by | ARTICLES, BLOG, ECONOMY, EDUCATION, HYPOCRISY, NEW YORK
I was disgusted to read Jamie Dimon’s new initiative, the “New York Jobs CEO Council,” not because I oppose gainful employment for New Yorkers, but because Dimon completely gives a free pass to the New York education system with this program. He misses an opportunity – and ignores his responsibility – to help improve a clearly broken system.
Dimon spends most of his op-ed talking about “skills-based hiring and matching,” but completely ignores the elephant in the room: New York’s education system is failing our kids. He describes how, “The council will create sustained pathways for opportunities in the city, better aligning educational programs with skills that employers need as the demands of the labor market rapidly evolve. This will alleviate unemployment—filling currently open jobs through skills training and empowering communities for the jobs of the future.” Quite frankly, this is PR-speak nonsense. New Yorkers are bereft of a decent education system, which is strangled by public school unions, and exacerbated by the fact that Mayor de Blasio is abusively hostile to charter and religious schools, even though those schools consistently outperform public schools — especially among black and Hispanic students.
If Dimon really wanted to make a difference, he would blast de Blasio on the sub-standard New York education system, but instead, he’s joining forces with him. This is an embarrassment, a detriment of rank-and-file New Yorkers. You would think Dimon would be smart enough to know that he’s in bed with New York politicians and playing politics with regular New Yorkers, but perhaps he thinks he can get away with being so political just because he’s the CEO and chairman of JPMorgan Chase.
by | ARTICLES, BLOG, COVID, HYPOCRISY, MEDIA, QUICKLY NOTED
This article from the WSJ is a must-read reflecting how the media reported on the pandemic:
“Has there been in recent history a more tendentious, hysterical, data-denying and frankly disreputable exercise in misdirection than the way in which much of America’s media has covered the Covid-19 epidemic?
Perhaps we can forgive them the endless repetition of pandemic porn; the selectively culled stories of tragedy about otherwise completely healthy young people succumbing to the virus. While we know that the chances of someone under 30 being killed by Covid are very slim, we know too that news judgments have always favored the exceptional and horrific over the routine and unremarkable.
Perhaps we can even forgive them the rapidly shifting headlines—each one shouting with absolute certitude—about the basic facts of the virus and its context: its lethality and transmissibility, the merits of mask-wearing, or the effectiveness of this or that therapy. The science is evolving, and so too is the reporting.
But there are larger representations of this massive and complex story that we should mark as simply unforgivable.
First, the notion, implicit or at times explicit, in so much of the reporting, that the U.S. handling of the pandemic has been a globally unique failure. This is quickly ascribed to the ignorance and malevolence of the Clorox-injecting, quack-cure-peddling bozo in the White House.”
And this:
Even less forgivable is the naked, politically motivated selective use and manipulation of data to damage Republicans and favor Democrats. Typical of this is the steady stream of stories telling us what a great job New York and other (Democrat-controlled) Northeastern states have been doing in managing the spread of the virus, in contrast with the performance of other (Republican-led) states.”
And this:
“There are many reasons for differing rates of infection, death and economic performance, and it would be unwise at this stage to say anything about outcomes with absolute certainty.
But that is perhaps the greatest dishonesty of all: the media’s self-serving insistence that their narrow, partisan narrative of this complex and evolving phenomenon is the revealed and unchallengeable truth.”
The article is worth it to read in its entirety.
by | BLOG, BUSINESS, CONSTITUTION, GOVERNMENT, RETIREMENT
There’s another issue with regard to the crushing liabilities of public sector pensions. Several states, such as California and New York, have a constitutional amendment that grants pension entitlement to public sector workers. In other words, once a person is working for the government and they have a defined benefit plan, they are entitled to keep it and transfer it, even if the contract runs out.
This kind of constitutional amendment says it’s a constitutional requirement to pay employees for their pensions. Now, what it should mean legally is that any pension any employee is earned, it is a constitutional obligation. But that’s not the problem. It has been redefined by the leftest political structure and judiciary to mean something else, which from an economic literacy point of view, that something is incompetent. They have defined it to pay the pension not only for what they’ve earned but also include an obligation to continue that level of funding into new contracts, even those that aren’t signed on yet. So even if a contract is over, it’s not really over. And their employer can’t renegotiate it.
