Political Strategists and Journalists Do Not Solve Problems

That would be bad for their business since problems are what they thrive on.

A government that does not know what it is doing often gets gulled into hiring these strategists to do the same things they wanted to do but with a scapegoat attached.  And the deeper the crisis the higher the circulation and viewership even if it’s only talking points being regurgitated.

This hit home yesterday when MY9 got these people together to discuss the pension crisis in New Jersey which I watched because the two political strategists involved were both from the law firm (DeCotiis, Fitzpatrick & Cole, LLP) that runs the county I live in, principally by having a bunch of their partners get together and donate $30,000 each election cycle to the campaigns of the party in office.  If they were truly interested in being honest about helping taxpayers their experience of campaign financing would prove enlightening.

As for their knowledge of the pension crisis it is secondhand, gleaned from studies and anecdotes that support their interests, which leaves them only to parrot those opinions without being able to explain, defend, or even understand the real situation. Here is a taste:



.
Usually these political types make problems appear worse so they can put into a play a solution that happens to benefit them personally (think solar panels solving the energy crisis) but in the case of the New Jersey pension system collapse those same people do not have the wherewithal (or inclination) to appreciate the actual scope of the disaster since an aspect of any real solution would threaten their incomes.

46 responses to this post.

  1. Posted by Tough Love on June 15, 2015 at 11:05 pm

    I just viewed your video ….. boy, high level Gov’t meetings are far LESS productive than similar Corporate meetings. As you stated, they were mostly just repeating that which has been published online, in news reports, and blogs such as this. In well run Corporations there is always someone at the table with the “RESPONSIBILITY” for reaching an effective “solution” … something seriously lacking here.

    After all this time they seem to recognize that SOMEONE (either the taxpayers and/or the workers/retirees) are in some real pain. Big woop, we ALL knew THAT …. how about focusing on that “balance” mentioned with some meaty proposals ……… sort of like the ones we ALREADY HAVE from the NJ pension Commission.

    Reply

    • Posted by Anonymous on June 16, 2015 at 1:01 am

      not true if you pay attention, they dont recognize that, watch the video again and listen to all of them carefully. defiinitely did not acknowledge that.

      Reply

    • Posted by S Moderation Douglas on June 16, 2015 at 4:02 pm

      First, this ain’t a government meeting, high level or otherwise.

      Second, you seem to have a very idealized perception of corporate efficiency.

      “Laws are like sausages, it is better not to see them being made.”
      Otto von Bismarck

      Same thing can be said about most business decisions.

      Reply

  2. Everyone attached to NJ politics, employee or consultant, is a lying POS. If you are not a liar when you get hired, elected or engaged (lawyer or consultant) you become one afterwards.

    Reply

  3. Posted by Tough Love on June 15, 2015 at 11:11 pm

    Just read an “oldie”, so “on the mark” in accuracy and completeness that it should be required reading for anyone looking for an honest evaluation of the many arguments put forth AGAINST pension reform by the Public Sector Unions:
    —————————————————————————————
    Here’s the link: http://thf_media.s3.amazonaws.com/2013/pdf/bg2765.pdf

    Here’s the Title: Nine Fallacies Used to Defend Public-Sector Pensions

    Here’s the Table of Contents:

    Fallacy 1: The average public pension payment reflects the generosity of the plan’s benefits.

    Fallacy 2: The cost of a public pension plan is equal to whatever the
    government contributes to the pension fund each year.

    Fallacy 3: Public pension plans can “assume away” risk because governments are long-lived.

    Fallacy 4: Advocates of risk-adjusted discounting are merely a niche group of contrarian economists.

    Fallacy 5: Critics of public pension accounting assumptions are projecting low rates of return.

    Fallacy 6: The investment returns earned by a pension fund pay for most pension benefits, so taxpayers are actually charged very little.

    Fallacy 7: Public pensions are not overly generous because they are simply deferred compensation.

    Fallacy 8: Generous pensions are necessary because some government employees do not participate in Social Security.

    Fallacy 9: Closing a public pension carries major transition costs.

    Reply

    • Posted by Charles on June 15, 2015 at 11:57 pm

      Any assumptions about long term gains is a guess. Using totally “safe” estimates would greatly increase yearly contributions causing the account to be vastly overendowed. Politicians would take the surpluses by not contributing but historically they have done that anyway. What is your solution?

