Post by jeffolie on Aug 13, 2012 15:58:19 GMT -6
My assumption may be incorrect, but my assumption is that most people are followers and not independent thinkers nor leaders and these mostly followers like to have a common enemy, scapegoat:
"... the enemy of my friend is my enemy, the friend of my friend is my friend ... " of followers wanting to belong.
Even a consumate BOND GUY has a warning:
" ... The risk for the United States, as well as the global economy, is that a lack of vision and political courage ends up leading to even greater economic disappointment and financial instability, bringing with it the social unrest we've seen in so many other countries over the past 18 months. Occupy Wall Street and the Tea Party may have somewhat fizzled, but populist anger could return with a vengeance.
Now that only the upper 20% of incomes/wealth are prosperly compared to the bottom 60%, the majority want to blame "the system" ... I agree...establishment political parties have lost ground to the vague and leaderless political category called Independents. Independents separated from the political 'system'. Especially, similarly extreme inequalities are hatefully jealous and envious of anyone doing financially better than them without examining why. Mass followers mostly want to be comfortably among those their group hates rather than criticized. The follow the crowd now fails to examine how large or in this case below average the retirement income actually is at $26,000 compared to the median family income. No thinking, no examining facts are done.
Ludites, know nothings join popular movements easily.
Polling often shows that randomly selected common Americans do not know that 50% of America's budget goes to seniors.
Polling often shows that randomly selected common Californians do not know that 50% of California's budget goes to education for K thru 12.
"... The average public employee in California retires with a modest $26,000 pension. These are firefighters, teachers, police officers, bus drivers -- many of whom earn no Social Security at all, and so rely wholly on their pension for retirement.
"... Sure, pensions need some reform. All sides agree that some loopholes need closing that currently allow for a small percentage of public employees to abuse the system. For example, "spiking" one's salary in the last months prior to retirement in order to artificially increase the size of pension payouts is unacceptable. However, that kind of abuse happens less than 2 percent of the time and is generally seen in upper management, not by rank-and-file public workers.
=========================================
Scapegoating pensions is no fix for municipal budgets
08/09/2012
In ancient Greece, when famine or illness or invasion would ravage a town, the town's leaders would identify a beggar or a criminal and cast him out of the community in a symbolic removal of sins.
Of course, the beggar or criminal had nothing to do with the tragedy that had befallen the town. He was nothing more than a scapegoat. So too is the relationship between government employee pensions and a growing trend toward municipal bankruptcies.
Cities are pretty good at this. In years past, they have blamed their fiscal woes on the dot-com bubble, the housing market crash, state government and a general economic malaise. Now that three California cities have declared bankruptcy -- first Stockton, then Mammoth Lakes, and now San Bernardino -- the overly simplistic storyline is already emerging: blame pensions.
The only problem to that storyline is that it's inaccurate. Ed Mendel, a journalist who writes more thoroughly about California public employee pensions than any other, posted at his blog recently that a sharp spike in pension costs is not the reason an alarmed San Bernardino City Council voted last month to authorize filing for bankruptcy. He pointed out that pension obligations, as a percentage of a city's general fund budget, are far higher in other California cities than in the three filing for bankruptcy protection.
In fact, according to San Bernardino city officials, its pension costs for the fiscal year are $1.9 million -- just 4 percent of its budget shortfall. That means even if pensions were eliminated entirely, San Bernardino would still have a $43 billion budget hole.
San Bernardino's mayor -- the Stanford-educated former judge Pat Morris -- said the same thing: "The reasons for our dilemma are multiple and long enduring," he said. "They began long before the meltdown of our economy .... We have been living on the financial edge for a long, long time."
Why, then, are we allowing local politicians to blame pensions? That is, in effect, to let them off the hook for addressing the real problem.
Sure, pensions need some reform. All sides agree that some loopholes need closing that currently allow for a small percentage of public employees to abuse the system. For example, "spiking" one's salary in the last months prior to retirement in order to artificially increase the size of pension payouts is unacceptable. However, that kind of abuse happens less than 2 percent of the time and is generally seen in upper management, not by rank-and-file public workers.
The average public employee in California retires with a modest $26,000 pension. These are firefighters, teachers, police officers, bus drivers -- many of whom earn no Social Security at all, and so rely wholly on their pension for retirement.
What's more, these average working Californians have already made concessions, recognizing that cities and counties are under financial pressure. In more than 240 municipalities throughout the state, public employee labor unions have sat down at the bargaining table and agreed to concessions.
Another sensible reform to pensions would be to view them over the long term, rather than in snapshots that fail to give a true picture of their performance. Imagine if we all viewed our home values week-to-week rather than as a 10- or 20- or 30-year investment. Over the past 20 years, the California Public Employees Retirement System (CalPERS) has earned nearly 8 percent annually on its investments.
