The CA Teachers Association Dons Victim Guise and Joins the “Occupy” Crowd

It’s almost Halloween and the California Teachers Association, a rich and powerful outfit, is in costume as one of the “99%ers” – protesters who claim to be have-nots.

A couple of weeks ago United Federation of Teachers President Michael Mulgrew and American Federation of Teachers President Randi Weingarten made sympathetic statements about the Occupy Wall Street movement. Now the California Teachers Association has jumped in with a full endorsement and suggestions on its website as to how teachers and others can get involved in OWS activities.

Stunning in its mendacity, CTA issued a press release (H/T Mike Antonucci) which announced its “support of the nationwide ‘Occupy Wall Street’ movement for tax fairness and against corporate greed.” It goes on to say, “…a stable tax structure begins with everyone paying their fair share.”

Paying their fair share?

Never shying away from class warfare, the union really has hit a new low here. According its latest available income tax form, CTA took in $186,216,493 in 2009. As a 501(c)(5), the union has a special tax exempt status with the IRS which is accorded to “Labor, Agricultural, and Horticultural Organizations.”

Hence, CTA would appear to be following the letter of the law in paying no money in taxes. But there is a bigger picture here, and it is bloated with hypocrisy. First CTA manages to siphon off $600+ yearly ($647 in 2011-2012) from every teacher in the state in forced union dues. Then it turns around and spends much of those dues on politicking — over $211 million on politicking from 2000-2009 — frequently on issues that have nothing to do with teachers or kids – and supporting causes that are contrary to the positions of many of its members. Then the union elites have the audacity to whine about millionaires and billionaires “not paying their fair share of taxes” when they don’t pay a penny, and all the while fund politicians who ensure that CTA’s pilfer-and-spend scheme rolls on undisturbed.

And just what do the “anti-greed” union bosses make for their efforts? In 2009, CTA President David Sanchez was compensated $289,550, three times what an average teacher in CA makes, while VP Dean Vogel had to suffer along with a mere $244,925 a year.

On a national level the union bosses do even better.

According to a recently issued LM-2 report (H/T RiShawn Biddle), we see that AFT President Randi Weingarten raked in a cool $493,859 last year. And NEA President Dennis Van Roekel managed to “earn” a whopping $543,868 in salary and benefits. I guess their justification for such high salaries is that it is very hard work to fight reformers who are actually concerned about educating children.

But CTA and other teachers unions can snooker people only for so long. Far from being a part of the 99%, they are big special interest businesses — spending millions to maintain their monopoly over American education, while paying not a penny in taxes. AsTroy Senik wrote last week in Public Sector Inc., “The CTA is the one percent.” And poll after poll has shown that the general public is catching on.

If the OWSers were to put their bongs away, stop beating their drums, defecating on police cars, chanting and repeating nonsense in zombie-like tones for just a moment, they just may realize that the unions claiming to support them are really fat cats disguised as victims.

(Larry Sand is the president of the non-profit California Teachers Empowerment Network – a non-partisan, non-political group dedicated to providing teachers with reliable and balanced information about professional affiliations and positions on educational issues. This article was originally posted on

Time for Bachmann and Santorum to Withdraw

It’s been fun and all, but the time for actual voting in GOP primaries is fast approaching. It’s time for conservatives to get serious about a choice. To do so, we need to hand out parting gifts and a hearty “thanks for playing” to Michelle Bachmann and Rick Santorum and get them off the stage. Both nice people – and in Bachmann’s case someone who will be a force in politics in the future – but neither has a chance at being nominated and hence serve only as distractions to the real task at hand. That task is settling on the conservative standard bearer against Mitt Romney, the “not-Romney” in media shorthand.

I’ve never understood the raison d’etre of the Santorum candidacy (for UCLA graduates among readers, “raison d’etre” means “reason for existence”). Santorum is a presentable candidate, a solid conservative, but couldn’t hold his own Senate seat in Pennsylvania.  Call me old fashioned, but losing a statewide race in a pivotal state seems a weak recommendation to be a Presidential nominee.

Bachmann has the much brighter future. She was the first woman elected to Congress from Minnesota (which is odd considering Minnesota’s liberal reputation – it took the state until 2006 to elect a woman to Congress?) and has been an outspoken, consistent conservative voice from day one. In the last decade Minnesotans elected Norm Coleman as Senator and Tim Pawlenty as Governor.  Bachmann can afford to wait in the House until the next realistic opportunity to move up to either position.  Her influence will only grow as she gains more experience and national exposure, and that is good news for the conservative movement.

