Is it possible to get rich — or richer — while destroying the public pension system? Rolling Stone‘s Matt Taibbi says it’s happening all the time, thanks to the blueprint drawn up by a little-known politician in Rhode Island with lots of friends on Wall Street. The state “reformed” its pension system that turns over millions to hedge funds which reaped more millions in the fees to “manage” the money.
Not only did these middle-class workers already lose huge chunks of retirement money to huckster financiers in the crash, and not only are they now being asked to take the long-term hit for those years of greed and speculative excess, but in many cases they’re also being forced to sit by and watch helplessly as Gordon Gekko wanna-be’s like Loeb or scorched-earth takeover artists like Bain Capital are put in charge of their retirement savings.
Here’s what this game comes down to. Politicians run for office, promising to deliver law and order, safe and clean streets, and good schools. Then they get elected, and instead of paying for the cops, garbagemen, teachers and firefighters they only just 10 minutes ago promised voters, they intercept taxpayer money allocated for those workers and blow it on other stuff. It’s the governmental equivalent of stealing from your kids’ college fund to buy lap dances. In Rhode Island, some cities have underfunded pensions for decades. In certain years zero required dollars were contributed to the municipal pension fund. “We’d be fine if they had made all of their contributions,” says Stephen T. Day, retired president of the Providence firefighters union. “Instead, after they took all that money, they’re saying we’re broke. Are you ******* kidding me?”
There’s an arcane but highly disturbing twist to the practice of not paying required contributions into pension funds: The states that engage in this activity may also be committing securities fraud. Why? Because if a city or state hasn’t been making its required contributions, and this hasn’t been made plain to the ratings agencies, then that same city or state is actually concealing what in effect are massive secret loans and is actually far more broke than it is representing to investors when it goes out into the world and borrows money by issuing bonds.
Coincidentally, or maybe not, David Sirota at Salon carries an identical story, focusing on the Pew Foundation’s work, which Sirota says manufactured the appearance of a pension fund crisis to spur the politicians toward “reform.”
Perhaps the most famous illustration of the pervasiveness of this deceptive argument comes from Detroit. When the city recently declared bankruptcy, much of the media and political narrative around the fiasco simply assumed that public pension liabilities are the problem. Few noted that both Detroit and the state of Michigan have for years been spending hundreds of millions of dollars on wasteful corporate subsidies. Worse, the very same political leaders pleading poverty to demand cuts to municipal pensions were simultaneously promising to spend more than a quarter-billion taxpayer dollars on a professional hockey arena.
But as outrageous as the blame-the-pensioners mythology from Detroit is, it is the same misleading mythology that is now driving public policy in states across America.
He noted in Rhode Island, for example, the state was giving former baseball player Curt Schilling millions of dollars in subsidies, which he promptly blew.
“In bequeathing its brand to an Enron billionaire and embracing this campaign, Pew is being steered back toward its ultraconservative roots. In the process, the retirement security of millions of Americans is being jeopardized,” he says.
NPR’s Tovia Smith tackles the story of the homeless man in Boston who turned in a lost bag of cash and traveler’s checks, and the story about the football players who left money on a store counter when the cashier wasn’t there.
“There are lots of people who suffer from moral myopia, and so when you see this good happening, it renews some of your faith,” says University of Texas professor Mimi Drumwright. She says these are the types of stories you hope will inspire copycats: “The reports of these good deeds probably are going to begat more good deeds, and that is a good thing.”
Wait for it. It’s public radio. You know it’s coming.
But at the risk of twisting any of these precious good-news stories into more bad news, experts say there may be a downside to overplaying it.
Bingo, the staple of what keeps us working: “experts.”
“They did do the right thing, and that’s commendable. But heroic? I think not,” says Carnegie Mellon ethics professor Peter Madsen. He sees the high praise swirling around the stories as a kind of moral grade inflation.
“They had an obligation to do what they did. It was not above and beyond the call of duty. They really just did what we should have expected them to do,” he says.
When you celebrate what should be ordinary behavior as extraordinary, experts say, it sends a dangerous message.
