Archive | economy RSS feed for this section

UC Regents raided pension funds, enriched selves.

8 Jan

It should come as no surprise to anyone who reads this blog that the UC Regents are corrupt. But this article gives some thorough and much-appreciated detail into how Regents Parsky, Wachter, Blum, and Lansing channeled pension funds into their own business investments.

Here’s a brief summary, followed by a link to the article:

UC’s Pension Fund Corruption

According to this article, a group of key UC Regents wrecked the university’s pension fund by dissolving the in-house staff of financial analysts and hiring outside firms, (who happened to be large Republican donors,) at a cost of tens of millions in brokerage and consulting fees paid by the university—and tens of billions of dollars in losses to UC worker pensions.

A Brief Summary of the Article:

In 2000, Regent Gerald Parsky, who had worked in the Nixon Administration and was a major powerbroker in California’s Republican Party, became chair of the Regents’ Investment Committee, and inaugurated a series of drastic changes to the UC pension fund’s investment strategy of the UC’s pension fund. The fund had until that point been managed in-house by UC Treasurer Patricia Small and a small staff of analysts. Under Small, who had put in 28 years at the UC, the fund outperformed comparable funds, with an average return of more than 15%. Part of this success was due to Small’s knack for mitigating risk. During the dot-com bubble, she had hedged bets by investing in long-term bonds, which proved to be a smart move. In fact UC’s pension fund was managed so well that it paid for itself. For 17 years, employees gladly accepted wages that were 10-20% below market value because they did not have to make pension contributions. But this winning strategy was put to an end in 2000.

Once ensconced as investment chair, Regent Parsky worked quickly to shut out Small and pressure her to retire. The committee then decided to out-source investing decisions to Wilshire Investments, another large Republican donor, costing the university tens of millions per year in fees. Still worse, the new outside fund managers opted move a large portion into riskier private equity and real estate investments, which are not subject to federal oversight.

The trio of regents supporting this change—Parsky, Paul Wachter, and Richard Blum, are financiers and are heavily invested in private equity and real estate markets. Under their stewardship, the fund has made investments that raise serious questions about conflicts of interests. According to a recent report, since 2002, the university has “invested $748 million in seven private equity deals in which [Richard Blum] or his firm, Blum Capital Partners, was a major investor.”

Since Small’s ouster in 2000, investment fees and brokerage commissions paid by the UC went from $5.5M–to $52M in 2006. Though the UC pension fund had been running a surplus from 1999 to 2000, in the years that followed, “[n]early every pension portfolio in the country [was] doing better than the university’s … 86 percent of large US investment trusts outperformed the UC pension fund from 2001 to 2006.”

The UC has blamed workers and faculty for pension fund shortfalls, explaining that the problem is that they have not been making contributions. The UC is currently seizing up to 8% of paychecks to cover the billions that have been lost to bad investments.





Nov. 28th Day of Action Media Coverage

30 Nov,0,7181269.story

A quick glance at the 99%

19 Nov

Santa Cruz Community and Students Rally, March, Act Nov. 9 to ReFund California!

13 Nov

On Nov. 9, 2011, more than 600 students, workers, and faculty attended a noon rally in Quarry Plaza on the UCSC campus.

A group of about 500 students then marched to the base of campus in a dance party fueled by chanting, drumming, and a roving amp playing hip-hop and dance music. At the base of campus, students rallied, rested, danced, snacked, and had an impromptu poetry reading, then headed downtown to join a rally with local workers and K-12 teachers planned to take place at the clock tower on Water and Pacific.

Their March continued down Bay and took a left at Mission St., where they blocked traffic, and police quickly closed off the street. Students danced down Mission and workers and residents came out of their businesses and homes to wave or stare. Marchers waved and greeted spectators.

Here’s a video from the Noon rally:



When students got to the clock tower, the crowd was too big to fit around the clock tower without blocking traffic. The large crowd stood in the intersection of Pacific and Water while deciding for a while but then opted to gather around the steps of the post office in order to keep traffic moving on Water St. so that workers could arrive. But the actions were not over! See video and pictures below, but keep scrolling for more about the day of action.


