Archive for the ‘Pensions’ Category

THEY WANT YOUR IRA

Saturday, April 9th, 2016

 

www.wsj.com/articles/they-want-your-ira-1459985170

THE WALL STREET JOURNAL

They Want Your IRA

The White House pushes investors toward government accounts.

Secretary of Labor Thomas Perez in Washington D.C. on April 30, 2015.
Secretary of Labor Thomas Perez in Washington D.C. on April 30, 2015. Photo: CQ-Roll Call,Inc.

The Department of Labor says its so-called fiduciary rule will make financial advisers act in the best interests of clients. What Labor doesn’t say is that the rule carries such enormous potential legal liability and demands such a high standard of care that many advisers will shun non-affluent accounts. Middle-income investors may be forced to look elsewhere for financial advice even as Team Obama is enabling a raft of new government-run competitors for retirement savings. This is no coincidence.

Labor’s new rule will start biting in January as the President is leaving office. Under the rule, financial firms advising workers moving money out of company 401(k) plans into Individual Retirement Accounts will have to follow the new higher standards. But Labor has already proposed waivers from the federal Erisa law so new state-run retirement plans don’t have the same regulatory burden as private employers do.

This competitive advantage could be significant. Last month the board of California’s new “Secure Choice” retirement plan wrote to state legislators about their “exciting win” in Washington. They reported that employers enrolling workers in the new government-run plan “would have no liability or fiduciary duty for the plan.” Score! The California bureaucrats added that “we have been given the green light to auto-enroll workers into an Individual Retirement Account (IRA).”

(more…)

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JERRY BROWN STANDS ATOP CALIFORNIA’S COLLAPSING HOUSE OF CARDS

Wednesday, July 10th, 2013

 

 

 

Thomas Del Beccaro

Thomas Del Beccaro, Contributor

I try to place politics in perspective.

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7/08/2013 @ 8:00AM |43,549 views

Jerry Brown Stands Atop California’s Collapsing House Of Cards

SAN FRANCISCO, CA - JULY 11:  California Gover...

California Governor Jerry Brown. (Image credit: Getty Images via @daylife)

Jerry Brown, soon to be California’s longest-serving Governor, is obsessed with his legacy. Legacies, however, are judged retrospectively. For now, Brown has been receiving much credit nationally for “balancing” the budget. In truth, the budget is not really balanced and Brown is setting California up to fall like a house of cards.

Jerry Brown certainly is having a good year in the media. This year, PBS told us: “Gov. Jerry Brown Makes Tough Choices to Balance State Budget.” The Atlantic recently heralded: “California’s New ‘Problem’: Jerry Brown on the Sudden Surplus.” Even BusinessWeek proclaimed that Jerry Brown had “Scared California Straight” and that “Jerry Brown Stays Stern on California’s Budget Surplus.”

Brown has received such praise in connection with the California budget process this year, and the ruling Democrats’ self-proclaimed budget balancing. The real score in California, however, demonstrates that the budget is not really balanced and there is nothing but trouble ahead.

First, to use Jerry Brown’s own words, California has a “wall of debt,” which doesn’t include unfunded pension and medical liability – and that wall of debt is NOT included in the budget. The total amount of that debt is somewhere in the $27 billion range and includes over $10 billion owed to the federal government. That money was used to fund California’s Unemployment Insurance Fund, and California seems to have no plan to pay it back – a sort of “reverse” unfunded mandate, if you will. (more…)

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VIDEO – THE MONARCHS OF MONEY – THE UNPRECEDENTED POWER OF THE CENTRAL BANKERSS

Wednesday, May 1st, 2013

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Tuesday, April 2nd, 2013

 

The Wall Street Journal

  • March 30, 2013

The Debt Bomb That Taxpayers Won’t See

Coming

State and local governments owe $7.3 trillion in promises they’ve made that were never approved by taxpayers.

By STEVEN MALANGA

Mr. Malanga is a senior fellow at the Manhattan Institute. This column is adapted from a forthcoming issue of City Journal, where he is a senior editor.

