Looting the Pension Funds: All across America, Wall St. is grabbing money meant for public workers

[Triana]

From September of this year, but I thought it particularly apropos since the new "budget deal" is looming and includes MORE public worker and military pension cuts....



. . .

The state's workers, in other words, were being forced to subsidize their own political disenfranchisement, coughing up at least $200 million to members of a group that had supported anti-labor laws. Later, when Edward Siedle, a former SEC lawyer, asked Raimondo in a column for Forbes.com how much the state was paying in fees to these hedge funds, she first claimed she didn't know. Raimondo later told the Providence Journal she was contractually obliged to defer to hedge funds on the release of "proprietary" information, which immediately prompted a letter in protest from a series of freaked-out interest groups. Under pressure, the state later released some fee information, but the information was originally kept hidden, even from the workers themselves. "When I asked, I was basically hammered," says Marcia Reback, a former sixth-grade schoolteacher and retired Providence Teachers Union president who serves as the lone union rep on Rhode Island's nine-member State Investment Commission. "I couldn't get any information about the actual costs."

This is the third act in an improbable triple-fucking of ordinary people that Wall Street is seeking to pull off as a shocker epilogue to the crisis era. Five years ago this fall, an epidemic of fraud and thievery in the financial-services industry triggered the collapse of our economy. The resultant loss of tax revenue plunged states everywhere into spiraling fiscal crises, and local governments suffered huge losses in their retirement portfolios – remember, these public pension funds were some of the most frequently targeted suckers upon whom Wall Street dumped its fraud-riddled mortgage-backed securities in the pre-crash years.

Today, the same Wall Street crowd that caused the crash is not merely rolling in money again but aggressively counterattacking on the public-relations front. The battle increasingly centers around public funds like state and municipal pensions. This war isn't just about money. Crucially, in ways invisible to most Americans, it's also about blame. In state after state, politicians are following the Rhode Island playbook, using scare tactics and lavishly funded PR campaigns to cast teachers, firefighters and cops – not bankers – as the budget-devouring boogeymen responsible for the mounting fiscal problems of America's states and cities.

Secrets and Lies of the Bailout

Not only did these middle-class workers already lose huge chunks of retirement money to huckster financiers in the crash, and not only are they now being asked to take the long-term hit for those years of greed and speculative excess, but in many cases they're also being forced to sit by and watch helplessly as Gordon Gekko wanna-be's like Loeb or scorched-earth takeover artists like Bain Capital are put in charge of their retirement savings.

THE REST of this hideous tale of the economic RAPE of the middle class:

http://www.rollingstone.com/politics/news/looting-the-pension-funds-20130926

[Skittles]

1. strange how so many public workers think their pensions are protected

they are not, and they WILL be coming after yours

[WinkyDink]

52. This would virtually kill me and my husband, retired teachers. I do not jest.

[El_Johns]

2. K&R. Deliberate, planned & coordinated theft.

[Enthusiast]

25. That is exactly correct. Deliberate, planned & coordinated theft.

Aided and abetted by representatives of the 1%.

[Agschmid]

4. So is this all you post...

You seem to have a "thing"

[Agschmid]

6. Yup. I do...

I'll "come out" ain't like I haven't done it before.

[senseandsensibility]

9. Do it again

Please.

[NRaleighLiberal]

7. really? shut down Wall Street? close all Corporations? then....what?

[Agschmid]

8. Anarchy I suppose...

Or at least is get a few hundred ripped from the hands of Jamie Dimon.

[socialist_n_TN]

29. Then workers take over the productive sector.......

and run it as a non-profit in a planned economy. The admin costs will be MUCH lower than the profit margin.

[LuvLoogie]

10. I can't get past Taibbi's sophomoric language...

The topic is too serious for such shock jock reporting. He'd get a wider audience by just telling the story and backing up his many assertions with backing examples. You can't present this to someone you want to persuade.

[senseandsensibility]

11. okay

you've convinced me. If you say it doesn't meet your sophisticated standards it's obviously not to be trusted.

[LuvLoogie]

16. It's off putting. I'm not asking for sophisticated...

I'm asking for readable. He describes someone as "a dickishly ubiquitous young right-wing kingmaker with clear designs on becoming the next generation's Koch brothers.."

A little too much Matt Taibbi for me to get through to the facts. Like an over-salted steak. Hell, I'd eat a goddamned pizza puff first!

[rhett o rick]

35. I a curious what you think of Occupy? nm

[LuvLoogie]

38. Occupy was a great protest.

Like an amoeba with a brain.