Los Mejicas performed at the UCSC Rally.

Students gather at the base of UCSC’s campus.


When workers and K-12 teachers arrived, the community rally began. It featured local labor and community leaders: Nancy Abbey, a long-time activist with the Women’s International League for Peace and Freedom; Jenn Laskin, a teacher for Pajaro Valley School District, secretary for her union, and activist in the Brown Berets; Cesar Lara, Executive Director for the Monterey Bay Labor Council; Rafael Gomez, President of the California Faculty Association at CSUMB, and Rocio, a UCSC student active in the Brown Berets.

Before the rally could conclude, organizers received word that more than a dozen activists who had been milling around inside the Wells-Fargo lobby had been locked inside by police. When this was announced at the rally, the crowd of around 600 decided to go to the bank just a few blocks away. Once there, protesters surrounded the bank, chanting “spank the banks” and “we are the 99%”, and wrapping it in crime tape. One protester scaled an awning above one of the bank’s entrances and hung a banner.

A student read a list of the crimes that Wells-Fargo had committed against the community and the crowd repeated the charges using the “human microphone”. Charges included predatory lending targeting communities of color and students, and heavy investment in detention centers for undocumented migrants. After finding Wells-Fargo guilty of crimes against the community, the crowd repeated “we must love and take care of each other,” and dispersed peacefully, with more than half heading to Occupy Santa Cruz to participate in an Action Assembly there.










Occupy Cal calls for general strike Tuesday, Nov. 15th

10 Nov

See details here.


Intergenerational Theft?

29 Oct

U.S. poverty, inequality is among the worst in the “developed” world.

According to a new report by a German research institute, the US lags behind most countries in the Organization for Economic Co-operation and Development (OECD), an organization that includes most of Europe, plus the US, Mexico, Chile, Japan, Korea, Australia, and New Zealand. Among the 31 countries ranked in the study, the U.S. is in the bottom 5 for overall social justice, poverty prevention, child poverty rates, and income inequality.

But perhaps the most interesting thing revealed in this study is the generation gap in social spending and economic opportunity that most of us have intuited. The U.S. is in the bottom ten on senior citizen poverty rates–but is ranked even lower for child poverty rates, just above Mexico, Chile, and Turkey. Do we care more about old people than we do about kids? The U.S. is also in the bottom half when it comes to intergenerational justice, a measure of three components: family and pension policies, environmental protection, and the politico-economic conditions being established for future generations. As you can see from the charts below, the U.S. ranks 20th in intergenerational justice, just below the Czech Republic, and just above the poorest countries on the list. Greece is at the bottom.

A 2007 USA Today report reveals that behind the growing wealth gap lies a generation gap. The baby boom generation benefitted from an unprecedented growth in the welfare state that provided white workers a pipeline to a secure middle class lifestyle through access to quality, affordable higher education; subsidized housing loans; favorable tax policies; and support for middle class wages. But this bounty of government goodies has been slowly chipped away in the post-Civil Rights Era, as people of color and women have just begun to gain access to the benefits that had enriched whites, and especially white men.

Today’s young people are going into more debt so they can earn less. Politicians regularly re-assure baby-boomers that the government is determined to honor their social security benefits–but the next generation will have to accept less. At the same time that young workers are instructed to adjust their expectations downward, they are also required to pay into the Social Security and Medicare funds upon which the boomers who rail against “Obamacare” rely.

If current economic and policy trends continue, the baby-boomers will leave behind a society that is poorer, dirtier, and more unequal. These trends cannot be allowed to continue.


Teach the Budget Is Back!

24 Oct

We have a new, updated curriculum with surprising new figures on how the UC and the state of California are cheating students, workers, and educators. But the problems we are facing are more complex and serious and formidable than ever, so we’ve put together a couple of extras to help educators, students, and workers understand the nitty-gritty of the huge wealth-grab that has sent our economy tumbling:

Please help us spread the word by teaching the budget, sharing this link, and spreading the word that the California movement to defend education is back in action and ready for a fight!
Learn more about our new
Sign up to