 

EXCERPT FROM THIS ARTICLE:  A December report by the States Project, a joint venture of Harvard’s Institute of Politics and the University of Pennsylvania’s Fels Institute of Government, estimated that state and local governments now owe in sum a staggering $7.3 trillion. Incredibly, the vast majority of this debt has never been approved by taxpayers, who are often unaware of the extent of their obligations.

Most state constitutions and many municipal charters limit borrowing and mandate voter approval. No matter. Politicians evade the limits, issuing billions of dollars in municipal offerings never approved by voters, sometimes with disastrous consequences. Courts have rubber-stamped many of these schemes.

Earlier this month, the Securities and Exchange Commission charged Illinois officials with making misleading statements to bond investors about the state’s pension system. The agency detailed a long list of deceptive practices including failure to tell investors that the system was so underfunded that it risked bankruptcy.

Illinois taxpayers, as well as the holders of its debt, will ultimately bear the burden of the officials’ misdeeds. But there is nothing unique about the Prairie State. For years, elected officials in states and municipalities across the country have been imprudently piling up obligations that are imposing serious strains on budgets, prompting higher taxes and cutbacks in services.

In January, city officials in Sacramento, California’s capital, reported the results of a study they had commissioned on all the debt that the municipality had incurred. At a City Council meeting that the Sacramento Bee reported as “sobering,” the city manager explained that Sacramento had racked up some $2 billion in obligations (mostly pensions and retiree health care). All this for a municipality of 477,000 residents with an annual general fund budget of just $366 million.

Sacramento finances are already stretched—the city has cut some 1,200 workers, or 20% of its workforce, in the past several years. Servicing its debt in years to come will only add more woe, especially given the intractability of public unions. The budget report noted that “While reducing staff is clearly not the preferred method for reducing costs, the city has a very limited ability to reduce the cost of labor absent cooperation from the city’s employee groups.”

According to studies by the Pew Center on the States, states and the biggest cities have made nearly three-quarters of a trillion dollars in promises to pay for retiree health-care insurance. Yet governments have set aside only about 5% of the money they’ll need to pay for these promises. (more…)

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OBAMA’S UNITED AUTO WORKERS BAILOUT

Friday, June 15th, 2012
The Wall Street Journal

  • June 14, 2012

Sherk and Zywicki: Obama’s United Auto Workers Bailout

If the administration treated the UAW in the manner required by bankruptcy law, it could have saved U.S. taxpayers $26.5 billion.

By JAMES SHERK
AND TODD ZYWICKI
Mr. Sherk is a senior policy analyst in labor economics at the Heritage Foundation. Mr. Zywicki is a law professor at George Mason University and a senior scholar at the university’s Mercatus Center. This op-ed is adapted from a longer article published this week at Heritage.org.

EXCERPT FROM THIS ARTICLE:    Avoiding these losses would have been straightforward. If the government treated the UAW in the manner required by bankruptcy law, it could have given the stock and promissory notes to the Treasury instead of to the UAW. Labor cost savings and not supporting Delphi pensions would have increased the value of the taxpayers’ shares of GM, while GM would have needed less financing.

Instead, President Obama gave over $26 billion to the UAW—more money than the U.S spent on foreign aid last year and 50% more than NASA’s budget. None of that money kept factories running. Instead it sustained the above-average compensation of members of an influential union, sparing them from most of the sacrifices typically made in bankruptcy. Such spending does not serve the common good. President Obama did not bail out the auto industry. He bailed out the United Auto Workers.

President Obama touts the bailout of General Motors and Chrysler as one of the signature successes of his administration. He argues that the estimated $23 billion the taxpayers lost was worth paying to avoid massive job losses. However, our research finds that the president could have both kept the auto makers running and avoided losing money.

The preferential treatment given to the United Auto Workers accounts for the American taxpayers’ entire losses from the bailout. Had the UAW received normal treatment in standard bankruptcy proceedings, the Treasury would have recouped its entire investment. Three irregularities in the bankruptcy case resulted in a windfall to the UAW.

