Will unions now thank Wall Street?

Steven Greenhut: Last week, I was a witness on a mock trial at Freedom Fest, in which public employee unions were in the dock over the detrimental effect of their pensions on the public treasury. It was a fun event, designed to debate and discuss the role of public employee unions in the current fiscal situation, but the union officials who questioned me and made their case kept coming back to the same argument.

Wall Street is evil. That’s what they say, basically. They deny that the routine six-figure pensions have anything to do with any fiscal problems suffered by cities and states. They deny that pensions are too high. They insist that public employees remain underpaid. They deny the obvious numbers about unfunded pension liabilities. The whole problem is in their view due to Wall Street greed, which sunk the economy and reduced the rates of return that kept sustaining the pensions their members receive.

Now, the unions are crowing over new reports that CalPERS and CalSTRS have recorded huge gains in the last fiscal year based on their stock-market investments. They now claim that there is no pension crisis and that we can go back to business as usual. But even the Bee report shows the following: “Yet the two systems, like many public pensions around the country, remain underfunded and are still feeling the effects of the market crash of 2008. Officials said it will be difficult to duplicate the latest investment results in the coming years, and both funds are likely to continue looking to taxpayers for higher contributions.”

I’m not betting that they will continue 20 percent rates of return for more than a year. And as Wayne Lusvardi, a CalWatchDog.com reporter, explains in a piece posted in Breaking News, “CalPERS made an anemic 3.41 percent return over the last five years and only 0.98 percent over the last three years, falling far short of its 7.75 percent annual target return it needs to meet pension obligations.”

Lusvardi quotes the CalSTRS CEO: “Even given this past year’s impressive performance, CalSTRS would need more than a 20 percent return each year for the next four years to achieve full funding in 30 years, an impractical expectation.”

That’s hardly room for celebration.

Consider these two recent Sacramento Bee stories:

1. Six-figure pensions soar;

2. Late-career raises strain CalSTRS.

This is just the unions’ latest, desperate attempt to deflect criticism from their plundering of the public treasury. But it is fun listening to them praise Wall Street for a change, which apparently is their new savior.

JULY 19, 2011

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  1. GSL
    GSL 19 July, 2011, 15:37

    Not sure the unions will thank Wall Street; I think the organized-labor community would refer to the high-finance folks as “useful idiots.”

    We wrote about this here.

    Reply this comment
  2. Sol
    Sol 19 July, 2011, 16:08

    And check out this about federal government job security. The federal worker is more likely to die than get laid off or fired.

    http://www.usatoday.com/news/washington/2011-07-18-fderal-job-security_n.htm

    Reply this comment
  3. Marc Rogers
    Marc Rogers 20 July, 2011, 13:10

    Before I read your op-ed essay entitled ‘First responders’ who don’t, I first read the short bio that was included at the end. The minute I saw that you wrote for the Orange County Register, I knew immediately, like Abbott and Costello always going back to first base no matter where they were on the field, that you would blame the unions for the subject matter in your essay.

    No matter how a conservative/Republican like yourself starts off, you always, through legerdemain, alchemy and verbal doublespeak and gymnastics, blame the unions for the subject”du jour.” And naturally, through a twisting that would have made Houdini proud, you reflexively made the unions your punching bag.

    The $100,000 salaries and pensions that you so righteously and indignantly lament, pale when compared to the $600 TRILLION debt incurred by your Wall Street Sun Kings.

    Like your fellow courtiers and acolytes at the rightwing roundtable( Prager, Savage, Hannity, Limbaugh Coulter- I have to stop before a disabling dyspepsia sets in), you genuflect before the God of Mammom while eschewing the manna which sustains whatever empathic humanity you have left.

    If the unions had half the power and influence that you think they do, then a decent and sharing world may actually have a fighting chance.

    Reply this comment
  4. CalWatchdog
    CalWatchdog Author 20 July, 2011, 14:12

    Marc: FYI, the Register’s editorial page is libertarian and not conservative and I am a Libertarian who has spent much of my career blasting conservatives and Republicans. Hate to rain on your preconceived notions.

    Reply this comment
  5. David from Oceanside
    David from Oceanside 21 July, 2011, 08:31

    The party line among union hacks seems to be point the finger at wall street and hope to distract from union/government abuse. I join Marc Rogers condemnation of the unholy alliance between bankers and government.

    Its time to end all taxpayer abuse caused by government collusion with both unions and bankers.

    Reply this comment

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