The Retirement Model

Lifehacker urges that we will improve our chances of solace in retirement by a factor of 10.  It's intriguing, although I am not sure it is fully articulated. I suppose the point is: would you give up 10 later on for one now?  I guess I see that except if we are doing the time-is-money comparison we'd want to discount that future 10 back to present value we might wind up right where we started from, which is not exactly what they had in mind, now is it?

Joel is not impressed.  " Too optimistic about the rate of return in my humble opinion," he says.  I haven't cross-examined him on the point but I think I see where he is going.  Sure enough, (1.06)^40=10.29, which is to say that a dollar compounded at such  a rate from age 25 would yield $10.29 at age 65.  And I take it on faith that the S and P has yielded something like six percent over the past couple of generations (I haven't done the homework myself).   I'll even concede that we're talkin' real returns here, i.e., inflation adjusted.  Still, are we looking forward to another 40 years of six percent real?  Oh my.  On the other hand, I don't suppose many people forecast the real returns of the last generation, either.

[Compare: public employee pension funds are still assuming 7-7.5 percent, and that is part of the problem, not so?]

And of course the rate is just the beginning.  Recall, so far we are talking about investment at age 25. And how many 25-year-olds do you know who are fully funding their 401ks  right now, huh?  Huh?  But to get the same $10 from, say, a mere  30 years, you'd need to start with a buck 75.  From 20 years, a bit over $3.10.  From ten years, you don't even want to know.

So I agree with Joel that a 10 factor is a fantasy.  FWIW, I do think I have some sense of why we are in such a pension mess, though understanding it may not be much help.  The trouble is--well, sure, there are corrupt and incompetent managers, lying politicians, greedy unions and all that.  But a major difficulty, IMO, is that the whole structure of the pension system is such that none but the mavens has any sense what a pension really costs.  You worked for BigCo for 40 years, you looked forward to a defined-benefit payout. Just as you come to the golden day, the fund collapses and you get nothing or, if lucky, the measly payout from the Pension Benefit Guarantee Corporation. Well, of course you were disappointed: the employer was robbing you blind. The trouble is, if the employer had dealt with you honestly, it surely would have affected your compensation all those years on the job.  Similar with public: we could make those glorious promises to people like, well,  me, only to the extent that we weren't paying for them.  A new world in which we all live longer, and want not to have to work forever, and where we have to tot up the true cost of those golden years--it won't be nearly as much fun as it was to live on smoke and mirrors.

Pensions Again: For My Friends Who Think That I'm Not as Smart as Paul Krugman

I've been getting some backscatter from my homies for remarks yesterday upon public pensions--specifically from those who say I'm not as smart as Paul Krugman, be still my soul.

Well, I'm impenitent.  I concede that part of the uproar is the forces of evil trying to demoralize us and sap our will (or demonize us which is pretty close to the same).  But the public pension problem is real.   More, there re a number of differences between the public issue and other matters with which it may be confused.  So let's review the bidding, taking note of a few points, every one of which is actually well known by anybody who has read this far.

One: forget the nay-sayers Social Security is actually in pretty good shape, and will remain so for a while.  Public pensions are a lurid actuarial nightmare.  Corollary, social security has actually been pretty well managed. State and local pensions have too often fallen into the hands of incompetents, mediocrities and outright crooks.  Honorable exceptions including my buds in public pension management.

Two: the real problem with Social Security is that the noise machine has succeeded in muddling it up with health care, and health care is a problem.  Health care is also, be it said, a problem that cannot be solved by tinkering with the public system alone, but it is a problem.

Three, Social Security does have problems, but they are not related to fund management.  The biggest is the absurdly regressive mode of fund-raising.  It's an outrage but an outrage that nobody is pressing to solve just now.

Four, the root problem with Social Security is that it is part just savings and in part, wealth transfer (side note--oddly enough, it seems to be impossible to pin down  just exactly how much is which: I've tried).  Anyway--I know I've said this before--this leaves supporters in a strategic trap.  If they argue that it is only a savings program, they are met with the rejoinder, "Then why not let it it go private?  Let people manage their own money blah blah." If they admit that it is wealth transfer then they re toast because the voters aren't going to support it as wealth transfer.

