maximum contribution. (For 2015, that’s $18,000 for those under age 50 and $24,000 for those who turn 50 this year and above.) . . .

-  Use the catch-up provision. Once you turn 50, you are eligible to start making catch-up contributions–an extra $6,000 a year for 2015. Every few years, this catch-up tends to increase....

-  Understand your match. Many 401(k) participants don’t take the time to understand how the company matching program works. (Typically) . . . the match will be $1 for $1 on the first 3% you save, and then 50 cents for $1 on the next 2% you save. That means if you put away 5%, your company will match 4% of what you save. Can you think of a better deal?...

- Choose low-cost investments. Most participants don’t take the time to analyze the funds within their 401(k) plan. Although you don’t always see a fee taken out of your account, there is no free lunch to investing. Make sure you take the time to review all of the funds and look for the ones that have lower fees with better overall returns.

- Don’t borrow. . . from a 401(k) because the money you take out has now stopped working for your retirement. In addition, you are paying interest on your own money. You should get the mindset that your 401(k) balance is sacred money, unless you are in a dire situation."

DISCUSSION

The above recommendations for individual 401(k) investors apply to IRA investing as well. They are based on common sense, are simple and easy to understand, and should be internalized by all income earners and savers at an early age.

Along with some much needed self directed education about financial literacy and taking advantage of some low cost, high value offerings, we need to start a 'self help club' of individual savers and investors.

We definitely don't need or want the Nanny state government to do for us that which we can do, and do better, both for ourselves and each other.

States to Help Workers Save for Retirement is subtitled 'Automatic IRAs for people without workplace plans gain traction in Democratic legislatures:'

"In July, Oregon became the third state to enact legislation creating automatic individual retirement accounts for workers who don’t have retirement plans at work. State officials say the plans are an attempt to cushion the blow for millions of workers who could someday find themselves too old to work but short of savings. They are also an attempt to protect taxpayers in the future, said Oregon Treasurer Ted Wheeler.

“If people have not saved, they’re completely dependent upon government safety-net programs,” Mr. Wheeler said.

The gradual but broad shift away from of old-fashioned pensions—which provided lifetime retirement payments to retirees—has left millions of Americans unprepared for retirement, experts say.

In the private sector, almost 44% of prime-aged workers don’t have access to a retirement plan at work . . . . Currently, about 46.4% of private-sector workers take part in a workplace retirement plan, meaning that almost 10% of workers have access to a plan but don’t take part.

“It’s shocking…that less than half of employed adults are covered by any kind of employer plan,” said Alicia Munnell, director of the Center for Retirement Research at Boston College, which is working with Connecticut to set up a program. “There’s just a huge coverage gap out there.”

California was the first state to pass legislation in 2012 setting the stage for automatic retirement accounts for workers without coverage. Illinois enacted a similar law in January. Connecticut’s plan could be in place by next year, and legislation is pending in New Jersey and Massachusetts. In some states, such as Maryland and Maine, efforts have foundered in the legislature. For now, only Democratic-controlled legislatures have enacted the plans.


The initiatives differ in the details but all would feature automatic paycheck deductions—California, Oregon and Illinois are all contemplating 3%—to be placed in individual retirement accounts. In all three states, workers would be automatically enrolled, a feature designed to overcome people’s inertia about saving, but they would be allowed to opt out. State boards would manage the programs. In Oregon, the plans would apply to all employers regardless of size, but California and Illinois exempt smaller employers. . . .

For now, the state plans—even those passed by legislatures—are in the development stages and none has yet begun withdrawing money from paychecks. But the idea has caught on. At least 18 bills have been introduced in 15 states this year dealing with state-sponsored retirement plans, up from 10 bills in seven states in 2013, according to the National Conference of State Legislatures. . . .

The Obama administration supports the state initiatives and has promised to unveil rules this year to help states navigate the regulatory pitfalls . . . .

Whatever their design, the state plans will not guarantee a comfortable retirement for future generations. A study by the Employee Benefit Research Institute, a think tank funded by insurers, companies, unions and others interested in retirement issues, found that a mandatory 3% deduction would reduce the overall retirement-savings shortfall for working-age households by only 6.5%, in part due to the rising cost of long-term care for the elderly.

