Referencing an LA Times story, the New Editor’s Tom Elia notes that
teachers unions are steering their members into inappropriate retirement plans that charge abnormally large fees, in return for which the unions receive millions in payments from the investment companies that set up the accounts. These transactions effectively transfer large portions of the teachers’ retirement savings into income streams for the unions—and is done mostly without the knowledge of union members.
t must be remembered that teachers unions in large part helped to fund the campaign against private accounts for Social Security by playing the anti-corporate populism card with the basic argument, ‘People shouldn’t trust the stock or bond markets with their retirements, you see, because they are prone to corruption and uncertainty.’
[My emphasis]
Tom goes on to note that “[t]here is nothing inherently wrong with investing in annuities, but they are generally the investment vehicle of choice for those that are already retired, not those saving for it.” Further, he argues,
teachers should be investing in stock index and bond index funds. A stock index fund can be had for a .05% fee, or a fraction of what they are currently paying for annuities.
So not only are teachers buying the wrong, and more expensive, product, they are unknowingly paying a commision to their union.
Unfortunately, they don’t seem to be teaching these things in school.
On the otherhand, if you ever have problems sliding a lubricated rubber over a banana, they’ve got you covered, from what I understand.
Read the rest of Tom’s analysis here.
I’ve always believed that an algorithym could be created that would automatically create an optimal asset allocation mix just by factoring some variables that could be derived via a simple questionaire.
It isn’t rocket science as a formulaic approach to allocation has been around for some time.
Maybe I found my calling?
Looks like we need a paternalistic attitute to the retirement decisions that teachers are making. They’re not up to par with the decisions that the new editor would make for them.
But seriously, these unions should be using that money to organize or at least invest in labor-accomodating businesses. Who knows what ING’s labor practices are.
But the surprise is the bolded part. The money, is, gasp, being spent on salaries for people running the union. Who would have thought? Who would have thought that union money would be used to run the union? Someone should put a stop to this. Someone that really, really cares about the interest of teachers should bust up that union.
Teacher, teacher, won’t you teach whoever titled this article:
“CIA officer fired for leaks has some incredulous defenders”
http://www.sltrib.com/news/ci_3741248
That’s either incredibly honest or incredibly illiterate.
I like the last bit, which you’ve seen elsewhere:
‘’It looks to me like Mary is being used as a sacrificial lamb,’’ said Larry Johnson, a former CIA officer who worked for McCarthy in the agency’s Latin America section.
Mary was a little lamb, whose fleece was white as snow.
Trade Monkey – sorry, it already exists in many forms. Vanguard’s version works quite well.
Shorter actus – it’s OK to help IMG steal from teachers, cause the union gets a cut of the take. And it’s not OK for evil conservatives to act as if we care whether or not teachers build up enough of a portfolio to retire on, cause we’d just use it as an excuse to slash social security if they did.
TW: able – sometimes I’m just not able to follow his reasoning.
Steal? There’s a lot of consumer choice involved here. Like I said, we need to have a real paternalistic attitute towards teacher. But in general, I think its ok for unions to ask for money from their members and then to use that money to run the union. Specially if they’re doing it to save social secure retirements for the rest of us.
Obligatory ignore acthole post.
He misses the point…..again.
Good! They earned it. If they want their union to continuously fight any meaningful reform to our educational system at the expense of children, then I’m quite pleased with the idea teachers will spend their golden years eating cat food. My profession doesn’t get rewarded for resisting innovations that lead to improved services, so why should they?
No surprise that the Teachers Unions are just as corrupt and abusive of their members as the Teamsters or AFL/CIO are to theirs. After all, unions are nothing more than bureaucracies, which always devolve into entities more concerned with
preserving their power and growing their financial clout than with “serving” the rank and file.
Interesting to note, that while the Teachers Unions also oppossed the Prescription Drug Program
passed a couple years ago, the leftist AARP broke with the Demo-rats and supported it because there was a provision which allowed the AARP to set up a “plan” within the program by which they could make more money of their membership, another example of this truism.
