Can Arnie and the legislature figure this out?

California's state government budget teeters on the edge of a precipice. Public school elementary and secondary education is a $50 billion section of that $119b budget (which includes a $42b deficit). It is the pink elephant in the room. It is what costs the State the most, and, as the teachers' unions in California would have you believe, it must remain fiscally sacrosanct. Public schools are doing a dismal job, and especially in this state. There is just no factual countervailing argument. And you simply do not reward bad performance with higher pay or funding. The problem is not a lack of funding. In fact, the problem is too much funding, and a reduction in funding will result in a corresponding improvement in eduation. I will explain.

California's taxpayers pay $8594 per student per year for education under this model. Their children get very little in return. The main reason is that the model is bureaucratic and monopolistic. In other words, it is highly inefficient, with an inbelieveably massive, bloated lethargic bureacracy, and it has no competition. There is a simple fix for this. It is not politically easy, but it is simple. Make private education an option of the public funding of education. Offer to all who are legal residents of this state, and the parents or legal guardians of elementary or secondary school students, the option to receive a $5000 voucher per student, per year, to be used at a private school of their choosing. Such a voucher would be used to pay for some or all of a private school education; let the parents/guardians figure that out (this is also known as letting the market decide). For each student that is pulled out of the public school system, and enters into the voucher system, the State would save $3,594. If 20% of the students in the State move into this system, that would save the State $3.6b. The dollar amount does not have to be $5,000, but it has to be reasonable and realistic. Private schools handily provide a consistently dramatically superior education when compared to public schools, and do so at far less per student. So I figure somewhere in the range of $3,500-$5,000 will be sufficient to allow market forces to work, and work they will. This is what will happen.

Poor performing schools and school districts will see their enrollments drop, anywhere from incrementally to dramatically, depending on the aggregate student capacity of alternative private schools in that locality, and on the ability of the public schools and their leadership to dramatically change their organizations, their behaviors, and their cost structures. Some school districts will eventually be forced to consolidate, and to close and sell school properties to reduce and regroup. Private schools (with increased facility demands) and other interests will purchase those properties and repurpose them. Public school teachers unions, instead of changing and responding to market changes, will dig their heels in and try more of the same: demand more money, fight against vouchers with shrill protests, and strike. School districts and county offices of education will be forced to further consolidate, to reduce their administrator-to-student ratios (also known as reducing unproductive payroll), to contract out non-education services like landscaping and facilities management. A byproduct opportunity in this consolidation is that public school districts can simply sell older facilities, and consolidate into newer ones. Instead of having to engage in expensive building retrofits and remodelings, the properties can be sold for cold hard cash. 

Meanwhile, the percentage of students in private schools will continue to swell to the available capacity of local private schools, moving more and more funding from public schools to private schools. This increased demand will strengthen the efficiency and effectiveness of the private school "industry" in California. Private school chains and franchises will arise, and the more innovative and opportunistic among them will target weak and ineffective school districts. This will further the demise of ineffective public schools. This will shine a very bright light on the fact that public schools cannot compete with private schools. The "market" will consistently choose private education over public education, because of the contrast in quality. People will vote with their dollars.

The demand for teachers in private schools will steadily climb. Private school teacher pay will incrementally climb, as a direct result of the increased demand. A larger percentage of the better teachers will walk away from the unions, and take jobs with private schools, which will offer more immediate cash rewards such as signing bonuses, performance bonuses, and merit increases. Private school teachers have always worked harder than public school teachers. Some innovative private institutions will offer profit bonuses to their teachers as part of their compensation, giving them a financial stake in the efficiency and effectiveness of that institution. Private schools are not bound by tenure rules and union constraints. If a teacher does not perform, regardless, he or she is subject to disciplinary action and termination. 

