Pensions-Empowerment!

On July 20 the United Furniture Workers Pension Fund A, Nashville, Tenn. got approval for benefit reductions. The New York State Teamsters Conference Pension and Retirement Fund, Syracuse began benefit reductions on October 1. The International Association of Machinists of Motor City Pension Fund, Troy, Mich., got approval for benefit reductions on November 6.  This paper is dedicated to participants in those plans – you have options not yet explored.

Many companies, banks, investment funds, and pensions, have a commonality.  Monthly there is an inflow of new cash and a need to invest, with sufficient rates, to meet investing (or pension) needs.

The Federal Reserve (Fed), from the beginning in 1913, has a primary function, of economic stability. Part of this is ownership of Monetary Policy, or to influence the economy, by changing interest rates.  Not everyone gets it right every time.  The Fed mismanaged our economy resulting in the recent depression and, likely, losses to your pension.

Consider four consecutive events and results of the same.  First was the Banking Deregulation, or the Gramm–Leach–Bliley Act, effective, Nov 1999.  At this time, average Fed Funds interest rates, or minimum rates banks use to lend money, was about 5.4%, a respectable rate, which allows pensions to have the returns they need.  In November 2001 starts the single largest, consecutive interest rate decreases, hitting about 1.73%, in January 2002. This is the second event to consider, this massive drop in rates, the first misstep of the Fed.

If you erroneously believe the actions of the Fed do not impact your pension, consider the following quote from page three of the 2002 CALSTRS Comprehensive Annual Financial Report, June 30, 2002:

“The prolonged negative (bear) market in U.S. and Non- U.S. stocks contributed to a second year of decline in the market value of the CalSTRS’ investment portfolio from $102.8 to $96.7 billion.”

The fund had a negative net interest rate of 10.2% in 2001 and 6.4% in 2002.

The Fed will take an action to move interest rates, then look for a subsequent change in the economy.  If the desired economic shifts do not happen the Fed takes another interest rate change.  If insanity is repeating a behavior while expecting a different outcome, this single largest, consecutive drop in interest rates is insane.  The Fed did not understand the economy has evolved and has no new theory to cope.  Bad theory, bad actions, and bad results.

The third event to examine and the second Fed mistake, dating from about January, 2002 through May 2004, was to hold interest rates at a very low point for longer than at any recorded time.  This creates a panic in funds, pensions, etc., needing but not having adequate rates on investments.  Since sub-prime loans pay a much higher rate than other assets, sub-prime loans are one investment of “saving grace”.  In the first quarter of 2001 banks reported about $2.4 trillion in real estate loans. By the first quarter of 2008, eight years later, real estate loans are $4.8 trillion, doubling real estate loans held.

The fourth event and third mistake by the Fed was the single largest consecutive interest rate increase, 4.25% increase between June 2004 and August 2006.  This is a repeat of insanity.  While higher interest rates are good for investments, and pensions, there are limits.  How many home owners could see a 4% increase in a mortgage in about two years and then keep their homes?

Page 49 of the 2005 CALSTRS annual reports states:

“Over the past year, the CALSTRS investments produced an absolute return of 11.1%…During the last three years, the portfolio generated a 10.5% return…Over the last five years, the CALSTRS fund produced an average annual return of 2.9%.”

While there were some interest rate movements over this period by the Fed, average rates were about 1.76%.  For funds to cope with low rates investments outside the Fed influence were sought.  Banking deregulation allowed this to happen.

To Furniture Workers, Teamsters, and Machinists, you are not alone and need not be scared.  What is a purpose of a national government if not to respond to national crises?  The Fed, with the best of intentions, sadly mismanaged our economy, likely to your detriment.  Why not hold the government accountable?

You possess the most powerful tool, the American vote.  Use your powers!  Why wait for the next election?  Why not hold your leaders accountable now-tell your leaders to solve this or they will be replaced before the next election!  California did with a fool governor.  As your pension crumbles, theirs remains funded.  This is your country, take it back.  As long as the Fed is selling trillions of dollars in assets, tell your elected officials; “this is for pension relief.  Do this or your replacements will!”

Tim Alexander
Triune
805402-4943
tim@triunegfs.com

56 responses to this post.

  1. Posted by Tough Love on November 27, 2017 at 10:41 am

    Tim,

    Your history of Fed action is interesting and pretty much on the mark, but it’s a BIG leap to assume that such actions support what you appear to be calling for…… a bailout of underfunded pensions.

    Saying …. “why not “hold government accountable” …. gets people pumped up, but what would it mean in the contest of bailing out the underfunded multi-employer plans (to a larger extent than ALREADY called for via PBGC insurance)? Isn’t any such bailout simply a taking AWAY from group to GIVE to another ?

    While you didn’t bring up what you called a Fed “windfall” of $4 Trillion that you mentioned in one of your earlier comments, your going to have a had time convincing anyone that it is really a “windfall” instead of funds really “owned” by ALL Americans, and not to be played with to give advantage to one group over another. For every winner, there is a loser.

