Fifteen Years After 2008, Why Do Banks Keep Failing?
Peter Coy – March 13, 2023
Credit…Illustration by The New York Times; images by CSA Images/Getty Images
The weekend rescue of uninsured depositors in Silicon Valley Bank and Signature Bank was absolutely essential and absolutely frustrating. We have to stop getting ourselves into these messes, people.
If the federal government hadn’t given a blanket of protection to all deposits, companies that had deposits in either of the banks above $250,000, the maximum that’s insured by the Federal Deposit Insurance Corp., would not have been able to pay their workers. Start-ups that bank with Silicon Valley Bank would have been imperiled. “It could have destroyed early-stage biomedical research in this country for a decade,” said Karen Petrou, the managing partner of the consulting firm Federal Financial Analytics, who sits on the board of a biomedical research foundation.
The damage could have been far greater. Depositors at other banks were beginning to panic, worrying that their banks would be next to fail and looking for safer places to stash their cash. We were looking at the early stages of a generalized bank run that would have done serious damage to the U.S. economy. Even a healthy bank can be destroyed overnight if all its depositors demand all their money at once. The only way to arrest the panic was for the government to assure all depositors that there was no need to yank from the bank.
Even after the emergency intervention, markets remained unsettled on Monday. Bank stocks were down. Economists at Capital Economics reported “worrying signs of incipient strains in core money markets.” Interest rates fell as investors speculated that the Federal Reserve might curb its rate-raising campaign to relieve pressure on banks (a concern I wrote about on Friday). A scare such as this one has lasting consequences.
True, the government didn’t bail out everyone involved. Shareholders in the banks are wiped out and members of senior management were fired. That’s fair — and contrasts with what happened during the 2008 global financial crisis, when the government propped up shaky banks while leaving management and shareholders in place.
Whether taxpayers helped pay for the rescue is a matter of semantics. On Monday, President Biden told reporters, “No losses, and this is an important point, no losses will be borne by the taxpayers.” Still, the government — and by extension, taxpayers — is providing a valuable guarantee to the banking system. The fact that any government expenditures will eventually be recouped through higher insurance premiums doesn’t take away from that. Also, the Federal Reserve is promising to support troubled banks by buying bonds from them at face value rather than their current depressed market price. Not a bailout, exactly, but certainly a good deal.
The real question is why this keeps happening. After the global financial crisis, Congress passed and President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Federal Reserve raised safety standards for banks, especially ones that are deemed “systemically important.” There’s a Financial Stability Oversight Council that’s supposed to take a broad view of risks in the system.
It clearly wasn’t enough. It didn’t help matters that bank lobbyists got Congress and regulators to roll back some measures that they regarded as onerous. For example, a 2018 law signed by President Trump — which was passed by Congress with bipartisan support — spared banks with $100 billion to $250 billion in assets from the highest level of scrutiny. Hard to say, but Silicon Valley Bank — which lobbied for the law — might still be with us if it weren’t for that law.
There are lots of things that could be done to improve banking supervision, require thicker capital cushions and so on, but for now I’d like to focus on the question of the day, which is what to do about uninsured deposits.
The theory in banking is that big depositors have the financial sophistication and the incentive to make sure that the banks where they keep their money are safe. Keeping deposits uninsured above a certain threshold is thus supposed to be a kind of market discipline, supplementing the supervision by state and federal regulators. But that was never a realistic expectation for most depositors, who have other things on their minds. Plus, because big depositors know that they’ll be protected when push comes to shove, they have no incentive to seek out safe banks.
This is hardly a new problem. In 1991, Jerome Powell, now the chair of the Federal Reserve, was a senior official in the Treasury Department who was assigned to deal with the collapse of the Bank of New England Corp. As he recounted in a 2013 speech: “We came to understand that either the F.D.I.C. would protect all of the bank’s depositors, without regard to deposit insurance limits, or there would likely be a run on all the money center banks the next morning — the first such run since 1933. We chose the first option, without dissent.”
Under the Federal Deposit Insurance Corporation Improvement Act of 1991, the F.D.I.C. is required to resolve bank failures in the way that incurs the least cost to the deposit insurance fund, even if that means wiping out uninsured depositors. But in practice, uninsured depositors almost never get wiped out because the F.D.I.C. arranges for a stronger bank to acquire the failed one, assuming all of its deposits. The Dodd-Frank Act of 2010 made an explicit exception to the least-cost test for cases of “systemic risk” — that is, if complying with the least-cost test “would have serious adverse effects on economic conditions or financial stability.” That’s the exception that the government invoked for Silicon Valley Bank and Signature Bank.
If market discipline works in theory but not in practice, one alternative is to bow to reality and explicitly insure all bank deposits. It would certainly lessen the number of panics such as the one that killed Silicon Valley Bank and Signature Bank, without giving banks carte blanche to behave irresponsibly. One person who favors that solution is Robert Hockett, a professor at Cornell Law School, who has written twopieces about the idea for Forbes recently. The F.D.I.C. premiums are higher for riskier banks, which makes sense. Given that the F.D.I.C. already takes risk into account, Hockett told me, the $250,000 limit is “vestigial, like the human tailbone.”
Insuring all bank deposits would make banks look more like public utilities, Petrou told me. She said she’d prefer relying more on market discipline, as originally intended. But that ship may already have sailed.
Elizabeth Warren: Silicon Valley Bank Is Gone. We Know Who Is Responsible.
By Elizabeth Warren– March 13, 2023
Credit…Justin Sullivan/Getty Images
Senator Warren is a Democrat from Massachusetts.Sign up for the Opinion Today newsletter Get expert analysis of the news and a guide to the big ideas shaping the world every weekday morning. Get it sent to your inbox.
No one should be mistaken about what unfolded over the past few days in the U.S. banking system: These recent bank failures are the direct result of leaders in Washington weakening the financial rules.
In the aftermath of the 2008 financial crisis, Congress passed the Dodd-Frank Act to protect consumers and ensure that big banks could never again take down the economy and destroy millions of lives. Wall Street chief executives and their armies of lawyers and lobbyists hated this law. They spent millions trying to defeat it, and, when they lost, spent millions more trying to weaken it.
Greg Becker, the chief executive of Silicon Valley Bank, was one of the many high-powered executives who lobbied Congress to weaken the law. In 2018, the big banks won. With support from both parties, President Donald Trump signed a law to roll back critical parts of Dodd-Frank. Regulators, including the Federal Reserve chair Jerome Powell, then made a bad situation worse, letting financial institutions load up on risk.
Banks like S.V.B. — which had become the 16th largest bank in the country before regulators shut it down on Friday — got relief from stringent requirements, basing their claim on the laughable assertion that banks like them weren’t actually “big” and therefore didn’t need strong oversight.
I fought against these changes. On the eve of the Senate vote in 2018, I warned, “Washington is about to make it easier for the banks to run up risk, make it easier to put our constituents at risk, make it easier to put American families in danger, just so the C.E.O.s of these banks can get a new corporate jet and add another floor to their new corporate headquarters.”
I wish I’d been wrong. But on Friday, S.V.B. executives were busy paying out congratulatory bonuses hours before the Federal Deposit Insurance Corporation rushed in to take over their failing institution — leaving countless businesses and non-profits with accounts at the bank alarmed that they wouldn’t be able to pay their bills and employees.
S.V.B. suffered from a toxic mix of risky management and weak supervision. For one, the bank relied on a concentrated group of tech companies with big deposits, driving an abnormally large ratio of uninsured deposits. This meant that weakness in a single sector of the economy could threaten the bank’s stability.
Instead of managing that risk, S.V.B. funneled these deposits into long-term bonds, making it hard for the bank to respond to a drawdown. S.V.B. apparently failed to hedge against the obvious risk of rising interest rates. This business model was great for S.V.B.’s short-term profits, which shot up by nearly 40 percent over the last three years — but now we know its cost.
S.V.B.’s collapse set off looming contagion that regulators felt forced to stanch, leading to their decision to dissolve Signature Bank. Signature had touted its F.D.I.C. insurance as it whipped up a customer base tilted toward risky crypto-currency firms.
Had Congress and the Federal Reserve not rolled back the stricter oversight, S.V.B. and Signature would have been subject to stronger liquidity and capital requirements to withstand financial shocks. They would have been required to conduct regular stress tests to expose their vulnerabilities and shore up their businesses. But because those requirements were repealed, when an old-fashioned bank run hit S.V.B., the bank couldn’t withstand the pressure — and Signature’s collapse was close behind.
On Sunday night, regulators announced they would ensure that all deposits at S.V.B. and Signature would be repaid 100 cents on the dollar. Not just small businesses and nonprofits, but also billion-dollar companies, crypto investors and the very venture capital firms that triggered the bank run on S.V.B. in the first place — all in the name of preventing further contagion.
Regulators have said that banks, rather than taxpayers, will bear the cost of the federal backstop required to protect deposits. We’ll see if that’s true. But it’s no wonder the American people are skeptical of a system that holds millions of struggling student loan borrowers in limbo but steps in overnight to ensure that billion-dollar crypto firms won’t lose a dime in deposits.
These threats never should have been allowed to materialize. We must act to prevent them from occurring again.
First, Congress, the White House and banking regulators should reverse the dangerous bank deregulation of the Trump era. Repealing the 2018 legislation that weakened the rules for banks like S.V.B. must be an immediate priority for Congress. Similarly, Mr. Powell’s disastrous “tailoring” of these rules has put our economy at risk, and it needs to end — now.
Bank regulators must also take a careful look under the hood at our financial institutions to see where other dangers may be lurking. Elected officials, including the Senate Republicans who, just days before S.V.B.’s collapse, pressed Mr. Powell to stave off higher capital standards, must now demand stronger — not weaker — oversight.
Second, regulators should reform deposit insurance so that both during this crisis and in the future, businesses that are trying to make payroll and otherwise conduct ordinary financial transactions are fully covered — while ensuring the cost of protecting outsized depositors is borne by those financial institutions that pose the greatest risk. Never again should large companies with billions in unsecured deposits expect, or receive, free support from the government.
Finally, if we are to deter this kind of risky behavior from happening again, it’s critical that those responsible not be rewarded. S.V.B. and Signature shareholders will be wiped out, but their executives must also be held accountable. Mr. Becker of S.V.B. took home $9.9 million in compensation last year, including a $1.5 million bonus for boosting bank profitability — and its riskiness. Joseph DePaolo of Signature got $8.6 million. We should claw all of that back, along with bonuses for other executives at these banks. Where needed, Congress should empower regulators to recover pay and bonuses. Prosecutors and regulators should investigate whether any executives engaged in insider trading or broke other civil or criminal laws.