IGNORE ACTUS ALERT: once again, the resident disembler and provaricator is attempting to deflect the discussion by defending the union’s right to fleece school teachers! Proving once again that there is no Demo-rat interest group that the left won’t throw under the bus when it suits their politics. (Not unlike the desertion of the labor unions and African-American voter blocks on display in the left’s embrace of open borders and illegal immigration as they pander for the votes of the larger Hispanic community.) Pathetic.
I can’t say I’m surprised. Unions + retirement money = corruption and has for how long now?
There are two types of risk when planning for retirement. One is that you’ll lose the money you’re investing because the value of the investment goes down. Think stock-market crash or maybe just General Motors. The other is that you won’t make enough on your investment to meet your needs when considering inflation.
Here, the union is screwing its members twice. Even if the investment vehicle was the stock market–say an S&P 500 index fund–this would virtually ensure that they didn’t make any real money on it at all. With historical stock market returns at ~8-10%/year and inflation at ~3%/year, at best they’d see ~2%/year. Since annuities don’t return as much as the stock market, chances are the members are actually losing money overall. So they’re taking their money up front and ensuring they lose money in the long run.
Nice work if you can get it, I guess. And if you’re the type who just really enjoys screwing people.
What do you think of the folks at the change to win coalition of UNITE/HERE?
What I got out of it was that the “scheme” as the British say, is a backdoor way of funding the Union at the expense of the Union Members. Then the union can fund political advocacy.
Just a thought.
At who else’s expense are unions funded?
You know in Greek, they have three words for love (agape, philia and eros) where in English we really only have one. Similiarly, of all 900,000 words in English, we certainly don’t have enough to describe the utter, skull-scouring stupidity of those two statements.
On the otherhand, if you ever have problems sliding a lubricated rubber over a banana, they’ve got you covered, from what I understand.
In Maryland, our schools use cucumbers. Aren’t you sorry you moved?
Cucumbers? Doesn’t that encourage–y’know, invidious comparisons? What about their self-esteem?
“Derek Smalls? Paging Derek Smalls. Please call your party from any white courtesy phone.”
Kickbacks may not necessarily be illegal, but they’re an obvious conflict of interest. Does the union buy the best plan or the one that pays the union the most?
Mostly I think they’re sad because unlike their blissfully ignorant AFL/CIO brethren, Change to Win is conscious of the fact that they’re swirling around the bowl, but don’t understand why.
Unions were created long ago to defend workers against one of the more unpleasant aspects of transformation from an agricultural economy: the low wages caused by a seemingly endless supply of low skill labor migrating from the farm to the city. As recently as WWII, half of all Americans still worked in agriculture, thus the high water mark of union membership in the fifties.
Today however about 1% of the population works in agriculture, yet the unions are still lumbering along equipped with the same istitutional tools and goals appropriate for an economy that no longer exists. The cost of participating in a union is still there, but the benefit isn’t, which is why when you don’t count teachers’ unions and other government unions, fewer than 5% of Americas workers are unionized. For the most part, American workers are simply better off competing in the labor market than being in a union.
If UNITE HERE could just purchase a vowel, they might come to understand that they need to restructure into a competitive paradigm that’s actually relevant to the economy in which they’re participating. Something along the lines of a corporate temp agency whose majority stockholders are the temps themselves. Until then it’s just like everything else with the left: one long goodbye.
yours/
peter
But people are migrating to work in low wage work. That’s what UNITE/HERE recognize.
How do union wages compare to non-union ones? Do you really think that people get less in union benefits than they pay in dues?
For the most part, half of americans would join a union. Of course, thats not all it takes to make one. It takes organization against an increasingly empowered—and already organized—management.
Who cares? The question is how much does a union career pay compared to a non-union career? Today workers aspire to more than turning the same bolt for thirty years.
Sure. Half of all Americans would do a lot of thingsâ€â€if there was any money in it.
Goodbyyyyyyyeeee….
T/W: basic. As in take a class in basic economics…
;peter
Thats so great for them. They dream of the stars! like being pilots, or engineers, or firemen and cops. And even teachers. All of which turn that great big bolt in the sky.
