Monthly Archives: October 2012

When Greed Meets Tinker Bell

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State pension funds are another time bomb of malaise (to the tune of a $1.4 trillion shortfall) waiting to explode, and Rhode Island provides an example of the difficulty we each, in our own state, face in defusing it.

Rhode Island passed a massive overhaul (as such things go; they have a long way, yet, before they’ve completely cured their problem) of their state retirement system last year, including such unheard-ofs as raising the retirement age, suspending pension increases for several years, and generating a hybrid retirement plan that combines traditional pensions with 401(k)-like accounts.  Rhode Island’s General Treasurer, Gina Raimondo, says that this reform will save Rhode Islanders $4 billion over the next 20 years (compared to a 2013 budget that proposes spending $8 billion in that year alone, small potatoes, indeed, but a critical start).  This minor reform also seeks to redress astonishing conditions that include 58 percent of retired teachers and 48 percent of state retirees receiving more in their pensions than in their final years of work.

But it’s too much change for some.  The public “service” unions (service: you service me) object: it’s somehow wrong for their members to be responsible for their own retirement funding.  Even a little bit.  Instead, these public “service” unions protest that it’s all unfair.  Rhode Island is reneging on promises to workers, they say.  Bob Walsh, Executive Director of the National Education Association of Rhode Island, goes so far as to insist

What they did was illegal.  We’re deep into a real assault on labor.  It worries me that people who purport themselves as Democrats do this.

Never mind that there’s nothing at all illegal about these changes.  It’s a well-established principle in American jurisprudence that when the conditions extant when a contract was agreed (stipulating arguendo that the agreement was made in good faith by all parties) no longer exist, or have so radically changed that the terms can no longer be met, the contract can be abrogated and either a new one negotiated or the parties involved go their separate ways.  In extreme cases, this is what bankruptcy achieves; although, when the conditions have changed as radically as these have, bankruptcy isn’t necessary.

Never mind, also, these are promises that couldn’t be kept in any event, and both the state government and the public “service” unions at the time knew they could not be kept.  Or they blindly believed real hard in government’s ability to keep collecting funds from…somewhere.  Tinker Bell is alive and well in Public Service Land.

Never mind, finally, that this public “service” union greed at the expense of taxpayers makes “labor” a valid target.

One tear-jerker that the unions are trotting out is this:

North Providence retiree Jamie Reilly left her job as a secretary at age 50 [remember that raising of the retirement age?], thinking her 30 years of state employment would mean good benefits during her later years.  But now she said she may be forced to re-enter the workforce at age 55 because the state has put off pension increases.

“I counted on that money,” Reilly said….  “You work all your life and you plan, and they take it away from you.”

Worked all her life?  She worked 30 years and wanted to be retired for 40.  Workers in the private sector don’t get it that easy; they work until they’re in their mid-60s—a working life 50% longer.

And this one:

Cranston firefighter Dean Brockway said higher retirement ages mean he will have to work several years longer than he expected, and he wonders how he’ll climb stairs in heavy gear in his 60s.

“Could I do something else? I don’t know,” he said. “A lot of us chose to dedicate our lives to public service because to us it’s an honor.  Could I be a carpenter?  I don’t think so. This is what I do.”

Brockway has a legitimate concern, but it’s no different from the concerns of a private sector employee whose work is primarily physical labor.  But if he’s not going to look for alternatives, if he’s not going to try to retrain into something less physically demanding (certainly no stroll in the park for a middle-aged or older person, but assuredly not impossible), he loses sympathy for his plight, which begins to be self-imposed.  Certainly, there’s no more obligation for Rhode Island’s citizens to indemnify him against the outcomes of his choices than there is for them to indemnify similarly situated private sector employees.

Raimondo understands this in all its practicalities—how affordable are the existing programs:

These problems won’t go away.  The longer you wait, the bigger the problems get.  People looking for easy, short-term solutions. … Well, there are none.

Raimondo doesn’t believe in Tinker Bell.

Hmm….

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According to Matthew Payne in The Wall Street Journal, Democratic Party Presidential Candidate Barack Obama held a rally on the University of Wisconsin campus last Thursday.  But there were conditions attached for the students’ to gain permissiontickets to attend.

In order to get a ticket for the speech, students were forced to go to Mr. Obama’s campaign website and pledge their support for the president—in the process giving the Obama campaign a gold mine of contact information in a key swing state.

Worse, the University was complicit in this:

The university even provided direct links to the website—free advertising to 40,000 students in one of Mr. Obama’s most important demographics.

Can we afford four years of a more “flexible” President, even less accountable than he recognizes himself to be today?

German Intelligence Assessment of Afghanistan

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According to Spiegel Online International, here’s what the Bundesnachrichtendienst (BND, the German Federal Intelligence Service), in their report “Afghanistan until 2014 – A Prognosis,” is telling the German government about the situation in Afghanistan.

Of the Karzai government, the report says

Susceptibility to corruption, influence peddling by individuals and nepotism will continue[.]

On Afghanistan’s security, the report says, as summarized by Spiegel Online,

[T]he number of attacks that members of the Afghan security forces carry out against Western soldiers will continue to increase.  It also predicts that the program for reintegrating former Taliban fighters who have renounced violence will have “no effects” on the peace process.

And

[T]he Afghan government’s efforts to hold talks with insurgents have no chance at success.  It says that the latter only want to negotiate with the US and not with Kabul, and that “no greater progress” is to be expected by 2014, the year of planned [American] withdrawal[.]

