I showed yesterday the National AFT Teacher's Union leader Weingartner standing on a stage at a university under the Clinton Initiative banner and these national US labor union leaders do this on university stages all over the world. This is premium advertizement for Wall Street and global neo-liberalism as US unions are made tools of autocratic totalitarianism. This happens because US unions were allowed to become financial institutions----they are operating as banks profiting from this criminal stock market. When students around the world see labor unions on stage with Clinton and neo-liberalism they are not made aware that Clinton and neo-liberalism killed US unions, the middle-class and all labor laws fought and won for a century. US LABOR UNION LEADERS DO NOT EDUCATE OR MENTION THIS----THEY STAND BESIDE CLINTON NEO-LIBERALISM . Real progressive labor and justice Democrats should be out there BOOing Weingarten.
Meanwhile, in Europe where unions still work for labor------the Labour Party is being cleaned of neo-liberals and Clinton's counterpart in neo-liberalism, Tony Blair is sold as a criminal needing to go to jail by unions.
THESE ARE OUR FUTURE CITIZENS FOLKS----IF WE DO NOT EDUCATE AND HELP UNIVERSITY STUDENTS FIND A REAL PROGRESSIVE VOICE---CLINTON NEO-LIBERALISM WILL MAKE UP ONE.
While Americans are still being told Clinton is a liberal Democrat with labor leaders standing under the Clinton neo-liberal banner-----Europeans a decade ago were in the streets against neo-liberalism and there are the unions and students. THIS IS THE DIFFERENCE AND WHY CLINTON HAS HELD ON SO LONG IN THE US-----UNIONS AND STUDENTS IN THE US ARE STILL BEING SOLD NEO-LIBERALISM AS AN NATIONAL ECONOMIC STRATEGY.
European universities are still public and academic in freedom and political discourse but guess who set up shop in Sweden recently? THE CLINTON INITIATIVE-----WITH THE GOAL OF TAKING EUROPEAN UNIVERSITIES CORPORATE AND NEO-LIBERAL.
Brussels: 150.000 demonstrate against neo-liberalism
Wed, 23/03/2005 - 10:13 The Belgian capital saw a massive demonstration against the upcoming summit of the European Union designed to review the results of five years of implementing the neoliberal Lisbon Agenda.
The march assembled as Gare du Midi from midday onwards and passed through to main streets up to the final rally at the Gare du Nord.
Just to give an indication of the size of the demonstration: It took five hours till the last marchers arrived at the final destination of the march.
The initiative for the demonstration had been a call made at the last European Social Forum in London as an international demonstration against the neo-liberal attacks, the capitalist EU draft constitution and against war and occupation of Iraq.
But the European Social Forum failed to make the call a united European demonstration and a rallying point to bring together the various struggles. Even at the London ESF itself the UK Stop the War Coalition, in fact the leadership of the Socialist Workers Party, insisted that on 19 March they would be demonstrating in London against the war, not in Brussels against the European bosses’ offensive. In this the Italian section of the ESF backed them. The result was that virtually no one came from Britain and the Italian forces were much reduced.
The leadership of the demonstration and the mobilisation itself was almost completely left to the European Trade Union council (ETUC) and the national ETUC-leaderships and bureaucracies.
No wonder that the speeches at the beginning as well as at the end were a “who is who” of the European trade union bureaucracy. The rally of the social movements at Port d’Anderlecht was politically more left wing, but completely sidelined.
John Monks, ETUC-leader’s speech, showed clearly, what the ETUC’s impact was. The speech did not mention he war and occupation at all. It did not criticise the European constitution. It focused entirely on the Bolkestein directive, calling for the withdrawal of “Frankenstein’s Europe” and a plaintive appeal to the European Commission to “rework” the directive.
The European Social Forum also failed to provide any call to unite the mass struggles in defence of social gains, such as the recent ones in France, the (threatened but then called -off) strike against the pensions robbery in Britain and all the other struggles in Europe. It also failed to put any demands on the European Trade Union leaders. The “Social Movements” and Attac formed the end of the march, symbolically trailing behind the union leaders.
The march itself started of with the youth march - mainly a march of Trade Union youth and students associations from Belgium. It was a loud parade with huge trucks and sound systems. REVOLUTION- the socialist youth organisation had a small, but lively contingent in the demonstration and distributed thousands of leaflets in French and other languages to the marchers.
Then the main march of the unions followed. There were large and impressive contingents from Belgium and the Netherlands. Also some East European countries like Romania, Slovenia and Poland had sizable and well organised contingents on the march.
The British union movement was almost invisible represented by only a few unison placards. But the German unions also failed to turn up in large numbers: between 7.000 and 10.000 from Europe’s largest country. This failure to mobilise significant numbers was the result of the unions’ refusal to make the demonstration a public campaigning event and focus.
It was the French and Belgian workers movement, who saved the demonstration from outright failure. And amongst them it was the CGT who mobilised the largest and most militant contingents. It alone had several 10.000s on the demonstrations, divided up into regional and local sections with sound systems. The CGT, one has to day, dwarfed the other French unions including the more radical one’s like SUD and G 10.
The CGT blocks were also the most political and militant, chanting loudly and throwing loud and smoky firecrackers. More importantly, it was they who successfully challenged the political timidity of the ETUC. The ETUC wanted to restrict the whole demonstration to protest against Bolkestein directive on services.
The CGT (and most of the other French unions and unions from the Benelux as well) made the fight against the neo-liberal European constitution a major focus of their political intervention and slogans. Tens of thousands of stickers against the constitution were distributed.
The 5000 leaflets members of our international tendency from Britain, France, Germany and Sweden distributed were extremely well received by the French workers, who took bundles to distribute themselves.
The impressive and encouraging role played by the CGT workers was also a result of the recent struggles in France for the 35 hour week and of central importance the question of the European constitution plays in the mind of the French labour movement and population in general.
But the “European day of action” was in reality no real Europe-wide event. The mass demonstration in Brussels was accompanied by mass demonstrations in London and Rome against the occupation of Iraq. But it was - unfortunately - a coincidence of dates, rather than a coordinated action.
This poses the question “to be or not to be” to the European Social Forum. Can it become a centre for mobilising such action or will it remain a mere talking shop— a think tank for vapid reformist policies with no takers in the reformist parties. Since the Florence ESF’s courageous antiwar call, which led to worldwide demonstrations by tens of millions on February 15th 2003, the ESF has just vegetated. It has repeatedly failed to give a lead to the widespread struggles of workers and youth that wracked Europe over the last two years.
In fact to avoid a rapid descent into irrelevancy the next European Preparatory Assembly of the ESF, due to take place in Prague in mid-May, must give a lead in bringing together the various struggles, in encouraging forces like the French CGT with its mass working class membership and the East European Unions together in a real Europe-wide co-ordination of struggles against the social attacks, the constitution and imperialist war. Otherwise, the European Social Forum will remain - as it proved to be in Brussels - a feeble appendage of the ETUC - rather than an organ to challenge the old bureaucratic apparatuses.
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Obama placed Clinton's corporatization of American universities on steroids while having a super-majority of supposed Democrats in Senate and House. The Democratic voters expected public schools to be strengthened and resourced as Congress and Obama talked of rebuilding American education and what it got was a continuation of Clinton defunding of the public in American schools and building of the corporate.
WE HAD A SUPER-MAJORITY OF DEMOCRATS AND GOT THE MOST GLOBAL CORPORATE NEO-LIBERAL OF EDUCATION REFORMS BECAUSE MOST DEMOCRATIC POLS IN THE SENATE AND HOUSE ARE CLINTON NEO-LIBERALS---NOT DEMOCRATS!
Democratic voters did not know where these policies were going in 2009 when they were marketed as strengthening education in America----but national labor and justice leaders DID. SO DID UNIVERSITY ACADEMICS. Instead of sending billions of Federal funding into the classrooms and building schools----Obama and neo-liberals spent hundreds of billions building the infrastructure for corporate K-12 charters and super-sized corporate R and D on university campuses. Why did Obama and neo-liberals in Congress tie school rebuilding to bond leverage and not send money?
BECAUSE THEY KNEW THEY WERE GOING TO IMPLODE THE US BOND MARKET SENDING ALL TIED TO CREDIT BOND LEVERAGE INTO DEFAULT. IT IS CRIMINAL TO PLAN TO DEFRAUD THE AMERICAN PEOPLE.
Below you see a great document I cannot post on whole---please search the title. It shows how to move against this corporate capture but it waits until the city is in the worst of stances-----don't wait for bankruptcy to fight this and it begins by getting rid of city halls and mayors tied to Clinton and Bush neo-liberals and neo-cons. Note that this Detroit complaint identifies the bond deals tied to schools that were made charters after the bankruptcy.
Title 6 Complaint----Public School System of Detroit after bankruptcy -
Go Left America has worked with the people of the Detroit School Board to file a Title 6 complaint against the state of Michigan for its practices in school districts primarily in minority districts. This is the complaint and these are their stories.
BUILD AMERICA BONDS WAS A POLICY MEANT TO SUPER-HEAT THE US TREASURY BOND MARKET AS THESE BONDS WERE SOLD ALL OVER THE WORLD---JUST AS SUBPRIME MORTGAGE LOANS AND NOW WE ARE HEADING INTO A BOND MARKET CRASH-----WITH PUBLIC SCHOOLS TIED TO THIS BOND DEBT.
When we know our government is defrauding its citizens we can simply default on all that bond debt because these deals were illegal. If left in place as Wall Street wants-----all public schools tied to this bond debt will default into the hands of private investors just as it did in Detroit.
Bond Market Crash Will Strike By 2016, Expert... econintersect.com/.../06/bond-market-crash-will-strike-by... Not only is a bond market crash inevitable, but it will hit sooner than many think - by 2015 or 2016 at the latest, according to Michael Pento, president of Pento ...
Aid for Facilities
Economic stimulus funds from the federal government provide numerous avenues for schools and universities to improve facilities.
Jun 1, 2009 Mike Kennedy
Build America Bonds also will benefit South Dakota State University, Brookings, with a student union expansion. Photo courtesy of Eric Landwehr" src="http://asumag.com/images/stimulus-200906.jpg"><strong>Build America Bonds also will benefit South Dakota State University, Brookings, with a student union expansion.</strong> Photo courtesy of Eric LandwehrEven before the state fire marshal ordered the Somersworth (N.H.) School District in 2007 to abandon the top two floors of Hilltop Elementary School because of safety concerns, folks in the city of 12,000 had been debating whether the aging facility should be replaced — and how to pay for it.
Finally, in February 2009, despite the grumblings from residents who thought Somersworth couldn't afford it, the city council approved plans to issue $19.9 million in bonds to pay for construction of a new 450-student elementary school.
Three months later, the price tag became a little easier to swallow when the New Hampshire School Building Authority awarded Somersworth $19.9 million in zero-interest Qualified School Construction Bonds, part of the federal government economic stimulus package.
Somersworth is one of many communities whose schools and universities stand to benefit from the stimulus — formally known as The American Recovery and Reinvestment Act of 2009 — that Congress approved to help the U.S. economy regain its health.
"It's going to save us $12 million to $15 million over the life of the bonds," says Karen Soule, superintendent of School Administrative Unit 56, which includes the Somersworth district.
Many avenues to aidPreliminary versions of the economic stimulus legislation in Congress proposed allocating billions of dollars to pay for school facility upgrades — a version passed by the House called for $16 billion in school construction funding. But after House and Senate negotiators got together to work out differences and craft the final bill, that provision was eliminated from the $787 billion package.
Still, the recovery effort offers schools and universities various subsidies, grants, tax credits and other incentives to alleviate the cost of modernizing and constructing facilities.
Among those:
The people in Somersworth knew they had to address the inadequate conditions at Hilltop Elementary, but like a lot of communities trying to make ends meet, they kept putting off the hard decisions.
State officials tried to force the city to act in August 2007. Two weeks before classes were to begin, the state fire marshal ruled that the second and third floors of Hilltop had significant fire-safety problems and had to be closed.
School officials scrambled to acquire portable classrooms to begin the school year on time. While the community debated whether Hilltop could be renovated, the district spent more than $250,000 on portables and additional transportation costs.
