Two strong pieces on the Washington Post’s misrepresentation of public pension problems, one from Kthug:
OK, this is quite amazing: Dean Baker catches the WaPo editorial page claiming that we have $3.8 trillion in unfunded state and local pension liabilities. Say it in your best Dr. Evil voice: THREE POINT EIGHT TRILLION DOLLARS. Except the study the WaPo cites very carefully says that it’s $3.8 trillion in total liabilities, not unfunded; unfunded liabilities are only $1 trillion.
Another from Jeff Wattrick of Deadline Detroit:
Just one sentence ahead of the above passage, (WaPo’s Charles) Lane misstates the size of Detroit’s unpayable debt.
Just read emergency manager Kevyn Orr’s134-page report on Detroit, which has $20 billion in unpayable debt.
While Detroit total long-term debt load may be around $20 billion, a good portion of that debt will be paid in full. According to Orr’s report, the city has $11.449 billion in unsecured debt it can’t repay and must restructure.
The war against public pensions reminds me of the Iraq War. Even if one accepts that there is/was a big pre-existing problem in either case, the constant stream of lies is troubling.
NickT
Boycott Kaplan and WaPo effectively and maybe their behavior will improve.
GregB
They are letting the meat axes fly. The big money folks want some of the last vestiges of grabbable cash that the rubes still have access to.
It is really a monstrous thing they are doing. Yet many of the American idiots are cheering this on because it is Detroit which is full of those kinds of people. So they don’t see that it can happen to them.
Yet the precedent set there will spread like a virus throughout America. They are coming for your pensions folks.
Baud
Contracts are sacred unless they’re contracts with workers.
I know defined contribution plans don’t get a lot of love around here — and there is much that can be done to reform the system — but this is why I prefer them. Better to own the money now than to have a promise to own it later.
Frankensteinbeck
You will continue to see this. The two most important things to remember about traditional national journalism is A) it is dominated by fiscal conservatives in the modern sense, rich people who think they are gods and that screwing over the poor will solve everything, and B) every day less people give a fuck what traditional national journalists say. As the problem grows in brazenness it shrinks in importance. Right now it’s still important enough to discuss, mostly because it tells you what the Village Conventional Wisdom is.
EDIT – @GregB:
I really think it’s about fucking the poor, about pure assholery that has become dogma. The rich making more money and black people being punished is a sideline. (There being a black president is a strong background modifier, since it makes the assholes crazy.)
MattF
The WaPo has been doing its ‘Don’t forget how stupid and innumerate we are’ routine all week. For the Post editorial board, it’s all about the perils of debt and how unions need to go away. And, somehow, it’s the working class that has to suffer– it’s just their lot in life, and besides…
Josie
I was half-way listening to a talk show last week and thought I heard a pundit say that the state owes Detroit a large amount of money, which they are refusing to pay. The person seemed to think that this was part of the problem for Detroit. Does anyone who actually understands economics know more about this?
Villago Delenda Est
Lane is a fabricating sack of shit.
No quarter for liars like Lane.
c u n d gulag
It’s that old adage come to life:
“If you can’t dazzle them with brilliance, baffle them with bullshit.”
I remember a country where, if you were found to be stealing from people’s pensions, you were lucky if all that happened to you was you were tarred and feathered, and ridden out on a rail.
That USED to be America!
Now you have corporate raiding pirate yahoo’s, like those assholes who took over Hostess, who gave themselves huge raises, sucked the workers pensions dry, and rode out of town with the “HUZZAH’S” of Conservatives, ringing in their ears.
And there’s nothing anybody can do about that.
Nothing.
NOTHING.
Train and bank robbers at least took some risks. They were mere pikers compared to these evil assclowns.
And now, we have politicians who look to take money from retired workers by bankrupting whole cities, selling off the assets, and absconding with the old folks pension money.
I think it’s time we did some watering of that them thar Liberty tree – the threat of tarring and feathering doesn’t scare them much anymore.