    All of that being said, I really do NOT have very strong feeling one way or the other about this issue for MULTI-employer Union Plans OTHER THAN how such a bailout could set a VERY VERY bad precedent for how underfunded State & Local Public Sector Pension Plans are handled as they continue their path toward insolvency.

    While apparently supporting this bailout of underfunded Multi-employer Union Plans, you didn’t (in this post) suggest extending the use of such funds to bailout underfunded State & Local PUBLIC Sector pension Plans. Are you calling for that as well ?

    There is a VERY BIG difference. While I’m sure there were the typically difficult Union/Management negotiations resulting in the Multi-employer pension plans’ benefit structure, assuredly BOTH sides at the negotiating table were TRULY looking out for their own best interests. With the benefit of hindsight, mistakes were made, but no one was being abused, and there was no sucker either in that room (or outside who would unknowingly be handed the bill).

    Taxpayers have VERY CLEARLY been abused via our Elected Officials granting Public Sector workers pensions many multiples greater in value than what comparable Private Sector workers are granted in similar retirement security (either via DB or DC Plans) from their employers……. to an extent that (on average for all workers taken together) it FAR exceeds any lower Public Sector “cash wages” ….. hence yielding MUCH greater Public Sector Total Compensation (wages + pensions + benefits).

    This abuse was deliberate and intentional, with the Public Sector Unions BUYING the favorable votes of our Elected Officials (on Public Sector wages, pensions, and benefits) in exchange for BRIBES disguised as campaign contribution and election support. In any other venue, such actions would be bribery and racketeering. Nobody in the room “negotiating” Public Sector pensions was looking out for the best (or even reasonable) interests of the Taxpayers, and clearly the Taxpayers were earmarked as the 3-rd party “sucker” who would be handed the bill.

    Such actions deserve punishment, not reward…… and most certainly NOT a “bailout”.

    *********************************************************************************

    In all seriousness, if you think you can do better, why not apply for a managerial position (helping establish policy) at the Fed ?

    Reply

  2. Posted by Triune on November 27, 2017 at 11:32 am

    Tough Love-thank you for your comments.
    “Taking from one and giving to another”?
    “For every winner, there is a loser”?
    I pity you and any person with such a dismal outlook on life. If this is what you believe, may I suggest you volunteer with the Special Olympics. For every ounce of love given, you will receive pounds of love in return? Have you ever visited a rescue shelter for animals?
    Perhaps you have been an elected official with limited funds and several competing projects from various departments? The libraries need new furniture, a building requires renovations, new street lights at a busy corner. Is the library a looser if they are delayed a year in favor of the new streetlights? No, all citizens equally benefit, just not at once. This is sharing, a skill taught in kindergarten.
    I continue to say, and you do not hear, that I propose a bailout for all pensions equally, public and private, and reforms. Some say the banking bailout was a bad idea, but, in the end, the banking system was saved and, with capital twice previous levels, banking is much stronger.
    When I reread your prior comments, I see great anger and defiance; my view is right and the rest are fools! It is not my job to change any person or point of view. The best I can do is encourage reflection and discussion.
    You demand I lower myself to your level of win/loose vision. I will do this one last time, in hope of offering a new view of your future.
    Reality 1-Retired persons are the fastest growing demographic in the US, and most depend on some form of retirement. If we take this population of, what, 40 million or so today, and cut their pension by 50% or more, what is the consequence? As we are a consumer economy, we will lose trillions from the national economy. Also remember that for each subsequent year, we add new retirees that worked yesterday, earned and spent. Today, with an underfunded pension, their purchasing power falls, as does our economy. We cannot remove such a volume of spending from a consumer economy.
    Reality 1-Retired persons are likely the largest consumer of publically subsidized health care. If the disposable income is allowed to critically fall, so too falls the quality of life and, a massive increase in subsidized health care, which you, the tax payer, pays. Your bill (taxes) will mushroom.
    Tough Love, you are wrong on so many levels. You spend so much time barking your views, you cannot see the world around you. I cannot change another and have no interest in trying, or barking back and forth. Please, stop talking and writing. Look at the world around you.
    You have my contact info, use it.
    Tim Alexander
    Triune
    tim@triunegfs.com
    805-402-4943
    PS-I do not need to join the Fed to make a difference.

    Reply

    • Posted by Tough Love on November 27, 2017 at 1:21 pm

      Quoting ……..

      ““Taking from one and giving to another”?
      “For every winner, there is a loser”?
      I pity you and any person with such a dismal outlook on life. If this is what you believe, may I suggest you volunteer with the Special Olympics. For every ounce of love given, you will receive pounds of love in return?

      That logic may fly to a LIMITED extent with Multi-employer Plans, but not AT ALL for Public Sector Plans, where the gross excess is palpable and the abuse of taxpayers was calculated, deliberate, and intentional. And FWIW, I have volunteered my time for a worthy cause for decades.