Bachmann and Santorum being voted off the island leaves conservatives with three realistic “not-Romneys”, Herman Cain, Newt Gingrich and Rick Perry.  Unless conservatives coalesce, and soon, around one of them, Mitt Romney will be our nominee next year.

Al Hunt of the Wall Street Journal recently described Romney as the second coming of George H.W. Bush, and we all remember what fun times those were. True he did bring us Clarence Thomas, though the lion’s share of credit – both for the initial nomination and the victory in the confirmation fight – belongs to then Senator John Danforth of Missouri. However Bush’s fecklessness on the “read my lips” tax pledge and his Yankee Brahmin inability to connect with ordinary Americans also gave us Bill and Hillary Clinton.  H.W.  is the man who managed to lose an election after having a 91% approval rating – in the aftermath of Gulf War I.I don’t think Romney would be a “bad” President, but he instills little confidence that he will be a good one, “good” being defined as sticking to conservative principles on most issues.  There is nothing in his background or record that indicates he is inclined to do so.

The math is pretty simple actually – if conservatives unite on a candidate Romney cannot win the nomination. He is a well-known commodity among GOP voters, but has been unable to top 30% in any national survey.  Romney is far in front in New Hampshire, a reflection of his days as Governor of Massachusetts and his part-time residency in the Granite State.  However recent surveys show he is behind Cain in Iowa, Perry in South Carolina, and no better than tied with those two in Nevada.

Gingrich has enjoyed a mini-surge in the polls due to his strong debate performances.  I think any fair appraisal gives Newt the “brightest candidate on the stage” award, and he has further endeared himself to conservatives by spotlighting and attacking the liberal bias of the media moderators in those debates. Shortly after he announced his candidacy, Gingrich gave what I thought was the best reason Republicans should consider his candidacy.  He asked who GOP voters would like to have on the debate stage facing Obama in late October 2012.  That’s a powerful image.

Also powerful however are Cain’s personality and pugnaciousness, as is Perry’s ability to raise money, his strong conservative positions (illegal immigration an obvious and painful exception) and his “this is where I stand, love it or find another candidate” attitude.  The downsides are Cain never having been through a campaign – which leads inevitably to mistakes; Perry’s Dan Quayle “deer in the headlights” impression during debates; and Gingrich’s indefensible handling of his first divorce.

But conservatives have to anoint one of them as our champion. Our “time for choosing” has to come soon if we don’t want to give the nomination to George H.W. Bush II.  I frankly haven’t made up my mind, though when I do you will surely read about it here. In the meantime I would like to hear from other conservatives on the matter.  Please don’t just repeat campaign talking points – this is too important a choice for that.  Tell me who you support, why and why he can win next November.  To steal from songwriter Sammy Cahn, conservatives have our three coins in the fountain – we now need to decide which one will bring us happiness.

(William E. Saracino is a member of California Political Review’s editorial board.)

Sons of Liberty: The Tea Party Movement

T2AR: The Second American Revolution, Part 3

The Tea Party movement that began in 2009 took its name from a famous chapter of American history – The Boston Tea Party. That famous act of civil disobedience was the culmination of the heavy hand of King George and a Parliament imposing oppressive taxation upon a hard working people.

In the late 1760’s, King George sent 40,000 British troops to America to assist his tax collectors. In 1770, British soldiers fired on a group of unarmed colonists in Boston who were throwing snowballs at them. Five colonists were killed in what became known as The Boston Massacre. As penalty for the murders, two soldiers had their thumbs branded with a hot iron. While some taxes were repealed, the Townsend Act that imposed a tax on tea, remained.

In 1773, fifty members of the Sons of Liberty, dressed as Indians, boarded British ships and tossed 342 chests of tea into the harbor. One of these rebels was Paul Revere and their action became forever known as The Boston Tea Party. Historians point to this act as the catalyst to the American Revolution.

Conservative Americans in 2009 took their name from the Sons of Liberty and their famous act of frustration with their government. But then as now, many Americans did not share their views. Many of the colonists, known as Loyalists, sided with King George and were appalled at the lawbreakers. Some offered to pay for the damage. Like their predecessors, Tea Party members have accused of being nuts, racist, haters, and worse. Their support is far from universal.

The similarities of 1773 to 2011 are striking. Instead of comprehending why the colonists were frustrated with his existing taxes, King George responded by imposing even more taxes on the colonies. The new acts of hostility towards his colonies came to be known as The Intolerable Acts and pushed the colonists closer to war.

President Obama has ignored the pleas of millions of Americans who openly protest high taxes, wasteful spending and excessive borrowing. Like King George, Obama has proposed higher taxes on “millionaires and billionaires” as his response.

