Can they learn the lesson'
Is there a betrayal more obscene than a union that will sell out its members?
Teachers will wonder about that as they learn how the National Education Association, the nation's largest teacher union with 2.7 million members, plays them for fools.
And they will stop wondering when they discover how the NEA has been pocketing their money while keeping them in the dark.
The Los Angeles Times reported on Tuesday that "labor groups have joined forces with investment firms to steer members into savings plans that often have high expenses and poor returns." It's a must-read for more than teachers; it is an eye-opener for the rank-and-file who blindly trust union leaders.
Union officials declined to say how royalties were calculated or how much loot was obtained from union-endorsed retirement plans. The NEA collected almost $50 million in 2004 from virtual kickbacks better known as "royalties" from the sales of annuities, life insurance and other union-endorsed financial instruments, according to the federally mandated disclosure statement.
Teacher unions in Pennsylvania, Michigan, Oregon, San Diego and Las Vegas have their own endorsement deals. Other teacher unions get a piece of the action from a sale from members referred to NEA approved products, according to the L.A. Times story.
The members understandably assume that the NEA endorsed savings or investment plans would be the best for them. Alas, it appears to be anything but.
The Times story included detailed financial analysis of the union-endorsed products that indicates they are substantially inferior and very costly. And that was not the most disturbing part of the virtual scam.
"Teachers generally are not aware that unions are paid for their endorsements, directly or indirectly. Such deals usually are not mentioned on union Web sites or in brochures describing the favored investments," according to the story.
The NEA has made Enron look ethical. Could that dripping sound off in the distance be drooling plaintiff attorneys?
A union spokesman trying to rationalize the betrayal told the reporter that, "Teachers are trained as educators, not financial managers. What we are concerned about is guided, safe, secure investments."
In other words the union claims its teachers cannot tell the difference between a good rate of return versus a bad one even though millions of employees with 401(k) accounts who also are not financial managers can.
Could that be why American students typically have the lowest math scores compared to other nations•
Since the NEA thinks so little of its patsies, er, um, members, it probably did not want to overwhelm the 2.7 million with details about the union's sweetheart endorsement deals.
There is at least one more disturbing issue that the otherwise excellent article did not address. While surely there are brilliant teachers who have mastered every aspect of investing -- and no doubt profit handsomely from their acumen -- how could so many others have been duped for so long•
Could they actually be that dense about their own basic personal finances?
But even if they are, they won't be much longer.
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