Can Benchmark But Not Audit

benchmark: a standard or point of reference against which things may be compared or assessed.

audit: an official inspection of an individual’s or organization’s accounts, typically by an independent body.

At the State Investment Council bimonthly meeting it was reported:

New Jersey’s pension-fund investments posted an annual return of 4.16 percent in the fiscal year that ended June 30, following years of mostly sustained double-digit returns, state officials said Wednesday.

Nevertheless, according to Treasury Department data, the unaudited investment returns beat the state’s benchmark, a composite of various indexes, which yielded 2.93 percent.

Which brings up the obvious (at least to me) questions:

  1. If the state can spend resources on developing a benchmark return how about putting some effort into auditing these numbers?
  2. If 2.93% is the benchmark then why not use that as the expected investment return instead of 7.9%?

Number 2 is easy.  The valuation investment return has nothing to do with funded ratios or what the trust earnings will be and everything to do with plugging in the highest number you can get away with to keep the contribution as low as possible.  It’s that first question that yields a tougher and even more troubling answer.

In the private sector if you have over 100 participants you must get an independent audit even you have a plain vanilla 401(k) plan with maybe a couple hundred thousand dollars in it.  Yet a government plan which reports $79 billion in assets on its website can prevaricate:

(Market value, unaudited, as of 6/30/2015. May not reflect the current market values of some alternative investments through the period noted, due to lags in reporting under industry standards.)

Plan trustees begging for an audit are being told by the Christie administration that they have no authority to request an audit of their fund’s investments which brings up two more questions:

  1. What does the Audit Committee of the State Investment Council do if audits are off the table?
  2. What do they have to hide?

 

88 responses to this post.

  1. Posted by Anonymous on September 23, 2015 at 11:31 pm

    State’s “benchmark” of 2.93% – what’s that their CMF (Cash Management Fund)? What about the pension funds 7% ROR? How and where does that fit into this ridiculous benchmark rate of 2.93%? Someone must have come with this at happy hour, wish I was there must of been some party!

    Reply

    • Posted by Tough Love on September 24, 2015 at 1:07 am

      You guys as so thick …………. the 2.93% is clearly the year-ending-6/30/15 average return of some other index (such as S& P, or more likely the average return of a pool of similar-size Public Sector pensions funds) to which they compare. By coming in at 4.16%, the “beat’ the “benchmark” against-which they compare themselves.

      It’s not a forward-looking goal, projection, or expectation.

      Reply

  2. Posted by skip3house on September 24, 2015 at 12:04 am

    NJ, as Chicago now, has little of the money necessary to honor the popular NJ workers (and politicians) retirement promises.
    Sure would like to know from each elected person who voted for these benefits….what was the thinking on paying for them, and was simple arithmetic used to know they had to be funded each year, by NJ taxpayers in that year, for services rendered then….not dumped on later NJ taxpayers?

    Regards

    Reply

    • Posted by Tough Love on September 24, 2015 at 1:13 am

      They were thinking ………

      (a) Man, is this vote gonna generate a boatload of contributions and lock-up my next election, and
      (b) I better make damn sure I’m out-of-here (with MY pension/benefits) a few years before this implodes

      Reply

  3. Posted by Anonymous on September 24, 2015 at 7:14 am

    No you’re the thick one. That’s why it’s a DBP. ROR down ARC up, and vice versa.

    Reply

  4. Posted by Anonymous on September 24, 2015 at 7:40 am

    Given the pension funds varying investment portfolio we both know there’s no representative benchmark. There should be, maybe there is, a composite benchmark for pension funds of similar size, although their investment decrees will certainly vary. Thick indeed!

    Reply

  5. Posted by Anonymous on September 24, 2015 at 8:53 am

    DBP! In the private sector a deals a deal unless one or more of the following occurs; bankruptcy, illegal activity, gross negligence, et al. Of course any of the above would have to be proven in a court of law, not by public opinion. One catch, unless your Donald Duck, then the heck with everybody else, he just keeps on keeping on – quack quack quack!

    Reply

    • Posted by Tough Love on September 24, 2015 at 12:19 pm

      PRIVATE Sector Plan sponsors don’t have the luxury of being able to grant excessively generous pensions because they can hand the bill for payment to an involved (and betrayed) 3-rd party ………. the taxpayers.

      PRIVATE Sector Plan sponsors are spending the Corporation’s money and won’t give away more than absolutely necessary, justifiable, reasonable, and affordable …… a far cry from the self-interested practices of Elected Officials in the PUBLIC Sector.
      ———————————-

      And “deals” in he PRIVATE Sector don’t screw those whose interests you are supposed to be looking out for … again, the taxpayers.

      Reply

      • Posted by Anonymous on September 24, 2015 at 12:34 pm

        Oh sure the angelic private sector, never screwed others public and private. You can wake up now your dream’s over!

        Reply

        • Posted by Tough Love on September 24, 2015 at 12:47 pm

          What WILL be “over” quite soon is your absurdly generous pension & benefit “promises”.