In 1774, all of the American colonies except Georgia sent representatives to Philadelphia to determine how to respond to The Intolerable Acts. This gathering was called the First Continental Congress.

T2AR: The Second American Revolution, Part 2
T2AR: The Second American Revolution, Part 1 

(Robert J Cristiano PhD is the Real Estate Professional in Residence at Chapman University in Orange, CA, Senior Fellow at The Pacific Research Institute and President of the international investment firm, L88 Investments LLC. He has been a successful real estate developer in Newport Beach California for thirty years.)

The Role of Crony Capitalism in NFL’s Return to LA

California, a state whose greatest innovation in recent years has been finding creative ways to inhibit economic growth, stepped out of character in late September: it went easy on a developer. Seated at a table outside the Los Angeles Convention Center, Governor Jerry Brown signed a bill expediting the resolution of legal challenges to—and thus speeding the construction of—Farmers Field, the stadium that, its backers hope, will usher in the National Football League’s return to the City of Angels.

This is the latest step in L.A.’s nearly two-decade-long effort to exorcise the Ghost of Christmas Past. The yuletide in question was in 1994, when both of the region’s professional football teams—the Los Angeles Rams and the Los Angeles Raiders—played their final games in the Southland on Christmas Eve. By the time the next season rolled around, the Rams had decamped to their new home in St. Louis, and the Raiders had retraced their steps northward, departing downtown L.A. for Oakland, the city that they left in 1982.

The nation’s second-largest media market has gone without a professional football team ever since, but not for lack of effort. Several plans gained early traction but fell apart later. In the mid-1990s, Peter O’Malley, then the owner of baseball’s Los Angeles Dodgers, sank more than $1 million into the development of a new stadium, only to see the plan grind to a halt when members of the city council proved unwilling to entertain the idea of a new football team’s playing anywhere other than the government-owned Los Angeles Memorial Coliseum. In early 1999, the NFL announced that Los Angeles had been awarded an expansion franchise, but canceled the deal later and gave the new team to Houston. The reason? L.A.’s chaotic bid failed to produce such basic requirements as an ownership group, a financial plan, and a stadium location. In the intervening years, other similarly half-baked proposals have fizzled.

In recent months, however, the tide seems finally to have turned. The sports and entertainment behemoth AEG received unanimous support from the city council in August for the financial plan to build Farmers Field in downtown Los Angeles. Brown signed the bill accelerating AEG’s legal process about six weeks later. A competing stadium project, helmed by billionaire real-estate developer Ed Roski and slated for the City of Industry, an L.A. suburb, has already received building permits and won exemption from the state’s onerous California Environmental Quality Act in a bill signed in 2009 by then-governor Arnold Schwarzenegger. Which NFL franchise will choose to relocate to Los Angeles is not yet clear. The city is likely to get only one team in the immediate future—though there is already talk of a second team’s coming later—so it’s a fair bet that only one of these stadiums will be built. But each is making more progress than any Los Angeles football plan in years.

Part of the reason that both projects are moving forward where others failed is that they are shunning public financing. As former governor Gray Davis told ESPN’s Arash Farkazi: “Even in boon [sic] times, Californians are very suspect of allocating public money to build a stadium. In bad times, it’s simply impossible. The state has a tradition of not spending public money on stadiums or arenas. For example, 1999 and 2000 were good years in California and even in those good times there was no appetite in spending public money.” The Southland’s would-be builders have voiced similar sentiments. At a speech to an industry group in April, AEG president Timothy Leiweke said that his counterparts should focus “on trying to figure out how the private sector can step up and formulate these visions without necessarily expecting the taxpayers to write the check.” He added, “Let’s agree that it is the private sector that must now step up and take the risk.” Roski has said much the same, pledging to build his stadium with private money.

The reality, however, is more complicated. The AEG project—widely considered more likely to materialize than Roski’s—is not, in fact, free of taxpayer commitments. Under the framework passed by the city council in August, Angelenos would be on the hook for $275 million (about 4 percent of the city’s entire annual budget) in tax-exempt bonds—this in a city that teetered on the edge of bankruptcy just 18 months ago. AEG has pledged to pay back nearly three-quarters of that money through the revenues that a new team would generate. But the hefty relocation fee that the NFL charges teams that switch markets—which, one legislative analysis estimated, may exceed $500 million—could leave the endeavor operating at a loss for years to come, thus delaying AEG’s repayment to the city. The remaining debt obligations would be financed through an accounting trick, using AEG’s lease payments and new tax revenue from the stadium—money that would otherwise accrue in the city’s general fund.