Test scores will incrementally improve on the whole, but only insomuch as the percentage of private school enrollments swell. This will be simply evidence of the provision of a better education. A better educated student populace will directly result in a correspondingly larger percentage of students pursuing higher education, which will result in a more valuable, competitive, and productive work force, which will result in a stronger state economy, and eventually an incrementally higher tax revenue base for the State's coffers. 

So the government will see, over the long run, a tangible benefit to its financial structure, by steadily divesting itself of largely ineffective costs (public education), while taking meaningful steps to bolster the underpinnings of the state's economy: an educated workforce. Like I once heard said, when your outgo exceeds your income, then your upkeep becomes your downfall. Um, that's happening in California. It takes brave and bold steps like this to produce lasting and effective change. I hope Arnie and the legislature can figure this out, but something tells me they will not.

A detailed and thorough analysis of this premise, approached on a national level, can be found here. It has the hard facts, and is worth the read, particularly if you care about this topic. 

Thanks for playing.

:^/ 

July! Julyer!

My friend sent me a series of jokes about how some students had to use certain words in sentences for an assignment in an English class. One of them was Mexican (my friend is hispanic; I am 1/2 Puerto Rican, so we can traffic in this stuff, laughing at our own kind). When he came to the word July, his sentence was:

"Ju told me ju were going to tha store and July to me! Julyer!"

Too funny! But the accusation can be leveled against someone else now. Someone who has some serious Baby Mama Drama going on. The Baby being Nancy's stack of changing stories and accusations of being lied to by the CIA, and the Mama being, well, Nan herself. The Drama being how can she stand there and lie, accusing the CIA of lying to Congress "all the time" no less. She was briefed. She knew about the water boarding. She didn't protest until she thought she could make political currency of it. Which leads you to what conclusion? She's an unscrupulous, shameless powermonger who exhibits no sense of respect of the Constitution, or of the office she holds, or of the country she rules, or of those who serve and defend it. That's how she sees it; be under no illusions. She doesn't serve the country. The country serves her. She'd be just fine with a crown and a sceptre. 

Could you do that? Could you stand in front of the nation and lie? She's not even good at it. It was a World Class performance in fumbling, bumbling, and looking the stooge. And shameful and reproachable as well. She stood up again today and made a statement about everything else, and she took NO questions on the CIA. She asserted her accusation. Even with overwhelming evidence to the contrary. Wow. 

How do you do that? I could never conceive of doing such a thing, not and hold my head up in public. This is the big lion in the democratic caucus of the House? This is #3 in line for the Presidency, if Barry is impeached and Joe kicks the bucket? What an empty-headed mannequin, a Hamas-groupie, a queen who thinks the Air Force exists as her personal taxi to San Francisco and back. To her it's all about power, and her mustering it in one fist, it's all about her personal lust for control and worship, it's not about the nation or its security or its best interests. It's not about honor, it's not about owning up to her faults, or providing meaningful leadership. In classic Machiavellian fashion, she will never admit she lied, she will never apologize, and her attacks will grow more outrageous and shrill, or, she'll completely ignore it (if the press lets her) and go on and act like it never, ever happened. And her groupies in The City? Well don't hold your breath waiting for them to vote her out of office. 

All I can hope for is that she just keeps doing more of what she's doing. Barely 6 months into a new Congress, and she's leaving a trail of political excrement that will give the conservative movement the best case study in liberal power-lust and shameless behavior it has ever had. 

Thanks for playing. 

:^/

Strong Financial Discipline? You cannot be serious!

OK noodle this with me and think about it for a moment. It should take just a moment; if it takes any longer than that, go away and never read my blog again, because, need I say it? Your kung fu is weak. 

