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CA renter.
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August 9, 2013 at 12:19 AM #764225August 9, 2013 at 12:19 AM #764224
CA renter
Participant[quote=SD Realtor]Perhaps I should revise. Forecasting costs given a smaller finite set of parameters is possible. Private companies do indeed seem to do it well. Much better then the public entities. Especially when healthcare is involved.
Yes so one statement out of all the other points I made was arguable. All of the other ones do indicate that the way that it is being done now does not work and costs the taxpayers alot of money. Furthermore that the amount that is being heaped on the taxpayers could grow dramatically based on the outcome of future court cases as more municipalities fall by the wayside and look for ways to keep those pension checks rolling.[/quote]
SDR,
Just to be clear, the studies that show how privatization costs more or about the same (while reducing the number of good-paying jobs) do include costs for pensions and healthcare.
And it’s not just annuities…insurance companies of all kinds would not be able to exist if they couldn’t properly calculate costs vs. liabilities.
FWIW, the numbers for “unfunded liabilities” that have been bandied about are no more accurate than the “funded” status of the pension funds. In each case they are dealing with unknowns, with each having a different objective — one to show how bad things could get (numbers from those pushing privatization/capital), while the other tries to show things in a more positive light (labor).
I’d also point out that current pension contribution rates are very much in line with historical norms. The Privatization Movement tries to compare today’s contribution rates with those from the late 90s/early 2000s when many public employers were paying little to NOTHING in contributions toward employee pensions. THAT rate was the anomaly, not today’s rate.
One more thing: I have *always* acknowledged that some changes need to be made. Pension spiking, retroactive pension increases, certain “garbage” add-ons, etc. need to be dealt with. And while I do not advocate for at-will employment for anyone (union or not), I do think that it should be easier to get rid of the few unionized employees who truly are parasitic liabilities.
August 9, 2013 at 12:25 AM #764226njtosd
ParticipantReceived from a Detroit friend:
http://thehayride.com/wp-content/uploads/2012/08/hiroshima-detroit.jpg
August 9, 2013 at 12:37 AM #764227Participant[quote=njtosd]Received from a Detroit friend:
http://thehayride.com/wp-content/uploads/2012/08/hiroshima-detroit.jpg%5B/quote%5D
Okay, but they are trying to blame the decline of Detroit on a Democratic government…which is a spurious argument. While some of the elected leaders might not have been the best for Detroit, there were so many other internal and external factors that were completely out of the hands of local politicians.
We desperately need to bring manufacturing jobs back to the U.S., and enacting some reasonable tariffs that offset the lower wages and lax labor and environmental regulations would be a good start. If another country has better access to raw materials, or performs better work, then let them compete based on that. But trying to drive every worker into the ground is not the way to a better world for society.
August 9, 2013 at 5:59 AM #764230The-Shoveler
ParticipantGeez haven’t you heard, Manufacturing is starting to return to the U.S.A in a big way, the Robot’s and the hand full of Automation people that know how to set them up are busier than ever!!
Even in China Automation is starting to have a big impact..
August 9, 2013 at 6:56 AM #764232livinincali
Participant[quote=SK in CV][quote=SD Realtor]Sounds like there should be no private entities then because any service industry that has multiple providers is less efficient then a single entity.
Hmmm curious logic.[/quote]
I was specifically talking about residential trash pick-up. And yes, it’s perfect logic. Everyone gets almost identical service, differing only in the number of trash cans. You tell me, which would be more efficient, one provider stopping at every house once a week or 10 different providers driving the exact same route every week, but stopping, on average at every 10th house?[/quote]
Why is weekly pickup at every house the most efficient method of trash disposal. The problem is you are assuming that is the only and most efficient way to remove trash from residences. Maybe having a large bin at the end of the street where each house drops off their trash and then the bin is serviced on demand is a better way to do things. That’s how apartments do trash removal.
There’s obviously some weeks that go by when I didn’t generate a lot of trash and don’t need my trash picked up yet the garbage truck drives by anyways. That’s not necessarily the most efficient way of doing things.
My point is that competitive forces drive efficiency. Obviously companies that figure out more efficient ways of doing thing enjoy a competitive advantage over their competitors. That’s what drives up their profits and lowers cost to consumers.
We often complain about government being inefficient and I think one of the major reasons they are efficient is they don’t have any competition. What drives them to deliver better service for lower cost. Absolutely nothing, other than a shortage of tax revenue, which is usually solved by increasing revenue rather an innovative efficiency improvement.