          Reply

        • Posted by skip3house on September 24, 2015 at 2:00 pm

          That ‘Trickle Down Economics’ failed. Since 1980, they have found the leaks and plugged them.

          Reply

        • Posted by Tough Love on September 24, 2015 at 2:24 pm

          THIS is the factual basis for you rather sour future ………

          http://www.truthinaccounting.org/library/doclib/NJ-2-pager.pdf

          Reply

          • Posted by dentss dunnigan on September 24, 2015 at 6:09 pm

            Put that on a bilboard for all who enter this state to see …..and watch what happens .

          • Posted by Anonymous on September 24, 2015 at 6:11 pm

            So what are you still doing in the State, truth be told???

          • Posted by Tough Love on September 24, 2015 at 6:38 pm

            John, A few questions.

            (1) The Report I linked above is based on NJ’s “official” figures (from CAFR). Part of the $185 Billion in accumulated debt is (a) $85 Billion for unfunded pension benefits, and (b) $55 Billion for unfunded Retiree healthcare benefits.

            What is YOUR latest (best est.) of theses liabilities using more appropriate actuarial methodology/assumptions ?

            (2) Interestingly, in arriving at the $52,300 per-Taxpayer share of NJ’s total debt (per the last sentence on the 2-nd page) … the “Number of taxpayers is based on an estimation of the State’s population with a Federal Tax Liability”.

            Does that mean that for a “couple” filing jointly, on average, THEIR share of NJ’s debt is double the $52,300 or $104,600?

          • I put the debt at $300 billion:
            https://burypensions.wordpress.com/2015/09/16/nj-benefit-debt-exceeds-300-billion/
            but it’s hard to believe that will all be paid with the default option on the table.

            $161 billion divided by $52,300 comes to about 3 million which sounds like the number of individual NJ tax returns that would have been filed but that’s a guess.

          • Posted by Anonymous on September 24, 2015 at 8:25 pm

            Of course it’s an estimate based on individual filings. Default option a tough break for current and retired members, vendors, and bondholders. I guess it’s eventually a win for taxpayers once NJ recovers from the economic fallout!

          • Posted by Tough Love on September 24, 2015 at 8:37 pm

            Thanks John.

            For FIT year 2012 I found the following (for NJ) from here:

            http://www.irs.gov/uac/SOI-Tax-Stats-Historic-Table-2

            Single returns = 2.0 million
            Joint returns = 1.6 million
            Head of Household returns = 0.6 million

            Total returns = 4.3 million

            $161 Billion Debt /4.3 million Taxpayers = $37,442 Taxpayer “share”

            Seems a bit confusing how they arrived at the $52,300 per-NJ Taxpayer share of the debt unless NJ has lost 28% of it’s Tax filers since 2012.

          • Posted by Tough Love on September 24, 2015 at 8:47 pm

            In any event, if we use John’s figure of $300 Billion for NJ’s unfunded pension and retiree healthcare liability (instead of NJ’s “official” figures of $85 Billion for unfunded pension benefits, and $55 Billion for unfunded Retiree healthcare benefits), NJ’s total debt rises to (in $ Billions) $161 + ($300 – (85+55)) = 321, and the per-tax-filer “share” rises to $52,300 x (321/161) = $104,275.

            Does anyone REALLY believe even a SMALL portion of this will actually be paid ?

          • Posted by Anonymous on September 24, 2015 at 10:46 pm

            Like I said bankruptcy is a beautiful thing. The ultimate American dream. Just ask The Donald. Most NJ’s will suffer and not just current and retired members. The 1% wealthy, as they always do, will escape with minimal or no economic impact. So let’s get on with it!

          • Posted by Anonymous on September 24, 2015 at 10:58 pm

            On a (not so) positive note, what are the numbers with full and immediate implementation of the Commission’s P&B reforms?
            Both NJ’s (unofficial official numbers) and John’s (official unofficial numbers). And is the resultant numbers something reasonably workable from a budgetary/tax perspective. Or are we putting forth another c.78 by another name with another opps to follow?

          • Posted by Tough Love on September 24, 2015 at 11:46 pm

            Anon, The P&B proposal only addresses FUTURE service pension reductions (via a DB Plan freeze) so the existing PAST service unfunded liability is not diminished at all.

            The P&B proposal (as far as I know) is less clear with respect to retiree healthcare reductions as this benefit isn’t “accrued” via annual service credits the way pensions are. However, I would guess that all those not yet retired, and likely most already retired would need to get FAR FAR less in retiree healthcare benefits than promised for the healthcare savings to have even a remote shot at helping pay down the huge past service pension accruals ….. which was one big element of the P&B proposal.

          • Posted by Anonymous on September 25, 2015 at 9:01 am

            Thanks for the unnecessary education as I already knew that. The P&B proposal set forth $ savings to pay down the current unfunded w/o specifically addressing retiree health care premium share. Only a switch from platinum to gold. Changing the game, more deception, crash and burn for all except NJ’s elite!