The city council, as well as the school board, was required to approve any plan for a new school. In December 2007, the council approved the purchase of a site. The school board concluded that even if safety issues were resolved, Hilltop, a 25,000-square-foot facility built in 1927, could not be renovated or expanded to become an effective 21st-century learning space. In June 2008, the board approved a $19.9 million plan for a 74,300-square-foot, K-5 elementary school.
And the debate went on. The city council in September 2008 voted 5-4 in favor of the project, but a two-thirds majority was needed for approval. In January 2009, Lyonel Tracy, the commissioner of education in New Hampshire, delivered a tongue lashing in a letter to Somersworth Mayor Michael Micucci:
"I am disappointed by your comment that some in the community do not see a need to move forward. How can that be when the State Fire Marshal has found it necessary to close two-thirds of the building? The Hilltop School building is not safe for your children to occupy …. The continued lack of action by the City Council is disturbing. Something must be done."
And, finally, something was done. The city council approved the plan in February, but not without misgivings about spending $19.9 million. So when the state awarded Somersworth the zero-interest bonds, much of the anxiety about moving forward was eased, Soule says.
"This is such an opportunity for us," she says. "This will allow us to expand and have enough space for years to come."
Soule expects the new elementary to open in 2011.
Build AmericaFor schools and universities with construction projects already in the works, Build America Bonds enable them to get a better deal on the bonds they are selling.
Education institutions using the program receive a federal subsidy equal to 35 percent of the interest costs of the bonds. In effect, the subsidy results in a lower interest rate for school systems while making the bonds more attractive for buyers.
The Olathe (Kan.) district used the Build America Bond program in May to sell $95 million in bonds, says Gary Diener, Olathe's executive director of business and finance.
Among the projects those bonds will help pay for are a new junior high, and for additions at all four district high schools so that the campuses can accommodate ninth-graders.
In South Dakota, the Board of Regents has approved the sale of $90 million in Build America Bonds to pay for projects at four campuses, says Janelle Toman, director of information and institutional research for the regents. Those include a new residence hall and an expansion of the student union at South Dakota State University in Brookings; a new residence hall and a student wellness center at the University of South Dakota in Vermillion; renovations of residence halls and a student center at the South Dakota School of Mines and Technology in Rapid City; and a residence hall renovation at Northern State University in Aberdeen.
First in lineThe San Diego Unified School District achieved the distinction in April of becoming the first school system to sell Qualified School Construction Bonds as authorized in The American Recovery and Reinvestment Act.
As one of the largest districts in the nation with more than 110,000 students, the economic stimulus package gave the San Diego district the authority to issue $38.8 million in the zero-interest bonds.
The bonds will pay for some of the $2.1 billion construction program known as Proposition S, which voters approved in November 2008.
Yes, you may — but maybe you shouldn'tWhen the economic stimulus package was approved, the U.S. Education Department guidelines stated that local education agencies (LEAs) were allowed to use Education Stabilization funds for new construction. But in May, the department revised its guidelines to say, "Yes, but … "
"An LEA … may use the funds to support the construction of new school buildings," the Education Department stated. "However, the Department discourages LEAs from using Education Stabilization funds for new construction because this use of funds may limit an LEA's ability to meet other essential needs or implement necessary reform initiatives."
The department makes a distinction between new construction and modernization. It is not discouraging school systems from using stabilization funds for modernization, renovation or repair.
The statement also warns states and school systems that Education Secretary Arne Duncan will take into account whether they have used stabilization funds for new construction when he decides who will get some of the $5 billion in competitive grants under his discretion.
The Education Department plans to conduct a competition among states for a $4.35 billion "Race to the Top" fund to improve education quality and results. Another $650 million will be available through the "Invest in What Works and Innovation" fund. Districts and non-profit groups with a strong track record of improving education will compete for those funds, the department says.
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Remember, Obama's education policy moved community colleges from a stepping stone to 4 year university to being a job training center-----an extension of corporate Human Resources. Where are all of the bond debt school building going? To those public school structures that Wall Street wants to privatize into corporate neo-liberal education.......K-12 school buildings, community college buildings, and university research facilities.
Sending in the economic crash and bond market collapse will create the excuse that the Federal, state, and local government has no money and defaulted debt and VOILA-----corporations must come in to take over schools at all levels.
You can see how moving from the 1970s when the corporate think tanks took hold on college campuses moving universities from academic and free thought to market-based corporate education-----and now policy geared to hand the actual physical building structures to corporations.
If we have city halls with city council and mayors who are REAL progressives in 2016 when this economic crash hits-----they will simply declare these bonds illegal fraud and VOID the debt. Clinton neo-liberals and Bush neo-cons as in Baltimore will do as Detroit City Council did-----send it all into bankruptcy.
California is ground zero for for-profit education fraud and the Reagan neo-liberalism has made the once best in the world public education system one of the most corporate and neo-liberal. You see where California is leading in tying schools to bond debt----as is Baltimore.
THIS IS WHY WHEN YOU SEE A DEMOCRATIC PRIMARY WITH TWO CLINTON NEO-LIBERALS AND NO REAL PROGRESSIVES FIGHTING IT OUT---NO MATTER RACE, CREED, OR GENDER----THE AMERICAN PEOPLE HAVE NO ONE IN THESE RACES WORKING FOR THEIR INTERESTS---IT IS ALL WALL STREET.
Who was brought out to support these school bond deals-----the NAACP and Labor union members made all of this fraud seem legitimate and in Maryland the ACLU partnered with Wall Street in this. It is a disgrace. In Maryland's case O'Malley tied what he knew would be soaring profit for Wall Street to property taxes for decades.
Risky bonds tie schools to huge debt
About 200 districts in California may have to pay as much as 10 to 20 times the amount borrowed.
November 29, 2012|Dan Weikel
Newport Harbor High School in Newport Beach is part of the Newport Mesa School… (Mark Boster / Los Angeles…) Two hundred school districts across California have borrowed billions of dollars using a costly and risky form of financing that has saddled them with staggering debt, according to a Times analysis.
Schools and community colleges have turned increasingly to so-called capital appreciation bonds in the economic downturn, which depressed property values and made it harder for districts to raise money for new classrooms, auditoriums and sports facilities.
Unlike conventional shorter-term bonds that require payments to begin immediately, this type of borrowing lets districts postpone the start of payments for decades. Some districts are gambling the economic picture will improve in the decades ahead, with local tax collections increasingly enough to repay the notes.
CABs, as the bonds are known, allow schools to borrow large sums without violating state or locally imposed caps on property taxes, at least in the short term. But the lengthy delays in repayment increase interest expenses, in some cases to as much as 10 or 20 times the amount borrowed.
For The Record
Los Angeles Times Wednesday, December 05, 2012 Home Edition Main News Part A Page 4 News Desk 2 inches; 73 words Type of Material: Correction
School bonds: An article in the Nov. 29 Section A about a risky type of construction financing used by school districts said that news of one bond issued by the Poway district was first reported by the Voice of San Diego website. That website has acknowledged that its work was assisted by Joel Thurtell, a retired reporter for the Detroit Free Press who had previously written about the bonds in a blog post.
The practice is controversial and has been banned in at least one state. In California, prominent government officials charged with watching the public purse are warning school districts to avoid the transactions.
One sounding the alarm is California Treasurer Bill Lockyer, who compares CABs to the sort of creative Wall Street financing that contributed to the housing bubble, the subsequent debt crisis and the nation's lingering economic malaise.
Most school bonds, like home mortgages, require roughly $2 to $3 to be paid back for every $1 borrowed. But CABs compound interest for much longer periods, meaning repayment costs are often many times that of traditional school bonds.
And property owners -- not the school system -- are likely to be on the hook for bigger tax bills if the agency's revenues can't cover future bond payments, Lockyer and other critics say.
Several financial consultants who advise school districts on CABs declined to comment, as did the chairman of their trade group. Education officials acknowledge some drawbacks with CABs, but argue that the bonds are funding vital educational projects.
The Newport Mesa Unified School District in Orange County issued $83 million in long-term notes in May 2011. Principal and interest will total about $548 million, but officials say they are confident they can pay off the debt.
The bonds "have allowed us to provide for facilities that are needed now," said the district's business manager, Paul Reed. "We could not afford to wait another 10 years."
Overall, 200 school systems, roughly a fifth of the districts statewide, have borrowed more than $2.8 billion since 2007 using CABs with maturities longer than 25 years. They will have to pay back about $16.3 billion in principal and interest, or an average of 5.8 times the amount they borrowed.
Nearly 70% of the money borrowed involves extended 30- to 40-year notes, which will cost district taxpayers $13.1 billion, or about 6.6 times the amount borrowed on average.
State and county treasurers say debt payments of no more than four times principal are considered reasonable, though some recommend a more conservative limit of three times.
"This is part of the 'new' Wall Street," Lockyer said. "It has done this kind of thing on the private investor side for years, then the housing market and now its public entities."
The Poway Unified School District, which serves middle-class communities in north San Diego County, is one of the school systems faced with massive CAB debt payments. In 2011, it issued $105 million in capital appreciation bonds to complete a school rebuilding program.
Because the recession had depressed property values and tax revenue, Poway district officials realized that using conventional bonds might jeopardize a promise to district voters to limit the tax rate.
So on the advice of an Irvine-based financial consulting firm, they turned to the long-term notes. Under the deal, the school board could keep construction moving, avoid reneging on its pledge to voters and stay within the legal limits. And it would not have to repay the bonds for decades.
By the maturity date of 2051, however, the $105 million in Poway notes will cost district taxpayers almost $1 billion in principal and interest -- more than $9 for every $1 borrowed.
That deal, first reported by the Voice of San Diego news website, raised alarms. But some Poway officials defend it as necessary to complete much-needed projects.
"It was well worth it," said Jennifer Zaheer, president of the Palomar Council Parent Teachers Assn., which serves Poway Unified. "In my son's experience, there's a big difference between using a trailer and having a new classroom."
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You see Texas tied its school bond debt to property tax just as O'Malley did in Maryland and Baltimore. This supposedly made it a AAA bond investment. As we see below, the citizens voted these bond deals in as they did in Baltimore----but in Baltimore we have a 17% voter turnout and no education on the ramifications of these deals---they are just sold as good for schools and children.
Instead, it is killing public education by taking the very school buildings that house public education and giving excuse for handing them to national charter chains. As we know here in Maryland as I bet in Texas----the new Governor Hogan is ready to move national charter chains into Baltimore after this bond default.
In Europe it is labor and justice organizations educating people as to why all of this is to be avoided and fighting it as it happens.....in the US it is labor and justice that is brought out to sell these Wall Street deals. THIS IS WHAT MUST CHANGE! WE NEED PROGRESSIVE LABOR AND JUSTICE TO TAKE BACK THE DEMOCRATIC PARTY.
If the American people are told this is a Wall Street scheme filled with fraud with a goal of imploding the economy and sending more public wealth to the rich---THEN VOTERS WOULD NOT APPROVE THESE POLICIES-----THAT YOUR POLS ARE PUSHING ON YOU!
Texas Drowning In School Bond Debt, $75B Before Interest
by Merrill Hope17 Nov 201416
Already on the hook for $65 billion in outstanding school bond debt approved and issued between 2007-2013, Texans voted in more mega-school bond debt statewide in 2014 that will pile nearly $10 billion more onto the statewide property tax payer tab. For public school debt alone, Texans will owe almost $75 billion — before interest. In the latest go-round of school bonds on the November ballot, the meatiest measure to pass was in Katy Independent School District (ISD), weighing in at $748,118,930, followed by Fort Bend ISD at $484,157,027 and Garland ISD at $455,500,000, the last of which boasted that this was its largest bond package in the district’s history.
According to the Dallas Morning News, the funds were needed for aging facilities and school security:
“Dallas County’s second-largest district was also proposing a natatorium and a career tech center in its first bond election since 2002. The money will be used to upgrade exterior cameras, add fire alarms, provide interior sprinkler systems for 35 campuses and secure the entrances at 64 schools.” Other approved big bonds around the state included Lamar ISD, whose voters approved $240.6 million; Birdsville, $163.2 million, Brazosport, $175 million; Bryan ISD $132 million, Corpus Cristi ISD, $100 million; Duncanville ISD, $102.5 million; Del Valle ISD, $134 million; and Pasadena ISD, $175.5. Wylie ISD’s $94.2 million bond measure claimed no tax increase for residents, also according to the article.
