Category: News and Opinion

The U.S. Census Bureau has released 2007 data on the financial status of state and local government pension plans in the U.S. The data is at the state level, and is at present separate from data from the rest of the finance phase of the 2007 Census of Governments, so only limited conclusions may be drawn from it, but I’ve calculated some ratios to see how New York compares. What the data shows is that New York State’s pension plans, and in particular New York City’s pension plans, tend to be on the extreme end compared with other states by a variety of measures. There are more retirees relative to the number of workers in New York. Public employees contribute less to their own pensions here. For New York City, payments to pensioners and others are draining existing assets at an above-average rate. And, perhaps in an attempt to get out of the hole, New York’s plans were among the most highly invested in risky stocks in fiscal 2007.

On June 29th 2007, the last trading day of that fiscal year, the S&P 500 was at 1,505.70, while as I write this it is at about 925, a loss of 38.6%. Based on the assumption that the pension funds earn 8 percent per year, it should be at 1,756 by now starting at June 2007. Then again, starting at June 2000, when that assumption was made by state law, it should be at 2,960, or triple its actual level. It’s based on assumptions like those that all those pension enhancements over the past decade were described as “free.”

I guess neither Bill Hammond of the Daily News, Nicholas Confessore of the Times nor Mike McKee, the lobbyist for tenants are as dumb as Hiram hoped they would be.

My alarm rang at 5:30 AM. I tried to remember why. It was primary day.

Senator Hiram Monserrate, has been giving a series of interviews, in which he constantly repeats the talking point that he was once a Marine and a cop and then tries to explain his wacky behavior of the last week. While I’m glad his defense is not as lame as his defense from the charges that slashed his girlfriend (at least he doesn’t deny he voted with the Republicans!), his statements make no sense.

It is now the ninth day of Albany’s Time of Troubles and we’ve entered the game show phase.

Democrats have put forth a power-sharing agreement, while Republicans are insisting on the bigger share. If they do not decide who is in charge among themselves, a judge may decide it for them.

Democrats are saying “Let’s Make a Deal,” while Republican respond, “Monty, I’d rather see what’s behind door number three.”

The big surprise here is the unexpected willingness of the Democratic Conference, including Leader in Name Only Malcolm Smith, to behave like grown-ups. Looking back, historians may find this to be the one silver lining to this dark cloud reigning forth on our Capitol.

As I write this on Monday morning, Juan Gonzalez of the NY Daily News is reporting that Senator Hiram Monserrate has decided to rejoin the Democrats in Albany.

When I first ran for public office (state assembly) in 1998, I was called for an interview by the Brooklyn leaders of the Independence Political Party; so I showed up. I was reached out to by some people within that party, with whom I was politically connected. We met in a Brooklyn Diner (Lindenwood). I thought it was a strange venue for such an interview, but I held my sometimes-wayward tongue in check that night. There were many candidates seeking office(s) that year, and quite a few insurgents showed up to be interviewed. I thought I did well in the session, and their officials must have concurred since they offered me their line on the November ballot. 

Tom Friedman: The Times’s Robert Mackey reported that in Tehran “chants of ‘Death to America’ ” at rallies for Mahmoud Ahmadinejad last week were answered by chants of “Death to the Taliban — in Kabul and Tehran” at a rally for his opponent, Mir Hussein Moussavi.

Encouraging, yes. And to some extent, a message to the skeptics (myself, to some extent, included) that the Cairo speech, warts and all, may pay real dividends.

This week in Time, another Peter Beinart Democrat (Peter Beinart), also expressed his approval of the new direction in Mid East politics (which, in regard to Israeli settlements, isn‘t really new–it‘s been the same since 1967).

As was once again proven this week, there is nothing more destructive to the New York State political process than a billionaire scorned. In fact, this may be the single best argument for Mike Bloomberg’s re-election.

In 1989, for reasons too petty to be worth discussing, Al D’Amato filled his billionaire buddy Ron Lauder’s head full of visions of dancing sugarplums, and convinced him to run for Mayor, the better to sabotage the hopes of his former protégé, Rudy Giuliani, who had shown him insufficiently gratitude and fealty.

Lauder, not realizing his own campaign was a sick joke, got his clocked cleaned, and went into shock. Finally realizing his political career was dead, Lauder undertook Kubler-Ross’ stages of grief, but never got beyond anger, which he decided to visit upon the entire New York City political establishment, by finally hiring some competent people and putting on the ballot and passing an initiative instituting term limits for City offices, thereby putting an end date to Rudy’s term in public office before it had even started.

Back in the mid-1990s, after we had purchased and fixed up our home, we had a little savings left and decided to set it aside for the next big expense, the education of our children, toddlers at the time. With a long time horizon, and willing to settle for whatever the average U.S. stock would return, we put it in a Total Stock Market index fund with a low-cost mutual fund company. With college looming we removed the money from that fund last week, and so I have a pretty good idea what savers who invested in stocks, on average, have received over the past 13 years. Despite reinvesting dividends (such as they were), dividends on which we paid taxes from other funds, despite not putting money in at one of the bubble peaks, and despite the low fees charged by our mutual fund company, we merely got the same amount of money back. Money that is now worth 25% less based on overall inflation, and far less relative to the cost of higher education, which is a whole additional discussion in itself.

I bring this up on Room Eight not to complain about my return, because you pay your money and take your chances. I mention this to show that the excuse used to justify the soaring share of national wealth paid to top executives over the past 15 years, the purported need to attract the greatest superstars to enhance shareholder value, has been a fraud. Because the average team of corporate executives has delivered zero shareholder value over the long term — or far less, adjusted for inflation and taxes — while being richly rewarded for it. They took everything for nothing.