Capitol Fax.com - Your Illinois News Radar


Latest Post | Last 10 Posts | Archives


Previous Post: No excuse for this loophole
Next Post: Where are they now?

Putting two and two together

Posted in:

* An interesting take from Aviva Bowen at the IFT

Last week, Michael Hiltzik of the Los Angeles Times ran a story about how shutting down a public pension plan – the kind of thing that occurred in nearby Michigan and regularly in Governor Bruce Rauner’s daydreams – actually costs taxpayers money. Hiltzik references a recent study from the National Institute on Retirement Security, an organization “whose board and advisors comprise officials of public pension agencies and leading academic experts on pension economics.”

 
The upshot:

Featured in the story is “billionaire former Enron trader John D. Arnold, a backer of the campaign against public employee pensions”:

Let me put that more simply: destroying your retirement security makes Wall Street a lot more money.
 
But beyond just general outrage, why is that important to us here in Illinois? And why is that Arnold name so familiar …?

That’s why. The caption that appears below Mr. Arnold’s photo in the Times reads: “What does he get out of it?”
 
Good question.
 
Beyond the Arnolds, other IllinoisGO funders have strong ties to Governor Rauner as well. So far, the PAC has produced an online video, distributed fliers, and sent misleading mailers about school funding into targeted legislative districts around the State.
 
Anyone want to wager what’s next on their agenda? I’ll bet you $5 million.

Discuss.

posted by Rich Miller
Friday, Aug 28, 15 @ 10:04 am

Comments

  1. Follow. The. Money.

    Comment by Concerned Friday, Aug 28, 15 @ 10:11 am

  2. Concerned: “Follow. The. Money.”

    Yes. And:

    “Screw. The. Little guys.”

    Comment by IllinoisBoi Friday, Aug 28, 15 @ 10:15 am

  3. The fall of rime was complicated, but one of the things that lead tomita demise was the accumulation of wealth in the hands of the few. It turns out you cant sustain an economy with money and spending from the majority of your Population. If you cut retiree money then they dont spend. Cut cuteeetn workers and they dont spend. The small business and big business that get income from these folks go under etc.

    Defined benefit plans outperform 401k anf provide money to the economy. 401k were designed to be in addition to defined benefit plans. As more and more companies eliminate defined benefits, we are increasing our population of retirees in poverty and the drain on social services to support them…. All so a small grp and earn large bonuses.

    The us economy has grown since the 50s. But the money is not going to the middle class whose buying power is hald what it used to be.

    Comment by Ghost Friday, Aug 28, 15 @ 10:15 am

  4. I was wondering what Arnold’s angle was months ago when he made that huge contribution. Now I know. Yikes.

    Comment by Tournaround Agenda Friday, Aug 28, 15 @ 10:16 am

  5. Beware of politicians who won’t take a salary. There is always some way they will make money. Interesting friends he has considering Enron is such a “stellar” example of changing employee benefits.

    Comment by illinifan Friday, Aug 28, 15 @ 10:19 am

  6. Rauner, Griffin, and now Arnold. Is this what democracy looks like. Blagojevich and Resco were little leaguers compared to these guys. Is Illinois ready for oligarchy?

    Comment by Truthteller Friday, Aug 28, 15 @ 10:24 am

  7. And if you wondered what thd end game was, here ut is …

    Comment by The Way I See It Friday, Aug 28, 15 @ 10:29 am

  8. Is Illinois being sold down the river?

    Comment by Anonymous Redux Friday, Aug 28, 15 @ 10:29 am

  9. The footprints of Brucie’s hostile electoral takeover.

    Comment by D.P.Gumby Friday, Aug 28, 15 @ 10:30 am

  10. == “Let me put that more simply: destroying your retirement security makes Wall Street a lot more money.” ==

    I’m shocked — SHOCKED — to find that gambling is going on in this establishment.