That indicates a sound system that is returning, on average, more than is necessary to fund pension obligations.
California cities shouldn't take clues from Greece's current economic crisis, and certainly should not take a page from ancient Greece's superstitions. Let's not let local elected officials use pensions as a scapegoat for financial mismanagement. Let's force them to identify and fix the root problems.
www.presstelegram.com/opinions/ci_21276866/blaine-meek-scapegoating-pensions-is-no-fix-municipal
========================================
With Both Presidential Candidates Full Of Hot Air, El-Erian Warns Of Populist Anger Returning
08/13/2012
As the 'new' normal limps on, PIMCO's Mohamed El-Erian focuses his attention on the political dysfunction that roils the 'new new' normal in an excellent op-ed in Foreign Policy today. The economic and financial system risks breakages that the political system will be increasingly incapable of mending rapidly enough," he opines as he fears sluggishness in economic growth, unacceptably high youth unemployment and long-term joblessness, redoubled debt and deficit concerns, and worsening inequalities between rich and poor leading the US down a path towards Europe's disruption.
Via Foreign Policy:
"Sadly, neither Obama nor Romney has yet offered a meaningful, forward-looking economic reform program to address problems such as a malfunctioning labor market, unsustainable public finances, a broken credit system, inadequate infrastructure, and a lagging education system.
The risk for the United States, as well as the global economy, is that a lack of vision and political courage ends up leading to even greater economic disappointment and financial instability, bringing with it the social unrest we've seen in so many other countries over the past 18 months. Occupy Wall Street and the Tea Party may have somewhat fizzled, but populist anger could return with a vengeance.
The longer America's interlocking economic and political challenges persist, the greater the number of companies and long-term investors that begin to worry -- and, more importantly, act on those fears. They hire fewer people and invest less in factories and equipment. As they increasingly sit on the sidelines, the country's fate will be left in the hands of tactical position players and short-term traders, further ramping up volatility and reducing future growth and job opportunities. And when day traders and company flippers start running a country's economy, watch out.
The warning bells are ringing, and they are ringing loudly. We've already allowed bad economics to lead to bad politics. Now, it's high time to put a stop to the cycle where bad politics undermines an already fragile economy."
www.zerohedge.com/news/both-presidential-candidates-full-hot-air-el-erian-warns-populist-anger-returning?tw_p=twt
"... the enemy of my friend is my enemy, the friend of my friend is my friend ... " of followers wanting to belong.
Even a consumate BOND GUY has a warning:
" ... The risk for the United States, as well as the global economy, is that a lack of vision and political courage ends up leading to even greater economic disappointment and financial instability, bringing with it the social unrest we've seen in so many other countries over the past 18 months. Occupy Wall Street and the Tea Party may have somewhat fizzled, but populist anger could return with a vengeance.
Now that only the upper 20% of incomes/wealth are prosperly compared to the bottom 60%, the majority want to blame "the system" ... I agree...establishment political parties have lost ground to the vague and leaderless political category called Independents. Independents separated from the political 'system'. Especially, similarly extreme inequalities are hatefully jealous and envious of anyone doing financially better than them without examining why. Mass followers mostly want to be comfortably among those their group hates rather than criticized. The follow the crowd now fails to examine how large or in this case below average the retirement income actually is at $26,000 compared to the median family income. No thinking, no examining facts are done.
Ludites, know nothings join popular movements easily.
Polling often shows that randomly selected common Americans do not know that 50% of America's budget goes to seniors.
Polling often shows that randomly selected common Californians do not know that 50% of California's budget goes to education for K thru 12.
"... The average public employee in California retires with a modest $26,000 pension. These are firefighters, teachers, police officers, bus drivers -- many of whom earn no Social Security at all, and so rely wholly on their pension for retirement.
"... Sure, pensions need some reform. All sides agree that some loopholes need closing that currently allow for a small percentage of public employees to abuse the system. For example, "spiking" one's salary in the last months prior to retirement in order to artificially increase the size of pension payouts is unacceptable. However, that kind of abuse happens less than 2 percent of the time and is generally seen in upper management, not by rank-and-file public workers.
=========================================
Scapegoating pensions is no fix for municipal budgets
08/09/2012
In ancient Greece, when famine or illness or invasion would ravage a town, the town's leaders would identify a beggar or a criminal and cast him out of the community in a symbolic removal of sins.
Of course, the beggar or criminal had nothing to do with the tragedy that had befallen the town. He was nothing more than a scapegoat. So too is the relationship between government employee pensions and a growing trend toward municipal bankruptcies.