These bank failures were entirely avoidable if Congress and the Fed had done their jobs and kept strong banking regulations in place since 2018. S.V.B. and Signature are gone, and now Washington must act quickly to prevent the next crisis.
Elizabeth Warren is a United States senator for Massachusetts.
One of Anna Maria Island’s last trailer parks is for sale in Florida. ‘It’s a family.’
James A. Jones Jr. – March 12, 2023
Along with the bright colors, quirky personal touches and flowering plants at the Pines Trailer Park, there is sadness and uncertainty among residents.
Dating back to 1935, the park was first used by members of a traveling circus, some say, and baseball great Babe Ruth once owned a home at 402 Church Ave., that later burned down, the Bradenton Herald reported in 1990.
It’s a tight-knit group of residents, some full-time, but many seasonal. The park bumps up against Sarasota Bay. Bridge Street and Bay Drive both run through it. Visitors often walk through, taking in the local color of one of Anna Maria Island’s last two trailer parks.
It’s a throwback to the Florida of yore.
Bradenton Beach City Hall sits a few blocks to the west.
“It’s sad. We are extremely hopeful residents will be able to work out a deal with the property owner,” Mayor John Chappie said. “The Pines is really a community within a community.”
Trailer park residents respond
Pines Trailer Park and Sandpiper Mobile Resort, 2601 Gulf Drive N., also in Bradenton Beach, are the last remaining trailer parks on Anna Maria Island.
For some of the residents of Pines Trailer Park, it is the only home they have, said Linda Maerker, president of the tenant’s association.
She worries for them.
“You know the price of real estate. It’s sad,” she said.
Maerker and her husband have wintered in Pines Trailer Park for 15 years.
“This place is so important to so many people,” she said. “It’s a family. We have become very close.”
Maerker calls the park her healing place after some tragedies in her life.
Ranae Ratajczak has lived in the park for 13 years, spending six months a year there.
“It’s our happy place, our piece of paradise,” Ratajczak said.
The owners of Pines Trailer Park in Bradenton Beach want to sell the property and have offered residents the option to purchase the park for $16 million.
“Our hope is to become owners of the park. There is a lot of history here. We want to keep it as it is, as a mobile home park,” she said.
History of Pines Trailer Park
This is not the first time that park owners have offered to sell the park to residents.
In 2002, the owners also offered residents a chance to buy the park, according to records filed with the Manatee County Clerk of Court’s Office.
George and Grace Bagley started Pines Mobile Home Park — named after the Australian pine trees in the area — in 1935 and the park has had many owners over the years, according to Jonathan Torkos, historical resources librarian for the clerk’s office.
At its opening in 1935, the Bradenton Herald reported that it was a “new and strictly modern tourist camp” with a community hall, dance hall, restaurant and laundry. Budweiser was offered on draft, according to a newspaper advertisement.
In 1936, thieves entered the washroom of the park and stole all the plumbing, the Bradenton Herald reported.
In 1948, Mr. and Mrs. Harry Hively sold the park to Mr. and Mrs. James Ashby for $25,400.
This aerial depicts the southern-most portion of Bradenton Beach. To the right of the image is the Anna Maria Sound and to the left of the image is the Gulf of Mexico in this historic postcard from 1945.
One of the subsequent owners, Mr. and Mrs. Glen Fifer, sold the park in 1956 for $55,000 to Mr. and Mrs. Charles Bisbee.
In 1962, Bradenton Beach’s then-mayor Victor Reinel sold the park to Mildred Henri and Forrest J. and Elizabeth Lincoln for $150,000, the Bradenton Herald reported.
Jackson Partnership has been the owner of the trailer park since 1976.
Challenging housing market
The housing market has never been so challenging in the Bradenton area, with rental prices becoming some of the least affordable in the United States and the price paid to buy a house at record levels.
In the early 1970s, Bradenton Beach had very affordable housing that service workers on the island could afford, Chappie said this week.
That is a concern not only for Pines Trailer Park residents who want to remain in their homes but for many who are looking to rent or buy elsewhere in the Bradenton area.
The owners of Pines Trailer Park in Bradenton Beach want to sell the property and have offered residents the option to purchase the park for $16 million.
The availability of affordable housing and workforce housing has become a major concern not only for consumers but for business interests and public service providers.
The owners of Pines Trailer Park in Bradenton Beach want to sell the property and have offered residents the option to purchase the park for $16 million.The owners of Pines Trailer Park in Bradenton Beach want to sell the property and have offered residents the option to purchase the park for $16 million.The owners of Pines Trailer Park in Bradenton Beach want to sell the property and have offered residents the option to purchase the park for $16 million.The owners of Pines Trailer Park in Bradenton Beach want to sell the property and have offered residents the option to purchase the park for $16 million.
They bought their dream homes from the ‘King of Coconut Grove.’ They still can’t move in
Linda Robertson – March 12, 2023
Twelve new townhouses line a block of Coconut Avenue. Lushly landscaped, outfitted with high-end appliances and spacious closets, they’re in move-in condition. Yet the Coconut City Villas are empty, as empty as their backyard swimming pools and unsullied trash bins sitting in unoccupied driveways.
Instead of “For Sale” signs, house hunters see “No Trespassing” notices posted along the street and “Do Not Enter” decals stuck to the front doors, a curious contrast in Coconut Grove, one of the most hotly desired neighborhoods in the country, where housing prices have nearly doubled over the past three years.
The lack of residents can’t be explained by lack of demand. The 4,000-square-foot townhouses, originally priced from $1.2 million to $1.8 million, are under contract to buyers who put down as much as $500,000 starting as far back as 2018. They were told by developer Doug Cox their homes would be ready in 45 to 90 days, or at the latest six months.
They’ve been waiting ever since. Their plans have been perpetually postponed by Cox, owner of Drive Development, who has not closed a house sale in four years despite a booming market. His completion dates teased buyers as the houses beckoned. But their dreams of a dream home have gone bust.
They have been locked out and led into a dead end darkened by threats, lawsuits, non-disclosure agreements and unsavory lenders, buyers say.
The delays have turned buyers and their families into nomads — moving from one expensive rental to another, cramming in with relatives while living out of suitcases — draining their finances and testing their marriages. When they go past their houses they are tantalized by memories not made — cooking in the kitchen, playing in the pool, celebrating birthdays, hosting block parties.
“We’ve spent three Christmases in limbo,” said Alan Lombardi, who signed a contract three years ago with the assurance that he, his husband and their newborn twin daughters would move in by summer 2020. The twins are now age 3. “The developer has kept us hanging on his hook, ruining people’s lives by deceiving us with false promises, just like Bernie Madoff.”
Lombardi has asked the FBI to investigate Cox for running a Ponzi scheme.
The buyers can’t move in because Cox has failed to complete inspections and get certificates of occupancy from city of Miami building department officials, whose lack of oversight enabled Cox to ignore expired permits and a Stop Work order and avoid applying finishing touches on houses for years. The city, which has ceased responding to buyers’ calls and emails, says it can’t intervene in a private dispute.
The buyers got caught in the fallout from Miami’s COVID-driven housing gold rush. Some are transplants from New York, Chicago and California who were eager to sign purchase agreements for new homes that looked — outside and inside — like they were ready to sleep in, missing only a mirror, some paint, a fence. They want their plight to serve as a warning: Don’t make one-sided deals with developers.
A Coconut Avenue townhouse built by Drive Development. Buyers who have paid hundreds of thousands in deposits for these houses have been waiting to move in for two, three and more than four years. They’ve been stymied by the Coconut developer, Doug Cox, who has continually stalled the closings on the properties.
Cox is deliberately stalling to frustrate them into canceling their contracts so he can flip each house for an additional $1 million or more, buyers allege. They feel trapped: As time passed, the market skyrocketed, and in 2023 they will never find comparable homes in the neighborhood for the price they planned to pay and the mortgage rate they had secured.
On Wednesday, Drive Realty listed 2986 Coconut Ave. for $2.495 million. Original sales price in July 2020 was $1.385 million, a difference of $1.11 million. One catch: It doesn’t have a certificate of occupancy so anyone who buys it can’t move in.
“Seems like a shell game,” said Andy Parrish, a longtime Miami developer who lives in Coconut Grove. “He’s put these people through hell by stonewalling them with excuses.”
One weary buyer confided in Parrish, cried on his shoulder.
“She said, ‘I can’t believe people lie to other people like this,’ ” Parrish said. “I told her, ‘Welcome to Miami! A sunny place for shady people.’ ”
Cox, 52, initially agreed to an interview with the Miami Herald, then changed his mind and asked for emailed questions. He didn’t respond to questions sent twice or attempts to talk to him over the past two weeks.
Nicole Pearl, 37, who is Cox’s business partner and mother of their three children, declined to talk to the Herald. Her law firm, Pearl & Associates, is the registered agent of companies connected to the properties, Florida corporate records show. She is a licensed real estate agent who lists homes for Drive Realty.
The Herald spoke to 16 buyers — many did not want their names published, fearing retaliation by Cox — and examined lawsuits, mortgages, purchase agreements, property records and Miami building department reports, which substantiated buyers’ chorus of complaints.
Several of the 12 townhouses in the 2900 block of Coconut Avenue in Coconut Grove on Wednesday, Feb. 15, 2023. Buyers who have put down deposits as much as $500,000 dating back to 2018 say they haven’t been able to move into the homes due to perpetual delays by their developer, Doug Cox of Drive Development.
No sales closed since 2019
Cox calls himself the “King of Coconut Grove.” His clients call him less flattering nicknames. What his gambit is no one can say for certain because he has not sold a home since August 2019 when he and Pearl closed on a Bridgeport Avenue townhouse for $1.15 million. Closing on the new homes should be a mutual goal but there are no signs of progress. He offers clients refunds of their deposits and says he’s got a line of backup buyers.
“It’s a strange way to run a real estate development company,” Lombardi said. “It’s really an anti-development company. Why doesn’t he want to deliver? How can he afford to operate?”
Cox has told buyers he wants to get them into their special houses, but he’s been delayed by factors beyond his control: the pandemic, supply-chain problems, manpower shortages, rising construction costs, subcontractor snafus and now bureaucratic red tape in the building department tangling his efforts to finish inspections.
A padlock and chain link fence greet passersby at 3159 Virginia St. in Coconut Grove on Thursday, Feb. 9, 2023. The property is owned by Send Enterprises LLC, one of the limited liability companies connected to Doug Cox and Nicole Pearl.
Double contracts on homes
Is Cox playing musical chairs? At least three of the townhouses have double contracts on them. The legal descriptions correspond to 2955, 2960 and 2990 Coconut Ave.