Like, “most people are good,” for example.
There are corrupt politicians, mass murderers, and despots who use chemical weapons on innocent people. But what worries you, Daniel Effron of the London Business School?
“I do worry about a culture in which people are giving selves credit for not having done terrible things. It sets a really low bar for what it takes to be a good person.”
Why does the news leave people with a feeling of hopelessness and despair? It’s good for us. It sets a high bar.
So don’t watch stuff like this.
What is lost when a radio network lays off employees besides a familiar voice on the radio? NPR is about to find out with its recent announcement it intends to slash its workforce.
Former NPR ombudsman Jeff Dvorkin sees an additional detriment — the loss of a newsroom’s memory. But, he says, it’s time to make room for a younger crowd:
While there is gloom among the veterans, the young journalists I meet are eager to take over. My students in the journalism program at the University of Toronto Scarborough Campus are not put off by the moaners in the media.
This is good and augers well for the future of journalism.
But if newsrooms are losing their veterans, they are also losing their historical memory and connection to the newsroom’s culture. And that is irreplaceable.
This is an opportunity for journalism schools to fill some of that role of mentorship and institutional memory. J-School profs can’t all know the minutiae of each newsroom. But we can impart what some of the best values all media share. Ideally, we should be imparting that sense of mission and excitement about what journalism can offer.
Neil Carruthers was 34. Tina Nedulco just 29. They were married in 2010 and 9 months later her cancer returned, the Boston Globe writes today.
“He said, ‘Mom, you don’t marry someone for their pedigree and you don’t marry them for their health history,’ ” his mother, Rosanne, recalled. “He told me, ‘Mom, whatever time we have, I want to spend with her.’ ”
Last month, she entered hospice and when Neil walked out of her room, he collapsed and died.
Before leaving for the hospital, Rosanne had broken the news to Tina that something happened to Neil, “and I know she understood. When I came home, I went in and I held her hand and I told her, ‘Tina, he didn’t make it, he’s going to have to be there waiting for you,’ and tears ran right down her cheeks.”
Forty six hours later, Tina died in hospice care. She was 29, he was 34, and their joint funeral will be held in Stoneham Saturday.
“God knew they were going to go at the same time,” Neil’s mother said.
More: Wisconsin man leaves fortune to family, with one big condition (kare11.com)
Related: Joy Jars
It was Mariano’s last day at the office (Yankee Stadium) last evening when Derek Jeter and Andy Pettite did the honors. This is how everyone sees the day of their retirement, right?
“Mariano Rivera was a great pitcher,” Cleveland Indians broadcaster Tom Hamilton said last night during the Twins game about the fuss over Rivera’s last season. “But, geez, he didn’t die.”
Meanwhile, in Minnesota, this is pretty much what it looks like when your team is turning in its third straight 90-loss season. It’s all over but the yawning.
Related: It’s a foul if you kiss another player in basketball.
More sports: Fans Experience The Thin Line Between Winning And Losing (NPR)
Bonus I: How Recycling Bias Affects What You Toss Where (NPR)
Bonus II: Dad To Son: ‘I Was Not Going To Let You Drop’ (NPR)
WHAT WE’RE DOING
Daily Circuit (9-12 p.m.): First hour: The Friday Roundtable panel of judges will discuss Attorney General Eric Holder’s assertion that America’s justice system is broken.
Second hour: Alternative medical and the organic lifestyle.
Third hour: Somalis in Minnesota.
MPR News Presents (12-1 pm): MPR’s Cathy Wurzer hosts award-winning children’s book author Kate DiCamillo at an event held at the Fitzgerald Theater Tuesday night.
Science Friday (1-2 p.m.): Think evolution was just for our ancestors, and that Darwin’s theories no longer apply? Ira Flatow takes a look at how evolution is shaping humans.
All Things Considered (3-6:30 p.m.): Bankruptcies have been on the decline in Minnesota since hitting a recent peak during the recession. The reasons for the drop are complicated, and are less tied to the economy than you might think. MPR’s Annie Baxter will have the story.