And

Up to 35,000 foreign soldiers—mostly trainers for the Afghan army, combat troops required to protect the trainers and as many elite soldiers as possible to hunt down terrorists—will be needed to stabilize the country [post-2014.]

If this is accurate, what does this say about American intelligence capability?  Or, what does this say about what the administration is willing to tell us, publicly, about what our intel is telling them?

Some Thoughts on the Fed’s Latest Guess at Monetary Policy

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The good folks at Sober Look have a good post on this.  Basically, the Fed’s latest scheme is to buy $40 billion of mortgage debt from lenders every month until the labor market improves.  That’s nearly a trillion dollars every two years.  And its purpose is to hold down mortgage interest rates in particular, rather than interest rates in general, which have already been artificially lowered to near zero (to negative values in some cases in real, inflation-adjusted terms) for several years.

Those nearly non-existent interest rates generally, though, are associated with 43 months of unemployment above 8% (notwithstanding last week’s Labor Department claim of 7.8% unemployment).  Here’s what Sober Look thinks of this latest…idea…from the Fed.  Follow the links, too.

  1. It is not clear what impact asset purchases will have on consumer confidence.
  2. We’ve had extraordinarily low interest rates for quite some time now, yet improvements in job growth have been limited.
  3. Lowering mortgage rates from 3.5% to 3% is not going to have a significant impact on home affordability or materially reduce consumers’ interest expense (see this discussion).
  4. Raising bank excess reserves is not going to accelerate credit expansion.
  5. Fed’s unemployment targets are unrealistic – it’s going to be an exercise in “squeezing blood from a stone” (see discussion).
  6. US real median household income has basically been unchanged since 1994. The Fed’ program is unlikely to improve this metric and could actually impair incomes further by elevating inflation levels.
  7. The market “euphoria” effect is fleeting.

What will restore employment is less government interference—by the Fed and the Congress and the Executive—in our economy so that free market forces can start an actual recovery.  Which will lead to increased hiring; leading to more savings (in absolute terms, if not relatively), which are funds that can be loaned to support home purchases or business expansion (each of which is jobs) and to more spending, which supports business expansion (which is jobs); leading to increased hiring; leading to….

Lies of my President, Part 7

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This is Part 7 of my series on the lies told by Democratic Presidential Candidate Barack Obama in the nearly four years in which he’s been in office.  As I said earlier, I’m not concerned with his broken campaign promises so much as I am with his dishonesty while in office.

Recall Obama’s promise of the most open and transparent administration in history.  This is how he’s carried out that “promise.”

Here’s secret collusion between the (publicly) hated health-care industry and the White House underlying the development of Obamacare.  These emails were sent in early/mid-June of 2009:

From: Jeffrey Kindler [Pfizer CEO]

To: Billy Tauzin [PhRMA lobbyist]

Billy—Sounds like you had very valuable conversations with [REDACTED]. They sound as though they both went quite well and that you established our key deal points that are, to some extent, as important as the total dollars. Thanks so much for doing that.

An ideal end game here would be a joint meeting to confirm any deal that we work out in a meeting with us and the principals ([White House Chief of Staff Rahm] Emanuel, [REDACTED]) early next week. Whether a deal fully sticks or not, we can’t be sure, but I for one would like to look the other side in the eye and shake their hand on whatever deal we work out. Jeff

From: Jeffrey Kindler

To: Billy Tauzin

Billy: As you know, yesterday’s discussion was premised on our understanding, as you informed the Board, that, given our willingness to work within the indicated range, the President would not, in fact, put Part D [the Medicare prescription drug plan] in play or otherwise offer new pharma pay-fors in tomorrow’s radio address. We need to confirm this inasmuch as it will completely undermine what we’re trying to do here if he, in fact, does say those kinds of things.

If this is not clear, I would strongly encourage you to engage personally on this with [REDACTED] and possibly others. Based on Bryant’s report yesterday, it does appear that [REDACTED] could, in fact, be helpful. Jeff

There’s lots more here.

These emails took a trade group’s efforts to expose, as the White House refused to cooperate with the House’s Energy and Commerce Committee attempts to review Obamacare’s development history.  The Wall Street Journal went on:

As a White House staffer put it in May 2009, “Rahm’s calling Nancy-Ann and knows Billy is going to talk to Nancy-Ann tonight. Rahm will make it clear that PhRMA needs a direct line of communication, separate and apart from any coalition.”  Nancy-Ann is Nancy-Ann DeParle, the White House health reform director, and Rahm is, of course, Rahm.

Final development of the bill was done behind the locked-doors of the back offices of Senate Majority Leader Harry Reid’s (D, NV) Senate office suite, and the Senate vote itself occurred after the 2,000 page bill had been on the Congress’ Web site for public perusal for just 72 hours.  The bill itself was so secret that nearly all of the Congressmen voting were utterly ignorant of the bill’s contents.

And the House’s attempts to investigate the Obama DoJ’s Fast and Furious fiasco?  I’ve written about it here, here, and here (which post describes, briefly, other of Obama’s attempts to block transparency), among other posts.  This “openness” has culminated in Obama’s assertion of Executive Privilege to block responses to subpoenas for the information issued by the House Committee on Oversight and Government Reform.

The only thing transparent here is Obama’s dishonesty.