Category: folly

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folly too much government video

Video of the Week: California PERS Aristocracy

In vignette after vignette, this mash-​up provides a helpful (and amusing) take on California’s pension fiasco:

It’s not easy thinking about government-​enacted pensions, I guess. Everyone wants to retire young and well-​off, and no one wants to appear stingy. But there has to be responsibility in how these things are set up.

I touched upon the subject earlier this week, in “Pension Declension.” Two of my commenters — Charles Sainte Claire and SkipppingDog — strike me as perhaps not quite getting why pension reform is necessary.

What Charles and Skipping aren’t saying is that a defined benefit plan guarantees a certain return whether or not the money has been invested to produce such a return. So, where does the money to pay the defined benefit come from?

Yep, you guessed it: The taxpayers. Future taxpayers who can’t even be blamed for having elected the dishonest pols who cut these fraudulent deals with the politically active and powerful public employee unions.

In the public sector, the pressure will then be off the workers and politicians to actually fund today what will be spent tomorrow. Which means embracing the sort of chaos now destroying states and municipalities in California and across these United States.

What about in the private sector? Did someone say “private” sector? Well, even in the private sector, it will be the taxpayers who get stuck with the bill.

To suggest that defined benefit plans are the way to go is to suggest that workers can have whatever they desire and some magic person named The Taxpayer will always be there to pay for it. It is to embrace fleecing future generations.

Of course, we’ll be told that it “worked well in the past.” In a manner of speaking. After all, Bernie Madoff’s fraudulent scam worked well “in the past.” Most rip-​offs “work well” … that is, until the very moment when honest, hard-​working people realize they’ve been had.

Categories
folly free trade & free markets too much government

The Alternative to the Public Option

The congressional “progressive” caucus still wants to impose a public health insurance option, allegedly to “reduce the deficit.”

According to caucus kingpin Raul Grijalva, deficit hawks are “hypocrites” for predicting that government spending would balloon were a public option imposed. Their “excuse … that it was going to be too expensive is phony,” according to Congressman Grijalva.

The progressives’ notion seems to be that accelerating the pell-​mell government takeover of the medical delivery industry is the very best thing one could do to reduce the deficit.

If that’s the case, then why not also “reduce the deficit” with respect to other sectors of the economy in which government spends any money at all — that is, in any economic sector — by launching a government takeover that eventually swamps private markets altogether? 

By “progressive” logic, communizing the whole economy must be the best way to foster fiscal sobriety in DC. 

Absurd, I know.

Perhaps Grijalva’s deceived by his franking privilege. The public option for postal delivery works so well. For him. For the rest of us, we have to pay the billions the USPS loses every year.

The solution to the USPS’s constant, persistent failure is not to regulate and nationalize Fed-​Ex and UPS and every other alternative. 

Real progress requires the opposite of Grijalva’s “progressivism”: Pry government out of both health care and postal delivery. This is not a radical idea. It is only … well …

This is Common Sense. I’m Paul Jacob.

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folly

Pension Problems

BP finally managed to place a cap on its leaking oil well in the Gulf of Mexico.

Bristol Palin — that other “BP” in the news — is engaged to be married.

And the new iPhone’s antenna problems can be fixed by holding it in a special, dainty way — or by adding on a plastic holder.

So, with popular news stories wrapping up, can we now get back to fixing the political mess we’re in?

With the Republicans now said to be divided on whether to actually produce a game plan to fix up the fix we’re in, you can see how all the old perversities of politics still remain in full play at the federal level.

But look closer to home. There’s a lot to fix there. 

Throughout the country, politicians have made all sorts of bad deals with public employee unions regarding pay and pensions. They love to spend our money buying their votes. In cities like San Diego, the invested pension funds’ values have plummeted, making renegotiations necessary, and necessarily painful. Your town may be next.

Simple solution? We need constitutional amendments preventing politicians from promising pension pay-​outs of any amount. The only kind of pension governments should be allowed to offer is the placement of a negotiated amount of funds in a retirement account to be managed by the employee or the employee’s assigns.

Taxpayers must not be held in hock to the unfulfillable promises of a previous set of politicians.

This is Common Sense. I’m Paul Jacob.