The plan even manages to debit taxpayers in other states. Los Angeles officials in February used $1 million in federal community-development grant money—earmarked for “the most vulnerable in our communities”—to move the architecture firm working on Farmers Field from Santa Monica to a location near the site of the future stadium. The highly questionable idea was that a new stadium would produce enough economic benefits to qualify as a public good, though the experiences of similarly situated cities in the past have almost universally disproved that supposition.

When Governor Brown signed the bill speeding up the AEG project, he said, “There are too many damn regulations, let’s be clear about that.” He was certainly correct about the excesses of California’s regulatory regime. But he ignored the fact that the same bureaucracy that impedes stadium projects with stratospheric price tags also chokes off prospects for much smaller businesses throughout the state. While enormous corporations like AEG and Roski’s Majestic Realty can grease the legislative skids to make their development projects viable, small and midsize entrepreneurs enjoy no similar source of relief. Removing those burdens for all Californians, at a time when the state’s unemployment rate is stuck above 12 percent, would demonstrate a serious commitment to jump-starting economic growth. Removing them for just a privileged few is nothing more than crony capitalism.

(Troy Senik is a senior fellow at the Center for Individual Freedom and a contributor at This article first appeared on City Journal.)

“Occupy’s” Coercion is the Problem, not the Solution

Today, from Washington to the Occupy Everywhere movement, there are unending calls to further expand paternalist government to help everyone with everything.  But in the battle to push aside individual choice through government determination, reason and evidence are on liberty’s side.

One of history’s most insightful participants in that battle was Thomas Babington, Lord Macaulay.  Statesman, historian and writer, he advocated economic freedom, highlighting the illogic of government control and the abuses of power it enabled, making him perhaps “the most influential of the British classical liberals,” according to Walter Olson.

In particular, Macaulay’s 1830 “Southey’s Colloquies on Society” devastated the statist arguments of Robert Southey, England’s Poet Laureate.  On his October 25 birthday, with statism now far more advanced, his insights merit remembering.

“He conceives that the business of the magistrate is, not merely to see that the persons and property of the people are secure from attack, but… spending our money for us, and choosing our opinions for us…that no man can do anything so well for himself as his rulers…”

“[He] entertains as exaggerated a notion of the wisdom of governments as of their power…”

“[I]t is, therefore, says Mr. Southey, the first rule of policy, that the government should train the people in the way in which they should go…But is there any reason for believing that a government is more likely to lead the people in the right way than the people to fall into the right way themselves?”

“Many politicians…[believe it] a self-evident proposition that no people ought to be free till they are fit to use their freedom…If men are to wait for liberty till they become wise and good in slavery, they may indeed wait forever.”

“[C]onsider, not merely the goodness of the end, but also the fitness of the means…a certain section of the community may be quite competent to protect the persons and property of the rest, yet quite unfit to direct our opinions, or to superintend our private habits.”

“[W]e see no reason for thinking that the opinions of the magistrate on speculative questions are more likely to be right than those of any other man.”

“The duties of government would be…paternal, if a government were necessarily…superior in wisdom…and if a government loved a people as fathers generally love their children. But there is no reason to believe that a government will have either the paternal warmth of affection or the paternal superiority of intellect…any man in the streets may know as much and think as justly…”

“A government can interfere in discussion only by making it less free…Government…carries on controversy, not with reasons, but with threats and bribes…Thus, instead of a contest between argument and argument, we have a contest between argument and force…a contest in which truth can be victorious only by accident.”

“[Civilization]…is not [created] by…the omniscient and omnipotent State, but by the prudence and energy of the people…Our rulers will best promote the improvement of the nation by strictly confining themselves to their own legitimate duties, by leaving capital to find its most lucrative course, commodities their fair price, industry and intelligence their natural reward, idleness and folly their natural punishment, by maintaining peace, by defending property, by diminishing the price of law, and by observing strict economy in every department of the state. Let the Government do this: the People will assuredly do the rest.”

“There is only one cure for the evils that newly acquired freedom produces, and that cure is freedom.”

The statist presumptions Thomas Babington Macaulay exposed nearly two centuries ago increasingly dominate public policy today, despite a telling absence of logic or success.  But unlike those who now so eagerly grasp at flimsy excuses to force their will on others “for their own good,” he saw that government coercion was the primary problem, not the universal solution to every problem.

(Gary Galles is a professor of economics at Pepperdine University)

Don’t Occupy Wall Street — Occupy Yourself

Veterans of the 1960s anti-Vietnam War rallies, if totally honest, would admit they attended those rallies…primarily to pick up girls.

Veterans of the early 2000s anti-Iraq War rallies, if totally honest, would admit they attended those rallies…so they could feel young again.