Still, supporters see the plans as a first step, one that can be expanded upon later."

Summing Up

Social Security requires too much in individual contributions for the retirement funds we eventually receive. As individuals we could do much better by investing that same money on our own.

And MOM (my own money) contributions that we save and invest properly would remain ours by staying in our individual account and grow nicely over time.

So let's get busy with the 401(k) and IRA opportunity and resolve to take care of our own future financial needs rather than 'hiring' more Nanny state government to do it for us.

Savings is a great personal financial health habit, and investing successfully for the long haul really isn't difficult.

A genuine commitment to self help, a habit of consistently saving, and a lengthy time horizon are all we need to make that happen.

Finally, since we provide the funds, why would we want the Nanny state to 'help' us do that which we can do better by ourselves?

That's my take.

Thanks. Bob.

Teachers Sometimes Get A Bad Rap In The Education Debate

A few months ago, I mentioned W. Edwards Deming in a post about the travails of the Cleveland police department.  My purpose in establishing a connection between the two was to highlight the need for systems thinking in problem solving.  Deming, who was a well known statistician and quality guru in the 1950s, was credited with being the inspiration for “post war economic miracle in Japan, which was the 10 year period from 1950 to 1960 when Japan rose from the ashes to become the second most powerful economy in the world”. (Wikipedia)

In his book, Out of the Crisis, Deming laid out his now famous 14 points for management.  I’ve listed them all below, but it’s number 3 and number 5 that were called to mind when I read a Washington Post article by a teacher who just recently hung it up. I’ve posted the article in its entirety below as well:

Deming 14 Points for Management:

1. Create constancy of purpose toward improvement of product and service, with the aim to become competitive and to stay in business, and to provide jobs.

2. Adopt the new philosophy. We are in a new economic age. Western management must awaken to the challenge, must learn their responsibilities, and take on leadership for change.

3. Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place.

4. End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move toward a single supplier for any one item, on a long-term relationship of loyalty and trust.

5. Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs.

6. Institute training on the job.

7. Institute leadership (see Point 12 and Ch. 8). The aim of supervision should be to help people and machines and gadgets to do a better job. Supervision of management is in need of overhaul, as well as supervision of production workers.

8. Drive out fear, so that everyone may work effectively for the company (see Ch. 3).

9. Break down barriers between departments. People in research, design, sales, and production must work as a team, to foresee problems of production and in use that may be encountered with the product or service.

10. Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force. Eliminate work standards (quotas) on the factory floor. Substitute leadership. Eliminate management by objective. Eliminate management by numbers, numerical goals. Substitute leadership.

11. Remove barriers that rob the hourly worker of his right to pride of workmanship. The responsibility of supervisors must be changed from sheer numbers to quality.

12. Remove barriers that rob people in management and in engineering of their right to pride of workmanship. This means, inter alia, abolishment of the annual or merit rating and of management by objective (see Ch. 3).

13. Institute a vigorous program of education and self-improvement.

14. Put everybody in the company to work to accomplish the transformation. The transformation is everybody's job.


Washington Post Article

Why I Quit Teaching
by Jan Sidebotham

"I was a teacher for 30 years, except for one five-year hiatus. This year I left the profession. The short explanation is that I was burned out. I arrived at school at 7:45 every morning, I rarely left before 5:30 p.m. and I was often there later. As a new school year gets rolling, I offer two lists. Keep in mind that these are drawn from my experience in private schools, which are regarded as an ideal place to teach because of their small class sizes. 

What people think teachers do:

-Teach five classes or so. 

-Prepare lessons. 

-Create assessments such as quizzes, tests and other assignments. 

-Grade assessments. 

-Take long vacations. 

What teachers do: 

-Teach five classes or so — which is like doing five performances every day in which you stand up in front of 15 people and entertain them for an hour. Or it's like being a pitcher in a game. You are always part of the play. 

-Prepare lessons. Research. Reread a chapter of, say, "The Scarlet Letter" and an article about Puritan culture, prepare discussion questions, plan an activity, figure out how to pace the class. To keep students' interest, you need to shift gears. 