Cities are pretty good at this. In years past, they have blamed their fiscal woes on the dot-com bubble, the housing market crash, state government and a general economic malaise. Now that three California cities have declared bankruptcy -- first Stockton, then Mammoth Lakes, and now San Bernardino -- the overly simplistic storyline is already emerging: blame pensions.
The only problem to that storyline is that it's inaccurate. Ed Mendel, a journalist who writes more thoroughly about California public employee pensions than any other, posted at his blog recently that a sharp spike in pension costs is not the reason an alarmed San Bernardino City Council voted last month to authorize filing for bankruptcy. He pointed out that pension obligations, as a percentage of a city's general fund budget, are far higher in other California cities than in the three filing for bankruptcy protection.
In fact, according to San Bernardino city officials, its pension costs for the fiscal year are $1.9 million -- just 4 percent of its budget shortfall. That means even if pensions were eliminated entirely, San Bernardino would still have a $43 billion budget hole.
San Bernardino's mayor -- the Stanford-educated former judge Pat Morris -- said the same thing: "The reasons for our dilemma are multiple and long enduring," he said. "They began long before the meltdown of our economy .... We have been living on the financial edge for a long, long time."
Why, then, are we allowing local politicians to blame pensions? That is, in effect, to let them off the hook for addressing the real problem.
Sure, pensions need some reform. All sides agree that some loopholes need closing that currently allow for a small percentage of public employees to abuse the system. For example, "spiking" one's salary in the last months prior to retirement in order to artificially increase the size of pension payouts is unacceptable. However, that kind of abuse happens less than 2 percent of the time and is generally seen in upper management, not by rank-and-file public workers.
The average public employee in California retires with a modest $26,000 pension. These are firefighters, teachers, police officers, bus drivers -- many of whom earn no Social Security at all, and so rely wholly on their pension for retirement.
What's more, these average working Californians have already made concessions, recognizing that cities and counties are under financial pressure. In more than 240 municipalities throughout the state, public employee labor unions have sat down at the bargaining table and agreed to concessions.
Another sensible reform to pensions would be to view them over the long term, rather than in snapshots that fail to give a true picture of their performance. Imagine if we all viewed our home values week-to-week rather than as a 10- or 20- or 30-year investment. Over the past 20 years, the California Public Employees Retirement System (CalPERS) has earned nearly 8 percent annually on its investments.
That indicates a sound system that is returning, on average, more than is necessary to fund pension obligations.
California cities shouldn't take clues from Greece's current economic crisis, and certainly should not take a page from ancient Greece's superstitions. Let's not let local elected officials use pensions as a scapegoat for financial mismanagement. Let's force them to identify and fix the root problems.
www.presstelegram.com/opinions/ci_21276866/blaine-meek-scapegoating-pensions-is-no-fix-municipal
========================================
With Both Presidential Candidates Full Of Hot Air, El-Erian Warns Of Populist Anger Returning
08/13/2012
As the 'new' normal limps on, PIMCO's Mohamed El-Erian focuses his attention on the political dysfunction that roils the 'new new' normal in an excellent op-ed in Foreign Policy today. The economic and financial system risks breakages that the political system will be increasingly incapable of mending rapidly enough," he opines as he fears sluggishness in economic growth, unacceptably high youth unemployment and long-term joblessness, redoubled debt and deficit concerns, and worsening inequalities between rich and poor leading the US down a path towards Europe's disruption.
Via Foreign Policy:
"Sadly, neither Obama nor Romney has yet offered a meaningful, forward-looking economic reform program to address problems such as a malfunctioning labor market, unsustainable public finances, a broken credit system, inadequate infrastructure, and a lagging education system.
The risk for the United States, as well as the global economy, is that a lack of vision and political courage ends up leading to even greater economic disappointment and financial instability, bringing with it the social unrest we've seen in so many other countries over the past 18 months. Occupy Wall Street and the Tea Party may have somewhat fizzled, but populist anger could return with a vengeance.
The longer America's interlocking economic and political challenges persist, the greater the number of companies and long-term investors that begin to worry -- and, more importantly, act on those fears. They hire fewer people and invest less in factories and equipment. As they increasingly sit on the sidelines, the country's fate will be left in the hands of tactical position players and short-term traders, further ramping up volatility and reducing future growth and job opportunities. And when day traders and company flippers start running a country's economy, watch out.
The warning bells are ringing, and they are ringing loudly. We've already allowed bad economics to lead to bad politics. Now, it's high time to put a stop to the cycle where bad politics undermines an already fragile economy."
www.zerohedge.com/news/both-presidential-candidates-full-hot-air-el-erian-warns-populist-anger-returning?tw_p=twt