August 9, 2013 at 7:13 AM #764233Participant[quote=CA renter]
The only thing privatization does is expand the wealth/income gap and concentrate power into fewer and fewer hands. It does NOT save taxpayers or consumers money. It will NOT result in more or better paying jobs for workers. Learn about the people and organizations behind the privatization movement to see why this is being pushed.[/quote]That’s because of the way it’s done. It’s almost always done as a transfer of a public service monopoly to a private service monopoly. We’re taking bids to select the new single provider of x service. It’s never we’re opening up this service to all business that would like to perform the task. I don’t expect the practice to change. I’m just saying that privatization could be successful if done in the manner I described. I’m well aware that there would be concerns and some pains associated with that type of change at first but eventually it would be a better system.
Obviously that’s not practical for some services but it’s the monopoly aspect of many government services that leads to inefficiencies and high costs. There’s no incentive to change or be more efficient if you don’t have any competition. The only thing the taxpayers can do is leave the city if the city doesn’t want to improve efficiency, witness Detroit.
Schools are a great example. Eventually somebody is probably going to figure out a better more efficient and cost effective way to do K-12 education in a charter school (maybe even online, who knows). The public school system (teacher unions and especially administrators) is desperately attempting to protect it’s monopoly of K-12 education because they know when somebody figures it out they are done for. Privatization of education is eventually going to happen and the costs will come down. The only question is when? It should be interesting to watch the educational complex fight this inevitable change. The medical system will likely see the same fight.
August 9, 2013 at 7:15 AM #764234Participantdup
August 9, 2013 at 8:18 AM #764245Anonymous
Guest[quote=SK in CV]It IS possible.[/quote]
Yes, it IS possible.
And it has been done successfully in the past, even a hundred years ago:
http://www.history.com/this-day-in-history/first-barrel-ride-down-niagara-falls
On this day in 1901, a 63-year-old schoolteacher named Annie Edson Taylor becomes the first person to take the plunge over Niagara Falls in a barrel.
Yes, is IS possible to survive a barrel ride over Niagara Falls. And it IS possible to manage an annuity or defined benefit pension plan successfully. Folks have been doing all these things for a long time.
But not without RISK.
So who bears the risk? And why?
I say the person who takes a ride over Niagara in a barrel should bear the risk. If it works out, they get the glory.
If it doesn’t work, well …
Of course there are ways to mitigate the risk: a stronger barrel, an analysis of water currents, etc. We know a lot more than we did a century ago, and folks have probably gotten a lot better at managing these risks.
In August 1995, Steve Trotter, and Lori Martin took a barrel ride over the falls. They survived the fall but their barrel became stuck at the bottom of the falls, requiring a rescue.
Seems there are black swans swimming in the Niagara River.
The real estate crash that is the basis for this website occurred for one fundamental reason: We thought we could eliminate risk, or at least reduce it to the point that we could ignore it.
The financial theory behind mortgage CDOs is not much different than the ones used by annuities and pension funds. Smart people running highly diversified portfolios, actuarial planning based on historical statistics, etc. And it all works, most of the time.
But there is still risk.
So how do we eliminate the risk of dying when riding a barrel over a waterfall?
There’s only one way to eliminate all risk: Don’t ride a barrel over a waterfall.
So how we eliminate the risk of a defined benefit pension crisis?
There’s only one way to eliminate all risk: Don’t use defined benefit plans.
That’s right, just don’t do it.
One can live a happy, fulfilling life without ever riding a barrel over a waterfall.
It IS possible.
In fact, that’s how most people live.
And we can have a government that provides necessary services while compensating employees fairly without ever using a government-guaranteed defined benefit pension plan.
It IS possible.
In fact that’s how most people live.
August 9, 2013 at 8:29 AM #764247SK in CV
Participant[quote=livinincali]
That’s because of the way it’s done. It’s almost always done as a transfer of a public service monopoly to a private service monopoly. We’re taking bids to select the new single provider of x service. It’s never we’re opening up this service to all business that would like to perform the task. I don’t expect the practice to change. I’m just saying that privatization could be successful if done in the manner I described. I’m well aware that there would be concerns and some pains associated with that type of change at first but eventually it would be a better system.[/quote]
To quote the most interesting man in the world “when you find something you don’t do very well, don’t do that thing”. Government doesn’t outsource very well. Hell, even private industry often doesn’t outsource very well.