          • Posted by Tough Love on September 25, 2015 at 10:59 am

            Indeed Anon ……………. “changing the game” from grossly excessive pensions to perhaps one reasonably comparable to what Private Sector workers typically get.

            Not justified …… what makes you so “special” on the Taxpayers’ dime ?

          • Posted by Anonymous on September 25, 2015 at 11:50 am

            Considering you put it that way, the same thing that entitles the 1% to grossly excessive wealth accumulation TAKEN from the rest of us. Let’s face it the pie has eight slices, if the 1% getting 5-6 slices that leave 2-3 slices for the crumb ruggers.

          • Posted by Tough Love on September 25, 2015 at 12:07 pm

            Anon,

            So the 1% stealing from “everyone”, justifies the 15% of all workers who are PUBLIC Sector workers, stealing from the 85% of all workers (less those in the 1% group) who work in the Private Sector ?

            That’s EXACTLY what Public Sector workers do …. steal from MIDDLE CLASS Private Sector workers….. with pensions ROUTINELY 3x-4x (4x-6x for safety workers) greater in value at retirement than those of identically situated (in pay, age at retirement, and years of service) Private Sector workers….. and free or heavily subsidized “Platinum+” retiree healthcare coverage (worth hundreds of thousands of dollars) that VERY few in the Private Sector get any longer.

          • Posted by Anonymous on September 25, 2015 at 12:21 pm

            BS TL and you know it. Al la Whitman’s 30% GIT reduction, the vetoed millionaires tax, and you’re alleged advocating for a class (middle) you don’t even belong to, 1% hogwash!

          • Posted by Tough Love on September 25, 2015 at 1:16 pm

            Anon, wish I were, but I’m not in the 1%, but I do pay enough in taxes to be annoyed by the HUGE increase in taxes that WILL BE needed in future years if the grossly excessive pension & benefit promises made to NJ’s (State AND Local) Public Sector workers aren’t VERY materially reduced.

  6. Posted by Anonymous on September 24, 2015 at 10:34 am

    Honestly, no pun intended, this entire issue is becoming very “taxing” for everyone!!!

    Reply

  7. Posted by Anonymous on September 24, 2015 at 11:49 am

    $ 600 million in fees and bonuses to politically connected investment firms and a loss of $2 billion dollars based on alternative investments. The audit would kill a fledgling presidential campaign and begin another huge investigation.

    Reply

  8. Posted by Anonymous on September 24, 2015 at 11:04 pm

    Ok was just in a friendly discussion tonight with a public worker who believes that as new people are hired they will pay for his pension and those already retired and so on and so forth. Tried to talk about some of the discussions here on this blog but didn’t seem to be getting through. He kept saying that they will switch “new” people to 401ks and he and other current workers will be “grandfathered” into receiving a full pension and life time health benefits.

    Is there any simple way that I can try to explain this situation to public workers? I’m tired of hearing the Christie Whitman argument and Chris Christie Bridgegate boondoogle. Certainly lots of blame to go around but surely doesn’t put any more money into the till for pensions. UGH!!

    Reply

    • Posted by Tough Love on September 24, 2015 at 11:54 pm

      Ponzi schemes last only so long. THIS one has just about run it’s course…… and “grandfathering” all CURRENT workers (i.e., keeping their currently promised pensions & benefits) is simply too expensive.
      —————————————————————————————-
      Just encourage him to save (a LOT) OUTSIDE of his workplace pension & benefits.

      Reply

      • If the PW is too dumb to figure out now what financial fix he is in by doing even basic historical research, he will soon figure it out the “hard” way. Just like SS disability recipients are about to find out when their “trust fund” runs out of $ next year.

        All of us in this country are facing financial armageddon of one sort or another; if you do not believe that you better spend more time reading the financial press.

        Reply

        • Posted by S Moderation Douglas is Wrong Again on September 26, 2015 at 7:09 pm

          I like you PS, you are above average in understanding the mess/quagmire we’re in…

          Reply

      • Posted by S Moderation Douglas on September 25, 2015 at 3:34 am

        Perhaps…..
        New Jersey could cap current pensions at $100,000 and proportionally reduce all those between $100,000 and $50,000. Under $50k would remain untouched. I’ve heard worse ideas.

        Reply

        • Posted by Anonymous on September 25, 2015 at 7:30 am

          Perhaps and other ideas as well. Inaction is the road to inevitable ruin!

          Reply

        • Posted by Tough Love on September 25, 2015 at 11:03 am

          All $50k pensions are not the same.

          Yes perhaps OK for someone who has 35-40 years of service and retires at age 65, but definitively NOT OK for the $150K-salary guy who put in 15 years of service before retiring.

          The comparison should always be to what a reasonably comparable Private Sector workers would get.

          Reply

          • Posted by S Moderation Douglas on September 25, 2015 at 12:16 pm

            Yowzah!

