While there's time
The fix is in
You'll be a witness to that game of chance in the sky
You know we've got to win
Here at home we'll play in the city
Powered by the sun
Perfect weather for a streamlined world
There'll be spandex jackets one for everyone
Donald Fagen I.G.Y.
Wall Street thinks the coast is clear. The Fed didn't give enough ammo to suggest more quantitative easing is coming anytime soon, but it made it clear policy will be driven by Wall Street and not by Main Street. You better own stocks if you want to offset the exploding cost of food and fuel because Ben Bernanke says if there is inflation from gas it will only be temporary. If there's inflation, heck according to the Fed and national government, there isn't much to be concerned about with soaring food prices and record-breaking gas.
The result of this wink and nod was that street investors dumped gold and bonds, sending the 10-year yield soaring 9% and even pressuring corporate bonds. Safe havens of 2011 are not only laggards but under considerable pressure this year. Utility stocks surprised big time last year beating all other sectors and delivering hefty dividends to boot. I watched yesterday's session, and it followed the same script of intraday resolve and a late bounce. There was a long period, however, when the smart money guys nudged the action to induce some selling, but that didn't work. Would-be sellers are going to need to feel more pressure.
I'm not sure if this means we go straight up and twist so-so news into the great news, but I do believe the fix is in.
Our education crisis continues to bump into our economic crisis and the old ideology crisis all at the same time.
It's not talked about as an economic issue, but without a doubt, America's declining educational standards are in fact more dangerous that our debt bomb. The thing is they probably reach the point of no return at the same time. This is already the case in Greece where more than 40% of the people have never been on the Internet, and the country's 15 year old rank of last or near last in reading, math and science among all so-called developed nations (OECD). The challenges are clear, and the answer includes an all of the above approach (with all due respect to the Commander in Chief):
> The Home
> The Community
> The Schools
> Society at Large
I want to focus on the schools and their role in preparing our children for the world where a kid born in Bangladesh tomorrow will compete against a kid born simultaneously in West Virginia for the great global jobs. I think the biggest obstacles to good schools are bad teachers milking the system and being rewarded. It soon corrupts or discourages a lot of good teachers. This is an area where there has to be merit pay. By the same token, like a lot of government jobs, pay and benefits are already choking many states, cities and towns. One state under such pressure is Louisiana.
Governor Bobby Jindal of Louisiana is working on ways to make schools better with private sector approaches that typically allow the cream to rise to the top and doesn't smother young and hungry workers on slow-moving conveyer belts. The governor also aims to slow the fiscal drain on the state from education. To counter his move, teacher unions called all teachers for a massive protest that resulted in schools around the state being closed because only students showed up. I discussed this on Cavuto on the Fox News Channel yesterday and got a ton of feedback. Here are the goals of Jindal:
* Dramatically curtail tenure
* Shift hiring and firing to superintendents from school boards
* Make it easier to fire bad teachers
* Increase charter schools
* Create formula using public school outlays to pay for private schools for low-income students
Essentially, we are talking teachers having to continuously earn their keep much like the rest of the world. The plan creates competition and rewards merit rather than seniority. Yesterday teachers put students last. I would argue it has been lingering longer than just yesterday. Here are some statistics:
44% of state's public schools received grades of D or F
The state ranks last in English and Math
In 2010, 230,000 students were below grade level—1/3 of all students
The state's teachers earned $42,816 in 2007—ranking 38 in the nation
I know that's not a lot of money, but it doesn't include pensions. Teachers' unions are a huge problem. I did get a wonderful email from a volunteer in the Louisiana school system who disagrees with my assessment. I think it's touching and invite everyone to view it at www.wstreet.com. Not to be outdone, the California Teachers Association finally came to an agreement with Governor Jerry Brown. In an effort to not give up any pay or benefits, they have pushed the governor to up his millionaires' tax to seven years from five and to even higher brackets. The plan begins its higher rates with couples making $250,000 and seeks to hammer those above $500,000. For the record, California teachers earned $63,640 (2007) not counting benefits and rank number one in the country.
I'm not sure why a teacher in California would earn so much more than one in South Dakota ($35,378). One thing I know for sure is successful people in California are NOT the problem with lagging education and overpaid teachers. It would be a crime to continue this onslaught of wealth redistribution. It deflects from real challenges and issues. Of course so many innovative, resourceful, and smart people have already bolted the Golden State already.
This is the kind of deal movie stars will support because it's no sweat for them, but it's a nightmare for small businesses or successful, but not millionaire, households that thought they would be patted on the back for reaching the American dream—not become chattel for teachers' unions looking to avoid the shared sacrifice.