Hearing to Examine the Nomination of….

According to the Congressional Record last Thursday there were four Congressional committee hearings:

Let’s take a look at what is likely to be the most consequential one:

Gordon Hartogensis is widely perceived as a nepotism hire for Director of the PBGC:
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According to the only coverage of the hearing I could find (ASPPA News):

Asked by [Senator Ron] Wyden who should be paying multi-employer insurance premiums that are not already doing so, Hartogensis responded that “others than just employers,” could also pay them, including employees.

……

[New Jersey Senator Bob] Menendez expressed concern about Hartogensis’ lack of experience working with pensions. Hartogensis responded that he considers his background to be a plus. “The PBGC will benefit from the perspective of an outsider,” he told Wyden, adding that, “The PBGC will benefit from an experienced technology leader at the helm.”

……

“This is an important mission for me,” Hartogensis said in response to Sen. Bob Menendez’ (D-NJ) remark that he needed “to know that you’re going to stand up with the working class to protect their pensions.” Hartogensis said “I pledge to work with Congress to protect the retirement security of all Americans” and assured committee members, “I understand what’s at stake” and what employees stand to lose.

I assume if there were any questions about 40 million participants losing their pensions or the PBGC multiemployer program becoming insolvent in 2025 then ASPPA News would have reported it. On the other hand, had CNN covered this hearing we might have found out if Mr. Hartogensis likes beer.

18 responses to this post.

  1. Posted by Tough Love on October 3, 2018 at 8:26 am

    Off Topic ………..

    Great article and summary of the pension-mess issue:

    https://californiapolicycenter.org/public-servant-who-made-327491-in-2017-asks-us-to-support-higher-taxes/

    And 2 questions for Stephen Douglas (aka EARTH) ………

    Are his WAGES alone not excessive ?

    Is his (and all other Safety-worker) pension (projected to shortly cost his city annually over 50% of those excessive wages in ADDITIONAL Taxpayer contributions), a COLA-increased 90% of final wages after 30 years, not “LUDICROUSLY EXCESSIVE” ?

    Reply

  2. Posted by skip3house on October 3, 2018 at 10:09 am

    Can’t help wondering how Gordon Hartogensis would reply on this blog to whether the pension solution should be ‘You get what was funded/what was paid for,’ or ‘ We all must make pension promises whole with taxing more?’

    Reply

    • Posted by Stanley on October 3, 2018 at 3:37 pm

      I would prefer A, “You get what was funded”, but some who follow this blog want the general public to be cosigned on the credit that they extended. Hopefully, Gordon will limit assistance to minimally propping up the MEP PBGC. I’m wondering how a tax on pension would work. Anyway, it’s a pretty big tar baby that no one in his right mind would get within miles of.

      Reply

  3. Posted by Stephen Douglas on October 3, 2018 at 11:59 am

    Good question, Brother Love. First, tell us how much you earned last year. Are YOUR wages excessive?

    Short answer, Josh Rauh…

    “I am, however, skeptical that comparability of individual and job characteristics in the public and private sector has been or really can ever be achieved. Attempting to benchmark the compensation of, say, public safety officials to private sector employees is obviously problematic.”

    Joshua Rauh further mentioned that, since there is no real private sector comparison to police or firefighter work, the only proper way to value it is what can be reasonably negotiated.

    You wouldn’t like the long story either.

    Reply

    • “I am, however, skeptical that comparability of individual and job characteristics in the public and private sector has been or really can ever be achieved. Attempting to benchmark the compensation of, say, public safety officials to private sector employees is obviously problematic.”
      It is NOT “problematic” at ALL. These are unskilled/semi-skilled blue collar job where ALL the training is on the job. They are compensated at 1%er levels (or close to it).
      90% of the public could do either job, if given the chance.

      Reply

    • Posted by Tough Love on October 3, 2018 at 3:33 pm

      Quoting …………….

      “Joshua Rauh further mentioned that, since there is no real private sector comparison to police or firefighter work, the only proper way to value it is what can be reasonably negotiated. ”

      That might be true if such “negotiations” we at “arms length” with EACH SIDE trying to get themselves the best deal. But we BOTH know that that is VERY far from what takes place in Public Sector compensation “negotiations”

      The our self-interested Elected Officials, who SHOULD be representing the best interest of the Taxpayers, instead BETRAY THEM …………. gleefully trading their favorable votes on Public Sector pay, pensions, and benefits for Public Sector Union campaign contribution and election support.

      Reply

    • Posted by Stanley on October 3, 2018 at 3:53 pm

      Mr Bindle Stick: “since there is no real private sector comparison to police or firefighter work, the only proper way to value it is what can be reasonably negotiated.

      You wouldn’t like the long story either.”

      Down the road apiece, bud, you won’t like the long story either. You will find that the joke is on you. There are no entities including the U.S. Government with the ability to underwrite these absurd public pension promises. Only the market knows what plumbers, pipefitters, policemen and firemen are worth. And every other trade or profession.

      Reply

      • Posted by Stephen Douglas on October 3, 2018 at 11:21 pm

        Thanks, bub. I’m well aware of the dangers. There will be cuts, even for current retirees (Moi) in some cases. My concern is that the pain should be shared equitably. To do that, you need to understand how the pension actually works, not just bullshit rants.

        Reply

        • Posted by Stanley on October 4, 2018 at 1:45 pm

          You’re going to get your equitable pain, good and hard and a terrific knowledge of pensions won’t be much of a pain killer. You will be the bill of goods specialist.

          Reply

        • Posted by Stephen Douglas on October 4, 2018 at 3:43 pm

          It sounds… almost… as if you would enjoy that.