Some buyers discovered through Miami-Dade Clerk of Court records that near the end of 2022 Cox signed a “memorandum of contract” on their houses with Chris Paciello, the former South Beach nightclub impresario, and his business partner, Mio Danilovic. Before he became famous for hosting parties at Liquid and dating Madonna, Sofia Vergara and Jennifer Lopez, Paciello was a Mafia henchman and thief in New York City.
Once Paciello’s past caught up with him in 2000, he became an FBI informant, pleaded guilty to racketeering and served six years in prison for robbing $300,000 from a New York bank and driving the getaway car in a home invasion during which a Staten Island housewife was shot in the face and killed.
Paciello, the owner of four Anatomy Fitness deluxe gyms in South Florida, has ventured into real estate investment since the pandemic and flipped houses for $9 million and $14 million in Miami Beach. It’s unclear how much of a deposit Paciello and Danilovic put down in their backup contract deal with Cox. Backup contracts are not illegal.
When contacted by the Herald, Paciello, 51, declined to comment.
Ingrid Casares and Chris Paciello at Liquid, the South Beach nightclub, on Nov. 16, 1995. Casares and Madonna were lovers; Casares and Paciello were partners in Liquid. Paciello and his business partner have backup contracts on three of the Coconut Avenue townhouses.
In another complication that has alarmed buyers, Cox took out a $350,000 loan in December from DC Fund based in Sunny Isles Beach, whose associates include men who were sued for racketeering in an alleged loansharking scheme that disguised “criminally usurious loans” as cash advances that had to be repaid with 430 percent interest, according to a lawsuit filed in Brooklyn. Cox put up eight properties as collateral. If he defaults on the loan, he could lose them.
Buyers have observed Cox showing their houses to prospective buyers on multiple occasions. He says he is merely displaying his handiwork, and not offering those particular houses for sale. But contract holders have heard from acquaintances whose names are on a list of backup buyers Cox has compiled. One is upset he’s only No. 3 on the list.
A finished kitchen in one of the Coconut Avenue townhouses built by Doug Cox of Drive Development.
If Cox is flipping the townhouses, for how much? Miami real estate agent Randi Connell, who identifies herself as a Drive Development sales associate, recently texted a prospective buyer about two off-market Coconut Avenue houses available for $2.7 million and $3 million, which is $1.5 million and $1.2 million more than the original sales prices.
Homebuyers who signed purchase agreements and put down deposits on townhouses along Coconut Avenue in Coconut Grove have been waiting for several years to move into their dream home. The developer, Doug Cox of Drive Development, keeps stalling, the buyers allege. Photo was taken in 2021 by a buyer.
Pearl listed 2986 Coconut Ave. for sale for $2.495 million on Wednesday morning. The house first went under contract for $1.385 million on July 8, 2020, to Jonathan Schonfeld and Aviva Auslander, with a completion date of Sept. 1, 2020, or at the latest, March 1, 2021. They waited two years. Disgusted, they gave up.
If Cox and Pearl land a buyer for 2986, they could collect at least a $500,000 deposit and “utilize” it as they please, according to two Send Enterprises contracts the Herald reviewed. Contrary to realty ethics rules, Pearl did not disclose in the listing that the house doesn’t have a certificate of occupancy, and its building permit expired Feb. 15.
“If the delays are indeed outside their control, how can they list a property if they don’t know when or if they can close?” Lombardi asked.
South Florida real estate lawyer Dennis Eisinger said home buyers can get “boxed in” by contracts that typically favor the developer and waive buyers’ rights.
“It appears this developer is bullying the buyers to get the financial advantage,” he said. “We saw this situation before the recession in 2003-2006 when defiant and unscrupulous developers tried to get buyers to rescind contracts so they could resell at higher prices.”
Lawsuits, ‘worst decision of my life’
At least three buyers, including Schonfeld and Auslander, sued Send Enterprises, alleging fraud and breach of contract. The cases were assigned to mediation, as required in the contracts; buyers cannot seek a jury trial. They had to sign non-disclosure agreements. At least four others have taken Cox up on his offer to refund their deposits and walk away; they also signed NDAs.
Catherine and Andrew Prescott of Miami Beach signed a $1.82 million purchase agreement on May 25, 2021, and paid a $455,000 deposit for 2960 Coconut Ave. The contract stipulated a completion date of Aug. 1, 2021, and an “outside” closing date within six months.
The Prescotts sued Send Enterprises in January 2022 for its alleged failure to achieve specific performance of its obligations, fraudulent inducement, unfair trade practices, negligent misrepresentation and unjust enrichment.
In their lawsuit, which also named Cox, Schonfeld and Auslander asserted that Cox “repeatedly lied” about “fabricated dates.” The Prescotts said the developer made promises “without any intention of performing, or with the positive intention to not perform” to entice them to sign and pay a deposit. The cases went to mediation and everyone signed NDAs.
Three months after the Prescotts sued, a real estate agent who works with Cox offered the house for $2.4 million, about $600,000 more than the original sales price.
Other buyers are determined to stick it out. They can’t afford to hire a lawyer. They’re not ready to abandon the houses they’ve invested in, emotionally and financially. And they don’t want to let Cox win.
“If I could rewind time — this was the worst decision of my life,” said Kevin Ware, who owns an insurance brokerage firm. He moved his family from Chicago in March of 2021, walked through a Coconut Avenue townhouse that was weeks from completion and fell in love with it. They’ve lived in three rentals since. “We cannot let Doug keep scamming more people. We don’t want anyone else to get caught in this predicament. Buyer beware.”
Strung along by Cox, buyers acquired mortgages with 2 percent rates that have since tripled.
“It must be exhausting to be Doug Cox. He lives in 15-minute increments. Think of all the lies he has to keep track of,” Ware said. “We have paid a high price for dealing with him. From the sheer expense of living in short-term housing to the financial damage of losing our mortgage rate locks to the strain on our relationships and mental health, Doug has constantly and cruelly put his greed above our well-being.”
Kevin Ware moved his family from Chicago in March of 2021, walked through a Coconut Avenue townhouse that was weeks from completion and fell in love with it. They’ve lived in three rentals since, unable to move into their home.
‘Cautionary tale for other home buyers’
For Lombardi and his family, it’s been a three-year ordeal, first sharing his mother’s small Hollywood condo with his partner and infant twins, now in a $5,000-per-month Midtown apartment.
“We thought it would be a three-month wait because the house was 80 percent done, so we sold our Brickell condo, put everything, including baby equipment, in a sealed storage pod, packed four suitcases and moved in with my mom — for two years,” said Lombardi, a real estate agent.
The twins never had the nursery Lombardi envisioned.
One buyer described himself and his wife as “40-year-old couch surfers.” They’ve lived in seven different places.
New York transplants Michael Coyne and his wife, Oksana, have 1-year-old twin daughters and a 3-year-old son, and expected to share 2978 Coconut Ave. with her parents, who fled Ukraine after Russia attacked. Among the six places they have lived since their closing date evaporated was a one-bedroom apartment.
Coyne said they moved to a rental in Rhode Island to wait it out because they couldn’t afford “insane” rents in Miami. Fueled by inflation that’s made housing unaffordable for many and the influx of remote workers and newcomers moving to a no-income tax state, Miami has become the most competitive rental market in the country with prices 76 percent higher than the national median, a Zillow study showed.
Coyne, an investment banker, wanted to open an office with two of his business associates in Miami but he’s told them not to come. Oksana, a registered nurse, was scheduled to do her clinical work to become a nurse practitioner; she’s postponed her career plans. The chaos has been difficult for the children and Oksana’s Ukrainian parents, who speak limited English.
“Doug and Nicole either lie to you or ignore you,” Coyne said. “You work really hard for your family to buy the most important asset of your life and you get caught in a calculated, malicious, exploitative scheme by a flimflam developer.
“I’m not letting him get away with it. Let this be a cautionary tale for other homebuyers.”
New York transplants Michael Coyne and his wife, Oksana, have 1-year-old twin daughters and a 3-year-old son, and expected to share 2978 Coconut Ave. with her parents, who fled Ukraine after Russia attacked.
One family has suffered the longest. They chose a four-bedroom model four and a half years ago so their 12-year-old daughter would have her own room and so her grandmother, recovering from cancer, could live with them. Now, the daughter is a high school senior heading to college in the fall. The grandmother never got to move in with her family.
City of Miami should be ‘embarrassed’
Cox brags about his chummy connections to the city’s building department and Miami Mayor Francis Suarez.
Cox’s customers recount the exact same comments he’s made to all of them — that he can remove any obstacle by “having a cafecito” with officials. Drive Development contributed $50,000 to Suarez’s re-election campaign in 2020 and $100,000 to Suarez’s 2018 initiative to create a strong mayor position (voters rejected it), campaign finance records show.
Buyers who have sought relief from the city have gotten nowhere: Emails, phone calls and meetings have prompted no corrective action.
Buyers acknowledge they signed contracts that gave lots of leeway to the developer but decided to sign because they were shown nearly completed houses by a persuasive seller who had previously built fine houses. What could go wrong?
The Herald asked to speak to three City of Miami building department officials about inspection delays and an audit of Drive Development plans. The city’s reply: “The Building Department takes this matter seriously and is tasked with enforcement of the building code and other technical standards, as well as City ordinances. The Building Department has no authority over the pace of construction, nor any contractual matters between the buyers and the developer.”
The city does have authority over permitting and inspections, but wouldn’t explain why it has taken years for Cox to receive city approvals and certificates of occupancy. Nor would officials answer questions about penalties for permit violations or prolonging the inspection process.
“The city should be embarrassed,” Lombardi said.
A walk-in closet at one of the 12 luxury townhouses on Coconut Avenue in Coconut Grove that developer Doug Cox of Drive Development built. The photo was taken in 2021 by a buyer.
When the Coynes asked Pearl for an update three weeks ago, she told them inspectors can’t work during an audit. The city said that’s not true; inspectors are allowed to carry on.
Developers like Cox can hire “private providers” to conduct inspections and submit the results to the city. Cox hired MEP Consulting Engineers of Coral Gables. He’s told buyers he blames MEP for bungling reports. MEP blames Cox for not giving inspectors the information they need to finish the job.
MEP President Katrina Meneses said that the city’s audit is done and in the hands of Cox.
“What we’re waiting on is paperwork from the owner, our client,” she said. “We love to finish projects so we can move on to the next one. Anything that takes over a year, it’s difficult to continue and slows us down. Yes, if I was a customer, I’d feel upset.”
The city is notorious for its lack of transparency and accountability, said Parrish, the Miami developer who lives in the Grove.
