I’m out of the country right now, traveling, and didn’t have time to respond to you festin, relative to the Stuart Carlson toon of a couple of days ago on Scott Walker. I do like ti when people provide their “evidence” for their positions, so you do have me on that one. So, what I can tell you is that I am intimately involved with pensions. Wrote a groundbreaking book on the topic in 1992, have advised public pension trusttees on their investment policies and allocations, and have built up quite abit of knowledge about the topic. Private unions and public unions have very different constituencies. Putting aside the precipitous decline in private ERISA DB plans, and focusing just for a minute on the public sector, I have seen how the mechanisms of this stuff work from the inside. First, I am NOT anti-union. Never have been. Both union and management have been bad actors from time to time, and for much of their history, unions have been a positive force. But public unions are different because of their employer—the public sector. Actuarial calculations to determine the funded ratio of a DB plan are complicated, and subject to pressure. I have personally seen a (democratic) state governor do the following: a) pressure the actuary to make the funded ratio calculations come out the way he wanted., b) “buy off” the legistature with a series of goodies that I won’t go into (I know this is anonymous, but the details point to which state and which governor and I still work with pension funds) c) “buy off” the current union members as well as the annuitants with a big increase in their healthcare plan, with no increase in premia contributions. and d) secure his union base for the next election—where the unions had threatened action and a withholding of political support unless he “played ball” with them. There were other, less savory aspects of this involving smear campaigns, and other “special investigations” of the trustees who objected to the governor’s move. But the governor got to save $600 million in contributions, “balance” the state budget and get the “credit” for having the pension fund funded ratio not go down (as it would have without the contribution). I have seen the internal calculations on the current cost of this blatant political activity, and it is estimated to have costn the public system $2.6 billion. This amount will have to be added to the well over $300 billion of unfunded liabilities already on the books. I watched the players do their thing. I saw raw political power in play, with threats and the follow-through on threats. The unions were right at the center of this. They didn’t care about the taxpayers. Made no difference to them at all. Neither did the politicians. So who stands up for the taxpayer? The power equation is assymetric and unhealthy. Plus, when you have public employees who are resented because they work less for more money and benefits than the average Joe, how is that a positive thing? This is a complicated subject. It’s true I gave you no fancy stats or links, but it is equally true that I am writing from over 30 years of experience working with public pension funds on a professional basis. So maybe that counts for something.
I’m out of the country right now, traveling, and didn’t have time to respond to you festin, relative to the Stuart Carlson toon of a couple of days ago on Scott Walker. I do like ti when people provide their “evidence” for their positions, so you do have me on that one. So, what I can tell you is that I am intimately involved with pensions. Wrote a groundbreaking book on the topic in 1992, have advised public pension trusttees on their investment policies and allocations, and have built up quite abit of knowledge about the topic. Private unions and public unions have very different constituencies. Putting aside the precipitous decline in private ERISA DB plans, and focusing just for a minute on the public sector, I have seen how the mechanisms of this stuff work from the inside. First, I am NOT anti-union. Never have been. Both union and management have been bad actors from time to time, and for much of their history, unions have been a positive force. But public unions are different because of their employer—the public sector. Actuarial calculations to determine the funded ratio of a DB plan are complicated, and subject to pressure. I have personally seen a (democratic) state governor do the following: a) pressure the actuary to make the funded ratio calculations come out the way he wanted., b) “buy off” the legistature with a series of goodies that I won’t go into (I know this is anonymous, but the details point to which state and which governor and I still work with pension funds) c) “buy off” the current union members as well as the annuitants with a big increase in their healthcare plan, with no increase in premia contributions. and d) secure his union base for the next election—where the unions had threatened action and a withholding of political support unless he “played ball” with them. There were other, less savory aspects of this involving smear campaigns, and other “special investigations” of the trustees who objected to the governor’s move. But the governor got to save $600 million in contributions, “balance” the state budget and get the “credit” for having the pension fund funded ratio not go down (as it would have without the contribution). I have seen the internal calculations on the current cost of this blatant political activity, and it is estimated to have costn the public system $2.6 billion. This amount will have to be added to the well over $300 billion of unfunded liabilities already on the books. I watched the players do their thing. I saw raw political power in play, with threats and the follow-through on threats. The unions were right at the center of this. They didn’t care about the taxpayers. Made no difference to them at all. Neither did the politicians. So who stands up for the taxpayer? The power equation is assymetric and unhealthy. Plus, when you have public employees who are resented because they work less for more money and benefits than the average Joe, how is that a positive thing? This is a complicated subject. It’s true I gave you no fancy stats or links, but it is equally true that I am writing from over 30 years of experience working with public pension funds on a professional basis. So maybe that counts for something.