      —————–

      Quoting ………..

      “Perhaps you have been an elected official with limited funds and several competing projects from various departments? The libraries need new furniture, a building requires renovations, new street lights at a busy corner. Is the library a looser if they are delayed a year in favor of the new streetlights? ”

      All are valid needs for Taxpayer funding, but if the revenue isn’t there BECAUSE of grossly excessive PUBLIC Sector Pension & Benefit promises, reducing those excessive promises (for the future service of all CURRENT workers) is the PROPER way to find the revenue to fund legitimate needs.

      ——————–

      Quoting ………..

      “I continue to say, and you do not hear, that I propose a bailout for all pensions equally, public and private, and reforms. Some say the banking bailout was a bad idea, but, in the end, the banking system was saved and, with capital twice previous levels, banking is much stronger.”

      Well then were going to be on different sides of this issue. Reforms are necessary and should be pursued with vigor, but you will never convince me that the 85% of workers who work in the Private Sector should pay unnecessarily high taxes to bail out the underfunded pensions of the 15% who work in the Public Sector with pensions that are both multiples greater than theirs, and were granted ONLY as a result of collusion and underhanded deal-making between their Unions and our Elected Officials.

      The banking bailout was a necessary evil to fend-off the real possibility of a complete collapse of Americas financial system. Having done THAT (because it appeared that we had no other options) in no way justifies bailing out (meaning memorializing) the now multiples-greater Public Sector pensions with Taxpayer funds.

      ___________________

      Quoting ……..

      “You demand I lower myself to your level of win/loose vision. ”

      I’m not demanding anything of you, just pointing out that just because YOU think your position is the correct way (and apparently the ONLY option) forward, I don’t agree with you….. and I believe many (if not MOST) of the the betrayed and beleaguered Taxpayers now called upon to pay for (via their tax-sourced contributions towards Public Sector pensions and the foregone investment earnings thereon) 80% to 90% of the total cost of those multiples-greater Public Sector pensions, would agree with me.

      ——————————-

      Quoting ………

      “f we take this population of, what, 40 million or so today, and cut their pension by 50% or more, what is the consequence? As we are a consumer economy, we will lose trillions from the national economy. ”

      First, if we reduced Public Sector pensions by 50% IN VALUE (via increases in the youngest age at which unreduced pensions can be collected, not just via $$ payout reductions), in the vast majority of cases Public Sector pensions would STILL BE greater in value than those granted comparable Private Sector workers.

      Your national-economy-loss argument holds no water with me. For every dollar taken away from a Public Sector worker/retiree via a reduction in their pensions, there is an equal and offsetting additional dollar that stays in the Taxpayers’ pockets for THEM to spend. I can’t fathom how anyone who purports to be an “economist” doesn’t understand that.

      ———————-

      Quoting ……..

      “Retired persons are likely the largest consumer of publically subsidized health care. If the disposable income is allowed to critically fall, so too falls the quality of life and, a massive increase in subsidized health care, which you, the tax payer, pays. Your bill (taxes) will mushroom.”

      America has a whole set of difficult issues as to the most effective way to deliver quality healthcare, and how/who to pay for it. But putting that aside, are PUBLIC Sector retirees ….. via being granted outsized pensions …… more worthy of quality medical care than Private Sector retirees? If the Pensions of Public Sector retirees were reduced to a level EQUAL to that granted their Private Sector counterparts, both would be on an equal footing in spending for ALL needs …. including medical care in retirement.

      Stated differently, why should PRIVATE Sector Taxpayers (as a group) be able to afford only lower quality medical care (or more often have to seek charity care) BECAUSE more of their income is taxed-away to provide Public Sector retirees.multiples-greater pensions that affords them better access to quality medical care?

      Reply

      • Posted by Anonymous on November 27, 2017 at 2:12 pm

        She is a greedy hoarder.

        Reply

        • Posted by dentss dunnigan on November 27, 2017 at 2:28 pm

          I swear by my life and my love of it that I will never live for the sake of another man, nor ask another man to live for mine.”
          ― Ayn Rand, Atlas Shrugged

          Reply

          • Posted by Anonymous on November 27, 2017 at 2:36 pm

            Ayn Rand was a Russian-American novelist, philosopher, playwright, and screenwriter. She is known for her two best-selling novels, The Fountainhead and Atlas Shrugged, and for developing a philosophical system she called Objectivism. Wikipedia
            Born:
            February 2, 1905, Saint Petersburg, Russia
            Died:
            March 6, 1982, Manhattan, New York City, NY
            Spouse:
            Frank O’Connor (m. 1929–1979)
            Movies:
            Atlas Shrugged: Part I, Atlas Shrugged Part III: Who Is John Galt?, The Fountainhead

          • Posted by Anonymous on November 27, 2017 at 2:40 pm

            Are you suggesting cutting ALL ‘safety net’ programs – or are you suggesting exceptions to the excerpt you posted??