“We’re in a pro-development city, county and state where everything is driven by developers and their money. Florida is a creation of developers,” he said. “Developers control elections, elections control politicians and politicians control building and zoning. The city of Miami is one of the worst examples of how the gravy train works. It’s an absolute mess.”
Buyers have asked for help from the city, ex-Miami commissioner Ken Russell, Mayor Suarez, the Miami-Dade State Attorney’s Office, the state’s Department of Business and Professional Regulation and the FBI. The response: If Cox isn’t doing anything illegal, we can’t get involved.
Ware’s experiences illustrate the relationship between Cox and the city.
Cox was allowed to work through a Stop Work order for more than a year. The city issued the order because Cox failed to submit plans for the five three-story townhouses he was building on Coconut Avenue; he only submitted plans for the two-story units. His reason: Plans were proprietary and he didn’t want his design stolen.
Ware discovered there was a Stop Work order and expired permit on his house when he checked the city website iBuild in summer 2021.
Kevin Ware moved his family from Chicago in 2021 and has been waiting to move into their Coconut Avenue home in Coconut Grove.
According to Ware, Cox told him not to worry, the order wasn’t being enforced and he’d have a cafecito with officials to smooth things over. Five months later, after repeated requests for an update, Cox told Ware he had submitted a substantial number of reports to the city after giving MEP engineers a $50,000 bonus each to expedite inspections, and promised Ware “we’re almost there.”
A month later, Ware met with city inspector Perla Mutter. She told him Cox had submitted nothing, and that because of the expired permit, nothing could be submitted until Cox and his contractor Eric Myers met with the building department.
A month after that, on April 26, 2022, Ware went to the meeting at city offices expecting to talk to Cox, Myers and Miami building department assistant director Luis Torres. But Cox met with Torres privately first. And there was no sign of Myers.
“Doug comes out of the office and admits he met with Torres early so that, ‘Everything would be taken care of,’ ” Ware said. ”The following week Doug paid a $100 fine and reopened his permit.
“The city can try to cleanse its hands but it is enabling this developer to abuse the system,’’ Ware said.
The permits for 2984 and 2986 Coconut Ave. expired last month. Cox must sign onto iBuild and pay $100 to re-activate the permits for six months. It’s part of a years-long pattern: His permits expire, he reactivates them months later, then doesn’t enter documentation in time for the city to complete reviews before they expire again, records show.
Permits for the other townhouses on Coconut Avenue are scheduled to expire March 12, April 30 and July 4. Buyers check iBuild and see a vicious cycle: Submit, Pending, Review, Deny, repeat.
To fix the slow and complicated permitting process that has stranded buyers, they advocate new laws with strict 120-day deadlines for the review and approval of applications and harsh penalties for breaking them.
There’s a cost to the city as well. Cox has been paying property taxes of $10,000 per lot, or $60,000 per year on the Coconut Avenue townhouses. Homeowners would pay about $20,000 per unit, or a total of $240,000 per year.
‘House of Rumors’
Then there’s the seven-year saga of 4010 Park Ave.
The two-story South Grove house still has plywood for a front door and a Porta Potty in the front yard.
On realtor.com, it’s listed as a 5-bedroom, 6-bathroom home “active with contract” for $2.95 million.
In 2019, Steven Salm bought the home for $2.55 million. He sued Send Enterprises in November 2020; the lawsuit went to mediation and NDAs were signed. The house was re-listed in February 2021 for $2.95 million.
Marcos Junges has lived next door for 27 years. He said the building of 4010 Park began back in 2016.
“Goes in fits and starts, with long hiatus periods,” he said.
A home under construction at 4010 Park Ave. in Coconut Grove on Feb 15, 2023. A neighbor who lives next door said the home has been under construction since 2016. Neighbors call it the ‘House of Rumors.’ The property is owned by Send Enterprises LLC.
He and his neighbors — who paused to chat during one of their evening walks — call it the “House of Rumors.” They’ve heard it’s been under contract for five years with a succession of buyers. Junges said Cox bought the modest house that used to be there from his elderly neighbor’s family when she died.
At 2050 Secoffee St., majestic oak trees shade a vacant lot. Secoffee is a quintessential Grove street in the rapidly transforming North Grove, where developers capitalize on the neighborhood’s expansive lots by tearing down old houses and the jungle that surrounds them and building new ones with much larger footprints. Price-per-square-foot in the Grove’s 33133 ZIP code rose to a record $874 last year.
Drive Development’s website shows a gorgeous rendering of a 5,302-square-foot house with atrium, listed for $4.85 million in July 2021, then removed in January 2022. A description currently on movoto.com includes three different wishful details: Under construction! Expected completion Q3 2022 and Year built 2021.
No ground has been broken.
The image on the real estate website movoto.com shows a rendering of a house at 2050 Secoffee St. in Coconut Grove, on Feb. 25, 2023. The description includes three different wishful details: Under construction! expected completion Q3 2022 and Year built 2021.Drive Development advertises a luxury designer home along a fence in front of a lot at 2050 Secoffee St. in Coconut Grove. The lot is vacant.
Cox tells buyers he’s finishing his own dream townhouse at 3167 Shipping Ave. in central Coconut Grove. The adjacent one is under contract with a buyer from New York City who is growing more impatient. Both look ready for move in. Around the corner on Gifford Lane, a buyer from southern California awaits a townhouse that was supposed to be done in November. Other than grass growing, nothing’s happening on the lot.
Newly constructed homes along the 3100 block of Shipping Avenue in Coconut Grove on Wednesday, Feb. 15, 2023. Cox tells buyers he’s finishing his own dream townhouse at 3167 Shipping Ave. in central Coconut Grove. The adjacent one is under contract with a buyer from New York City who is getting impatient.
The loans
Cox’s companies have taken out at least $59 million in loans, for which he put up 20 properties as collateral, according to public records.
But it’s his most recent loan that has buyers concerned about the fate of their houses. Cox borrowed $350,000 from DC Fund on Dec. 30, 2022, soon after three buyers decided to cancel and get their deposits back. Around the same time, Pearl signed the double contracts with Paciello and Danilovic. And now Cox and Pearl have listed a house for which they could pocket $500,000 or more in deposit money.
Cox put up eight properties as collateral on the DC Fund loan. If he defaults, lenders get first dibs.
DC Fund’s registered agent is Ariel Peretz, principal of Diverse Capital, a lender that advertises “we say yes when others say no” and urges customers to get in touch “if you’re in search of desperately-needed money.”
Peretz and DC Fund members run firms in the merchant cash advance business, mostly based in Brooklyn, which attempt to skirt state usury laws by saying they are not lending quick money at exorbitant rates but are buying the future earnings of their borrowers.
Peretz and DC Fund associates Yoel Getter and Jonathan Allayev and their companies were sued in 2021 by a Texas businessman who accused them of collaborating in a “criminal enterprise that profits by making and collecting on illegal loans.”
The businessman took out a $150,000 loan for which he agreed to repay $224,850 at 215 percent interest via $3,748 daily debits from his bank account. Two weeks later, the businessman borrowed $350,000 — in part to repay the first one — at 430 percent interest, for which he owed $524,650 via $17,488 daily debits.
The businessman dropped the case.
Peretz didn’t return messages left by the Herald.
“We are very worried,” Coyne said. “If Doug gets in trouble with these high-risk loans and debts, we may be left with nothing.”
Cox boasts to buyers that he and Pearl are independently wealthy with $70 million in savings, but if his cash flow has dried up, they fear he can’t pay off mortgages, can’t obtain the clean title necessary to close and could declare bankruptcy.
“He may have thought, ‘I sold these too cheap and I can make more money if I resell,’ but that makes less sense every day because the market is cooling,” Parrish said. “Maybe he got in too deep and has problems paying lenders. He can’t close so he’s kicking the can down the road.”
The two sides of Doug Cox
Cox can be a charming salesman.
Or a belligerent bully.
Michael Coyne has seen both sides. But as a U.S. Army combat veteran, he is not intimidated.
“The last time I saw him he ran up to my car, leans in and says he’s hired a former CIA operative to tail me because my wife made disparaging comments on social media,” Coyne said. “Another time he told me, ‘Bring it!’ I deal with plenty of nasty lawyers on Wall Street and none of them have ever challenged me to a street fight.”
Lombardi has felt Cox’s wrath. Cox terminated Lombardi’s 3-year-old contract last month, accusing him of trespassing at his house at 2984 Coconut Ave. and making derogatory comments. Cox prohibits buyers from going on their properties and has installed surveillance cameras. But he allowed Lombardi to go inside last May with his family.
Eight months later, when Cox heard Lombardi called the FBI, Lombardi said, Cox canceled his contract. They are in mediation. Lombardi wants his deposit back, and believes Cox wants him out so he can list 2984 at a higher price and collect another $500,000 deposit.
Buyers are also wary of Cox because they’ve read a graphic police report from Sept. 6, 2020, when Cox and Pearl got into an argument.
Pearl, who describes Cox in the report as her “live-in boyfriend,” told police Cox began texting her with insulting names from the master bedroom where he was with their daughter as she put their 3-year-old son to bed in his room. Cox stormed in and hit her, choked her, pulled her hair and spit on her as their son watched, “terrified and screaming.” She wrote this description for police:
“He has a pattern of domestic violence and extreme childhood abuse and trauma which has left him with deep unresolved issues and anger problems. This has culminated into a cycle of violence with me since 2014. … He has repeatedly threatened that if I report it, it will destroy his life and in turn he will destroy mine and that of my family.”
Pearl also checked boxes asserting he has “threatened to conceal, kidnap or harm” their children and “intentionally injured or killed a family pet.”
Cox was charged with battery and domestic violence by strangulation and spent the night in jail, Miami-Dade Corrections records show. He was given a restraining order. Pearl dropped the charges.
Booking mug when Doug Cox was arrested and charged with battery and domestic violence by strangulation in 2020.
Cox has perfected the art of evasion.
“I call it the Doug Cox two-step,” Coyne said.
When buyers are able to chase him down on the phone — he avoids putting anything in writing — he swears he’s pushing against the forces obstructing him. He wants them living in their dream homes as ardently as they do.
A vacant lot on Woodridge, a sweet little street in the South Grove next to Merrie Christmas Park and its towering banyan trees, has been overtaken by vegetation. As people in Miami clamor for more housing, this spot where a cottage once stood has grown wild. Vines climb the trees instead of children. The scraping racket of a bulldozer echoes down the block.
On this patch, owned by the King of Coconut Grove, all is still. The ripe land, taking revenge, has reclaimed itself.