Categories
folly free trade & free markets national politics & policies too much government

Wide-​Eyed Wackiness

Where to begin? How about the very first sentence of the New York Times article hailing passage of the Dodd-​Frank financial bill? According to the illustrious fishwrap, “sweeping expansion of federal financial regulation” reflects “a renewed mistrust of financial markets after decades in which Washington stood back from Wall Street with wide-​eyed admiration.”

We’ve seen some liberalization of financial dealings over the years. It was once illegal to own gold. Travelers can be glad of the rise of interstate banking after governments began to permit it in the 1980s.

But have politicians really offered nothing but “wide-​eyed admiration” for “Wall Street” for “decades”? Has the federal government really been hands-​off till now?

Take Senators Dodd and Frank. They were out front pushing home ownership on people who could not afford homes, with multiple programs and legislative packages. This bubble-​making process was further inflated (quite literally) by the Federal Reserve’s cheap credit policies. Many lenders, encouraged by government-​provided (but perverse) incentives, jumped onto the Irresponsibility Bandwagon in the run-​up to collapse. 

So how can the “solution” be additional bailout authority … which will further encourage bankers and others to invest unwisely? 

And the new regulations — these, too, are supposed to help? We don’t even know what they are yet, because bureaucrats have yet to write them, as specified (vaguely) by Congress. In addition to their burden, they will allow pols to shake down Wall Street for years to come. 

This is Common Sense. I’m Paul Jacob.

Categories
folly national politics & policies

Save the Unions’ Ponzi Schemes?

Senator Bob Casey from Pennsylvania is legislating something big, the “Create Jobs and Save Benefits Act.”

Innocuous? Everyone wants more jobs. Government may have a lousy track record creating jobs that actually produce things demanded by people, but still — the bill is hardly unexpected in times like these.

It’s the second half of the title that indicates the powder keg within. The bill would bail out horrendously mismanaged union pension plans.

Unions, in the current legal context, are legal creatures of the state, with special privileges. And, surprise surprise, their own pensions — the ones that they manage — appear to be in as bad shape as the public-​employee pensions I’ve talked about before, the ones that are building into a tsunami of insolvency.

A public bailout would transfer money from people without any special pension plan to people with pensions that are going bust. This is horribly unjust. That’s why Americans for Limited Government — a past sponsor of this program — is calling out Republican politicians who’ve signed onto Casey’s audacious scheme.

“At issue are multi-​employer pension plans, in which companies across an industry pay into a single pension pool,” explains the Wall Street Journal. “[E]ven before 2006 only about 6% of multi-​employer plans were fully funded, compared to about 31% of single-​employer plans. The real problem is that multi-​employer plans have become a sort of pension Ponzi scheme.”

Hmmm. Where have we heard that before?

This is Common Sense. I’m Paul Jacob.

Categories
folly general freedom ideological culture

Facebook’s Secret Shame

Facebook has had some bad press lately.

The popular social networking site got in trouble in recent months for the ever-​more-​cavalier way it treats users’ privacy. People complain that their data has been unilaterally exposed in ways they never expected when they first signed up for the service, and that privacy settings have devolved into a confusing, hard-​to-​tweak labyrinth.

Facebook seems to be adjusting its privacy practices in response to the bad publicity. But there’s another lamentable Facebook practice that has, unfortunately, received less sustained attention: Its willingness to shut down a user’s Facebook page solely because somebody else is offended by the viewpoint expressed on that page.

The “somebody else,” in the case I’m referring to, is the government of Pakistan, which banned Facebook because of a page encouraging people to display images of the prophet Muhammad in protest of threats of violence against the show South Park, which had made fun of making threats against people who display images of Muhammad.

“In response to our protest, Facebook has tendered their apology and informed us that all the sacrilegious material has been removed from the URL,” gloated Najibullah Malik, who represents Pakistan’s Orwellian “information technology ministry.”

It’s dangerous to cave in to demands for censorship. The folks at Facebook were faced with the loss of a large market, but they should have let the anti-​censorship page remain published and let Facebook users in Pakistan pressure their government to lift the ban.

This is Common Sense. I’m Paul Jacob.