“Hey Dad, Why do we save Billionaires, but not Teachers?”

[one...two...tree 2,762]

By Les Leopold

This week thousands of New Jersey public school students walked out of class to protest draconian school budget cuts. “Save my teacher,” their signs read. In a state that is home to a bevy of high finance billionaires, with the highest per capita income in the nation, teachers are being sacked left and right. In our town half the student body protested outside the high school. Perhaps the protesters should turn their eyes towards the twenty-five top hedge fund honchos who took in $25 billion in 2009. Their “earnings” alone could fund 658,000 entry level teachers.

It’s ironic that the battlefield in this war over resources is public education. Because the public remains entirely uneducated about the connection between those billionaires and school budget cuts. We are clueless about what the Wall Street billionaires do to earn their riches and whether it’s of any value. We might be able to understand “weapons of mass destruction,” but financial weapons of mass destruction are way beyond us.

The new earning reports are good, we read. The giant financial institutions are back to making billions through “trading.” So are these bankers grown-up versions of kids trading baseball cards–or are they robber barons? Are they enriching our society or siphoning off its wealth? Maybe the marching students of New Jersey could ask Governor Christie to explain.

Here’s what we do know for sure. Our modern financial honchos are very different from the robber barons of old. Everybody knew that Rockefeller meant oil, Ford meant cars and Carnegie meant steel.

Yes, today, we know that Gates and Jobs mean computers. But who the hell is David Tepper, and what does he produce with his Appaloosa hedge fund? He must have done something pretty impressive to earn $4 billion (not million) in 2009, the worst financial year since the Great Depression, with 29 million Americans unemployed or forced into part-time work. Then again, how much would he have “earned” had we not provided more than $8 trillion in bailout funds, loans and guarantees to the collapsed financial sector?

Mr. Tepper lives in New Jersey where the governor has gone to war with the teachers, hoping to break the union and balance the budget on the backs of our students. But Governor Christie’s enthusiasm for a balanced budget only goes so far: He’s resolutely opposed to reinstituting the “millionaires’ tax” -even though the state’s fiscal crisis is a direct consequence of what millionaires and billionaires did on Wall Street.

Mr. Tepper’s personal income for 2009 would have covered the salaries of 62 percent of public school teachers–who reach 855,600 students. (Mean salary $57,645 )

But let’s not lay it all on Tepper’s shoulders. Andrew J. Hall once worked for the financial basket case called Citigroup. When it became clear that his $100 million bonus was embarrassment for the bailed out bank, his own financial group was sold to Occidental Petroleum. He’s an oil trader.

Can some well-educated New Jersey public school student please explain: What’s an oil trader? We say it’s all about gambling – me included. But does that mean that when he wins someone else loses? Can he make bets where no one loses? Or does the house lose? Are we the house and lose by paying more for gas? Or, is Mr. Hall really a shining green knight who is helping to reduce global warming by driving up the price of oil? We don’t know enough to even ask.

And unfortunately we also don’t know enough to ask the most important question of all: Do these financial barons create economic value or are they just siphoning off wealth from other parts of the economy? Is their work productive or are they just blowing air into the next financial bubble that will explode in our faces?

Because we don’t know, we also can’t discuss how our system assigns economic value to what each of us does. Something is really screwed up when we award billions to Wall Street elites for doing things we don’t comprehend, even as we lay off teachers by the thousands.

It’s the invisible hand of the free market, we’re told. Invisible is right. We can’t see, feel, touch or even fathom the outlines of our current financial system. If we were able to shine a bright light on the financial machinations happening right now on Wall Street, we might find that our financial free markets are not all that free. We might find that a few large financial institutions have a stranglehold over many financial markets and are sucking all the money out of them. We might find a massive array of government subsidies in the form of asset guarantees and cheap borrowing facilities. We might discover that like the robber barons of old with their all-powerful “trusts,” the largest financial institutions have invented new forms of monopoly power and political influence.

How much does President Obama himself know about what our modern-day barons really do? You’ve got to wonder when he calls Jamie Dimon and Lloyd Blankfein “savvy businessmen” and says he doesn’t “begrudge” them their “success and wealth.” As the Goldman Sachs scandal unfolds from civil to criminal charges, the President may be finding out more than he wanted to know about just what the JP Morgan and Goldman Sachs execs have been up to.