First, GM and Chrysler owed billions of dollars to the union’s Voluntary Employee Beneficiary Association (VEBA) when they went bankrupt. The union and the auto makers created VEBA in 2007 to assume responsibility for the UAW’s generous retiree health benefits. The benefits allowed UAW members to retire in their mid-50s with minimal out-of-pocket health-care expenses for the rest of their lives. GM owed $20.6 billion and Chrysler owed $8 billion to VEBA as unsecured claims.

A bedrock principle of bankruptcy law is that creditors with similar claims priority receive equal treatment. If you owe $1,000 each on two credit cards, in bankruptcy you cannot choose to pay $900 to Citi and only $200 to Chase. Each of the creditors is entitled to an equal percentage recovery.

In the auto bankruptcies, however, the administration gave the unsecured claims of VEBA much higher priority than those of other unsecured creditors, such as suppliers and unsecured bondholders.

At the time of bankruptcy, GM owed these unsecured creditors $29.9 billion, for which they received 10% of the stock of “new” GM, which went public in November 2010, and warrants to purchase 15% more at preferred prices. Yet VEBA got 17.5% of new GM and $9 billion in preferred stock and debt obligations. Based on GM’s current stock price, VEBA collected assets worth $17.8 billion—$12.2 billion more than if the administration had treated it like the other unsecured creditors.

The same thing happened at Chrysler, only to a greater degree. Chrysler’s junior creditors recovered none of their $7 billion in claims. In normal bankruptcy proceedings, the UAW would have also collected nothing. Instead it walked away owning almost half of new Chrysler and a $4.6 billion promissory note earning 9% interest. Had the stock and note gone to the Treasury instead, the bailout would have cost taxpayers $9.2 billion less.

Zwycki

Getty ImagesUnited Auto Workers President Bob King (left) with President Barack Obama at a UAW conference in Washington, D.C., Feb. 28. (more…)

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AFTER WISCONSIN, OBAMA’S HOUSE OF CARDS

Monday, June 11th, 2012
The Wall Street Journal

  • June 7, 2012

What’s Changed After Wisconsin

The Obama administration suddenly looks like a house of cards.

  • By PEGGY NOONAN

What happened in Wisconsin signals a shift in political mood and assumption. Public employee unions were beaten back and defeated in a state with a long progressive tradition. The unions and their allies put everything they had into “one of their most aggressive grass-roots campaigns ever,” as the Washington Post’s Peter Whoriskey and Dan Balz reported in a day-after piece. Fifty thousand volunteers made phone calls and knocked on 1.4 million doors to get out the vote against Gov. Scott Walker. Mr. Walker’s supporters, less deeply organized on the ground, had a considerable advantage in money.

But organization and money aren’t the headline. The shift in mood and assumption is. The vote was a blow to the power and prestige not only of the unions but of the blue-state budgetary model, which for two generations has been: Public-employee unions with their manpower, money and clout, get what they want. If you move against them, you will be crushed. 

Mr. Walker was not crushed. He was buoyed, winning by a solid seven points in a high-turnout race.

Governors and local leaders will now have help in controlling budgets. Down the road there will be fewer contracts in which you work for, say, 23 years for a city, then retire with full salary and free health care for the rest of your life—paid for by taxpayers who cannot afford such plans for themselves, and who sometimes have no pension at all. The big meaning of Wisconsin is that a public injustice is in the process of being righted because a public mood is changing.

Political professionals now lay down lines even before a story happens. They used to wait to do the honest, desperate, last-minute spin of yesteryear. Now it’s strategized in advance, which makes things tidier but less raggedly fun. The line laid down by the Democrats weeks before the vote was that it’s all about money: The Walker forces outspent the unions so they won, end of story.

Money is important, as all but children know. But the line wasn’t very flattering to Wisconsin’s voters, implying that they were automatons drooling in front of the TV waiting to be told who to back. It was also demonstrably incorrect. Most voters, according to surveys, had made up their minds well before the heavy spending of the closing weeks.

Mr. Walker didn’t win because of his charm—he’s not charming. It wasn’t because he is compelling on the campaign trail—he’s not, especially. Even his victory speech on that epic night was, except for its opening sentence—”First of all, I want to thank God for his abundant grace,” which, amazingly enough, seemed to be wholly sincere—meandering, unable to name and put forward what had really happened.

