Sorry I assumed you puposely shut down comments on the Trish Beck post. You could say that to assume the worst of a fellow blogger is the height of lameness.

That said…it still does appear that you were wrong. Do you do corrections?

You’re wrong and you should admit it. Rob fact checked you here:

http://utahamicus.com/2008/11/16/lyall-swim-of-the-sutherland-institute-and-polilticalcivilitycom-needs-to-check-his-facts/#comment-3817

Investments into the market are not savings and as long as there is a risk, we cannot count on the money being there when we need it. The only time you can count on invested money is when you actually remove the money from the investment. Whatever you remove is money you can count on.

So, when we are talking about the education fund, I think we’re better off leaving the money exposed as little as possible to being depleted. That increases our likelihood of having money to pull out of the investment when it comes time to rely on the existence of that money.

Are you intentionally getting sidetracked on defining adequate funding so you won’t have to address the financial benefits to the public education likely to result from this legislation? For the sake of argument lets assume that schools are currently funded adequately.

Over the next 20 years Utah’s public school student population is projected to nearly double. If economic growth doesn’t keep up with this demographic explosion (the number of workers in the population isn’t projected to increase in anywhere near the same proportion as the number of pupils) our public school system will be severely underfunded.

You’re poo pooing the idea of allowing the market to work in providing much needed money for public schools. That just seems incredibly short sighted to me. You’re right…there is some risk. It will be important for us to elect state treasurers who are skilled and knowledgeable enough to mitigate as much of that risk as possible and who can make excellent use of the new flexibility this amendment will grant them.

I agree with some of you concerns about possible conflicts of interest and reporting requirements but don’t see anything in the amendment that would prevent the legislature or executive from making laws or rules that could alleviate many of those issues.

Thanks for the follow-up. Let me just hit a few of your comments really quickly.

1) Eastern schools have more money, but many of them perform much more poorly compared to Utah. This gets back to my comment to Jeremy. I hear clamour for more money, but you can’t show me the statistical link to $7,500 versus 10,000 makes a difference in student performance. MORE Money is not the answer. It may help, but it may not. The research simply doesn’t support your assumption that more money = better schools.  I go back to the example that my children are getting a better education for half the cost of a public school student.

2) You ASSUME that our fund would be closer to $27 billion. It may or may not have. You have no way of knowing what the real number would be It could have been $50 billion or it could have been $4 billion. We just don’t know.

3) Diversification means a lot of different things. I do not have to be invested in highly risky private investments to be diversified. That is where I think you have misunderstood me and where your definition of diversified is only a partial one. I could be highly diversified in a real estate only portfolio (rental–which would be really good right now–, commercial, residential–which would not be so good right now, etc.). I could be highly diversified in publicly traded stocks (micro cap, mid cap, high dividend yielding, emerginc companies etc.). Or I could be diversified in bonds (AAA or high yield short term C rated bonds)–that’s what Moody’s ratings are for. Or finally I could be diversified into a wide range of investment instruments (i.e., a little of all of the above). Once again you may or may not mitigate risk. What is really happening is you are spreading out risk. The risk has not gone away.

4) If the Trib endorses anything, I have to admit that I am skeptical. So their endorsement does little to help me. They pretty much support from a political standpoint everything I oppose (i.e., big government, curtailing parental rights, government-run health care, abortion, gay marriage, Obama–not that I’m voting for McCain either–, the list could go on.) Thanks for the link. I’ll read the editorial, but I know their world view and will take anything they say with a grain of salt (which I am sure you do same while reading my blog ).

And, if the state had been managing the land and investing the money the right way since statehood, we’d be closer to the $27 billion in the Texas fund, which distributed $974 million to public schools last year.

The permanent State School Fund is already invested in publicly traded stocks and bonds, and it has taken a hit recently, but the investments still are in the positive - worth more than the state paid for them. The treasurer doesn’t invest in individual companies, but invests in funds. And, Lyall must have missed the day they talked about diversification, because although private equity is considered more risky than other investments, in times like this, it is best to have your eggs spread out into a lot of baskets. So, investing a small portion (defined as 7-12% by prudent investor standards) in a fund that invests in private equity would actually mitigate the risks.

The Tribune stated in it’s endorsement of Amendment E that if people took enough time to get their questions answered, they would support it, too. You can read the entire editorial here http://www.sltrib.com/ci_10788589

:)

http://www.newcoolthang.com/index.php/2008/10/prop-8-comment-they-would-not-print/569/

It’s long, but interesting nonetheless.