Let's say, for argument's sake, that your family budget this year is $35,000. However,  the hard truth of the matter is that your actual income is only $23,000, but you want to spend $35,000. So, how are you going to do that? Forget how idiotic it would be, for a moment. Since you have a credit card with a $12,000 limit , you are going to charge $12,000 to that card. Yes, it will have interest, and yes, that amount is over one half of what your annual income is, and yes, it will take you an immense amount of time at your income rate to pay that debt off, and (shh! don't tell your spouse) yes, you even fully intent to outspending your income again next year too, and the following year, but hey, you have big dreams so you are going to do this. So, when questioned by your spouse about this intended course of action, and the overt imprudence, ludicrousness, indulgence, irresponsibility, and unhampered consumer-lust of your spending plan, you retort with how you are showing amazingly Strong Financial Discipline. Your spouse waits to hear your explanation. 

You present to your spouse, with great conviction, that you are exhibiting heretofore unheardof fiscal austerity by cutting ninety (count them, ninety!) "Venti half-caf with room" cups of coffee annually(!) from your Starbucks budget, which will net a savings the equivalent of $170 dollars, annually. You heard me right, annually. One-hundred, seventy dollars. One-seventy. Dollars. That much. Fiscal discipline. You think your spouse would buy into that? Do you view your spouse as that stupid? How would your spouse respond? Before or after filing for divorce? Exactly. 

Well evidently your President of the US of A thinks you ARE that stupid. Because today, the White House has annouced it's fiscal budget for 09-10, which is $3.5 trillion with a T budget, which contains a $1.2 trillion with a T deficit (borrowed, which must be paid back, with interest). To top it off, they are hailing this administration as exhibiting Strong Financial Discipline, but cutting $17 billion in federal spending as part of this exercise in financial suicide. 

Hey, if you haven't figured it out, that's the same as you offering an annual savings of $170 on your family's $35,000 annual budget and calling yourself fiscally responsible and disciplined. (I just removed some zeroes to make it easier to grasp.) I do not know what your reaction is to this, but right off, mine is: You're kidding me right? You cannot be serious!

Well guess what? This adminstration is serious about the spending, and they aren't kidding about the plan, and they are hoping you are stupid enough to buy the idea that they are fiscally disciplined. They site the $170 savings while they borrow $12,000 as the proof. Are you that stupid? Tell me you are not that stupid. 

Final irony: guess how much federal borrowed spending that is per household? Well let me help. At approximately 116m households in the US, that is about $10,344 borrowed per household. Just shy of the $12,000 credit card debt in our above scenario. Oh, and you and I have to pay it back, with interest. How ya feelin' now? If like me, right now you are torn between looking for the nearest toilet into which to empty the contents of your stomach, and angry enough to call your congressman and senators. So whether or not you toss your cookies into the porcelin recepticle, do call your representatives. They are partially and particularly to blame for this fiscal disaster. I assure you that Feinstein and Boxer are complicit in this budgetary action. And if you think for a moment that this fiscal action is not going to have severe negative repurcussions in the next handful of years, then you are dangerously ignorant of even the most fundamental math. I am talking 2+2=4 math.  This is not even economics. This is just plain math.

Thanks for playing

:^\

It doesn't take 17 working synapses to figure this out

In my state (California), the government is about to go broke. On first examination of that scenario, one might think, oh no! But after a very brief reflection it occurred to me that this is exactly what we need. We have a democratically controlled legislature which has expanded its expenditures and government programs by almost double in 19 years. Revenues, obviously, have not doubled. Hence the $42 billion with a B deficit. The legislature is in need of a collective financial full-blown intervention (you heard of that TV show Intervention, right? With the drug and alcohol abusers? Yeah). They remind me of the girl in that movie Shopaholic. They just can't stop increased spending. And the notion of shrinking spending, shutting down programs, thinning the ranks of government so-called "workers" (there's an oxymoron for you) - it is completely foreign to them. In fact, the current slate of propositions on the May 19 ballot represent behavior analogous to the Shopaholic main character pulling her last usable credit card (which is encased in a brick of ice) out of the freezer, and applying all necessary tools to break that card free from its cryogenic state and resume spending like it was the next needed fix of heroin. Which is pretty much what these propositions are, to this State government.