Villago Delenda Est
@GregB:
Word.
They’re not happy with most of the money. They want all of it.
Zapruder F. Mashtots, D.D.S. (formerly Mumphrey, et al.)
Don’t you think “lies” is a little bit much? After all, these are our betters, people who know things, and understand things, and if they use a–well, let’s say a creative phrase here or there, well, they’re doing this for our own good.
And they have a pretty good record, after all, don’t they? I mean, hey, what has Charles Lane or Fred Hiatt ever gotten wrong? What has David Brooks ever been wrong about? George Will? Charles Krauthammer? Richard Cohen?
Well, O.K., if you want to get nitpicky here, you could make a case that they’ve gotten everything wrong; but, well, who hasn’t made a mistake now and again? I know I have. And if they’ve been wrong–and while that’s a pretty strong word, I’ll give it to you for the sake of this argument–even if they might have, uh, well, been less than fully truthful, which, again is a stretch, but let’s let that go; anyway, even if you concede those small points–for the sake of argument, mind you–they were doing it for our own good. They know much more than we do, and we should trust them. Because it would make them feel bad to raise a stink about small things like 5000 dead soldiers killed in a pointless war or an economy shattered by the neoliberal economic policies they touted, and still tout.
We don’t want to make these fine people feel bad, do we? I know, you can set their feelings on one side of the ledger and 5000 dead Americans and countless lives worldwide thrown into a mire of joblessness, poverty and, in some countries, even abject starvation, and a cursory look might lead you to shriek, “To hell with their feelings!” But these are sensitive people.
Look at it this way: These are people who aren’t used to being made to feel bad or guilty, or being made to take a hard look at the lives they’ve helped wreck. If they had to do that, some of them sink into a bottomless, hopeless depression. Do we want to do that to them?
And on the other side, you have a whole slew of people who never had many things go well for them to begin with. These people are used to eating shit sandwiches. So some inner city kid’s father gets blown away in Iraq. So what? It isn’t like that kid’s life was going to be anything all that great even with a father, right? So some simgle mother who was barely scraping by loses her pittance of a pension when her company raids the fund. So what? Is it like she was going to be retiring to the Riviera to begin with? Obviously not.
So what I’m asking for here, are two things: One, that we keep a little perspective. These important writers and thinkers never meant to hurt anybody. Do we prosecute people who kill somebody if they didn’t mean to? Obviously not, at least if they’re rich. That should be instructive. And, Two, that we have a little bit of compassion for them. We don’t want to make them sad. They have rich, full lives, lives that would lose much of their meaning if we heartlessly confronted them with the effects of their opinionating.
If I might humbly suggest our course, what we need to do is to grow up here, and do the right thing. If I might be so presumptuous as to paraphrase Jesus, How about a kind gesture toward Charles Lane; he’ll be gone someday. The poor we will always have with us. So why should we bother to help them?
Neutron Flux
@Zapruder F. Mashtots, D.D.S. (formerly Mumphrey, et al.): In honor of the Open golf tournament… [golf clap]
ETA golf clap
Villago Delenda Est
@Zapruder F. Mashtots, D.D.S. (formerly Mumphrey, et al.):
“Ohkay, Chuck, instead of the usual rusty axe, we’ll take your head off with a highly polished broadsword, as a gesture of kindness. How’s that, pumpkin?”
Sibling Nonspecific Firearm of Random Adjective Followed by a Noun That Describes a Mental State (fka AWS)
The Chicago Tribune’s war on public pensions makes the WaPo look like pikers.
Davis X. Machina
Crab Bucket America. In the absence of a credible foreign threat you could ride this right into the White House. Appealing to the worst in people gives you a leg up, because in the aggregate, people are shits. (Lovely as people may be taken individually….)
Chris Christie saw this coming, and got the lap band as a result.
Jockey Full of Malbec
@Baud:
It was only a matter of time before ‘corporations are people’ turned into “only corporations are people”.
becca
@Neutron Flux: golf clap? tee-hee.
