Looting the Pension Funds
http://m.rollingstone.com/politics/news/looting-the-pension-funds-20130926What few people knew at the time was that Raimondo's "tool kit" wasn't just meant for local consumption. The dynamic young Rhodes scholar was allowing her state to be used as a test case for the rest of the country, at the behest of powerful out-of-state financiers with dreams of pushing pension reform down the throats of taxpayers and public workers from coast to coast. One of her key supporters was billionaire former Enron executive John Arnold – a dickishly ubiquitous young right-wing kingmaker with clear designs on becoming the next generation's Koch brothers, and who for years had been funding a nationwide campaign to slash benefits for public workers.
Nor did anyone know that part of Raimondo's strategy for saving money involved handing more than $1 billion – 14 percent of the state fund – to hedge funds, including a trio of well-known New York-based funds: Dan Loeb's Third Point Capital was given $66 million, Ken Garschina's Mason Capital got $64 million and $70 million went to Paul Singer's Elliott Management. The funds now stood collectively to be paid tens of millions in fees every single year by the already overburdened taxpayers of her ostensibly flat-broke state. Felicitously, Loeb, Garschina and Singer serve on the board of the Manhattan Institute, a prominent conservative think tank with a history of supporting benefit-slashing reforms. The institute named Raimondo its 2011 "Urban Innovator" of the year.
The state's workers, in other words, were being forced to subsidize their own political disenfranchisement, coughing up at least $200 million to members of a group that had supported anti-labor laws.
Read more: http://www.rollingstone.com/politics/news/looting-the-pension-funds-20130926#ixzz2iS966ncv
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Plutocrats at Work: How Big Philanthropy Undermines Democracy
The Case of Public Education
For a dozen years, big philanthropy has been funding a massive crusade to remake public education for low-income and minority children in the image of the private sector. If schools were run like businesses competing in the market—so the argument goes—the achievement gap that separates poor and minority students from middle-class and affluent students would disappear. The Bill and Melinda Gates Foundation, the Eli and Edythe Broad Foundation, and the Walton Family Foundation have taken the lead, but other mega-foundations have joined in to underwrite the self-proclaimed “education reform movement.” Some of them are the Laura and John Arnold, Anschutz, Annie E. Casey, Michael and Susan Dell, William and Flora Hewlett, and Joyce foundations.
Each year big philanthropy channels about $1 billion to “ed reform.” This might look like a drop in the bucket compared to the $525 billion or so that taxpayers spend on K–12 education annually. But discretionary spending—spending beyond what covers ordinary running costs—is where policy is shaped and changed. The mega-foundations use their grants as leverage: they give money to grantees who agree to adopt the foundations’ pet policies. Resource-starved states and school districts feel compelled to say yes to millions of dollars even when many strings are attached or they consider the policies unwise. They are often in desperate straits.
Most critiques of big philanthropy’s current role in public education focus on the poor quality of the reforms and their negative effects on schooling—on who controls schools, how classroom time is spent, how learning is measured, and how teachers and principals are evaluated. The harsh criticism is justified. But to examine the effect of big philanthropy’s ed-reform work on democracy and civil society requires a different focus. Have the voices of “stakeholders”—students, their parents and families, educators, and citizens who support public education—been strengthened or weakened? Has their involvement in public decision-making increased or decreased? Has their grassroots activity been encouraged or stifled? Are politicians more or less responsive to them? Is the press more or less free to inform them? According to these measures, big philanthropy’s involvement has undoubtedly undermined democracy and civil society.
The best way to show this is to describe how mega-foundations actually operate on the ground and how the public has responded. What follows are reports on a surreptitious campaign to generate support for a foundation’s teaching reforms, a project to create bogus grassroots activity to increase the number of privately managed charter schools, the effort to exert influence by making grant money contingent on a specific person remaining in a specific public office, and the practice of paying the salaries of public officials hired to implement ed reforms.
You Can’t Fool All of the People All of the Time
The Parent Trigger Trap