The title of this post expresses what is probably the greatest example of a monstrous hypocrisy – that public employee unions, and the pension funds they control, are supposedly helping the American economy, and protecting the American people from “the bankers.” Overpriced “bubble” assets caused by banks offering low interest rates hurt ordinary working people in two ways – they cannot afford to buy homes, and they are denied any sort of viable low risk investment opportunity. But without an endlessly appreciating asset bubble,every public employee pension fund in the United States would go broke.

The inspiration for this post is a guest column published on April 27th in the Huffington Post entitled “The Real Retirement Crisis,” authored byRandi Weingarten, the president of the American Federation of Teachers. The totality of Weingarten’s column, a depressing plethora of misleading statistics and questionable assertions, compels a response:

Weingarten writes:“America has a retirement crisis, but it’s not what some people want you to… Read More

Two people walked into a bank, somewhere in California. Both individuals needed to prepare financially for their retirement. Both of them earned about $80,000 per year.

The first individual, Mr. Jones, was presented by the banker with a contract called “Social Security.” The contract read as follows:For as long as you work, you will give us 12.4% of your gross earnings, and we will invest the money. When you retire, we will pay you an annuity for as long as you live. Your annuity will be based on a guaranteed rate of interest – depending on how long you live – of about 1.5% per year, compounded! When you die, you will have nothing left of your investment to pass on to your heirs.

The second individual, Mr. Smith, was presented with a very different contract, called “Collective Bargaining Agreement.” It read:For as long as you work, you will give us 5.0% of your gross earnings, and we will invest the money. When you retire, we will pay you an annuity for as long as you live.Your annuity will be based on a guaranteed rate of interest of exactly 7.5% per year, compounded. When you die, you too will have nothing left of your investment… Read More

News media and California Republican Party activists are focused on which Republicans are running for Governor, and rightfully so.

But there is anotherelected statewide office that invites a campaign based on intellectual and popular arguments in support of fiscal responsibility.

That obscure but influential office is California State Treasurer.

And that office is quite winnable for a libertarian populist-styleRepublican who can credibly argue to The People against crony capitalism and build a majority coalition of support from voters on the Left and Right.

Why isn’t a smart, dynamic Republican with this kind of thinking jumping into this race? What an opportunity! Below are five winning issues for a Republican candidate for California State Treasurer.

Bonds are free money that comes from President Obama or somewhere, right?

Californians don’t know that state and local “bond measures” on the ballot authorize governments to borrow money from Wall Street and pay it back – with interest. The so-called “One Percent”… Read More

One of the biggest unreported, blockbuster stories in modern America is the alliance between public sector unions and the speculative banking industry. It is a story saturated in greed, drowning in delusion, smothered and marginalized by an avalanche of propaganda – paid for by taxpayers who fund both the public sector unions and the public employee pension funds.

The problem with public sector defined benefit pensions can be boiled down to two cold factors: They are too generous, and they rely on rate-of-return assumptions that are too optimistic. The first is the result of greed, the second of delusion. To indulge these vices requires corruption, and it is a rot that joins public sector unions with the most questionable elements of that Wall Street machine they so readily demonize.

If you honestly review the numbers, the greed is obvious. The average pension for a public servant who has worked 30 years or more in public service is more thanfour timeswhat the average social security benefit is for someone who has worked 40 years or more in the private sector. To cite… Read More

A couple weeks ago CalPERS and other government pension funds released glowing reports about their earnings, which had “soared” in the last fiscal year. Most pension funds reported in excess of a 20% return on investment. The inference was that the pension managers were back in the saddle, riding great returns to pension fund recovery.

The unions and their apologists went into full attack mode, ridiculing those who have been expressing deep concerns about defined benefit pension plans and the lackluster returns this past decade (among several others problems) — when pension funds averaged under 6% returns per year.

The pitch from obnoxious labor posters and bloggers has been that “happy days are here again,” and that essentially we can now look forward to a string of similar annual returns that will make up the massive unfunded liability deficit that ALL such funds face.

Gee — what a difference two weeks makes. At this point, the stock market has lost all gains since the beginning of the year — and then some. Yesterday’s 500+ point DJIA drop was only the latest down day — though (so far) by far the… Read More