      Reply

      • Posted by Tough Love on June 16, 2015 at 12:54 am

        How about not “promising” more (in pension formulas or provisions… i.e., no COLAs, no young-age full/unreduced retirements, etc.) than what Private Sector workers typically get in retirement benefits from their employers ….. ROUTINELY 1//4 to 1/3 the value at retirement of the promises made to non-safety* Public Sector workers.

        * 1/5 to 1/4 for Safety workers.
        ——————————————–
        And Public Sector retiree healthcare subsidies EQUAL to what Private Sector workers typically get in Employer-Sponsored retiree healthcare coverage ……. NOTHING !

        Reply

        • Posted by S Moderation Douglas on June 16, 2015 at 2:03 pm

          ” ROUTINELY 1//4 to 1/3 the value at retirement of the promises made to non-safety* Public Sector workers. Yadda, yadda, yadda. …. *1/5 to 1/4 for Safety workers…. Yadda, yadda, yadda.”

          How is this (still) anything more than meaningless drivel?
          There is no such thing as a “typical” private sector pension to be compared.
          …………..
          CNN Ultimate Guide to Retirement:

          “The percentage of workers in the private sector whose only retirement account is a defined benefit pension plan is now 10%, down from 60% in the early 1980s. About 30% of companies offer a combination of both types.
          Meanwhile, the few employers that still offer traditional pensions – typically industries with a strong union presence, such as the airline and auto sectors – are working overtime to cut deals to either reduce or eliminate their plans.”
          ……………
          What is “typical”?

          Also, please note, companies are, and have been, “cutting deals” to eliminate DB plans. Implying quid pro quo. Unlike public sector, private workers who still have DB plans do not contribute to them, yet companies are willing to offer something else of value to replace DB pensions.

          Even if there were a typical private sector pension, comparison to the public sector disregarding total compensation is not germane.

          GIGO, still.

          Reply

          • Posted by Tough Love on June 16, 2015 at 2:44 pm

            You are right, the “typical” pension I used in that comparison for the Private Sector worker was for the lucky FEW who still have traditional DB Plans ….. 90% have the much LESS generous Cash Balance or 401K Plans.”

            Hence the PUBLIC Sector “advantage” is really much GREATER (on average) than what I showed.

          • Posted by S Moderation Douglas on June 16, 2015 at 3:42 pm

            In other words, worthless math and personal opinion.

            i.e.: “misstatements, distortions, omissions of material facts, and outright lies.”

          • Posted by Tough Love on June 16, 2015 at 6:51 pm

            Keep trying, and perhaps the naive will accept the BS from someone now collecting a Gov’t pension, and not wanting it RIGHTFULLY reduced …you.

          • Posted by Tough Love on June 17, 2015 at 2:24 am

            Well, let’s concentrate on that “logic”…..

            This last trading of comments between you and I started with my quoting of Jasine Richwine’s … “Nine Fallacies Used to Defend Public-Sector Pensions”.

            Go ahead, let’s see the quality of YOUR “logic” refuting what Mr. Richwine stated.

            No need to do all 9. Just pick a few … ANY few.

        • Posted by S Moderation Douglas on June 16, 2015 at 11:37 pm

          I am literally Laughing Out Loud. LLOL?

          The self proclaimed expert has been posting the same worse than useless fabricated “math” for years. Now concedes it is baseless gibberish. And yet, allegedly, “the PUBLIC Sector “advantage” is really much GREATER (on average) than what I showed.”

          Why bother with phony math at all? Do you think that really gives some validity to your personal subjective “opinion” ?

          TL:

          “But intelligent people needed not have a comparative “study” to recognize GROSSLY EXCESSIVE pay, pensions, and benefits (that are unnecessary, unjust to Taxpayers, and unaffordable) when they see it.”

          Right. Personal opinion, anecdotal evidence, and unbridled obsession may be sufficient to satisfy your own mind, but it won’t convince objective readers, and it’s useless for formulating proper and reasonable pension reform.

          And I am the naïve one, brother?

          Reply

          • Posted by Tough Love on June 17, 2015 at 1:04 am

            Is my math really bad or is it that it’s correct but refutes your absurd bias as a California Public Sector retiree either blind to the truth, or incapable of understanding it, or fearful of it’s consequences ?

          • Posted by S Moderation Douglas on June 17, 2015 at 1:43 am

            No problem with your math. It’s your logic that is faulty.

            And, as usual, your attitude socks.

            That’s my opinion.

          • Posted by Tough Love on June 17, 2015 at 1:57 am

            From YOUR response, it seem that MY prior response was right on the money ………….

            “is it that it’s (my math) correct but refutes your absurd bias as a California Public Sector retiree either blind to the truth, or incapable of understanding it, or fearful of it’s consequences ?”

