« ‘… to shift the burden of hardship to the rich …’ | Main | Prelude to an American Spring? »

08 May 2012


billy T

Dr. Rebane, what is plain as the honking nose on my face is somehow invisible to most people in Europe and in the Ivy League towers. I am talking about the recent elections in Old Europe. First, France does not know what austerity means and their draconian measures (cough, cough) have only been talked about which results with the usual vehicle bonfires with fine cheese and breaking glass. France's so called implementation of cuts are so tiny no one can even measure them, lol. But the second issue is what your post is about. Obama and France both want more spending and more taxes on the evil rich. Never mind that Warren Buffet said yesterday he meant the UBBER RICH (ultra rich billionaires) should pay 30%, not the guys and dolls making a couple of mill or less. Never mind any of that. We know what is coming after the election. Obama is seizing the anti-capitalist anti-income inequality, pro OWS pro Socialist pro redistribution of people's wealth moment to achieve Big Government's wet dream. But there is one problem. If France starts implementing raping of businesses and takes out another 30 credit cards and maxes them out as fast as humanely possible, then the train wreck will be visible for all to see before November. Can't have that happen before November. People might equal France with Obama. So our White House has sent its message to France: Wait a few months before you crash and burn. Wait until after November because your plans are my plans and we don't need a burning example of how my plans will work work in the New World. After November France can do what they want, and with a wink and a nod, Russia will get what they want. Just be patient my children....http://michellemalkin.com/2012/05/07/obama-france-economy/

billy T

This prediction thing is becoming more and more like shooting fish in a barrel. Me thinks this Old Europe thing may be masking the last jobs report. Obama dodges another bullet, but he is still in the barrel, figuratively speaking. http://finance.yahoo.com/news/stock-index-futures-signal-steady-open-083943392.html

George Rebane

billyT 104pm - your points are well made. Hollande's ability to lay low until after November will depend on his leftwing supporters not starting to demand too much too soon too visibly. But if Greece and Spain really split wide open, the French socialists will have to show some solidarity with their southern gimme cousins. And all this may be helped with the upcoming Berlin visit from which I am waiting for Angie to tell Frank, 'Definitiv nein!'

Todd Juvinall

Tom Sullivan said 22% of the total workforce in France are government. No wonder they are toast. And that is what our local lefty socialists want? I guess so.


"A government big enough to give you everything you want is a government big enough to take from you everything you have."

That's the most cogent remark Gerald Ford ever made (1974 address to Congress).

A Europe hemorrhaging capital to the US is certainly the silver lining in the French election, but to really goose US investment will take the China bubble finally bursting and a neo-cultural revolution to hunt down and punish the scapegoats while people and what capital is left do their best to move to friendlier shores.

I think it will eventually happen, but not today and not tomorrow.

George Rebane

Gregory 757pm - “Government big enough to supply everything you need is big enough to take everything you have. The course of history shows us that as a government grows, liberty decreases.” ― Thomas Jefferson

And I've even heard it attributed to Barry Goldwater.

In any case Greg, can you say more why you don't think that the Chinese can bring their communism down to a soft landing?


George, the Jefferson attribution has been debunked to my satisfaction. Ditto the Goldwater. Here is an authoritative source on the TJ claim:

The problem is that no one thinks Gerald Ford could utter anything so clear and profoundly Jeffersonian ... :)

Soft landings are nice, but with accounting standards that make Arthur Andersen and Enron look like paragons of virtue, I don't see how a China slowdown could do anything but make it impossible to continue to paper over really ugly balance sheets.

Douglas Keachie

And you think the grads of today are too stupid to watch the following and come out madder than hell and not willing to take it anymore, from Republican "free marketeers," who obviously could care less about the public? Good luck this fall, you all hate Obama, the one big plank in your platform, which I doubt very much will carry an election.


Douglas Keachie

"I don't see how a China slowdown could do anything but make it impossible to continue to paper over really ugly balance sheets. "

Slave labor works wonders.


I didn't go past the intro, but I'm guessing Reiche didn't reveal where that investment capital came from... the "other people's money".

CalSTRS, the teacher pension fund, is one of Bain's biggest 'investors'

It appears teachers really don't care how many private jobs are sacrificed for their pensions.

Douglas Keachie

I rather doubt the Bain will saty in the CALSTRS portfolio, now that there is more awareness of what it represents. So rich folks doing it up right:

MS Tûranor PlanetSolar Completes Round-the-World Voyage (8 photos)

Arriving in Monaco today, MS Tûranor PlanetSolar celebrates its feat as the first craft to successfully travel around the world on only solar power. The high-tech catamaran has visited 28 countries in its 19 months of globetrotting. “We have shown that we have the technologies as well as the knowledge to become sustainable and safeguard our blue planet,” says the project’s expedition leader, Raphaël Domjan.

