Author Archives: Les Schreiber

And Your Priorities Are Teaching Kids, Really?

maggie_walker_hsAs a retiree from Maggie Walker Governor’s School, I am constantly bombarded with requests for money for who knows what.  As I have written here before, teachers in Central Virginia have not had a raise since the 2008-2009 school year.  A search of the school website showed a conflicting message about finances.

A review of the minutes of the January 16, 2014 budget session demonstrates some rather strange contradictions. The general faculty will receive a “whopping” raise of 2% as some are asked to teach more classes, thus significantly raising the workload. A course or two may be dropped, and other minor adjustments may be made. But wait, there’s more.

The budget includes a $13,000 raise for an administrator whose sole job is to overlook the curriculum of the school.  (Please see 01-16-2014 meeting of the regional board of the Budget Work session on the school’s website.)  The Board justifies this outrage by having this educrat work a few more weeks in the summer. It mystified me how an organization that claims to be short on cash seems to find funds to pay such increases while asking the bulk of their employees to continue to experience a decreasing standard of living.

I would love to be a fly on the wall when the leadership of the school gives the usual “let’s-do-more-with-less” speech.  If it believes that its administrative staff is underpaid, let them go out into the pool of mid-management talent and find out what the job market in the real world is really like.  This is an example of why the public has lost faith in education.

– Les Schreiber

Let Them Use Chamber Pots

A Chesterfield County classroom.

A Chesterfield County classroom.

Chesterfield county, famous for voting for bond issues but refusing to approve a mechanism to fund their debt, is rapidly becoming a model of governmental dysfunction.  This bastion of conservatism demonstrates what happens when years of anti-government rhetoric and “good old boy” ethics meet the financial realities of governing.

Several weeks ago, the Richmond Times-Dispatch ran an article documenting the stresses in the Chesterfield Public School system.  Stories of large classes, underfunded programs, rising health and pension costs and no increase in pay for five academic years seem, according to the article, to have put the system on the verge of collapse.

School maintenance and expansion are funded, in part, by a tax on developers called a “proffers.”  This levy pays for schools, sewer and roads. They are paid by the developer and passed on to the eventual buyer of the house.

The recent school budget in Chesterfield currently shows about a 1% operating deficit. Members of the Board are tasked with funding the system using all traditional means. According to press reports, one of the members of the board is one Carrie Coyner. In addition to being a member of the Board,  Ms. Coyner is representing a developer seeking a reduction of a “proffer” to build 400 or more homes in the county. This would increase the county debt and thus reduce funding for the school system.

What is the definition of “conflict of interest”?  It is as if on the next time the Yankees play Boston at Fenway, Derek Jeter is allowed the call balls and strikes. On the other side of the river, things really are different.

– Les Schreiber

What’s A Course Worth???

ap_examsIn these days of attempting to measure teacher performance and the value of education the, RTD has provided a great service in quantifying the value of high school Advanced Placement classes. These are college level courses, taught  in secondary schools, to prepare students for a national exam, given in May which allows the student to receive college credit if the enrollee receives a score that satisfies each undergraduate school’s requirement. The scale ranges from 1 to 5 with 3 usually being the minimum accepted for course credit. Some universities only accept a low of 4 and some of the Ivy League schools do not participate in the program.

In these days of rising tuition, the benefits of not paying for a significant number of credit hours can be substantial. When I taught AP Economics, U.S. Government, and Comparative Government at Maggie Walker, it was not unusual for students to finish their undergraduate degree in three years, thus saving a ton of money for parents. In fact the article in the RTD estimated total  tuition savings  for the students at the Governor’s School to be slightly over $1,100,000 per year. One would think that this program with such an obvious monetary benefit to the students would receive unqualified support from all parties involved. Like many things in education, unfortunately, that is not the case.

These tests are given in May. Schools in Virginia begin with a disadvantage. This state’s “Kings Dominion” law prevents these institutions from opening before Labor Day, even though tourist-dependent states like Florida and California get started in August. I guess our General Assembly values the thrill of meeting Yogi Bear and his sidekick Booboo is greater than saving a few thousand constituent dollars on college tuition.

This winter has been brutal for schools. Two inches of snow has shuttered the system. For high schools, it’s exam time. Exams in AP courses are especially important as these tests give instructor and student an evaluation and a chance to make mid-course corrections. They are important.

