Saturday, February 28, 2015

Female Teachers Need Rich Husband

By Stephen Wilson

(Moscow, Russia) 'I want to offer you some advise. You ought to focus on your personal life and find a rich husband,' declared the Rector of the Ural State Mining university to any teacher who is dissatisfied with recent cuts in their salaries. 

Nikolai Kosarev, a local head of the All Russia People's front, which is a pro-Kremlin coalition, being a rector of a mining university fitting, adds that there are a lot of available and agreeable miners who would make suitable husbands. Displaying a note reminding us that the age of chivalry is not over, he reassures female teachers 'if the husbands abuse them, the All Russian people's Front will come to the rescue!' Teachers certainly could do with more financial support. This is partly, though not wholly, because in September in the Svedlovsk region, in Yekaterinburg, the teachers' payment check has been cut by 75 million rubles ($1.2 million ). A teacher in this region earns an estimated 29,000 rubles a month which works out at 596 dollars, although even this is a rosy estimate. Their salaries are lower than the Russian national  average salary. In contrast, the average bricklayer makes 48,000 rubles, a plumber 40,000 rubles, and a joiner
50,000 rubles (mainly in Moscow).

I attempted to persuade some female teachers to consider his proposals. I was not too successful. One unmarried teacher laughed at me, saying 'Those people in the government are idiots.' There was one problem that Kosarev overlooked. A lot of female teachers are already married and it still can't pay the bills. What should they do? Get a divorce then marry a richer husband? And what do male teachers do?  Should they try and marry some female miners?


One Russian English teacher called Olga said she had given up looking for a husband because it was so difficult. She had tried all kinds of dating agencies and matchmakers without success. In some cases, a teacher told me, 'We are glad we divorced our husbands because we can manage better without them.' I came across one teacher who told how she had divorced her husband because he spent all his time
wandering around the house and to the balcony drinking beer and chatting with his neighbors, while she was working like a dog.

When one Russian teacher entered her staff office to inform them she had just got divorced, they congratulated her by saying, 'We also divorced from our husbands and are better off!' It was like joining some new sisterhood!

Alena, a Russian journalist, who is in no hurry to get married, told me, 'There are a lot of men in Russia who rather than seek to do any work and support a wife, look for a wife who will keep them.' I wondered whether this was too hard on Russian men, as most Russian men I meet seem worn out from overwork!

I gave up informing female teachers about Kosarev's proposals as I got  some pretty nasty responses. Kosarev claims he has been misunderstood and his comments misconstrued. He claims he simply wants to make female teachers happy and spare them too much toil!

That is not how all female teachers see things.  'If you don't shut up Stephen, I will hit you over the head,' and 'It is not funny Stephen.'

'Who is this Kosarev?' They thought I was either naive or trying to make a fool of them. The main problem is finding your second half is often highly problematic. However, watch out that your dreams can come true! A Danish philosopher once stated, 'If you marry, you will regret it, if you don't marry, you will also regret it!' Or as Humphre
Bogart once quipped, 'You can't have everything.'

Thursday, February 26, 2015

Say No to PARCC

Albany Park, North Park, Mayfair Neighbors for Peace and Justice invites you to our next program--
                                               AGAINST THE PARCC TESTS!
(1) What does it mean to say “Children Are More Than a Score“?
(2)  Are these features of existing standardized tests a problem?:
They mainly reflect class backgrounds.
They are taking too much teaching and learning time in Chicago.
They narrow what is taught in classrooms.
They are being misused in judging schools, teachers, students.
(3) Why we call on everyone to support the Opt-Out movement against the PARCC standardized tests this March and May.
(4) What are good ways to assess children’s progress?  Are there good alternatives to the existing standardized tests? 
Saturday, February 28, 2- 4 p.m.
Albany Park Library, Foster & Kimball
(The Kimball and Foster buses stop there. This is four blocks north of the Lawrence/Kimball Brown Line stop.)
(This library is wheel chair accessible.)
For more information or questions call Albany Park, North Park, Mayfair Neighbors for Peace and Justice
at 773.250.3335 or write                  
(This is from the February For Peace and Justice, newsletter of Albany Park, North Park, Mayfair Neighbors for Peace & Justice.)
Why are so many parents, students & teachers opposing
      the PARCC tests that are to be given in March and May?