-Create assessments. Write up the assignment, create a rubric, draft detailed instructions. Quizzes should be fair to everyone but also test whether students have done the work. A good five-question multiple-choice quiz can take 45 minutes to an hour to create. 

-Grade assessments. One essay for a class of 15 means reading some 60 pages of student-written work, writing and editing comments, and making a judgment about each grade, all while wondering: Is this fair? Did the student improve? Did he or she really read the book? Will the parents complain? Am I expecting too much? Am I expecting too little? Some teachers read papers three times. 

-Email with colleagues. Answer an email asking why you gave two quizzes in a week. Send an email expressing concern about a student's sudden, dramatic weight loss. 

-Email with parents. This often involves calculating updated course averages, because parents want to know what they want to know when they want to know it. Sometimes it means untangling a misunderstanding. No, your son's iPad use was not appropriate for class. He was not taking notes. He was playing a game. I did not take it away from him for no reason. Don't take things personally. Sometimes you get to write a thank-you for a parent's kind words about how you've helped his or her child.   

-Stay up to date on your material. Read secondary sources on the books you're teaching, read about teaching techniques and so on. 

-Respond to a student crying in the bathroom. Hunt down the student's counselor. 

-Write a college recommendation. Go back through your grade books and papers. Check the school's website to see if the student was the captain of the soccer team. Send an email to find out more about her role in the choral group. Make it unique.

-Chaperone a dance. -Chaperone a camping trip. And like it. 

-Attend a game.

-Attend the school play. 

-Attend the school concert. 

-Attend faculty meetings. 

-Perform at back-to-school night. Prepare what you'll say to parents; write, print and photocopy handouts. Get your clothes dry-cleaned, if you can afford it. Shine your shoes. 

-Learn a new grading input program (about once every two years). 

-Learn a new program for posting homework, which will inevitably be counterintuitive to operate and have numerous glitches that you have to figure out how to deal with. -Calculate grades and drop the lowest quiz. Make sure it's accurate. 

-Write comments for each student. Sixty students, at a third of a page each, comes to 20 pages of tactful evaluation. Reread these for unintended messages. Include something that shows you really know the child. Proofread, proofread, proofread. 

-Write exams. Come up with 12 pages of questions that are not too hard and not too easy, plus an essay question that will help them show what they know without freaking them out. 

-Grade exams. (Ugh.) This is usually done during vacations. 

-Be compassionate, rigorous, interesting, funny, smart, innovative, experienced and patient. 

-And don't be defensive about it, but fend off a stream of snarky remarks about your summer vacation."


Jan Sidebotham has taught English in private schools in the District of Columbia, Maryland and Massachusetts.

I’ve posted several times on this site stories about how bad I believe our system of education is and how self serving those in charge seem to be.  What has gone unsaid is that there are lots of Jan Sidebothams out there, even in the public schools, who take their jobs very seriously but are nonetheless stuck in the system.  To her credit, Ms. Sidebotham quit and left, most probably with her apparently high quality reputation intact.

Unfortunately, the system, with all its glaring flaws, also produces and harbors teachers of the opposite ilk of Ms. Sidebotham - those who don’t take their responsibilities anywhere near as seriously as she did.  How do I know that to be true?  Because it must be.  If the system was full of nothing but teachers like her, the results would bear that out.  And there wouldn’t be a place in the system for the kind of teacher who, unlike Ms. Sidebotham, would “quit and stay”.

Back to Deming’s points 3 and 5.  What if we could convince our so called leaders to work more on building quality in than in designing tests (mass inspections at the end of the production process) that largely affirm the existence of flaws in that process.

And what if the mantra of the education establishment in our country was similar to Deming’s point number 5?  Charter schools, vouchers, and who knows what else would be in play.  Innovation would be encouraged rather than treated as public (union) enemy number 1.

When I look back on my own primary and secondary educations, I have to conclude that my experience was replete with exposure to the Jan Sidebothams of the world.  So my hat goes off to them (Ms Bradshaw, Ms. Powell, Ms. Smith and Ms. Prince, Ms. Boyd, Ms. Bell, Ms. Belay, Ms. Lamback, Ms. Harrison, Ms. Sistrunk, Mr. Westafer, Ms. Walden, Ms. Mahaffie, Mr. Miller)

But my heart goes out to those forced to settle for something less because, as near as I can tell, the negative effects are powerful and long lasting.