Imagine my surprise when I learned that at Governor’s School, the institution with the most at stake, exams in AP classes are not required this winter. Informed rumor has it that 60% of the faculty voiced their opinion in favor of this traditional testing. It seems that the educrats in charge caved in to pressure from such “important” extracurricular activities as Model U.N. and Model Congress, and made exams optional. Maybe next time I have to write a check for state and local taxes, I’ll try and pay with Model $$.

“Blurred Lines” is up for a Grammy this year. Blurred thinking seems to affect some educational administrators. Boy, now that I am retired, am I glad I sleep through first period and then go to the gym.

– Les Schreiber

Oh, No!! Not Another One$$$$

gillespie

Ed Gillespie

Virginia is proud of its political history.  As we all know, it was home to many of the founding fathers. Jefferson, Mason, and Madison all hailed from the Old Dominion. However, recently we seem to be leading a trend that should give many pause.

The state has recently chosen as governor a man whose political activities mostly concerned fundraising. He is a charter member of the “Friends of Bill” Clinton club with no experience in elective office. Of course, history will judge his performance. Now we learn that the front runner for the Republican nomination to unseat Democrat Mark Warner is Ed Gillespie, a well known Republican operative with no governing experience.

Ed Gillespie is a model of what is wrong with politics in Washington. In  his recently published book, “This Town,” Mark Leibovich paints a disgusting picture of Washington with the “arrival of big money and politics.” Fueled by the rise of cable news and the 24-hour story cycle, big money following the Citizens United decision, and some very large egos, Washington has become a dung heap where the national interest is always minimized and the advancement of the political class and their self interest is the real game in town.

Ed Gillespie is a combination of lobbyist and political manager. As a lobbyist his most famous client was Enron, the Texas based electric utility and trading company whose bankruptcy and trails of executives was one of the biggest financial scandals until the mortgage crisis of 2008/2009. Press reports have already noted the appearance of  a few “Enron Ed” signs in some parts of the state. However Enron may not be this lobbyist’s  biggest problem.

His constant efforts at self-promotion have left a trail that can be followed on You Tube. In 2007, he told MSNBC that the Bush economic policies would balance the budget in 5 years. In  2012, on another show, he accepted no blame at all for the financial crisis even though his campaign web page touts his role as a senior White House official during the last 18 months of the George II Presidency. Perhaps his role was to be sure that Goldman Sachs did its patriotic duty and accepted no discount on the payments made to it by the taxpayers to settle credit default swaps issued by AIG against securities that contained mortgages that Goldman knew would fail. After all, they are the job creators doing “God’s work.”  I thought Republicans were against welfare and believed in the free market. We all await Ed’s comment on the TARP program and why it was good policy while cutting food for poor children and research money for National Institutes of Health. It seems to me, Ed would be a perfect candidate for the Russian Duma under Putin. they seem to share a belief in crony capitalism.

– Les Schreiber

Happy New Year — It’s Time To Go Back To The Future

Mel Gibson as William Wallace: FREEEEDOM!

Mel Gibson as William Wallace: FREEEEDOM!

In September 2014 the people of Scotland will vote on devolution. Should this pass, the ancestral home of my dog Tony “T” West Highland, Adam Smith and Single Malts will be independent. The Act of Union of 1707 will be terminated.

On the Continent, many are questioning the concept of European Union. Those in Southern Europe are suffering levels of unemployment not seen since the Great Depression. Their problems have been made worse by the austerity demanded by the European Central Bank. Many in Northern Europe question whether they should continue to bail out the governments and banks of the PIGS (Portugal, Ireland, Greece and Spain). In May, the elections for the European Parliament may produce anti-European majorities from The United Kingdom, France and the Netherlands.

In the United States, the Civil War and its slaughter have been remembered on its 150th anniversary. Most thought the “Lost Cause” was confined to collective memory and to movies and text books, but references to it seem to come up in unexpected places. In the wake of the passage of the Affordable Care Act, Tea Party meetings around the country attracted an eclectic combination of people. Many of these carried side arms, and appeared to be candidates for roles on “Duck Dynasty.”  MSNBC’s Chris Matthews often referred to these Tea Party types as “neo-Confederates.” Liberal web sites such as Salon and the Huffington Post began to include this term to describe the President’s opponents. At one point, the website of the New York Daily News, hardly a liberal rag, displayed many pictures to accompany a story on the Confederate flag in I-95 just south of the Richmond City limit. Even so, most did not think that political opposition really could lead to a serious breach of the union. It was colorful and got attention, but secession as a solution to political grid lock? Been There, Done That!