Scroll about 1/2 down second column to find links to the images:


(one of my old clients)

Douglas Keachie

And here we are, CALSTRS, etc making wise investments today. Not too long ago, they were crappy managers of teachers' monies. Which side are you REALLY on?

Yes, I must admit the irony is delicious!

"Ironically then, the public pensions hand billions over to private equity seeking these higher returns to benefit their unionized membership, and private equity turns around to fund corporate raids, offshoring of jobs, attacks on workers in other countries, and environmentally destructive activities. And it’s still unclear if, after fees and other costs are calculated, private equity pays. It’s all shrouded in secrecy."

From the article cited by Greg above.


Let me translate Keachie's response...

"The devil made us do it!"

Keach, I never exhorted CalSTRS to make higher paying investments, only to be honest about expected returns and make promises that could be kept. It was the Unions screaming for bigger public pensions, not the private sector. There is only tragedy here; the irony is only in the fevered imaginations of the usual suspects.

Oh, and the first circumnavigation of the Earth using only solar power was completed in 1522.

George Rebane

Gregory 1248pm - Kind of revealing that CalSTRS is run by portfolio managers who don't know the basis for returns from the companies they invest in. But, it kinda goes with their sister fund manager CalPERS, who demonstrate no greater prowess in that function.

Your 1522 circumnavigation point is well made. I wonder how the fast 19th century clippers would make such a journey, or the new modern computer controlled large sailing ships. I have to believe that the mean usable power generated by a square foot of sail is a lot more than that produced by an equivalent PV area, especially if you consider the power train and storage device efficiencies. Last time I looked, the wind also blows at night and under cloudy skies.


George, as long as more solar energy is absorbed in equatorial regions than in polar regions, the wind will be blowing somewhere and with modern meteorology and GPS technology, the chance of being caught in the Doldrums is low. Yes, modern sailboats should handily outperform the old Yankee Clippers but I think the economics of running big container ships belching Bunker #2 continues to favor the stinkpots.

What isn't surprising is that Robert Reiche either didn't know or didn't care that CalSTRS was a major Bain investor and didn't even pay the 15% tax he was upset Romney got away with paying.

"“A private-equity firm puts up a token amount, gets a larger down payment from a pension fund or other limited partner, and borrows most of the money, using the takeover target’s assets as collateral.” The results of these leveraged buyout deals are mixed, but oftentimes the conquered company is forced to cut costs by laying off workers and selling assets, reinforcing private equity’s predatory reputation... “More than half of the CalPERS and CalSTRS private-equity holdings are in buyouts,” Mendel observes."

Can we afford the fantasyland that public employees pay their own way?

George Rebane

Gregory 324pm - "Can we afford the fantasyland that public employees pay their own way?" As I have written more times than I can remember, to the extent that public employees are paid by taxpayers, to that extent we in the private sector pay their way (and that includes their taxes, insurance premiums, benefit plan contributions, ...).


"For example, 70% of CalSTRS' $45.6 billion private equity program is invested in buyouts, with 61% of the program in buyout megafunds."



George 04:25 PM

All that and we have nearly the worst educational outcomes nationwide.

Maybe if we found a way to give the same folks even more money, it would get better? Worth a try?

Just kidding. :)

Douglas Keachie

"Can we afford the fantasyland that public employees pay their own way?"

We, can, yes we can, afford that fantasy, every it as much as we can believe in the self made Walmartians, who had a handbook for their employees to make sure the employees all dug into the public trough as deeply as possible, so that the WallyWorld's leading denizens could enjoy their spot on the Forbes top 400.

And you always forget, public employees are taxpayers too, and Brown had better brace himself for the reduce state income taxes that come along with the reduced state employees' salaries (and teachers, no doubt, wife already took a 6% hit two years ago)

When it comes to taxes of all kinds, state and school employees are as much in the "private sector" as anyone else, much more so than the folks in the top .1% who pay Buffett rates.

Douglas Keachie

As one who sails on a board, I can assure you that there is no way that my windsurfer sail in area expressed as a solar panels/motor/ and moi combination could go as fast as I can in a 20 knot wind, on a broad reach. Going straight upwind, no tacking allowed, is an area where a solar electric boat excels.