The Occupy people, if they could admit the truth, would tell you they’re camping out in Lower Manhattan and 184 other cities…for reasons they don’t fully understand.

In one sense, they’re right to be upset.  In America, business school students who get A’s go to Wall Street, where they are “regulated” by the B-school students who got C’s.  The smart kids put gajillions of dollars in their pockets, right under the noses of their dumber classmates, tanked the American economy, all but tanked the world economy…and never spent a day in jail.

The Occupy’ers sense injustice here, and accurately so.  The system of allocating wealth on Wall Street failed, the regulators failed, the economy all but failed, and the criminal justice system never had a chance to get in the game.  You can go to jail for stealing a box of Pampers, but apparently it’s no crime to shave trillions of dollars of wealth from the assets of everyone in the country.

But that’s not what the Occupy-tion is all about.

It’s a cri de coeur from young folks who haven’t gotten their lives started and suddenly wish they could.  It’s boiled over frustration from older people who overcame every opportunity to make it in America.  It’s yet another opportunity to blame other people for one’s own shortcomings.

A lot of people love a sour economy, because it allows them to justify their own failures.  You’ve got someone or something to blame aside from yourself.  How could I possibly succeed?  Look at the economy!  I’m doomed!

No, you aren’t.  Except possibly by your own negative attitude.

In the years since the economy crashed, millions of jobs vanished, wealth diminished, and LeBron took his talents to South Beach.  Disasters all.

But people didn’t stop eating, or buying cars, or going to the movies, or having kids, or getting married, or getting divorced, or doing all the things that people do, buy, rent, and consume, regardless of the economy.

In other words, somebody made money during the last four years.

In fact, millions of people made money during the last four years.  Not enough people, but plenty.

Those who did took the attitude that said, “I cannot afford to participate in the recession, so I’m sitting it out.”

They said, “I know that times are tough, so I have to just work a little harder. Or maybe a lot harder.”

This isn’t economic determinism or greed; this is about the fact that some people refused to be defeated by dour headlines and misery-loves-company conversationalists.

These hard-working individuals may have taken a financial haircut.  But they didn’t take a pass on the concept of personal responsibility.

Your dad was right:  the world doesn’t owe you a job, or a meal, or a warm place to sleep.  You’ve got to get them yourself.

Your job went away?  Find another one in your field.  Your field disappeared?  Find another field.

The Occupy’ers ought to take a long, hard look at the groups who have joined in supporting them:  the Democratic Party; organized labor; former Speaker Pelosi, even the President.  These are organizations and individuals who attain and consolidate power by claiming to speak for those too passive or disorganized to speak for themselves.  Not exactly people I’d like to be in bed with.

That’s why the Occupy’ers ought to use some of their downtime from marching and beating drums to ask where they’re really going.  To change the world, or to be taken advantage of by some of the most cynical forces and people in society.

Back in the 1960s, the protestors were told to get a haircut.  And before you knew it, everybody had long hair.

Today, the Occupy’ers need to be told to get a job.  No matter how hard it might seem.

Don’t occupy Wall Street.  Occupy yourself.

(Michael Levin is a New York Times bestselling author and runs, America’s leading provider of ghostwritten business books.)

T2AR: The Second American Revolution, Part 2

President Barack Obama has attempted to raise taxes on the rich, those making more than $250,000 per year, each year of his presidency. He believes they must pay their fair share even though the top 1% already pay 38.02% of all federal taxes and the top 10% pay 69.94% of all taxes (National Taxpayers Union). In 1999, the top 1% paid 36.18% of federal taxes, therefore the tax burden of the top 1% has actually increased – despite the infamous Bush tax cuts that so bother the President.

In the 1765, King George imposed the Stamp Act on the colonies. Tax stamps had to be put on 54 kinds of papers, from playing cards to newspapers. The payments varied from one cent on a newspaper to ten dollars on a college diploma. The payments had to be made in gold or silver. Patrick Henry of Virginia was outspoken about the taxes stating that Parliament passed the taxes but no colonists served in Parliament. James Otis, a Boston lawyer coined the phrase, “No taxation without representation”. Delegates sent a letter to Parliament demanding the tax be rescinded. The response was even more taxation. In 1767, the British imposed the Townsend Act on glass, tea, paper and paint. In response, Americans formed the Sons of Liberty whose motto was Join or Die. They harassed the tax collectors to such a degree that the British were forced to send 40,000 troops to the colonies to assist with the tax collection. Worse they informed the colonists that the British troops would live in the homes of the colonists, an action that infuriated the colonists.

