Dear Commons Community,.

In his latest annual letter to shareholders, Warren Buffett  takes other corporate leaders to task for complaining all of the time about “uncertainty” in the world, including most recently the political morass in Washington and all of the regulatory and tax “uncertainty” that it has spawned.  As reported in The Huffington Post: 

“A thought for my fellow CEOs: Of course, the immediate future is uncertain; America has faced the unknown since 1776,” he wrote. “It’s just that sometimes people focus on the myriad of uncertainties that always exist while at other times they ignore them (usually because the recent past has been uneventful).”

“If you are a CEO who has some large, profitable project you are shelving because of short-term worries, call Berkshire,” he added. “Let us unburden you.”

Buffett’s company, Berkshire Hathaway, spent a record $9.8 billion on plants and equipment last year, Buffett wrote, up 19 percent from 2011, and “will almost certainly” spend more this year. Berkshire spent about 88 percent of that $9.8 billion in the U.S., Buffett wrote.

“Opportunities abound in America,” Buffett wrote.

Thank you for your leadership, Mr. Buffett.  You should be in Washington, D.C.

Tony

Dear Commons Community,

The sequester is here and now we have to wait and see what it means.  Some have said that the sky will fall and others that it will not change much of anything.  In the New York Times opinion pages today we have both sides of the argument.

On one side, the New York Times editorial cautions:

“As the cuts take effect, they will inflict widespread hardship. But some Americans will be hurt more than others, and the people who will be hurt the most are those who are already struggling. In the months ahead, an estimated 3.8 million Americans who have been unemployed for more than six months face a cut in federal jobless benefits of nearly 11 percent — or about $32 a week — all from the recent average weekly benefit of $292. And an estimated 600,000 low-income women and toddlers will be turned away from the federal nutrition program for women, infants and children, known as WIC.

It should not be this way. Deficit reduction should not occur on the backs of the poor and vulnerable. At the insistence of Democrats, most major programs that help the needy have been exempted from the cuts, including food stamps and Medicaid. Democrats also won exemptions for beneficiaries of programs that are not explicitly aimed at low-income Americans but that are crucial to keeping many retirees out of poverty or near-poverty, notably veterans’ pensions, Social Security and Medicare. Still, smaller, vital programs will fall under the knife, in part because they are in spending categories deemed dispensable under the unthinking rules for across-the-board cuts.”

On the other side on the op-ed page, Joe Scarborough comments:

“Mr. Obama seems to be the one who has overplayed his hand.

His predictions of a crippled military, contaminated food and unforeseen hurricanes will pack a political punch only if those projections come to pass. Republicans can be forgiven for asking what hardships most Americans can expect to face if sequestration actually allows spending to rise another $15 billion next year. How compromised will federal agencies’ missions really be, given that their budgets increased sizably during Mr. Obama’s first term?

How much pain will voters inflict on Republicans for following through on the Obama-originated plan to force automatic spending “cuts” that nonetheless maintain the dollars flowing from taxpayers to Washington? For all the warnings from the Pentagon, it’s worth noting that the defense budget will continue to grow even after the sequestration.

All this is not to say that such a crude approach to spending cuts isn’t shortsighted. And recklessly cutting discretionary spending does little to address America’s long-term debt crisis — which is supposedly why we pushed ourselves into the sequester in the first place.

But it is also a fact that this year’s reductions will not do great damage to domestic and defense programs. Congress will have $85 billion less to spend this year, but the Congressional Budget Office projects that the actual cuts implemented this year will amount to only $42 billion out of a $3.5 trillion budget. That means that politicians will have to cut a little more than a penny out of every dollar that it spends this year.”

We will see who is right over the next few weeks.  One thing is for sure about the sequester debate and that is our elected officials in Washington continue to demonstrate that they are incapable of leading our nation and instead prefer to  spend the vast majority of their time and energy on political posturing.

Tony

Dear Commons Community,

Total student debt has nearly tripled to almost $1 trillion over the past eight years, a new report from the New York Federal Reserve has found.

Total student debt stands at $966 billion as of the fourth quarter of 2012, theN.Y. Fed said in press materials, with a 70 percent increase in both the number of borrowers and the average balance per person. The overall number of borrowers past due on their student loan payments has also grown, from under 10 percent in 2004 to 17 percent in 2012.  As reported in The Huffington Post:

Fewer people with student loans are buying homes, according to data in the report. Of borrowers ages 25 to 30 who are taking out new mortgages, the percentage of those with student debt has fallen by half, from nearly 9 percent in 2005 to just above 4 percent in 2012.

The fed report sees a connection, stating, “The higher burden of student loans and higher delinquencies may affect borrowers’ access to other types of credit and the performance of other debt.

The growth in student debt is due to a combination of more students attending college, more parents taking out loans for their children’s education and a lack of options to discharge the debt, the fed reports. In 2005, congressional Republicans pushed through a new law that made private student loans nearly impossible to discharge in bankruptcy. While student debt tops all other forms of consumer debt, it’s the only kind that cannot be absolved in bankruptcy.

Tony

Dear Commons Community,

In 1997,a teacher,  Jonathan M. Levin, the son of the Time Warner chairman, Gerald Levin, was killed by one of his former high school students. Five years later, the New York City Education Department opened Jonathan Levin High School for Media and Communications in the same South Bronx building where he had taught, declaring it “a living tribute” to the English teacher’s “spirit, values, commitment and impassioned belief” that every child has a right to a quality education.

Ten years after it opened, the New York City Education Department has deemed Levin High School a failure, and is preparing to close it down.  As the New York Times reports:

“Closing schools, and replacing them with new ones, has become a hallmark of education reform efforts around the country, promoted by the Obama administration and embraced by Mayor Michael R. Bloomberg, who has shuttered 142 of them since taking office in 2002 and, in his final year, is moving to close 24 more. The central, free-market premise is that schools that fail to deliver should not be permitted to continue, and that their buildings could be better used to experiment with new ideas, often with new personnel.

The policy has been repeatedly criticized by teachers’ unions, and is now also under attack by several Democratic candidates for mayor, who in varying degrees have all pledged to slow or halt the process of closing schools. Civil-rights groups have filed complaints with the federal Education Department asserting that the policy has a disproportionate effect on black and Hispanic students.

The critics contend that school systems like New York’s are more interested in letting schools fail, to accelerate the process of creating new schools, than in helping struggling schools, and the students in them, succeed.

“We have a mayor who treats the act of closing a school as the accomplishment,” said Bill de Blasio, the city’s public advocate and, as one of five Democratic mayoral hopefuls, a supporter of a moratorium on closings. “What should be a last resort is now the go-to policy, and kids are suffering the consequences.”

There may be no better example for weighing these arguments than Levin High School, which, as it happens, is one of seven small schools operating inside the shell of William Howard Taft High School, Jonathan Levin’s school, which was closed for poor performance.”

Bill de Blasio has it right.  The Department of Education takes pride in its accomplishment of closing schools and then creating new schools including charter schools.  The Department of Education does not take responsibility for  schools not meeting its “standards” and instead blames the principal, the teachers, the neighborhood, and everyone else except itself.

Tony