    Comment by thunderspirit Friday, Aug 28, 15 @ 10:31 am

  11. As Homer says, Duh!

    Comment by Sir Reel Friday, Aug 28, 15 @ 10:34 am

  12. I think you just unlocked this IllinoisGo outfit. Hopefully the rest of the press pays attention to this background.

    Comment by Albany Park Patriot Friday, Aug 28, 15 @ 10:35 am

  13. “What does he get”
    Does he need more? Those Enron boys scorched the earth…some did some hard time…This guy reminds us TeamBungle consultant Stu Levine who is closin’ on the homestretch in the pokey and soon available to be appointed to some board or commission. Don’t forget the head of the racin’ board and his subprime loan scam — his pappy and boss is recently back from slam city.

    Comment by Anonin' Friday, Aug 28, 15 @ 10:38 am

  14. Yes folks, it’s about the money. That’s Rauner’s version of the state motto.

    Comment by Norseman Friday, Aug 28, 15 @ 10:40 am

  15. ol·i·gar·chy
    ˈäləˌɡärkē/
    noun
    a small group of people having control of a country, organization, or institution.
    “the ruling oligarchy of military men around the president”

    Too late, we already have that.

    Comment by RetiredStateEmployee Friday, Aug 28, 15 @ 10:45 am

  16. Not shocking in any way. Illinois is yet another prize for the billionaire boys club (not that the previous owners were doing us any favors).

    The narrative against public pensions has been repeated often enough that, even though generally false or at least misleading, it has been accepted because it is simple to digest and places responsibility on someone else, primarily the public worker and their dastardly unions. This type of scapegoating is a time honored and effective tactic that goes back millennia.

    Comment by JS Mill Friday, Aug 28, 15 @ 10:47 am

  17. == ol·i·gar·chy ==

    To put a finer point on it, plu-to-cra-cy.

    As in: NASA’s recent fly by of the dwarf planet seems like such a waste of taxpayer dollars when you consider all the plutocracy we have right here at home.

    Comment by X-prof Friday, Aug 28, 15 @ 11:14 am

  18. If the State or any other public entity wants DC pensions, let them also start withholding and paying FICA. That would be the only fair way of doing it. It won’t save the State (or locality) any money.

    Rauner wants to save money. read: save money for his hedge fund buddies.

    Comment by Langston Huffington Friday, Aug 28, 15 @ 11:20 am

  19. Thanks Citizen United…How’s that working out for America? See above for an example.

    Comment by PublicServant Friday, Aug 28, 15 @ 11:34 am

  20. Regardless of the pros/cons of defined benefits plans which are the basis of virtually all public pensions, no one can argue that it is fair to make the taxpayer ultimately responsible for market performance. Given the vagaries of stock performance, the public bares the funding hit when markets tank. If we are going to be on the hook for pension performance the GA should at least change the trustee selection process to insure that the funds are administered by professionals. At least for TRS, the teachers who get elected to the Board tend to be IEA stalwarts. We would all be better off if the Illinois funds had investment expertise on the boards as opposed to the folks being selected based on political considerations

    Comment by Sue Friday, Aug 28, 15 @ 11:39 am

  21. Rich, you continue to highlight studies of organizations that have a built-in bias. Most of NIRS’s, see below, investors are public employee pension systems. NIRS makes money by keeping the status quo. They are not a legitimate source in this instance.

    Broad & Diverse Support
    Leadership Members

    Council of Institutional Investors
    National Association of State Retirement Administrators
    National Council on Teacher Retirement
    National Conference of Public Employee Retirement Systems
    Visionary Circle
    AARP
    AON Hewitt
    BNY Mellon
    CalPERS
    CalSTRS
    Colorado PERA
    Communication Workers of America
    District of Columbia Retirement Board
    Employee Retirement System of Texas
    IAM National Pension Plan
    Illinois Municipal Retirement Fund
    Kentucky Teachers’ Retirement System
    Los Angeles County Employees’ State Retirement Association
    Minnesota Teachers’ Retirement Association

    Comment by Big Mouth Friday, Aug 28, 15 @ 11:39 am

  22. ===Most of NIRS’s, see below, investors are public employee pension systems.===

    Also, see above, where that’s made clear in the post.