KM

Teachers' Unions Vehemently Oppose School Reform and Charter Schools ... Meanwhile, We the People Have Been MIA, and the Teachers' Unions Like It That Way

Keenan posted today about the charter school issue in the state of Washington and how the teachers' unions have prevailed in that state's court. The ruling by the court denied parents and their kids the right to choose where to attend public schools with taxpayer money. Let's discuss the bigger and broader issue herein.


Have you ever wondered why teachers' unions universally oppose parental control, school choice and charter schools? And why they totally support requiring kids, especially urban kids, to remain enrolled in failing public schools. Well, you need wonder no more. It's the money, Stupid!


For the teachers' unions, it's an issue which is simply about money and control. That is, they want to be the ones taking the money from taxpayers and then controlling how it's spent. And the basic idea is to spend as much as possible of it on the teachers and the union officials.


And now in large part it's about having enough money to pay teachers and their union dues, as well as paying and funding outsized pensions for the teachers.


The teachers' unions are able to accomplish that feat by securing votes for local and state Democratic politicians. It's a 'together' thing.


Chicago School Seek State Cash as Crunch Looms is subtitled 'Officials warn of deep cuts ahead if Illinois, facing its own fiscal crisis, doesn't pony up $480 million in coming months:'


"The nation’s third-largest public school system is set to open Tuesday without enough money to make it through the school year . . . .


The school board warns of deep cuts later this year if Illinois, which faces its own fiscal crisis, doesn’t deliver an additional $480 million in the coming months, representing roughly 8% of annual district spending.


“It is like the board is a desperate gambler at the end of their run,” said Jesse Sharkey, vice president of the Chicago Teachers Union, in a recent speech.

. . . pressures remain for some districts struggling with challenges like Chicago’s and other issues, including increased competition from charter schools.


While the Philadelphia school district is no longer at risk of opening late as in past years, it continues to face uncertainty about state funding. . . . Detroit’s public schools remain under stress, as do other large districts in Michigan . . . .


The troubles in Chicago are among the most severe nationally as ballooning pension payments come due and officials run out of one-time fixes. The three major ratings firms in recent months have cut the credit rating of Chicago schools to junk, and bond investors are demanding much higher interest rates to hold district debt.


“We are really now at a point where further cuts would reach deep into the classroom,” said Forrest Claypool, who was named chief executive of the city schools in July.


Since 2011, the school board has made nearly $1 billion in cuts—including $200 million this year that involved eliminating 1,400 positions, mostly through layoffs. Enrollment declines, due to shifting demographics and Chicago’s shrinking population, have led to school closings, including nearly 50 elementary schools in 2013 alone. . . .



The district’s pension costs have more than doubled in recent years after the board took a partial “holiday” for three years from paying the amount needed to put the retirement system on a path to long-term solvency.


At first, the board drained reserves and paid off old debt with new, but those options are running out. The district also is raising property taxes as much as it can under a state cap....


That has left the schools to look to lawmakers in Springfield, the state capital, for help. District officials point to falling state funding, particularly for districts with students in poverty, and a teachers retirement system in which state government picks up pension costs for all communities except Chicago.


Democratic legislative leaders and GOP Gov. Bruce Rauner are deadlocked about how to fill a projected $5 billion shortfall in the state’s own budget. The Illinois Senate has passed legislation that would address the hole in the Chicago school budget through a combination of new state dollars and lowering what the district has to pay toward pensions in the near term. But the House hasn’t yet heard the bill and it is unclear how it would be funded."


Summing Up


For more timely 'back-to-school' news, another good read today is The Judges Who Stole Free Choice. The editorial is subtitled 'A court rejects a voter-passed charter law in Washington state, and it's a nice adder to Keenan's post today on school choice.


My question is simply this: will We the People ever take charge?


Or will we continue to play 'screw the kids and their futures' by deferring to the self-interested and joined-at-the-hip Democratic Party and teachers' unions?


In the end, it's our choice and not theirs, although we certainly haven't been acting that way.


That's my take.


Thanks. Bob.