Now as to my fantasies, they tend to run more towards listening to George and Greg, chained to the oars of the Waterworld tanker, discussing politics. Metaphorically speaking, that may even be out current reality.

George Rebane

DougK 451pm - "And you always forget, public employees are taxpayers too,..." Perhaps we have finally penetrated the fog of progressive arithmetic. First, that firm belief that public employee income adds anything to tax revenues; and second, that confusion reigns as to where government defaults and where it saves.

Consider that for every dollar of income from taxes a public employee receives, s/he may pay 35 cents taxes. If s/he's no longer employed by the state, the state and we taxpayers not only save 65 cents, but may even have that person join the private sector and start adding to state revenues. A most curious calculation you progressives always propose when it comes to anything to do with economics.

Douglas Keachie

Well by God, George, fire them all! Whatever they are doing can't be that important, right? Gotta save that 65¢. And the more labor available to the private sector, the lower wages the owners can offer (although the less in taxes they will generate as well.) kewl!

George Rebane

DougK 512pm - Excellent, now we're talking. Doing away with the gargantuan public education monster will be a common ground from which we can go forward to fashion an educational system that works. How about vouchers or tax credits that can be spent in private schools that bid for franchises within legal jurisdictions such as cities and counties?

Douglas Keachie

Vouchers would cost tax money, bad idea. Why give away what few taxes are left with tax credits? No George, you're being too socialist.

Douglas Keachie

Exclusive Franchises are monopolies, completely contrary to the spirit of free enterprise. Let every teacher hang out their shingles, and bring back the good old days of Heidelberg and free beer in the bar.


"Exclusive Franchises are monopolies, completely contrary to the spirit of free enterprise."

While it wouldn't be a terminology I'd choose, George didn't write "exclusive". That was a Keachie Straw Man talking. Grant a 'franchise' to any school that meets the standard, then let them sign up students.

"Let every teacher hang out their shingles, and bring back the good old days of Heidelberg and free beer in the bar."

"Every teacher"? No. Academic competence wasn't much of a problem in old Heidelberg but based on current outcomes, it would appear fewer than half of the current teachers in California are above average, so let's take the initiative and shuttle their low average bretheren into shoe and mobile phone sales where they may excel.

Douglas Keachie

Who said you had to have a credential or meet standards to run a school? Let the parents and students decide. They are the customers. If the state feels it necessary to chip in to the parents for some of the expenses of hiring a "school" let them do so, but no more than 50% of the cost. That way the parents will take a real interest in making sure they get their money's worth. If the state pays more than 50% of the cost, who knows what sorts of deals might be set up. "Enroll your kid, get a kickback. We promise to return him at the end of each day, unharmed, at least physically."

BTW, you have misrepresented me again. I never said that George said that they were to be exclusive monopolies, I merely made the statement that IF they were exclusive monopolies, then yadayadayada. Please review your logic courses Greg, you're slipping.

Douglas Keachie

"Zeugnisse? Wir haben keine Zeugnisse bekommen! Wir brauchen keine Zeugnisse! Ich muss ihnen überhaupt keine stinkige Zeugnisse zeigen!“)

This is in German, and I have to add this, because God knows Typepad's nannychecker will bounce it otherwise, or so I presumenad don't want to waste time reposting.


"BTW, you have misrepresented me again. I never said that George said that they were to be exclusive monopolies, I merely made the statement that IF they were exclusive monopolies, then yadayadayada."

No one believes you. You can't argue the fine points so you take every contrary position and drive it to an extreme where you can argue against it.

There is a rainbow between ultraviolet and infrared. We have a failed school system in California and your only solution is higher salaries and more robust pension. Call that infrared. Getting rid of public schools and granting monopolies is ultraviolet. There's a rainbow inbetween. Why are you afraid to talk about nudging bad teachers towards the door?


It should also be noted "stinking badges" is a misquote, never uttered in "Treasure of the Sierra Madre" or, one might expect, in German subtitles.

Brad Croul

Stinkin' badges here


Douglas Keachie

I should be noted that Greg's assertion that Greg's "It should also be noted "stinking badges" is a misquote, never uttered in "Treasure of the Sierra Madre" or, one might expect, in German subtitles." has been nicely dis-proven by Brad Croul's post.

It should be further noted that Greg does not know the difference between the German word for "certificate" and the German word for "badges." As this was in regards teaching, I made the necessary change, and Greg was unable to pick up on it. I trust George to be a final arbiter here.

