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Wall Street Looting Pensions

[ 83 ] September 30, 2013 |

Matt Taibbi has a comprehensive takedown on of how Wall Street has combined with irresponsible state politicians to steal public workers’ pensions. It’s the latest iteration of the Wall Street war to increase profits by undermining the working and middle classes. At the heart of it is former Enron billionaire John Arnold, the same man recorded bragging about manipulating energy prices in California during their corporate created energy crisis. Here’s the skinny.

So even if Pew’s numbers were right, the “unfunded liability” crisis had nothing to do with the systemic unsustainability of public pensions. Thanks to a deadly combination of unscrupulous states illegally borrowing from their pensioners, and unscrupulous banks whose mass sales of fraudulent toxic subprime products crashed the market, these funds were out some $930 billion. Yet the public was being told that the problem was state workers’ benefits were simply too expensive.

In a way, this was a repeat of a shell game with retirement finance that had been going on at the federal level since the Reagan years. The supposed impending collapse of Social Security, which actually should be running a surplus of trillions of dollars, is now repeated as a simple truth. But Social Security wouldn’t be “collapsing” at all had not three decades of presidents continually burgled the cash in the Social Security trust fund to pay for tax cuts, wars and God knows what else. Same with the alleged insolvencies of state pension programs. The money may not be there, but that’s not because the program is unsustainable: It’s because bankers and politicians stole the money.

Still, the public mostly bought the line being sold by Arnold, Pew and other anti-pension figures like the Koch brothers. To most, it didn’t matter who was to blame: What mattered is that the money was gone, and there seemed to be only two possible paths forward. One led to bankruptcy, a real-enough threat that had already ravaged places like Vallejo, California; Jefferson County, Alabama; and, this summer, Detroit. In Rhode Island, the tiny town of Central Falls went bust in 2011, and even after a court-ordered plan lifted the town out of bankruptcy in 2012, the “rescue” left pensions slashed as much as 55 percent. “You had guys who were living off $24,000, and now they’re getting $12,000,” says Day. Though Day and his fellow retirees are still fighting reform, he says other union workers might rather settle than file bankruptcy. Holding up an infamous local-newspaper picture of a retired Central Falls policeman in a praying posture, as though begging not to have his whole pension taken away, Day sighs. “Guys take one look at this picture and that’s it. They’re terrified.”

Such images chilled many public workers into accepting the second path – the kind of pension reform meagerly touted by one-percent-friendly politicians like Gina Raimondo. Anyone could see that “reform” meant giving up cash. But the other parts of these schemes were murkier. Most pension-reform proposals required that states must go after higher returns by seeking out “alternative investments,” which sounds harmless enough. But we are now finding out what that term actually means – and it’s a little north of harmless

The politician most complicit with this stealing of public pensions is Rhode Island treasurer Gina Raimondo, who has turned the state’s pension program into a giant feeding frenzy for Wall Street capitalists like Arnold. She’s the one Democratic politician in this country who is clearly worse than Andrew Cuomo. How bad is Raimondo? She was attacked from the left in the pages (or website anyway) of Forbes. Say that again. Forbes attacked her for being too beholden to Wall Street.

She is running for Rhode Island governor. To say the least, I hope she loses to Providence mayor Angel Taveras. Still, she has the name in this very Italian state and there’s a tremendous amount of dislike of public workers in this supposedly union-friendly state. So we shall see if the Ocean State rejects a politician so clearly supportive of the New Gilded Age.

Lawrence Goodwyn, RIP

[ 4 ] September 30, 2013 |

The great U.S. historian Lawrence Goodwyn has passed. The author of the single best book even written on the Populists, Democratic Promise, The Populist Movement in America (as well as the shorter version, The Populist Moment), Goodwyn made the concerns of these impoverished 19th century farmers central to the response and resistance to the rise of rapacious Gilded Age capitalism. He also helped shift the conversation about the Populists away from the condescension of Richard Hofstadter. Instead of a bunch of intolerant yokels, Goodwyn shows the Populists as the continuance of a working-class rural democratic culture challenging the overwhelming control and oppression of an intolerant and thieving time.

I’ve never read Goodwyn book on Poland’s Solidarity movement, but I respect someone who seeks to take their insights about democratic uprisings and compare them to movements abroad.


Resisting Unpaid Internships

[ 28 ] September 30, 2013 |

It’s good to see Europeans following their American comrades and resisting unpaid internships. I thought this quote was a pretty good example of why internships need to be governed by conventional labor law.

Saxon Baird, 29, a freelance journalist based in Brooklyn, says he has already completed six internships. “Only one internship really paid an amount that I could scrape by on,” Mr. Baird said: “In places like Vogue, I was getting paid $12 a day and working 25 to 30 hours a week. So, while that was technically a paid internship, it might as well not have been.”

He said that his internship at Vogue included some perks — like invites to celebrity parties and a few bylines — but he spent a large amount of time running errands, and acting as a substitute for a salaried employee.

But you know, a poor start up like Vogue magazine, how could they afford to pay minimum wage?

The Greatest Nation in Human History, Part 5002

[ 15 ] September 28, 2013 |

Only the greatest nation in human history could have a plutocracy of unbelievable wealth and endemic poverty that forces children to go hungry and reinforces gender and racial inequality.

Friday Night

[ 57 ] September 27, 2013 |

These drawings of all your varieties of 18th century drunk British women pretty much describes the average Friday night of your typical LGM reader writer. I relate most to the woman in glasses drunkenly smashing her face on a tree.

Obviously you need to click on the image to read it at all.

Union-Made Cars

[ 35 ] September 27, 2013 |

Buying a new car in 2014? Check out the United Auto Workers list of union-made vehicles before you buy (PDF, see here if you don’t to link straight to it. This list will grow after the UAW-Volkswagen partnership in Chattanooga goes through.


[ 9 ] September 27, 2013 |

Once again, humans are a disaster for almost every other species on the planet.


[ 35 ] September 26, 2013 |

Not only does Megan McArdle not understand how agricultural subsidies work, she creates a myth about giving money to people for working being better than giving money to people for just living that she would never apply to people who were not consistent Republican voters. I’m sure once this inconsistency is pointed out to her, she will be happy to support massive government projects that guarantees work to all unemployed Americans.


[ 197 ] September 26, 2013 |

If these crazy demands in exchange for raising the debt ceiling briefly are indicative, among the Republican demands we can probably expect in the near future in exchange for not destroying the world are the abolition of the Democratic Party, the repeal of the Civil Rights Act of 1964, and the outlawing of labor unions.

Environmental Linkage

[ 13 ] September 26, 2013 |

1. More on climate change destroying the ocean ecosystem and the rise of jellyfish as our new overlords.

2. Support for fracking declines in the United States. This is useful given our embrace of the technology without anything close to the proper research as to how it will affect water supplies, not to mention create earthquakes. But where there’s profit to be found, you can forget about caution.

3. The Louisiana sinkhole caused by mining corporations using the state as a dumping zone has gotten worse and has no signs of stopping.

The Greatest Nation in History

[ 44 ] September 26, 2013 |

Only the greatest nation in the world could have an infrastructure system this modern and reliable.

Luciano Vincenzoni, RIP

[ 13 ] September 25, 2013 |

Anyone who can write awesome scenes like this needs to be remembered upon his death.