Texas caps school property tax at the current $0.50 of $100 taxable value. Keller ISD, which just passed a $169.5 million bond, is one of the many districts that where the $0.50 property tax limit is in place but even so, the total taxpayer liability is over $1.4 billion (including principal & interest), and that translates into a debt payment of over $42,000 per student, which Empower Texans called “nearly three times the state average in a state with the second highest, per capita local debt.”
The Fast Growth School Coalition (FGSC) is a name that comes up repeatedly with school district bonds. In an earlier article, Empower Texans described FGSC dubiously as a “voluntary association of who’ve organized for the explicit purpose of lobbying legislators to raise your property taxes and eliminate existing borrowing limits.”
They have also called FGSC the “unholy alliance of pro-debt special interests, school administrators, and taxpayer-funded lobbyists that stand ready to feed from the ISD bond money trough. Fast Growth’s stated purpose is to substantially increase spending on school facilities and repeal the few debt and tax limits set on ISDs by Texas law.”
Last May’s approved bloated bond measures included $1.2 billion for Cypress-Fairbanks ISD and $775 million for Frisco ISD. The new Frisco property taxpayer debt was heaped onto existing $798 million outstanding debt from a 2006 school bond measure. In 2003, voters had approved a $498 million bond. Along the way seven elementary schools went missing because funds were diverted.
The Texas Public Policy Foundation (TPPF) also took a long, hard look at the Frisco ISD measure, pointing out that on a 30-year bond at 4 percent interest, Frisco school district taxpayers would be on the hook for $556 million worth of interest which factored in with principal costs, would bring the amount owed by Frisco taxpayers for just the 2014 bond to a shocking $1.33 billion, which Breitbart Texas reported.
Meanwhile Frisco ISD already held $2.6 billion in principal and interest debt outstanding. That came out to roughly $56,000 per enrolled student. Today Frisco ISD’s debt level is more than twice that of the surrounding school districts — Lewisville ISD ($1.7 billion), Plano ISD ($1.4 billion), Denton ISD ($1.1 billion), Allen ISD ($806 million) and McKinney ISD ($712 million).
James Quintero, Director of the TPPF’s Center for Local Governance provided Breitbart Texaswith a searing reality check on the staggering actual costs of school bonds for Texans. He broke down the figures statewide with not just principal but with interest on bonds issued as of August 31, 2013.
The “face value” of what people voted on in those bond measures or “principal” may have totaled $65,104,657,568 but once the known interest on the loans were folded in, that layered another $42,971,809,762 onto the debt.
The actual grand total of public school district debt was $108 billion, or $108,076,467,330 to be exact.
May and November 2014 approved bonds were not factored into these calculations because they have not yet been issued, which means the interest is not yet known. Breitbart Texas also spoke to Ross Kecseg, Director of Empower Texans’ Metroplex office. His emphasis is county and local government.
Kecseg said the interest costs are “significant” and underscored that “you’re paying for it with property taxes.”
He explained, “Under the current state law, local governments are not required to disclose the interest costs on the ballot for voters. In other words, interest is a hidden cost taxpayers don’t see until it shows up on their property tax bill.”
Another key factor is the funding mechanism behind school bonds — like Capital Appreciation Bonds (CABs). In 2013, Watchdog.org looked at this issue, calling CABs “a product of their time, of $17 trillion national debts, incalculable unfunded national, state and local liabilities and grotesquely underfunded public pensions.”
Unlike the more common current interest bonds, which require that the issuer pay off the principal and interest throughout the term of the bond, interest on capital appreciation bonds compounds and accumulates until maturity. It’s more of a kick the can down the road approach. By the time the bill comes due for a new generation of taxpayers, many of whom had no say in issuing the bonds, the elected officials who did are long out of office or dead, Watchdog.orgalso wrote.
Breitbart Texas highlighted another problem — school CABs do not have regular payments. Interest and principle accrue and compound until maturity when a “balloon payment” is due.
One of the more disconcerting realities is unpredictability. Previously, TPPF pointed out toBreitbart Texas that the success of a CAB is reliant on “the continued explosive growth of Frisco and the surrounding area to meet its obligations. The need to expand must be balanced against the reality that Frisco’s present fiscal situation is tenuous at best.”
This kind of funding formula wilts in times of economic downturn, leaving Frisco ISD “stuck with an enormous amount of debt and facilities it cannot fill and taxpayers are going to have to pick up the tab,” according to TPPF.
In 2011, the Comptroller’s office reported that Texas had the second highest debt in the nation. Public school bonds are not the only debt in Texas — yet accounts for the largest category of debt in the state.
Through August 2013, the actual current total local debt total with principal and interest accounted for in Texas is $328 billion. Cities, towns and villages debt ranks second largest to public school debt at $102,966,602,537 for issued principal plus interest.
Among the six bonds to fail in this November election was Bridge City ISD’s $25 million construction proposal that would have provided a new fine arts complex and other unspecified district improvements according to KFDM. The voters of the small community less than 50 miles from Lake Charles, Louisiana said something most other Texas school districts have had a tough time saying, ‘no.’
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All of this gained power with Reagan/Clinton neo-liberalism. As Reagan and Clinton dismantled all Federal oversight and accountability, the Federal coffers were sucked dry with fraud and it all was made to look like increased spending on social and education programs when it was simply fraud. Neo-liberalism is naked capitalism and if you think you can have free market deregulation without this fraudulent free-for-all-----you are not paying attention.
You see below how corporations in the 1970s planned to turn the progressive hold on the country around to corporate market-based policy and we went from having broad, open political discussion and debate in universities, media, labor unions and justice organizations----and even church pulpits----to all of the above captured to this global neo-liberalism in both parties----Bush neo-cons and Clinton neo-liberals are the same global corporate tribunal party pols!
Patient nurturing of movement-building work remains the exception to the rule among foundations that purport to strengthen democracy and citizen engagement. The growing movement to revoke corporate personhood is supported almost entirely from contributions by individual (real) people like you. Please consider supporting the work of groups like Move to Amend, Free Speech for People and Reclaim Democracy! that devote themselves to this essential movement-building work, rather than short-term projects and results demanded by most foundations.
Meanwhile, in Europe where unions still work for labor------the Labour Party is being cleaned of neo-liberals and Clinton's counterpart in neo-liberalism, Tony Blair is sold as a criminal needing to go to jail by unions.
THESE ARE OUR FUTURE CITIZENS FOLKS----IF WE DO NOT EDUCATE AND HELP UNIVERSITY STUDENTS FIND A REAL PROGRESSIVE VOICE---CLINTON NEO-LIBERALISM WILL MAKE UP ONE.
While Americans are still being told Clinton is a liberal Democrat with labor leaders standing under the Clinton neo-liberal banner-----Europeans a decade ago were in the streets against neo-liberalism and there are the unions and students. THIS IS THE DIFFERENCE AND WHY CLINTON HAS HELD ON SO LONG IN THE US-----UNIONS AND STUDENTS IN THE US ARE STILL BEING SOLD NEO-LIBERALISM AS AN NATIONAL ECONOMIC STRATEGY.
European universities are still public and academic in freedom and political discourse but guess who set up shop in Sweden recently? THE CLINTON INITIATIVE-----WITH THE GOAL OF TAKING EUROPEAN UNIVERSITIES CORPORATE AND NEO-LIBERAL.
Brussels: 150.000 demonstrate against neo-liberalism
Wed, 23/03/2005 - 10:13 The Belgian capital saw a massive demonstration against the upcoming summit of the European Union designed to review the results of five years of implementing the neoliberal Lisbon Agenda.
The march assembled as Gare du Midi from midday onwards and passed through to main streets up to the final rally at the Gare du Nord.
Just to give an indication of the size of the demonstration: It took five hours till the last marchers arrived at the final destination of the march.
The initiative for the demonstration had been a call made at the last European Social Forum in London as an international demonstration against the neo-liberal attacks, the capitalist EU draft constitution and against war and occupation of Iraq.
But the European Social Forum failed to make the call a united European demonstration and a rallying point to bring together the various struggles. Even at the London ESF itself the UK Stop the War Coalition, in fact the leadership of the Socialist Workers Party, insisted that on 19 March they would be demonstrating in London against the war, not in Brussels against the European bosses’ offensive. In this the Italian section of the ESF backed them. The result was that virtually no one came from Britain and the Italian forces were much reduced.
The leadership of the demonstration and the mobilisation itself was almost completely left to the European Trade Union council (ETUC) and the national ETUC-leaderships and bureaucracies.
No wonder that the speeches at the beginning as well as at the end were a “who is who” of the European trade union bureaucracy. The rally of the social movements at Port d’Anderlecht was politically more left wing, but completely sidelined.
John Monks, ETUC-leader’s speech, showed clearly, what the ETUC’s impact was. The speech did not mention he war and occupation at all. It did not criticise the European constitution. It focused entirely on the Bolkestein directive, calling for the withdrawal of “Frankenstein’s Europe” and a plaintive appeal to the European Commission to “rework” the directive.
The European Social Forum also failed to provide any call to unite the mass struggles in defence of social gains, such as the recent ones in France, the (threatened but then called -off) strike against the pensions robbery in Britain and all the other struggles in Europe. It also failed to put any demands on the European Trade Union leaders. The “Social Movements” and Attac formed the end of the march, symbolically trailing behind the union leaders.
The march itself started of with the youth march - mainly a march of Trade Union youth and students associations from Belgium. It was a loud parade with huge trucks and sound systems. REVOLUTION- the socialist youth organisation had a small, but lively contingent in the demonstration and distributed thousands of leaflets in French and other languages to the marchers.
Then the main march of the unions followed. There were large and impressive contingents from Belgium and the Netherlands. Also some East European countries like Romania, Slovenia and Poland had sizable and well organised contingents on the march.
The British union movement was almost invisible represented by only a few unison placards. But the German unions also failed to turn up in large numbers: between 7.000 and 10.000 from Europe’s largest country. This failure to mobilise significant numbers was the result of the unions’ refusal to make the demonstration a public campaigning event and focus.
It was the French and Belgian workers movement, who saved the demonstration from outright failure. And amongst them it was the CGT who mobilised the largest and most militant contingents. It alone had several 10.000s on the demonstrations, divided up into regional and local sections with sound systems. The CGT, one has to day, dwarfed the other French unions including the more radical one’s like SUD and G 10.
The CGT blocks were also the most political and militant, chanting loudly and throwing loud and smoky firecrackers. More importantly, it was they who successfully challenged the political timidity of the ETUC. The ETUC wanted to restrict the whole demonstration to protest against Bolkestein directive on services.
The CGT (and most of the other French unions and unions from the Benelux as well) made the fight against the neo-liberal European constitution a major focus of their political intervention and slogans. Tens of thousands of stickers against the constitution were distributed.
The 5000 leaflets members of our international tendency from Britain, France, Germany and Sweden distributed were extremely well received by the French workers, who took bundles to distribute themselves.
The impressive and encouraging role played by the CGT workers was also a result of the recent struggles in France for the 35 hour week and of central importance the question of the European constitution plays in the mind of the French labour movement and population in general.
But the “European day of action” was in reality no real Europe-wide event. The mass demonstration in Brussels was accompanied by mass demonstrations in London and Rome against the occupation of Iraq. But it was - unfortunately - a coincidence of dates, rather than a coordinated action.
This poses the question “to be or not to be” to the European Social Forum. Can it become a centre for mobilising such action or will it remain a mere talking shop— a think tank for vapid reformist policies with no takers in the reformist parties. Since the Florence ESF’s courageous antiwar call, which led to worldwide demonstrations by tens of millions on February 15th 2003, the ESF has just vegetated. It has repeatedly failed to give a lead to the widespread struggles of workers and youth that wracked Europe over the last two years.