Greg further states another silly falsehood, despite my writings referenced many time here, with his, "Why are you afraid to talk about nudging bad teachers towards the door?" I not only talk about nudging them, I talk about booting them out the door.

"The evaluation would be done in the second semester of teaching. The results would come back to the teacher, no penalties, but a clear indication of how well they are doing, referenced to other teachers. In the second year, the classroom would again be rated, but this time, those rating 3 standard deviations to the low side would be let go in June. Those 2 standard deviations below would get a warning, and would be tested again in their third year, unlike the rest, who get a pass until year 5."

which is from: http://farstars.blogspot.com/search?q=evaluation

Ryan Mount

I think some of you folks are too hard on teachers. My experience with the GVSD and NCSD instructors have been generally positive. I send them emails and they respond. If there is an issue, we get together and try and work it out. Are there issues? Absolutely. But not for all students and certainly not with most instructors.

Maybe we should have teachers take the same standardized tests their students take? And to season this proposition, let's adjust the standards upwards, say by I dunno 4 grades, to make sure they understand the material? Do this every year. If we discover a teacher is faltering, then offer a remediation plan. Like most [good] businesses do. And in the spirit of forgiveness, we'll keep it private. If they goof that opportunity up, then we can offer them as Bill Murray noted in Ghostbusters, a job in either the "housekeeping or food service industries."

Or how about this? Let's increase teacher's salaries, but make it easier to fire them? How about a (I'm picking a number out of the air here) 40% (or more) raise, yet make them more accountable (IOW easier to fire them) via the mechanism I outlined above? Another way to do this would allow instructors to opt out [gasp] of a union. It seems to me this proposal will irritate all sides of the issue. The Right will moan about more taxes, and the Left will complain about being subjected to the whims of the marketplace. Win/Win. Or is that Lose/Lose?

George Rebane

RyanM 221pm - a lot of good thoughts. I would advise that the salary question can be answered in the same manner that private industry solves their salary determination - interview the candidate and dicker out a number. My feeling is that once the union, etc barriers are down, there will be more applicants than a school district can handle lining up at the door. But certification and metrics are required, and can again be handled by established methods, say, in the software industry.

Ryan Mount

I'm not sure that a [more] free market solution will draw any more qualified teachers given our fiscal condition. That said I believe, as you do if I may be so presumptuous, that adding some market forces might benefit our school systems.

It seems to me we need to attack this issue from both ends. That is, if that is not a false dichotomy, which it probably is. More taxes and more instructor accountability. There, I said it. This GenXer would be happier to pay more in the form of taxes if I say the return on investment. But this GenXer, if you'll forgive my Bob Dole 3rd person, is also not interested in throwing good money after bad without more accountability across the board. (across the board = everyone in the process, not just teachers.)

BTW, as a side note...no one has even dared touch the third rail of public education. And I'm not talking about the Unions. I'm talking about...um...special education. Sorry to open that can of worms.

Douglas Keachie

Neither of you have addressed the core issue that makes teaching so risky: The once a year hiring pattern. I rather suspect that if all programmers, or anoy other group of professionals, faced that situation, that they would immediately organize and form a union. Do you have any idea of the real third rail of education? Try quitting in mid year for any reason other than being on a death bed, and then getting another job in teaching. You will find every door slammed in your face. Uless you wish to make it illegal for districts to discriminate against folks who have said. "enough is enough," you will not find any takers for your plans. Teaching is unique in this regard. You can be a doctor, a lawyer, or an architect, and, as long as you are not in the middle of an operation, a big lawsuit, or a major building, you can quit and find another job. Try doing that as a teacher from one district to another, mid year, if you can even find an opening, they will not hire you. Between school districts, it is considered professional courtesy.

George Rebane

DougK 329pm - We'll just have to see how the market will react. I predict that the un/undermployed by the end of this decade will exceed 70 million. That will call for a lot of changes in rules. I have more to say about that in my next two posts.

Douglas Keachie

"I predict that the un/undermployed by the end of this decade will exceed 70 million."

I suspect they may be employed, in the 2nd American Revolution, if your numbers are correct. Land and water are king, but only if you can keep from getting shot. Those in the USA military and LE may have second thoughts about serving Bastiat masters who would jail or imprison the relatives of those in the militaryand LE. Keeping things peaceful will be a very hard sell. Occupy is the canary in the coal mine here, so think fast, if you've only got 7.5 years left. Can you build LE robots good enough and fast enough in that time frame? Why is this beginning to sound like a grade "B" sci fi show? It's not the reality I had in mind.

George Rebane

DougK 427pm - please define your "LE", and this thread should really continue on my 'American Spring' post.