    Comment by Rich Miller Friday, Aug 28, 15 @ 11:41 am

  23. Big Mouth: do you have some data to support a different view, or is your only disqualification of the study who funded it?

    Comment by Willie Stark Friday, Aug 28, 15 @ 11:44 am

  24. == If the State or any other public entity wants DC pensions, let them also start withholding and paying FICA. ==

    I’ll concede the following is oversimplified but note the qualifying words; I realize some people do not fall into the general categories.

    The majority of actual State Employees (defined as those who are members of SERS) already contribute to FICA along with SERS and, in some cases, the Deferred Compensation (DC) program. There are some exceptions.

    The majority of “state” employees who do not currently contribute to FICA are teachers. You are correct that changing them to a DC system would require additional cost that would, presumably, have to be paid by the school districts via the local property tax.

    Comment by RNUG Friday, Aug 28, 15 @ 11:44 am

  25. The problem isn’t that 401k plans have worse returns necessarily, but that the all of the pension plans they studied are underfunded while life expectancy continues to increase (increasing liabilities).

    Comment by Chicagonk Friday, Aug 28, 15 @ 12:40 pm

  26. Let me see if I got this straight. When the State contributes less to pensions it actually cost taxpayers more money? Interesting. No wonder Democrates rely on low information voters. By the way, I have a bridge in New York I’d love to sell you.

    Comment by DonaldTrump Friday, Aug 28, 15 @ 1:01 pm

  27. “former Enron trader”

    That, right there, is all the reason anyone needs to ignore anything this guy says.

    Comment by JoanP Friday, Aug 28, 15 @ 1:18 pm

  28. Rich:

    From my post yesterday(emphasis added):

    - Juvenal - Thursday, Aug 27, 15 @ 1:34 pm:

    === Well, yeah. I figured everybody already knew that. ===

    I think you and Giertz are forgetting two very important details.

    First, Cullerton wanted to insert the compromise plan as a Plan B into the bill, but that was quashed by the Tribune and GOP. That undermines the argument that SB 1 was built-to-fail by Democrats.

    Secondly, the failed bill also kept the issue alive for Rauner and others who still dream of implementing a plan that privatizes and balkanizes the current retirement system into individual accounts where they could collect much more lucrative fees.

    Plus, a failed bill allows the GOP to keep railing against unions and state budgets in general.

    Comment by Juvenal Friday, Aug 28, 15 @ 1:21 pm

  29. I’ve always wondered if it has something to do with these wealthy people being able to crash the market and benefit from it. They were able to buy property much cheaper after the crash in 08 and also make large sums of retirement monies just ‘vanished’ into thin air after 911. People on track for retirement have to work longer, then those jobs are not available for the next generation and so on. But now I’m starting to sound a little crazy. As if there are people smart enough and powerful enough to orchestrate such events.

    Comment by Dale Cooper Friday, Aug 28, 15 @ 2:18 pm

  30. If you think no one can figure out how to destroy the middle class, just look at what ALEC has been doing with their training programs for politicians.

    Comment by Geek Marine Friday, Aug 28, 15 @ 2:49 pm

  31. Dale Cooper:

    “I’ve always wondered if it has something to do with these wealthy people being able to crash the market and benefit from it. They were able to buy property much cheaper after the crash in 08 and also make large sums of retirement monies just ‘vanished’ into thin air after 911.”

    I’ve often wondered that too, but the optimistic fool in me rejects the idea as paranoia. But, you have to admit that whether the crash was “engineered” or not, its end effect was to transfer billions of dollars from working people to the super rich.

    Comment by IllinoisBoi Friday, Aug 28, 15 @ 3:21 pm

  32. Headline– Rauner Linked to WallStreet Pension Scam

    Comment by cdog Friday, Aug 28, 15 @ 4:27 pm

Add a comment

Sorry, comments are closed at this time.

Previous Post: No excuse for this loophole
Next Post: Where are they now?


Last 10 posts:

more Posts (Archives)

WordPress Mobile Edition available at alexking.org.

powered by WordPress.