In fact to avoid a rapid descent into irrelevancy the next European Preparatory Assembly of the ESF, due to take place in Prague in mid-May, must give a lead in bringing together the various struggles, in encouraging forces like the French CGT with its mass working class membership and the East European Unions together in a real Europe-wide co-ordination of struggles against the social attacks, the constitution and imperialist war. Otherwise, the European Social Forum will remain - as it proved to be in Brussels - a feeble appendage of the ETUC - rather than an organ to challenge the old bureaucratic apparatuses.
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Obama placed Clinton's corporatization of American universities on steroids while having a super-majority of supposed Democrats in Senate and House. The Democratic voters expected public schools to be strengthened and resourced as Congress and Obama talked of rebuilding American education and what it got was a continuation of Clinton defunding of the public in American schools and building of the corporate.
WE HAD A SUPER-MAJORITY OF DEMOCRATS AND GOT THE MOST GLOBAL CORPORATE NEO-LIBERAL OF EDUCATION REFORMS BECAUSE MOST DEMOCRATIC POLS IN THE SENATE AND HOUSE ARE CLINTON NEO-LIBERALS---NOT DEMOCRATS!
Democratic voters did not know where these policies were going in 2009 when they were marketed as strengthening education in America----but national labor and justice leaders DID. SO DID UNIVERSITY ACADEMICS. Instead of sending billions of Federal funding into the classrooms and building schools----Obama and neo-liberals spent hundreds of billions building the infrastructure for corporate K-12 charters and super-sized corporate R and D on university campuses. Why did Obama and neo-liberals in Congress tie school rebuilding to bond leverage and not send money?
BECAUSE THEY KNEW THEY WERE GOING TO IMPLODE THE US BOND MARKET SENDING ALL TIED TO CREDIT BOND LEVERAGE INTO DEFAULT. IT IS CRIMINAL TO PLAN TO DEFRAUD THE AMERICAN PEOPLE.
Below you see a great document I cannot post on whole---please search the title. It shows how to move against this corporate capture but it waits until the city is in the worst of stances-----don't wait for bankruptcy to fight this and it begins by getting rid of city halls and mayors tied to Clinton and Bush neo-liberals and neo-cons. Note that this Detroit complaint identifies the bond deals tied to schools that were made charters after the bankruptcy.
Title 6 Complaint----Public School System of Detroit after bankruptcy -
Go Left America has worked with the people of the Detroit School Board to file a Title 6 complaint against the state of Michigan for its practices in school districts primarily in minority districts. This is the complaint and these are their stories.
BUILD AMERICA BONDS WAS A POLICY MEANT TO SUPER-HEAT THE US TREASURY BOND MARKET AS THESE BONDS WERE SOLD ALL OVER THE WORLD---JUST AS SUBPRIME MORTGAGE LOANS AND NOW WE ARE HEADING INTO A BOND MARKET CRASH-----WITH PUBLIC SCHOOLS TIED TO THIS BOND DEBT.
When we know our government is defrauding its citizens we can simply default on all that bond debt because these deals were illegal. If left in place as Wall Street wants-----all public schools tied to this bond debt will default into the hands of private investors just as it did in Detroit.
Bond Market Crash Will Strike By 2016, Expert... econintersect.com/.../06/bond-market-crash-will-strike-by... Not only is a bond market crash inevitable, but it will hit sooner than many think - by 2015 or 2016 at the latest, according to Michael Pento, president of Pento ...
Aid for Facilities
Economic stimulus funds from the federal government provide numerous avenues for schools and universities to improve facilities.
Jun 1, 2009 Mike Kennedy
Build America Bonds also will benefit South Dakota State University, Brookings, with a student union expansion. Photo courtesy of Eric Landwehr" src="http://asumag.com/images/stimulus-200906.jpg"><strong>Build America Bonds also will benefit South Dakota State University, Brookings, with a student union expansion.</strong> Photo courtesy of Eric LandwehrEven before the state fire marshal ordered the Somersworth (N.H.) School District in 2007 to abandon the top two floors of Hilltop Elementary School because of safety concerns, folks in the city of 12,000 had been debating whether the aging facility should be replaced — and how to pay for it.
Finally, in February 2009, despite the grumblings from residents who thought Somersworth couldn't afford it, the city council approved plans to issue $19.9 million in bonds to pay for construction of a new 450-student elementary school.
Three months later, the price tag became a little easier to swallow when the New Hampshire School Building Authority awarded Somersworth $19.9 million in zero-interest Qualified School Construction Bonds, part of the federal government economic stimulus package.
Somersworth is one of many communities whose schools and universities stand to benefit from the stimulus — formally known as The American Recovery and Reinvestment Act of 2009 — that Congress approved to help the U.S. economy regain its health.
"It's going to save us $12 million to $15 million over the life of the bonds," says Karen Soule, superintendent of School Administrative Unit 56, which includes the Somersworth district.
Many avenues to aidPreliminary versions of the economic stimulus legislation in Congress proposed allocating billions of dollars to pay for school facility upgrades — a version passed by the House called for $16 billion in school construction funding. But after House and Senate negotiators got together to work out differences and craft the final bill, that provision was eliminated from the $787 billion package.
Still, the recovery effort offers schools and universities various subsidies, grants, tax credits and other incentives to alleviate the cost of modernizing and constructing facilities.
Among those:
- State Fiscal Stabilization Fund The U.S. Education Department describes this as a one-time appropriation of about $48.6 billion that the department will award to governors to help minimize and avoid reductions in education and other essential services. In return, a state must commit to pursuing four areas of education reform: making improvements in teacher effectiveness and in the equitable distribution of qualified teachers; establishing pre-K-to-college-and-career data systems that track progress and foster continuous improvement; making progress toward rigorous college- and career-ready standards and high-quality assessments; and providing targeted, intensive support and effective interventions for the lowest-performing schools.
School systems can use the funds for facility improvements, but the department is discouraging use of the funds for new construction (see the "Yes, you may — but maybe you shouldn't" sidebar). - Qualified School Construction Bonds The program provides $22 billion of bond authority ($11 billion in 2009 and $11 billion in 2010 for states and school systems. The legislation calls for 40 percent of the authority to go to the nation's 100 largest districts, plus 25 additional systems that the education department determines to be in need. The remaining 60 percent will go to states, using a formula that is based on Title I funding for disadvantaged students. School systems that issue the bonds pay no interest — they repay only the principal.
- Qualified Zone Academy Bonds Schools or districts with 35 percent or more of their students eligible for free or reduced-price lunches have $2.8 billion in zero-interest bonds ($1.4 billion in 2009 and $1.4 billion in 2010) available to be used on school renovations and other educational improvements.
- Build America Bonds These bonds can be issued by state and local governments and will give them access to the conventional corporate debt markets, the U.S. Treasury Department says. The Treasury Department will reimburse the state or local governmental issuer 35 percent of the interest payment. That enables state and local governments to reduce their borrowing costs and reach more sources of borrowing.
- Impact Aid $100 million is available for construction aid to school systems that serve military bases or Indian reservations.
- Bureau of Indian Affairs School Construction $277 million is available — $134 million to replace deteriorating Bureau-funded schools, and $143 million to repair existing facilities.
- Academic Research Infrastructure The National Science Foundation has a $200 million program that will award grants of up to $10 million for repairing or renovating academic research facilities. The foundation is encouraging proposals that will improve shared space where research activities take place as well as facility projects that will promote the development of a diverse workforce.
- Biomedical and Behavioral Research Facilities The National Institutes of Health has $1 billion to award as grants to institutions seeking to construct, renovate or repair biomedical or behavioral research facilities.
- Research Science Buildings The National Institute of Standards and Technology (NIST) will distribute $120 million in grants for construction of scientific research buildings at higher-education institutions and nonprofit organizations. NIST says eligible projects include laboratories, test facilities, measurement facilities, research computing facilities and observatories. In addition, NIST will award another $60 million in grants to proposals that were submitted in fiscal 2008 but not funded.
- Rural Community Facilities Program The Recovery Act provided $1.1 billion to the Department of Agriculture to make loans for rural areas and towns of up to 20,000 people to develop "essential community facilities." The department says units of local government, including education institutions, can use the money for facility acquisition, construction, renovation, or the purchase of equipment and furnishings. In addition to the direct loans, the department also has $61 million available in grants for projects in communities with smaller populations and lower incomes.
- Energy Efficiency Block Grants The Department of Energy has $3.2 billion for grants to states and local governments. The money can be used for "energy efficiency and conservation programs and projects community wide, and renewable energy installations in or on government buildings," the department says.
- State Energy Program The U.S. Department of Energy has received $3.1 billion in recovery funds for this program, which awards grants to states for energy-efficiency and renewable-energy projects. The types of projects that would receive grants include state and local building retrofits that are ready to start with additional funding; and programs that incorporate sustainable strategies, such as performance contracting.
The people in Somersworth knew they had to address the inadequate conditions at Hilltop Elementary, but like a lot of communities trying to make ends meet, they kept putting off the hard decisions.
State officials tried to force the city to act in August 2007. Two weeks before classes were to begin, the state fire marshal ruled that the second and third floors of Hilltop had significant fire-safety problems and had to be closed.
School officials scrambled to acquire portable classrooms to begin the school year on time. While the community debated whether Hilltop could be renovated, the district spent more than $250,000 on portables and additional transportation costs.
The city council, as well as the school board, was required to approve any plan for a new school. In December 2007, the council approved the purchase of a site. The school board concluded that even if safety issues were resolved, Hilltop, a 25,000-square-foot facility built in 1927, could not be renovated or expanded to become an effective 21st-century learning space. In June 2008, the board approved a $19.9 million plan for a 74,300-square-foot, K-5 elementary school.
And the debate went on. The city council in September 2008 voted 5-4 in favor of the project, but a two-thirds majority was needed for approval. In January 2009, Lyonel Tracy, the commissioner of education in New Hampshire, delivered a tongue lashing in a letter to Somersworth Mayor Michael Micucci:
"I am disappointed by your comment that some in the community do not see a need to move forward. How can that be when the State Fire Marshal has found it necessary to close two-thirds of the building? The Hilltop School building is not safe for your children to occupy …. The continued lack of action by the City Council is disturbing. Something must be done."
And, finally, something was done. The city council approved the plan in February, but not without misgivings about spending $19.9 million. So when the state awarded Somersworth the zero-interest bonds, much of the anxiety about moving forward was eased, Soule says.
"This is such an opportunity for us," she says. "This will allow us to expand and have enough space for years to come."
Soule expects the new elementary to open in 2011.
Build AmericaFor schools and universities with construction projects already in the works, Build America Bonds enable them to get a better deal on the bonds they are selling.
Education institutions using the program receive a federal subsidy equal to 35 percent of the interest costs of the bonds. In effect, the subsidy results in a lower interest rate for school systems while making the bonds more attractive for buyers.
The Olathe (Kan.) district used the Build America Bond program in May to sell $95 million in bonds, says Gary Diener, Olathe's executive director of business and finance.
Among the projects those bonds will help pay for are a new junior high, and for additions at all four district high schools so that the campuses can accommodate ninth-graders.
In South Dakota, the Board of Regents has approved the sale of $90 million in Build America Bonds to pay for projects at four campuses, says Janelle Toman, director of information and institutional research for the regents. Those include a new residence hall and an expansion of the student union at South Dakota State University in Brookings; a new residence hall and a student wellness center at the University of South Dakota in Vermillion; renovations of residence halls and a student center at the South Dakota School of Mines and Technology in Rapid City; and a residence hall renovation at Northern State University in Aberdeen.
- Read the "First in line" sidebar for information on how the San Diego Unified School District sold the first Qualified School Construction Bonds as authorized by ARRA.
- Read the "Yes, you may — but maybe you shouldn't" sidebar for information on the U.S. Education Department's updated guidelines for local education agencies looking to use Education Stabilization funds for new construction.
First in lineThe San Diego Unified School District achieved the distinction in April of becoming the first school system to sell Qualified School Construction Bonds as authorized in The American Recovery and Reinvestment Act.
As one of the largest districts in the nation with more than 110,000 students, the economic stimulus package gave the San Diego district the authority to issue $38.8 million in the zero-interest bonds.
The bonds will pay for some of the $2.1 billion construction program known as Proposition S, which voters approved in November 2008.