The President is not alone in accepting the equation that wealth = success = deserving of our admiration. Without much reflection many of us assume that because the rich are successful, their work must have great value. But since we don’t really know what they do, their financial haul may not in fact reflect any real contribution to our society. Ask Tony Soprano.

As we stumble around in a fog of confusion about the financial industry, more and more of our economy is being eaten up by it. Financial profits and bonuses are soaring again. The share of all corporate profits that come from finance jumped from about 7 percent in 1948 to nearly 35 percent just before the recent crash. And they are rising back up to those levels right now. (You want to see some scary pictures? Check out the financial graphs at Tradersnarrative.com.)

We were once told by gurus like Robert Rubin and Alan Greenspan that this brave new financial world was the key to a bright future. The great new service sector was supposed to replace our old, polluting industrial jobs with clean, high-paying jobs in finance. American investors would be the bankers of the world. We did it better and smarter than everyone else.

But is ripping off consumers with hidden credit card fees a worthwhile activity? How about placing layers of fantasy finance bets on subprime mortgages? Is buying and selling millions of credit default swaps on Greek bonds that you don’t own a constructive activity? Would the world really suffer if we did some heavy financial industry trust-busting? We need to know more, much more.

So how do we find out? Our journalists and commentators have to dig deeper. We can’t be cowed by the enormous wealth these “successful” financiers have amassed, even if some of them are progressive philanthropists.

It’s good for America to see its bankers parade before congressional committees and offer spirited defenses of the indefensible. The more the American people can hear banking tycoons trying to justify their existence, the angrier they’ll become. But the investigations have to go deeper. Yes, Goldman Sachs seems to have pulled off a slimy scam by building securities they knew would tank and helping a hedge fund billionaire bet against them. But it’s what they do every day that really matters. We need to ask: How are your activities helping to build a better America? How are you helping to put our people to work? Do you know? Do you care?

And then we have to decide: Should we reinstitute Eisenhower-era taxes on the super-rich? Should we tax the hell out of financial gambling? Should we cut financial institutions down to size? Should we value teachers more than we value hedge fund billionaires?

Maybe the marching students already know the answers.

Les Leopold is the author of The Looting of America: How Wall Street’s Game of Fantasy Finance destroyed our Jobs, Pensions and Prosperity, and What We Can Do About It Chelsea Green Publishing, June 2009.

Article printed from SpeakEasy: http://blogs.alternet.org/speakeasy

[Danno 1,228]

By Les Leopold

This week thousands of New Jersey public school students walked out of class to protest draconian school budget cuts. “Save my teacher,” their signs read. In a state that is home to a bevy of high finance billionaires, with the highest per capita income in the nation, teachers are being sacked left and right. In our town half the student body protested outside the high school. Perhaps the protesters should turn their eyes towards the twenty-five top hedge fund honchos who took in $25 billion in 2009. Their “earnings” alone could fund 658,000 entry level teachers.

It’s ironic that the battlefield in this war over resources is public education. Because the public remains entirely uneducated about the connection between those billionaires and school budget cuts. We are clueless about what the Wall Street billionaires do to earn their riches and whether it’s of any value. We might be able to understand “weapons of mass destruction,” but financial weapons of mass destruction are way beyond us.

The new earning reports are good, we read. The giant financial institutions are back to making billions through “trading.” So are these bankers grown-up versions of kids trading baseball cards–or are they robber barons? Are they enriching our society or siphoning off its wealth? Maybe the marching students of New Jersey could ask Governor Christie to explain.

Here’s what we do know for sure. Our modern financial honchos are very different from the robber barons of old. Everybody knew that Rockefeller meant oil, Ford meant cars and Carnegie meant steel.

Yes, today, we know that Gates and Jobs mean computers. But who the hell is David Tepper, and what does he produce with his Appaloosa hedge fund? He must have done something pretty impressive to earn $4 billion (not million) in 2009, the worst financial year since the Great Depression, with 29 million Americans unemployed or forced into part-time work. Then again, how much would he have “earned” had we not provided more than $8 trillion in bailout funds, loans and guarantees to the collapsed financial sector?

Mr. Tepper lives in New Jersey where the governor has gone to war with the teachers, hoping to break the union and balance the budget on the backs of our students. But Governor Christie’s enthusiasm for a balanced budget only goes so far: He’s resolutely opposed to reinstituting the “millionaires’ tax” -even though the state’s fiscal crisis is a direct consequence of what millionaires and billionaires did on Wall Street.

Mr. Tepper’s personal income for 2009 would have covered the salaries of 62 percent of public school teachers–who reach 855,600 students. (Mean salary $57,645 )

But let’s not lay it all on Tepper’s shoulders. Andrew J. Hall once worked for the financial basket case called Citigroup. When it became clear that his $100 million bonus was embarrassment for the bailed out bank, his own financial group was sold to Occidental Petroleum. He’s an oil trader.

Can some well-educated New Jersey public school student please explain: What’s an oil trader? We say it’s all about gambling – me included. But does that mean that when he wins someone else loses? Can he make bets where no one loses? Or does the house lose? Are we the house and lose by paying more for gas? Or, is Mr. Hall really a shining green knight who is helping to reduce global warming by driving up the price of oil? We don’t know enough to even ask.

And unfortunately we also don’t know enough to ask the most important question of all: Do these financial barons create economic value or are they just siphoning off wealth from other parts of the economy? Is their work productive or are they just blowing air into the next financial bubble that will explode in our faces?

Because we don’t know, we also can’t discuss how our system assigns economic value to what each of us does. Something is really screwed up when we award billions to Wall Street elites for doing things we don’t comprehend, even as we lay off teachers by the thousands.

It’s the invisible hand of the free market, we’re told. Invisible is right. We can’t see, feel, touch or even fathom the outlines of our current financial system. If we were able to shine a bright light on the financial machinations happening right now on Wall Street, we might find that our financial free markets are not all that free. We might find that a few large financial institutions have a stranglehold over many financial markets and are sucking all the money out of them. We might find a massive array of government subsidies in the form of asset guarantees and cheap borrowing facilities. We might discover that like the robber barons of old with their all-powerful “trusts,” the largest financial institutions have invented new forms of monopoly power and political influence.

How much does President Obama himself know about what our modern-day barons really do? You’ve got to wonder when he calls Jamie Dimon and Lloyd Blankfein “savvy businessmen” and says he doesn’t “begrudge” them their “success and wealth.” As the Goldman Sachs scandal unfolds from civil to criminal charges, the President may be finding out more than he wanted to know about just what the JP Morgan and Goldman Sachs execs have been up to.

The President is not alone in accepting the equation that wealth = success = deserving of our admiration. Without much reflection many of us assume that because the rich are successful, their work must have great value. But since we don’t really know what they do, their financial haul may not in fact reflect any real contribution to our society. Ask Tony Soprano.

As we stumble around in a fog of confusion about the financial industry, more and more of our economy is being eaten up by it. Financial profits and bonuses are soaring again. The share of all corporate profits that come from finance jumped from about 7 percent in 1948 to nearly 35 percent just before the recent crash. And they are rising back up to those levels right now. (You want to see some scary pictures? Check out the financial graphs at Tradersnarrative.com.)

We were once told by gurus like Robert Rubin and Alan Greenspan that this brave new financial world was the key to a bright future. The great new service sector was supposed to replace our old, polluting industrial jobs with clean, high-paying jobs in finance. American investors would be the bankers of the world. We did it better and smarter than everyone else.

But is ripping off consumers with hidden credit card fees a worthwhile activity? How about placing layers of fantasy finance bets on subprime mortgages? Is buying and selling millions of credit default swaps on Greek bonds that you don’t own a constructive activity? Would the world really suffer if we did some heavy financial industry trust-busting? We need to know more, much more.

So how do we find out? Our journalists and commentators have to dig deeper. We can’t be cowed by the enormous wealth these “successful” financiers have amassed, even if some of them are progressive philanthropists.

It’s good for America to see its bankers parade before congressional committees and offer spirited defenses of the indefensible. The more the American people can hear banking tycoons trying to justify their existence, the angrier they’ll become. But the investigations have to go deeper. Yes, Goldman Sachs seems to have pulled off a slimy scam by building securities they knew would tank and helping a hedge fund billionaire bet against them. But it’s what they do every day that really matters. We need to ask: How are your activities helping to build a better America? How are you helping to put our people to work? Do you know? Do you care?