          • Posted by S Moderation Douglas on June 17, 2015 at 2:08 am

            And yet still stubbornly immune to logic.

          • Posted by Tough Love on June 17, 2015 at 2:25 am

            Well, let’s concentrate on that “logic”…..

            This last trading of comments between you and I started with my quoting of Jasine Richwine’s … “Nine Fallacies Used to Defend Public-Sector Pensions”.

            Go ahead, let’s see the quality of YOUR “logic” refuting what Mr. Richwine stated.

            No need to do all 9. Just pick a few … ANY few.

          • Posted by S Moderation Douglas on June 17, 2015 at 4:57 am

            Actually started with your response to Charles about using totally “safe” estimates. But rather than answering him, you used it as an excuse to copy and paste your usual screed.

            You feel free to gnaw on that bone all you want. I will feel free to point out the errors.

      • Posted by Tough Love on June 16, 2015 at 1:36 pm

        Quoting Charles … “Using totally “safe” estimates would greatly increase yearly contributions causing the account to be vastly overendowed. ”

        The actual “cost” of a given “pension benefit” doesn’t change with the choice of funding pattern. Using conservative assumptions properly accounts for the high probability (in the current interest environment) that the high returns (now assumed) will not materialize, and for the COST of the RISK that they won’t (that is now ignored). When using conservative assumptions, returns greater than the conservative assumptions act to lower future year contributions, and would provided for much better funded and secure pension Plans.

        All using conservative assumptions does is price the benefit provided HONESTLY … as all other investments are priced. The current “dishonesty” manifested in the high rates now assumed is ignoring the (REAL cost) of the risk of lower-than-assumed investment returns, essentially making the Taxpayers not only pay for your pensions, but for that real “risk” as well.

        Of course using conservative assumption DOES change the SLOPE of the funding pattern and increases the early year contributions. It is exposing this higher more honest contribution level that Public Sector workers are so concerned about, because if the Taxpayers compared that HIGHER level of HONEST contributions to what THEY typically get from their employers, it would be FAR more apparent that your promised pension are indeed grossly excessive…. and pressure to reduce them (prospectively, for FUTURE Service) would increase.

        Reply

  4. Posted by Anonymous on June 16, 2015 at 12:54 am

    Hey John in the video where Christie was asked about the downgrades, he blamed past adminstrations or what he inherited. Christie criticized Obama for using that same excuse and the interviewer reminded him of that. Christie said that the difference it that Christie created 185,000 new jobs in NJ, so in essence he has accomplished something, where Obama has not. Is this true?

    Reply

    • Probably not but I can’t find the 185,000 number in the Bureau of Labor Statistics though I suspect that the corresponding national number is a lot higher since national unemployment rates have dropped much more than New Jersey’s though I don’t trust those rates to start with.

      Another thing is that some of those private sector jobs may be government functions that were privatized and taxpayers are still paying for. This happened in Union County where friends and campaign donors (mostly lawyers but they also privatized golf and a nursing home) got work and the county was able to get rid of some workers (and their benefit costs).

      Reply

  5. Posted by javagold on June 16, 2015 at 2:29 pm

    What you’ve all just said is one of the most insanely idiotic things I have ever heard. At no point in your rambling, incoherent responses were you even close to anything that could be considered a rational thought. Everyone in this room is now dumber for having listened to it. I award you no points, and may God have mercy on your soul.”

    Reply

  6. Posted by Jim on June 16, 2015 at 4:35 pm

    New Jersey needs to figure out how to counterfeit US currency. Maybe the NJ Mafia could give them some insight into how to do this.

    Reply

  7. Posted by Anonymous on June 16, 2015 at 4:56 pm

    John hypothetical question applying the NJSC c.78 opinion? This excludes “trust fund” debt which is generally voter approved. If the D’s really wanted to force the R’s hand on the upcoming budget couldn’t they propose a budget that appropriates more $ to P&B by cutting non- voter approved “conduit” debt like New Jersey Building Authority and Economic Development Authority, etc. It’s political suicide I know but the D’s also know the Gov will veto any tax increase and the R’s win’t override the veto. Just curious because wouldn’t the same logic apply to any multi year obligation that’s subject to legislative appropriation.

    Reply

    • The test case for this could be the Whitman Pension Obligation Bonds where the payments are probably over that 1%-of-budget amount now so they could try to make a case for not paying those debts which definitely did not have voter approval.

      But they won’t. It will only be tax proposed tax increases and more posturing.