Douglas Keachie

Transferring to other frequency, later on tonight. water voley ball calls, after hot day whacking broom, fixing pipes that froze, or just were too old.

billy T

Ryan Mount: http://www.foxbusiness.com/markets/2012/05/10/germany-to-greece-no-austerity-no-bailout/

Ryan Mount

Thanks for the heads-up billy T. Not sure why I'm keeping my eye on Europe as I'm typically watching Asia. It could be my amateur reading of recent Continental history. All those World Wars, etc. As cynical as this may sound, my hope is that they've had enough of bombing each other into dust.

"France's new president-elect, Francois Hollande, has vowed to shift Europe's focus from hair-shirted austerity to measures to revive growth and will take that message to Berlin right after his inauguration next Tuesday."

Good luck with that Mr. Hollande. It oughta be great theater for this political junkie.

Seems like we're heading towards a showdown. Not between Greece and Germany, but rather between France and Germany. Greece is acting like they actually have a say in their situation, which is entertaining. At this point they're just a bratty, misbehaved child in the eyes of their patrons. And I'm being generous here.

If Greece pulls the plug on their austerity plans, they're gonna have to go looking elsewhere for the money. And if Germany ain't there, will the other EU members fill in the gap? The people of France's(the second largest economy in Europe) Left turn are internally focused and they, like the American Left, would prefer to have spending targeted at their citizens and not at the spend-happy Greeks. However, I'm certain that the people of France would be happy to spend Germany's money on Greece. The ghost of Milton Friedman is chortling.

And if France pulls the austerity plug like Greece, I would question whether the entire EU can survive.

Next up, Portugal followed by Italy perhaps?

Douglas Keachie

Gaudi's "help, I'm melting' architecture was 70 years ahead of its time.


I stand corrected on stinking badges, but a system that can't get rid of a lousy teacher at 10, 20, 30 years of service or any year inbetween is not acceptable. The guy I had to hire a lawyer over had about 30 years in and had apparently been a mean, conniving incompetent for years.

Keach complains about teachers only having one year contracts. How about at will, which covers about 99 44/100% of all the engineers I know. Or more. The only guy I know who can't be laid off was in a small company that got sold to a foreign company, and the handful (less than 5) of American engineers that were there (who also had significant stock holdings) can't be laid off. However, they'll also never hire another engineer here. Chinese engineers are cheaper to hire in China.


"Neither of you have addressed the core issue that makes teaching so risky: The once a year hiring pattern. I rather suspect that if all programmers, or anoy other group of professionals, faced that situation, that they would immediately organize and form a union."

I heartily support the concept of no contracts and at will employment for all teachers. Keach, get the ball rolling and I'll be happy to help.


"I think some of you folks are too hard on teachers. My experience with the GVSD and NCSD instructors have been generally positive. I send them emails and they respond. If there is an issue, we get together and try and work it out."

Have you looked at the STAR results for the GVSD? The longer kids attend, the further behind the average they are. At Lyman Gilmore School last year only one eighth grader was reported as Advanced in Algebra, and not many more proficient, out of 181 listed as being tested, and the entire school was in the bottom decile of similar schools. If you have a kid in the early grades in the GVSD your best bet is to move them to a good district ASAP. Lots of very nice well meaning people, but wretched results.

Ryan, a teacher no longer active in the high school district had a history of tanking the math grades of boys who caught his errors in the classroom. One victim I know of now has a Ph.D. in Math from UC Berkeley, two others are in hard science PhD programs at other top schools. He had a peculiar grading system that, while it could be made to work just fine, was also perfect for manipulating grades at will, since there was no set value for any test problem. He lied about the performance of kids he was hired to teach, and refused parent teacher conferences that are guaranteed by the Education Code to any parent upon request. He's gone now, allowed to retire under a cloud, but now every teacher in the NJUHSD has to sign a statement every semester that the grades are based on the work performed. As if that wasn't expected at every school I've ever heard of, even without a twice a year pledge.

No, the local schools and teachers aren't the universal paragons of virtue many imagine them to be. Some districts are better than others, with Pleasant Ridge probably at the top and Pleasant Valley and the GVSD bringing up the rear. The NJUHSD is a very mixed bag, with spotty academic results at the two comprehensive high schools made better by having lots of alternative schools to ship kids to before they drop out or otherwise fail to graduate.

George Rebane

Gregory 605pm - having worked with the best and brightest students during the last six years, I can attest that your report is not even the half of it.

The comments to this entry are closed.