     Who has the right to decide the future of public education? Is it educators, parents, and other working people-- or big corporations from the Business Roundtable, like Exxon Mobil?    
     Corporations are trying to block us from exercising our right to be the ones who make changes in public education. One result is called Common Core, which uses tests like the PARCC (“Partnership for Assessment of Readiness for College and Careers”) to see whether children are learning what corporations think they should learn. These tests are to be given in Chicago in March and May.
     Why are so many teachers, parents and students up in arms against these new standardized tests-- which they judge to be even worse than the unfair standardized tests that have been used for years 
     To begin with, these tests mean great stress for children--and their teachers and parents--and serve no good purpose.
     They are called “standardized tests,” but that doesn’t mean they were scientifically constructed  by educators, or tested on a representative sample of children. They are based on “standards” that are unproven and untested. Generally, they are also culturally biased against working class, poor and minority students whose vocabularies and experiences are usually quite different from children in affluent families. Their cultures are usually not represented in tests.  
     What amazes many people is that study after study shows that what standardized tests actually measure is the students’ class backgrounds: the higher the parents’ income, the higher the children’s test scores(Readings that show all these facts:  Chris Carter, “The Case Against StandardizedTests”;;unitedoptout. com/wpcontent/uploads/2014/04/ArizonaMarch302014.pdf; ew/articles/2014/05/ 07/30letter-5.h33.html #).
     Students from all backgrounds have already been frustrated by the new books and computer lessons that go with Common Core tests. 
     After taking practice PARCC tests, many children have come home crying about how confusing they are(For examples, see the recent More Than a Score webinar on PARCC testing at minute 39:41-- or see )
     It’s useful to look at the experience of  states, such as NY, where students have already taken PARCC tests. Before the tests were given, Pearson Corp. explained that they had purposely decided to set the passing grades so high that only 30% of children would pass. That’s exactly what happened--70% of the children failed!   This was a terrible new experience for most children.  Their teachers knew all their work and had judged them to be progressing normally for their grade levels.
     But the corporations who want Common Core and the tests that go with it think that a very high failure rate is just fine. From their standpoint, students need to be “stretched to meet higher standards.”  According to them, when children fail, they try harder. 
    On the other side are educators and parents.  They know that when children are set up to fail, they become discouraged, and hate school.
     So should we just go back to what we had before? No. The aim of thoughtful people is to save AND  improve public education.
    So then, what’s to be done?  Is it wrong to assess how well children are progressingNot at all. But there is strong evidence that other kinds of assessment are effective. These include using portfolios of children’s work, evaluations of their individual and
group projects, and fair tests that can be used to improve teaching and learning.            
Tens of thousands of teachers, parents and other working people are protesting.  Why?
      * PARCC tests  increase the already overwhelming  number of standardized tests being given to students.  They require more hours of class time, usually on computers,  and more months of teaching for the tests.
      * PARCC tests, created by the Pearson Corporation, are filled with confusing questions, often with no clearly correct answers in the multiple choice selections.
      Teachers are pressured  to spend most of the time preparing students for tests based on narrow Common Core standards, leaving little or no time  for art, music, languages, physical education, critical thinking--  essentials for a  curriculum inclusinf learning about problems in our society and possible solutions.
       * Next year more will be at stake in PARCC tests. Teachers will  be given bad marks and can eventually be fired, if their students get lower grades than students in affluent neighborhoods,as if teachers can overcome the problems many children face--poverty, racism, unemployment. This adds insult to injury, since the tests are no good for any child:  they are based on the dismal Common Core curriculum.      
       * Neighborhood schools may also be unfairly graded as “failures” and shut down, or shaken up by outsiders.  
      * When  the grades on the tests are finally available to teachers, it will be impossible for teachers to use them to help the children, because Pearson won’t allow teachers to see the questions and answers, or how particular children answered specific questions.
              Can the PARCC tests be re-written so they are valid, and promote well-rounded education? --Not as long as they are based on the privately owned and copyrighted Common Core curriculum and standards. The tests will reflect the faulty standards they are based on.  Common Core is a total package-- starting with what it says children must know or be able to do at each grade level, regardless of whether it’s age-appropriate.The stated aim is to produce “career and college ready” graduates--which means students are ready to fill jobs in corporations or go into the military. Most parents have a larger vision. They consider their children to be more than a score on these tests.  Most parents want children prepared to build a democratic society with peace and justice.  This is not what corporations are after.
              Serious public discussion across the nation is essential  so everyone can help to decide what kind of public education and assessment is needed.    Throughout the U.S. parents, teachers, students, and others have organized  a movement  which encourages  students to refuse to take (that is, opt out of) the PARCC tests. Last year tens of thousands opted-out from PARCC and other standardized tests. This includes Chicago.
             We can all empower ourselves by working with others to oppose what is wrong and exercise our right to decide what kinds of changes are needed.  Corporations can not be allowed to produce a lockstep  workforce, and an obedient military--for  the sake of maximizing profits.  
    In Chicago right now, empowering ourselves means participating in the fight against the PARCC tests. Call or email us to describe your experiences and raise questions, and to get updates and information about planned actions.