On October 3rd, 2008, Congress passed The Emergency Economic Stabilization Act of 2008, using $700 billion to bail out American banks. On January 24, 2009, the Young Americans for Liberty in New York State organized a “Tea Party” to protest the bail out and obesity taxes proposed by New York Governor David Paterson.  On February 17, 2009, the American Recovery and Reinvestment Act of 2009 passed spending $800 billion on “Stimulus”. Two days later, CNBC Business News editor Rick Santelli ranted against the “Porkulus” bill and a government plan to refinance mortgages for irresponsible borrowers. He called for a new Tea Party. Within 24 hours, plans for Tea Party tax protests swept the nation.

Tea Party supporters protest Crony Capitalism that sends billions to companies whose owners are heavy political contributors. They feel disconnected from their elected representatives in Washington as their ancestors did 250 years ago. The result of their frustration may feel like a Second American Revolution as even more entrenched politicians are sent packing.

(Robert J Cristiano PhD is the Real Estate Professional in Residence at Chapman University in Orange, CA, Senior Fellow at The Pacific Research Institute and President of the international investment firm, L88 Investments LLC. He has been a successful real estate developer in Newport Beach California for thirty years.)

California Public Employees Unions Not Serious About Pension Reform

In a San Jose Mercury News column on public pensions, Dave Low, chairman of Californians for Retirement Security, a union coalition, and executive director of the California School Employees Association, argues that there is no public pension crisis, and offers some minor reforms the unions support that won’t do much to help.

“The condition of public pensions in California is not a crisis despite the best efforts of pension slashers to portray it as such,” says Low.  “Pension costs make up just three percent of the state budget, a percentage that has actually fallen $600 million over the past two years as collective bargaining has increased the share public workers contribute to their pensions and as funds have taken tougher lines on pension spiking.”

The truth is that the public employees unions have been dragged kicking and screaming toward even modest pension reforms.  Moreover, while the billions the state currently spends on employee pension and retiree health-care benefits is hardly chump change, the real concern is for the future.  California’s public pension and retiree health and dental care expenditures have quintupled since fiscal year 1998-99, from about $1 billion to $5 billion last year. Retirement spending is expected to triple again—to $15 billion—within the next decade.  Several academic studies in recent years have pegged the state’s unfunded pension liability in the neighborhood of $400 billion to $500+ billion (see, for example, herehere, andhere—see pp. 197-199), which translates to roughly $36,000 for every household in the state. And those figures do not even include $60 billion in unfunded retiree health-care liabilities.

Low’s article then goes on to list some bullet points summarizing Californians for Retirement Security positions.  They begin with a couple of non-controversial points about curbing pension spiking, curbing some of the most egregious pension benefits for “the small number of public workers—mostly senior officials—who have outsize retirement benefits,” creating a form of pension rainy-day fund, and reducing double-dipping by imposing a waiting period before retirees could return to take part-time jobs with the state.

But, as a report from the state’s bipartisan Little Hoover Commission noted earlier this year, California’s public pension situation truly is dire, and will require much more significant reforms:

In its study of public pensions, the Commission found that the state’s 10 largest pension funds – encompassing 90 percent of all public employees – are overextended in their promises to current workers and retirees. The ability and willingness of leaders to contain growing pension obligations should concern not only taxpayers who are seeing vital services and programs cut to balance budgets, but the public employees who have the most to lose. A pension is worthless without a job to back it.

The Legislature has the tools to put state and local public employee pensions back on a path that can restore stability and public confidence to state and local pension systems. Marginal changes, however, will fall short of the need for serious action. Adding a “second tier” of lower pension benefits for new hires, for example, will not deliver savings for a generation, while pension costs are swelling now as Baby Boomers retire.

In this report, the Commission confronts the elephant in the room: The legal obstacles that limit the options of state and local pension plans to reduce future, as-yet-unearned pension benefits promised to current workers. These promises, protected by decades of court decisions, were made under the illusion that the stock market returns of the dot-com boom were the new normal. After years of benefit enhancements, pay raises and government hiring sprees, the drop in stock and home values made it clear that the promised benefits are unaffordable and leave taxpayers facing all the risk as the bill becomes due.

While recognizing the legal challenges, this is a path that the state has no choice but to pursue. Public agencies must have the flexibility and authority to freeze accrued pension benefits for current workers, and make changes to pension formulas going forward to protect state and local public employees and the public good.