Having said that, an opinion piece published in the ‘Richmond Times Dispatch‘ last Thursday set off a few alarm bells. The article written by Walter Williams, a conservative pundit and economics professor at George Mason, clearly stated that he believes “that our nation is at a point where separation is the only alternative. Even during the days of “Massive Resistance,” only the KKK and their supporters called for dissolution of the Union.

Mr. Williams seems to have a problem with modernity. He writes in opposition to Social Security, public education, speed limits, zoning, and any program to aid those less fortunate. Even though these programs were enacted by an elected Congress and many passed muster with the Supreme Court, his analysis of the Constitution finds fault with all.

The question remains: Does Mr Williams speak for a fringe element, or does he have significant support within the Republican Party??

– Les Schreiber

Things Are Different on the Other side of the James

What else do you expect from a dude leaning on a pick axe?

What else do you expect from a dude leaning on a pick axe?

Last November the residents of Chesterfield proved that most of them need to take a course in intro finance. They approved a bond issue but not the mechanism to fund it. According to press reports, the county is now in a fiscal fix.

However, it must not be too bad because press reports also indicate that the superintendent of schools is up for a big raise, even though his contract is not up for over a year. I guess the “do more with less” speech given to teachers will ring especially hollow next fall.

I used to joke in my economics class about the “Tooth Fairy” school of economic thought. I never realized anybody took it seriously. I grew up in the West End. There must be something in the water “over there.”

– Les Schreiber

Is This Want Adam Smith Wanted?

Codere makes the games, Blackstone hits the jackpot.

Codere makes the games, Blackstone hits the jackpot.

As a former money manager and teacher of economics, I would not normally look to Jon Stewart’s comedy show as a source for financial news, but last evening he hit a home run. He ran a story, ignored by most in the media , concerning a  recent deal that raises many questions about the current state of the economy and especially Wall Street.

The Blackstone Group, a hedge fund/private equity firm structured a deal that raises many questions. Blackstone recently bought a credit default swap, i.e. insurance on the outstanding debt of Codere,  a troubled Spanish gaming company. It then lent Codere US$100 million with the understanding that the company would default on its outstanding debt before Blackstone would execute the new loan. In effect, Blackstone created the default that they had just insured themselves against. Is this capital formation, and risk-reward in the classic sense?

As a hedge fund, the Blackstone Group is subject to tax treatment known as “carried interest.”  This tax loophole is vigorously defended by Richmond’s own Eric Cantor, allows financial manipulators to pay a tax rate of 15% as the tax code treats all their profits as long-term capital gains. Steve Schwarzman, the head of Blackstone, is so wedded to carried interest that he once stated that the removal of this taxpayer subsidy would have consequences for the economy as devastating as the Nazi invasion of Poland in 1939 that began World War II and the Holocaust.

This trade brings up many questions. Was it legal? Insider trading, yes or no? If it was legal, why does the system allow a few firms such as Blackstone to in effect be on both sides of a transaction? Finally, why is the taxpayer subsidizing this type of manipulation through the “carried interest” section of the tax code?

– D. Leslie Schreiber

Enough With “Floydgracht”

Cyclists near VCU. Photo credit: Style Weekly.

Cyclists near VCU. Photo credit: Style Weekly.

It seems that cyclists and their supporters are getting a lot of press and a vocal, if not large, group of supporters.  As I have written previously on this blog, I spent a year in grad school at the University of Amsterdam and often biked through the Rijksmuseum to classes on one of the famous canals — the Herengracht. I don’t believe bikes are a wave of the future in Richmond or anywhere else in the United States. Pete Jordan, an American who moved to Amsterdam and stayed to open a bike shop, examines some of the historical, cultural, and geographic reasons for the popularity of cycles in Holland in his book, “In the City of Bikes.”

The Dutch never developed a domestic auto industry. The Netherlands never had anyone comparable to Henry Ford who had as his goal, “cars for everyone at affordable prices.” Autos were expensive and, as Jordan points out, credit to finance consumer goods was not readily available .