As big a problem as the often extra costs are, is the destination of those costs. The increasing wage gap we’ve experienced in this country over the last three decades has severely shrunk the middle class. Outsourcing of government services has increased the size of this gap, as traditional government services are turned into private services. The government doesn’t want to make a profit, it wants to deliver whatever the body politic deems to be essential services.
Even when those services are outsourced at the identical cost, the economy suffers, because private industry doesn’t work for free. They work for profit. So rather than the costs ending up in the hands of the highest number of people, they end up in the lowest. And that IS the wage gap. An ever expanding piece of the pie going to those who provide capital rather than those who provide work.
August 9, 2013 at 8:41 AM #764249no_such_reality
Participant[quote=SK in CV]
To quote the most interesting man in the world “when you find something you don’t do very well, don’t do that thing”. Government doesn’t outsource very well. Hell, even private industry often doesn’t outsource very well. [/quote]
Most people don’t do amputations well. You may find yourself in a situation where you need to do one. In fact, you may find you need to do it with a dull multi-tool and not a nice clean surgery center after being stuck under a rock for 127 hours.
That’s actually why most corporations outsource to. They know the service is broken and inefficient and bloated. Like a 400lb person, they could go a the biggest loser, start a multi-year regimen of serious exercise and diet or, they could do surgery.
They opt for surgery because they know the organization, much like many people do not have the stamina and fortitude to deal with all the hard work of fixing it themselves.
Most importantly, though they never openly admit it, they really do it because they know they cannot control their own demand for services unless there’s an immediate cost. They know can’t say no to an extra cookie.
August 10, 2013 at 2:27 AM #764301Participant[quote=harvey][quote=SK in CV]It IS possible.[/quote]
Yes, it IS possible.
And it has been done successfully in the past, even a hundred years ago:
http://www.history.com/this-day-in-history/first-barrel-ride-down-niagara-falls
On this day in 1901, a 63-year-old schoolteacher named Annie Edson Taylor becomes the first person to take the plunge over Niagara Falls in a barrel.
Yes, is IS possible to survive a barrel ride over Niagara Falls. And it IS possible to manage an annuity or defined benefit pension plan successfully. Folks have been doing all these things for a long time.
But not without RISK.
So who bears the risk? And why?
I say the person who takes a ride over Niagara in a barrel should bear the risk. If it works out, they get the glory.
If it doesn’t work, well …
Of course there are ways to mitigate the risk: a stronger barrel, an analysis of water currents, etc. We know a lot more than we did a century ago, and folks have probably gotten a lot better at managing these risks.
In August 1995, Steve Trotter, and Lori Martin took a barrel ride over the falls. They survived the fall but their barrel became stuck at the bottom of the falls, requiring a rescue.
Seems there are black swans swimming in the Niagara River.
The real estate crash that is the basis for this website occurred for one fundamental reason: We thought we could eliminate risk, or at least reduce it to the point that we could ignore it.
The financial theory behind mortgage CDOs is not much different than the ones used by annuities and pension funds. Smart people running highly diversified portfolios, actuarial planning based on historical statistics, etc. And it all works, most of the time.
But there is still risk.
So how do we eliminate the risk of dying when riding a barrel over a waterfall?
There’s only one way to eliminate all risk: Don’t ride a barrel over a waterfall.
So how we eliminate the risk of a defined benefit pension crisis?
There’s only one way to eliminate all risk: Don’t use defined benefit plans.
That’s right, just don’t do it.
One can live a happy, fulfilling life without ever riding a barrel over a waterfall.
It IS possible.
In fact, that’s how most people live.
And we can have a government that provides necessary services while compensating employees fairly without ever using a government-guaranteed defined benefit pension plan.
It IS possible.
In fact that’s how most people live.[/quote]
The government guarantees all kinds of things: GSE mortgages, student loans, farm loans, agricultural crop prices, FDIC insurance, Section 8 rent…and much more.
If you want to eliminate government guarantees, great; but lets eliminate ALL government guarantees and entitlements.
Once again, we ALL have to pay for things we don’t like. Some of these things we really HATE to pay for. For me, it’s wars, drones, the NSA, the “drug war,” subsidies for Walmart and others who underpay their employees so they have to use food stamps, Medicaid, etc. Some don’t want to pay for sidewalks, libraries, parks, or schools that they will never use. The list goes on and on. That’s the price of living in a democratic, civilized society. Why do you feel that you shouldn’t have to pay for things you don’t like when everybody else has to do so?