And then we have to decide: Should we reinstitute Eisenhower-era taxes on the super-rich? Should we tax the hell out of financial gambling? Should we cut financial institutions down to size? Should we value teachers more than we value hedge fund billionaires?

Maybe the marching students already know the answers.

Les Leopold is the author of The Looting of America: How Wall Street’s Game of Fantasy Finance destroyed our Jobs, Pensions and Prosperity, and What We Can Do About It Chelsea Green Publishing, June 2009.

Article printed from SpeakEasy: http://blogs.alternet.org/speakeasy

“Hey Dad, Why do we save Billionaires, but not Teachers?”

It's the law of -Supply and demand- son, do you know what that is?? Ohh thats right, you went to public school.

[Obama 2012 1,714]

“Hey Dad, Why do we save Billionaires, but not Teachers?”

It's the law of -Supply and demand- son, do you know what that is?? Ohh thats right, you went to public school.

“Hey Dad, Why do we save Billionaires, but not Teachers?”

Because billionaires can pay back their loans son by continuing to produce something great to the system. Teachers are victims of affirmative action and really can't teach anyone well at all these days. So their lack of salary is quite justified until the discriminatory law gets tossed out the window.

[justashooter 430]

the real question is whether a teacher should be paid $57K for a job that involves 6-7 hours work a day, 5 days a week, for 9 months of the year. a related question is if they should receive 8% pay raises every year, even during a recession in which most salaries are stagnant.

[Obama 2012 1,714]

the real question is whether a teacher should be paid $57K for a job that involves 6-7 hours work a day, 5 days a week, for 9 months of the year. a related question is if they should receive 8% pay raises every year, even during a recession in which most salaries are stagnant.

Most teachers work a lot more than that.... They do A LOT of their work after school hours at home and on the weekends...

[ready4ONE 5,400]

"Hey Dad, Why do we save Billionaires, but not Teachers?"

It's the law of -Supply and demand- son, do you know what that is?? Ohh thats right, you went to public school.

You didn't have no fancy teacher, nobody else should either huh?

the real question is whether a teacher should be paid $57K for a job that involves 6-7 hours work a day, 5 days a week, for 9 months of the year. a related question is if they should receive 8% pay raises every year, even during a recession in which most salaries are stagnant.

If you believe teaching starts and stops with the school bell you are sadly mistaken.

[spookyturtle 9,466]

You didn't have no fancy teacher, nobody else should either huh?

If you believe teaching starts and stops with the school bell you are sadly mistaken.

And not too bright to boot.

[Dan J 277]

“Hey Dad, Why do we save Billionaires, but not Teachers?”

Because billionaires can pay back their loans son by continuing to produce something great to the system. Teachers are victims of affirmative action and really can't teach anyone well at all these days. So their lack of salary is quite justified until the discriminatory law gets tossed out the window.

Thats true for those who made their money out of technological innovation. Not so much for those who exploited the markets.

[Heracles 417]

“Hey Dad, Why do we save Billionaires, but not Teachers?”

It's the law of -Supply and demand- son, do you know what that is?? Ohh thats right, you went to public school.

Danno, I could have sworn you are earning $10 mill a year. Why else would you defend people in the financial sector that do squat? But not ask, why am I danno not earning $150K? Why is it my friends and family that work hard don't earn $150K? It's honestly mind-boggling that anyone from the Midwest to the south and rural America would support this, considering you guys have received the short end of the stick.

[Heracles 417]

the real question is whether a teacher should be paid $57K for a job that involves 6-7 hours work a day, 5 days a week, for 9 months of the year. a related question is if they should receive 8% pay raises every year, even during a recession in which most salaries are stagnant.

Any of my wife's friends that are teachers start between 7 to 8 and usually finish between 5 to 6. Not to mention all of the training they do after hours and all of the work they take home. The only people who do have a sweet deal are professors at certain colleges. They receive a high salary and have quite a liberal work schedule.

With some of the stories I hear from teachers, I wouldn't teach for $300k.

[mawilson 2,133]

the real question is whether a teacher should be paid $57K for a job that involves 6-7 hours work a day, 5 days a week, for 9 months of the year. a related question is if they should receive 8% pay raises every year, even during a recession in which most salaries are stagnant.

$57k is barely above the poverty line in NJ.