Low then offers some support for 401(k)-style, defined contribution retirement plans, but only as a voluntary option and only as a supplement to defined-benefit plans:

“We support expansion of voluntary worker and employer contributions into 401(k) type funds as a valuable way to supplement secure, defined benefit pensions. But we must ensure that retirement for public workers is secure and retirement systems are healthy. . . .  We adamantly oppose erosion of the present system’s central pillars:

  • “Defined benefit pensions must remain the core of the system. Those opposing the current public pension structure claim that the only acceptable option is a wholesale shift to insecure 401(k)-type pensions now prevalent in the private sector. Anyone with their pension savings locked into a 401(k) knows how precarious such a retirement plan is.
  • “Collective bargaining must remain central to the process. Pensions are part and parcel of a larger wage and compensation structure. Public employers and the unions that represent their workers must maintain the authority to negotiate over pensions.”

There is a reason that the private sector has shifted away from defined-benefit pension plans for the last 30 years and hardly any private-sector DB plans have been created in the past decade or more: they are simply too volatile and too expensive.  Just look at the “legacy” industries characterized by strong labor unions where DB plans persisted, for a time, at least.  First the steel companies went bankrupt, then the airlines, and, more recently, the domestic auto companies.  All were largely strangled by unsustainable pension obligations.

Now we are facing the same thing in state and local governments across the nation.  The difference is that the steel and airline and auto companies could not use the government to force people to pay more for their products so they could offer more and more generous pension benefits. (I should qualify this by noting that some of the airline and auto companies were successful in doing just this, in effect, by obtaining bailouts from the federal government.)

As for the collective bargaining argument, of course they want to preserve collective bargaining.  The public employees unions own the legislature and have close ties with the governor.  The collusion between unions and legislators is what has gotten us in to this mess, and naturally they do not want to lose the ability to make sweetheart deals.

The article then concludes by deteriorating further with a couple of silly arguments.  First is the ludicrous claim that the $12 billion CalPERS paid out to pensioners in 2010 “[stimulated] $26 billion in total economic activity and [supported] 93,000 California jobs.”  But the money paid out by CalPERS was the result of contributions paid by state workers and the government (i.e., taxpayers), as well as the investment gains earned on those contributions.  Clearly, if the contributions paid by employees and taxpayers had not been made for pensions, they would have been devoted to some other “stimulative” use.  In other words, if there is a stimulative effect from CalPERS payouts, there is also a de-stimulative effect from making those contributions in the first place.  Thus, the entire notion of CalPERS as some sort of economic stimulus programs is fallacious.

Finally, Low argues “The retirement crisis in America stems not from mostly modest public workers’ pensions but from the alarming deterioration of private-sector pensions.” Notwithstanding that the “retirement crisis,” and, indeed, the economic crisis in general, was caused primarily by government interventions in the housing market and other fiscal and monetary policies, this appears to be a form of argument I have heard many times from union members that goes something like this: “You in the private sector should strive to increase your pensions to our (public-sector) level, not bring our pensions down to the private-sector level.”  Unfortunately, this “logic” does not pass muster for two reasons: (1) money does not grow on trees and (2) there is no pension fairy.

In the private sector, people must produce something of value (revealed through the prices of goods and services in a competitive market) in order to earn their benefits and salaries, a portion of which they may devote to their own savings and retirement plans. In the public sector, there is no real pricing mechanism so decisions such as which government programs should be funded (and how much), how many employees to hire, and how much to pay employees in wages and benefits are made arbitrarily based on political considerations like special interest group power or the whims of legislators and bureaucrats. As noted previously, taxpayers can be forced to pay for these things through the imposition of taxes, whether they want them or not. Therefore, it is all well and good to say “Why don’t you just increase your own pensions to match ours?” but the answer is because, unlike the public labor unions, those in the private sector cannot force other people to pay more for their retirement plans, and, since their wealth is not unlimited, any attempt to do so would leave less money for salaries and reinvesting in businesses to allow for even more innovation and job creation (not to mention the fact that any forced wealth transfer would violate individuals’ rights).

See the full Low article here.  Then, for a more realistic analysis of the public pension problem and the differences in public-sector and private-sector compensation, see the following:

(Adam Summers is a policy analyst at Reason Foundation, where this piece first appeared.)

Jerry Brown, the Unions’ Governor

Since their inception, California’s government unions have found no greater ally than Jerry Brown. In fact, it was Jerry Brown who first authorized government employees to unionize in 1978 through the Dill Act. Since then, unions have pushed government spending on benefits and pensions to the breaking point. The self-interested unions have built a political machine of campaign spending that ensures their candidates toe the line once elected.

When Meg Whitman ran against Jerry Brown for governor last year, her detractors loved drawing attention to the large amount of money she spent in contrast to her opponent. They sought to portray Whitman as a Wall Street billionaire completely out of touch with common folk as evinced by her ability to drop lots of cash into her campaign, while Brown was her thrifty counterpart, spending very little and promising to do the same with the state’s purse. But in reality, Whitman and Republicans were downright paupers compared to the massive spending unions typically pour into their causes. Whitman was the rarecandidate who could try to match the unions’ war chest. It was no secret that Jerry Brown wouldn’t need to raise or spend the same amount of money as Whitman since his union attack dogs would more than match any check she personally wrote.