A ‘Do Not Enter’ sign is affixed to the front door of one of the 12 luxury townhouses on Coconut Avenue in Coconut Grove that have been built by Doug Cox of Drive Development. Buyers of the homes have been waiting years to move in.
Miami Herald Director of Research Monika Leal contributed to this report.
More Retiree Health Plans Move Away From Traditional Medicare
Mark Miller – March 11, 2023
President Joe Biden delivers remarks on Social Security and healthcare costs at University of Tampa, Fla. on Feb. 9, 2023. (Haiyun Jiang/The New York Times)
Bob Bentkowski, a retired New York City firefighter, has a rare, painful disease that caused his kidneys to swell almost to the size of basketballs. He needed a transplant, and in the fall of 2021, he found a donor after waiting for years — but he was unsure whether Medicare would cover his surgery.
New York City has long provided its retired employees with comprehensive health benefits that pay for most of their Medicare costs. But with his transplant approaching, the city, and a coalition of its labor unions, had thrown Bentkowski a curveball. Aiming to save $600 million annually, they were negotiating to shift 250,000 retirees out of traditional fee-for-service Medicare into a privately operated Medicare Advantage plan.
“I was panicking about what might happen if I moved over to this new plan, since I was only a month away from the surgery,” Bentkowski said. But after hours on the phone with the insurance company, he was told that it couldn’t give him an answer until he enrolled. “They just give you the runaround. How am I going to join the plan when I don’t know what it will cover?”
Ultimately, Bentkowski’s surgery was covered under traditional Medicare. The city’s plans for Medicare Advantage became bogged down in litigation and political battles, with the opposition led by a group of New York City retirees who organized to fight not only the city but their own unions. Their battle has continued into this year, with a group representing city workers voting Thursday to approve the latest Advantage proposal.
The fight in New York City is a highly visible example of a nationwide shift in the way some retirees receive health insurance benefits from former employers, both in the public and private sector. It pits the drive to control health care costs against retired workers’ pocketbook and health concerns.
Many employers have dropped these benefits over the past several decades, and those that still offer them are shifting retirees into Medicare Advantage plans at a rapid pace.
Half of large employers offering benefits to Medicare-age retirees have contracts with Medicare Advantage plans, nearly double the share in 2017, according to the Kaiser Family Foundation. And roughly 44% don’t give retirees a choice to use traditional Medicare within their programs. Most cited lower cost as the key reason.
The growth is part of a bigger story about Medicare Advantage expansion. Advantage is an alternative to traditional Medicare offered by insurance companies, and it uses managed-care techniques to control costs. Nearly half of Medicare beneficiaries were enrolled in Advantage plans last year, more than double the rate in 2007. And enrollment is projected to cross the 50% threshold as soon as this year, according to the foundation.
Retirees who are shifted into Medicare Advantage plans may not fully understand the major differences from traditional Medicare. These include the requirement to use physicians and hospitals in their plan’s narrower network, and reduced access to care in some instances. A federal investigation concluded last year that tens of thousands of people in Medicare Advantage plans were denied necessary care that should be covered.
The shift will also mean higher costs for taxpayers and all Medicare beneficiaries, some experts say. Payments by the federal government to Advantage plans average 102% of its spending on the fee-for-service traditional program, and that contributes to higher overall Medicare spending. This occurs in part because a bonus system awards extra dollars to plans that achieve high quality ratings from Medicare.
Advantage plans have also been found to submit to Medicare inflated bills that over-diagnose their patients. According to federal audits, the practice of “upcoding” crossed the line into fraud. Excess payments totaled $12 billion in 2020, according to the independent Medicare Payment Advisory Commission, which advises Congress.
The higher costs add financial pressure to Medicare’s hospital insurance (Part A) trust fund, as well as the taxpayers, beneficiaries and state-run Medicaid programs that fund the Part B program. The Part A trust fund is forecast to run dry in 2028, leaving revenue sufficient to meet 90% of the program’s obligations.
“On the one hand, Medicare Advantage allows employers to continue to offer retiree health benefits and potentially broaden benefits, and may lower their financial liability for retiree health,” said Tricia Neuman, senior vice president of the Kaiser Family Foundation. “It also has the possibility of increasing Medicare spending.”
Insurers argue that Medicare Advantage group plans are simply one choice available to retirees. “Medicare rules require that retirees always have the option to opt out of enrollment in a group Medicare Advantage plan in favor of other forms of coverage that may be available,” said Heather Soule, a spokesperson for UnitedHealthcare, one of the largest providers of Advantage plans.
But for many retirees, joining an Advantage plan can be a difficult decision to reverse. Traditional Medicare should be paired with supplemental coverage — often a Medigap policy — to protect against potentially high out-of-pocket costs. But the best time to buy a Medigap policy is during the six months after you sign up for Part B (outpatient services), when insurers cannot reject you, or charge a higher premium, because of preexisting conditions. After that time, you can be rejected or charged more in most states.
What’s more, when employers make this transition, retirees often face a choice: Join an Advantage plan or lose the benefit.
“It really takes away choice,” said Marilyn Moon, an economist and a former trustee of both Social Security and Medicare. “The whole idea of Medicare Advantage was supposed to be to give people more choice, not less.”
Seeking Cost Savings
Medicare Advantage offers employers an opportunity to reduce costs substantially. They and unions traditionally have provided a retiree health benefit that fills the gaps in traditional Medicare by paying for deductibles and co-pays, and by providing other benefits. When an employer contracts with a Medicare Advantage insurer, retirees get all of their benefits, including their Medicare-covered benefits, from this Medicare Advantage plan.
In New York City, labor unions representing retirees have been working with the city on its planned shift to Advantage. They promoted the projected savings and their ability to use their bargaining clout to negotiate for far more generous features than those in plans available for individual purchase.
“When we looked at this, we saw that we could design our own plan that would get the same benefits and even more for our retirees,” said Michael Mulgrew, president of the United Federation of Teachers, the city teachers union. “One of our greatest assets is the ability to use our buying power to get that done and, more importantly, to set up an accountability system and a contract where we’re holding the provider to every single word in our contract.”
As the plan was originally envisioned in 2018, retirees who wanted to stay on traditional Medicare could do so if they paid an estimated $191 per month to cover its higher cost to the city. But a grassroots group founded in 2021, the NYC Organization of Public Service Retirees, sued over the plan, taking its battle to the City Council and organizing through Facebook, YouTube and email.
On Thursday, the Municipal Labor Committee, which represents the city’s 102 unions, approved the latest plan to offer only Medicare Advantage starting in September.
In a statement Thursday, Mayor Eric Adams said the new arrangement “improves upon retirees’ current plans,” and includes a lower deductible, a cap on out-of-pocket expenses, and new benefits. “We also heard the concerns of retirees and worked to significantly limit the number of procedures subject to prior authorization under this plan,” Adams said. “This Medicare Advantage Plan is in the best interests of retirees and taxpayers.”
The retiree group says it is considering its next steps, possibly including new litigation. “Labor should never support privatizing public health care or stripping retirees of vested earned benefits,” the group’s founder, Marianne Pizzitola, a retired city Fire Department emergency medical services employee, said in a statement.
“This is a daily anxiety the city and the Municipal Labor Committee are putting us through,” she added in an interview.
Bentkowski felt that anxiety in 2021 as he tried to learn whether an Advantage plan would cover his kidney transplant. He was among the first firefighters to respond at the World Trade Center on Sept. 11, 2001, and a lung-related disability that developed afterward forced him to retire at age 45. He qualifies for Medicare now, at 53, because he receives Social Security Disability Insurance.
“The Medicare Advantage plan might be good for some people,” Bentkowski said. “But you just can’t squeeze everyone into one plan and say it’s going to work.”
The protection of labor agreements and the municipal code has given opponents of the New York City plan leverage to fight the Medicare Advantage transition. In the corporate sector, retiree benefits are offered at employers’ discretion — but that hasn’t stopped some retirees from trying to fight these transitions.
IBM introduced two new Medicare Advantage plans this year for its large retired workforce, replacing a plan that paid for supplemental Medigap coverage along with prescription drugs, dental and vision.
IBM retirees were given the option to stick with the old benefit — but they would lose access to balances in their health reimbursement arrangements, an employer-funded plan that reimburses certain medical expenses and insurance premiums. In most cases, employers retain the right to change this type of benefit, says Trevis Parson, chief actuary for individual marketplace business at the benefits consulting firm Willis Towers Watson.
“Most plan sponsors include language in their plan documents explicitly reserving rights to amend the plan,” he said. Some retirees were outraged by that tactic, and by the announcement of the planned transition with relatively short notice in September.
“They sprung it on us — either take Medicare Advantage or forfeit your balance,” said Steve Bergeron, who retired from IBM in 2009 after 29 years.
In a statement, IBM said that for 2023, two Medicare Advantage PPO options have “enhanced design elements above and beyond what participants were previously able to obtain with individual policies.”
Like many group plans, the new IBM offering features copays and annual deductibles much lower than those found in individual plans, and wider networks of providers. But it’s not clear how long those features will remain.
“There’s no guarantee of anything from IBM,” Bergeron said. “What if these terms were just to get people to sign up?”
Neuman of Kaiser Family Foundation shares that concern. “The question is, what happens over the longer term for retirees, perhaps five or 10 years from now, when the circumstances may change and it may be more difficult to maintain the favorable terms of a negotiated contract?” she asked.
Bergeron has been organizing retirees on social media to fight the change and with an online petition calling on IBM to drop the plan. He has also tried to recruit lawyers to sue the company, but most have advised that the case is not strong, since the retiree benefit is discretionary.
After holding out against the change, Bergeron reluctantly joined one of the Advantage plans, not wanting to forfeit the $27,000 balance in his health reimbursement arrangement.
“I never dreamed I would join, but I did,” he said. “I waited until the last minute, and signed up on the last day that I could. I really was fighting it in my brain.”
A Virginia bakery gave BLM activists free coffee. Then came the backlash.
Tim Carman, The Washington Post – March 10, 2023
Brian Noyes and Josephine Gilbert agreed to sit down on March 1 and talk it out. Noyes, founder of the celebrated Red Truck Bakery, and Gilbert, the leader of a loose coalition that demonstrates under the banner of All Lives Matter, wanted to reach an accord before events spun out of control in the usually restful town of Warrenton, Va.
The issue was coffee – and the weekly demonstrations on Courthouse Square in downtown Warrenton, where two groups have been trying to poke and prod the conscience of the city.
Since June 2020, not long after George Floyd was murdered in Minneapolis, a handful of organizations have hosted a Black Lives Matter Vigil For Action on Saturday mornings when, for 45 minutes, dozens of people quietly hold up signs to remind locals about racial injustice and institutional racism. The demonstrations eventually led to counterprotests across the street, aimed at shutting down the vigils that All Lives Matter activists see as destructive to this conservative community in Fauquier County, a traditional Republican stronghold.