In contrast, in private industries, if an employer terminates a defined benefit plan by a negotiation with a person or whatever, they can’t reduce what they already promised, but there’s an amount that is calculable and then that’s it. Whatever you’ve earned in a contract is specific to that contract. When the contract is over, you have to negotiate a new contract. The terms can be the same. The terms can be different. You may suddenly get offered a contract with no medical benefits when you once had medical benefits. By and large, contracts tend to be the same but there is no obligation to have anything in a new contract that existed in a prior contract.
But in the government world in some places, you have to give the person the same pension benefits in a new contract. Therefore, that is a whole additional cost factored into what an employee earns. The fact that he is required to be given that benefit in the future is an additional cost that is never factored into the equation. As a result, we have enormous forced sums of liabilities that add to the unreported sheets. Yet the municipalities say they are entitled to keep that same level of funding, which is economically illogical and illiterate. The crux of the problem is that the amendment is interpreted in a way that interferes with the ability for two parties to contract by giving one party extra benefits. This is both unjust and financially negligent.
by | ARTICLES, BLOG, BUSINESS, CONSTITUTION, HYPOCRISY, RETIREMENT
Over the years, I have written numerous articles on the looming problem of funding public pensions. Many states are facing severe shortfalls and it isn’t due to the economy or the recent recession or the pandemic. The main problem is accounting gimmicks that cities and states regularly do which results in underreporting their pensions. In the private sector, if someone were to underreport a pension, they go to jail for it, but the public sector gets away with it, and the taxpayer is left holding the bag.
Here’s what’s going on. A principle of normal (accrual) accounting is that if you have incurred current expenses, they have to be reported currently. You cannot delay reporting it until a future year, even if it is not paid until a future year. You have to count their costs today. So when you accrue an expense — for instance, a legal fee — you owe that money. Even if the bill arrives after the new year and you pay it that next year, you still owe it for the current year when incurred. It is a payable – that is, a liability – as of the end of the year incurred.. This is accrual basis accounting, and it’s how pensions must be accounted for in the public sector — but they’re not. And therein lies the problem.
When an employee works for a government (or any organization) in a given year, all costs associated with that employment must be recorded as an expense for that year. Naturally, the regular pay iis an expense incurred. That’s an easy enough concept to understand. But there are other things to consider — for instance, a bonus. If you have a bonus that is not paid until the next year, it still has to be recorded in the year it was earned. Now, pensions are not paid out in the year worked or the year after, but they will be years in the future and actuaries can calculate that amount. That amount is not what is booked as an expense. What is booked as an expense is what’s paid. There’s a disconnect between the funding requirement for pensions, and those funding requirements are usually less than the cost incurred.
If that amount is two billion dollars (one billion earned now and one billion in future pension benefits) you are supposed to record two billion dollars. In other words, that liability should be factored in on the balance sheet. But what’s happening instead is that they’re merely recording the one billion earned by the employee as an expense and not accounting for future payouts. There is no measure of a pension’s accrued actuarial liabilities (the current value of earned benefits in the future). The accountants are merely recording the present expenses while underreporting the future ones.
In a given year, you might incur $100 million in future payments for employees who work. So that $100 million is the true cost. Remember that even though the money is not paid for many years, you still need to know what that cost is today, and include that amount in the budget. You cannot say you’ll ignore it and not include it because you won’t pay it for twenty years. But that is what has been happening. Suffice it to say, in the private sector, it’s very onerous. You have to pay in an amount very close to what the cost is so that the company doesn’t go bankrupt and then leave the pensions hanging. That is both right and responsible. But the morons in the public sector think that because the municipality is so powerful, it doesn’t have to do the funding requirement — and therein lies the reason why they are in trouble. They only put the amount that they pay as an expense; they don’t put the whole thing. That is fraud. So now they’re falling further behind. Even if they don’t have to fund it all, they are required to keep a balanced budget, but they don’t.