            So a doctor who gets a state job at 50 and retires at 65 should lose a portion of his pension over $50k, even though he clearly earns less than a private sector doctor……… And a 40 year janitor with a $40k pension is untouchable, even though his total compensation is 20% higher than a private sector janitor.

            It’s confuseder and confuseder.

            For every complex problem there is an answer that is clear, simple, and wrong.

            H. L. Mencken

          • Posted by Tough Love on September 25, 2015 at 1:09 pm

            S Moderation Douglas, The “doctor” might be a special case (falling in that small category of “professionals”), but if we substituted the myriad of excessively paid managers, what I stated is certainly justified.
            ————————-

            I was simply responding with an exam, but for the fuller answer ……

            ALL Public Sector worker compensation (from the janitor to the doctor) should be comparable to what a similarly experienced, and skilled worker in the Private Sector would be compensated (taking into account ALL elements of compensation … primarily, pay, pensions, and benefits).

            Got a problem with EQUAL ?

          • Posted by S Moderation Douglas on September 25, 2015 at 2:26 pm

            Liberté, égalité, fraternité

            Quoting Tough Love:

            “ALL Public Sector worker compensation (from the janitor to the doctor) should be comparable to what a similarly experienced, and skilled worker in the Private Sector would be compensated…….”

            I’m sorry, but that is (still) a specious and doctrinaire premise.

            Get out of spreadsheet tunnel vision and research “wage compression” in the public sector.

            It is not a new phenomenon. It’s not a local phenomenon. It exists in virtually every first world nation. A public sector doctor does not need to have compensation equal to the average private sector doctor; and a private sector janitor need not have compensation “equal” to a public sector janitor.

            Don’t shoot the messenger. I didn’t write the rules. I didn’t fabricate the data.
            It tis what it tis.

          • Posted by Tough Love on September 25, 2015 at 2:36 pm

            Quoting …. ” A public sector doctor does not need to have compensation equal to the average private sector doctor; and a private sector janitor need not have compensation “equal” to a public sector janitor. ”

            Assuredly, you we be on MY side on the argument if the compensation ADVANTAGE materially favored the PRIVATE Sector.

          • Posted by S Moderation Douglas on September 25, 2015 at 2:53 pm

            Moderation is eponymous.

            By definition, Moderation is non judgemental.

            Moderation is on neither “side”.

            Moderation is a never-ending battle for truth, justice and the American way.

          • Posted by Tough Love on September 25, 2015 at 5:44 pm

            “Moderation” is an idiot ………….

          • Posted by S Moderation Douglas on September 25, 2015 at 5:58 pm

            That’s what the Wonder dog said.

          • Posted by S Moderation Douglas is Wrong Again on September 26, 2015 at 7:14 pm

            That’s what the Wonder dog said.
            I do not know this “Wonder Dog” buy the pup sounds highly intelligent 🙂

        • Posted by S Moderation Douglas is Wrong Again on September 26, 2015 at 7:11 pm

          New Jersey could cap current pensions at $100,000 and proportionally reduce all those between $100,000 and $50,000. Under $50k would remain untouched.

          If you start posting more of these intelligent comments I am going to be forced to change my handle…..

          Reply

          • Posted by Tough Love on September 26, 2015 at 7:21 pm

            Seems that you do not fully understand the proper Public/Private sector pension “comparison”. You should read my longer comment later on, but excerpting from THAT comment:

            “Bottom line ………

            The $50,000 Public Sector pension may “look like” the $50,000 Private Sector pension, but if the Public Sector worker begins collecting it 10 years younger and if it is COLA-increased (as most are, but now suspended in NJ) …. as is OFTEN the case ….. the $50,000 Public Sector pension on an apples-to-apples-basis is EQUIVALENT in “value” to the Private Sector worker getting not a $50,000 pension, but a $50,000 x 200% x 130% = $130,000 pension.”

          • Posted by S Moderation Douglas is Wrong Again on September 27, 2015 at 9:49 am

            $50,000 x 200% x 130% = $130,000 pension.”
            ?????

    • Posted by Anonymous on September 25, 2015 at 10:10 am

      That’s easy, no more accrued benefits, COLA history, and start looking into ObamaCare!

      Reply

  9. Posted by Anonymous on September 25, 2015 at 8:35 am

    IF Trump gets elected let’s not stop at State default. We can default Nationally, that’s what he’s done with his “private” entities in the past. No SS, medicare/caid, Federal pensions including Armed Forces. Oh yeah it’ll be one heck of a party. Let’s get it started!

    Reply

  10. Posted by Anonymous on September 25, 2015 at 12:58 pm

    Vehment anti public blogger breaching their client’s fiduciary responsibility? Walker for President indeed, Tough Luck!

    Reply

    • Posted by Tough Love on September 25, 2015 at 1:02 pm

      “Client’s fiscal responsibility”?