      Reply

      • Posted by Anonymous on June 16, 2015 at 5:37 pm

        Roger that but why not any multi years obligation that is subject to legislative approval? Why not NJBA lease obligations with the State for building construction? Why not NJEDA tobacco settlement, DMV securitization and other off book to circumvent voter approval debt?

        Reply

      • Posted by Anonymous on June 16, 2015 at 5:54 pm

        John is the 1% of total budget a cumulative # or individual test for each obligation in question. Also, is the implication that the NJSC opinion only applies to amounts in excess of the 1% or any multi year obligation subject to legislative approval?

        Reply

        • From my interpretation it seems to mean any amount over 1% that was not voter-approved is able to be defaulted on and not only that amount over the $330 million or so but the full amount. Not sure of this since at this point they’re making stuff up as they go along.

          Reply

          • Posted by Anonymous on June 16, 2015 at 6:45 pm

            Ok thanks, can’t agree with you more!

          • Posted by PatB on June 16, 2015 at 9:19 pm

            Could the debt limitation clause be forced? Say the unions challenge the Whitman bonds to free up money for the pensions?

          • Technically the Whitman bonds are pension contributions since that is where most of the money from the bond sale went. Now they need to be repaid and it is now transparent that POBs were a way to make future generations pay for current expenses – something the the NJ Supreme Court deems unconstitutional.

            NJ is not about to default on bonds since that would mean an end to the ability to bond and the house of cards would collapse. As it is they can run up the credit card limit indefinitely to keep being able to borrow and if it takes cutting back retiree benefits then that’s what will be done.

          • Posted by Anonymous on June 16, 2015 at 10:01 pm

            But isn’t what you say NJ wants to avoid (bond default) exactly what insolvency (if and when State’s could declare bankruptcy) would be forced upon them by a court appointed trustee? Of course at that point the house of cards are crumbling and everything is up for grabs.

  8. Posted by Tough Love on June 16, 2015 at 11:14 pm

    I am (a tax-burdened) NJ resident and feel that the beneficiaries of the state’s pensions (NOT Taxpayers) should bear the brunt of reform measures.

    While there are hundreds of articles on the Public Pension mess in Americas States & Cities every week VERY few address the “generosity” of Public Sector pensions vs those of comparably situated (in wages, age at retirement, and years of service) Private Sector workers. I believe that grossly excessive Public Sector pension “generosity” is the ROOT CAUSE of the problem, and lack of full funding is NOT a CAUSE, but a CONSEQUENCE of that ROOT CAUSE.

    By training and experience, I am very well versed in pension funding and design and can very easily demonstrate that when BOTH the very rich Public Sector pension “formulas” AND the very generous Public Sector pension “provisions” (such as very young full/unreduced retirement ages, very liberal definitions of “pensionable compensation”, and COLA increases … unheard of in Private Sector Plans) are properly taken into account, Public Sector pension are TYPICALLY 3x-4x (4x-6x for Safety workers) greater in value at retirement than those of similarly situate Private Sector workers retiring at the SAME age, with the SAME pay, and the SAME years of Service.

    Several decades ago, considerably lower Public Sector “cash pay” justified greater pensions (although not as large as they were, even then), But today, with very
    small differences in Public/Private Sector “cash pay”, (and with equal “Total compensation” …. pay + pensions + benefits …. a reasonable goal in comparable
    Public/Private Sector jobs), there is no real justification for ANY greater
    pensions (or better benefits) let alone the 3x-4x (even 6x for some safety
    workers) greater pensions that are ROUTINE in the Public Sector almost
    everywhere today.

    Those hundreds of articles (that rarely address pension “generosity”) rarely fail to included the workers’ protestations that they “paid their share” …. never looking further into what that “share” really amounts to. Here again, I believe (and can demonstrate quite easily) that it would be very rare for a worker’s actual pension
    contributions (INCLUDING investment earnings thereon) to accumulate to a sum at
    retirement sufficient to buy more than 10-20% of their promised pension. Taxpayer contributions, and the investment earnings thereon are “responsible” for the 80-90% balance. Why is this acceptable if they demand such rich pensions ?

    Lastly, in the USA, employer-sponsored retiree healthcare subsidies are all but gone in the Private Sector, while it remains ROUTINE for Public Sector employers (i.e., the Taxpayers) to provide free or heavily subsidized retiree healthcare coverage. That coverage is so generous in NJ that it is referred to as
    “Platinum+” coverage with a pre-Medicare age annual cost for Family
    coverage of $25K-$35K. With Private Sector Taxpayers typically getting NOTHING, how can that possibly be justified?

