Bob Harris, EI's Senior Consultant to the General Secretary, shares information and commentary on the impact of the financial crisis on education funding, and how education can be part of the solution.
The story of how five Wisconsin school districts lost millions due to Wall Street financial engineering that trustees believed to be AA safe is just one example of the impact of the financial crisis on education.
Five school districts in Wisconsin joined together with the aim of enhancing their pension trust fund investments. Trustees were persuaded that new financial instruments called CDOs were nearly as safe as Treasury Bonds, but with better rates of return. They put in $37.5 million of their own funds, and borrowed another à $165 from an Irish Bank. They did not realize that they were bit players in a complex international deal involving banks in the US, Ireland, Germany and Canada.
This example is given by Les Leopold, Director of the Labour Institute and Public Health Institute in New York, in his new book “The Looting of America: How Wall Street’s Game of Fantasy Finance destroyed our Jobs, Pensions and Prosperity, and What we can do about it”. He quotes the New York Times: “Wisconsin schools were not the only ones to jump into such complicated financial products. More than $1.2 trillion of CDOs have been sold to buyers of all kinds since 2005 – including many cities and government agencies….”.
Read the story of the “Wisconsin Five” on http://www.alternet.org/story/140208/the_looting_of_america%3A_how_wall_street_fleeced_millions_from_wisconsin_schools/.
Les Leopold’s book is available on Amazon at http://bit.ly/rltb4.
Source: ITUC and International Federation of Journalists (IFJ)
Five school districts in Wisconsin joined together with the aim of enhancing their pension trust fund investments. Trustees were persuaded that new financial instruments called CDOs were nearly as safe as Treasury Bonds, but with better rates of return. They put in $37.5 million of their own funds, and borrowed another à $165 from an Irish Bank. They did not realize that they were bit players in a complex international deal involving banks in the US, Ireland, Germany and Canada.
This example is given by Les Leopold, Director of the Labour Institute and Public Health Institute in New York, in his new book “The Looting of America: How Wall Street’s Game of Fantasy Finance destroyed our Jobs, Pensions and Prosperity, and What we can do about it”. He quotes the New York Times: “Wisconsin schools were not the only ones to jump into such complicated financial products. More than $1.2 trillion of CDOs have been sold to buyers of all kinds since 2005 – including many cities and government agencies….”.
Read the story of the “Wisconsin Five” on http://www.alternet.org/story/140208/the_looting_of_america%3A_how_wall_street_fleeced_millions_from_wisconsin_schools/.
Les Leopold’s book is available on Amazon at http://bit.ly/rltb4.
Source: ITUC and International Federation of Journalists (IFJ)
Education International 2009
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