How’s the pay wall going for WaPo? I do hope the worst for Hiatt and Lally.
I love the way conservatives use “even the liberal WaPo sez…” canard to legitimize their stupid.
As for Detroit… I think this is all working out just like the Koch, et al planned. There’s water in them Great Lakes, folks! It’s the next investor gold mine, for them that knows what’s what.
Ruckus
The lies may be troubling(I think they are far worse) but it is amazing that we expect anything more from conservatives. Especially today’s conservatives.
They are all the uncle that is never left alone with the kids at a family picnic.
MikeBoyScout
No worries.
The INVISIBLE HAND will fix the error prone MSM and the greedy workers who want pensions and government services.
The Koch brothers and Rupert Murdoch assure me.
Ruckus
@Zapruder F. Mashtots, D.D.S. (formerly Mumphrey, et al.):
You sir need a job at the NYT or maybe even the WaPo for that one. Anyone who could dash that off and not have to go into rehab…
SP&T should be proud.
IOW, I second the golf clap.
Tripod
@Josie:
http://www.mlive.com/news/index.ssf/2013/07/detroit_bankruptcy_handshake_d.html
RSA
Lies like this really have a pernicious effect on discourse. I’ll predict two generic conservative responses to Krugman/Dean’s correction:
“$3.8 trillion or $1 trillion, what’s the difference? It’s a big scary number!”
and
“Funded or unfunded liability, what’s the difference? Debt is debt!”
@Zapruder F. Mashtots, D.D.S. (formerly Mumphrey, et al.): Also, continuing golf clap.
becca
The media phraseology would have no one connect a lost pension with an actual human being.
Public services and Pension cuts are necessary for fiscal discipline.
Or,,,
Destroying the lives and livelihoods of millions of middle-aged Americans is necessary for fiscal discipline.
We are only 1’s and 0’s to these folks.
Sibling Nonspecific Firearm of Random Adjective Followed by a Noun That Describes a Mental State (fka AWS)
Another thing I wonder: not all of these public workers on pension, or contributing to pension, are Democrats. I’m pretty certain a large minority (at least) are the people who vote GOP, or participate in Tea Parties. I wonder what the response of these pensioners/workers is to all this cutting of pensions?
Ruckus
@becca:
You really think we rise to the level of 1s and 0s with them? I don’t. Numbers they can manipulate, numbers they can abuse to get richer, we just stand in their way. Except when they can steal from us. They have already stolen the big stuff, now the only things left are the pennies we have.
Josie
@Tripod: Thanks. I had googled it but didn’t find that article. It was interesting and so were the comments.
Ultraviolet Thunder
“Don’t forget the Motor City”
ETA: “It was better before, before they voted for ‘What’s his name’
This is suppose to be the new world
It was better before, before they voted for ‘What’s his name’
This is suppose to be the new world
Flint Ford Automobile, Alabama
Windshield Wiper, Buffalo, New York
Gary, Indiana, don’t forget the Motor City”
X: The Real World
becca
@Ruckus: we are the numbers to them. We can be removed or manipulated by the leisure class. We are nonexistent until needed to be “productive” and discarded when the profit margins see fit.
The media has spent decades dehumanizing economics. It’s ONLY business, nothing personal, right?
Ultraviolet Thunder
@Sibling Nonspecific Firearm of Random Adjective Followed by a Noun That Describes a Mental State (fka AWS):
One of the reasons Snyder wants to screw Detroit is Southeast MI is the Dem stronghold. The GOP will never get significant votes from Wayne County so why not strip it for parts?
Shakezula
@Zapruder F. Mashtots, D.D.S. (formerly Mumphrey, et al.): Awesome.