What’s even more difficult, a lot of municipalities also promised other things like future medical expenses, and those aren’t even booked. They’ll just list it as an expense when it is paid. That’s not right. You can’t promise someone a benefit and have a legal obligation for the future and then not book it on your books. And what’s worst of all is a constitutional amendment in several states that grants pension entitlement to public sector workers. In other words, once a person is working for the government and they have a defined benefit plan, they are entitled to keep it and transfer it, even if the contract runs out. They have defined it to pay the pension — not only for what they’ve earned but also include an obligation to continue that level of funding into new contracts, even those that aren’t signed on yet.
These non-standard, non-accrual forms of accounting for public pensions over the past few decades have resulted in reckless — and dare I say criminal — budgets resulting in billions and trillions of unfunded liabilities that in some places are financially insurmountable. Those that have engaged in such practices should be sued criminally for intentionally filing false sheets on their pensions.
by | ARTICLES, BLOG, ECONOMY, MEDIA
The Wall Street Journal has a feature called “Notes on the News” which is supposed to “walk you through the biggest news stories of the week.” Unfortunately, their writer, Tyler Blint-Welsh is so inept and full of bias that he misses key points in his summaries to the detriment of WSJ readers.
For instance, on July 26, while writing about federal agents being sent to US cities, he describes how federal officers have been patrolling Portland, Oregon since July 2, but utterly leaves out the fact that violence in Portland has been going on for much longer; many people and property have been injured, yet he ignores that fact in order to focus on the presence of federal authorities. He further mishandles the scenario by describing the use of force on protesters as “apparently without provocation.” However, anyone watching the videos of the circumstances can’t possibly make the assumption of apparent provocation; doing so is utterly inappropriate and dishonest. The protesters were trying to set the courthouse on fire with people in it, but he completely omits that from his analysis. He also chooses not to include the fact that the federal agents were there to protect the federal buildings that the mayor refused to protect but managed to mention that the mayor was tear-gassed by federal agents. The lopsided point-of-view is ridiculous.
Unfortunately, it doesn’t end there. Blint-Welsh also analyzes the situation with unemployment benefits which face an expiration at the end of the month, saying “that lack of progress could jeopardize the $600 weekly unemployment supplement that millions of Americans have been relying on since the pandemic triggered record numbers of jobless claims.” He further describes how the Democrats want to extend the $600 until January 2021 while noting that the Republicans want to reduce the benefit amount. However, he conveniently leaves out the fact that the reason the Republicans want to cut back payments is because a large number of recipients are paying more to stay home than if they went to work — which is hampering economic recovery. Forget about the fact that it shouldn’t be so readily available to collect because jobs are available. The extension that the Democrats want is unconscionable but he’s making it seem like the Democrat position is reasonable and that the Republicans are selfish and cold-hearted.
It’s hard to imagine that Blint-Welsh is so uninformed as to not know what’s actually going on, so the only conclusion is that he is intentionally distorting these situations. That is egregious for both the integrity of the Wall Street Journal and those who have to read his diatribes.
by | ARTICLES, BLOG, ECONOMY, GOVERNMENT, NEW YORK, POLITICS
New York Governor Cuomo continues his crusade for a state bailout by claiming that New York is a “donor state” and therefore entitled to more federal funds. By this, he means that New York gives more in tax revenue to Washington than it gets back. However, the “donor state” mantra and his calculations making that claim are incorrect.
A recent article in the Wall Street Journal, “New York is No ‘Donor’ State,” did a thorough breakdown on how to calculate and account for federal funds in order to better understand the ebb and flow of dollars in and out of states. In this, it showed that New York really isn’t a donor state at all. It seems that various “donor state” claims tend to cling to a Rockefeller Institute report published in 2017 that erroneously calculated what states receive. For instance, it counted both food stamps and servicemen’s paychecks as federal subsidies when that’s clearly not the case. Likewise, it omitted the federal subsidization of municipal debt issuance and also didn’t account for the implicit socialization of their unfunded pensions and postemployment benefits. Thus, in reality, New York is one of several high-tax blue states that “are net ‘receivers’ of federal funds.” The aforementioned article is a definitely worthwhile read.