SAMPLE QUESTION FROM A COMMON CORE PARCC TEST (Partnership for Assessing Readiness for College and Careers)

Take the following practice test  question from the Pearson Co to see for yourself what the experience of schoolchildren will be. It is for grade 4.  It can be found at: Keep in mind that students have to have computer skills, and this is a  timed test.  What do you think of it?\u001F\u001F\u001F\u001F\u001F\u001F\u001F\u001F\u001F\u001F\u001F\u001F\u001F\u001F\u001F\u001F\u001F\u001F\u001F

“The Cricket and the Cougar” by Kathleen Chandler
1)  One day the cougar was out walking in the woods.  As he was stepping near an old rotten log, he heard a tiny voice say, “Oh, please don’t step there.  That’s my house, and with one step more you will destroy it.”
2)  The cougar looked down and saw a little cricket sitting on the log.  He roared, “And is it you, weak little creature, that dares to tell me where to step? Don’t you know that I am king of the beasts?”
3)  “You may be king of the beasts, but I am king of my house, and I don’t want you to break it down, king or no king.”
4) The cougar was amazed at such daring.  “Don’t you know, you weakling, that I could kill you and your house and all your relatives with one blow of my paw?”
5) “I may be weak, but I have a cousin no bigger than I am who can master you in a fight?”
6)  “Well, little boaster, you have that cousin here to-morrow. Let’s see if he can master me!”
7) The next day the cougar came back to the same spot and roared, “Where is your cousin?”
8) The mosquito, the cricket’s cousin was buzzing around.”
9) The cricket sat on a log and looked on.
10) Then the cougar felt a stinging, “Oh, oh,” he roared, “get out of my ear!’”
11) “With every sting the cougar roared louder and scratched his ear and jumped around.”
12) “Oh, oh!” he roared,  ‘get out of my ear!”
13)  The cricket said, “ Mosquito will stop, if you promise never to step on my house.  You are not the king of beasts.”
14) “Yes, yes.  Make him stop.”
What is the meaning of the word master as it is used in paragraphs 5 and 6?
A) understand  C) befriend
B) conquer D) frighten
Which detail from the story best supports the answer to PART A?
A) “Don’t you know that I am king of the beasts?”
B) “Well, little boaster, you have that cousin here to-morrow…”
C) Then he felt a stinging, “Oh, oh” he roared, “get out of my ear!”
D) The cricket sat on a log and looked on.
Drop and drag three details from the story that help create the setting of this story.
Details from the Story
“One day the cougar was out “The cougar looked down and
walking in the woods.” saw a little cricket sitting on a log.”
“He roared, “And is it you, “With every sting the cougar
weak little creature,  roared louder and scratched
that tells me where to step?” his ear and jumped around…”  
“Oh, oh!” he roared,  “The next day the cougar came back 
“get out of my ear!’” to the same spot and roared…”