Linnaeus
@Josie:
The pundit was probably referring to the revenue-sharing deal cut between then-Detroit mayor Dennis Archer and then-Michigan governor John Engler in 1998. You can read the backstory on that here. The short version is that the city agreed to roll back its income tax rates on both residents (3%) and commuters (1.5%) down to 2% and 1%, respectively, in return for money from the state. When the state experienced budget crises in the early 2000s, it cut revenue sharing (not just to Detroit, but to other municipalities, too.). The city asked the state to allow it to restore its earlier, higher tax rates, but the state rejected that and only allowed the city to rollback less than the original deal. So the argument is that the state not only backed out on revenue sharing, but at the same time wouldn’t allow the city to recover that loss through restoring earlier tax rates. Snyder’s stance is that the city can’t compel the state to pay up.
Roger Moore
@becca:
FTFY. I don’t think we rise to the level of a 1 in their estimation.
Ruckus
@becca:
Was going for what Roger said. We don’t amount to a hill of shit to them, unless they can sell us as scrap so they can steal from us easier. Numbers they revere, us not so much.
We are all on the same page, I just think you give them more credit than they deserve. Not that you are giving them much but I don’t think they deserve any credit, what very, very little they had they blew away long ago.
Higgs Boson's Mate
Rust never sleeps. Neither do those who want to grab everything of value in America for their very own.
The largest remaining chunk of grabbable cash in the US is the Social Security trust fund. It’s a component of our nation’s largest defined benefit plan. The grabbing class have been stymied so far in their attempts to grab the SS trust fund. That’s okay, they’re patient. First make it okay, a Detroit at a time, to argue that defined benefit plans are unfunded liabilities that will lead to bad and scary things. Rinse and repeat until it’s okay to hand over the SS trust fund to the private sector. It’s the Christian thing to do because it will end a lot of masturbation.
StringOnAStick
@Baud:
I have to say that this is part of the logic being used to killed defined benefit programs. Also, the main problem with defined contribution programs is your money is out there in the rough and tumble of Wall Street with the words “slow moving, bovine, mutual fund money to be plundered by computerized trading and hedge funds” tattooed on it’s forehead. FREEDOM!
LongHairedWeirdo
@Baud:
DB plans are supposed to meet funding requirements to avoid this kind of problem. However, I’d assume that public plans don’t have the same requirements under ERISA. A well funded DB plan is no more risky than a DC, except both will collapse during a stock market meltdown, and the former is the only one that’s likely to face termination when that occurs.
(See, if the DB plan loses value, the employer must top up the deficiency, and since a stock market meltdown usually means poor business times ahead, they won’t want to do that.)
becca
@Ruckus: we are less than shit, because shit stinks. It has a presence. We are the Ether until inserted into the program. We can be erased from the memory of TPTB at will, and re-inserted at their pleasure, and only then.
Essentially, we agree that TPTB are socio- paths, tho.
We really need some kind of cap on wealth/power. Or trade this bunch of sadists in for some rich people not as inbred. It’s pretty obvious they’ve been casting a smaller and smaller net at the gene pool up on Magic Mountain.
Haydnseek
@Sibling Nonspecific Firearm of Random Adjective Followed by a Noun That Describes a Mental State (fka AWS): They may be living under a bridge and roasting sparrows skewered on a bent coat hanger, but as long as the black/brown/gay/atheist person next to them has neither coat hanger nor sparrow, they’re perfectly fine with it.
qwerty42
But, Doug, math is so haaaaaaaaaaaaaaaarrrrrrrrrrrrrrrrrrrrrrrd. You can’t really expect newspaper guys to know it. I mean, really. And research a topic? Know/learn something about it? C’mon. That’s for grad students. Not newspaper guys.
Ruckus
@becca:
In my youth we had a check on their power and greed, it was called 90% income tax rate and capital gains much higher and more restrictive than today. It didn’t always work that well but it was better than the almost nothing we have now.
Burnspbesq
@LongHairedWeirdo:
That’s why they’re allowed to make up the “accumulated funding deficiency “over a number of years.
LongHairedWeirdo
@c u n d gulag:
Alas, the raiding of pensions was a tiny bit complicated at one point. Not *very* complicated – stealing is stealing! – but a bit.