        • Posted by S Moderation on November 27, 2017 at 3:08 pm

          The Ayn Rand paradox…

          “Those who advocate public scholarships [or Social Security benefits] have no right to them; those who oppose them have,” Rand wrote. In fact, she seemed to see it as something approaching the duty of those opposed to the redistribution of wealth to accept such payments:

          Her books provided wide-ranging parables of “parasites,” “looters” and “moochers” using the levers of government to steal the fruits of her heroes’ labor. In the real world, however, Rand herself received Social Security payments and Medicare benefits under the name of Ann O’Connor (her husband was Frank O’Connor).

          Also, considered a schlock novelist and extremely misogynistic.

          Reply

    • Posted by Anonymous on November 27, 2017 at 2:31 pm

      Thank you Tim for your insightful and we’ll rounded logic! Clearly coming from a point of pure love (not tough love) your continued commentary will spread ripples through the economic cosmos. Everyone thinks responsibility lies with someone else. Guess they never looked in the mirror!

      Reply

      • Posted by Tough Love on November 27, 2017 at 4:04 pm

        …………………. lol

        Reply

      • Posted by Triune on November 27, 2017 at 4:58 pm

        Anonymous-I appreciate your words, thank you. Economic theory and practice must merge at some point. I attend international conferences and see the impressive papers, with numbers and algorithms, and no application to the real world.
        If I can look into the mirror and change, then anyone can.
        Criticism is the most distructive weapon and the easiest of past times. It is tempting to appoint our-selves as judge, jury, and executioner (just read the first comment). If I have never been injured by an IL cop, NJ sanitation worker, MI furniture worker or MA Machinists, why do I say they need; “to be punished!” What give one fool the right to make such a claim? How do you reach a fool and encourage; “a moment of personal reflection?”
        At each step of the way, I speak about both public and private pensions, but my words are not heard. I speak about a bailout and, reforms. Can you imagine saying “Elephant”, and the other party hears “blue”?
        I stress over and over that a bailout need not have additional taxpayer monies. The Fed has purchased assets starting close to a decade ago. The Fed wants to sell these assets. I simply say reserve these assets, and the relate proceeds, for a pension bailout. But the fool only hears “blue”.
        Call any time
        Tim Alexander
        Triune
        tim@triunegfs.com
        805-402-4943

        Reply

        • Posted by Tough Love on November 27, 2017 at 8:24 pm

          Ok ….you’ve slipped back into “preacher” mode.

          By-the-way, you were responding to a comment that included ……

          ” …….. your continued commentary will spread ripples through the economic cosmos.”

          Have you ever heard of “sarcasm”?

          Reply

          • Posted by Anonymous on November 27, 2017 at 9:20 pm

            Your, once again, incorrect opinion as my comment to Tim was intended to be sincere.

          • Posted by Tough Love on November 27, 2017 at 9:23 pm

            That’s even funnier ……………… lol

          • Posted by Anonymous on November 28, 2017 at 8:55 am

            Glad you got a laugh out of it. Keep the humorous state of mind it might ease your obvious pain.

          • Posted by Tough Love on November 28, 2017 at 7:35 pm

            If you are SERIOUS about comments like this ……… “….. your continued commentary will spread ripples through the economic cosmos.”….. I will certainly keep laughing.

  3. Posted by S Moderation on November 27, 2017 at 4:03 pm

    “Isn’t any such bailout simply a taking AWAY from group to GIVE to another ?”

    Huzzah!!

    Here is an instance I can actually agree with Mr. Love (conditionally, of course).

    That’s what government does, as in the progressive income tax, earned income tax credit, progressive Social Security benefit formula, Medicare, SNAP, housing assistance, etc., etc.

    AND…

    Public sector pensions. Whether you agree or not, government encourages employers to pay a living wage (even legislates it, via minimum wage laws.) Government encourages employers to provide medical insurance (and legislates workers comp. laws.) Government encourages employer subsidized retirement (legislated, in the case of Social Security and the Railroad Retirement Act). In all these, and others, what message would the government send if they did not lead by example?

    ………………………………………………………………..
    Average…

    Quoting Mr. Love…

    ( Public Sector workers pensions) “to an extent that (on average for all workers taken together) it FAR exceeds any lower Public Sector “cash wages” ….. hence yielding MUCH greater Public Sector Total Compensation (wages + pensions + benefits).”

    You routinely correct SeeSaw, and others when they say the average CalPERS pension is $31,000 a year. So be it. She claims this is a valid number because it represents the total CalPERS payments; $31,668/yr times 648,645 pensioners is a total of $20.5 billion.

    You claim the “proper” comparison is that for full career retirees only.