      Where was the exercise of our Elected Officials obligation to represent the best interests of ALL Taxpayers not just Public Sector workers,when (in exchange for the campaign contributions and election support) they granted such grossly excessive pensions & benefits ?

      Reply

      • Posted by Anonymous on September 25, 2015 at 1:11 pm

        Good deflection away from you and my point, you must have been a politician in a previous life!

        Reply

        • Posted by Tough Love on September 25, 2015 at 1:18 pm

          Deflection? Isn’t what I stated the ROOT CAUSE of NJ’s problems ….. the legalized bribing of our Elected Officials by NJ’s Public Sector Unions?

          Reply

          • Posted by Anonymous on September 25, 2015 at 1:25 pm

            And where’s the court ruling to back up your allegation? I think it’s called irrefutable proof. Anyway financial representative to have a fiduciary responsibility to their clients which is what I’m referring to?

          • Posted by Tough Love on September 25, 2015 at 1:45 pm

            Tell it to the judge …. who said NJ CANNOT be forced to fund these absurd pensions.

            And when the Plan assets run out (in just a few years), you can whistle-Dixie trying to get taxpayers to pay the ADDITIONAL $8 Billion annually that would be needed to keep paying JUST the retirees’ pensions.

            And retiree Healthcare ? As Tony Soprano would say …. Forgetaboutit !

            The House of Cards is coming down.

          • Posted by Anonymous on September 25, 2015 at 2:15 pm

            Another deflection from the unsubstantiated allegation you made. Just keep on breaching your client’s fiduciary responsibility and say forgetaboutit to your business model.

          • Posted by Tough Love on September 25, 2015 at 2:34 pm

            You call it a “fiduciary responsibility”.

            I call it theft, orchestrated by collusion between your Unions and our self-interested, contribution-soliciting, vote-selling, taxpayer-betraying Elected Officials.

          • Posted by Anonymous on September 25, 2015 at 2:45 pm

            (Un)fair enough.

  11. Posted by Anonymous on September 26, 2015 at 12:56 pm

    On to the next one, this post has redlined!

    Reply

    • Posted by Anonymous on September 26, 2015 at 2:40 pm

      And “private sector” left unchecked? Our Great Recession would indeed been a Great Depression. Walker indeed, Tough Luck maybe in four or eight years – LOL!

      Reply

      • Posted by Tough Love on September 26, 2015 at 2:51 pm

        Two wrong don’t make a right ….

        The undeniably grossly excessive Public Sector pensions and benefits must be reduced (for the future service of all CURRENT workers) and ALL THE WAY down to a level no greater than those typically granted Private Sector workers.

        AND …. those reductions must factor in not only the formula-factors, but ALSO the incremental value of (a) including COLA-increases, unheard of in Private Sector Plans, and (b) the MUCH younger full/unreduced PUBLIC Sector retirement ages.

        Reply

        • Posted by S Moderation Douglas on September 26, 2015 at 3:10 pm

          Tough Love September 25, 2015 at 4:42 PM

          (On another site where I have apparently worn out my welcome.)

          “Public Sector pensions are ROUTINELY 3x-4x (4x-6x for safety workers) greater in value upon retirement than those of comparable Private Sector workers retiring with the SAME pay, with the SAME years of service, and at the SAME age.”

          Tough Love September 26, 2015 at 10:09 AM

          “Your propensity (when you have no effective response)
          of simply waiving accurate and meaningful commentary by calling it “illogical” or “GIGO” fools only the most uneducated/intellectually-challenged readers.”
          ………………..

          Moderation, one more time:

          “effective response”:

          Your math is not in question for workers with:

          SAME pay,

          SAME years of service,

          SAME age at retirement

          But the result is …….“illogical” or “GIGO”……. unless there is one more “SAME”: equivalent workers.

          The American Enterprise Institute has given us a concrete example compiled from nationwide empirical data of two workers: one private sector, and one public sector, who earn almost exactly the SAME pay ($62,830 year) If they retire at the SAME age with the SAME years of service, the public sector worker WILL have a much higher pension because he works at a Masters degree level but is paid the same as the private sector worker at a Bachelor’s degree level. It is (still) called “deferred compensation”.

          Even the most uneducated/intellectually-challenged readers can understand the concept of working for less today in exchange for a better pension.

          Reply

          • Posted by Tough Love on September 26, 2015 at 5:51 pm

            S Moderation Douglas,

            And the educated/intelligent readers understand that only a very small % of Public Sector workers receive less in “cash pay” while ALL Public Sector workers get multiples greater (3x-6x greater) pensions ….. and when making that compensation comparison, they remember that BEFORE comparing the Public Sector $$$ pension payout to the Private Sector $$$ pension payout they must:

            (a) FIRST, DOUBLE the Public Sector $$$ pension payout to reflect the incremental “value” of being able to collect a full/unreduced payout at an age often 10 years younger than their Private Sector counterparts, and
            (b) SECOND, increase the Public Sector $$$ pension payout by ANOTHER (multiplicatively applied) 30% to reflect (where COLA-increases apply) the incremental “value” of COLA-increases almost never found in Private Sector Plans.
            —————————————————————————-
            Bottom line ………

            The $50,000 Public Sector pension may “look like” the $50,000 Private Sector pension, but if the Public Sector worker begins collecting it 10 years younger and if it is COLA-increased (as most are, but now suspended in NJ) …. as is OFTEN the case ….. the $50,000 Public Sector pension on an apples-to-apples-basis is EQUIVALENT in “value” to the Private Sector worker getting not a $50,000 pension, but a $50,000 x 200% x 130% = $130,000 pension.