[SharonAnn]

18. I can forgive him a lot just for this sentence about Goldman Sachs in an article

Stating that Goldman Sachs is "a giant vampire squid wrapped about the face of humanity, relentlessly jamming its blood-funnel into anything that looks like money".

One of the best descriptions of the predatory Wall Street firm(s) that I've ever seen.

[LuvLoogie]

39. Does he mean this guy from 1912?

[LuvLoogie]

44. Link broke, sorry

[valerief]

26. The topic is too serious to whine about adjectives. nt

[LuvLoogie]

40. He can write anyway he wants.

But I think that, unless you are already of the opinion that these people suck, you'll have hard time getting through all five pages of the article. One of the people he quotes drops an f-bomb, but its power is diluted, in my opinion.

[TransitJohn]

32. I like his writing, it's evocative and modern, like Palast. eom

n/t

[yodermon]

42. ... said "LuvLoogie" n/t

[LuvLoogie]

43. That's right! I said it...

But I would never ask you to skim through 5 pages of jiz.

[Bigmack]

46. Ever read Hunter S. Thompson..?

Taibbi is the irreverent journalistic son of HST.

My advice... learn to get past the "sophomoric" language, and concentrate on the topic.

I believe he uses lots of examples in his stories, myself.

I don't necessarily always agree with Matt, but I sure as hell read his stuff.

[LuvLoogie]

48. But that's my point. Getting past the language...

I'm not criticizing his journalism. The presentation is distracting. I don't mind irreverence, but I need to be set up with a little context first. I don't necessarily want to jump into Mike Hammer's mind if I'm asked to judge the evidence.

[Benton D Struckcheon]

53. How's this?

On Wall Street, people are beginning to clue in to the fact – spikes notwithstanding – that over time, hedge funds basically suck. In 2008, Warren Buffett famously placed a million-dollar bet with the heads of a New York hedge fund called Protégé Partners that the S&P 500 index fund – a neutral bet on the entire stock market, in other words – would outperform a portfolio of five hedge funds hand-picked by the geniuses at Protégé.

Five years later, Buffett's zero-effort, pin-the-tail-on-the-stock-market portfolio is up 8.69 percent total. Protégé's numbers are comical in comparison; all those superminds came up with a 0.13 percent increase over five long years, meaning Buffett is beating the hedgies by nearly nine points without lifting a finger.

Union leaders all over the country have started to figure out the perils of hiring a bunch of overpriced Wall Street wizards to manage the public's money. Among other things, investing with hedge funds is infinitely more expensive than investing with simple index funds. On Wall Street and in the investment world, the management price is measured in something called basis points, a basis point equaling one hundredth of one percent. So a state like Rhode Island, which is paying a two percent fee to hedge funds, is said to be paying an upfront fee of 200 basis points.

How much does it cost to invest public money in a simple index fund? "We've paid as little as .875 of a basis point," says William Atwood, executive director of the Illinois State Board of Investment. "At most, five basis points."

So at the low end, Atwood is paying 200 times less than the standard two percent hedge-fund fee.

Looks pretty easy to understand to me. 200 times more. What's so hard?

[LuvLoogie]

54. I'll tell you what...

I'll give it another shot after the wife and kids are asleep.

[msongs]

12. democrats walking hand in hand with republicans to allow this to happen. thanks a lot nt

[Egalitarian Thug]

13. All across America, Wall Street has been doing this for at least a century,

although this current pillage has been going on for over thirty years.

Maybe someone should do something about that.
& R

[socialist_n_TN]

30. Yep. ITSS..........

It's The System Stupid. To paraphrase a Bill Clinton campaign phrase.

[loudsue]

14. In North Carolina, I would say about 80% of public workers in and around the capitol vote republican

They are absolutely CLUELESS about what they are facing.

[alarimer]

37. I can vouch for at least some of my colleagues

The ones complaining that Bev Perdue was a crook. Well, the R's and McCrory are bigger crooks than she could have ever dreamed of being. My attitude is one of I told you so.

[colsohlibgal]

15. Shameful Robber Barons

This cycle has been repeated through history, rich people trying to make off with everything if they can.

Love Taibbi, I see him kind of like this generation's Hunter Thompson.

[ChisolmTrailDem]

17. Most Americans will allow themselves to be completely fleeced of everything and

will do absolutely nothing to defend themselves or do anything, even vote, to stop it.

Most are clueless but those that are in the know will do nothing while complaining to anyone who will listen.

