Are Teachers To Blame For Economic Illiteracy?

Teachers, administrators, and other inquiring minds will be interested in an email from a California Teacher written in response to Why Is California Broke? and Mayor of LA Says "Bankruptcy is Not an Option".

"California Teacher" Writes:

Mish

I teach special education and make $52K a year. That doesn�t sound bad, but factor in the cost to buy a house here and you realize that $52K is a low salary for living in San Diego.

Everything is relative Mish, I know for a fact that NJ and NY teachers have higher salaries than CA, at least San Diego Unified. Teacher salaries are all public info you can look up, it really depends upon the district that you work in.

Larger districts tend to pay less than smaller more wealthy districts like Del Mar Unified. I wish I was living so high on the hog as you always infer that teachers do.

"California Teacher"

Everything Is Relative (But It All Matters)

Dear "California Teacher"

The whole defined benefit scheme in general is broke. Cities will go bankrupt unless something is done. That is a simple mathematical statement of fact.

Yes, relatively speaking, teacher salaries are not as problematic as police or firefighter salaries, but is that a sound reason to avoid fixing a fundamental problem with teacher pensions and union rules that protect the worst employees?

I am infuriated with police and firefighters retiring at age 50 with 90% of top salary. However, just because something is less of a problem does not mean it is not a problem.

Teachers email me saying they are underpaid, police and firefighters email me telling me that their life is on the line, bureaucrats of all sorts email me saying what they do is important. To top it off, warmongers email me in support of defense spending because they have a job at a defense contractor.

In short, everyone wants an exception for their group and everyone thinks what they do is necessary. Unions spread fear if they do not get what they want. The teachers' unions, along with police and firefighters, are the most adept at spreading fear. Politicians are afraid to take on unions, and exempt themselves from the mess by increasing their own pay and benefits as well.

The only sensible thing to do is reduce benefits. Taxing the already overburdened private sector, which does not get such benefits, cannot and will not work.

It's Not How Much One Makes, It's How Much The Dollar Buys

The plight you face is not insufficient wages, but rather with how far the dollar goes.

Inflation benefits those with first access to money, the banks and the wealthy. Moreover, the Fed is purposely attempting to reinflate the credit bubble, now. We all face this problem. There is no particular reason unions should be exempt from problems the private sector faces.

One reason the cost of housing is high, is that people who could not afford houses bought them anyway. Why did people buy houses they cannot afford?

There are multiple answers to that question

• Monetary policies at the Fed and ridiculously low interest rates encouraged speculation
• Tax policies encouraged it
• Bush and Greenspan embraced the "Ownership Society"
• Originators were able to pass the trash (poor quality loans)to speculators
  
• Uneducated people have no idea about money and interest rates

Raising property taxes (or taxes in general) for the select benefit of union workers, just because property valuations are still in la-la land is both unwise and demographically untenable.

Moreover, we are wasting $trillions on war. Reduce military spending by 67% and the US will still be safe, probably safer as we will make less enemies. Military spending is another reason for the falling dollar.

It is important to talk about all of these things because the only way to bring about change is through education. People need to understand what is happening and why.

Question for Teachers and Administrators

I have a simple question for teachers and administrators.

Why is it that one can go through 12 years of schooling without taking a single class on what money is, how money is created, credit cards and other traps, interest rates, the role of the Fed, etc., when the one thing everyone absolutely needs to understand the moment they are tossed into the real world is money?

How is it that we have an education system that leaves students so ill prepared for the real world in regards to things they need to know about stocks, bonds, interest rates, credit cards, and the time value of money?

Yes, I know that administrators, not teachers set the curriculum. However, the end result is what matters: high school graduates are economically illiterate.

I am wondering: How many teachers would complain if we threw music, art, and Latin class out the window and required 4 years of economics instead?

How many parents and teachers would complain if we threw sports out the window?

Regardless of who is to blame, the bottom line is what matters, and the bottom line is our education system churns out economic illiterates, ill prepared for the real world. Sadly, I believe it is safe to say that most teachers are economic illiterates as well. Of course the same applies to Congress, and even the Fed, the latter being "over-educated" to the point of placing complete faith in academic gibberish instead of real world practically.

Pray tell, why is this?

Bankrupt Education System

Not only do we have bankrupt nation, our education system is bankrupt, leaving students ill prepared for the real world. On the bright side, I suppose we could be thankful for that. If educators were given a chance, they might poison young minds with Keynesian claptrap while singing the praises of unions. In this regard, ignorance may indeed be bliss, at least compared to outright economic brainwashing that might otherwise occur.

For the record, I am sure most teachers are hardworking and very devoted. However, class sizes continue to shrink while benefits for teachers and administrators expand.

We need to balance the results with the cost of education. We also must balance the cost of education with what taxpayers can afford, not pay scales that teachers think they deserve! Obviously similar statements apply to police and firefighters, except even more so.

Pray tell, what are taxpayers getting for their money? The sad answer to that question defines the problem at hand.

1. The education system is geared to benefit the system, not the kids.
2. As bad as things are through grade 12, the cost of college education is much worse.

Union salaries combined with shrinking class sizes and untenable pension plan benefits are an unsustainable brew. That is a simple mathematical statement of fact. Arguably, any teacher who cannot figure that out probably should not be teaching.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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