          • Posted by skip3house on September 26, 2015 at 7:02 pm

            Put in Perspective, regards

            https://en.wikipedia.org/wiki/Vasili_Arkhipov

            Unlike the other subs in the flotilla, three officers on board the B-59 had to agree unanimously to authorize a nuclear launch: Captain Savitsky, the political officer Ivan Semonovich Maslennikov, and the second-in-command Arkhipov. Typically, Russian submarines armed with the “Special Weapon” only required the captain to get authorization from the political officer to launch a nuclear torpedo. However, due to Arkhipov’s position as flotilla commander, the B-59’s captain also was required to gain Arkhipov’s approval. An argument broke out, with only Arkhipov against the launch.[7]
            Even though Arkhipov was only second-in-command of the submarine B-59, he was in fact commander of the entire submarine flotilla, including the B-4, B-36 and B-130, and equal in rank to Captain Savitsky. According to author Edward Wilson, the reputation Arkhipov had gained from his courageous conduct in the previous year’s Soviet submarine K-19 incident also helped him prevail.[3] Arkhipov eventually persuaded Savitsky to surface and await orders from Moscow. This effectively averted the nuclear warfare which probably would have ensued if the nuclear weapon had been fired.[8] The submarine’s batteries had run very low and the air-conditioning had failed, so it was forced to surface amidst its U.S. pursuers and head home.[9] Washington’s message that practice depth charges were being used to signal the submarine to surface never reached B-59, and Moscow claims it has no record of receiving it either.[citation needed]
            Aftermath
            When discussing the Cuban Missile Crisis in 2002, Robert McNamara, who had been U.S. Secretary of Defense at the time, stated “We came very close” to nuclear war, “closer than we knew at the time.

            http://www.historynet.com/the-marksman-who-refused-to-shoot-george-washington.htm

            the British marksmen, who were equipped with fast-firing, breech-loading rifles of Ferguson’s own design. He whispered to three of his best riflemen to creep forward and pick off the unsuspecting officers. But before the men were in place, he felt disgust at the idea of such an ambush, and ordered them not to fire. He shouted to the American officer, who was riding a bay horse. The American looked his way for a moment, and turned to ride on. Ferguson called again, this time leveling his rifle toward the officer. The American glanced back before slowly cantering away.
            A day later, after he had been seriously wounded himself, Ferguson learned that the American officer he let ride off was most likely General George Washington. “I could have lodged half a dozen balls in or about him, before he was out of my reach,” Ferguson recalled, “but it was not pleasant to fire at the back of an unoffending individual, who was acquitting himself very coolly of his duty—so I let him alone.”
            If Ferguson had taken aim and fired at the officer who turned his back and rode away, there is no telling how the American Revolution would have turned out. Washington lost the Battle of Brandywine and then the city of Philadelphia, but lived on to win the war. A century later the American historian Lyman C. Draper wrote: “How slight, oftentimes, are the incidents which…seem to give direction to the most momentous concerns of the human race. This singular impulse of Ferguson illustrates, in a forcible manner, the over-ruling hand of Providence in directing the operation of a man’s mind when he himself is least of all aware of it.”

            https://www.google.com/?gws_rd=ssl#q=Atomic+bombing+caused+by+wrong+interpretation

            United States National Security Agency
            The story of how an ill-chosen translation of the Japanese word mohusatsa led to the United States decision to drop the world’s first atomic bomb on Hiroshima is well known to many linguists. But perhaps it would not be amiss …. the wrong meaning or failing to inform a decision-maker that there are such nuances could well ..

            https://en.wikipedia.org/wiki/Charge_of_the_Light_Brigade

            The Charge of the Light Brigade was a charge of British light cavalry led by Lord Cardigan against Russian forces during the Battle of Balaclava on 25 October 1854 in the Crimean War. Lord Raglan, overall commander of the British forces, had intended to send the Light Brigade to pursue and harry a retreating Russian artillery battery, a task well-suited to light cavalry. Due to miscommunication in the chain of command, the Light Brigade was instead sent on a frontal assault against a different artillery battery, one well-prepared with excellent fields of defensive fire.
            Although the Light Brigade reached the battery under withering direct fire and scattered some of the gunners, the badly mauled brigade was forced to retreat immediately. Thus, the assault ended with very high British casualties and no decisive gains.
            The events are best remembered as the subject of the poem “The Charge of the Light Brigade” by Alfred, Lord Tennyson. Published just six weeks after the event, its lines emphasize the valour of the cavalry in bravely carrying out their orders, regardless of the obvious outcome. Blame for the miscommunication has remained controversial, as the original order itself was vague.