Yes, you may — but maybe you shouldn'tWhen the economic stimulus package was approved, the U.S. Education Department guidelines stated that local education agencies (LEAs) were allowed to use Education Stabilization funds for new construction. But in May, the department revised its guidelines to say, "Yes, but … "
"An LEA … may use the funds to support the construction of new school buildings," the Education Department stated. "However, the Department discourages LEAs from using Education Stabilization funds for new construction because this use of funds may limit an LEA's ability to meet other essential needs or implement necessary reform initiatives."
The department makes a distinction between new construction and modernization. It is not discouraging school systems from using stabilization funds for modernization, renovation or repair.
The statement also warns states and school systems that Education Secretary Arne Duncan will take into account whether they have used stabilization funds for new construction when he decides who will get some of the $5 billion in competitive grants under his discretion.
The Education Department plans to conduct a competition among states for a $4.35 billion "Race to the Top" fund to improve education quality and results. Another $650 million will be available through the "Invest in What Works and Innovation" fund. Districts and non-profit groups with a strong track record of improving education will compete for those funds, the department says.
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Remember, Obama's education policy moved community colleges from a stepping stone to 4 year university to being a job training center-----an extension of corporate Human Resources. Where are all of the bond debt school building going? To those public school structures that Wall Street wants to privatize into corporate neo-liberal education.......K-12 school buildings, community college buildings, and university research facilities.
Sending in the economic crash and bond market collapse will create the excuse that the Federal, state, and local government has no money and defaulted debt and VOILA-----corporations must come in to take over schools at all levels.
You can see how moving from the 1970s when the corporate think tanks took hold on college campuses moving universities from academic and free thought to market-based corporate education-----and now policy geared to hand the actual physical building structures to corporations.
If we have city halls with city council and mayors who are REAL progressives in 2016 when this economic crash hits-----they will simply declare these bonds illegal fraud and VOID the debt. Clinton neo-liberals and Bush neo-cons as in Baltimore will do as Detroit City Council did-----send it all into bankruptcy.
California is ground zero for for-profit education fraud and the Reagan neo-liberalism has made the once best in the world public education system one of the most corporate and neo-liberal. You see where California is leading in tying schools to bond debt----as is Baltimore.
THIS IS WHY WHEN YOU SEE A DEMOCRATIC PRIMARY WITH TWO CLINTON NEO-LIBERALS AND NO REAL PROGRESSIVES FIGHTING IT OUT---NO MATTER RACE, CREED, OR GENDER----THE AMERICAN PEOPLE HAVE NO ONE IN THESE RACES WORKING FOR THEIR INTERESTS---IT IS ALL WALL STREET.
Who was brought out to support these school bond deals-----the NAACP and Labor union members made all of this fraud seem legitimate and in Maryland the ACLU partnered with Wall Street in this. It is a disgrace. In Maryland's case O'Malley tied what he knew would be soaring profit for Wall Street to property taxes for decades.
Risky bonds tie schools to huge debt
About 200 districts in California may have to pay as much as 10 to 20 times the amount borrowed.
November 29, 2012|Dan Weikel
Newport Harbor High School in Newport Beach is part of the Newport Mesa School… (Mark Boster / Los Angeles…) Two hundred school districts across California have borrowed billions of dollars using a costly and risky form of financing that has saddled them with staggering debt, according to a Times analysis.
Schools and community colleges have turned increasingly to so-called capital appreciation bonds in the economic downturn, which depressed property values and made it harder for districts to raise money for new classrooms, auditoriums and sports facilities.
Unlike conventional shorter-term bonds that require payments to begin immediately, this type of borrowing lets districts postpone the start of payments for decades. Some districts are gambling the economic picture will improve in the decades ahead, with local tax collections increasingly enough to repay the notes.
CABs, as the bonds are known, allow schools to borrow large sums without violating state or locally imposed caps on property taxes, at least in the short term. But the lengthy delays in repayment increase interest expenses, in some cases to as much as 10 or 20 times the amount borrowed.
For The Record
Los Angeles Times Wednesday, December 05, 2012 Home Edition Main News Part A Page 4 News Desk 2 inches; 73 words Type of Material: Correction
School bonds: An article in the Nov. 29 Section A about a risky type of construction financing used by school districts said that news of one bond issued by the Poway district was first reported by the Voice of San Diego website. That website has acknowledged that its work was assisted by Joel Thurtell, a retired reporter for the Detroit Free Press who had previously written about the bonds in a blog post.
The practice is controversial and has been banned in at least one state. In California, prominent government officials charged with watching the public purse are warning school districts to avoid the transactions.
One sounding the alarm is California Treasurer Bill Lockyer, who compares CABs to the sort of creative Wall Street financing that contributed to the housing bubble, the subsequent debt crisis and the nation's lingering economic malaise.
Most school bonds, like home mortgages, require roughly $2 to $3 to be paid back for every $1 borrowed. But CABs compound interest for much longer periods, meaning repayment costs are often many times that of traditional school bonds.
And property owners -- not the school system -- are likely to be on the hook for bigger tax bills if the agency's revenues can't cover future bond payments, Lockyer and other critics say.
Several financial consultants who advise school districts on CABs declined to comment, as did the chairman of their trade group. Education officials acknowledge some drawbacks with CABs, but argue that the bonds are funding vital educational projects.
The Newport Mesa Unified School District in Orange County issued $83 million in long-term notes in May 2011. Principal and interest will total about $548 million, but officials say they are confident they can pay off the debt.
The bonds "have allowed us to provide for facilities that are needed now," said the district's business manager, Paul Reed. "We could not afford to wait another 10 years."
Overall, 200 school systems, roughly a fifth of the districts statewide, have borrowed more than $2.8 billion since 2007 using CABs with maturities longer than 25 years. They will have to pay back about $16.3 billion in principal and interest, or an average of 5.8 times the amount they borrowed.
Nearly 70% of the money borrowed involves extended 30- to 40-year notes, which will cost district taxpayers $13.1 billion, or about 6.6 times the amount borrowed on average.
State and county treasurers say debt payments of no more than four times principal are considered reasonable, though some recommend a more conservative limit of three times.
"This is part of the 'new' Wall Street," Lockyer said. "It has done this kind of thing on the private investor side for years, then the housing market and now its public entities."
The Poway Unified School District, which serves middle-class communities in north San Diego County, is one of the school systems faced with massive CAB debt payments. In 2011, it issued $105 million in capital appreciation bonds to complete a school rebuilding program.
Because the recession had depressed property values and tax revenue, Poway district officials realized that using conventional bonds might jeopardize a promise to district voters to limit the tax rate.
So on the advice of an Irvine-based financial consulting firm, they turned to the long-term notes. Under the deal, the school board could keep construction moving, avoid reneging on its pledge to voters and stay within the legal limits. And it would not have to repay the bonds for decades.
By the maturity date of 2051, however, the $105 million in Poway notes will cost district taxpayers almost $1 billion in principal and interest -- more than $9 for every $1 borrowed.
That deal, first reported by the Voice of San Diego news website, raised alarms. But some Poway officials defend it as necessary to complete much-needed projects.
"It was well worth it," said Jennifer Zaheer, president of the Palomar Council Parent Teachers Assn., which serves Poway Unified. "In my son's experience, there's a big difference between using a trailer and having a new classroom."
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You see Texas tied its school bond debt to property tax just as O'Malley did in Maryland and Baltimore. This supposedly made it a AAA bond investment. As we see below, the citizens voted these bond deals in as they did in Baltimore----but in Baltimore we have a 17% voter turnout and no education on the ramifications of these deals---they are just sold as good for schools and children.
Instead, it is killing public education by taking the very school buildings that house public education and giving excuse for handing them to national charter chains. As we know here in Maryland as I bet in Texas----the new Governor Hogan is ready to move national charter chains into Baltimore after this bond default.
In Europe it is labor and justice organizations educating people as to why all of this is to be avoided and fighting it as it happens.....in the US it is labor and justice that is brought out to sell these Wall Street deals. THIS IS WHAT MUST CHANGE! WE NEED PROGRESSIVE LABOR AND JUSTICE TO TAKE BACK THE DEMOCRATIC PARTY.
If the American people are told this is a Wall Street scheme filled with fraud with a goal of imploding the economy and sending more public wealth to the rich---THEN VOTERS WOULD NOT APPROVE THESE POLICIES-----THAT YOUR POLS ARE PUSHING ON YOU!
Texas Drowning In School Bond Debt, $75B Before Interest
by Merrill Hope17 Nov 201416
Already on the hook for $65 billion in outstanding school bond debt approved and issued between 2007-2013, Texans voted in more mega-school bond debt statewide in 2014 that will pile nearly $10 billion more onto the statewide property tax payer tab. For public school debt alone, Texans will owe almost $75 billion — before interest. In the latest go-round of school bonds on the November ballot, the meatiest measure to pass was in Katy Independent School District (ISD), weighing in at $748,118,930, followed by Fort Bend ISD at $484,157,027 and Garland ISD at $455,500,000, the last of which boasted that this was its largest bond package in the district’s history.
According to the Dallas Morning News, the funds were needed for aging facilities and school security:
“Dallas County’s second-largest district was also proposing a natatorium and a career tech center in its first bond election since 2002. The money will be used to upgrade exterior cameras, add fire alarms, provide interior sprinkler systems for 35 campuses and secure the entrances at 64 schools.” Other approved big bonds around the state included Lamar ISD, whose voters approved $240.6 million; Birdsville, $163.2 million, Brazosport, $175 million; Bryan ISD $132 million, Corpus Cristi ISD, $100 million; Duncanville ISD, $102.5 million; Del Valle ISD, $134 million; and Pasadena ISD, $175.5. Wylie ISD’s $94.2 million bond measure claimed no tax increase for residents, also according to the article.
Texas caps school property tax at the current $0.50 of $100 taxable value. Keller ISD, which just passed a $169.5 million bond, is one of the many districts that where the $0.50 property tax limit is in place but even so, the total taxpayer liability is over $1.4 billion (including principal & interest), and that translates into a debt payment of over $42,000 per student, which Empower Texans called “nearly three times the state average in a state with the second highest, per capita local debt.”
The Fast Growth School Coalition (FGSC) is a name that comes up repeatedly with school district bonds. In an earlier article, Empower Texans described FGSC dubiously as a “voluntary association of who’ve organized for the explicit purpose of lobbying legislators to raise your property taxes and eliminate existing borrowing limits.”
They have also called FGSC the “unholy alliance of pro-debt special interests, school administrators, and taxpayer-funded lobbyists that stand ready to feed from the ISD bond money trough. Fast Growth’s stated purpose is to substantially increase spending on school facilities and repeal the few debt and tax limits set on ISDs by Texas law.”
Last May’s approved bloated bond measures included $1.2 billion for Cypress-Fairbanks ISD and $775 million for Frisco ISD. The new Frisco property taxpayer debt was heaped onto existing $798 million outstanding debt from a 2006 school bond measure. In 2003, voters had approved a $498 million bond. Along the way seven elementary schools went missing because funds were diverted.
The Texas Public Policy Foundation (TPPF) also took a long, hard look at the Frisco ISD measure, pointing out that on a 30-year bond at 4 percent interest, Frisco school district taxpayers would be on the hook for $556 million worth of interest which factored in with principal costs, would bring the amount owed by Frisco taxpayers for just the 2014 bond to a shocking $1.33 billion, which Breitbart Texas reported.
Meanwhile Frisco ISD already held $2.6 billion in principal and interest debt outstanding. That came out to roughly $56,000 per enrolled student. Today Frisco ISD’s debt level is more than twice that of the surrounding school districts — Lewisville ISD ($1.7 billion), Plano ISD ($1.4 billion), Denton ISD ($1.1 billion), Allen ISD ($806 million) and McKinney ISD ($712 million).
James Quintero, Director of the TPPF’s Center for Local Governance provided Breitbart Texaswith a searing reality check on the staggering actual costs of school bonds for Texans. He broke down the figures statewide with not just principal but with interest on bonds issued as of August 31, 2013.
The “face value” of what people voted on in those bond measures or “principal” may have totaled $65,104,657,568 but once the known interest on the loans were folded in, that layered another $42,971,809,762 onto the debt.