    Are you not now arguing the opposite? “(on average for all workers taken together)”
    The average is very strongly skewed by the lowest level workers. Higher up the skill, education level, public employees EVEN WITH their so-called exorbitant pensions and benefits earn a total compensation equal to or less than their private sector equivalents. It is, for better or worse, income redistribution, described and lauded by Monique Morrissey, and even recommended by Ed Ring, of the libertarian California Policy Center…

    “Impose a ceiling on pension benefits to retirees, based on the principle that pensions are supposed to ensure retirement security, not lavish affluence. Similarly, establish a floor for pension benefits to retirees, based on the principle that employees at the low end of the pay scale are nonetheless entitled to retire with an income sufficient to live with dignity.”
    ……………………………………………………………….
    Average…

    Finally, your assertion, again, that…

    ” to an extent that (on average for all workers taken together) it FAR exceeds any lower Public Sector “cash wages” ….. hence yielding MUCH greater Public Sector Total Compensation (wages + pensions + benefits).”.

    Even if you consider only the “average”, your statement is based on ONLY ONE of several studies which have varying results, namely that “on average” public workers, even when pensions and benefits are included, earn roughly equal or slightly less than equivalent private sector workers. You don’t have to agree with it, but the conflicting studies are out there. Personally, I would take them all with a grain of salt.

    SMH

    Reply

    • Posted by S Moderation on November 27, 2017 at 4:06 pm

      For what it’s worth, the author of the above mentioned study also now says there is NO retirement crisis.

      Very interesting.

      http://www.aei.org/publication/memo-to-trump-there-is-no-looming-retirement-crisis/

      Reply

    • Posted by Tough Love on November 27, 2017 at 4:26 pm

      SM-Whatever,

      Oh please, While some (certain rich Republicans) may indeed took to take from the poor and give to the rich, it’s NOT the Govt’s job to do so ……… as in making those (non-Public-Sector-worker Taxpayers) with far LESS, subsidize those with far MORE (Public Sector workers).

      Quoting ….

      “Public sector pensions. Whether you agree or not, government encourages employers to pay a living wage (even legislates it, via minimum wage laws.) Government encourages employers to provide medical insurance (and legislates workers comp. laws.) Government encourages employer subsidized retirement (legislated, in the case of Social Security and the Railroad Retirement Act). In all these, and others, what message would the government send if they did not lead by example?”

      The “example” they are showing is simply that they (our Elected Officials) can be BOUGHT if the price is right………….. you-scratch-my-back, and I’ll-scratch-yours

      ——————————

      Quoting ……..

      “You claim the “proper” comparison is that for full career retirees only.”

      I never said such, and at EVERY (reasonably) service duration a comparison of total Compensation of Public and Private Sector workers would provide far greater Public Sector pensions. With universally richer formulas and younger unreduced retirement ages, Public Sector pensions are richer across the full spectrum of service durations.

      ———————-

      Quoting …………

      ““Impose a ceiling on pension benefits to retirees, based on the principle that pensions are supposed to ensure retirement security, not lavish affluence. Similarly, establish a floor for pension benefits to retirees, based on the principle that employees at the low end of the pay scale are nonetheless entitled to retire with an income sufficient to live with dignity.””

      All fine and dandy with me ….as long as ……. in total for all workers taken together …… the Public & Private Sector total compensation is near equal.

      We (the Taxpayers) don’t owe Public Sector workers ….on average as a group (equalized in size of course) ….. a better deal.

      —————————

      Re your last paragraph. I know of no study OTHER than that AEI Study that shows STATE-SPECIFIC differentials in both wages and Total Compensation for Private Sector vs States Public Sector workers ……………State-specific being very important due to the wide variations from State to State. Provide a link to another and I’ll read it.

      Reply

      • Posted by S Moderation on November 27, 2017 at 5:35 pm

        SeeSaw November 16, 2017

        The average CalPERS pension is about $30,000–not $55,000.

        Tough Love November 16, 2017 – 10:51 pm

        SeeSaw, yes the average is likely about $30,000 when you include: (a) those who worked only part-time and hence received very small pensions, (b) those who had short careers and hence had far lower than typical pensions, (c) those who retired decades ago under lower salaries and lower pension formulas, (d) the 50% survivors of deceased Public Sector workers. Now how about apologizing for trying to mislead the readers.

        ……………………………………………….
        S Moderation…

        Yes, Mr. Love, the “average” total compensation may be greater for the public sector (emphasis on “may”), but that includes lower level workers whose pensions and benefits far exceed those of equivalent private sector workers.

        AND it includes hundreds of thousands of public-sector workers whose total compensation is equal to or less than those in the private sector. Even in California and New Jersey.