Five, re state and local--well, I guess you could say they are wealth transfer insofar as they are transfer from taxpayers to public employees.  But in that sense, every employer payroll is wealth transfer.  And rich-to-poor (on the order of Social Security) has never (so far as I know) been part of any state and local pension scheme.

Six: I admit I don't know everything about every public employee pension fund, but anyone I've ever seen, there's a direct line between contributions and the employee's right to draw: your pension is part of your compensation package.  Of course we pretend (or used to) that your Social Security account is "your money."  But of course, it has really never been that.  The problem with state and local is that there really is "a fund," and more often than not it has been recklessly, or inattentively, or criminally, mismanaged.

Seven: on that last point, while state and local pensions are unlike Social Security, they are very much like private pension plans where, for a generation, employers have been breaking promises or ignoring them with impunity (often enough, with the help of corrupt union brass).  Here again I can endorse Mathbabe:

  “[B]ankruptcy” in the realm of airlines has come to mean “a short period wherein we toss our promises to retired workers and then come back to life as a company.”, 

 Which brings me to

Eight (and last): I suspect a good part of the hostility to public employee pensions just now comes from people who have been screwed out of their private pensions and can't see why the teachers and social workers should not suffer as well.  Sad to say, I find it hard to quarrel with this.

Krugman on Pensions: Move Along Folks, Nothing to See Here

I really do not get Krugman's point on public pensions this morning.   Okay, I can see that he is saying, put narrowly, that the  shortfall in state and local pension liabilities isn't as big a problem as it cracked up to be.  I suppose the answer to that is the old punchline, "compared to what?"  And I guess I'd agree that the current shortfall--even a much bigger one--might not be as bad as global warming, or nuclear proliferation, whatever, but this doesn't seem to be Krugman's ultimate point.  What really seems to bug him is the intuition that there is some kind of sinister conspiracy to exaggerate the extent of a problem which, taken in perspective, just isn't that bad..  "So, why is it being hyped?," he asks, and "Do I even need to ask?"

Well, maybe he doesn't but I do.  I'm really not clear what the answer to his rhetorical question.  I guess he might be telling us that it is being hyped by those who hope to demoralize us into giving up and accepting our impending poverty and desolation.  And I agree, there might be some of that going on--the conservative noise machine has gone a long way towards achieving this result with Social Security (don't bother, it won't be there anyway!)..  But the public pension problem is real, even if not as big as a breadbox.  And I suspect a good bit of the concern comes from people who are just damn ticked off when they finally discover how badly they have been (are being) used and abused by near- (or outright) criminal mismanagement.  Pensions are a classic instance of a can that can be  kicked down the road because, even though all the interested parties will get old or dependent sooner or later, still for most of them the point is not yet.   Sure, some will say that you left the window latch unhooked last night, you really can't blame the burglar for walking off with grandmother's heirloom necklace.  But I don't really think Krugman wants to put himself in company with that crowd.

Actually, when I stop to think of it, I guess I am part of the demoralization faction because I've been pretty well satisfied for years that just about none of us--except those that get lucky and die early--will see what they thought they were promised out of their public pension.   But "move along folks, nothing to see here," is not a good solution.

Afterthought  But he was perfectly right in showcasing Dean Baker who picked up that absurd pension howler in the Washington Post this morning.

Afterthought II  For a bit of cold water on the smoldering K, go here.  "Public Plan and Reputational Risk Task Force," heh, what a concept.

Afterthought III:  In fairness, I suppose Krugman might be thinking of Walter Russell Mead, for whom every time a public pension stumbles, an angel gets its wings.  See, e.g., link.

Resolving the Pension Crisis, Part II

Here's a man who needs no introduction so I won't give him any, except to say here's Robert Frost with "Provide, Provide!"

The witch that came (the withered hag)
To wash the steps with pail and rag,
Was once the beauty Abishag, 

The picture pride of Hollywood.
Too many fall from great and good
For you to doubt the likelihood. 

Die early and avoid the fate.
Or if predestined to die late,
Make up your mind to die in state. 

Make the whole stock exchange your own!
If need be occupy a throne,
Where nobody can call you crone. 

Some have relied on what they knew;
Others on simply being true.
What worked for them might work for you. 

No memory of having starred
Atones for later disregard,
Or keeps the end from being hard. 