Did that. The fun stuff was in the more advanced courses.
Economics department or Womyn’s Studies?
“Got you covered”. Bwah!
re: a****
Given that the percentage of private sector workers who are union members has declined from 24% in 1973 to 7.8% in 2005, the management teams are doing a great job. It’s also striking how much lower productivity and the standard of living are now than in 1973.
Fortunately, in the public sector, where employees really need protection from rapacious, profit-obsessed management teams, union membership has been steadily increasing. Thank goodness we hae a well organized and efficient public sector to compensate for the horrors of the private sector.
I don’t think we had a womens studies dept. We did have both an econ and business school. Which made the econ dept not so liberal artish and more just texbook based Mankiwnomics type stuff.
Productivety has certainly gained. But wages and compensation haven’t kept up with those. This latest recovery has been unprecedented in how uneven it is. My guess is its hte increasing imbalance of power between labor and capital.
You’d think they’d be so kind as to join the efforts of UNITE/HERE, but no, they’re content. Jerks.
Hmmm.
1.
Or hanging out at the local produce section of the grocery store?
2. Aren’t union salaries and expenses supposed to be paid for by union dues?
Dan Collins: Yes, don’t think I haven’t thought about that problem.
There’s an old joke it reminds me of, too. Here’s one version I found:
Mr. Baldwin, the biology teacher called on Mary, “Can you tell me the part of the body that, under the right conditions, expands to six times its normal size, and state the conditions.”
Mary gasped and said in a huff, “Why, Mr. Baldwin! That is an inappropriate question and my parents are going to hear of it when I get home!” She sat down, red-faced.
“Susan, can you tell me the answer?” asked Mr. Baldwin.
“The pupil of the eye, under dark conditions,” said Susan.
“Correct. Now Mary, I have three things to say to you. First, you have not studied your lesson. Second, you have a dirty mind. And third, boy are you going to be disappointed someday!”
Actually actus, they dream of getting into management.
Actually actus, management has never had less power over labor. Now that labor is actually scarceâ€â€as it has been for decadees now. Employees have far more options than than they did before WWII, when there were twenty other workers waiting to take a someone’s position if they didn’t toe management’s line. These days it’s managers that get fired if they have too much turnover on their teams.
The fact is actus, as I’m sure you learned in your classes, “labor” and “management” are a false dichotomy based on outmoded Marxian paradigms of “labor” being some special type of capital different from the rest, that magical capital from which “value” is derived. Today we understand that “labor” is just another input, and, thanks to Jevons and the other marginalists, we understand that value is subjective. We’re all workers actus, whether we’re managers or line workers, CEOs or tradesmen or entrepreneurs.
Organized labor, again, being a product of it’s time during the birth of industrialism, derives all of it’s power from restricting workers’ entry into various trades or industries, thus creating a false scarcity and higher wages. Unsurprisingly this anti-competitive model is moot in a competitive market place, which is why the only sectors it isn’t an abject failure (See American Steel, GM, Ford, et al) are non-competitive sectors, i.e. government.
yours/
peter
Yes. to the workers the factories belong!
Next time that profits go up and salaries don’t, i’ll remember this. It will make me feel warm inside.
Of course we all do work. Some of us make money because we own though. And some of us have jobs where we have fiduciary duties to those who own. That being management. Others of us don’t have those fiduciary duties.
You’ll find that this breakdown is not quite fictional nor marxist. Specially when that derivative suit from shareholders is facing down Mr. CEO for breach of fiduciary duties. I’m sure he be grateful at that moment if he was just another worker on the line, without fiduciary duties.
Ah. but you ignore where UNITE/HERE Is growing: service. The organized Houston’s janitors. Houston!
No to the owners the factories belong whether they’re also workers or not.
And next time profits tank and salaries don’t, what will you remember?
And some of us lose money because we own. Capitalism is a profit and loss system. What’s your point?