        Average/smaverage

        SMH

        (Daily Republic, Solano County)

        Reply

    • Posted by Triune on November 27, 2017 at 5:04 pm

      S Moderation- thank your for your comments and a single question for you. Who do I take from?
      The Fed has already purchased assets, close to a decade back. All profits are remitted to the Treasury, and then to Congress to spend. Do we accept Congress can responsibly spend this money?
      This money is a windfall. I look out and see a pension bailout, along with prudent reforms, is both compassionate, a trait ingrained in America from the start, and the most economically viable use of the money.
      Keep your comments coming.
      Tim Alexander
      Triune
      805-402-4943

      Reply

      • Posted by PS Drone on November 27, 2017 at 6:01 pm

        In your sometimes incomprehensible musings, do you ever contemplate the $20 Trillion of booked federal debt and the $100 Trillion (or more) of unrecorded net liabilities (for SS, Medicare and Federal Pensions and POB) when you cavalierly call for a federal “bailout” of all under-resourced pension plans? Maybe instead you should focus on the sorry fiscal state of the PBGC whose function when set up was to bailout ERISA regulated DB plans. You are hopelessly naive.

        Reply

        • Posted by Triune on November 27, 2017 at 11:40 pm

          I have a proposal for funding there. An income stream not based on tax payer dollars.
          Tim Alexander
          Triune
          tim@triunegfs.com
          805/402-4943

          Reply

          • Posted by Tough Love on November 28, 2017 at 12:46 am

            I’d love to read a CLEAR such plan* …….. and money to pay off taxpayer obligations w/o costing them a dime !

            A win/win ………. unless it’s phony, just an expansion of debt (printed money), or unspent debt existing from past sales.
            ____________________

            * but PLEASE keep the fluff to a minimum.

      • Posted by Tough Love on November 27, 2017 at 6:05 pm

        I love to hear you thoughts on what “prudent reforms” you believe should be put in place for State & Local Public Sector Plans.

        Ass far as your statement ……. “This money is a windfall. I look out and see a pension bailout” ………… if you are suggesting a “bailout” of the now ludicrously excessive, unnecessary, unjust, unfair to taxpayers, and clearly unaffordable State & Local PUBLIC Sector Plans, I couldn’t disagree with you more.

        But yes, we are each entitled to our own opinions..

        Reply

        • Posted by Earth on November 27, 2017 at 7:52 pm

          Earth to blog:

          Synathroesmus alert !!!

          the now ludicrously excessive, unnecessary, unjust, unfair to taxpayers, and clearly unaffordable State & Local PUBLIC Sector Plans,

          Foul, excessive use of adjectives!

          Reply

          • Posted by Tough Love on November 27, 2017 at 8:55 pm

            Thanks,

            It’s always a “positive” when I learn a new word. …… “synathroesmus”. …. one of the benefits of reading commentary.

            Wow, that one is even difficult to pronounce.
            *******************************

            Double wow……….. even my spell-check thinks it’s wrong (being underlined in red) ……..or it’s not in it’s database.

  4. Posted by S Moderation on November 27, 2017 at 7:15 pm

    “Who do I take from?”

    Gadzooks! Now you have me agreeing with Mr. Love twice in one day. (Conditionally, of course.)

    I don’t know about purchased assets and windfalls, but if there is “free” money in government hands, it belongs to everyone. If you can convince Congress to use it to bailout private pensions, go for it. I think you will find very stiff opposition, whether you use the empathy tack, or use the “good for the economy” tack.

    “Do we accept Congress can responsibly spend this money?”

    Do we have a choice? That’s the way it works.
    ………………………………..
    For the hat trick, one more time I agree with Mr. Love…

    “All of that being said, I really do NOT have very strong feeling one way or the other about this issue for MULTI-employer Union Plans …”

    Neither do I (Conditionally, of course.)

    “…OTHER THAN how such a bailout could set a VERY VERY bad precedent for how underfunded State & Local Public Sector Pension Plans are handled as they continue their path toward insolvency.”

    If bailouts, or partial bailouts for union plans will help stabilize, or improve the economy, the same would be true for public sector pensions. With substantial conditions, true pension reform, not just blanket reducing of pensions.

    Aye, there’s the rub.

    SMH

    Reply

    • Posted by Tough Love on November 27, 2017 at 7:48 pm

      I’m speechless !

      You would have hit a HOME RUN if you defined “true pension reform” (meaning for Public Sector Plans) being retirement security (pensions & benefits) EQUAL in amounts for the Public & Private Sectors …. along with adjustments to make wages equal as well.

      Reply

      • Posted by Triune on November 27, 2017 at 9:03 pm

        Thank you, Professor Joe Nation of Stanford University is doing excellent work and has a report suggesting numerous reforms. I will work to get a piece published on these recommended reforms. Thank you for your constructive comments.
        Tim Alexander
        Triune
        tim@triunegfs.com
        805-402-4943

        Reply

        • Posted by Tough Love on November 27, 2017 at 9:37 pm

          I’m assuming your above comment was supposed to be a reply to SMH.
          *******************************************************************************************
          No problem finding Joe Nation’s articles Studies and reports.

