KeNo's Housing and Economic Portal: Monday May 30 Housing and Economic stories

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The Dirty Secret Behind Teacher Pay And Teacher Quality - (www.businessinsider.com) There is no correlation. Lost in the debate about collective bargaining rights and the related issues of pay, pensions, and health care coverage is the dialogue about a core issue. There is no clear correlation that better paid teachers produce better educated students. Click here to see grades for the top paying states for teachers > Wisconsin teachers are among the most vocal opponents of Gov. Scott Walker’s plan to curtail some collective bargaining rights. Though there is little doubt that good teachers improve student achievement, the evidence that well-compensated educators produce better prepared students is mixed. Wisconsin is a case in point. Wisconsin teachers fare slightly worse than the national average with starting salaries of $32,642 and a maximum with a master’s degree of $60,036. The Tax Foundation says its tax burden is the fourth worst in the U.S. and its QualityCounts rating was a C+, about average. What the state underscores is how a dysfunctional system of teacher pay rewards educators with little emphasis on merit. Throwing more money at teachers, however, is not the answer to the myriad of problems affecting the nation’s schools.

California Cash Crisis May Loom Even as Brown Adds $6.6 Billion to Budget - (www.bloomberg.com) California Governor Jerry Brown’s revised budget with $6.6 billion more revenue may not avert a cash crisis looming in July that may force the most-populous U.S. state to pay bills with IOUs for the first time since 2009. Brown yesterday proposed asking lawmakers to keep $9.1 billion of taxes and fees from expiring, then having a referendum to validate the extension in November or later, when a statewide ballot can be arranged. The state won’t be able to borrow cash from Wall Street in July or August with that validation vote pending unless Brown and lawmakers agree on spending cuts that would be activated if voters turn down the tax plan, Treasurer Bill Lockyer said. “My office will not be able to complete a cash-flow borrowing transaction unless the final adopted budget includes real, inescapable, quickly-implemented spending cuts that would be triggered if voters reject the taxes,” Lockyer said yesterday.

Merkel rejects Greek debt restructuring - (www.ft.com) GERMAN Chancellor Angela Merkel opposes a restructuring of Greek debt, putting her at odds with her own finance minister, the German daily Bild said on Tuesday. During a discussion with students at the Sophie-Scholl school on Monday in Berlin, Dr Merkel backed aid for Greece and ruled out changes to debt repayment prgrammes for any euro zone countries before 2013, Bild said. The newspaper did not provide direct quotes by the German chancellor however. Financial markets have increasingly bet on the possibility that Greece will either extend the repayment period on its debt or decide it must reimburse less than the full amount owed. On Sunday, German Finance Minister Wolfgang Schaeuble said he could support a longer repayment period if private creditors agreed to it, something known as a voluntary restructuring.

‘Hidden’ debt raises Spain bond fears - (www.ft.com) The rapid growth of “hidden” public debt in Spain is likely to be revealed by incoming regional and local administrations to be elected on Sunday, damaging Spain’s credibility in the bond markets, according to a report. “It is clear that in some or even many regional governments the official accounts do not reflect the truth,” says the research by Freemarket Corporate Intelligence, a consulting firm run by Lorenzo Bernaldo de Quirós, an economist critical of Spain’s devolved system of government. “It also seems clear that the new administrations, if there is a change of the party in power, are not going to take on the inherited debt without clarifying the details,” the report says – an echo of complaints about prior fiscal mismanagement made by the present government of the Spanish region of Catalonia. Latest data from the Bank of Spain, calculated in accordance with European Union guidelines, show that the country’s 17 autonomous regions have nearly doubled their public debt to more than €115bn ($160bn) since 2008, while municipal and provincial debt has risen to €35bn. Central government debt stands at €488bn.

GORDON BROWN: 2008 Was Just A Trailer For The Next Big Crisis - (www.businessinsider.com) He predicts three financial crises in the next 20 years. In 2008, when we were hours away from ATMs running out of money, small businesses being unable to pay their staffs, and schools and hospitals closing down through lack of cash flow, it felt as if the crisis of the century was upon us. But if the world continues on its current path, the historians of the future will say that the great financial collapse of three years ago was simply the trailer for a succession of avoidable crises that eroded popular consent for globalization itself. Those who believe that the world has learned from the mistakes that led to the crash are mistaken: on the contrary, Prof. David Miles of the Bank of England now predicts not just one further financial crisis but three in the next two decades; and Andrew Haldane, also of the Bank of England, is already charting the volatile and unsustainable wave of speculative capital flows that are still not fully monitored and operate with no early-warning system, no global financial standards, and no consensus on capital and liquidity requirements for banks.