Red Truck got dragged into this drama on the last Saturday in February when a relatively new member of the ALM group entered the bakery, camera phone in hand. Jennifer Blevins Ragle asked a young employee why the shop was giving out free coffee to participants at the BLM vigil, but not others on the square. She implied Red Truck was discriminating against ALM.
“I just don’t understand giving free coffee to some people, but not others. I mean, that makes your store very political,” Ragle said to the 17-year-old employee behind the counter. “I’ll make sure it gets to the paper and everything else.”
Ragle’s video was posted on a YouTube channel called Singing Patriot, where it gained little traction. But it was also posted on a TikTok account, named crossstitch1954, where it has racked up more than 21,000 views and generated more than 800 comments, many of them calling for boycotts of Red Truck. Or worse.
“Hope this place burns to the ground,” wrote one commenter. “Close the place down! Let those black lives keep the place open. All the other lives don’t matter,” wrote another. “Someone please put a pallet of bricks in front of that store so we can protest against Red Truck Bakery,” added a third.
Negative reviews started appearing on Red Truck’s Yelp and Google pages, sometimes from people far from the streets of Warrenton. The bakery began receiving harassing phone calls, too. “Threats of damage and injury,” Noyes told The Washington Post.
One caller said, simply, “we are watching you,” Noyes said. “Picture a young girl answering the phone at a small bakery and hearing that.”
On Feb. 27, Noyes issued an apology and an explanation to try to defuse the situation. The owner wrote that he is not in the Warrenton store often – Red Truck’s headquarters are in Marshall, Va. – and that when he first encountered the BLM vigil in 2021, he saw no counterprotesters on the square. He treated the vigil participants to water and cranberry muffins. Noyes then told his staff that BLM members might occasionally wander in for water or coffee, which would be on the house.
“It started as an innocent and spur-of-the-moment neighborly gesture, but no good deed goes unpunished, I guess,” Noyes wrote. “I don’t remember an All Lives Matter group being there back then, but if they had ever asked me about this, I certainly would have given them the same consideration.”
Before Noyes posted the statement on his social channels, he sent it to Gilbert, as a courtesy. She acknowledged that she received it ahead of time and “thought it was fine,” she told The Washington Post. They then agreed to meet for coffee at Red Truck. They had a favor to ask of each other.
After exchanging pleasantries, Gilbert asked Noyes if he would talk to the BLM demonstrators. She hoped Noyes would use his influence in the community – earned by hosting fundraisers and events, garnering national acclaim for his baked goods, even getting a shout-out from President Barack Obama – to convince the BLM group to stop their weekly gatherings.
Gilbert had already petitioned others to stop the vigils. She had addressed the Warrenton Town Council. She had expressed her concerns to the Fauquier County Board of Supervisors. She had even talked to the city’s chief of police and mayor. “I appreciate you figuring out a way to stop this indoctrination,” Gilbert told the town council on Sept. 14, 2021.
Gilbert clarified her “indoctrination” comment for The Post.
“When I say ‘indoctrination,’ what I mean by that is, normalizing this type of protest for kids that come by every Saturday morning with their parents to the farmers market,” she said. “They’re not going to change my mind or any of the people who are standing with me. They are normalizing behavior that is not right. Warrenton is not racist.”
Like the public officials in Warrenton, Noyes rejected Gilbert’s proposal. Noyes told her that he has no control over BLM demonstrators. “That’s their right to be out there, just like it’s your right,” he said to her.
Once rebuffed, Gilbert started to raise her voice. Noyes called her loud and animated. Gilbert said she’s from Sicily. “As I get passionate about this and get excited, my voice automatically goes up,” she told The Post. She said she apologized to Noyes on the spot after raising her voice.
The meeting did the exact opposite of what Noyes had hoped. He left it feeling “discouraged and realizing that there’s no way to work with these people.” His employees were worried, too, after hearing the conversation turn intense.
Noyes decided right then he would shut down Red Truck in Warrenton for the weekend, including the Saturday when demonstrators would gather again on Courthouse Square. He said he would pay the staff for those two days. (The closure would stretch into Monday and not just in Warrenton; he also closed the Marshall shop that day as he worked to hire security to ease his staff’s fears.) Noyes even moved his signature red truck, a 1954 Ford F-100 that he bought from Tommy Hilfiger, out of an abundance of caution.
Noyes thought the closures would calm things down – and demonstrators were calm that weekend – but Gilbert thought the closings were “ridiculous.”
“Why didn’t he just shut down for the two hours that we were going to be there” on the square, Gilbert said. “This is just a game that Mr. Noyes is playing. He’s a smart man, but like I told him when I left, I’m smart too. I’m not stupid. I’m not rolling over.”
Even as the conversation turned noisy, Noyes reminded Gilbert that he still had a request. He wanted her to ask Ragle to take down the video. Not only was it stirring things up, it was putting a minor in the public eye, which was troubling to the girl’s parents and to Red Truck’s staff. Gilbert said she wouldn’t contact Ragle, that Noyes would have to do it. She said she didn’t believe in taking down the video. She wanted people to see it, as further evidence of how BLM demonstrators have divided the town, she said.
What’s more, Gilbert didn’t think Red Truck’s free coffee policy was an honest mistake or a misunderstanding, as Noyes alleges. “He got caught,” she said. “He told me he didn’t want to take sides, but he did take sides and now he got busted. And he doesn’t want the community to know he took sides.” (Noyes, incidentally, has halted the free coffee program.)
Both Red Truck employees and the minor’s mother attempted to track down Ragle, but Noyes wasn’t sure they ever made contact. Ragle’s video remains up on both YouTube and TikTok.
Ragle’s behavior has given Red Truck staff cause for concern, Noyes said. She refused to turn off her video camera, as requested by an employee, and as she exited the bakery, she bumped into a man at the front door. Ragle later contacted police and said the man, apparently a BLM demonstrator, was blocking her exit. “Our investigation revealed that that did not happen,” said Timothy Carter, Warrenton’s police chief. “It was probably just a big misunderstanding.”
Ragle has also posted more videos, including one where she appears to be on the opposite side of the street, yelling at BLM demonstrators. Another video scrolls through a recent article in the Fauquier Times, with added captions that suggest it was Noyes, not Gilbert, who raised his voice during their meeting. (Noyes denied the charge.) “Bryan [sic] Noyes,” the caption continues, “backs BLM period!!!” Cage the Elephant’s song, “Hypocrite,” plays in the background.
According to public records and one newspaper story, Ragle has had criminal charges filed against her. She was charged with violating a restraining order in 2013 and trespassing in 2014. The charges in both cases were dismissed. In 2016, the Culpeper County Sheriff’s Office arrested Ragle for assault and battery, according to the Culpeper Times. The Post could not immediately find out how the case was resolved.
The Post left a pair of voice mails to a number connected with Ragle in public records. A woman who called back did not identify herself and hung up after learning she was talking to a Post reporter. A short time later, Ragle posted another video featuring a screenshot of a 2014 news story about Red Truck. Ragle superimposed a caption over the story: “Prior Washington Post writer, sending out his goons to cover his backing of BLM.” (Noyes is a former art director for The Post.)
Ragle’s TikTok video has changed the dynamic in Warrenton, said Noyes and Carter, the police chief. It has taken an issue that was rooted in the community and spread it beyond the city’s borders. “This video on TikTok is just living a life of its own,” Noyes said. “It’s just bringing in so much… anger from people who don’t even know the store. It’s just reason for them to rally.”
The police chief harbors similar concerns: that someone from outside might “take action kind of in the fog of what’s going on,” Carter said. “I’m not really concerned about either one of our groups, but what I’m concerned about – what we’re always concerned about – is someone coming in and just using it as a platform to do something else.”
This weekend will be the first one, post TikTok video, when Red Truck is open and the demonstrators are back on the square. No one in Warrenton – not Noyes, not Carter, not BLM organizer Scott Christian – is sure what to expect. The dueling demonstrations have been generally peaceful, especially in recent weeks, said Carter and Christian, though the BLM leader has lately seen signs among ALM protesters about freeing the prisoners who were convicted of their actions during the Jan. 6 riots.
Gilbert said ALM has “no intention” of singling out Red Truck this weekend. “Our beef is actually with the town for not stopping what’s going on across the street,” she said.
Del. Michael J. Webert (R-Fauquier) released a statement on Thursday that said it was time for the community to put this incident behind them. The coffee, he noted, was given out in good faith. “We are a close-knit community that has no need to be angry or mistrust one another,” Webert said. “Let’s remember that we all have a stake in making our community the best it can be, and act like the neighbors we are.”
For his part, Noyes is debating just how neighborly to be on Saturday. He’s contemplating whether to bring muffins to people on both sides of the square, a kind of Red Truck peace offering. But he also wants to see how things unfold. He doesn’t want to make a wrong move. He’s already paid a price, both emotionally and financially. He figures he has lost between $15,000 to $20,000 because of the bakery closures. He’s paying out another $1,000 a day for security.
No one hates ordinary people like the Republicans and their media enablers do.
By Tom Nichols – March 9, 2023
A political display is posted on the outside of the Fox News headquarters in New York in July 2020. (Timothy A. Clary / AFP via Getty)
Fox News will likely never face any real consequences for the biggest scandal in the history of American media. But will Republican voters finally understand who really looks down on them?
Loathing and Indifference
It’s time to talk about elitism.
Last month, I wrote that the revelations about Fox News in the Dominion Voting Systems lawsuit showed that Fox personalities, for all their populist bloviation, are actually titanic elitists. This is not the elitism of those who think they are smarter or more capable than others—I’ll get to that in a moment—but a new and gruesome elitism of the American right, a kind of hatred and disgust on the part of right-wing media and political leaders for the people they claim to love and defend. Greed and cynicism and moral poverty can explain only so much of what we’ve learned about Fox; what the Dominion filings show is a staggering, dehumanizing version of elitism among people who have made a living by presenting themselves as the only truth-tellers who can be trusted by ordinary Americans.
I am, to say the least, no stranger to the charge of elitism. When I wrote a book in 2018 titled The Death of Expertise, a study of how people have become so narcissistic and so addled by cable and the internet that they believe themselves to be smarter than doctors and diplomats, I was regularly tagged as an “elitist.” And the truth is: I am an elitist, insofar as I believe that some people are better at things than others.