August 10, 2013 at 3:49 AM #764302Participant[quote=livinincali]
Schools are a great example. Eventually somebody is probably going to figure out a better more efficient and cost effective way to do K-12 education in a charter school (maybe even online, who knows). The public school system (teacher unions and especially administrators) is desperately attempting to protect it’s monopoly of K-12 education because they know when somebody figures it out they are done for. Privatization of education is eventually going to happen and the costs will come down. The only question is when? It should be interesting to watch the educational complex fight this inevitable change. The medical system will likely see the same fight.[/quote]Have you looked at how charter schools are performing relative to public schools?
The formatting of the following quote is off, so please check the original study for more info. The quote is from page 48 of the study. Be sure to look at the chart on page 49 to see how charter schools perform slightly better in reading, and worse in math. The “benefits” seen in the charter schools WRT reading are miniscule — literally besting public schools by just a matter of “days of learning/education,” while under-performing in math by about the same number of days, especially when looking at the long-term results.
———
“In every scenario, the performance of the virtual twins in TPS serves as the baseline of comparison. The charter school learning gains are expressed
relative to that standard. The results are presented with two different measurement scales: standard deviations and days of learning.
Looking at the longest time frame (five growth periods: Spring 2006–Spring 2011),Figure 21
shows positive charter school impacts on student learning in reading equivalent to five additional days of learning per year compared
to what their TPS peers receive. The 5-year
charter school impact in math
is similar to the learning gains at TPS equal to no additional days).
It bears mentioning that the 3-period time frame
–the
middle scenario–
reflects the performance of the
charter sector since the 2009 study. This result shows the performance of the charter school sector as a whole in the ensuing three years. Across the 27 states, charter performance in the three most recent growth periods is positive and significant in reading, amounting to about seven extra days of learning over that of their TPS peers. The charter school impact on student learning in math is not significantly different between charter students and their TPS peers.
If we limit the analysis to the most recent growth period (Spring 2010 – Spring 2011), students in charter schools have eight more days of learning
than TPS in reading. In math, students at charter schools and TPS have similar learning gains.”http://credo.stanford.edu/documents/NCSS%202013%20Final%20Draft.pdf
—————–
Realize that many charter schools are also getting a lot of funding from very wealthy individuals and entities who are looking to “privatize” the money now going to public schools.
Sorry this is so long, but it’s a must-watch if you want to better understand some of what’s been going on with respect to privatization in education:
—————–
“Iron Man 3 just opened this past weekend, followed soon by more would-be blockbusters. I’m sure a lot of these movies will be entertaining, but none will be more important or relevant than a half-hour documentary I recently watched: The United States of ALEC.
This film, featuring Bill Moyers, does a masterful job of explaining how the closed-door manipulations of the American Legislative Exchange Council and its corporate lobbyists affect public policy in every realm of our society — including education.
Our nation spends about $500 billion in local, state and federal funds on public schools from kindergarten through high school. Most Americans view this as a wise investment in our nation’s future. Throughout the 20th century the U.S. was the clear leader in public education. We created the most vibrant economy the world has ever known. The record speaks for itself — public education is a great investment.”
http://www.huffingtonpost.com/dennis-van-roekel/exposing-alecs-agenda-to-_b_3223651.html
……
Those who want to debate this topic MUST learn about ALEC and the various players behind the privatization movement.
August 11, 2013 at 3:04 AM #764334paramount
ParticipantBy far the best video I’ve seen on Detroit:
August 11, 2013 at 9:27 AM #764340FlyerInHi
GuestCAr, right now there is no federal backstop for state and local pension in case of shortfall. So it’s not like we have to pay for something we don’t like.
Didn’t you say the pensions are self-sufficient with employer and employee contributions making up the funds. Let them remain self-sufficient. They can kick in more contributions if they wish. Or they can reduce benefits. Or they can eliminate defined benefits pensions if they want. Each locality has the choice based on its resources.
Detroit needs to examine its resources and decide what to do. If they can successful sue the state for money based on the Michigan constitution, good for them.
Harvey was talking about the risk of matching current contributions to future benefits. Can’t deal with the risk? Don’t do it.
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