[Texanadian 10]

From the article, I seem to gather that they are putting teachers ahead of hedge fund managers. And saying that hedge fund managers should pay more taxes to subsidize teacher salaries.

First of all, the fact that New Jersey has a large amount of wealthy people benefits New Jersey. States in the mid-west that have a lower share of wealthy people see less investment in their states. Less sales tax revenue, less property tax revenue, less people in general. Businesses don't grow in the mid-west like they do in the north east states or some of the southern states.

A hedge fund manager has less time off than a teacher does. Hedge fund managers are up at 4AM, studying/preparing for the day. Then it's insane stress from market open to market close. Once the market closes, there are after hours trades, foreign markets in Europe and Asia that operate while the average American is asleep. A hedge fund manager will be up until after midnight reading and planning. Who here has had a phone call telling them that the order they placed at 1PM today has gone down in value by $400,000? There's a reason most hedge fund managers retire by age 40. It's just too stressful an occupation to keep up. People are fickle. They'll pull their money from your fund if you have 1 bad year, nevermind that the last 5 years might have been great. You have to consistently beat the market to keep your customers. If you have customers who want their money back, you have to sell large amounts of stock quite possibly at a loss. This doesn't help your other customers. Of course the opposite problem happens when you're too successful. Your activity will start to move the stock itself. And it takes larger and larger bets to make a percentage back than it does for the average VisaJourney person who might be placing a few hundred dollars on a stock.

But more importantly, it's not the hedge fund person who got bailed out by the taxpayer. It's the large financial companies themselves. Who's fault is this? The person getting bailed out? Or the person who bailed them out? If you spoil your kids and buy them new cars when they turn 16, is it the kids' fault for asking for a new car? Or is it the parent's fault for spoiling them?

So what value do traders provide? Answer: The same benefit that somebody saving for retirement does. They're providing capital ($$$) into companies so that the companies can grow. The companies employ people. They make products. They buy new equipment. They update their machinery. If you owned stock in Ford, you helped them build cars and provide jobs. If you owned stock in Wells Fargo, you were helping them loan out money to people who would then try to better themselves or their company with that loaned money. Same way if you simply deposit money into a bank savings account. They pay you a tiny sum in interest and protect your money while at the same time loaning out money to people/businesses for higher interest.

The invisible hand refers to individuals serving their best interests by buying products for the cheapest amount and sellers selling their product for the highest amount. Where the two meet is the sale price. The invisible hand describes how the two parties benefit the entire society as a whole when this happens. Think how computers have gotten cheaper and made our lives easier and more beneficial. How an electronic calculator costs $5. Good businesses survive. Bad ones don't. There is no loser in the sale of goods because if there was, that side wouldn't participate.

Now if you don't want to pay money to companies, you don't have to. If you don't want to support Johnson & Johnson, then don't buy their band-aids or tylenol. If you don't like Wells Fargo, go to some other bank or credit union. Or put your money in a shoe box. You don't have to support them. Of course when government gets involved and subsidizes big business, you have no choice in the matter, other than to vote out the person who voted for it.

To think of it another way, these companies that are paying stupid high bonuses and having lobster/caviar luncheons are hurting themselves in the process. That's money they could have used in a more prudent way. Same way as people who spend lavishly on cars and expensive wine at home rather than eating cheaply and driving a paid off used car.

Traders simply want to make money by investing money into companies that will grow. If you eliminated this, you'd also eliminate 401k's, IRAs, and Roths. And we'd all be stuck with Social Security and personal piggy bank savings as our only means for saving for retirement.

School teachers are in a tough situation. The government has a monopoly as employer. And as such there really isn't much a NJ teacher can do other than move to another state that pays more. But even then, you still have the same government employer monopoly going on. Colleges and Universities can pay more because they have a competitive reason to pay their staff more. At least school teachers tend to enjoy their jobs and want to keep them until retirement. In today's world where we change professions often, it's nice that teachers can stay teachers until the end of their working career. And despite arguments about taking work home and coming to work early, it has to be nice to have the summer off, all the holidays off, weekends off.

[DEDixon 39]

Maryland has the "highest per capita income in the nation." It overtook NJ a few years ago.

[Niels Bohr 72]

I can name a tons of Nobel Laurettes who came public schools. So many imbeciles on this thread for not realizing it.