    The above being said, I do not “blame” the workers for the predicament that we now find ourselves. Individually, the workers certainly did nothing “wrong”,
    although as a group, and via their Unions, they have exhibited insatiable greed
    and arrogance toward the Taxpayers. While the primary “blame” belongs to our Elected Officials (clearly colluding to trade their favorable votes on pay, pensions, and benefits for Union campaign contributions and election support) the financial
    “beneficiaries” of that Union/politician “collusion” are indeed THE WORKERS via their grossly excessive pension & benefit “promises”. So THAT’S where
    the Taxpayer must look the “right this wrong”, by VERY materially reducing the grossly excessive pension/benefit promises in place today …. and for all CURRENT, not just new workers.

    Reply

    • Posted by S Moderation Douglas on June 17, 2015 at 12:05 am

      “By training and experience, I am very well versed in pension funding and design”

      And yet still stubbornly immune to logic.

      SAME age

      SAME pay

      SAME years of service

      Is an absolutely worthless and misleading comparison unless the workers have the SAME training, experience, responsibility, etc.

      Worthless, misleading, deceptive, GIGO.

      In Biggs data on professionals, it is possible, even likely, for the public worker to have 80% pension and retiree healthcare, while the private professional has no healthcare and no pension other than Social Security, and still makes more in total compensation than the public worker.

      Don’t “blame” the messenger.

      Reply

      • Posted by Tough Love on June 17, 2015 at 12:27 am

        Example: I know of no Private Sector workers who after 5 years of service with the Private Sector equivalent of the skills, experience, knowledge, and job risks of a Police Office would be making the $125K in BASE PAY alone that is commonplace in many of NJ’s towns today ….. not even close.

        And with pensions the Police Officer’s pension typically 5 times greater in value at retirement, the grossly excessive “Total; Compensation” is without refute.

        Reply

        • Posted by S Moderation Douglas on June 17, 2015 at 2:05 am

          There are a lot of things of which you do not know, brother. Don’t generalize about all public sector workers based on your opinion of one segment of that sector.

          Reply

          • Posted by Tough Love on June 17, 2015 at 2:16 am

            Agreed, the police were the easy pickings ….. so CLEARLY overcompensated that even clear-thinking SUPPORTERS of current pensions know to stay away from that comparison.

            The excessive compensation for non-safety workers is less extreme than that for Police but VERY clearly present no less. And I DEMONSTRATED that (in my very long comment towards the end of the comments) here:

            https://burypensions.wordpress.com/2015/05/14/its-embarsaing-and-im-tired-of-hearing-this-i-want-what-i-was-promised/#comments

          • Posted by S Moderation Douglas on June 17, 2015 at 3:18 am

            I agree. It WAS a very long comment. Great minds think alike.

          • Posted by Tough Love on June 17, 2015 at 4:12 am

            Yup long and right on the money …. DEMONSTRATING that pensions non-safety worker pensions (as well as the even more absurdly pensioned safety workers) typically get Public Sector pensions MULTIPLES greater than their Private Sector counterparts.

            THIS needs to end …. and for the future service of all CURRENT (STATE and LOCAL) workers.

          • Posted by Tough Love on June 17, 2015 at 4:15 am

            Hey S. Moderation Douglas,

            Still waiting…………………… …

            What ? Can’t refute Jason Richwine’s ……..”Nine Fallacies Used to Defend Public-Sector Pensions” … that I posted above.

  9. Posted by Anonymous on June 17, 2015 at 9:52 am

    Ignore her she thrives on the attention. She will shrivel up like the wicked witch of the west if she is deprived of the attention. Why dont we all try it for a change.She will quickly get bored of reading her own posts with no response. Okay lets begin now, at least for 2 weeks. Will be a nice experiment.

    Reply

    • Posted by Tough Love on June 17, 2015 at 1:52 pm

      Hiding from, and ignoring the truth about the DIRE state of your pensions (and need for reform … meaning very material pension REDUCTIONS), is not a strategy.

      Reply

  10. Posted by TrueSue... on September 2, 2017 at 10:00 am

    It’s a very good read and pertains to NJ ….if our politicians ever got real it would scare the pants off us all ….Pension Ponzi Exposed: Minnesota Underfunding Triples After Tweaking This One Small Assumption…http://www.zerohedge.com/news/2017-08-31/pension-ponzi-exposed-minnesota-underfunding-triples-after-tweaking-one-small-assump

    Reply

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: