Deciphering Public Pension Fund Investment Fee Reports
Recently there has been a good deal of press about public pension funds moving $600 billion to “alternative investments” managed by hedge funds and private equity funds. Some commentators, such as Matt Taibbi of Rolling Stone and David Sirota of Salon, criticize alternative investments as transfers of wealth to Wall Street because alternative investment managers […]
What’s Really the Principal Cause of CalSTRS’s Shortfall?
Recently CEO Jack Ehnes of the California State Teachers’ Retirement System (CalSTRS) asserted that the pension fund’s $71 billion unfunded liability “stems largely” from the 2008-9 economic downturn. But CalSTRS’s own information appears to contradict that claim and to point to another culprit. Over the last decade – including the economic downturn — CalSTRS reported […]
California’s New Taxes Are Paying for Pensions
What if a corporation raised $500 million in a securities offering on the premise that the proceeds would go for operating expenses, then disclosed a few months later that $300 million of this amount would instead be used to service a debt that wasn’t disclosed in the offering document? This would be false advertising, subject […]
Pension Problems not the Fault of Employees
Crossposted on Sacramento Bee Anyone who reads the papers knows that cities and states are being hit hard by fast-rising pension and retirement health care costs for public employees. Cities such as Stockton and San Bernardino have even declared bankruptcy. But few of those papers make clear that this crisis was not caused by the […]
With Retirement Costs Consuming One-Fifth of Discretionary Spending, California Must Reduce Un-Accrued Pension Benefits
Crossposted on Advancing A Free Society Pensions and other retirement costs will consume more than 23% of discretionary state spending in fiscal year 2012-13, according to the budget recently passed by the California State Legislature and signed by Governor Jerry Brown – nearly three times the share taken up by retirement costs just ten years […]
Rein In Benefits Now and Tax Californians Later
Crossposted on Bloomberg Governor Jerry Brown’s proposed $50 billion tax-increase initiative won’t solve California’s budget problems. Neither will anything else on the state’s ballot in November, nor will more cuts to child care, courts, parks, college and welfare programs repeatedly slashed by the state Legislature. Solving California’s budget woes requires addressing five root causes: unfunded health-care […]
California’s Bad Bet Makes JPMorgan’s Look Minor
Crossposted on Bloomberg Congress ordered JPMorgan Chase & Co. (JPM)’s chief executive officer, Jamie Dimon, to testify about $2 billion that his bank lost on an investment bet. Worrisome as that gamble was — after all, the banking crisis was largely due to bad bets by banks — it is unfortunate that Congress has never […]
When You Hate Your Taxes but Can’t Name Your Legislator
Crossposted on Bloomberg Who do you think has more influence over the education, safety, health, welfare, transportation, justice, recreation and economic well-being of 40 million Californians? U.S. Senator Dianne Feinstein or California State Senator Loni Hancock? That’s easy: Loni Hancock. How can it be that someone so powerful is so unknown? The answer is that few […]
New California Taxes Pay for Pensions, Not Schools
Crossposted on Bloomberg Most Californians would be surprised to learn that 100 percent of education’s share of the tax increase proposed by Governor Jerry Brown will go to pensions instead of classrooms. But that would be no surprise to longtime observers of the California State Teachers’ Retirement System, which administers teacher pensions. Here’s why: After retirement, […]
California must Address Leaks in Budget before Raising Taxes
Crossposted on Sacramento Bee In an effort topreserve existing services, Gov. Jerry Brown has proposed a temporary tax increase to generate new revenue of $9 billion per year for seven years. The Legislative Analyst’s Office says the proposed tax increase will yield less. Either way, little of the new money will help existing services for […]