The actual grand total of public school district debt was $108 billion, or $108,076,467,330 to be exact.
May and November 2014 approved bonds were not factored into these calculations because they have not yet been issued, which means the interest is not yet known. Breitbart Texas also spoke to Ross Kecseg, Director of Empower Texans’ Metroplex office. His emphasis is county and local government.
Kecseg said the interest costs are “significant” and underscored that “you’re paying for it with property taxes.”
He explained, “Under the current state law, local governments are not required to disclose the interest costs on the ballot for voters. In other words, interest is a hidden cost taxpayers don’t see until it shows up on their property tax bill.”
Another key factor is the funding mechanism behind school bonds — like Capital Appreciation Bonds (CABs). In 2013, Watchdog.org looked at this issue, calling CABs “a product of their time, of $17 trillion national debts, incalculable unfunded national, state and local liabilities and grotesquely underfunded public pensions.”
Unlike the more common current interest bonds, which require that the issuer pay off the principal and interest throughout the term of the bond, interest on capital appreciation bonds compounds and accumulates until maturity. It’s more of a kick the can down the road approach. By the time the bill comes due for a new generation of taxpayers, many of whom had no say in issuing the bonds, the elected officials who did are long out of office or dead, Watchdog.orgalso wrote.
Breitbart Texas highlighted another problem — school CABs do not have regular payments. Interest and principle accrue and compound until maturity when a “balloon payment” is due.
One of the more disconcerting realities is unpredictability. Previously, TPPF pointed out toBreitbart Texas that the success of a CAB is reliant on “the continued explosive growth of Frisco and the surrounding area to meet its obligations. The need to expand must be balanced against the reality that Frisco’s present fiscal situation is tenuous at best.”
This kind of funding formula wilts in times of economic downturn, leaving Frisco ISD “stuck with an enormous amount of debt and facilities it cannot fill and taxpayers are going to have to pick up the tab,” according to TPPF.
In 2011, the Comptroller’s office reported that Texas had the second highest debt in the nation. Public school bonds are not the only debt in Texas — yet accounts for the largest category of debt in the state.
Through August 2013, the actual current total local debt total with principal and interest accounted for in Texas is $328 billion. Cities, towns and villages debt ranks second largest to public school debt at $102,966,602,537 for issued principal plus interest.
Among the six bonds to fail in this November election was Bridge City ISD’s $25 million construction proposal that would have provided a new fine arts complex and other unspecified district improvements according to KFDM. The voters of the small community less than 50 miles from Lake Charles, Louisiana said something most other Texas school districts have had a tough time saying, ‘no.’
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All of this gained power with Reagan/Clinton neo-liberalism. As Reagan and Clinton dismantled all Federal oversight and accountability, the Federal coffers were sucked dry with fraud and it all was made to look like increased spending on social and education programs when it was simply fraud. Neo-liberalism is naked capitalism and if you think you can have free market deregulation without this fraudulent free-for-all-----you are not paying attention.
You see below how corporations in the 1970s planned to turn the progressive hold on the country around to corporate market-based policy and we went from having broad, open political discussion and debate in universities, media, labor unions and justice organizations----and even church pulpits----to all of the above captured to this global neo-liberalism in both parties----Bush neo-cons and Clinton neo-liberals are the same global corporate tribunal party pols!
- The Clinton Initiative attaching to our universities is his intention to keep this from happening! This was how complete the progressive voice was before Reagan/Clinton neo-liberalism took hold----------------------------------------------------------------
--'Sources of the Attack from 1970s
The sources are varied and diffused. They include, not unexpectedly, the Communists, New Leftists and other revolutionaries who would destroy the entire system, both political and economic. These extremists of the left are far more numerous, better financed, and increasingly are more welcomed and encouraged by other elements of society, than ever before in our history. But they remain a small minority, and are not yet the principal cause for concern.
The most disquieting voices joining the chorus of criticism come from perfectly respectable elements of society: from the college campus, the pulpit, the media, the intellectual and literary journals, the arts and sciences, and from politicians. In most of these groups the movement against the system is participated in only by minorities. Yet, these often are the most articulate, the most vocal, the most prolific in their writing and speaking' You will note that all of the above have been silenced-----the college campus---the pulpit-------the media------news journals-----and now we are seeing arts and sciences taken-----and of course the pols.
- _________________________
A friend makes a point----and if you like boring public policy this article shows when US universities were made in corporate-friendly and then literally corporate facilities with Obama-----this is when all of the university think tanks were created as Reagan came to office and Clinton followed with progressive think tanks taking on his corporate global market economic theme. Today, all public policy is written by think tanks----now controlled by Bush neo-conservative policy and Clinton neo-liberal ideas of what is progressive. Center for American Progress is Clinton neo-liberal----not progressive for example.
So, as we move back to social progressivism and our US Constitutional rights as citizens this is the critical first step----recapturing the university public policy message from the Chamber of Commerce. As students----this should be your goal and as politicians--funding these university organizations is central. Maryland of course has no progressive think tanks----simply organizations created by Tammany Hall Wall Street O'Malley to say everything he did was progressive and successful.
Below is a long article that may be boring---please glance through because this is the point corporations started installing organizations into our universities that led to further corporatization and corporate public policy think tanks.
The Powell Memo (also known as the Powell Manifesto) The Powell Memo was first published August 23, 1971
Introduction In 1971, Lewis Powell, then a corporate lawyer and member of the boards of 11 corporations, wrote a memo to his friend Eugene Sydnor, Jr., the Director of the U.S. Chamber of Commerce. The memorandum was dated August 23, 1971, two months prior to Powell’s nomination by President Nixon to the U.S. Supreme Court.
The Powell Memo did not become available to the public until long after his confirmation to the Court. It was leaked to Jack Anderson, a liberal syndicated columnist, who stirred interest in the document when he cited it as reason to doubt Powell’s legal objectivity. Anderson cautioned that Powell “might use his position on the Supreme Court to put his ideas into practice…in behalf of business interests.”
Though Powell’s memo was not the sole influence, the Chamber and corporate activists took his advice to heart and began building a powerful array of institutions designed to shift public attitudes and beliefs over the course of years and decades. The memo influenced or inspired the creation of the Heritage Foundation, the Manhattan Institute, the Cato Institute, Citizens for a Sound Economy, Accuracy in Academe, and other powerful organizations. Their long-term focus began paying off handsomely in the 1980s, in coordination with the Reagan Administration’s “hands-off business” philosophy.
Most notable about these institutions was their focus on education, shifting values, and movement-building — a focus we share, though often with sharply contrasting goals.* (See our endnote for more on this.)
So did Powell’s political views influence his judicial decisions? The evidence is mixed. Powell did embrace expansion of corporate privilege and wrote the majority opinion in First National Bank of Boston v. Bellotti, a 1978 decision that effectively invented a First Amendment “right” for corporations to influence ballot questions. On social issues, he was a moderate, whose votes often surprised his backers.
Confidential Memorandum: Attack of American Free Enterprise System DATE: August 23, 1971
TO: Mr. Eugene B. Sydnor, Jr., Chairman, Education Committee, U.S. Chamber of Commerce
FROM: Lewis F. Powell, Jr.
This memorandum is submitted at your request as a basis for the discussion on August 24 with Mr. Booth (executive vice president) and others at the U.S. Chamber of Commerce. The purpose is to identify the problem, and suggest possible avenues of action for further consideration.
Dimensions of the Attack No thoughtful person can question that the American economic system is under broad attack. This varies in scope, intensity, in the techniques employed, and in the level of visibility.
There always have been some who opposed the American system, and preferred socialism or some form of statism (communism or fascism). Also, there always have been critics of the system, whose criticism has been wholesome and constructive so long as the objective was to improve rather than to subvert or destroy.
But what now concerns us is quite new in the history of America. We are not dealing with sporadic or isolated attacks from a relatively few extremists or even from the minority socialist cadre. Rather, the assault on the enterprise system is broadly based and consistently pursued. It is gaining momentum and converts.
Sources of the Attack The sources are varied and diffused. They include, not unexpectedly, the Communists, New Leftists and other revolutionaries who would destroy the entire system, both political and economic. These extremists of the left are far more numerous, better financed, and increasingly are more welcomed and encouraged by other elements of society, than ever before in our history. But they remain a small minority, and are not yet the principal cause for concern.
The most disquieting voices joining the chorus of criticism come from perfectly respectable elements of society: from the college campus, the pulpit, the media, the intellectual and literary journals, the arts and sciences, and from politicians. In most of these groups the movement against the system is participated in only by minorities. Yet, these often are the most articulate, the most vocal, the most prolific in their writing and speaking.
Moreover, much of the media-for varying motives and in varying degrees-either voluntarily accords unique publicity to these “attackers,” or at least allows them to exploit the media for their purposes. This is especially true of television, which now plays such a predominant role in shaping the thinking, attitudes and emotions of our people.
One of the bewildering paradoxes of our time is the extent to which the enterprise system tolerates, if not participates in, its own destruction.
The campuses from which much of the criticism emanates are supported by (i) tax funds generated largely from American business, and (ii) contributions from capital funds controlled or generated by American business. The boards of trustees of our universities overwhelmingly are composed of men and women who are leaders in the system.
Most of the media, including the national TV systems, are owned and theoretically controlled by corporations which depend upon profits, and the enterprise system to survive.
Tone of the Attack This memorandum is not the place to document in detail the tone, character, or intensity of the attack. The following quotations will suffice to give one a general idea:
William Kunstler, warmly welcomed on campuses and listed in a recent student poll as the “American lawyer most admired,” incites audiences as follows:
“You must learn to fight in the streets, to revolt, to shoot guns. We will learn to do all of the things that property owners fear.”2 The New Leftists who heed Kunstler’s advice increasingly are beginning to act — not just against military recruiting offices and manufacturers of munitions, but against a variety of businesses: “Since February, 1970, branches (of Bank of America) have been attacked 39 times, 22 times with explosive devices and 17 times with fire bombs or by arsonists.”3 Although New Leftist spokesmen are succeeding in radicalizing thousands of the young, the greater cause for concern is the hostility of respectable liberals and social reformers. It is the sum total of their views and influence which could indeed fatally weaken or destroy the system.
A chilling description of what is being taught on many of our campuses was written by Stewart Alsop:
“Yale, like every other major college, is graduating scores of bright young men who are practitioners of ‘the politics of despair.’ These young men despise the American political and economic system . . . (their) minds seem to be wholly closed. They live, not by rational discussion, but by mindless slogans.”4 A recent poll of students on 12 representative campuses reported that: “Almost half the students favored socialization of basic U.S. industries.”5
A visiting professor from England at Rockford College gave a series of lectures entitled “The Ideological War Against Western Society,” in which he documents the extent to which members of the intellectual community are waging ideological warfare against the enterprise system and the values of western society. In a foreword to these lectures, famed Dr. Milton Friedman of Chicago warned: “It (is) crystal clear that the foundations of our free society are under wide-ranging and powerful attack — not by Communist or any other conspiracy but by misguided individuals parroting one another and unwittingly serving ends they would never intentionally promote.”6
Perhaps the single most effective antagonist of American business is Ralph Nader, who — thanks largely to the media — has become a legend in his own time and an idol of millions of Americans. A recent article in Fortune speaks of Nader as follows:
“The passion that rules in him — and he is a passionate man — is aimed at smashing utterly the target of his hatred, which is corporate power. He thinks, and says quite bluntly, that a great many corporate executives belong in prison — for defrauding the consumer with shoddy merchandise, poisoning the food supply with chemical additives, and willfully manufacturing unsafe products that will maim or kill the buyer. He emphasizes that he is not talking just about ‘fly-by-night hucksters’ but the top management of blue chip business.”7
A frontal assault was made on our government, our system of justice, and the free enterprise system by Yale Professor Charles Reich in his widely publicized book: “The Greening of America,” published last winter.