There are two things that killed the defined benefit pension. One was the dropping of tax rates. When you could get a 70% tax deduction on a pension contribution, it was a good deal; you could probably put more than 30% of the pension contribution to yourself, so you actually netted money (well, present value) on the deal. And your employees felt like you were a *great* boss, and they calculated numbers like “1% of highest salary per year of service” and thought they’d have a nice retirement in return for their loyalty.
Okay: first was dropping the tax rate, so that you could only get a 35-39.6% deduction on the contribution. You can’t make the pension contributions go over 2/3rds to you, so by making a pension contribution, you *lost* present value.
Second was the stock market. The stock market was growing so fast that a lot of pensions were highly overfunded, and wouldn’t require contributions for a long time (if ever). They were overfunded to the point that they were no longer any form of tax shelter; you couldn’t make any deductible contributions to them. And sometimes, there was a huge pot of money left over after paying present value of pension liabilities.
There were times when an ethical person might think it was best for the company (and the future retirees) to find a way to get a hold of some of that money to do something with it. Modernize a manufacturing plant, maybe – sure, it’s a big benefit to the company, but it’s also a big benefit to the employees, who need a healthy company so they can keep their jobs!
Of course, if there’s something that will tempt an ethical person, you know that wall street will go after it like… like… well, like something that goes after things really really fast and vigorously and shamelessly – especially shamelessly.
becca
@Ruckus: and then along came the Washington Consensus Manisfesto. Privatization and deregulation in all the Americas. Pinochet and his ilk are poster boys for the neo-liberal wet dream taken to its natural conclusion.
LongHairedWeirdo
@Burnspbesq: Yes, but now they’re no longer seeing it as a decent bone to throw to the dogs, er, employees, they’re seeing it as a pain in the ass, and if they have a chance to terminate it, they will probably do so.
Obviously, there are ethical employers who will try to bring the deficiency back in line with good funding because they made a promise and intend to keep it. But they’re not the majority or even a very large minority, I’d reckon.
Fred Beloit
@NickT:
Oh whew, what a relief, only a trillion dollars! I was afraid they were talking about a lot of money.
Stepsister shotgun of sweet sadness
Well, you know that Generalissimo Pinochet was in the dock for genocidal crimes, which was a good thing.
Perhaps with enough grass-roots organizing of folks whose pensions were raped, we can see that pension rapers wind up in the famously un-protected prison system where they can experiment with new sensations!
We all know that it’s easy to tell when Republicans are lying (hint: their lips are moving) so all we have to do is promulgate that information to everyone who worked for a living. The rest is a real justice system.
One thing that worries me is the governor of Alabama who went to prison for being a Democratic success story during a Republican administration. I think using the justice system to maintain political power is a capitol offence, and that those guys ( all of ’em! right up to W) should be grabbed at midnight and moved to a secure location offshore.
Like dropped into a pod of mating Great Whites!
Chris
@Frankensteinbeck:
This.
Not that racism, nativism and things like that don’t factor into it, but contempt for the poor and working class, especially those of them who get ideas above their station (like unionized workers which Detroit has a ton of) is a powerful enough belief system in its own right for plenty of people. And as public racism is less acceptable now than fifty years ago, people have doubled down on the purely classist prejudice. Of course, there’s so much overlap that it’s hard to tell where one starts and the other ends.
Chris
@becca:
Yeah, I’m pretty much at that point too. Concentrated wealth is as noxious to politics as military or religious influence over it.
becca
@Chris: it sends chills down my spine when the absolute worst people in the world like Sheldon Adelson have the power to undermine nations, democratic or not.
Chris
@becca:
Yeah, me too. Although it’s an extra level in evilness when it’s a democracy.
ChristianPinko
And this reminds me of the reaction to the Zimmerman trial verdict. Even if you accept that the jury made the right call, the constant stream of unjustified attacks on Trayvon Martin’s character is troubling.
There seems to be a pattern here; I’m not sure why.