[bvar22]

34. So WHO do we vote for to stop this?

New Rule (Passed by Congress and signed by President Obama) signals Kiss of Death for Pensions
http://www.cnbc.com/id/100694955

Obama Appoints Bain Capital Consultant Jeff Ziets to Top Post
http://www.democraticunderground.com/10023662209

Obama selects former Monsanto lobbyist to be his TPP chief agriculture negotiator
http://www.democraticunderground.com/10023662210

The Totally Unfair And Bitterly Uneven 'Recovery,' In 12 Charts – HuffPo
http://www.democraticunderground.com/10023662029

Larry Summers Gets 'Full-Throated Defense' From Obama In Capitol Hill Meeting
http://www.democraticunderground.com/1014553343#post1

Wall Street will get away with massive wave of criminality of 2008 - Statute of Limitations
http://www.democraticunderground.com/10022516719

[DeSwiss]

19. If I've said it once......

...I've said it twice.

- You can't fix rotten. If we don't stop them, they'll stop us.

K&R

[lutefisk]

20. Speaking as a state employee from Wisconsin...

...I'll just say that it kills the economy and devastates families. It's simply another part of the private/corporate grab for public money- the easiest and most profitable form of theft of the 21st Century. Here in Wisconsin, we're getting our pension fund (fully funded and the strongest in the country) looted very soon. It's just criminal.

[nikto]

21. This could ultimately...

Produce America's first suicide-bombers, and perhaps
a whole new group of potential assassins.

It would be an awful consequence, resulting from, and in reaction to, terrible injustice.

Taking pensions away from people who have worked their entire lives
and have little or nothing else, could produce a group of older, but hardened,
militants who feel they have nothing to lose and are not afraid to die.


Maybe it won't develop, and folks will continue to take this garbage lying down.

We'll see...

[socialist_n_TN]

31. And those tactics WILL set back the struggle and........

enable the thieves. There's a way to fight this and suicide bombers and individual acts of terrorism are NOT the way. All that does is replace one actor with another. To fight this shit you've got to take down the entire edifice of capitalism. To paraphrase a famous campaign slogan, It's The System Stupid. ITSS.

[nikto]

55. I agree

If they take away PART of the pensions of a bunch of people, that will make them fighting mad,
and probably energize them to political activism.

If they should take away/eliminate ENTIRE pensions, literally throwing people in the streets, all bets are off.

Hopefully, it wouldn't get that extreme.

It depends on the amount of restraint, and pity, bankers and investors have.

[socialist_n_TN]

56. Don't ever count on restraint or pity from bankers....

or investors.

It's called a strike. Of indefinite duration and general. Shut it all down and the workers then take political power through worker, soldier, and neighborhood councils.

[blkmusclmachine]

22. Chaaaaaaaaaaaaaaaaaaange.....

When does it start?!?!

[nikto]

23. We need to go "all Iceland" on this shite

All Iceland.


Just picture Bjork with a sledge-hammer and crowbar.

[onethatcares]

24. Does anyone here know

who won "dancing with stars" this past week?

[B Calm]

27. They been looting private pension funds since the 1980's.

[Laelth]

28. k&r for the truth, however depressing it may be. n/t

-Laelth

[Gidney N Cloyd]

33. K&R. It's a great and important article well worth repeated posts.

So many people all across the political landscape (ie, us folks, too!) hear about pension "reform" measures being taken at the state and local levels, watch promised pension money magically disappear and just buy into the bullshit claims of the 1% and their operatives.

[rhett o rick]

36. Does anyone think that Ms. Clinton would change this if elected?

And plez spare me the, "she's better than Palin" argument.

If we want this behavior to stop we must elect progressives. The Lieberman Wing of the Democratic Party is willing to let us sink into serfdom.

[Rex]

41. The Jet Set of Wall Street doesn't have to worry about repercussions like the working class does.

They lose someone else's 401k and go out for a steak dinner. We lose our house, stop eating and start looking for shelter. They have their dinner paid for by lobbying firms. Everything is free for them as long as they play the game. We have to buy something off the dollar menu at McDonald's, start counting all our loose change and looking for a hotel to stay in. For now.

We play the game too, but we're always meant to fail so that another anonymous number can take up our role as corporate slave -always seems to happen when we start to make too much money for our 'position'. Doesn't seem to be a problem for the CEO/VP/Pres/XO types. Their positions are so much more important than ours, they are few in number and treated like gods. We are just serfs in their grind.

[SoCalDem]

45. They have to do this..

The 401-ks got looted..
housing equity got looted..
they crashed the stock market (many times)
They cannot seem to get enough support to grab the social security money (yet)
The banksters/wallstreet gamblers HAVE to go "where the money is"

For now at least, that means pensions that remain in place for the few lucky ones who managed to hang onto them in the post-reagan era.