The foregoing references illustrate the broad, shotgun attack on the system itself. There are countless examples of rifle shots which undermine confidence and confuse the public. Favorite current targets are proposals for tax incentives through changes in depreciation rates and investment credits. These are usually described in the media as “tax breaks,” “loop holes” or “tax benefits” for the benefit of business. As viewed by a columnist in the Post, such tax measures would benefit “only the rich, the owners of big companies.”8
It is dismaying that many politicians make the same argument that tax measures of this kind benefit only “business,” without benefit to “the poor.” The fact that this is either political demagoguery or economic illiteracy is of slight comfort. This setting of the “rich” against the “poor,” of business against the people, is the cheapest and most dangerous kind of politics.
The Apathy and Default of Business What has been the response of business to this massive assault upon its fundamental economics, upon its philosophy, upon its right to continue to manage its own affairs, and indeed upon its integrity?
The painfully sad truth is that business, including the boards of directors’ and the top executives of corporations great and small and business organizations at all levels, often have responded — if at all — by appeasement, ineptitude and ignoring the problem. There are, of course, many exceptions to this sweeping generalization. But the net effect of such response as has been made is scarcely visible.
In all fairness, it must be recognized that businessmen have not been trained or equipped to conduct guerrilla warfare with those who propagandize against the system, seeking insidiously and constantly to sabotage it. The traditional role of business executives has been to manage, to produce, to sell, to create jobs, to make profits, to improve the standard of living, to be community leaders, to serve on charitable and educational boards, and generally to be good citizens. They have performed these tasks very well indeed.
But they have shown little stomach for hard-nose contest with their critics, and little skill in effective intellectual and philosophical debate.
A column recently carried by the Wall Street Journal was entitled: “Memo to GM: Why Not Fight Back?”9 Although addressed to GM by name, the article was a warning to all American business. Columnist St. John said:
“General Motors, like American business in general, is ‘plainly in trouble’ because intellectual bromides have been substituted for a sound intellectual exposition of its point of view.” Mr. St. John then commented on the tendency of business leaders to compromise with and appease critics. He cited the concessions which Nader wins from management, and spoke of “the fallacious view many businessmen take toward their critics.” He drew a parallel to the mistaken tactics of many college administrators: “College administrators learned too late that such appeasement serves to destroy free speech, academic freedom and genuine scholarship. One campus radical demand was conceded by university heads only to be followed by a fresh crop which soon escalated to what amounted to a demand for outright surrender.”
One need not agree entirely with Mr. St. John’s analysis. But most observers of the American scene will agree that the essence of his message is sound. American business “plainly in trouble”; the response to the wide range of critics has been ineffective, and has included appeasement; the time has come — indeed, it is long overdue — for the wisdom, ingenuity and resources of American business to be marshalled against those who would destroy it.
Responsibility of Business Executives What specifically should be done? The first essential — a prerequisite to any effective action — is for businessmen to confront this problem as a primary responsibility of corporate management.
The overriding first need is for businessmen to recognize that the ultimate issue may be survival — survival of what we call the free enterprise system, and all that this means for the strength and prosperity of America and the freedom of our people.
The day is long past when the chief executive officer of a major corporation discharges his responsibility by maintaining a satisfactory growth of profits, with due regard to the corporation’s public and social responsibilities. If our system is to survive, top management must be equally concerned with protecting and preserving the system itself. This involves far more than an increased emphasis on “public relations” or “governmental affairs” — two areas in which corporations long have invested substantial sums.
A significant first step by individual corporations could well be the designation of an executive vice president (ranking with other executive VP’s) whose responsibility is to counter-on the broadest front-the attack on the enterprise system. The public relations department could be one of the foundations assigned to this executive, but his responsibilities should encompass some of the types of activities referred to subsequently in this memorandum. His budget and staff should be adequate to the task.
Possible Role of the Chamber of Commerce But independent and uncoordinated activity by individual corporations, as important as this is, will not be sufficient. Strength lies in organization, in careful long-range planning and implementation, in consistency of action over an indefinite period of years, in the scale of financing available only through joint effort, and in the political power available only through united action and national organizations.
Moreover, there is the quite understandable reluctance on the part of any one corporation to get too far out in front and to make itself too visible a target.
The role of the National Chamber of Commerce is therefore vital. Other national organizations (especially those of various industrial and commercial groups) should join in the effort, but no other organizations appear to be as well situated as the Chamber. It enjoys a strategic position, with a fine reputation and a broad base of support. Also — and this is of immeasurable merit — there are hundreds of local Chambers of Commerce which can play a vital supportive role.
It hardly need be said that before embarking upon any program, the Chamber should study and analyze possible courses of action and activities, weighing risks against probable effectiveness and feasibility of each. Considerations of cost, the assurance of financial and other support from members, adequacy of staffing and similar problems will all require the most thoughtful consideration.
The Campus The assault on the enterprise system was not mounted in a few months. It has gradually evolved over the past two decades, barely perceptible in its origins and benefiting (sic) from a gradualism that provoked little awareness much less any real reaction.
Although origins, sources and causes are complex and interrelated, and obviously difficult to identify without careful qualification, there is reason to believe that the campus is the single most dynamic source. The social science faculties usually include members who are unsympathetic to the enterprise system. They may range from a Herbert Marcuse, Marxist faculty member at the University of California at San Diego, and convinced socialists, to the ambivalent liberal critic who finds more to condemn than to commend. Such faculty members need not be in a majority. They are often personally attractive and magnetic; they are stimulating teachers, and their controversy attracts student following; they are prolific writers and lecturers; they author many of the textbooks, and they exert enormous influence — far out of proportion to their numbers — on their colleagues and in the academic world.
Social science faculties (the political scientist, economist, sociologist and many of the historians) tend to be liberally oriented, even when leftists are not present. This is not a criticism per se, as the need for liberal thought is essential to a balanced viewpoint. The difficulty is that “balance” is conspicuous by its absence on many campuses, with relatively few members being of conservatives or moderate persuasion and even the relatively few often being less articulate and aggressive than their crusading colleagues.
This situation extending back many years and with the imbalance gradually worsening, has had an enormous impact on millions of young American students. In an article in Barron’s Weekly, seeking an answer to why so many young people are disaffected even to the point of being revolutionaries, it was said: “Because they were taught that way.”10 Or, as noted by columnist Stewart Alsop, writing about his alma mater: “Yale, like every other major college, is graduating scores’ of bright young men … who despise the American political and economic system.”
As these “bright young men,” from campuses across the country, seek opportunities to change a system which they have been taught to distrust — if not, indeed “despise” — they seek employment in the centers of the real power and influence in our country, namely: (i) with the news media, especially television; (ii) in government, as “staffers” and consultants at various levels; (iii) in elective politics; (iv) as lecturers and writers, and (v) on the faculties at various levels of education.
Many do enter the enterprise system — in business and the professions — and for the most part they quickly discover the fallacies of what they have been taught. But those who eschew the mainstream of the system often remain in key positions of influence where they mold public opinion and often shape governmental action. In many instances, these “intellectuals” end up in regulatory agencies or governmental departments with large authority over the business system they do not believe in.
If the foregoing analysis is approximately sound, a priority task of business — and organizations such as the Chamber — is to address the campus origin of this hostility. Few things are more sanctified in American life than academic freedom. It would be fatal to attack this as a principle. But if academic freedom is to retain the qualities of “openness,” “fairness” and “balance” — which are essential to its intellectual significance — there is a great opportunity for constructive action. The thrust of such action must be to restore the qualities just mentioned to the academic communities.
What Can Be Done About the Campus The ultimate responsibility for intellectual integrity on the campus must remain on the administrations and faculties of our colleges and universities. But organizations such as the Chamber can assist and activate constructive change in many ways, including the following:
Staff of Scholars The Chamber should consider establishing a staff of highly qualified scholars in the social sciences who do believe in the system. It should include several of national reputation whose authorship would be widely respected — even when disagreed with.
Staff of Speakers There also should be a staff of speakers of the highest competency. These might include the scholars, and certainly those who speak for the Chamber would have to articulate the product of the scholars.
Speaker’s Bureau In addition to full-time staff personnel, the Chamber should have a Speaker’s Bureau which should include the ablest and most effective advocates from the top echelons of American business.
Evaluation of Textbooks The staff of scholars (or preferably a panel of independent scholars) should evaluate social science textbooks, especially in economics, political science and sociology. This should be a continuing program.
The objective of such evaluation should be oriented toward restoring the balance essential to genuine academic freedom. This would include assurance of fair and factual treatment of our system of government and our enterprise system, its accomplishments, its basic relationship to individual rights and freedoms, and comparisons with the systems of socialism, fascism and communism. Most of the existing textbooks have some sort of comparisons, but many are superficial, biased and unfair.
We have seen the civil rights movement insist on re-writing many of the textbooks in our universities and schools. The labor unions likewise insist that textbooks be fair to the viewpoints of organized labor. Other interested citizens groups have not hesitated to review, analyze and criticize textbooks and teaching materials. In a democratic society, this can be a constructive process and should be regarded as an aid to genuine academic freedom and not as an intrusion upon it.
If the authors, publishers and users of textbooks know that they will be subjected — honestly, fairly and thoroughly — to review and critique by eminent scholars who believe in the American system, a return to a more rational balance can be expected.
Equal Time on the Campus The Chamber should insist upon equal time on the college speaking circuit. The FBI publishes each year a list of speeches made on college campuses by avowed Communists. The number in 1970 exceeded 100. There were, of course, many hundreds of appearances by leftists and ultra liberals who urge the types of viewpoints indicated earlier in this memorandum. There was no corresponding representation of American business, or indeed by individuals or organizations who appeared in support of the American system of government and business.
Every campus has its formal and informal groups which invite speakers. Each law school does the same thing. Many universities and colleges officially sponsor lecture and speaking programs. We all know the inadequacy of the representation of business in the programs.
It will be said that few invitations would be extended to Chamber speakers.11 This undoubtedly would be true unless the Chamber aggressively insisted upon the right to be heard — in effect, insisted upon “equal time.” University administrators and the great majority of student groups and committees would not welcome being put in the position publicly of refusing a forum to diverse views, indeed, this is the classic excuse for allowing Communists to speak.
The two essential ingredients are (i) to have attractive, articulate and well-informed speakers; and (ii) to exert whatever degree of pressure — publicly and privately — may be necessary to assure opportunities to speak. The objective always must be to inform and enlighten, and not merely to propagandize.
Balancing of Faculties Perhaps the most fundamental problem is the imbalance of many faculties. Correcting this is indeed a long-range and difficult project. Yet, it should be undertaken as a part of an overall program. This would mean the urging of the need for faculty balance upon university administrators and boards of trustees.
The methods to be employed require careful thought, and the obvious pitfalls must be avoided. Improper pressure would be counterproductive. But the basic concepts of balance, fairness and truth are difficult to resist, if properly presented to boards of trustees, by writing and speaking, and by appeals to alumni associations and groups.
This is a long road and not one for the fainthearted. But if pursued with integrity and conviction it could lead to a strengthening of both academic freedom on the campus and of the values which have made America the most productive of all societies.
Graduate Schools of Business The Chamber should enjoy a particular rapport with the increasingly influential graduate schools of business. Much that has been suggested above applies to such schools.
Should not the Chamber also request specific courses in such schools dealing with the entire scope of the problem addressed by this memorandum? This is now essential training for the executives of the future.
Secondary Education While the first priority should be at the college level, the trends mentioned above are increasingly evidenced in the high schools. Action programs, tailored to the high schools and similar to those mentioned, should be considered. The implementation thereof could become a major program for local chambers of commerce, although the control and direction — especially the quality control — should be retained by the National Chamber.
What Can Be Done About the Public? Reaching the campus and the secondary schools is vital for the long-term. Reaching the public generally may be more important for the shorter term. The first essential is to establish the staffs of eminent scholars, writers and speakers, who will do the thinking, the analysis, the writing and the speaking. It will also be essential to have staff personnel who are thoroughly familiar with the media, and how most effectively to communicate with the public. Among the more obvious means are the following:
Television The national television networks should be monitored in the same way that textbooks should be kept under constant surveillance. This applies not merely to so-called educational programs (such as “Selling of the Pentagon”), but to the daily “news analysis” which so often includes the most insidious type of criticism of the enterprise system.12 Whether this criticism results from hostility or economic ignorance, the result is the gradual erosion of confidence in “business” and free enterprise.
