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MEDIA WATCH: Sun Times and Tribune ignore letter to the editor from Jay Rehak, award winning teacher and President of the Chicago Teachers Pension Fund... while regularly publishing right wing propaganda....

[Editor's Note: The following is an example of how both of Chicago's major newspapers censors powerful voices, while regularly publishing the propaganda of the right wing. During the time since the following letter to the editor was sent to Chicago's daily newspapers, they have routinely published Op Ed pieces by right wing propagandists, including CPS "Chief Executive Officer" Forrest Claypool, the so-called "Illinois Policy Institute" and the "Better Government Association." Jay Rehak teaches full time at Whitney Young Magnet High School, while CPS CEO Forrest Clayppol has devoted his adult career to phony "reforms" aimed against working people and public services in Chicago. George N. Schmidt, Editor, Substance].

REHAK'S REMINDER AND LETTER:

Whitney Young High School teacher Jay Rehak has been a leader in the rank and file critiques of CPS budgeting and finances. Above, Rehak is seen testifying at the Board's annual budget hearing on August 9, 2009, at Marshall High School. Rehak and other researchers were the first to reveal and challenge the illegal actions of the Board of Education, which has issued variable rate bonds from 2003 through 2005. Instead of demanding that the bond fines be repaid, CPS leaders, under four different "Chief Executive Officers" (beginning with Arne Duncan) covered up the losses and allowed CPS to go more and more deeply into debt. Collaboration with the CPS frauds came from the city's daily newspapers, which in February 2016 refused to publish a letter from Rehak, while regularly publishing right wing propaganda from Forrest Claypool and other reactionaries. Substance photo by George N. Schmidt.On February 6th, I wrote a letter to the editor of the Tribune and the Sun-Times. Have not gotten a response from either, so I presume they are not going to run it. I think what I am talking about (Elected officials helping to create higher borrowing costs for government) is something we all need to be screaming about. And by all of us, I mean anyone who is not a member of the 1%. Because here's the reality from my point of view, the wealthy will continue to OWN more of the government as they drive up interest rates on government bonds and buy them. Chicago is just the latest City to pay outrageous borrowing costs instead of doing the right thing which is to raise taxes on the wealthy OR INSIST BOND RATINGS agencies treat them fairly. Anyhow, here is my letter:

February 6, 2016

To the editor:

This summer, when thousands of Chicago teenagers are without meaningful employment, consider what a 30 million dollar jobs program might have provided. Consider a summer jobs program that hired students at $10 an hour to clean the schools or help paint over graffiti tagged on public buildings, or hired students to be a part of a creative arts program. That 30 million dollars would have provided 3 million hours of honest work for many thousands of otherwise idled, unemployed teenagers. But where would Chicago find 30 million dollars? According to the Governor of Illinois, the Mayor and the business community, the City is broke. Chicago could hardly be expected to come up with an extra 30 million dollars for a jobs program. Right? Well, how about this: What if instead of CPS borrowing 725 million dollars at 8.5 percent interest, what if CPS had borrowed that money at 4%?

According to the Chicago Sun-Times, on Wednesday, February 3, 2016, the Chicago Board of Education borrowed 725 million dollars at an astounding interest rate of 8.5 %. This means Chicago will pay, this year alone, $61,625,000 in INTEREST. That 61 million dollars will provide Chicago school students absolutely nothing and every cent of that interest payment will be sucked out of the Chicago economy forever. The absolute tragedy of that high cost borrowing is the City could have done better and would have done better if the political leaders of this City and state had not driven up the interest rate with their own irresponsible rhetoric and irresponsible inaction.

Let me be clear: there is no defendable reason why CPS should not have been able to borrow that same 725 million dollars at the still exorbitant but much more responsible 4% interest rate. In 2015, according to Kurt Summers, the City Treasurer, the City of Chicago paid 3.9 % interest on their short term borrowing. While that is still an extremely high rate, CPS would have saved 30 million dollars per year, just for this single bond deal had it borrowed the 725 million at that rate.

So what happened between this year and last: First, the governor and the legislature have failed to pass a budget. This continued failure to act allows bond dealers to charge all of Illinois (the state, cities, municipalities, public entities such as school boards) a higher interest rate because of the uncertainty of the marketplace. Secondly, the Mayor of Chicago has lost the trust and confidence of the citizenry, and his public battle with the Governor fuels the speculation that the City and State are in extreme economic distress. This provides bond dealers additional leverage in extracting higher interest rates out of the City and CPS.

So this summer, when thousands of children in Chicago are not working, and the Citys infrastructure continues to crumble, remember the CPS bond deal at 8.5%. The 61 million dollars each year that Wall Street is going to get for loaning CPS money at a rate that should have been half as much. The 30 million dollar summer works program that wasnt. And if youre a Wall Street banker, dont forget to thank Governor Rauner, the Illinois Legislature and the Mayor for unnecessarily driving up the borrowing costs for schools.

Jay C. Rehak, NBCT



Comments:

February 15, 2016 at 1:54 AM

By: William McLaughlin

Vultures suck big bucks from Chicago kids through exorbitant and usurious interest rates.

Mr. Rehak is right on target here. And, I'm looking though the lens of my own academic background, which is finance and economics (I have a Master's).

Having said the above, I am at a loss to understand why CPS and the City are paying the interest rates they are paying - other then that these deals are being handled by Rahm's investment career buddies. Of course, we are told that there is no potential confilct of interest there. However, I don't know if anyone reclused themselves from this piece of business, and inded this is not easy information to find.

As to the legislature, Rahm's offensive, in your face, style (and Rauner's clueless and harmful cutting of core social programs and equally abrasive style) is not making him any friends in Springfield. Revenue is still the problem, and blame is being thrown around, and it always lands anywhere but with the Republicans. The only sustantive issue, the 10,000 pound elephant in the room, is the Consitutionally-mandated flat tax. An issue which no one in the media - short memories that they have - wants to talk about, especially the Trib and the Sun-Times, lest they offend his nibs in City Hall.

Not as an aside, back in the day my then Political Science professor was elected as a delegate to ConCon (Constitutional Convention) in 1969. Since they met only part of each week, to accomodate delegates with non-political careers, he was able to bring into class what was going on in Springfield. A lot of which revolved around Republican attempts to, first, have no income tax, then a flat tax. A progressive income tax was proposed, but was stonewalled by the Republicans to the extent that they were willing to scuttle the otherwise finished Constitution to get their much-loved and regressive flat tax. Sound vaguely familiar?

In short, the flat tax is responsible for ALL of Illinois current revenue problems, and hence ALL of Illinois' current bugetary issues, including starving CPS of the money needed to give each child the quality education they deserve, as well as beginning to deal with the Legislature-created pension 'crisis'.

.

William A. McLaughlin

Chicago

Permission to publish granted.

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