But even beyond talent and ability, I do in fact firmly believe that some opinions, political views, personal actions, and life choices are better than others. As I wrote in my book at the time:
Americans now believe that having equal rights in a political system also means that each person’s opinion about anything must be accepted as equal to anyone else’s. This is the credo of a fair number of people despite being obvious nonsense. It is a flat assertion of actual equality that is always illogical, sometimes funny, and often dangerous.
If that makes me an elitist, so be it.
In this, elitism is the opposite of populism, whose adherents believe that virtue and competence reside in the common wisdom of a nebulous coalition called “the people.” This pernicious and romantic myth is often a danger to liberal democracies and constitutional orders that are founded, first and foremost, on the inherent rights of individuals rather than whatever raw majorities think is right at any given time.
The American right, however, now uses elitist to mean “people who think they’re better than me because they live and work and play differently than I do.”They rage that people—myself included—look down upon them. And again, truth be told, I do look down on Trump voters, not because I am an elitist but because I am an American citizen and I believe that they, as my fellow citizens, have made political choices that have inflicted the greatest harm on our system of government since the Civil War. I refuse to treat their views as just part of the normal left-right axis of American politics.
(As an aside, note that the insecure whining about being “looked down upon” is wildly asymmetrical: Trump voters have no trouble looking down on their opponents as traitors, perverts, and, as Donald Trump himself once put it, “human scum.” But they react to criticism with a kind of deep hurt, as if others must accommodate their emotional well-being. Many of these same people gleefully adopted “Fuck your feelings” as a rallying cry but never expected that it was a slogan that worked both ways.)
In 2016, I believed that good people were making a mistake. In 2023, I cannot dismiss their choices as mere mistakes. Instead, I accept and respect the human agency that has led Trump supporters to their current choices. Indeed, I insist on recognizing that agency: I have never agreed with the people who dismiss Trump voters as robotic simpletons who were mesmerized by Russian memes. I believe that today’s Trump supporters are people who are making a conscious, knowing, and morally flawed choice to continue supporting a sociopath and a party chock-full of seditionists.
I have argued with some of these people. Sometimes, I have mocked them. Mostly, I have refused to engage them. But whatever my feelings are about the abominable choices of Trump supporters, here is the one thing I have never done that Fox’s hosts did for years: I have never patronized any of the people I disagree with.
Unlike people such as Tucker Carlson or Sean Hannity or Laura Ingraham, I have never told anyone—including you, readers of The Atlantic—anything I don’t believe. What we’re seeing at Fox, however, is lying on a grand scale, done with a snide loathing for the audience and a cool indifference to the damage being done to the nation. Fox, and the Republican Party it serves, for years has relentlessly patronized its audience, cooing to viewers about how right they are not to trust anyone else, banging the desk about the corruption of American institutions, and shouting into the camera about how the liars and betrayers must pay.
Fox’s stars did all of this while privately communicating with one another and rolling their eyes with contempt, admitting without a shred of shame that they were lying through their teeth. From Rupert Murdoch on down, top Fox personalities have admitted that they fed the rubes all of this red, rotting meat to keep them out of the way of the Fox limos headed to Long Island and Connecticut.
You can see this same kind of contemptuous elitism in Republicans such as Ted Cruz, Josh Hawley, and Elise Stefanik. They couldn’t care less about the voters—those hoopleheads back home who have to be placated with idiotic speeches against trans people and “critical race theory.” These politicians were bred to be leaders, you see, and having to gouge some votes out of the hayseeds back home requires a bit of performance art now and then, a small price to pay so that the sons and daughters of Harvard and Yale, Princeton and Stanford, can live in the imperial capital and rule as is their due and their right.
Some years ago, I was at a meeting of one of the committees of the National Academy of Sciences. The conferees asked me how scientists—there were Nobel Laureates in the room—could defend the cause of knowledge. Stand your ground, I told them. Never hesitate to tell people they’re wrong. One panel member shook his head: “Tom, people don’t like to be condescended to.” I said, “I agree, but what they hate even more is to be patronized.”
I believed it then, but we’re now testing that hypothesis on a national scale. I hope I wasn’t wrong.
Josh Hawley thinks you’re too stupid to realize Tucker Carlson is lying to you | Opinion
The Kansas City Star Editorial Board – March 8, 2023
Facebook/HawleyMO
Fox News lies to its viewers. Josh Hawley is fine with that.
Old news? Maybe. Certainly, we’ve known of both Fox’s mendacity and the Missouri Republican senator’s cynicism for a long time. But fresh developments have revealed yet again how deep the rot goes.
Monday night, Fox News host Tucker Carlson offered a ludicrous alternative take on the Jan. 6, 2021, insurrection — that deadly attack on American democracy in the name of defying the will of the voters in order to keep Donald Trump in the White House. Using a feeble smattering of clips eked out of 40,000 hours of unseen Capitol surveillance video furnished to him by House Speaker Kevin McCarthy, Carlson made a ridiculously weak case that it wasn’t actually a rebellion against the lawful and constitutional transfer of power to Joe Biden — instead, it was simply “mostly peaceful chaos,” generated by sightseers and tourists.
“The footage does not show an insurrection or a riot in progress,” Carlson said. It was a bald-faced attempt to rewrite history, to tell Americans that what they witnessed on Jan. 6 wasn’t real. “Gaslighting” is an overused term, but it describes Carlson’s efforts perfectly.
The good news is that many Republicans who typically defer to Fox News pushed back on Carlson’s falsehoods. Sen. Thom Tillis of North Carolina used a barnyard epithet to describe the absurdity. Senate Minority Leader Mitch McConnell aligned himself with a letter from the Capitol Police chief, who accused Carlson of “cherry-picking” his video clips to show calmer moments amid the insurrectionist storm.
These leaders showed it’s more than possible to be a member of the GOP and still respect the truth of what happened on Jan. 6.
Unless you’re Josh Hawley. He embraced Carlson’s version of the insurrection. “Sunshine is always the right answer,” he tweeted Tuesday, openly and directly mocking McConnell’s rightful denunciation of the Fox idiocy.
Please. It’s not “sunshine” to furnish government videos only to one favored propagandist, as McCarthy did to Carlson. Real transparency would’ve meant making the footage widely available to all the news outlets that asked for it.
But it’s no surprise McCarthy gave the videos to Fox. Over the last few weeks, filings in Dominion Voting Systems’ defamation lawsuit against the network have revealed that Fox hosts were happy to air Trump’s false and discredited claims even though senior figures — all the way up to owner Rupert Murdoch and prime-time host Sean Hannity — knew at the time they were patently false. Instead, Hannity and Carlson actively undermined Fox’s few real journalists, even calling for the firing of one reporter who debunked Trump’s lies.
Why? Because they were afraid of losing conservative viewers to even further-right-wing alternatives such as Newsmax. “Weak ratings make good journalists do bad things,” Fox News exec Bill Sammon wrote in a December 2020 email. He might believe that. We don’t.
Fox host on Trump: ‘I hate him passionately’
Believing one thing and telling viewers another is a regular practice at Fox, clearly. Carlson is a fierce defender of Trump when he’s on the air. Behind the scenes? “I hate him passionately,” Carlson said of Trump, in a text revealed by the Dominion lawsuit. “What he’s good at is destroying things.” His viewers never heard that view.
That is the guy McCarthy put in charge of shedding “sunshine” on Jan. 6.
We don’t know Hawley’s real feelings about Trump. But we suspect that — like those up and down the ranks at Fox News — the senator knew better than to believe the former president’s lies, yet still embraced them out of expediency and fear. That’s likely why he led the ludicrous and doomed Senate effort to deny Biden’s rightful election.
Fox executives worried about losing viewers. Hawley had donors and voters to think about.
Now? There’s the matter of his reputation. Carlson on Monday said the famous video showing Hawley fleeing from the insurrectionists was “edited deceptively” by the Jan. 6 committee because, in fact, several other senators were also running away. We’re not sure how that makes Hawley look better, but the senator must take comfort in having an embarrassing moment ever-so-slightly whitewashed.
The problem is that Carlson’s insurrection denialism won’t wash. More than two dozen of Hawley’s Missouri constituents — including, most recently, a member of the Missouri National Guard — have been arrested or charged for their participation in the insurrection. Across the border, another nine Kansans have also been accused of involvement.
Anybody who cares to know what happened on Jan. 6, 2021, understands it was the bloody, violent and irredeemable affair we all saw unfolding in real time with our own eyes.
The folks at Fox News know it, no matter what Tucker Carlson says on his show. And Josh Hawley knows it too.
‘I just found myself struggling to keep up’: Number of teachers quitting hits new high
Matt Barnum – March 6, 2023
Why some US school districts are seeing extreme teacher shortages
The data is in: More teachers than usual exited the classroom after last school year, confirming longstanding fears that pandemic-era stresses would prompt an outflow of educators. That’s according to a Chalkbeat analysis of data from eight states – the most comprehensive accounting of recent teacher turnover to date.
In Washington state, more teachers left the classroom after last school year than at any point in the last three decades. Maryland and Louisiana saw more teachers depart than any time in the last decade. And North Carolina saw a particularly alarming trend of more teachers leaving mid-school year.
The turnover increases were not massive. But they were meaningful, and the churn could affect schools’ ability to help students make up for learning loss in the wake of the pandemic. This data also suggests that spiking stress levels, student behavior challenges, and a harsh political spotlight have all taken their toll on many American teachers.
“Education had changed so dramatically since COVID. The issues were getting bigger and bigger,” said Rebecca Rojano, who last year left a job teaching high school Spanish in Connecticut. “I just found myself struggling to keep up.”
Across 8 states, more teachers left the classroom following last school year
Since the pandemic threw U.S. schools into disarray, many educators and experts warned that more teachers would flee the profession. But in 2020, turnover dipped in many places as the economy stalled, then in 2021 it ticked back up to normal or slightly above-average levels.
As this school year began, widespread reports of teacher shortages suggested that turnover had jumped more significantly.
Data was hard to come by, though. The federal government doesn’t regularly track teacher quit rates. Many states don’t either, with education officials in California, New Mexico, Ohio and Pennsylvania saying that they don’t know how many teachers leave each year.
But Chalkbeat was able to obtain the latest teacher turnover numbers from eight states: Hawaii, Louisiana, Maine, Maryland, Mississippi, North Carolina, South Carolina, and Washington. These figures encompassed turnover between the 2021-22 year and this school year.
In all cases, turnover was at its highest point in at least five years – typically around 2 percentage points greater than before the pandemic. That implies that in a school with 50 teachers, one more than usual left after last school year.
“I am struck by just how consistent these patterns are looking at all of these different states,” said Melissa Diliberti, a researcher at RAND, which has monitored teacher attrition during the pandemic.