So in any effective intervention, if you are going to break the addict free from his bondage, you have to permanently separate him from the powers that enslave him. In this case, those enslaving powers are led by the State's teachers' unions (paid 25% above the national average), the correctional officers' union (paid 35% above the national average), and the state service employees' unions (not paid so great, but way way too many of them). These unions have big money, are aggressive lobbyists, and their lobby money and contribution money is the crack that keeps the ho's of our state's legislature enslaved. These unions do not hesitate to use their pimp hand on our legislature.

When I noodle all this for a moment, when I lend about 17 synapses to the problem at hand, I realize that these two won't separate. It's systemic. Which is why I stated at the beginning that going broke is exactly what this state needs. We need a good bankruptcy. This will be the only thing that detonates the link between the unions and the government. A bankruptcy will negate the power of all contracts (as in labor contracts), and put the state into the place where everything is vulnerable, nothing is sacred. It will allow the government to do what it cannot do with these forces looking over its collective shoulder: drastically and permanently change state government's labor contracts and expenditures to align with the harsh reality of its financial situation. It is a needed step, but it is only the first step.

There's much more that needs to happen, and the only way to properly catalog it is to write a book, which was not my intent when I started this post. But just to throw a list out there (since I cannot resist at this point)...

...We need to open up K12 education to private competition in order to change its behavior, through vouchers. Yep, I just dropped the V word. Competition changes behavior, and behavior is our big K12 education problem, not funding. When private schools can deliver a far superior education at a fraction of the expense the state doles out per student, our education problem is not insufficient funding. So, competition changes behavior because it brings this unpleasant kind of accountability. That would be the first issue; the second issue is transparency. Transparency of meaningful performance metrics is the second part of California's K12 problem.

...The lack of transparency and accountability are also the root problems in our correctional system, and our state government at large. If you knew the crap that is going on, you would hit the roof. Opening up the correctional system to competition from the private sector would be a good start too. When a private contractor can function as the steward of a state inmate for materially less than the State can do it, it's time to change the model to drive out the cost. Why not get the Maricopa County Sheriff, and make him the Corrections Czar of California? I think if we did, we would see alot of changes here, changes we would like. Costs would plummet. Return customers would plummet. Crime rates would decrease. You get the idea.

...The third part is we need to give businesses cause to want to do business here. From a cost and regulation standpoint, we are giving businesses left and right plenty of reasons to not want to do business here. And guess what? As a result, they are leaving. That trend only gets reversed when it becomes more attractive to stay here than it does to leave here. If the state wants a growing tax revenue base to fund its operation, it needs an economy, and it's really hard to have an economy with businesses leaving, which means jobs are leaving too. Basic 2 + 2 stuff. At least for you and me.

...The fourth part is budgeting. As long as the State has a spend-it-or-lose it budgeting and spending model, which disallows the carrying forward of budget dollars, the State will continue each fiscal year to empty its checking accounts of all left over funds. That practice rarely results in good investments and a good use of tax dollars. Who does that? You don't behave this way. I don't treat my finances this way. What the heck?

...The fifth piece is retirement. This needs to get scaled back to reality. The main reason so many deadbeats run to the state employment payroll is because after barely working for a period of time less than you and I by about 10 years, they can retire at 55 without having to really do much of anything in the way of saving. As a hard-working tax-payer, how's that grab ya? I am not suggesting we take away the retirement of those that have worked for many years and are now 54 and a half, getting ready to retire. But I am saying drastically change that retirement scale now. Push it to 65, and scale the retirement benefits payout package way back. In fact, why not tie their retirement in a meaningful way to their financial contributions toward retirement so that they only get out something related to what they put in? Imagine that. Real world scenarios. Wow. What'll I think of next?

Alright, enough cataloging for now. I am getting angrier and more hostile as I contemplate this whole mess. So with that said, let's all get back to work. There are alot of able-bodied welfare recipients in this state depending on us, not to mention all the part-time workers otherwise known as government and education employees. You ticked off yet? I am.

Thanks for playing.

:^\