Tilting at Windmills

January/February 2013 Petraus’s demands … Fox News’s GOP ambitions … Washington’s merry-go-round

By Charles Peters

Let’s see Lloyd Blankfein pouring concrete at sixty-six
Among the pearls of wisdom that Blankfein shared with Pelley was that “the retirement age has to be changed.” It was clear that he meant upward. Of course, later retirement can make sense. I didn’t retire until I was seventy-four, but I was fortunate enough to have work that I loved for the preceding forty years. Unfortunately, many people don’t have my good luck. Life has forced them into jobs they don’t like, or that are so physically demanding that they are worn out by the time they’re in their sixties. These people need Social Security. If Social Security is reformed, why not do so by raising the employment tax so that it applies to all income over $106,000? That way, the Lloyd Blankfeins of the world, instead of pontificating about how others should bear the pain, can pay their fair share.

No escape
Speaking of taxes, Warren Buffett has a great idea: a minimum tax on the wealthy—one they can’t use any loophole to escape. He suggests 30 percent for incomes between $1 million and $10 million, and 35 percent on incomes above that. My only worry is the lawyers and accountants who serve the privileged will manage to redefine either the word “taxable” or the word “income.”

“What I Wore,” redux
Back to the Times’s Style section for a moment. I had thought that its editors had been embarrassed enough by the designer name dropping of the “What I Wore” feature that they’d abandoned it. In a November issue, however, the feature returned in a slightly different form with a photo of a young woman named Sky Ferreira, identified as a “musician, actress and model.” Under the caption, “What I’m Wearing Now,” is a list that includes a shirt from Miu Miu and shoes by Chloë Sevigny.

This is followed by Ms. Ferreira’s “Style Credo”: “When I wear designer clothes, I want to feel like myself. That’s probably why I always wear the same designers. If it’s not going to be a vintage or something from Uniqlo, I will wear Givenchy, Saint Laurent or Margiela. And Miu Miu,” she said, adding with Broadwellian modesty, “which is the only store where everyone knows me.”

Mind the gap
Congratulations to Jerry Markon of the Washington Post for revealing that the AARP gets a 4.95 percent royalty each time a senior buys a Medicare supplement policy from UnitedHealthcare with its widely advertised AARP endorsement. This not only nets the AARP a major share of its income, but it’s also a cash cow for UnitedHealthcare. According to Markon, the Medicare supplement and other AARP-endorsed policies are responsible for hundreds of millions of dollars a year, generating “slightly more than half of the group’s $1.4 billion in revenue.”

The one fact that Markon misses is that all Medicare supplement polices are a racket. Not only can the profit margin be huge, but many people who buy these policies think they will cover the difference between what Medicare pays and what policyholders are billed. What the supplement actually pays is the difference between what Medicare pays and what Medicare “authorizes”—an amount that’s frequently less, sometimes considerably less, than the actual bill.

Dewey, Cheatham & Howe
I was once a lawyer, and while in the game I observed that though some of my fellow attorneys were admirable—this magazine would not exist if it were not for the kindness and skill of two of them—a good many others used tactics that ranged from devious to contemptible.

Last year, West Virginia’s attorney general, Darrell McGraw, discovered that a Texas law firm was charging West Virginia clients a 20 percent fee to process claims under the National Mortgage Settlement. The fact is that a lawyer is not needed to make the claim. Free relief can be obtained by filling out a simple one-page form. McGraw was able to get the firm to agree to cease and desist this exploitative practice within West Virginia, but it appears to remain free to fleece the innocent in other states.

Hiring good teachers
The rush of the intellectual elite to embrace Diane Ravitch, noted in this space last spring after the New York Review of Books published articles by her in consecutive issues, now continues with an admiring profile in the New Yorker. Her distaste for Michelle Rhee, Joel Klein, and other public school reformers have made her a darling of teacher’s unions. The unions, in turn, have been embraced by liberals newly aware of the harm done by Republican efforts to cripple the labor movement, and the way that the unions’ decline has contributed to the increasing income inequality in this country. Ravitch and her allies threaten to undermine what had been a growing commitment to improving the quality of teachers. Both the liberals and Ravitch have a reasonable point that the socioeconomic status of the pupil can affect the quality of his education. Of course it does, but it is not more important than the quality of the teacher.

Reformers want bad teachers to be fired, while Ravitch and the unions passionately defend tenure. Tenure may be justified when awarded to a teacher who clearly deserves it. Unfortunately, in most states, tenure has been awarded almost automatically without regard to merit, and too often to teachers who were unqualified when hired.

In a sign that the teacher’s unions are at last beginning to recognize the hiring problem, a task force appointed by Randi Weingarten, president of the American Federation of Teachers, recently recommended basic qualifications for teachers: a year of practice teaching, a test of subject knowledge, and a requirement that they enter and graduate their teacher preparation program with a 3.0 average. The reason why these reforms are relevant to the issue of teacher quality is that these requirements are not now in place everywhere. Indeed, in most states, a 3.0 average is not required, nor is a year of practice teaching, nor is a teacher’s knowledge of his or her subject tested.

Ironically, it is the teachers colleges with the complicity of the teacher’s unions that have been responsible for the state rules that do not require subject knowledge or practice teaching, but do require “education” credits—in other words, courses in how to teach, but not what to teach.

Saving Private-contractor Ryan
I harp on the issue of government contractors because so few people have any idea how great their number is. The Washington Post recently reported that at the height of our diplomatic mission in Iraq, there were “twenty support personnel for each official,” many of them contractors, including 6,000 security guards. The Project on Government Oversight reports that each contract employee costs the Department of Defense 2.94 times as much as the average civil service employee.

The reliance on contract employees to replace civil servants began with the Clinton administration’s emphasis on “downsizing” as part of its Reinventing Government initiative, and expanded under George W. Bush, as government-phobic Republican administrators preferred hiring private contractors to adding civil servants. To be sure, private contractors are sometimes more efficient, but more often, as we saw with the Gallup Organization, their true expertise lies in the art of padding costs.

Charles Peters is the founding editor of the Washington Monthly and the author of a new book on Lyndon B. Johnson published by Times Books.


  • Richard Fox on January 15, 2013 2:57 PM:

    Regarding your item about AARP and Medicare, medical providers agree as a condition of participating in any insurance to accept what the insurance authorizes as total payment for a bill. This works the same with Medicare as with any private insurance. Therefore the difference between what Medicare pays and what it authorizes becomes the total amount owed. There is no "gap" as you imply.

  • Sparky Satori on February 21, 2013 4:04 PM:

    "...is more accurate than his movie JFK, in which he wove a few remotely plausible facts into an absurdly vast conspiracy to explain the assassination of John Kennedy."

    Why is it that those who have never bothered to acquaint themselves with the "facts" expect to be taken seriously when they pontificate about which among them are "plausible?"

    Oliver Stone got more right than wrong in JFK, but in order to know that, one would have to read more than just the Warren Commission Report, which is apparently where your own education on this ended.