In Louisiana, for instance, nearly 7,000 teachers exited the classroom last school year, or about 1,000 more than usual. That’s a turnover rate of 14%, up from between 11% and 12% in a typical pre-pandemic year.
There was variation among the eight states. Mississippi’s teacher workforce was the most stable: Turnover was 13% this year, only slightly higher than the two years before the pandemic. North Carolina saw the largest spike: 16% of teachers left after last year, compared with less than 12% in the three years before the pandemic.
For Kimberly Biondi, who taught high school English for 21 years in a district outside Charlotte, her reasons for leaving were wrapped up in the politics of education. She advocated for remote instruction as well as in-school safety rules, such as masking, but faced personal criticism from a local group opposed to these measures, she said. Biondi was also worried that politics could eventually limit what she taught.
“I taught AP language where we were supposed to teach very controversial work. I taught Malcolm X. I taught all sorts of philosophers and speakers,” she said. “I could only imagine how I would be targeted for continuing to teach this.”
Other former teachers cited growing workloads and more difficulty managing student behavior.
Rojano said that student engagement plummeted as students returned to class in fall 2021, some for the first time in over a year. “A lot of these students are really hurting and suffering with intense emotional problems and high needs,” she said. “The needs just grew after the pandemic – I noticed a lot more emotional outbursts.”
It didn’t help, she said, that her class sizes were large, ranging from 25 to 30 students, making it hard to form close relationships with students. Plus, the school was short staffed and had many absences, forcing Rojano to constantly cover other teachers’ classes, losing her planning time.
She left in the middle of the last school year, something she never imagined doing because it was so disruptive for the school and her students. “It got so bad,” she said. “I was very overwhelmed and stressed. I was anxious and tired all the time.” Rojano ended up taking a job at an insurance company, where she is able to work remotely when she wants.
State reports hint that rising frustration has pushed more teachers out of the classroom. In Louisiana, the number of teachers who resigned due to dissatisfaction increased. In Hawaii, more teachers than usual identified their work environment as the reason for leaving. (In both states, personal reasons or retirement were still far more common explanations.)
A degree of staff turnover in schools is considered healthy. Some new teachers realize the profession just isn’t for them. Others take different jobs in public education, becoming, say, an assistant principal. But in general, research has found that teacher churn harms student learning – students lose relationships with trusted educators, inexperienced teachers are brought on as replacements, and in some cases classrooms are left with only long-term substitutes.
While the eight states where Chalkbeat obtained data may not be representative of the country as a whole, there are signs that higher attrition was widespread. In a recent nationally representative survey from RAND, school district leaders reported a 4 percentage point increase in teacher turnover. Data from a handful of districts show a similar trend. For instance, turnover among licensed staff, including teachers, spiked from 9% to 12% in Clark County, Nevada, the country’s fifth-largest district. In Austin, Texas, turnover jumped from 17% to 24%.
Other school staff appear to be leaving at higher rates, too.
Hawaii experienced a jump in aides and service staff who exited public schools. North Carolina saw over 17% of principals depart last school year, compared to an average of 13% in the three years before the pandemic. The RAND survey also found a sharp increase in principals leaving.
A degree of staff turnover in schools is considered healthy. Some new teachers realize the profession just isn’t for them. Others take different jobs in public education, becoming, say, an assistant principal. But in general, research has found that teacher churn harms student learning – students lose relationships with trusted educators, inexperienced teachers are brought on as replacements, and in some cases classrooms are left with only long-term substitutes.
“Teacher attrition can be destabilizing for schools,” said Kevin Bastian, a researcher at the University of North Carolina, where he calculated the state’s turnover rate.
He found that effective teachers were particularly likely to leave the state’s public schools last year. Mid-year turnover, which is especially disruptive, increased from under 4% in prior years to over 6% in the 2021-22 school year in North Carolina. The state also ended up hiring fewer teachers for this school year than it lost, suggesting that some positions were eliminated or left vacant.
Biondi is now seeing the effects on her own children, who attend school in the district where she taught. “My daughter lost her math teacher in December,” she said. “They don’t have a replacement teacher – she’s struggling very much in math.”
This year, schools may have been in a particularly fraught position. Teachers appear to be leaving at higher rates, and there’s been a longer-standing decline in people training to become teachers. At the same time, schools may have wanted to hire more teachers than usual because they remain flush with COVID relief money and want to address learning loss. That’s a recipe for a shortage.
Typically, shortages hit high-poverty schools the hardest. They also tend to be more severe in certain areas including special education, math, and science.
Benjamin Mosley, principal of Glenmount Elementary/Middle School in Baltimore, has been buffeted by these pressures. He’s had multiple teachers leave in the middle of this year, and has not been able to replace them or some others who left at the end of last year.
On a recent visit to the school, students in a math class listened to a teacher based in Florida teach a lesson virtually; the class was supervised by an intervention teacher who was originally meant to provide small group tutoring. A social studies class, whose teacher had recently resigned, was being overseen by a staff member who had been hired to serve as a student mentor.
Mosley is still actively trying to find teachers and is now considering candidates whom he might have passed over in years past.
“We can put a man on the moon, but yet we can’t find teachers,” he said.
Matt Barnum is a Spencer fellow in education journalism at Columbia University and a national reporter at Chalkbeat covering education policy, politics, and research.
Thousands of pro-Trump bots are attacking DeSantis, Haley
Avid Klepper – March 6, 2023
WASHINGTON (AP) — Over the past 11 months, someone created thousands of fake, automated Twitter accounts — perhaps hundreds of thousands of them — to offer a stream of praise for Donald Trump.
Besides posting adoring words about the former president, the fake accounts ridiculed Trump’s critics from both parties and attacked Nikki Haley, the former South Carolina governor and U.N. ambassador who is challenging her onetime boss for the 2024 Republican presidential nomination.
When it came to Ron DeSantis, the bots aggressively suggested that the Florida governor couldn’t beat Trump, but would be a great running mate.
As Republican voters size up their candidates for 2024, whoever created the bot network is seeking to put a thumb on the scale, using online manipulation techniques pioneered by the Kremlin to sway the digital platform conversation about candidates while exploiting Twitter’s algorithms to maximize their reach.
The sprawling bot network was uncovered by researchers at Cyabra, an Israeli tech firm that shared its findings with The Associated Press. While the identity of those behind the network of fake accounts is unknown, Cyabra’s analysts determined that it was likely created within the U.S.
To identify a bot, researchers will look for patterns in an account’s profile, its follower list and the content it posts. Human users typically post about a variety of subjects, with a mix of original and reposted material, but bots often post repetitive content about the same topics.
That was true of many of the bots identified by Cyabra.
“One account will say, ‘Biden is trying to take our guns; Trump was the best,’ and another will say, ‘Jan. 6 was a lie and Trump was innocent,'” said Jules Gross, the Cyabra engineer who first discovered the network. “Those voices are not people. For the sake of democracy I want people to know this is happening.”
Bots, as they are commonly called, are fake, automated accounts that became notoriously well-known after Russia employed them in an effort to meddle in the 2016 election. While big tech companies have improved their detection of fake accounts, the network identified by Cyabra shows they remain a potent force in shaping online political discussion.
The new pro-Trump network is actually three different networks of Twitter accounts, all created in huge batches in April, October and November 2022. In all, researchers believe hundreds of thousands of accounts could be involved.
The accounts all feature personal photos of the alleged account holder as well as a name. Some of the accounts posted their own content, often in reply to real users, while others reposted content from real users, helping to amplify it further.
“McConnell… Traitor!” wrote one of the accounts, in response to an article in a conservative publication about GOP Senate leader Mitch McConnell, one of several Republican critics of Trump targeted by the network.
One way of gauging the impact of bots is to measure the percentage of posts about any given topic generated by accounts that appear to be fake. The percentage for typical online debates is often in the low single digits. Twitter itself has said that less than 5% of its active daily users are fake or spam accounts.
When Cyabra researchers examined negative posts about specific Trump critics, however, they found far higher levels of inauthenticity. Nearly three-fourths of the negative posts about Haley, for example, were traced back to fake accounts.
The network also helped popularize a call for DeSantis to join Trump as his vice presidential running mate — an outcome that would serve Trump well and allow him to avoid a potentially bitter matchup if DeSantis enters the race.
The same network of accounts shared overwhelmingly positive content about Trump and contributed to an overall false picture of his support online, researchers found.
“Our understanding of what is mainstream Republican sentiment for 2024 is being manipulated by the prevalence of bots online,” the Cyabra researchers concluded.
The triple network was discovered after Gross analyzed Tweets about different national political figures and noticed that many of the accounts posting the content were created on the same day. Most of the accounts remain active, though they have relatively modest numbers of followers.
A message left with a spokesman for Trump’s campaign was not immediately returned.
Most bots aren’t designed to persuade people, but to amplify certain content so more people see it, according to Samuel Woolley, a professor and misinformation researcher at the University of Texas whose most recent book focuses on automated propaganda.
When a human user sees a hashtag or piece of content from a bot and reposts it, they’re doing the network’s job for it, and also sending a signal to Twitter’s algorithms to boost the spread of the content further.
Bots can also succeed in convincing people that a candidate or idea is more or less popular than the reality, he said. More pro-Trump bots can lead to people overstating his popularity overall, for example.
“Bots absolutely do impact the flow of information,” Woolley said. “They’re built to manufacture the illusion of popularity. Repetition is the core weapon of propaganda and bots are really good at repetition. They’re really good at getting information in front of people’s eyeballs.”
Until recently, most bots were easily identified thanks to their clumsy writing or account names that included nonsensical words or long strings of random numbers. As social media platforms got better at detecting these accounts, the bots became more sophisticated.
So-called cyborg accounts are one example: a bot that is periodically taken over by a human user who can post original content and respond to users in human-like ways, making them much harder to sniff out.
Bots could soon get much sneakier thanks to advances in artificial intelligence. New AI programs can create lifelike profile photos and posts that sound much more authentic. Bots that sound like a real person and deploy deepfake video technology may challenge platforms and users alike in new ways, according to Katie Harbath, a fellow at the Bipartisan Policy Center and a former Facebook public policy director.
“The platforms have gotten so much better at combating bots since 2016,” Harbath said. “But the types that we’re starting to see now, with AI, they can create fake people. Fake videos.”
These technological advances likely ensure that bots have a long future in American politics — as digital foot soldiers in online campaigns, and as potential problems for both voters and candidates trying to defend themselves against anonymous online attacks.
“There’s never been more noise online,” said Tyler Brown, a political consultant and former digital director for the Republican National Committee. “How much of it is malicious or even unintentionally unfactual? It’s easy to imagine people being able to manipulate that.”