So it comes as no surprise (although the source is a bit surprising) that the Los Angeles Times has found Jerry Brown to be a very good friend to public employee unions. In fact, according to the article, “When the dust settled on Gov. Jerry Brown’s first legislative session in nearly three decades, no group had won more than organized labor, which heralded its largest string of victories in nearly a decade.” That’s right, it’s payback time for Jerry Brown and he knows exactly which special interest group to thank for his third term as governor.

Brown’s most blatant payback to the union was his approval of legislation that will move all initiatives slated for the June primary ballot to the November general election ballot. Political wisdom holds that turnout is lower in primaries and if the Stop Special Interest Money Now Initiative appeared on the June primary ballot, its chances of passing would be much greater since voter turnout amongst its supporters would be higher. Obviously unions are scared to death that such an initiative would cut their funding at the source since it would prevent corporate and union spending as well as employee payroll deductions for political spending.

This is the most galling example of unions and Democrats bending the political and legislative processes to their will without regard for the public good. It’s a shame Californians aren’t rising up and chastising the majority party and its union puppeteers for such abuse of the system. As long as the unions’ governor sits in the horseshoe and the unions’ lackeys control the legislature, there isn’t much hope the formerly-Golden State will pull out of its nosedive any time soon.

(Meredith Turney is a social and new media political consultant as well as a political commentator and writer.)

Placing the Blame on Dr. Conrad Murray

I feel bad for Dr. Conrad Murray, he of the marvelously tailored wardrobe, the exceedingly hot alleged mistress, and the hangdog mien of a man who knows that his trial is merely a prelude to a lengthy term in prison.

Dr. Murray, as everyone within range of TMZ, CNN, and the sound of Michael Jackson’s voice knows, is accused of killing Mr. Jackson by providing him with lethal doses of nasty-sounding drugs.

The good doctor is guilty of something, but not murder.  Stupidity, maybe.  What doctor would be dumb enough, or starstruck enough, to take on Michael Jackson as a patient?  Jackson was a murder malpractice suit waiting to happen.  When he finally died, the other 200 doctors who must have provided him the same, or worse, drugs, must have heaved sighs of relief big enough to blow a stiff breeze all the way to Neverland.  They all did the same crime, but they won’t be doing the same time.

Dr. Murray basically played medical musical chairs, and lost.  The music stopped and he had nowhere to sit down, except at a defendant’s table in a Los Angeles criminal courtroom.  He didn’t try to kill Jackson; he just took the family’s money and provided drugs.  Jackson’s own history of drug-taking was the real culprit; Dr. Murray was merely the not-entirely-innocent bystander.

But to incarcerate Dr. Murray, while not going after all the other drug pushers in Michael Jackson’s too brief life, is simply a manifestation of the age-old need to find a scapegoat.  Something bad happened; someone has to pay for it.  Why not the last doctor standing?

A Peanuts cartoon once showed Lucy, then Linus, and finally Charlie Brown all striking out in the ninth inning of a sandlot softball game.  “It’s all your fault, Charlie Brown,” came the inevitable cry, even though Charlie represented the last out and not all of the outs.  Same thing with Conrad Murray.

It isn’t Dr. Murray’s fault that Michael Jackson’s childhood was stolen from him; that he never had a normal life; that he took small children to bed with him to console himself.  Nor is it Dr. Murray’s fault that Michael Jackson hated his skin color, his nose, and, apparently, his own existence.

But somebody’s got to pay for it.

One wonders how much a doctor gets paid for being Michael Jackson’s personal physician.  I’m sure Dr. Murray’s fees have come out at trial, but it would be far too tiresome to search the record and find the exact amount.  I remember hearing that it was a very large fee, indeed.  Large enough, perhaps, to corrupt an otherwise upstanding medical doctor; certainly the Jackson family had established the going rate for that kind of transaction long ago.

Dr. Conrad Murray is indeed guilty of something.  He chose the wrong patient, cashed the wrong check, allegedly wrote the wrong prescription, and now he sits, morose and seemingly friendless, awaiting his show trial’s inevitable end.

Blinded by fame?  Tempted by fortune?  Guilty as charged.

But a killer?  No.  An enabler to a suicide, perhaps.  Michael Jackson took his own life.  It’s not fair for someone else to have to pay the price.

(Michael Levin is a New York Times bestselling author and runs, America’s leading provider of ghostwritten business books.)