Despite A Poor Performance As Comptroller, Scott Stringer Attempts Power Grab

The NY Post reports the following:

The budget for the office of the city’s financial watchdog grew at twice the rate of the rest of the government over the last two years, according to data examined by The Post.

Comptroller Scott String­er’s budget increased from $71 million in fiscal 2013, when John Liu was in charge, to $86 million in fiscal 2015, a 21 percent jump.

The city’s overall budget grew by 10 percent over the same time period, according to the Independent Budget Office — an increase city officials said was due largely to new labor contracts negotiated under Mayor de Blasio.

Stringer aides noted that $5.8 million in added charges came from having to find a new custodial bank for the pension system.

With Stringer's budget growing at twice the rate of the rest of the city government, New York City residents ought to be getting some bang for their buck out of Stringer.

Alas, they are not:

The New York City retirement fund posted a dismal 3.4% return for the fiscal year ended June 30. Comptroller Scott Stringer delayed release of the figure for months. The poor returns mean the city will have to spend billions of dollars more in pension contributions.

And with markets down so much this year, the city’s pension funds may soon be an increasingly severe budget problem.

The fiscal 2014 investment gain of 3.4% is less than half of the city’s target of 7%, which is the rate of return the city assumes in determining how much to put aside to pay benefits. The city is expected to contribute an average of $6 billion annually over the next few years to the five pension plans that comprise the city's retirement system.

Stringer attempted to hide the poor pension fund performance with a "bare-bones announcement" on the comptroller's website:

Stringer, who released news of a strong gain in fiscal 2014 in August of that year, waited until last week to deliver the bad news about 2015 and did so with a short, bare-bones announcement on his website. The strategy almost worked: Until now, only the trade publication the Bond Buyer has reported the news. The comptroller’s office says it waited for audited results rather than release an estimate as it did last year.

Perhaps Scott was hoping the big, strong arms of Governor Andy would save him from having to make the pension fund performance disclosure.

Speaking of disclosure, let's read (per Yves Smith) about pension fund fees and how Stringer continues to hide the management fees NYC funds pay while claiming he's all about disclosure:

Pensions & Investments reported yesterday that the New York City Retirement System reported that it paid $709 million in fees to investment managers in its last fiscal year, and was trying to give the impression that as a result of a big push for more disclosure, it was now reporting all the fees it is paying.

Yet if you read the article with a modicum of attentiveness, you can see that that is false. In reality, Stringer is trying to have it both ways: to appear to be on the right side of a controversy, while not doing anything to ruffle the pension systems’ fund managers, many of whom are very influential political donors.

Here are the key parts of the article:

The figure represented a 33.7% increase over the $530.2 million in fees reported for the fiscal year ended June 30, 2014. However, the most recent fiscal year’s accounting includes many incentive fees that hadn’t been identified in previous annual reports…

City officials said they believe the latest information covers most of the investment management fees, adding that the new rules for fee transparency will provide an even more accurate picture.

The big tell here is the use of the “believe” language. When CalPERS requested carry fee data from all the funds in the entire history of its program, it was able to tell the Financial Times a mere ten days into the exercise exactly how many funds had not yet coughed up the data: a mere six our of over 850 funds over the life of the program. The fact that New York City is so fuzzy on what it does and does not have 22 months into the effort is a strong tell that they are not going about the effort in a serious, rigorous manner. The end of the article confirms this impression:

In its October letter to private equity and hedge fund managers, city officials asked for fees based on asset class and type, such as commingled fund or separate account. The fee information will be posted on the comptroller’s website.

The letter also asked that each manager prepare a one-time analysis to each pension fund of base fees, performance fees and other fees charged by each investment option. The letter asked that this information be provided by year-end, adding that future information about fees must be provided quarterly.

By contrast, South Carolina, which has set the standard for fee information gathering, has a detailed template that it has managers fill out, and then staff follows up with funds that have not completed it or claim they have difficulty completing it, to get the missing items.

Stringer appears to be reacting to a set of articles in the New York Post last month that criticized his transparency head-fakery. The first Post article, dated October 8, pointed out an embarrassing omission: Stringer had tried showing how much the city’s pensions were paying to money managers. He reported a total of $399 million in fees for a total pension system of $169.2 billion in assets.

The wee problem was that Stringer completely left out the heftiest fees paid, those to private equity funds and hedge funds. The Post had previously reported that the total fees paid were actually $530.2 million. So Stringer made a flagrant misrepresentation a month ago. And in his report to Pensions & Investing yesterday, he confirmed that the Post’s figures of the costs the year before were correct.

The second Post article, on October 11, pointed out that the accounting that Stringer had just issued contained some howlers, and also, despite the braying about greater transparency, took a step back on disclosure in key areas:

For instance, the firefighters fund said it paid just 0.59 percent in fees as a percentage of hedge-fund assets — less than what it paid managers to invest in small-cap stocks. Hedge funds typically charge investors a management fee of 1 to 2 percent of assets and about 20 percent of any gains each year…
Problem is, the city’s percentage rate is just a guesstimate. By his own admission, Stinger doesn’t know all the fees the city is forking over to hedge funds, private-equity firms and other outside managers. Nowhere in his report, however, is there a footnote explaining this.

What’s more, Stringer has taken a step back in other areas. He didn’t provide names of outside money managers in his latest report — something the pensions had divulged in previous reports.

If you look at New York City’s Comprehensive Annual Financial Report, the pension fund performance disclosure is remarkably thin (see pages xxi to xxiv). As North Carolina’ former chief investment officer Andrew Silton said by e-mail, “If this is what transparency looks like when someone is trying to be transparent, NYC isn’t revealing much.”

So let's sum it all up - a skyrocketing budget for the comptroller's office, plummeting returns for the city's pension funds, a lack of transparency about the fees the city's pension funds are paying for management of those funds and Stringer bending over backward to not ruffle the feathers of the Wall Street guys because he's going to want to hit them up in the future when he runs for mayor.

Not exactly an effective performance as comptroller.

But wait - it gets worse.

Despite his poor stewardship of the city's pension funds, Stringer wanted to "reform" the system so he could consolidate power inside his office and have "carte blanche" over how the funds invest:

New York City Controller Scott Stringer will propose next week a sweeping change in how the city’s $160 billion pension system — the fourth largest in the nation — chooses the private companies that invest its money.

Stringer’s plan, according to several people briefed on it, will call for consolidating separate investment committees of the police, fire, teachers and other municipal union pension funds into a single combined umbrella group. That group would meet only four times a year, thus doing away with the current system, where the five major pension funds each hold their own separate monthly meetings to select investment managers.
The trustees of each fund, however, would still vote separately on whether to park their money with a particular firm.

He has told trustees of the funds that it will streamline an archaic and bureaucratic process that requires his staff to attend five separate investment meetings every month — 55 meetings a year — even though 95% of the investment decisions are the same for each fund. The change will give the controller’s staff more time to spend on monitoring funds and reducing fees, Stringer has claimed.