Gasoline has always been significantly more expensive in Europe than it is here. It is not unusual for gas prices to be two to be three times as high as in the US.

The availability of parking favors bikes. The center city was mostly constructed in the 17th century,  and the fact that much of the it is built on reclaimed land that is sandy,  making  it expensive to build, retards the building of garages in the business district. In fact, until the 1930′s, it was illegal to curbside park.

The old Dutch saying that God created the earth, but the Netherlanders created Holland indicates that having fought nature for centuries  to claim the land, most loath giving up space to to store autos. Holland is a small country, very densely populated with distances between cities very short by American standards. With a well developed inter-city train system, commuters tend to ride bikes to the suburban train stations  and use the tram system to take them to their place of business. Dutch cities, even the largest Amsterdam and Rotterdam, do not compare in population or square miles to a New York or Boston much less Los Angeles.

As the land was hard to acquire and building costly, most streets in the older central business districts are narrow, making it difficult for bikes and strollers to share space. The addition of cars makes things difficult. Several times a week I would see a car being raised out of a canal as a driver failed to negotiate the ancient street effectively (often under the influence of a bit too much Genever).

In his book Jordan highlights another interesting point. The tradition of Calvinism causes the Dutch to downplay outward displays of status. Autos in the U.S. are often sold as status symbols and many Americans drive to impress.  As they say in LA , “You are what you drive.”

History and culture are not the only drivers of public policy but they cannot be ignored. I doubt that the current emphasis on bikes will add significantly to urban development in the U.S. and certainly not in Richmond’s historic Fan District.

– D. Leslie Schreiber

Ken Has His 47% Moment

Some have put forth the sentiment that the Virginia GOP is really not a theocratic organization. An article in the Huffington Post cites the discovery of a speech by the “Cooch” given last year to the Christian Life Summit stating that the Republican candidate for governor was surprised that God had not imposed punishments on the USA for making abortion legal. This comment evokes memories made in the wake of 9/11 when Jerry Falwell blamed the attack on America’s gay population. Haven’t we had enough of the type of  religious bigotry put forth as mainstream politics??

– Les Schreiber

Religious Bigotry-OK in Virginia’s GOP????!!!!!!

At a recent Cuccinelli event in Northern Virginia, an introductory speaker for the G.O.P. standard-bearer distastefully told a “joke” suggesting that the Jews wished to be paid for the Last Supper.  Although Ken distanced himself from this remark, one might wonder why, in 2013, a political operative would entertain the thought that such an anti-Semitic remark would be positively received at a Republican event.

This week, the Times-Dispatch reported an amazingly bigoted speech by the G.O.P. nominee for Lt Governor, the Rev. E.W. Jackson. During a church service, he stated that those who do not follow Jesus Christ “engage in some kind of false religion.” This statement is beyond unfortunate, it is an expression of religious bigotry that has no place in contemporary politics. He even went so far as to criticize Pope Francis for reaching out to the gay community. Jackson’s anti-Semitic rant is shockingly reminiscent of a pastoral letter issued by the Polish episcopate in 1926 that helped lead to Polish acquiescence in the Nazi outrages that began a decade and a half later:

Today it is more apparent than ever before that the world is divided between 2 camps, between the camp of Christ, and the camp of Belial, between the Kingdom of Christ and the Kingdom of Satan… The other camp is striking against the very foundation of a healthy national and state system.

The persistent support of the candidacy of E.W. Jackson is indicative of a sickness in that party not seen since the rise of the America First-ers protesting American participation in the European war against Germany.  The silence of the leadership of the G.O.P. in this state raises significant questions about their political motivation and courage.

Neither Gov. McDonald, Lt. Gov. Bolling, or nominee Cuccinelli  has agitated for the removal of the anti-Semitic and anti-Catholic Jackson from the ticket.  The silence from Washington is instructive.

Eric Cantor is the only Jewish Republican in the House of Representatives. My friends in New York recall on a recent visit to the 92nd Street “Y”, Eric repeatedly referred to the moral and ethical guidance that he receives in his Hebrew faith. His silence in the face of Jackson’s overt anti-Semitism reminds me of the activities of the Judisher Ordnungsdienst, the Jewish police who for various reasons aided the Germans in the Warsaw ghetto. Few survived.

– D. Leslie Schreiber