But even if the donor state claim were true to some degree, it’s still a weak argument for a bailout. Any notable imbalances occur for several reasons that Cuomo refuses to even consider. For instance, the federal tax code is very progressive and New Yorkers have high incomes. Likewise, New York receives relatively less money in the form of federal contracts and federal employee wages. This is logically caused by the fact that New York has made itself such a terrible place to do business (including sky-high costs and ridiculously burdensome regulation and taxes) that it can’t compete for these projects. Furthermore, the flow of New York taxpayer money to Washington and back has virtually nothing to do with why the New York government can’t balance its budget due to overspending. The government is not the taxpayer. The states send no money to Washington – their earners do.
In other words, it’s not that the government is being shortchanged. The state government isn’t hurt by this at all. The taxpayers of New York are the ones hurt by perennial fiscal mismanagement and it is a sham to request a bailout under the guise of being a donor state.
by | ARTICLES, BLOG, GOVERNMENT, HYPOCRISY, LAW, POTUS, TRUMP
It’s really sad that Mitt Romney went off the deep end with regard to the commuting of Roger Stone’s sentence. Trump’s timing was definitely politically stupid and over the top. However, presidential pardons and commutations are often self-serving and inexplicable. Although Roger Stone was convicted of a relatively minor infraction of lying about something that was not of major significance, even that conviction was suspect because of clearly stated bias of the lead juror that should have led to a new trial. As such, his commutation was certainly less appalling compared to other pardons sometimes involving really horrific human beings.
Therefore, it is ridiculous that Mitt Romney declared Stone’s commutation was “unprecedented, historic corruption.” This is so absolutely wrong and incompetent that it could only be attributed the most vile case of Trump Derangement Syndrome. It seems that Mitt Romney either doesn’t know his history or is flat-out ignoring the fact that Stone’s commutation is one of a long line of Presidents using their Constitutional powers of pardon to benefit friends. Gerald Ford pardoned Richard Nixon. Richard Nixon pardoned Jimmy Hoffa. Bill Clinton pardoned his brother Roger Clinton and Marc Rich, the “fugitive financier.” Clinton also commuted the sentences of 16 members of FALN, the terrorists responsible for more than 130 bombings spanning several years against the wishes of Congress. Likewise, Obama commuted the sentence of one of the FALN masterminds, Oscar Lopez Rivera, who rejected the original commutation in 1999. Surely these pale in comparison to Roger Stone? As it is, Stone remains a convicted felon because he did not receive a full presidential pardon so he is not completely off the hook.
Romney’s assertions are completely unfounded and shows that his judgement continues to be unreliable. His response was so off the charts that it should make everyone doubt the credibility of anything that he says.
by | BLOG, FREEDOM, HYPOCRISY, MEDIA, POLITICS
The concept of black lives matter is a reasonable expression of sentiment for people who are trying to ensure equality and equity. The problem is that the concept, “black lives matter” shares the same name as the legal entity “Black Lives Matter.” But Black Lives Matter is an anti-capitalist, anti-semitic organization whose policies are anything but helpful to black people as a whole. Indeed, they call themselves a “member based abolitionist organization,” focusing on abolishing “capitalism”, and supporting single parent households, according to their own BLM chapter website for Washington, DC.
I would wager that the vast majority of people expressing support for black lives matter (small letters) don’t actually support Black Lives Matter (capital letters). They support the general concept but wouldn’t have anything to do with the organization if actually presented with its current objectives and ideologies. The problem arises when people support that general concept, but then any monies raised as a gesture of solidarity go to the big organization because it’s easy — or else they think it is a benign group.
Continuing to use the “black lives matter” mantra gives credibility to Black Lives Matter; this is dangerous and almost as bad as supporting Black Lives Matter outright. The worst way to poison someone is to tell them something is good, but then tell them its poison only after they’ve consumed it. Same with “black lives matter.” It would be wise to adopt another slogan that shows solidarity with the plight of black Americans without supporting and funding the anti-capitalist, anti-family, anti-police Black Lives Matters movement.