          Reply

          • Posted by Stanley on October 4, 2018 at 5:43 pm

            No. But no one can say that the pension problem has sprung up out of nowhere. Goldwater warned during his 1964 losing campaign that Social Security was doomed (I don’t remember his exact words). There have been many warnings along the way that more has been promised than what the delivering class can deliver. With all of the talk about caring for children, how can a large majority acquiesce to leaving a pile of pension promises to be paid by the next generation? And then, to think that the pensions will be paid in real terms? I receive modest pensions plus Social Security and I expect sooner or later to get whacked.

          • Posted by Stephen Douglas on October 4, 2018 at 7:55 pm

            And economists have predicted nine of the last five recessions. Defined benefits, including social security, are viable, but they do need reform. New Jersey, obviously, is toast. Serious cuts are coming, fair or not. Slightly less serious cuts may be coming to other states, even with reforms. The catalyst may be just around the corner.

          • Posted by Tough Love on October 4, 2018 at 9:04 pm

            Stephen,

            You bet Public Sector DB pension “do need reform” ……….. and a good/FAIR first step would be reducing the pension accrual rate for the future service of all CURRENT workers by no less than 50% and instituting a 4% reduction in payout for EACH-year-of-age that you elect to begin collecting that pension before age 65 (62 for Safety).

            And even if we did so, they would STILL be greater in value than the retirement security typically granted Private Sector workers.

          • Posted by Stephen Douglas on October 5, 2018 at 12:45 am

            I know you are absolutely obsessed by Biggs 23% claim for New Jersey. I assume that means you also agree with his data showing twenty states are (or were) “market level” compensation, or less. A 50 percent reduction in accrual rates in those states, I assume, would be unnecessary and probably counterproductive. Yet many of those states have pensions in worse shape than California.

            Pension reform… that’s where it’s at. Unfortunately, in some of these states pension reform will almost certainly include pension reduction, even though, according to Biggs, these employees are not overpaid (on average, because that’s apparently what affects the taxpayers.)

            In many of these states, required pension reductions are not a matter of fairness to the tax payer, it’s just the math, as they say. Why?

            “DON’T PAY THE BILLS, THE DEBT GETS LARGER”

            Or, as Leo Durocher said, They’ve got third base so screwed up nobody can play it.

            If New Jersey reduced the pension accrual rate for the future service of all CURRENT workers by no less than 50%, and continues their habit of intentionally underfunding, they will just be in a slightly smaller hole … good news. Bad news, that hole will continue to grow. It’s inevitable.

          • Posted by Tough Love on October 5, 2018 at 7:24 am

            Quoting Stephen Douglas (aka EARTH) …………

            “I assume that means you also agree with his data showing twenty states are (or were) “market level” compensation, or less. ”

            Biggs AEI Compensation study to which you are referring can be found here:

            https://www.aei.org/wp-content/uploads/2014/04/-biggs-overpaid-or-underpaid-a-statebystate-ranking-of-public-employee-compensation_112536583046.pdf

            I don’t know where you are getting your “twenty states”, because if you go to study Figure #6 (on page 67) ONLY 6 of the 50 States show greater PRIVATE Sector Total Compensation and with an average advantage of about 3%-of-pay (reducing to 5 … with 2 of then a hair below zero … with an average advantage of only about 1%-of-pay if you go to Figure #13 which also includes the value of the greater PUBLIC Sector job security) with Figure #6 also showing that the other 50-6=44 states show a PUBLIC Sector Total Compensation ADVANTAGE averaging about 15% of pay (5 times higher than the 6 states going the other way).

            And not a small point…………

            The AEI Study excludes Public Sector Safety workers (Police/Fire, etc.) whose pay, pensions, and benefits are FAR above that of the average non-Safety Public Sector worker. Clearly, had Safety workers been INCLUDED in that AEI Study, the PUBLIC Sector “Total Compensation” ADVANTAGE (shown as a % of pay) would have been materially HIGHER.
            ———————————–
            Seems like you are doing what you do OFTEN ……….. trying to obscure the truth and the DIRE need for VERY material Public Sector pension/benefit REDUCTIONS.

          • Posted by Stephen Douglas on October 5, 2018 at 11:04 am

            Table 2, page 59

  4. Foreign Exchange Trader
    Credit Suisse
    July 1992 – July 1993 1 year 1 month
    New York, NY
    Market maker in USD/Yen
    https://www.linkedin.com/in/gordonhartogensis

    LOL. He is managing his own FAMILY trust, who knows how much is in it and if that is in anyway a qualification.

    Reply

  5. Posted by Tough Love on October 3, 2018 at 4:14 pm

    OFF TOPIC ………. great education for those wishing to learn (including Public Sector workers/retirees willing to take off their blinders and take out their earplugs)…….

    http://www.njspotlight.com/stories/18/10/01/opinion-the-pension-discount-rate-and-investment-rate-are-not-the-same/

    By the way, I agree with everything stated EXCEPT the bullet from the Rockefeller Institute that …………….. “Governments must keep their bargain …………”

    If the author of that bullet meant when saying that we should “keep their bargain”, that all pension benefits should be paid a AS PROMISED, then I strongly disagree (and ESPCIALLY with respect to pension accruals associated with the FUTURE years of service of all CURRENT workers).

    Taxpayer were CHEATED in those “bargains” because our Elected Officials betrayed the Taxpayers in not negotiating for the best deal for THEM. …………. instead (as I stated in an earlier comment) gleefully trading their favorable votes on Public Sector pay, pensions, and benefits for Public Sector Union campaign contribution and election support.

    Reply

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