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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsMatt Taibbi: Looting the Pension Funds
By MATT TAIBBI | Sep 26, 2013 AT 07:00AM
n the final months of 2011, almost two years before the city of Detroit would shock America by declaring bankruptcy in the face of what it claimed were insurmountable pension costs, the state of Rhode Island took bold action to avert what it called its own looming pension crisis. Led by its newly elected treasurer, Gina Raimondo an ostentatiously ambitious 42-year-old Rhodes scholar and former venture capitalist the state declared war on public pensions, ramming through an ingenious new law slashing benefits of state employees with a speed and ferocity seldom before seen by any local government.
Detroit's Debt Crisis: Everything Must Go
Called the Rhode Island Retirement Security Act of 2011, her plan would later be hailed as the most comprehensive pension reform ever implemented. The rap was so convincing at first that the overwhelmed local burghers of her little petri-dish state didn't even know how to react. "She's Yale, Harvard, Oxford she worked on Wall Street," says Paul Doughty, the current president of the Providence firefighters union. "Nobody wanted to be the first to raise his hand and admit he didn't know what the fuck she was talking about."
Soon she was being talked about as a probable candidate for Rhode Island's 2014 gubernatorial race. By 2013, Raimondo had raised more than $2 million, a staggering sum for a still-undeclared candidate in a thimble-size state. Donors from Wall Street firms like Goldman Sachs, Bain Capital and JPMorgan Chase showered her with money, with more than $247,000 coming from New York contributors alone. A shadowy organization called EngageRI, a public-advocacy group of the 501(c)4 type whose donors were shielded from public scrutiny by the infamous Citizens United decision, spent $740,000 promoting Raimondo's ideas. Within Rhode Island, there began to be whispers that Raimondo had her sights on the presidency. Even former Obama right hand and Chicago mayor Rahm Emanuel pointed to Rhode Island as an example to be followed in curing pension woes.
What few people knew at the time was that Raimondo's "tool kit" wasn't just meant for local consumption. The dynamic young Rhodes scholar was allowing her state to be used as a test case for the rest of the country, at the behest of powerful out-of-state financiers with dreams of pushing pension reform down the throats of taxpayers and public workers from coast to coast. One of her key supporters was billionaire former Enron executive John Arnold a dickishly ubiquitous young right-wing kingmaker with clear designs on becoming the next generation's Koch brothers, and who for years had been funding a nationwide campaign to slash benefits for public workers.
Read more: http://www.rollingstone.com/politics/news/looting-the-pension-funds-20130926#ixzz2g7SLHzvu
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emsimon33
(3,128 posts)benld74
(9,909 posts)it just STOPPED funding the pension funuds ENTIRELY. THAT is why its pension funds are in such sad shape.
colsohlibgal
(5,275 posts)The 1 percent and their misguided allies have been gung ho to undo the New deal since it was enacted. I remember a history teacher in college expressing how irate her dad got when he talked about this bill.
I knew a lot about this, part through being involved myself and knowing a few high up financial types in my state. It's outright thievery, it's outright looting promised money, promised to average people, so wealthy people can get wealthier. That makes me irate.
One wish of mine would be that more everyday people would really study what's going on, would engage in critical thinking, and not depend on self serving sound bytes.
I am glad Matt Taibbi is tackling issues like this.
G_j
(40,367 posts)it is pure thievery. Notice how they consistently leave workers high and dry saying simply, they don't have the money, while they throw billions at the banks, who are, of course, richer than ever.
BelgianMadCow
(5,379 posts)drynberg
(1,648 posts)KG
(28,752 posts)JDPriestly
(57,936 posts)surveillance scandal.
Firemen? Police officers? Judges? Court clerks? City and County hospital workers? Many of them work for less than they could get for private firms. Others risk their lives to protect the public. And then they get cheated. The lack of morality is overwhelming. It's like being in a room filled with angry skunks and rotten eggs. How can people do these things to other people?
Do they abuse animals and children in their off-hours?
Human refuse. That's what these hedgefund managers are.
Less useful than rats.
Enthusiast
(50,983 posts)The right has been promoting cruelty and intolerance through hate radio for decades now. Just listen to them, their words. Like their 20th Century Nazi counterparts, they always focus on a convenient scapegoat. Then they hammer the talking points until their minions sound like parrots.
Fascists cannot exist is an environment free from cruelty and intolerance.
hack89
(39,171 posts)it is not complicated - the politicians bought votes by promising generous pension benefits to public employee unions (the unions are a huge political force in RI). Once in office they did not adequately fund the pensions because they did not want to raise taxes. Now the local governments find themselves with pension obligations they cannot pay and tax payers unwilling to pay double digit tax increases every year.
Enthusiast
(50,983 posts)hack89
(39,171 posts)pensions and politicians have been a toxic combination for a very long time.
nashville_brook
(20,958 posts)steve2470
(37,457 posts)LuvNewcastle
(16,849 posts)"In fact, Baker said, had public funds during the crash years simply earned modest returns equal to 30-year Treasury bonds, then public-pension assets would be $850 billion richer than they were two years after the crash." page 3
Why do we continue to allow these funds to be invested in the stock market? There are much safer investments out there that would basically guarantee a steady return. The stock market is too volatile for us to invest our pension funds in it. Haven't we learned a lesson here?
Enthusiast
(50,983 posts)Funny that we never hear this on the regular media. They are united in their misinformation message.
G_j
(40,367 posts)anti-worker script for a long time, since Reagan, at least.
adirondacker
(2,921 posts)LWolf
(46,179 posts)Looting pensions and protecting Monsanto.