          • Posted by S Moderation Douglas is Wrong Again on September 26, 2015 at 7:18 pm

            The American Enterprise Institute has given us a concrete example compiled from nationwide empirical data of two workers: one private sector, and one public sector, who earn almost exactly the SAME pay ($62,830 year)

            BS, post a link to it or it is a lie.

          • Posted by Anonymous on September 26, 2015 at 9:48 pm

            Whatever, then ALL inequities regarding public P&B must end. Federal Armed Forces to, no special cases, no if ands or buts. Equal to without regard to circumstance. Ten hut, forward bow!

          • Posted by Anonymous on September 26, 2015 at 9:51 pm

            Oh forgot to mention, what % of enlisted and for what % of their career ever see combat? I mean really, they choose their career as there’s been no draft for some time.

          • Posted by S Moderation Douglas on September 26, 2015 at 11:14 pm

            Tough Love:
            “And the educated/intelligent readers understand that only a very small % of Public Sector workers receive less in “cash pay”

            Biggs, Richwine:
            “Our analysis finds that the average state pays salaries around 12 percent below those paid by large private-sector employers for similarly-skilled workers.”

            Moderation:

            Even if the average is only 4 percent below, there is obviously much more than a “small percentage” making less cash pay.
            _______________________________________________

            More math? fuggedaboudit
            Since it is deferred compensation, the only relevant comparison is total compensation.

            The data has been gathered. The math has been done.

            EPI says the average total compensation of public workers is less than private.

            AEI says average public compensation is more than private.

            CIR says it’s just right. On average.

            They all agree the lower level public workers earn more than private. They all agree upper level public workers earn less.

            Apparently the same pattern is repeated in England.
            And in Japan.
            And in every other OECD country.

            Do you really think the proper response is to unilaterally reduce the compensation of all lower level employees AND simultaneously increase the pay of public sector doctors and lawyers…and lawyers?

            Or perhaps spend some time and effort trying to find out why this compensation compression occurred in the first place, and whether it serves some useful purpose? That would be my choice. Don’t begin a vast project with half – vast ideas.

          • Posted by Tough Love on September 27, 2015 at 12:19 am

            S Moderation Douglas ,

            Read my 10+ past replies to this SAME Old BS.

          • Posted by Anonymous on September 27, 2015 at 8:45 am

            He did, that’s why he’s responding and refitting your same old BS!!!

          • Posted by S Moderation Douglas on September 27, 2015 at 9:26 am

            S Moderation Douglas rambles too much.

            The main point of the last post was, why does Tough Love STILL say:

            “And the educated/intelligent readers understand that only a very small % of Public Sector workers receive less in “cash pay”

            When Biggs and most other researchers say the “average” is about 12% below. Even if, in NJ, the average is 4% below the private sector, doesn’t that mean most public workers earn at least somewhat less in cash pay than the private sector?

          • Posted by Anonymous on September 27, 2015 at 9:35 am

            Oh come on SModerator you know Tough Luck’s right wing conservative sources are the sole and valid source of the universe! Like I’ve said before and you concurred on at least one occasion, reality is somewhere in the middle of both extremes (left and right). The more both sides dig into their ideological corners the less likely any substantive change for the greater good.

          • Posted by S Moderation Douglas on September 27, 2015 at 9:39 am

            Maybe one of the most misquoted lines, from “Charge of the Light Brigade”

            I actually had a boss tell me one time: “Ours is not to reason why, ours is but to do or die.”

            I told him the line is…”ours is but to do AND die.”

            And, no thanks. You go on ahead. Mine is to reason why.

          • Posted by S Moderation Douglas on September 27, 2015 at 10:01 am

            Anonymous,

            In spite of all, I still highly recommend the AEI study on public/private compensation. (That’s the source of the 12% less cash pay for public workers.)

            As I predicted, Tough Love is like a little dog with a big bone on ……ONE result from that study: in final compensation, NJ public workers earn 23% more than the private sector (34% with the value of job security)

            One of the reasons I recommend that study is their detailed description of methodology. The ambiguity in data and the latitudes open to the researchers leaves a lot of room for either error or intentional fudge factor.

            Plus, the material is almost hopelessly out of date before it is even published.

            Yes, reality is somewhere in the middle. And it is constantly changing.

  12. Posted by Tough Love on September 27, 2015 at 12:57 pm

    Quoting S Moderation Douglas ….

    “The main point of the last post was, why does Tough Love STILL say:

    “And the educated/intelligent readers understand that only a very small % of Public Sector workers receive less in “cash pay”
    ——————

    Because per the Biggs (AEI Study) that you are quoting shows that the only Private Sector groups with ANY material “cash pay advantage (noting that those with Bachelors or Masters degrees just about offset, with no advantage one way or the other) are the PHD and Professional categories, and THOSE categories encompass (per Table 1 of this same study) only 3% of Private Sector workers and 10% of Public Sector workers.