          Googled …………. “Joe Nation” Stanford Institute for Economic Policy Research.

          Reply

    • Posted by Triune on November 27, 2017 at 9:00 pm

      “Do we accept Congress can responsibly spend this money?”
      Do we have a choice? That’s the way it works.
      No, it is not. Congress works for you. You have the most powerful tool, the vote. American need to reclaim Congress. The way it is suppose to work is Americans set the priorities for Congress.
      You seem to have forgotten the way it is “suppose to work”
      Tim Alexander
      Triune
      tim@triunegfs.com
      805-402-4943

      Reply

      • Posted by Tough Love on November 27, 2017 at 11:16 pm

        Quoting ………..

        ” Congress works for you. You have the most powerful tool, the vote. American need to reclaim Congress. The way it is suppose to work is Americans set the priorities for Congress.”

        naiveté …………. the quality or state of being naive

        Reply

      • Posted by other Anonymous on November 28, 2017 at 11:41 pm

        Meet the new Congress, same as the old Congress

        Reply

        • Posted by Anonymous on November 29, 2017 at 8:23 am

          TL believe the same congress that stole money from Social Security fund, that was the taxpayers money she is okay with that though.

          Reply

  5. Posted by George on November 28, 2017 at 1:37 am

    Don’t expect to see any asset sales.

    Fed nominee Powell, once hawkish, now champions Yellen’s focus on jobs

    https://uk.reuters.com/article/us-usa-fed-powell/fed-nominee-powell-once-hawkish-now-champions-yellens-focus-on-jobs-idUKKBN1DS0FG

    Still, even well-known economists have surprised once in the top job. A review of tenures of Arthur Burns, Alan Greenspan and Ben Bernanke by economists Alexander Salter and Daniel Smith showed all three implemented policies they opposed before taking office.

    “Prior to serving as Fed chairman, each favored a degree of monetary restraint, acknowledging the past errors of the Fed,” Salter and Smith wrote.

    “But during their tenure at the Fed, these economists’ views switch to promoting monetary activism,”

    Reply

  6. Posted by Anonymous on November 28, 2017 at 2:01 pm

    J Giles To e Stinks Hell Yeah!

    Reply

  7. Posted by S Moderation on November 29, 2017 at 12:19 am

    This is the way the world ends
    This is the way the world ends
    This is the way the world ends
    Not with a bang but a whimper.

    Leo Kolivakis had a recent article (November 27) on the NCPERS study that pension funds can continue to pay pensions even though they are not fully funded (or even close).

    http://pensionpulse.blogspot.ca/2017/11/time-to-dismantle-us-public-pensions.html
    ………………………………………………………………………………
    Did anyone but me assume that the first pensions to fail would be those in New Jersey, Illinois, and Kentucky?

    The canaries in the coal mine?

    If you are familiar with the Loyalton, California, you might change your mind. In this case, CalPERS has enough assets($327 billion.) to pay pensions for years (way longer than I will live).

    But…

    Cities like Loyalton have steadily increasing contributions, and, apparently, if they cannot or will not pay the required amount, CalPERS can cut them loose and pay the pensioners based on their current balance using an assumed rate of about 3%. In other words, 50% cuts or more for all new and current retirees.

    Are any other states set up this way?

    Reply

    • Posted by Tough Love on November 29, 2017 at 12:59 am

      In NJ, the Judge’s Plan will be the first to run out of assets, but it’s small (and because I’m sure they don’t want to cross the judges) that they’ll continue paying them somehow,

      The real test will be when the Teacher’s pension Plan runs out of assets (in about 5 years). It’s HUGE, a STATE responsibility, and there will only be 2 options* when it goes pay-go …. huge tax increases or cuts in the pension payments.

      Obviously I’m rooting for the latter, but not optimistic.

      * or perhaps a 3-rd option ….. end or materially reduce their retiree healthcare benefits and use the “savings” to continue paying their pensions

      Reply

  8. Posted by Triune on November 29, 2017 at 8:56 am

    Assuming you are correct and the pension fails, what next. When looking at the local communities, consider the economic losses to business. This loss would likely have a ripple effect. It is plausible that some local business could fail.
    It is also likely, that considering the purchasing power represented in the entire NJ Teachers pension that is paying, allowing the fund to fail may be an economically measurable event on the state level. It does not take many failures to cause an economic slowdown.
    What about a fourth option? Valid, workable, and available now! Readers please tell me. Do we explore the fourth option, or accept the limited vision of a Snarkasauras, roll over, and play dead?
    What does it take to motivate people to stand up and be counted? Please share your thoughts, emails and calls welcome
    Tim Alexander
    Triune
    tim@triunegfs.com
    805-402-4943

    Reply

    • Posted by Tough Love on November 29, 2017 at 9:25 am

      Quoting Tim A…….

      “Assuming you are correct and the pension fails, what next. When looking at the local communities, consider the economic losses to business. This loss would likely have a ripple effect. It is plausible that some local business could fail.”

      I stated it earlier but will repeat it……………

      Let’s assume the Teacher’s Plan will need an incremental $5 Billion annually to continue paying full pensions. In order for that to happen that incremental annual $5 Billion will need to come form NJ’s Taxpayers (ignoring that a small part may come from reduced services). Thus it’s a SHIFT of taxpayer money to the retirees, and the SAME TOTAL AMOUNT will be spent by one group or the other. There is NO net reduction in spending or economic loss

      I’d love to hear a VALID 4-th option, but the $4 trillion you have referred to is NOT “free money” and (if it truly exists), it belongs to all of Americas citizens, and it would be an unconscionable use of tortoise funds to prop up Public Sector pensions given that by any and every reasonable metric they are ludicrously excessive.

      Reply

      • Posted by Tough Love on November 29, 2017 at 9:27 am

        lol…………………… “tortoise” should have been “those”

        Reply

      • Posted by S Moderation on November 29, 2017 at 1:47 pm

        “… Public Sector pensions given that by any and every reasonable metric they are ludicrously excessive.”

        Are Teachers Paid Too Much? How 4 Studies Answered 1 Big Question

        https://www.theatlantic.com/business/archive/2011/11/are-teachers-paid-too-much-how-4-studies-answered-1-big-question/247872/

        Even if America’s best and the brightest aren’t becoming teachers, Richwine and Briggs’ concede that there’s a good argument for paying teachers more. As they note: “We have shown that existing teachers are paid above market rates, but recruiting highly effective teachers into the profession may require present levels of compensation or perhaps even higher levels.” 

        ……………………………………
        “It sometimes requires ignorance and arrogance to know something for sure.” 
        ― Mokokoma Mokhonoana

        Studies/schmudies… The average public worker is overpaid, therefore every public worker is overpaid… (and other logical fallacies)

        All the studies do agree that teachers (and other public workers) have a higher percentage of their compensation in pensions and benefits, therefore generally have higher pensions.

        Howsomever… to infer from that, that their total compensation is higher, is excessively ludicrous.

        I.e., “You cannot compare pensions outside the context of total compensation.”

        Reply

        • Posted by Tough Love on November 29, 2017 at 2:35 pm

          SM ………

          Teachers should be compensated (in wages + pensions +benefits) based upon the “value” they bring to the table (just the way Private Sector employers compensate THEIR employees), which for some means a bit more, for some quite a bit more, for other a bit less, for some quite a bit less, and for more than an incidental #, being fired as incompetent or untrustworthy
          .
          And one of the biggest impediment to paying teachers based on the VALUE they bring to the table are their Unions.. No offense to them, but shop teachers, gym teachers, and yes (sociology/philosophy/art-history, etc. teachers) SHOULD be compensated LESS that those who are certified to teach in the STEM fields (math, physics, chemistry, biology, engineering, etc.). The scarcity of teachers in the STEM fields is BECAUSE they are under-compensated. And the LACK of any scarcity of teachers in the other fields supports the notion that many are unnecessarily over-compensated.

          By Union insistence and Elected Official acquiescence, instead of paying teachers what they are truly WORTH, are are forced into the SAME compensation structure, with pay based on seniority and educational attainment ….. even when that additional degree (or additional credits) has NOTHING to do with the classes that they teach.

          It’s ridiculous.

          Reply

          • Posted by S Moderation on November 29, 2017 at 3:43 pm

            “The scarcity of teachers in the STEM fields is BECAUSE they are under-compensated.”

            And yet they have pensions worth at retirement at least twice that of a similar private sector worker.

            Go figger.

          • Posted by Tough Love on November 29, 2017 at 4:27 pm

            SM,

            Clearly many STEM teachers are under-“PAID” in “wages”. But not all, since I’m sure there are SOME Math/Science teachers with an MS + 30 additional credits (likely bringing them to the maximum salary scale) but who remain ineffective teachers.

            And YES, I am changing what I stated above (blanketly applying to ALL STEM teachers)…………

            Whether they are under-“COMPENSATED” will vary greatly with the particular skills/knowledge/experience they possess and how “effective” thet are as a teacher. I’m sure SOME STEM teachers are under-“COMPENSATED” and some are under-“PAID” but NOT under-“COMPENSATED”.

          • Posted by S Moderation on November 29, 2017 at 5:03 pm

            Well, as long as you’re SURE…

          • Posted by Anonymous on November 30, 2017 at 12:49 am

            “It sometimes requires ignorance and arrogance to know something for sure.”
            ― Mokokoma Mokhonoana

      • Posted by Earth on November 29, 2017 at 1:50 pm

        Earth to S Moderate… whaterver:

        It never gets old.

        Reply

  9. Posted by Anonymous on November 29, 2017 at 10:02 am

    Qu’ils mangent de la brioche!

    (Or mock tortoise soup)

    Reply

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