You’ll find that this breakdown is not quite fictional nor marxist. Specially when that derivative suit from shareholders is facing down Mr. CEO for breach of fiduciary duties. I’m sure he be grateful at that moment if he was just another worker on the line, without fiduciary duties.
That’s why they make the big bucks, actus.
Yeah, low-end services, where the supply of labor is always the largest. Hopefully organized labor can’t destroy those jobs like they did the higher paying industrial jobs we used to have.
yours/
peter.
Of course, because there are differences.
My pink slip. Or the contract I got. But I certainly won’t imagine that the differences are a false dichotomy.
You can’t nafta cleaning your office without naftaing your office.
It is a false dichotomy. The only time I’ve ever been layed off was from a management job. And the average worker today has more authority on the job than middle managers of forty years ago. And the percentage of ownership held by workers is enormous and growing, a phenomenon that has nothing to do with unions. “Management” and “labor” may still be useful as cliches, but those terms don’t describe the social classes of America as you pretend they do.
And you can’t make a $25 an hour job a $45 an hour job with lifetime benefits without obliterating most of them.
:peter
Other than the fact that the spread of returns to capital and labor are differing at unprecedented levels in this recovery. But that doesn’t compare to your experience being laid off once.
Try a 7 an hour job into a 16. And there are other ways to get funding for work besides eating into the work done by others. Its about relative market power of all the interested parties: the business, the other employees, the costumers, other suppliers, and even capital.
But I guess those 45$ an hour jobs will just have a nice trickle down effect on the rest. Or maybe thats a load of bullshit.
I’m not sure they are as corrupt. Nobody associated with the Wisconsin teachers union insurance trust has been slain gangland style, as has happened with Teamsters insurance people. They don’t actually demand that teachers’ insurance be purchased from them, they merely convince other insurers not to bid.
pvrwc-
No surprise that the Teachers Unions are just as corrupt and abusive of their members as the Teamsters or AFL/CIO are to theirs. After all, unions are nothing more than bureaucracies, which always devolve into entities more concerned with
preserving their power and growing their financial clout than with “serving†the rank and file.
My father was a USWA (Local #2173) worker.
My mother was a UFCW (Local #1059) worker.
I absolutely despise unions with every fiber of my being…
T/W: “major”- as in, “Unions majorly suck!”
Actus stupidus-
At who else’s expense are unions funded?
Look at the drop in private sector unions over the last 20-30-50 years.
Meanwhile, consider the increase in unionization of gov’t workers…
T/W: “order”- as in, “We, The State, order you to fund the unions…”
Scab,
Well, at least the Teachers Unions don’t own casino’s. Yet, but give them time.
Unlike the Levee Boards in NO that used their funds to buy hotel/casinos and Gulfstream jets instead of using the funds reinforcing the levees that were their responsibility and ended up being “breeched”, as opposed to “topped” (an important distinction that was lost on the AP as it persecuted it’s anti-Bush jihad) by Katrina.
actus, the point is that this is a scam. The union is taking its management fee from the teachers, over and above their dues; is investing the money from teachers in low-yielding securites, and taking a commission on the sales; and, no doubt, is using the profit to invest in the sort of high-yielding stocks that young people ought to pay attention to. If you dig deep, the teachers’ money probably isn’t being invested in the annuities. It’s probably being invested in high-yields, with a loan taken out with them as security financing the low-yields, and the union raking in the yield difference.
All of the money except the original management fee (and, arguably, the commission on sales from the annuity company) actually belongs to the investors, in this case the teachers whose contributions finance the whole scheme. It is, in fact, the sort of financianal shenanigan that causes weeping and wailing and gnashing of teeth, not to mention calls for better regulation of the securities business, from Leftists when engaged in by the likes of Ken Lay. It is, in fact, a low-grade version of what Enron was up to.
If a stockbroker did that, the client would have a right of action against the broker and/or agency for misrepresentation, among other things, and the SEC would be on their asses big-time. The larger brokerages, Merrill Lynch and that bunch, would fire a broker for setting up deals like that, because if word got out investors would be abandoning them in droves even if they couldn’t find a way to sue, not to mention the trouble with Securities & Exchange.