They got greedy & overplayed their hand with the 401-ks. All that luscious loot rolling in for a few decades gave them ample play-money to gamble with, but sooner or later the Boomers would want to cash in their chips and might actually WANT "their money".''Many (like myself) have known this would happen.. for years, and were always told to calm, down..."did we know how HUGE the "market " was..and that the sheer size of it would weather the storm of retirees wanting their money"..

What many who called us nervous-Nellies did not factor into the mix, was greed..and hubris..and a lack of shame.

Shameless money-grubbers will take Granny's last dime if they get a chance..

[Egalitarian Thug]

50. Willful amnesia. They keep playing the same game over and over because people

refuse to remember the last time around.

[freshwest]

47. Triana, the disdain felt for public workers over percieved advantage, anger over real injustices and

every media story extolling every fault of public workers, from the schools to the police, had this in mind for decades. The Koch and others placed long term memes to demonize all aspects of the New Deal and social programs for many decades now.

Some are from the right and some are from the left, some have no bent, do it this for self-interest, including both sides. These are the ones who are devouring the government by privatization. They show up at every public meeting of every single thing to determine all policy decisions as part of their insistence on getting paid by offering their private brand.

They dress up their endeavours with a mission statement with no discipline, accountability or transparency, as they are now 'private.' But taking money from those in the same field with every fault highlighted in paid presentations by media, to further make them look bad, and call for their being laid off.

Real public workers are not allowed to lobby openly as private sector groups do, it's seen as a conflict of interest for them to even negotiate the terms of their employment and the clients they care for. Many of these people who stay in these fields have a real heart for the people in their care.

They do not make a lot of money, are scrambling to get by, many have to work two or three jobs to make ends meet and have a family, and for those in cities, they cannot afford to buy homes there, but must rent to be close to work. Conditions not unknown to those in the private sector, yet they are no allowed to hold their heads up high as those others in 'more honest work' get to do.

Fascism and Big Brotherism is not from the top down, it is from the bottom up. A people have to be conditioned to see nepotism as a their only way to get ahead, and thus suppport it. Almost everyone disqualified from the steady income of city, county, state or federal work, cried they were discriminated against by hiring quotas, and felt resentment. They didn't get that job security with pension and benefits secured by unions there, and have gone along and passed by word of mouth all memes of the overpaid, stupid, unjust public worker. So they vote to defund them and not pay any taxes.

It's been in television programs, on radio, and in the bars and public meeting places. What they fail to grasp is that the jobs for the most part public workers do are not easy and don't pay as well as the private sector did and the conditions can be very harsh indeed, but they only look at the ones they see as lazy and overpaid. It is part of the rebellion against authority just for the sake of it, that we all have ingrained in us as a way of fighting for ourselves.

I've never been a public worker but have great respect for most of them. Others, I have actively sought to separate their ideas of their career being the primary goal instead of the mission to serve that the taxpayers pay for. There are public workers that are very troubling in the way they use their authority.

But not the majority, especially those in the social safety net jobs without holidays, shifts that defy good health at times, and lack of time with their family. Combine with knowing they are hated, that they are not allowed to advocate for better conditions without being seen as greedy, and subject to the petty whims of legislators who want them all fired and let their charges end up in jail, prison or under a bridge, and it's a truly demoralizing job.

The push for stealing pensions for jobs that didn't pay that well to begin with, became in real life terms, professions that are part of one's life, not just a paycheck did not simply come from decades of disrespect for the New Deal and government doing anything. It's part of the disdain for workers.

We're not even taught about how the government works in the real world, just fairy tales. Because we've been taught it's all dirty and wrong. I've lived in the corporate world, and those who think government is dirty, ought to see the blatant way that they make decisions and how they regard their work force, even unionized ones. They look people in the face and destroy their lives and then celebrate the big victory.

To do government work takes at first a certain positive or even naive outlook to doing good, to want to help others. Business is not about that, doing bad to others is good for the bottom line. And they want the whole world to think that way.

My solution to the pension mess is to elect those who do believe there is something worth doing for people they do not know but with a good heart to others in general. People are not getting involved and they are letting corporatists take over.

JMHO, clumsily cudgeled into a post on my way out the door.

[snot]

49. Thankful for Taibbi.

[Benton D Struckcheon]

51. Have not yet read the whole thing,

but the first part is on the money, as it were.
Over here in NJ, Christie Whitman, the first Christie, issued bonds against the pension funds. The second Christie, the current Republican huckster, ain't about to pay for her bonds. He's figuring on getting into the WH before the whole thing collapses.
I hope Taibbi does a thorough analysis of NJ's state of affairs if Christie winds up being the 2016 nominee for Prez on the Republican side.