Gee, sounds great - except that this seems to be nothing but a power grab by Stringer:

Public Advocate Letitia James, also a NYCERS trustee, is a vocal holdout.

"I am deeply concerned about these proposed changes as they relate to transparency, accountability and public access,” James said. “Any proposal that does not take these issues into account is difficult to support."

James declined further comment, but a source in her office labeled the proposal a “power grab” by Stringer.

Switching from 55 to just four meetings annually, the source said, will result in less time for trustees of the individual funds to grill the private firms about their performance and their management fees, and will force the trustees to depend more on Stringer’s investment recommendations. An earlier version that called for Stringer to make all major investment decisions was rebuffed, two union presidents said.

“It would have given Scott carte blanche,” one of those presidents said. “But we knocked that down, so he came up with a compromise we can support.”

Say this for Stringer - he may not know what the hell he's doing as comptroller or exactly how much his Wall Street buddies are charging the city's pension funds, but he sure does know how to increase his office's budget, power and public relations reach along with his own aggrandizing relationship with potential Wall Street donors.

Moskowitz Refuses To Give Back The Blood Money

From the Daily News:

Lawmakers slammed Success Academy charter boss Eva Moskowitz Wednesday for accepting an $8.5 million donation from controversial hedge fund manager John Paulson.

Paulson recently bought $120 million of Puerto Rico's debt and has developed a luxury retreat for wealthy Americans fleeing rising taxes in the U.S.

His critics say he is exploiting the island's recent economic troubles.

"You should not be living and making a profit off the bones of Puerto Rico," said New York State Sen. Gustavo Rivera. "This is blood money."

"It's important Eva Moskowitz stand up and say we don't take dirty money," said City Councilmember Antonio Reynoso.

More from Reynoso:

“Tell me who your friends are and I’ll tell you who you are,” Mr. Reynoso said, quoting a popular Spanish proverb. “Right now, the message Eva Moskowitz is sending to us and the diaspora of Puerto Rico is that her friends are false, and they take advantage of the terrible financial policies in Puerto Rico that have crippled the residents and the citizens of Puerto Rico.”

Moskowitz's reply?

But Moskowitz dismissed the criticism, saying: "Success Academy is proud to accept money from John Paulson."

Hey, what's a little blood money when it will buy some extra "Test Prep Pampers" for the kids to wear during the school day?

Education System Indoctrinates Children For A Life Of Stress, Pressure And Fear

One of the goals of education reform is to have both students and teachers under constant stress and pressure, working long hours with little free time to think "Hey, is this good for me?"

Mission accomplished:

Many American high school students don't sleep enough. They're tested too often and overburdened with homework and activities. They're stressed out.

So says "Overloaded and Underprepared," the latest book to chronicle how teenage life has changed. Rarely do today's high schoolers engage in unstructured activities, the book says. Rarely do they get to let their imaginations or bodies wander.

...

Recently, a parent of a Bethlehem Central High School student told me that many kids there no longer take a lunch break. They skip it to stuff an extra class into the day and instead eat at their desks.

...

"There's a large number of our students who do take advantage of that option," said Sabre Sarnataro, a spokewoman for the Bethlehem school district, who added that students could only forgo their lunch period with parental permission.

...

But allowing kids to multitask through a meal doesn't encourage healthy eating habits. Plus, we need time to decompress. Our brains work better when they're not overloaded.

"Students of all ages need times during the day to switch gears, take much-needed breaks and refuel," say Denise Pope, Maureen Brown and Sarah Miles, authors of "Overloaded and Unprepared," which urges schools to consider schedules that are more humane.

Breaks? Time to refuel?

No!!!!!!

That's time that could be used for academic activities, test prep or after school activities:

The authors sketch a typical day for students at high-achieving high schools. It begins at 6:15 a.m., when many students awake for a school day that starts before 8 a.m.

Then it's go, go, go, with extracurricular activities and three to four hours of homework filling the time after classes. Many teens, the authors say, don't get to sleep until almost midnight.

Which means they're perpetually sleep-deprived.

"Studies show that 80 percent of teenagers don't get the recommended amount of sleep," the authors write. "At least 28 percent fall asleep in school and 22 percent fall asleep doing homework."

The piece notes that this is about "high-achieving students" in "high-performing schools," that students in "low-performing schools" might actually need a little "pressure to succeed."

The truth is, these days in many so-called "low-achieving schools," that pressure is there for kids, it's just that they may not respond to it the same way the kids in the "high-performing schools" do.

I see it every work day, students behind in credits and/or state tests given a 7 and 1/2 hour class schedule, no lunch (instead they take a class), test prep both during and after school five days a week.

A very, very small number of those students are able to succeed at that schedule (sometimes after doing it for a year or more), but many just simply give up, stop coming to school or continue to come to school but walk through the day like a zombie.

You see it in charter schools too, with the ten hour school day and the intense pressure to "succeed" such that students fear going to the bathroom during the school day and soil themselves instead.

The idea that it's only "high-achieving students" in "high-performing schools" who are "overburdened" yet "unprepared" for life is erroneous.

The pressures and stresses in schools across the spectrum might be variegated, but they're there.

And this has always been one of the goals of education reform - to use FEAR (of success, of failure, of the future, of economic opportunity) to have students and staff stress themselves out overworking and overburdening themselves such that they can't wonder why the system is the way it is and whether it can be changed or not.

What's the value of a culture that privileges a sociopath like Eva Moskowitz who makes kids so fear asking to go to the bathroom during the school day that they soil themselves or a sociopath like KIPP's David Levin who brags about working 80 hour+ work weeks and only seeing his kid on Sundays?

Oh, but this is "high-achieving," right?

High-achieving at what?

What kind of life do Americans live these days, in FEAR for their careers, their livelihoods, their financial stability, their financial futures, their retirements?

The primary force behind education reform is Wall Street, which, not coincidentally, is also the primary force behind the economic instability and uncertainty that Americans face in 2015.

As the Masters of the Universe suck up more and more of the money and resources in this country, they leave less for the rest of us, forcing more and more people to struggle to get their part of a smaller and smaller pot.

Then these same Masters of the Universe fund an education reform movement that brainwashes children to see that struggle as the natural order of things without giving them the time or critical thinking skills to challenge it.

Gee, isn't that convenient?

It's all rigged, folks, it's all rigged.

The wealthy sociopaths and Wall Street criminals have got many people thinking this is the only way things can be so of course they must play the game even if it's killing them.

And you can bet it's killing lots of people - first on the inside, in their souls, and then later physically, with health ailments.

Luckily the Masters of the Universe run Big Pharma, so they've got a plethora of pills you can take to get you through those physical and emotional health ailments.

And isn't that convenient too?

Oh, but if you'd rather just stuff your FEAR with an addiction, well, the Masters will have no problem if you use food, alcohol, sex, gambling, shopping, or credit cards to stuff your feelings.

They make money off that stuff too.

Isn't that convenient?

It's all rigged, from the b.s. about the inevitability of globalization (we just can't fight it, we must join it!) to the jive behind education reform, to socialize Americans to believe this is the only way things can be, this is the natural order of things, and by golly, you had better start fighting for yourself and your family now or you'll be left behind.

What a screwed up culture America is.

All this "rigor" in the school system, yet most kids grow up without the critical thinking skills to see how badly they're getting screwed or the ability to step outside the system even if they do have an epiphany.

For, what real skills get taught in the Era of Education Reform?

What really gets taught in schools these days except indoctrination into a system that is killing us?

But on the plus side, at least kids will know how to eat lunch at their desks.

I mean, there's a skill that will come in handy in 21st Century America.

Cuomo's Hedge Fund Manager Pal Donates $1 Million To Pro-Charter/Anti-Union Lobby Group

Nick Reisman at State of Politics blog:

Hedge fund managers Paul Singer and Daniel Loeb helped replenish the coffers of a pro-charter school independent expenditure committee, contributing $1 million each to the group, according to its recent Board of Elections filing.

The PAC, known as New Yorkers For A Balanced Albany, had virtually maxed out its funds after the 2014 election.

Loeb just held a fundraiser for Cuomo at his Hamptons estate - one that was protested by a few hundred labor and public schools activists.

A few billionaires like Loeb and Singer quite literally own the political system in this state.

Democracy in New York?

Nahh.

Plutocracy wherein the Wall Street bankers, real estate industry and hedge fund managers call all the shots.

City Teachers Had Better Start Asking Some Hard Questions About Their Pension Fund Before It's Too Late

Guest Post By Harris Lirtzman, former Director of Risk Management for the New York City Retirement Systems in the NYC Comptroller's Office from 1996-2002 and former Deputy State Comptroller for Administration from 2003-2007.

During the last few weeks, there’s been a lot of news about the way that the City invests the money that backs your retirement benefit and none of it is good.

There are few things less interesting to read about than the condition of your pension fund system.  But, other than the financial condition of the City that prints your paycheck and the insurance company that provides your medical coverage, there is nothing more important.

Two weeks ago, the City Comptroller released a report that contained information that didn’t surprise anyone who follows these things closely but which should scare the bejesus out of any active or retired New York City school teacher.  According to an article in the New York Times, “The Lenape tribe got a better deal on the sale of Manhattan island than New York City’s pension funds have been getting from Wall Street.” 

Turns out that the trustees of the City pension funds, including your fund, the Teachers’ Retirement System of New York City, have been investing the money that backs your pension in ways that have given almost all of the market’s gains for the last ten years right back to the Wall Street firms they hire to do the job as big fat fees

Surprised?  I didn’t think so.

Wall Street has spent the last twenty years convincing public pension fund trustees, like the ones who run TRS, that only a company like Goldman Sachs or JP Morgan Chase is smart enough to know how to invest your retirement money.  Our trustees bought this story lock, stock and barrel.  We all know how well Wall Street has looked after the rest of us the last ten years.  Wall Street knows a sucker when it meets one and our pension trustees have been suckered, good.

This stuff is a little complicated but hang with me for a minute or two:

• Over the last 10 years, the return on very basic investments like stocks and bonds—more than 80% of the City’s pension portfolio—has exceeded expectations by more than $2 billion, despite the financial crisis of 2008 and the recession that followed.
• But nearly all that extra gain—about 97% of it—has been eaten up by Wall Street management fees, leaving only $40 million behind for the benefit of City retirees.
• Around 20% of the City’s pension funds is invested in complicated and expensive things called “alternative investments,” such as real estate and hedge funds.  The City began to invest in these investments in 2000, just at the moment when they began to do significantly worse than other parts of the market.
• The combination of the poor underperformance of these alternative investments and the huge fees that Wall Street firms charge to manage them for the City cost the pension funds—your pension funds—more than $2.5 billion since the end of 2004.

According to a New York Times editorial, “Even non-experts can grasp a primal personal-finance principle: buy low-cost funds linked to the overall performance of the stock market, be patient and don’t try to outsmart the market or pay someone an arm and a leg to do it for you. That a succession of fund trustees would never have thought of this before and found ways to reduce the damage done by excessive fees, is incredible.”

So let’s ask some of our trustees—members of the UFT who sit on the TRS board—what they think about all of this.  The UFT has three representatives on the TRS board of trustees: Mel Aaronson and Sandra March, who’ve been members for more than 20 years, and Thomas Brown.  Rank-and-file teachers elect these members to the board in some election process you probably never knew about or can remember.

Michael Mulgrew, president of the UFT, said that “he was happy that his union’s pension fund, TRS, had been performing well.  But he said the fees paid to some managers were ‘ridiculous’ and should be renegotiated if those managers are retained.  Education’s always being put under reform; maybe some of these financial practices should be put under reform as well.”

Ya think?

Teachers in New York City: According to an independent industry analysis, TRS now has money in it equal to around 58% of the future pension benefits that it must pay to current and retired teachers over the next 30 years.  As a comparison, the New York State Teachers Retirement System—which covers teachers who work in schools outside of the City—has around 96% of the money in it required to pay teacher pensions in the rest of New York State.  That means that your retirement benefit is only 61% as secure as the retirement benefit of a teacher who works outside of New York City.

Teachers in New York City:  The City TRS had a total investment return of 17.6% in 2014.  As a comparison, the State Teachers System had a total investment return of 18.2% in 2014—your retirement fund did 3.3% worse than did the retirement fund for teachers in the rest of the state.
Teachers in New York City: In 2014, the cost to run the City pension fund, including administrative expenses and fees paid to Wall Street firms, was almost twice the cost it took to run the State Teachers System. 

The UFT trustees sitting on the board of the TRS—the trustees your union nominated and that you elected—are guilty of gross negligence and of “investing-while-stupid.”

Teachers of New York City, if you don’t want to eat cat food when you retire start asking Michael Mulgrew, Mel Aaronson and Sandy March some hard questions about how they manage your pension fund.  If you make a big enough ruckus now there is still time to protect your pensions.  If you wait much longer I guarantee you that it will be too late.

Hillary Clinton "Absoluely Embraces" Common Core In Iowa Comments

Some people thought Clinton wouldn't take a stand on Common Core because it's so controversial these days, but her Wall Street/hedge fundie donors wanted to hear where she stands on the issue and she obliged today:

In Iowa, Hillary Clinton strongly defends the Common Core, despite strong opposition in some states like NY.
— Michael Gormley (@GormleyAlbany) April 14, 2015

Next up: Common Core under attack. @HillaryClinton "absolutely embraces" it, calls argument around CC "really painful," says was bipartisan.
— Taylor J. Wofford (@taylorjwofford) April 14, 2015

Asked about Common Core, @HillaryClinton says current debate has been "painful" to watch. "Common Core started off as a bipartisan effort."
— Ruby Cramer (@rubycramer) April 14, 2015

.@HillaryClinton says Iowa may be more understanding of Common Core b/c Iowa has had its own standards and assessments for years. #iacaucus
— Kathie Obradovich (@KObradovich) April 14, 2015

"How did we wind up at a point where we are so negative about... how our kids our educated?" -Hillary @HillaryClinton on Common Core
— Ashton E. Pittman (@ashtonpittman) April 14, 2015

Not a surprise - Big Money supports Common Core, so of course Hillary Clinton does too.

Still, glad to have her on the record.

Now I have one more reason not to support her.

If Jeb Bush becomes the GOP nominee and Clinton is the Democratic nominee, both major party candidates will be Common Core supporters.

The country is moving against Common Core but the political establishment (backed by Big Money) still "absolutely embraces" it.

Save The Date: Andrew Cuomo, Campbell Brown To Raise Money For Success Academies at Cipriani on Monday April 20, 2015

In case you haven't gotten your tickets already:

Monday, April 20, 2015 Success Academy Charter Schools
Third Annual Spring Benefit.   6:30 pm.   Cocktails and dinner.   Business attire.   Honoring Eli Broad.   Chaired by Campbell Brown, Joel Greenblatt, Daniel S. Loeb, John Scully, Regina Scully.   Tickets from $1,250.00.   Tables from $15,000.00.   Cipriani 42nd Street.   New York.   Contact: Julianna Harder.   (212) 245-6570.   Event address: 110 East 42nd Street, New York.   Event web address: www.successacademies.org.  

More incentive to attend:

CUOMO TO HEADLINE SUCCESS ACADEMY BENEFIT—Capital’s Eliza Shapiro: Governor Andrew Cuomo will be the keynote speaker at Success Academy's annual spring benefit this April, according to an invite sent to Success employees this weekend. Cuomo and Success C.E.O. Eva Moskowitz officially became allies last winter, when Cuomo stepped into a battle between Moskowitz and Mayor Bill de Blasio, declaring he would ‘save charter schools’ at a massive Albany rally partially organized by Success. The event will be held April 20 at Cipriani 42nd Street in Manhattan, and will be co-chaired by Success board members Campbell Brown, Daniel Loeb, Joel Greenblatt, and Regina and John Scully. http://bit.ly/1tT6Edx

NY Teacher has a suggestion:

Don't forget, Cuomo was scheduled to speak at the Success Academy Charter Schools Spring Benefit on April 20th; 6:30 pm at Cipriani (42nd St). If he does attend it would be a great place to demo/rally/press.

So does Norm Scott:

A massive protest in front of Ciprianis would be an appropriate response.

Seems like a great opportunity to all at once let Eva Moskowitz, her hedge fund supporters, Campbell Brown and Andrew Cuomo know what you think of them and their "reforms."

Cuomo Creates Pension Crisis In NY

From Bloomberg News:

ALBANY – New Yorkers are living longer, which is good news for the state’s 19.7 million residents. For Gov. Andrew M. Cuomo, it’s triggering a budget headache.

...


 The longer lives raised the $176.8 billion fund’s liability, boosting the 2016 pension bill to $355 million more than Cuomo had projected.

The added cost has Cuomo tapping a program allowing the state and its municipalities to borrow part of their annual pension bill from the fund with interest. Since 2011, Cuomo has used the tool to defer about $3.2 billion in payments. While he’d planned to exit the program in 2016, the budget he introduced last month includes borrowing $395 million for that year.

“Amortization takes volatility out of the state’s pension contribution costs and helps us maintain stability,” Morris Peters, a spokesman for Cuomo’s budget division, said via email.

Since Cuomo took office in 2011, he’s closed more than $12 billion in budget gaps, capped annual spending growth at 2 percent and won the state’s first four consecutive on-time budgets since 1977. The moves spurred Standard & Poor’s to award the state a AA+ mark in July, its highest since 1972. 

Yet the company also said the pension borrowing is swelling the state’s unfunded retirement liability.

And what's the goal of creating unfunded retirement liability?

Destroying the public pension system, of course:

While only seven states had stronger pensions than New York as of 2013, its funding ratio isn’t as robust as it once was. The fourth-most-populous state had 87.3 percent of assets to meet obligations, down from 105.9 percent in 2008, data compiled by Bloomberg show.

See the trajectory?

From 105.9% of assets to meet obligations in 2008 to 87.3% now.

Sure, there was the Great Recession during that time frame, but that economic downturn ended years ago and Cuomo's still draining the pension system of strength.

See New Jersey for what happens when governors underfund pension systems.

An accident that the NY pension system has been drained during King Andrew I of Wall Street's reign?

Nahh.

It's classic neo-liberalism.

Create the problem (underfund the pension system), set hair on fire over the problem (scream long and loud that the pension system is going broke), declare that we simply MUST make changes (i.e., cut pensions for current and future employees, retirees), repeat until system is busted

NY Post Editorial Calls For Pension Cuts To New York And New Jersey Retirees

I missed this in the days after Christmas, but the AFL-CIO didn't.

The Rupert Murdoch-owned NY Post says there's no money for government worker pensions and cuts must be instituted to "save" them:

Some promises are made to be broken. As 2014 draws to a close, it’s looking more and more likely that among them will soon be those made to retired public workers.

We don’t say this lightly. When governments make promises, they should keep them.

Here’s the problem: The same pols who made these promises looked the other way when it came time to funding them.

It doesn’t matter whether you’re a public worker for a city such as New York, which can go bankrupt, or a state such as New Jersey, which cannot. Fact is, even though more and more tax dollars are swallowed up by these pensions, the gap between what taxpayers will owe future retirees and the funding for them continues to widen.

That’s true in New Jersey, notwithstanding reforms in 2011. These were solid reforms — but nowhere near the fix both Democrats and Republicans pretended they were.

Now the pension gap is back with a vengeance, and Gov. Chris Christie is cutting payments into the system, because he says the state simply cannot afford them.

New York City is not as desperate, but it faces the same squeeze. Since 2000, the amount of money this city has been pumping in to pay for its pension promises has increased 12 times, to more than $8 billion. And it’s still not enough.

The government-worker unions and the pols in their pocket know this. For decades, they’ve played a game of deliberately underestimating the problem and fighting even modest cuts.

But they have played the game too long. It’s now starting to backfire, because the shortfalls can’t be made up with more taxes or contributions alone. Painful cuts will have to be part of the medicine.

For decades the public unions have assumed agreed-to benefits are sacrosanct. But if there is really no money in the till, all bets are off.

In this light, the recent deal in Washington on multi-employer plans was instructive. Though the deal involved pensions for private-sector retirees, the terms were illuminating. In the interest of keeping the program solvent for all, some retirees will get less benefits than promised. And there’s no congressional bailout.

Some version of this is likely to come to the public sector if we continue to kick the can down the road. The multi-employer deal looks more and more like the canary in the coal mine, and it’s hard not to imagine some judge approving cutbacks on the grounds that this is simple reality.

Those who hold such pensions will scream this is unfair. They will be right. But what should really worry them is that, if there’s really no money in the till, it won’t matter.

Mario Cilento, President of the New York State AFL-CIO, responded to the Post editorial:

It’s telling that during the same week the Dow Jones hits 18,000, a historic and once unthought of high, The Post calls for reductions to the pensions of current employees and retirees  (Pensions and Promises, Dec. 28).  

In the past, The Post’s advocacy for reducing worker wages and benefits would be hidden behind cries of economic crisis; now, there is no attempt to even mask that agenda.

New York continues to have some of the strongest public-pension systems in the country, and contrary to the assertions of the editorial, employer contribution rates are set to begin declining.  

The problem of income inequality is troubling and well-documented.  Gains in the economy have been enjoyed nearly exclusively by those at the top of the income ladder.  

It’s unconscionable to advocate for cutting one of the few ways workers directly benefit from growth in the market – pensions.

New employees have already had to eat two new pension tiers with reduced benefits in New York, but apparently that’s not enough.  Now, current employees and retirees are on the menu.

The NY Post editorial came five days before Governor Cuomo issued this threat in his "second" inauguration speech on January 1 in Buffalo, NY:

Albany has been too concerned with protecting the pension rights of teachers and not enough with the future of students. #NYGov2015
— Andrew Cuomo (@NYGovCuomo) January 1, 2015

Yesterday I surmised that Cuomo wouldn't have the political muscle to push through pension reform this time around, given the relative weakness of his political position to his first term.

But if he does push pension reform, it seems he will have the NY Post to provide political cover for him, even though as Mario Cilento points out in his response to the Posties, the economy is on the rebound, the Dow is at an all-time high, and two new pension tiers were added in recent years that reduce benefits for future retirees in New York.

But that's not enough for the plutocratic functionaries at the NY Post - they say there's no money for pensions for current employees and retirees and cuts must be instituted immediately.

Will Governor Cuomo agree with that false prescription for a fake crisis?

He just might.

But if he does, he's going to have a hell of a fight on his hands.

This isn't 2011 with the state still reeling from the worst economic downturn since the Great Depression.

This is 2015, with the Dow at an all-time high and the job market creating 200,000+ jobs a month again (albeit, not enough and not good ones - but a far cry from 2011 when the state and private sector were shedding workers.)

Cuomo and his fellow pension haters do not have an economic argument to use to try and cut pension promises to current employees and benefits to retirees.

Instead it would just be a naked money and power grab.

Is that what Governor Cuomo plans for his second term?

GOP Donors Gave To GOP Candidates, Andrew Cuomo This Election Cycle

From the Capital Playbook Newsletter:

Capital’s Laura Nahmias and Bill Mahoney: Governor Cuomo's top donors gave six times more money to help elect Republicans to the State Senate than they did to similar efforts to aid Democrats, a Capital New York analysis shows. The governor's top 25 donors gave Cuomo's campaign committee $5.1 million between December 1, 2010 and October 24, 2014. The same group of people and organizations spent only $444,604 contributing to Senate Democrats or independent expenditure committees that supported Democrats in this year's election cycle, while they spent $2.7 million—over six times as much money—helping the campaigns of Senate Republicans. Cuomo was criticized by some Democrats for appearing to renege on a promise he made in May this year to help Democrats win control of the Senate. http://bit.ly/1xbtoEL

Gee, how could anybody say that there's a link between the State GOP not helping GOP candidate Astorino and Cuomo not helping State Senate Democrats take back the State Senate?

So what if it appears GOP donors were sending their largesse to every GOP candidate in the state except for Rob Astorino and instead sending those checks to Andrew Cuomo.

Christie's Wife Rakes In $500K For Part Time Work

This is nice work if you can get it:

According to new tax filings, New Jersey Gov. Chris Christie's (R) wife, Mary Pat, who works part-time on Wall Street, earned $475,854 for her job as a director at Angelo, Gordon & Co. and $34,698 from Cantor Fitzgerald, the AP reports.

Be nice to have an independent prosecutor look into how Mary Pat makes that kind of dough for a part time gig and what that has to do with Christie's giveaway of the state pension funds to Wall Street.

I bet there's some connection there.

Seeds For Next Crash Sprout

From the NY Times:

FRANKFURT — An organization representing the world’s main central banks warned Sunday that dangerous new asset bubbles were forming even before the global economy had finished recovering from the last round of financial excess.

Investors, desperate to earn returns even as official interest rates are at or near record lows, have been driving up the prices of stocks and other assets with little regard for risk, the Bank for International Settlements in Basel, Switzerland, said in its annual report published Sunday.

Recovery from the financial crisis that began in 2007 could take several more years, Jaime Caruana, the general manager of the B.I.S., said at the organization’s annual meeting in Basel on Sunday. The recovery could be especially slow in Europe, he said, because debt levels remain high. “During the boom, resources were misallocated on a huge scale,” Mr. Caruana said, according to a text of his speech, “and it will take time to move them to new and more productive uses.”

The B.I.S. acts as a clearinghouse for transactions among national central banks and also as a setting where central bankers can discuss monetary policy and other issues like financial stability or bank regulation.

Its board includes Janet L. Yellen, chairwoman of the United States Federal Reserve; Mario Draghi, president of the European Central Bank; and the heads of central banks from Japan, China, India and many other countries.

The organization often uses its annual reports to send a message to political leaders, commercial bankers and investors, and reflects a widespread view among central bankers that they are bearing more than their share of the burden of fixing the global economy.

The language in the 2014 edition was unusually direct, as was its warning that the world could be hurtling toward a new crisis."There is a disappointing element of déjà vu in all this,” Claudio Borio, head of the monetary and economic department at the B.I.S., said in an interview ahead of Sunday’s release of the report, which he described “as a call to action.”

...

The B.I.S. also had harsh words for corporations, which it said were not taking advantage of booming stock markets to step up investment. That is one reason that gains in productivity — the foundation of sustained economic growth — have slowed in most advanced economies, according to the report. “Despite the euphoria in financial markets, investment remains weak,” it said. “Instead of adding to productive capacity, large firms prefer to buy back shares or engage in mergers and acquisitions.”

The overall message from the central bankers was that the world has forgotten the lessons of recent years."The temptation to postpone adjustment can prove irresistible, especially when times are good and financial booms sprinkle the fairy dust of illusory riches,” the B.I.S. said. “The consequence is a growth model that relies too much on debt, both private and public, and which over time sows the seeds of its own demise."

How exciting - the geniuses who brought us the last crash are working on bringing us the next one.

If Teachers Were Like Goldman Sachs Traders...

Thanks Uncle Mikey and Auntie Carmen - a $1,000 bucks (which is actually more like $863 after taxes and union dues)*:

Dear Colleagues,

As you come to the end of this school year we both wanted to take this opportunity to thank you for all your hard work and dedication. We both know from experience how difficult the work you do is, and we take great pride in the thousands of people in New York City Public Schools who work hard each and every day to try to fulfill the dreams and hopes of over one million students. We want you to know you have our respect and our thanks.

We wanted to do more than tell you we appreciate your hard work - we wanted to take action to show you. So we have taken the first step in implementing the financial component of the recent collective bargaining agreement between the United Federation of Teachers and the New York City Department of Education which provides for a one time ratification bonus of $1,000 (pro-rated for part-time employees) to be issued to any member who was on payroll as of the date of ratification, June 3, 2014. We are pleased to inform you that pending the ratification by the Panel for Educational Priorities on June 24th, for most school-based UFT staff this payment is going to appear in either your direct deposit account on June 25th, or in a check delivery scheduled for June 26th. Other UFT staff such as nurses and therapists should receive this payment on July 3, and part time F status staff should be receiving their pro-rated portion on July 10.

We hope you enjoy the summer and return refreshed and ready for the next school year. We have much to work on together, including efforts around enhanced professional development and dedicated time for parent engagement, and we look forward to working together on these and many other initiatives next year. Thank you for your work this year to provide a quality education for all of our students to keep them on the road to success.

Sincerely,



Meanwhile back at Goldman Sachs: 

Here’s an instant classic for the Out-of-Touch Banker genre: a former Goldman Sachs mortgage bond trader clears $30 million in the decade following his college graduation, racks up an $8.25 million bonus in a single year, and sues because he thinks he deserves another $5 million.

Meet Deeb Salem, the G.S. alum who now works at the hedge fund GoldenTree Asset Management but once helped Goldman shed its toxic assets by betting against its clients and, as his lawyer boasted to the New York Post, shorting the mortgage market in 2006. Salem is suing his former employer, alleging that he had every right to expect a $13 million bonus in 2010.

Much of the drama focuses on Salem’s 2007 self-evaluation, which eventually made its way into the public record thanks to a 2011 Senate investigation into the bank’s habit of betting against its own clients. Salem alleges that he was punished for his honesty (the bank, perhaps upset that his review provided Congress with ammunition, warned him in 2010 for “extremely poor judgment”). But it also rewarded him with an $8.25 million bonus. The previous year, he had received a $15 million bonus—more than Goldman Sachs C.E.O. Lloyd Blankfein.

Don’t get the wrong idea about Salem, though. It’s not just the money that bothers him—it’s the filial shame he faced after telling his mother that he would be taking home a full $13 million in 2010.

The Financial Industry Regulatory Authority tossed out Salem’s case (one panelist called his claims “bullshit”), and he has since asked the New York State Supreme Court to intervene. The judge in the case has sealed the documents pending a hearing in the fall, according to Bloomberg News.

Salem believes he could have made much more had he left the firm earlier, and the scary thing is, he’s probably right—his group at Goldman brought in more than $1 billion a year during the period between 2007 and 2010. He was something of a star in a world where moving crappy products faster and more ruthlessly than your competitors yields billions of dollars of profits. But, as Goldman’s lawyer, Andrew Frackman of O’Melveny & Myers, said at a February arbitration hearing, Salem “made a ton of money.”

“He’s not entitled to more money simple because he would like to have been paid more,” Frackman said. “If that were the case, you’d have traders and bankers in here every day of the week.”

“Let’s be very clear: I was one of the most sought-after investment professionals in the mortgage industry,” Salem told the panel at the same hearing. He also compared himself to Michael Jordan in self-evaluations, writing, “I am as competitive as Michael Jordan. . . I want to win every time and I want to steamroll the opposition.”

Even Jordan would have to stand in awe of this guy’s ego.

Enjoy your $863 bucks after taxes and union dues, teachers...

* See comment here.

No Court Case On Teacher Tenure In Works For New York - Yet

From Politicker:

A California court ruling striking down teacher tenure laws as unconstitutional prompted an outpouring of applause from education reform advocates–and a chorus of boos from supporters of public school instructors.

 ...


“It is fantastic news,” said TV anchor-turned-public education critic Campbell Brown. “The parents in California clearly felt the same frustration that many parents are feeling across the country at inaction at the legislative level and inaction by the politicians, and they took.”

Ms. Brown, who sits on the board of the controversial Success Academy Charter School chain, said that no such suit was in the works in New York, but said Treu’s decision would rally pro-charter and anti-tenure movements nationwide.

“What this has done is inspire a lot of education reform groups in states with similar laws,” said Ms. Brown, noting that the school system has similar difficulties removing teachers in New York.

It's only a matter of time until the Wall Street-backed Students First or some other corporate-funded education reform group takes on tenure laws here in NY State or NYC.

Yes, all eyes will watch to see what happens to the appeals in this case.

But you can bet the hedge fundies and the corporate deformers are licking their lips and getting ready to take down tenure here.

Charter School Proponent Carl Icahn Probed For Insider Trading

Now for a charter school insider trading story.

No, this is not about Whitney Tilson and that funky little Barnes and Noble thing from 2012.

This is about Carl Icahn, some sports and gambling pals and Clorox:

The feds are investigating whether golf legend Phil Mickelson, billionaire investor Carl Icahn and Vegas gambling kingpin William “Billy” Walters took part in an insider-trading scheme, federal law-enforcement sources told The Post Friday.

The FBI and the Securities and Exchange Commission suspect that Mickelson and Walters illegally traded on nonpublic information from Icahn about his investments in public companies — specifically his attempted takeover of ­Clorox, the sources said.

The two-year investigation was launched after Icahn made a $10 billion offer for Clorox in July 2011, causing the stock to skyrocket amid a rash of suspicious trading, according to sources with knowledge of the probe.

The feds and Manhattan federal prosecutors are examining Mickelson’s and Walters’ trading patterns to determine whether they profited by trading Clorox as its stock price spiked.

Investigators believe that Icahn, 78, may have passed potentially profitable information to Walters — who is well-known in Las Vegas for his big bets on sports — and that the gambler may have passed some tips along to Mickelson, federal sources told The Post.

Both Mickelson and Walters made similar trades in Clorox stock at about the same time, the sources said.

The investigators also examined phone records for Icahn and Walters, 67, to see whether the two men spoke shortly before the trades.

Icahn is a proponent of charter schools and has helped fund seven charter schools through his philanthropic organization.

All seven charters are named for him.

The Wall Street Journal reports no case may ever be brought against Icahn, Mickelson, or Walters:

There is no indication the government will bring a case in the current investigation, the people briefed on the probe said. Indeed, publicity of the probe could jeopardize the government's ability to put together any potential case, they said, by limiting its ability to covertly gather evidence.

The investigation signals that the FBI and the SEC are concerned about a potential dark side of shareholder activism. Activist investors push for broad changes at companies or try to move stock prices with their arguments. Mr. Icahn, a 78-year-old billionaire, has come to epitomize such activism in U.S. boardrooms.

But the Journal also reports there was much funkiness around the Clorox deal:

The government investigation began three years ago after Mr. Icahn accumulated a 9.1% stake in Clorox Co. CLX +0.16% in February 2011, said the people briefed on the probe. On July 15, 2011, he made a $10.2 billion offer for Clorox that caused the stock to jump.

Well-timed trading around the time of his bid caught the attention of investigators, who began digging into the suspicious trading in Clorox stock, the people familiar with the probe said. 

On Wall Street, rumors had swirled that word leaked out ahead of Mr. Icahn's Clorox bid. Large, highly risky trades had been made in Clorox options four days before his bid. After his $76.50-a-share offer was announced, those options soared in value along with Clorox shares, which closed on July 15 up 8.9% at $74.55.

Investigators have examined trades in Clorox options, the people briefed on the probe said. 

Clorox rejected Mr. Icahn's overture. He launched a proxy battle in August 2011, proposing a slate to replace the company's board with 11 of his nominees. In September 2011, he dropped his proxy battle.

By December 2011, he had sold his entire 12 million shares in the company. Clorox shares, which reached a high in 2011 just after Mr. Icahn's bid, closed at around $66 at the end 2011. A Clorox spokeswoman declined to comment.

I'm sure Icahn will manage to extricate himself from any problems here, but this episode is just another example of some of the corruption that infects these charter school proponents and edu-entrepreneurs.

Here's One Critic De Blasio Should Appreciate Having

They say you can know the mark of a man by the enemies he has - here's one enemy that Mayor de Blasio should be happy to have:

It’s a tale of the 1% city for Bernie Madoff.

The convicted swindler, cooling his heels in a North Carolina federal prison camp, is no fan of the progressive financial policies and vision touted by Mayor de Blasio.

“I’m not a great fan of redistribution of wealth,” the 75-year-old Wall Street villain said during a long, ranging interview with Politico.

...

The former Democrat, who now identifies as an independent, says he voted for President Obama in 2008, but would not have in 2012 because the president policies have become “too socialist.”

Dunno what Madoff is talking about - banksters are doing as well or better under the "Socialist" Obama as they did under Bush the Capitalist.

As for Madoff not being a fan of redistribution, that's not true.

He surely liked to redistribute other people's money to himself through fraud and criminal activity.

In that way, I suspect he isn't all that different from many of the "capitalists" on Wall Street these days.

Wall Street Bankers, Real Estate Titans For Cuomo

From the Post:

Gov. Cuomo is making another pitch Monday for Republican heavy hitters to back his re-election campaign.

Home Depot founder Ken Langone is hosting a “Republicans for Cuomo” event at the Harvard Club at 8:30 a.m. Cuomo will address the well-heeled Wall Street and real-estate titans and field questions.

David Malpass, who ran in the 2010 Republican US Senate primary, also was involved in planning the breakfast, sources said. Cuomo attended a similar event last month.

The Cuomo campaign wants to woo Republican backers to keep their big bucks from going to the eventual GOP nominee.

Gee, what is it about Cuomo that Wall Street bankers and real estate titans like?

Well, whatever it is, they sure are raising a lot of money for him.

Governor Cuomo Pals Up With Banker/Criminal John Mack For Wall Street Outreach

Jimmy Vielkind at Capital NY:

ALBANY—Governor Andrew Cuomo is utilizing John Mack, a senior adviser to Morgan Stanley who the governor recently brought on to be an adviser on global trade, to help him navigate the titans of Wall Street, according to schedule documents released by Cuomo's office.

Cuomo began regular meetings with Mack, a former C.E.O. of the investment bank, in the fall of last year.

The schedules show Mack accompanied Cuomo to a meeting with current Morgan Stanley C.E.O. James Gorman on December 12, and to a meeting with Goldman Sachs C.E.O. Lloyd Blankfein on the following day.

Mack also attended an afternoon meeting on Veteran's Day that included senior officials from Empire State Development as well as Leslie Whatley, the director of the governor's new program to create tax-free zones rooted at public university systems. She was formerly the global head of corporate real estate at both Morgan Stanley and JPMorgan

Cuomo administration spokespeople did not immediately say what the governor discussed with Gorman and Blankfein.

Matt Taibbi on John Mack:

John Mack, the former CEO of Morgan Stanley and one of the more irritatingly unrepentant dickheads of the crisis era, gave an incredible interview to Bloomberg TV. In a discussion about executive pay, Mack said we're all being too rough on his fellow too-big-to-fail bank CEOs.

He would love, he said, "to see people stop beating up on Lloyd and Jamie," endearingly referring to Goldman chief Lloyd Blankfein and Chase chief Jamie Dimon by their first names (Mack must be in a bowling league with both men). He added: "I think that would make a lot of sense, and I'm in favor of that."

Mack went on to say that the debate over compensation was healthy, just not always warranted. "As long as shareholders reward performance," he said, "we can argue." But, he added, "The last time I checked, this business is still a business that pays people extremely well."

It's already funny that of all the injustices in the world, this was the one Mack decided to worry about on TV: the criticism of poor Jamie Dimon's 74 percent raise. But more to the point: If we really did live in a world where shareholders rewarded performance, would a CEO who just oversaw a record $20 billion in regulatory penalties even have a job, much less be getting a raise?

Mack had stones enough to be whining about people "beating up" on Jamie Dimon, given the year Chase just had. But to do so and simultaneously scold us that high compensation on Wall Street is just "shareholders rewarding performance," that's either Nobel-caliber chutzpah or laboratory-pure stupidity.

John Mack of all people should be quiet when it comes to the issue of public outrage over bank corruption. How about this, John: All of us malcontents will promise to stop beating up on your fellow CEOs, if you share with us the entire contents of your conversation with Pequot hedge fund honcho Art Samberg on June 29th, 2001?

Mack, readers may recall, was at the center of the controversy involving SEC whistleblower Gary Aguirre. Aguirre is a lawyer and investigator who began working for the SEC in September 2004. One of his first assignments was to look into a case involving a hedge fund called Pequot Capital Management, which had made a highly auspicious series of trades just ahead of, and after, a merger involving GE and a company called Heller Financial in the summer of 2001. The man making the deal was legendary Pequot trader Art Samberg.

As evidence in a Senate investigation into Aguirre's firing later revealed, Samberg made a huge investment in Heller on July 2nd, 2001, apparently without having done any research into Heller before that time. He had, however, talked the previous business day (Friday, June 29th) to John Mack, who had recently left a job running Morgan Stanley and had just returned from Switzerland, where he'd interviewed for a job with Credit Suisse. Both Morgan Stanley and Credit Suisse had worked on the merger for Heller financial. and, the Senate explained, "possessed material, non-public information about the deal."

Right after Mack talked to Samberg and Samberg invested in Heller, Pequot cut Mack in on a lucrative deal involving a Lucent spinoff that ended up more than tripling Mack's $5 million investment. When Aguirre asked permission to interview Mack about all of this, he was denied such permission by his superiors at the SEC. When he pressed, they fired him (Aguirre later won a wrongful termination settlement with the SEC in the amount of $755,000).