This monitoring, to be effective, would require constant examination of the texts of adequate samples of programs. Complaints — to the media and to the Federal Communications Commission — should be made promptly and strongly when programs are unfair or inaccurate.
Equal time should be demanded when appropriate. Effort should be made to see that the forum-type programs (the Today Show, Meet the Press, etc.) afford at least as much opportunity for supporters of the American system to participate as these programs do for those who attack it.
Other Media Radio and the press are also important, and every available means should be employed to challenge and refute unfair attacks, as well as to present the affirmative case through these media.
The Scholarly Journals It is especially important for the Chamber’s “faculty of scholars” to publish. One of the keys to the success of the liberal and leftist faculty members has been their passion for “publication” and “lecturing.” A similar passion must exist among the Chamber’s scholars.
Incentives might be devised to induce more “publishing” by independent scholars who do believe in the system.
There should be a fairly steady flow of scholarly articles presented to a broad spectrum of magazines and periodicals — ranging from the popular magazines (Life, Look, Reader’s Digest, etc.) to the more intellectual ones (Atlantic, Harper’s, Saturday Review, New York, etc.)13 and to the various professional journals.
Books, Paperbacks and Pamphlets The news stands — at airports, drugstores, and elsewhere — are filled with paperbacks and pamphlets advocating everything from revolution to erotic free love. One finds almost no attractive, well-written paperbacks or pamphlets on “our side.” It will be difficult to compete with an Eldridge Cleaver or even a Charles Reich for reader attention, but unless the effort is made — on a large enough scale and with appropriate imagination to assure some success — this opportunity for educating the public will be irretrievably lost.
Paid Advertisements Business pays hundreds of millions of dollars to the media for advertisements. Most of this supports specific products; much of it supports institutional image making; and some fraction of it does support the system. But the latter has been more or less tangential, and rarely part of a sustained, major effort to inform and enlighten the American people.
If American business devoted only 10% of its total annual advertising budget to this overall purpose, it would be a statesman-like expenditure.
The Neglected Political Arena In the final analysis, the payoff — short-of revolution — is what government does. Business has been the favorite whipping-boy of many politicians for many years. But the measure of how far this has gone is perhaps best found in the anti-business views now being expressed by several leading candidates for President of the United States.
It is still Marxist doctrine that the “capitalist” countries are controlled by big business. This doctrine, consistently a part of leftist propaganda all over the world, has a wide public following among Americans.
Yet, as every business executive knows, few elements of American society today have as little influence in government as the American businessman, the corporation, or even the millions of corporate stockholders. If one doubts this, let him undertake the role of “lobbyist” for the business point of view before Congressional committees. The same situation obtains in the legislative halls of most states and major cities. One does not exaggerate to say that, in terms of political influence with respect to the course of legislation and government action, the American business executive is truly the “forgotten man.”
Current examples of the impotency of business, and of the near-contempt with which businessmen’s views are held, are the stampedes by politicians to support almost any legislation related to “consumerism” or to the “environment.”
Politicians reflect what they believe to be majority views of their constituents. It is thus evident that most politicians are making the judgment that the public has little sympathy for the businessman or his viewpoint.
The educational programs suggested above would be designed to enlighten public thinking — not so much about the businessman and his individual role as about the system which he administers, and which provides the goods, services and jobs on which our country depends.
But one should not postpone more direct political action, while awaiting the gradual change in public opinion to be effected through education and information. Business must learn the lesson, long ago learned by labor and other self-interest groups. This is the lesson that political power is necessary; that such power must be assidously (sic) cultivated; and that when necessary, it must be used aggressively and with determination — without embarrassment and without the reluctance which has been so characteristic of American business.
As unwelcome as it may be to the Chamber, it should consider assuming a broader and more vigorous role in the political arena.
Neglected Opportunity in the Courts American business and the enterprise system have been affected as much by the courts as by the executive and legislative branches of government. Under our constitutional system, especially with an activist-minded Supreme Court, the judiciary may be the most important instrument for social, economic and political change.
Other organizations and groups, recognizing this, have been far more astute in exploiting judicial action than American business. Perhaps the most active exploiters of the judicial system have been groups ranging in political orientation from “liberal” to the far left.
The American Civil Liberties Union is one example. It initiates or intervenes in scores of cases each year, and it files briefs amicus curiae in the Supreme Court in a number of cases during each term of that court. Labor unions, civil rights groups and now the public interest law firms are extremely active in the judicial arena. Their success, often at business’ expense, has not been inconsequential.
This is a vast area of opportunity for the Chamber, if it is willing to undertake the role of spokesman for American business and if, in turn, business is willing to provide the funds.
As with respect to scholars and speakers, the Chamber would need a highly competent staff of lawyers. In special situations it should be authorized to engage, to appear as counsel amicus in the Supreme Court, lawyers of national standing and reputation. The greatest care should be exercised in selecting the cases in which to participate, or the suits to institute. But the opportunity merits the necessary effort.
Neglected Stockholder Power The average member of the public thinks of “business” as an impersonal corporate entity, owned by the very rich and managed by over-paid executives. There is an almost total failure to appreciate that “business” actually embraces — in one way or another — most Americans. Those for whom business provides jobs, constitute a fairly obvious class. But the 20 million stockholders — most of whom are of modest means — are the real owners, the real entrepreneurs, the real capitalists under our system. They provide the capital which fuels the economic system which has produced the highest standard of living in all history. Yet, stockholders have been as ineffectual as business executives in promoting a genuine understanding of our system or in exercising political influence.
The question which merits the most thorough examination is how can the weight and influence of stockholders — 20 million voters — be mobilized to support (i) an educational program and (ii) a political action program.
Individual corporations are now required to make numerous reports to shareholders. Many corporations also have expensive “news” magazines which go to employees and stockholders. These opportunities to communicate can be used far more effectively as educational media.
The corporation itself must exercise restraint in undertaking political action and must, of course, comply with applicable laws. But is it not feasible — through an affiliate of the Chamber or otherwise — to establish a national organization of American stockholders and give it enough muscle to be influential?
A More Aggressive Attitude Business interests — especially big business and their national trade organizations — have tried to maintain low profiles, especially with respect to political action.
As suggested in the Wall Street Journal article, it has been fairly characteristic of the average business executive to be tolerant — at least in public — of those who attack his corporation and the system. Very few businessmen or business organizations respond in kind. There has been a disposition to appease; to regard the opposition as willing to compromise, or as likely to fade away in due time.
Business has shunted confrontation politics. Business, quite understandably, has been repelled by the multiplicity of non-negotiable “demands” made constantly by self-interest groups of all kinds.
While neither responsible business interests, nor the United States Chamber of Commerce, would engage in the irresponsible tactics of some pressure groups, it is essential that spokesmen for the enterprise system — at all levels and at every opportunity — be far more aggressive than in the past.
There should be no hesitation to attack the Naders, the Marcuses and others who openly seek destruction of the system. There should not be the slightest hesitation to press vigorously in all political arenas for support of the enterprise system. Nor should there be reluctance to penalize politically those who oppose it.
Lessons can be learned from organized labor in this respect. The head of the AFL-CIO may not appeal to businessmen as the most endearing or public-minded of citizens. Yet, over many years the heads of national labor organizations have done what they were paid to do very effectively. They may not have been beloved, but they have been respected — where it counts the most — by politicians, on the campus, and among the media.
It is time for American business — which has demonstrated the greatest capacity in all history to produce and to influence consumer decisions — to apply their great talents vigorously to the preservation of the system itself.
The Cost The type of program described above (which includes a broadly based combination of education and political action), if undertaken long term and adequately staffed, would require far more generous financial support from American corporations than the Chamber has ever received in the past. High level management participation in Chamber affairs also would be required.
The staff of the Chamber would have to be significantly increased, with the highest quality established and maintained. Salaries would have to be at levels fully comparable to those paid key business executives and the most prestigious faculty members. Professionals of the great skill in advertising and in working with the media, speakers, lawyers and other specialists would have to be recruited.
It is possible that the organization of the Chamber itself would benefit from restructuring. For example, as suggested by union experience, the office of President of the Chamber might well be a full-time career position. To assure maximum effectiveness and continuity, the chief executive officer of the Chamber should not be changed each year. The functions now largely performed by the President could be transferred to a Chairman of the Board, annually elected by the membership. The Board, of course, would continue to exercise policy control.
Quality Control is Essential Essential ingredients of the entire program must be responsibility and “quality control.” The publications, the articles, the speeches, the media programs, the advertising, the briefs filed in courts, and the appearances before legislative committees — all must meet the most exacting standards of accuracy and professional excellence. They must merit respect for their level of public responsibility and scholarship, whether one agrees with the viewpoints expressed or not.
Relationship to Freedom The threat to the enterprise system is not merely a matter of economics. It also is a threat to individual freedom.
It is this great truth — now so submerged by the rhetoric of the New Left and of many liberals — that must be re-affirmed if this program is to be meaningful.
There seems to be little awareness that the only alternatives to free enterprise are varying degrees of bureaucratic regulation of individual freedom — ranging from that under moderate socialism to the iron heel of the leftist or rightist dictatorship.
We in America already have moved very far indeed toward some aspects of state socialism, as the needs and complexities of a vast urban society require types of regulation and control that were quite unnecessary in earlier times. In some areas, such regulation and control already have seriously impaired the freedom of both business and labor, and indeed of the public generally. But most of the essential freedoms remain: private ownership, private profit, labor unions, collective bargaining, consumer choice, and a market economy in which competition largely determines price, quality and variety of the goods and services provided the consumer.
In addition to the ideological attack on the system itself (discussed in this memorandum), its essentials also are threatened by inequitable taxation, and — more recently — by an inflation which has seemed uncontrollable.14 But whatever the causes of diminishing economic freedom may be, the truth is that freedom as a concept is indivisible. As the experience of the socialist and totalitarian states demonstrates, the contraction and denial of economic freedom is followed inevitably by governmental restrictions on other cherished rights. It is this message, above all others, that must be carried home to the American people.
Conclusion It hardly need be said that the views expressed above are tentative and suggestive. The first step should be a thorough study. But this would be an exercise in futility unless the Board of Directors of the Chamber accepts the fundamental premise of this paper, namely, that business and the enterprise system are in deep trouble, and the hour is late.
Footnotes (Powell’s)- Variously called: the “free enterprise system,” “capitalism,” and the “profit system.” The American political system of democracy under the rule of law is also under attack, often by the same individuals and organizations who seek to undermine the enterprise system.
- Richmond News Leader, June 8, 1970. Column of William F. Buckley, Jr.
- N.Y. Times Service article, reprinted Richmond Times-Dispatch, May 17, 1971.
- Stewart Alsop, Yale and the Deadly Danger, Newsweek, May 18. 1970.
- Editorial, Richmond Times-Dispatch, July 7, 1971.
- Dr. Milton Friedman, Prof. of Economics, U. of Chicago, writing a foreword to Dr. Arthur A. Shenfield’s Rockford College lectures entitled “The Ideological War Against Western Society,” copyrighted 1970 by Rockford College.
- Fortune. May, 1971, p. 145. This Fortune analysis of the Nader influence includes a reference to Nader’s visit to a college where he was paid a lecture fee of $2,500 for “denouncing America’s big corporations in venomous language . . . bringing (rousing and spontaneous) bursts of applause” when he was asked when he planned to run for President.
- The Washington Post, Column of William Raspberry, June 28, 1971.
- Jeffrey St. John, The Wall Street Journal, May 21, 1971.
- Barron’s National Business and Financial Weekly, “The Total Break with America, The Fifth Annual Conference of Socialist Scholars,” Sept. 15, 1969.
- On many campuses freedom of speech has been denied to all who express moderate or conservative viewpoints.
- It has been estimated that the evening half-hour news programs of the networks reach daily some 50,000,000 Americans.
- One illustration of the type of article which should not go unanswered appeared in the popular “The New York” of July 19, 1971. This was entitled “A Populist Manifesto” by ultra liberal Jack Newfield — who argued that “the root need in our country is ‘to redistribute wealth’.”
- The recent “freeze” of prices and wages may well be justified by the current inflationary crisis. But if imposed as a permanent measure the enterprise system will have sustained a near fatal blow.
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