    So big woop 3% of Private Sector workers make more …….big woop.
    —————————————————————–

    It doesn’t escape me, and it shouldn’t escape the EDUCATED/INTELLIGENT readers how you always attempt to move the discussion or minimize the IMPORTANT conclusions of such studies when they don’t support your biased agenda (as a Public Sector retiree).

    Even WITH any and all Private Sector cash pay advantages (from ALL education groups), when we shift from the “cash pay” comparison to the “Total Compensation” comparison (by including pensions & benefits) the study shows a VERY material PUBLIC Sector ADVANTAGE, one that 10% nationally, and 23%-of-pay in BOTH CA and NJ.

    And though I’ve said it before, being of HUGE consequence it is worth repeating:

    Dear Private Sector Taxpayers, …… think about how much better YOUR retirement would be if YOU had 10% (or 23% in NJ and CA) EXTRA each and every year to save and invest for YOUR retirement.

    THAT is the amount that Public Sector workers/retirees are now UNJUSTLY taking from YOU.

    Reply

    • Posted by S Moderation Douglas on September 27, 2015 at 1:47 pm

      Perhaps one of us has an edited version. Table 4, p60 in my copy says ALL public worker wages are lower.

      HS diploma………3% less
      Some college……8% less
      BA…………………..18% less
      MA………………….24% less
      Professional……..37% less
      PhD………………….35% less

      Or, as Moderation prefers, ALL private sector wages are higher:

      HS diploma……..3% higher
      Some college…..9% higher
      BA………………….22% higher
      MA…………………31% higher
      Professional……59% higher
      PhD………………..53% higher

      Reply

      • Posted by Tough Love on September 27, 2015 at 7:10 pm

        Mea culpa …

        I too was looking at Table 4 but incorrectly was looking at Total Compensation figures (the last row) but thought they were only the Wage figures (shown in the first row).

        We’re still in THIS position:

        Nationally (for all education groups combined) a 12% Private Sector “wage” (i.e., “cash pay”) advantage, but when all 3 of the major elements of compensation (wages + pensions + benefits) are included, that swings to a PUBLIC Sector advantage of 10%-of-pay nationally and 23%-of-pay for CA and NJ …… and ZERO of that PUBLIC Sector “Total Compensation” advantage is necessary, just, fair (to Taxpayers) or affordable.

        Reply

        • Posted by S Moderation Douglas on September 27, 2015 at 8:17 pm

          It is an interesting study. Now look at those two columns on the left.

          Those are the only two “overpaid” in total compensation. According to Biggs the 2% advantage for BAs is insignificant, so they are “roughly equal” to the private sector. You don’t have to do any math to see that without those two groups, the 12% difference in cash pay would be much larger, and the ten percent total public sector compensation advantage would disappear (actually turn into a public sector disadvantage)

          It would not be productive to do the math, since the underlying data is up to six years old anyway. But it is obvious that those in the lowest thirty to forty percent are the only reason for the public sector advantage in cash pay …..or in total compensation.

          Reply

          • Posted by Tough Love on September 27, 2015 at 8:54 pm

            Keeping things honest and clear ………….

            While the overall PUBLIC Sector “Total Compensation” ADVANTAGE varies widely by education grouping, ONLY the Masters, PHD and Professional categories show a Private Sector advantage, and the percentage of all workers that fall into these 3 categories is (per AEI Study Table 1) ONLY 11% of Private Sector workers and 28% of Public Sector workers.

            The PUBLIC Sector “Total Compensation” advantage remains for the balance ….. 89% of Private Sector workers and 72% of Public Sector workers.

            I agree with your observation that the OVERALL 10%-of-pay (23% in NJ and CA) PUBLIC Sector “Total Compensation” advantage primarily arises from the 61% of Private Sector workers and 40% of Public Sector workers who have not completed a Bachelors degree …… and sufficient in magnitude to override the lower Public Sector “Total Compensation” in the HIGHEST educational categories.

            While you seem to be saying …. well, we shouldn’t fix that compensation differential in the lower educational categories because the “janitor” can’t get by without these healthcare benefits and pension.

            And I say …. sorry, but that doesn’t fly, because the financial impact upon comparable PRIVATE Sector Taxpayers matters, and with the PRIVATE Sector janitor getting at most a very modest 401K Plan and likely ZERO retiree healthcare subsidy, there is ZERO justification for granting the Public Sector janitor a TAXPAYER_FUNDED Public Sector pension (likely worth $750K after a long career) and heavily subsidized retiree healthcare.

    • Posted by Anonymous on September 27, 2015 at 2:53 pm

      Oh what a tangled web TL weaves in their practice to deceive!!! Selective presentation and manipulative interpretation of skewd data.

      Reply

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