Part A
Which statement best expresses one of the themes of the story?
A) Believe in the wisdom of others.
B) Everyone has strengths. 
C) Do not be afraid of others.
D) We can all learn how to do new things from others.
Part B
Which detail from the story provides the best evidence for the answer to Part A?
A) The tough cougar believes the cricket at the end of the story.
B) The tiny mosquito is not afraid of the cricket.
C. The scary cougar learns to leave the cricket alone.
D. The mighty mosquito saves the cricket’s house.

Wednesday, February 25, 2015

Elections are over!

Election Mania Over - Thank God!
By Jim Vail

Now that the elections are over, save the runoffs in April, we can all rest a bit.

And begin the real work.

Elections I have argued again and again really do not benefit we the people.

They are set up by the system, and the 1% who pay for it, to legitimize their ill begotten gains. Like privatized parking meters, private managers of corrupt charter schools stealing tax payer monies, bank bailouts, etc, etc.

Were those issues on the ballot? 

There were many worthy candidates who ran for a seat in the city council.  But I hate to say it, they reminded me of all those teachers who entered this noble profession to 'save the children.'

Noble indeed, not so realistic.

Teachers are decently compensated in this city, not because we voted for the right guys, but because we fought. The teachers went on strike several times during the reign of Harold Washington. That's right - teachers had to fight the great Harold to get what we wanted.

Now they are taking it all back, and elections put a rubber stamp on the whole process.

We know a mere one-third of the electorate voted. That is because those who are screwed by this system, working two, three or no jobs, barely paying the bills, don't see any stake in the elections. 

So we the teachers need to fight now. We have a new contract coming up where the boss wants to see blood. We have the continued attacks on public education and endless, mindless testing to further hurt the children.

So many miles to go before we sleep!

Monday, February 23, 2015

CTU Supports Racist?

Why Does CTU Support Racist Alderman?
By Jim Vail

The CTU endorsed Ald. Michael Zalewski who equated Section 8 renters to criminals.

Certainly the following headline in the Chicago Sun Times was glaring enough - Southwest Side alderman resorts to race-baiting to save job!

"In one of the more blatant bits of fear-mongering I have seen by a Chicago political candidate in some years, a Southwest Side alderman is attacking one of his election opponents for her supposed interest in Section 8 housing," wrote columnist Mark Brown.

Brown further wrote that Ald. Michael Zalewski has been sending out mailers in the upcoming election that his opponent, Polish-born real estate agent Anna Goral "supports Section 8 Housing that would allow criminals to move in next door."

What is even more glaring, however, is that this is the very alderman the Chicago Teachers Union endorsed.

Certainly, the CTU did not most likely make this endorsement with the understanding that their candidate would make such race-baiting statements during this election (has he ever in the past?).

The CTU prides itself on fighting racism all the way - whether it's going to war against the Chicago Public Schools policy of suspensions that unfairly targets minorities, filing a discrimination lawsuit (before taking office) on behalf of the many African American teachers who lost their jobs or calling out the closing of public schools a "racist" attack that focused primarily on African American schools on the south side. 

The fact that Ald. Zalewski was one of the few endorsed candidates who did not get a dime from the CTU is comforting, somewhat.

But the policy the union has to back "winners" can come at a certain price that will question the CTU's integrity.

For example, the union's Political Action Committee recommended the endorsement of former Mayor Richard Daley's nephew, Patrick Daley Thompson, that the delegates debated and shot down. Delegates pointed out that their candidate supports charter schools, vouchers and is the machine's face front and center!

The union tried unsuccessfully to endorse a Daley for alderman.
Certainly getting more involved in the political fight is no wine and roses affair. Politics is ugly, and making friends with arch enemies like House Speaker Mike Madigan, who's mission is to destroy the union in most respects, doesn't seem to make sense.

But unions need to make these deals and play ball, it is argued, or they will get smashed in the 'system.'

But when you are focused, as a union, on fighting for minorities that the school system serves, and your 'endorsed' candidate resorts to race baiting a la the old school system, then there's time to stop, reflect, and perhaps demand that the union distance itself and admit it made a mistake.

Remember - it's never too late to say you're sorry!

Saturday, February 21, 2015

Russian School Cuts

By Stephen Wilson

(Moscow, Russia) - While the Russian government is lavishly boosting expenditure on its
armed forces, it plans to drastically cut education services .The full implications of those proposals have not been thoroughly worked out or offered sufficient attention. If those plans are implemented almost 50% of schools and institutions of further education will be closed
down. Not only thousands of teachers will lose their jobs but the  the quality of education  will fall further. Second city Teacher investigated the proposals.

As I walked down the path I felt the ground was caving in. I almost tripped and fell flat on my face. When I looked down and ahead of me I noticed the newly laid paving stones of concrete (were they bricks?) had become shaky and rickety. I wondered how old and infirm people managed to navigate over this terrain. The new pavement was far worse than the previous path. You were not in danger of falling off badly laid paving stones. This result where many fine roads and pavements have been  uprooted and replaced by unsteady bricks was enforced by the local mayor of Moscow who made lucrative contracts with construction companies. But he has not only changed the paving stones of Moscow but the whole face. Whereas one could once easily find a kiosk  to buy some milk or bread now they can be difficult to find. In 2012, because the mayor deemed kiosks were blighting the city of Moscow, he closed down many making 50,000 workers redundant. Some of them have still not found work. He intends to close the rest of the remaining kiosks down making even more people redundant. Experts warn that another 50,000 kiosk workers could lose
their jobs by the end of December. There was hardly a murmur or protest against this mass program of redundancies. Now if 50,000 workers can be made redundant without a protest then so can many teachers whose jobs are threatened! 

A few demonstrations against those changes are not enough. The recent government proposals concerning the so-called 'modernisation' ,'reform' and 'optimisation' of schools should make teachers shudder!  The Prime Minister Dmitri Medvedev's has laid out his concept for education from 2016 -2020. According to his plans, 80% of philological institutes and 40% of institutes of education will be closed down. They are to be closed down for being 'ineffective' after a controversial government inspection in 2014 . Hardly any teacher was consulted about this, never mind students.


After inspecting 500 .F.E. institutions in 2014 ,the government claimed to have discovered wide scale violations of licences and even forbade 36 institutes from accepting students and 24 had their licences withdrawn altogether. Controversy arose because many of those institutions deemed 'ineffective' are first class legendary institutions with a solid reputation for excellence. The claims were so illogical that many people suspect the government of more ulterior motives such as an eye on acquiring real estate or simply letting certain favoured government institutions ward off competition from rivals and therefore gain more finance as well as students. Or if you want to put it more succinctly, 'modernisation' is a continuation of corruption by other means (one square metre of real estate can fetch 500,000 rubles). 

If 40 % of further educations institutions are closed then this amounts to the closure of more than 400 colleges and universities.

The intended closure of 80% of philology institutions lacks any logical sense. According to Irina Abankina, only around 40-60 of those institutes are 'phoney ones' without real trained staff or genuine degrees.

Medvedev claims that there are too many institutions and too many students in Russia! So from 2011 the number of school graduates was cut by 70,000, while the number of F.E. institutes rose by 70! The number of students rose to 6 million, whereas ten years ago it was
three times less!

Another claim is that Russia is short of joiners, plumbers and lathe machine operators. If this is so then why is the government also closing down some institutes which actually train people in those trades? An opposition leader claimed that the government wants to create a society full of plumbers and brick-layers rather than highly educated people with bachelor or master degrees. In fact, it is doubtful whether this government intends to build anything solid at all and is busy looting the property of educational institutes. They have the same crude mentality of someone breaking into a safe to attain short-term rewards.


A new Russia is emerging where students read less , think less and appreciate culture less. It is perhaps no accident that the government would like to close down the Institute of Literature, the Gorky institute, as well as a university in architecture. One of the main weaknesses of the Soviet System was it did not inspire much independent thinking.
It could produce great scientists but bad historians and banal philosophers. However, even independent thought was difficult to suppress and many students went on thinking independently regardless of what this or that official said.

President Roosevelt once warned that in times of economic crisis, the state should increase investment in education! The Russian state is doing the opposite! As little as 4.3% of the state budget goes into education, compared to say, 5-10% in Brazil! The Russian government intends to decrease this to 4.1% and then to 3.5% in the coming years. 

Those policies are not without any precedent. They were also imposed during the post -Soviet period with catastrophic results. In the 1990's 25,000 village schools and thousands of evening schools were closed.

When those schools closed down, it killed the soul of the whole village and many villages became deserted as the inhabitants abandoned them. Rural areas in Russia became haunted by ghost towns. Oleg Smolin, a member of the Duma and Communist party, warned that in the events of schools being closed down, 'There will be a massive
exodus of youth without any clear prospects or careers. Officials ignore the growth of crime which will follow lack of employment. It is possible that education offers those places a social lift off. Economising on schools and F.E. institutes means wasting money on building
prisons'. It is easy to forget that a school is not just a place where you learn to read, write or get a certificate, but an institution which offers an alternative road map to the blind alley of crime.

At the same time, the Russian government plans to spend 20 trillion rubles on defence by 2020 to modernise the armed forces. Even a government economist Alexei Kudrin resigned over this because he thought this money would by like throwing money into the wind as corruption would devour much of it.

This is not the only way money is sqaundered. Within the educational system the huge disparity in incomes is stunning! Claiming it is an 'injustice' represents an understatement! While some rectors earn a staggering 15 million rubles a month, a lecturer gets (if he is lucky) 45,000 rubles. You could finance a whole faculty in a university out of a rector's salary alone!

Some economists who work at Moscow State University support mass scale firing of the oldest teachers in schools because they regard them as 'backward', 'conservative' and opposing a commercial culture.

But those teachers they propose firing often turn out to be the most experienced, most educated and the best at controlling classrooms.

There are even cases of headmasters calling those teachers out of retirement to restore order in some schools. It is clear that those economists are out of touch with the situation in schools or are in love with abstract supply and demand curves. Abstract ideas and money matter more to them than skilled teachers.

According to Oleg Smolin, hardly any member of the Duma is opposing those policies. Instead, they are all competing to see who can be the 'favourite ' of President Putin. Politics has degenerated into whether you are for and against Putin rather than constructive debate on what constitutes the right policy to support. Unless teachers waken up and start actively opposing the policies of the government then they will suffer the same fate as workers at kiosks.  And many of those workers still remain unemployed!

Friday, February 20, 2015

Polls Show Runoff in 25th

Polls: Runoffs Possible In Chicago's 1st, 25th Wards


New polling shows that incumbent aldermen in Chicago's 1st and 25th Wards could be headed into a runoff, which will occur if no candidate earns 50 percent of the vote plus one in their respective races. 
The 1st Ward survey of 308 likely voters, conducted Thursday by Ogden and Fry on behalf of Aldertrack, shows incumbent Ald. Joe Moreno polling at 51.6 percent. However, the poll has a margin of error of plus or minus 5.7 percent.
Those challenging the 1st Ward incumbent include former Moreno staffer Ronda Locke and attorneys Andrew Hamilton and Anne Shaw. Coming in second in the poll was Shaw, who garnered 25.6 percent of potential voters' support, followed by Ronda Locke at 16.6 percent and Andrew Hamilton at 6.2 percent. 
Ogden and Fry also took a poll on the 25th Ward race, in which four candidates are vying to unseat incumbent Ald. Danny Solis. The survey of 343 likely voters, conducted Thursday, showed Solis with 54.2 percent of the vote, though the poll has a margin of error of plus or minus 5.83 percent.
In the poll, three aldermanic challengers, public school teacher Ed Hershey, community activist Jorge Mujica, and University of Illinois at Chicago instructor Byron Sigcho, each garnered about 13 percent of the vote. Coming in last was financial advisor Roberto "Beto" Montano with 5.8 percent of the vote.
Chicago's municipal election is this Tuesday.

Thursday, February 19, 2015

As Public Pensions Shift to Risky Wall Street, Local Politicians Rake in Political Cash
By Democracy Now

We look at a Wall Street scandal that has generated little attention but impacts millions of American public workers. In recent years, cities and states have been increasingly investing worker pensions in risky hedge funds, private equity and other so-called "alternative investments." Many of the investments are being done in secret while politically connected Wall Streets firms — including Blackstone, the Carlyle Group and Elliott Management — earn millions in investment fees from taxpayers. Denver-based journalist David Sirota recently revealed Chicago Mayor Rahm Emanuel, who once served as President Obama’s chief of staff, received more than $600,000 in campaign contributions from executives at investment firms that manage Chicago pension funds. Sirota also revealed the head of a New Jersey board that determines how the state invests its $80 billion pension fund was in direct contact with top political and campaign fundraising aides for New Jersey Gov. Chris Christie during his re-election bid. Meanwhile, some states, including Illinois, Kentucky and Rhode Island, have faced criticism for blocking the release of information about how their pension funds are being handled. We speak with David Sirota, senior writer at the International Business Times, who authored the 2013 report, "The Plot Against Pensions," published by the Institute for America’s Future.
This is a rush transcript. Copy may not be in its final form.
AMY GOODMAN: This is Democracy Now!democracynow.orgThe War and Peace Report. I’m Amy Goodman. We’re broadcasting from Denver, Colorado, from our friends here at Denver Open Media, Open Media Foundation, as we turn now to a Wall Street scandal that’s generated little attention but impacts millions of American public workers.
In recent years, cities and states have been increasingly investing worker pensions in risky hedge funds, private equity and other so-called alternative investments. Many of the investments are being done in secret, while politically connected Wall Streets firms, including Blackstone, the Carlyle Group and Elliott Management, earn millions in investment fees from taxpayers.
Well, the Denver-based journalist David Sirota has been closely following this story for years. Last year he revealed Chicago Mayor Rahm Emanuel, who once served as President Obama’s chief of staff, received more than $600,000 in campaign contributions from executives at investment firms that manage Chicago pension funds. David Sirota also revealed the head of a New Jersey board that determines how the state invests its $80 billion pension fund was in direct contact with top political and campaign fundraising aides for New Jersey Governor Chris Christie during his re-election bid. Meanwhile, some states, including Illinois, Kentucky and Rhode Island, have faced criticism for blocking the release of information about how their pension funds are being handled.
Well, David Sirota joins me here in Denver, senior writer at the International Business Times. In 2013, he authored the report, "The Plot Against Pensions," that was published by the Institute for America’s Future.
It’s great to have you with us, David, for me to be in your town. Explain what this is all about.
DAVID SIROTA: Basically, states and cities are putting more and more of their pension funds in high-fee, high-risk Wall Street investments. And the question is, that’s been asked is, now, why? We’re talking about a third of a $3 trillion public pension system being handed over, effectively, to Wall Street firms. High-fee, that is the key point, big fees. These firms earn huge fees off these pension funds. And the question is, why?
Well, there’s two—really, two answers. One, public pension systems are trying to big-bet their way out of their shortfalls. Politicians have not properly funded pension funds. They have not made their actuarially required payments each year, and so there are these shortfalls—effectively, money that is owed to workers that hasn’t been paid. And so, rather than have a debate over raising taxes, a lot of politicians have said, "Let’s give a lot of our money to high-risk Wall Street firms," under the premise that that will big-bet their way out of the pension funds, big-bet their way out of the budget shortfalls.
The problem is, is that the returns for the pension funds have been lower than the stock market, which costs basically nothing to invest in. So then the question is, well, why are you investing in high-fee investments that aren’t generating, better than the market, returns that we can get with no fees? And I think one thing you can look at is campaign contributions. You have Wall Street firms, executives at Wall Street firms, making campaign contributions. And one of the big goodies they can get back is pension investments, which kind of go under the radar. Nobody really—very few people really watch where these investments are going. The people who do watch are the Wall Street firms.
AMY GOODMAN: What does Governor Chris Christie have to do with this in New Jersey?
DAVID SIROTA: Well, his pension system is one of the biggest pension systems in the world, $80 billion. That is a huge, huge pot of money for Wall Street. And Chris Christie’s officials have moved an enormous amount of money into hedge funds and private equity. New Jersey is now one of the biggest investors in hedge funds in the world. In New Jersey, what’s happened is fees have tripled. New Jersey is now paying more than $400 million a year in fees just to manage its pension system. New Jersey has, similarly, delivered below-median returns—that is, below-median returns for similarly sized states. So, it’s paying a lot more in fees and getting less back than the typical pension fund, which of course is a double whammy for taxpayers.
AMY GOODMAN: When Governor Christie was asked about your, David Sirota’s, ongoing investigation into the New Jersey pension system, he lashed out at Sirota.
GOV. CHRIS CHRISTIE: The article that spurred all this conversation has been written by a guy who is a completely discredited journalist, who’s been fired for being inaccurate and inflammatory before. So, you know, right now, anybody who can, you know, pop up on a website calls himself a journalist. David Sirota is not a journalist. He’s a hack.
AMY GOODMAN: That is Governor Christie. You’re a hack.
DAVID SIROTA: Yeah, right. I mean, this has been the answer from the Christie administration, to simply lash out in a personal attack. But this is not a personal issue. This is about pensions for hundreds of thousands of workers.
AMY GOODMAN: And the head of the New Jersey board that determines the state’s investments in the $80 billion pension fund?
DAVID SIROTA: He ended up resigning. He ended up resigning. His name is Bob Grady. He ended up resigning after there were questions about the proximity of campaign contributions going into the Republican Governors Association, Governor Christie, the New Jersey Republican Party, proximity to pension deals going out.
AMY GOODMAN: Blackstone Group—there’s a major protest against Blackstone in New York that has to do with housing.
DAVID SIROTA: Yeah, well, and in New Jersey, again. New Jersey moved $2 billion of pension money into Blackstone at the very same time that Blackstone waived a number of rules to allow Bob Grady, the head of the New Jersey pension system, to allow his firm to invest in Blackstone at the same time.
AMY GOODMAN: What do you think needs to happen?
DAVID SIROTA: Well, clearly, there needs to be more transparency. As you mentioned in the beginning, if you’re a retiree, if you’re a taxpayer, and you call up your state and you say, "I’d like to see the terms of the deals about these pension investments that my taxpayer dollars are going to," your state will likely say, "I’m sorry, we can’t tell you what the terms of the deals are, what the fee structures are, what the risks analysis is." So there needs to be more transparency. And there needs to be a debate, a healthy debate, over whether this money is being properly invested, whether this is a prudent investment in high-fee Wall Street firms.
AMY GOODMAN: Can you say something quickly about Chicago Mayor Rahm Emanuel?
DAVID SIROTA: Sure. I mean, in Chicago, he has said that the city doesn’t have enough money to pay its pension obligations. Meanwhile, more of that money has moved into so-called alternative investments, paying higher fees. And let’s remember, there is an SEC rule on the books that says you cannot accept campaign contributions, if you’re running a pension system, from the people who are managing your pension system. And Chicago lawmakers have asked for an SECinvestigation in Chicago about his campaign contributors.
AMY GOODMAN: Well, David Sirota, there’s so much more to talk about, and we’ll get you back on again. David Sirota, senior writer at the International Business Times. We’ll link to his report, "The Plot Against Pensions."
And that does it for our broadcast. A very happy birthday to Brendan Allen. And I want to thank our crew here at Denver Open Media, the Open Media Foundation: Tony Shawcross, Ann Theis, John Aden, Gavin Dahl, Ivy Pharr, Susannah McLeod, Dana Thibault, Courtney Steele, Niki Smith-Reynolds and David Stewart. Special thanks to Denis Moynihan.

I’ll be speaking at the Carbondale Public Library tonight at 7:00. Hope to see people there.