But go ahead and make excuses. They’re almost as honest as Enron was, and they’re a union, so they’re allowed to steal all they want, right?
Regards,
Ric
They still look like union members to me.
And the counterpoint is that there is consumer choice, and its paternalistic to step into that choice. But I could go for general regulation of advertiseents for financial advice.
How is this like Ken Lay? They were falsifying reports to investors that they had a fiduciary duty to.
Here, the unions are endorsing particular products. The unions aren’t taking any money, and aren’t making any investment decisions. It is the brokers doing that, and if you say the SEC is going to go after them, then you know quite a bit about the Bush SEC
Well, Rick, pay attention. He said it just as plain right here:
Smooches, Rick, per usual.
TW: Purpose, as in the moron’s purpose in life is to justify the unjustifiable.
Listen, actus, you mental clown-midget, just shut the fuck up; if the union wants to offer a worthwhile product, then like any business, they can offer a discounted, preferred service. But are they?
Well, fucking ‘aye, it turns out, Sherlock, that they AREN’T. They’re offering a product that is best for the Unions, not the union members. That’s the whole goddamn point which you’ve argued into morbid stupidity. It’s the wrong product that the unions are selling and its going to hurt the overall future of the union members, AND the union is profiting off the sales.
The union could be twisting; it could be misrepresenting; it could even be rebating. Above all, it’s damn shitty customer service. And that’s the rule with unions.
If you don’t like it, fuck off. Grow up in Flint, asshole, and then give me your opinion of union-house rules. But next life, which God-willing, Insh’allah, will be soon for you, my window-licking friend.
But they’re not even offering it. Just endorsing it. Like Captain Kirk does for priceline. I suppose they could quit endorsing products, and just raise their dues.
I don’t see what makes unions so special that they can’t endorse things. But if you want to have more general regulation of advertisements for financial products, by all means, I’d love it.
Right. Tremendous difference between ‘offer’ a preferred product and ‘endorse’ a product. Like credit unions. Only in legalese; in English on the other hand…
Low rate of return. Inappropriate product. High Fees. Union profits.
Actus, two thumbs way up! “We should all have the pleasure of being screwed for the Local chapter!”
Et fin.
Quite. Like captain kirk isn’t responsible for what bad business practices priceline has. Thats because priceline offers the product. But kirk just endorses it.
I’d be open to the idea that people be responsible for products that they advertise. But it is problematic. Does the principle apply to blogads too?
Ladies and Gentlemen, I give you the World’s Most Fucking Stupidest Commenter, Actus.
actus,
The point here is that the union is chartered to operate to benefit its members, the workers.
What they are doing instead is scamming the workers for the benefit of the union management.
Overheard in the cocktail lounge at a Hilton:
“My lawyer can beat up on your lawyer.”
“Yeah, but my accountant can make an elephant disappear up its own ass.”
Congratulations. You’ve already put yourself in bed with Saddam Hussein and Stalin; now you’re endorsing John D. Rockefeller’s tactics. Or Enron’s. (You’re being far too technical, by the way, although that may befit a proto-lawyer. What Enron was doing was presenting what they were selling as one thing, while delivering something quite different and less valuable. As here.)
And if you believe the “endorsement” bit, you must surely in the market for a bridge somewhere. Let me see, where did I put those quitclaim forms…
Regards,
Ric
tw: position. I believe I’ll assume a prone position and become unconscious.
They’re getting money from members and for the union operation. Thats how union salaries are paid: from members. Next thing you know you’ll object that GASP, money is taken from their paycheks—their paychecks!—and used to pay salaries for the union.
And the union isn’t presenting specific returns here. You said brokerages get attacked for doing this. Well, brokerages ARE doing this. Perhaps they should be more tightly regulated. I agree with that. No reason to limit the sale of bad financial products to just union members.
You missed a word. The correct answer is:
Thank you for playing. Here’s some nice parting gifts.
However, you don’t get to keep the parting gifts unless you actually, y’know, depart.
My mother-in-law was a teacher, so I’m torn on this one.