But on the big question—getting control of the budget by taking actions resisted by public unions—he was essentially right, and he won.

noonan0609

Associated PressWisconsin Gov. Scott Walker. (more…)

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KARL ROVE – OBAMA’S PUBLIC-EQUITY RECORD

Tuesday, May 15th, 2012
The Wall Street Journal

  • May 10, 2012
  • Obama’s Public-Equity Record

The auto bailout makes Bain Capital look like an amateur on job losses and outsourcing.

By KARL ROVE

EXCERPT FROM THIS ARTICLE:

There are differences between Mr. Romney and Mr. Obama. Mr. Romney rescued companies with private money collected from investors including union pension funds, college endowments and private individuals. He had to go through the normal process of laws and courts. His principal focus was on long-term growth for companies in which he invested his company’s reputation and money. And he had to make a profit to be successful.

Mr. Obama’s story is very different. The auto industry was bailed out with taxpayer money. The president restructured GM and Chrysler by fiat and then forced them into bankruptcy, presenting the courts with a fait accompli.

President Barack Obama’s re-election organization is spending a lot of time attacking Mitt Romney over his careers in venture capital (investing in start-ups) and private equity (investing in troubled or failing businesses).

To reporters at Bloomberg Businessweek, Obama senior campaign adviser David Axelrod recently ripped Mr. Romney for “leveraging companies with debt, bankrupting companies and making money off of those bankruptcies . . . [that] cost jobs and certainly wages and benefits.”

And an Obama campaign briefing paper says “Romney closed over a thousand plants, stores and offices . . . cut employee wages, benefits and pensions . . . laid off American workers and outsourced their jobs to other countries.”

The president is guilty of the same alleged sins.

The Obama administration, after all, forced General Motors and Chrysler into Chapter 11 bankruptcy in 2009 and then capriciously ordered thousands of local dealerships closed.

The auto industry bailout cost lots of Americans their jobs. GM employed roughly 252,000 workers in 2008. Now it has 207,000, with 131,000 of them working in foreign plants. The Detroit Free Press recently noted that fewer Americans work at Chrysler than did before the bankruptcy. Based on data from the National Automobile Dealers Association, I estimate that as many as 100,000 Americans lost jobs at the companies’ dealerships. (more…)
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MICHELLE MALKIN – THE WAR ON WISCONSIN

Wednesday, April 25th, 2012

The war on Wisconsin; Update: Sarah Palin’s call to arms

By Michelle Malkin  •  March 28, 2012 02:52 AM

The war on Wisconsin
by Michelle Malkin
Creators Syndicate
Copyright 2012

Now is the time for all good tea partiers to come to the aid of Wisconsin. Fiscally conservative leaders in the Badger State are under coordinated siege from Big Labor, the White House, the liberal media and the judiciary. The yearlong campaign of union thuggery, family harassment and intimidation of Republican donors and businesses is about to escalate even further. This is the price the Right pays for doing the right thing.

The most visible target is Gov. Scott Walker, who faces recall on June 5 over his tough package of state budget and public employee union reforms. Three state GOP legislators — Senate Majority Leader Scott Fitzgerald, Sen. Van Wanggaard and Sen. Terry Moulton — also face recall. A fourth target, staunch union reformer and Second Amendment advocate Sen. Pam Galloway, announced she was stepping down last week — leaving the legislature deadlocked and Democratic strategists salivating. (more…)

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VIDEO – FRANK ROCHE , CANDIDATE FOR NORTH CAROLINA STATE TREASURER

Monday, April 2nd, 2012

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SARAH PALIN & MICHELLE MALKIN – RECALL ELECTION IN WISCONSIN

Saturday, March 31st, 2012

LINKS  RE  WISCONSIN RECALL ELECTION –  GOVERNOR SCOTT WALKER AND

LT. GOVERNOR REBECCA KLEEFISCH

www.facebook.com/notes/sarah-palin/as-goes-wisconsin-so-goes-america-support-lt-governor-rebecca-kleefisch/10150645375753435

michellemalkin.com/2012/03/28/the-war-on-wisconsin/

www.rebeccaforreal.com/

www.scottwalker.org/

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