Ultimately, the government did not interview Mack about the Pequot deal until August 1st, 2006, exactly five days after the five-year statute of limitations on the incident had expired. In that testimony, Mack denied having foreknowledge of the Heller deal, and claimed that Samberg had wanted him to invest in the Lucent spinoff, not the other way around – despite the fact that the SEC had emails from Samberg saying Mack had nagged Samberg to let him into the lucrative deal, "busting his chops" to get in.

The government never really pursued the matter further and Mack's role in what the Senate called a "highly suspicious" trade was never fully investigated. He ultimately returned to Morgan Stanley to serve as the bank's CEO from 2005 to 2009.

All of which means exactly nothing today, over a decade after the original incidents. By now it's just one of a pile of stories about cases that never got made against Wall Street executives for questionable behaviors in the pre-crisis years.

Still, it seems to me that after having been saved by the gods from the jaws of death in the Heller episode, Mack should probably henceforth stay on the sidelines in any debate about financial corruption. That he doesn't should tell us a lot. I'm not sure these guys can even spell "shame," much less exercise any.

So Sheriff Andy Cuomo brings on Wall Street criminal John Mack to work the room when Cuomo goes to chat with other Wall Street criminals like Lloyd Blankfein and James Gorman.

What a cozy group of criminals Sheriff Andy is palling around with.

No wonder he had such a piss-poor record bringing indictments against Wall Street criminals when he was attorney general of New York State.

He's pals with them.

NYCDOE Chancellor Announcement Not Coming This Week - But De Blasio Did Appoint Former Goldman Sachs Employee To Administration Post

De Blasio: "Very likely" to announce Chancellor next week. "There will be some interim leadership... until new chancellor fully on board"
— Beth Fertig (@bethfertig) December 23, 2013

No chancellor announcement, but de Blasio did appoint a former employee of Goldman Sachs, the Vampire Squid of Wall Street, as a deputy mayor for urban affairs:

For all his campaign bluster against the two cities New York has become, Mayor-elect Bill de Blasio isn't exactly shying away from some of the people who helped make it that way. This morning, the mayor-elect announced that Alicia Glen will serve as Deputy Mayor for Housing and Economic Development, a newly created position that will aim to make housing more affordable, as well create living-wage jobs for New Yorkers.

"We need to invest in key emerging industries and affordable housing so New Yorkers have a better shot at working their way into the middle class. Alicia has the record, fresh ideas and bold outlook to make that vision a reality,” said de Blasio at this morning's press conference.

De Blasio discussed Glen's vast experience, but mostly skirted the topic of Glen's last position, as the head of Goldman Sachs's Urban Investment Group.

While at Goldman, Glen worked with the Bloomberg administration on the public-private partnerships that Bloomberg championed throughout his reign. In her speech this morning, Glen told the crowd that "we can’t remain the greatest city in the world when half of New Yorkers are living in or near poverty. We can do so much more to lift people up by investing in our neighborhoods—especially in the outer boroughs."

Here is a description of one high profile piece of Alicia Glen's previous work at Goldman:

Goldman Sachs is making its second foray into an experimental method of financing social services, lending up to $4.6 million for a childhood education program in Salt Lake City.

This “social impact bond,” in which Goldman stands to make money if the program is successful but will lose its investment if it fails, will support a preschool program intended to reduce the need for special education and remedial services. The upshot, in theory, is that taxpayers will not have to bear the upfront cost of the program.

Goldman is being joined in this effort by the Chicago investor J.B. Pritzker, who is providing a subordinate loan of up to $2.4 million, bringing the total financing to $7 million. The loans will be announced at an event in Chicago on Thursday.

“Social impact bonds are an entirely new way of financing things that have traditionally been paid for either through philanthropy or by taxpayer dollars,” said Alicia Glen, head of Goldman’s urban investment group.

Though the effectiveness of this type of financing remains unproved, it has gained a prominent adherent in New York City, which allowed Goldman to invest nearly $10 million in a jail program last year. The city was the first in the United States to test social impact bonds.

For Goldman, which could gain a public-relations benefit from the investment, Salt Lake City has become an important business center. The city is home to Goldman’s second-largest office in the United States, and the Wall Street firm held its annual meeting there in May.

The loans are going to the United Way of Salt Lake, which oversees the Utah High Quality Preschool Program. The investment’s success will be measured by the level of cost savings when children do not need to use special education services, which are financed by the state.

The loans carry an interest rate of 5 percent, which is paid along with the principal if the program is successful. In the best case, Goldman and Mr. Pritzker would make additional “success fees.”

“We’re creating something sustainable that has a focus on returns,” Mr. Pritzker said. “This titillates my interest in business and engages me.”

This type of financing, which was first used in Britain in 2010, has raised eyebrows. Data on the New York investment, focused on men incarcerated at Rikers Island, is not yet available.

“I think it’s distressing the degree to which a new industry has been built around social impact bonds before it’s ever been proven viable,” said Mark Rosenman, a professor emeritus at Union Institute and University in Cincinnati. “We ought to work it to fruition in a couple places before we start promoting it.”

Ah yes - creating financial instruments so that Goldman can makes bets on students who need support services, giving the program the incentive to find ways to "demonstrate" the children do not need these services.

Boy, that sounds like there could be no down side there.

And who helped come up with this new scheme but Alicia Glen, Bill de Blasio's new Deputy Mayor for Housing and Economic Development.

Maybe I'm just cynical, but it sounds to me like de Blasio just appointed the scum of the earth to be a deputy mayor.

Meet the new boss, same as the old boss.

Real Estate Brokers Are Sad Mayor Bloomberg Is Leaving Office

Just as the Wall Street criminals are sad Mayor Bloomberg is leaving office, the real estate criminals are sad too:

Mayor Bloomberg would be crazy to try to run for a fourth term — but real estate brokers say it’s crazy to want anyone else in City Hall.

“I’m depressed at the thought that someone else will be mayor,” says Shaun Osher, president of real estate brokerage CORE. “I wish we could change term limits again.”

“I really wish he’d run again — and I’m a Democrat,” says Suzanne Hof, third-generation owner of Terrace real estate in Forest Hills, Queens.

“Mayor Bloomberg has been the finest mayor New York City has ever had,” says Brown Harris Stevens broker John Burger.

Burger was the top-selling agent in the country, and maybe even the world, in 2011 and 2012.
Does he have the mayor to thank for his industry’s booming success? Look no farther than the skyline for proof.

“Eight of the 20 tallest buildings in the city have been built in the past decade, and many of them are apartment buildings,” Corcoran Group CEO Pam Liebman says.

Many are the result of Bloomberg-led rezonings intended to spur development citywide.

Much of that development, of course, led to inflating apartment prices, higher rents, and driving middle and working class people out of the city and bringing in rich people.

The mayor turned the city into a luxury brand and the criminals in real estate and the criminals on Wall Street love it.