Better to go down dignified
With boughten friendship at your side
Than none at all. Provide, provide!

Afterthought: Humphrey Bogart (yes?) said the nicest thing about having money is that you can tell other people to go to hell. Steve Randy Waldman spells out what he really meant.


Previous: link.

Resolving the Pension Crisis Part I

I can dig up a couple more, I think. Here's Searcy Foote, from Edgar Lee Masters' Spoon River Anthology, courtesy of Bartleby:

I WANTED to go away to college
But rich Aunt Persis wouldn’t help me.
So I made gardens and raked the lawns
And bought John Alden’s books with my earnings
And toiled for the very means of life.	5
I wanted to marry Delia Prickett,
But how could I do it with what I earned?
And there was Aunt Persis more than seventy,
Who sat in a wheel-chair half alive,
With her throat so paralyzed, when she swallowed	10
The soup ran out of her mouth like a duck—
A gourmand yet, investing her income
In mortgages, fretting all the time
About her notes and rents and papers.
That day I was sawing wood for her,	15
And reading Proudhon in between.
I went in the house for a drink of water,
And there she sat asleep in her chair,
And Proudhon lying on the table,
And a bottle of chloroform on the book,	20
She used sometimes for an aching tooth!
I poured the chloroform on a handkerchief
And held it to her nose till she died.—
Oh, Delia, Delia, you and Proudhon
Steadied my hand, and the coroner	25
Said she died of heart failure.
I married Delia and got the money—
A joke on you, Spoon River?

Here's a rendering:

We Don't Need No Stinkin' [See infra, passim]

Ooh, heads will roll: WSJ op ed speaks well of health care and pensions.

Dallas, We Have a Problem

There's a great piece up in a Dallas city magazine about the new high-rise and how it--well, boils--the garden next door.  And just generally seems to be mucking up what passes in Dallas for (if you can get your mind around it) a chichi neighborhood.  The topic might seem to offer limited appeal to out-of-towners, but there's lot here to entertain anyone who ever banged their head against the schemes and follies of local governments anywhere.  Here's the fun part:

An announced 2007 groundbreaking had to be quietly canceled when the country plunged into the Great Recession and traditional construction loans dried up—especially for a condo project in an area (downtown, Uptown, Victory Park) that had already spawned nearly 1,800 condo units in the previous decade. But then, seemingly out of nowhere, a savior came to the rescue. The Dallas Police and Fire Pension System, which had earlier made a small investment in the Museum Tower project, announced that it would jump in with both feet and finance the entire thing, all $200 million of it.


The police and fire fund is a $3.24 billion juggernaut that makes all manner of investments all over the world. It has approximately 9,000 participants, meaning cops and firefighters, 3,500 of whom are retired and drawing benefits. The fund’s 12-member board includes four city councilmen, but otherwise the fund’s managers operate independently of the city of Dallas, which every year contributes to the fund 27.5 percent of every cop and firefighter’s salary. In 2010, that amounted to $108 million in taxpayer funds. ...


The police and fire fund’s investment in Museum Tower raised eyebrows across the country, and in June 2010, the Wall Street Journal ran a lengthy story about it. Jim Neil, a real estate investment banker with Churchill Capital Company, worked on behalf of the police and fire fund to find a bank brave enough to make the loan. Asked to describe that loan, Neil says: “It was a very unusual deal at a very unusual time.”


No one is in a better position than Richard Tettamant to explain how the deal got done. He has worked at the Dallas Police and Fire Pension System for 30 years, rising to administrator, the fund’s top executive. Tettamant is a large, affable man with a mustache that’s going gray. When I ask about the $200 million investment, he wants to know where I got the dollar figure. I tell him I saw it in the paper.


“They don’t have a clue,” he says, leaning back in his chair at a large conference table in the police and fire fund’s modern office. “Okay, the total construction budget for the tower is about $200 million, but we haven’t invested $200 million. The Morning News has had it wrong every time they’ve reported it.”


When I ask how much the fund does have invested, he says $100,000. I repeat the figure to make sure I heard it correctly.


“That’s all we have spent,” he says slowly, deliberately. “The bank that we borrowed the money from is financing the tower.”


For a second, I become disoriented and feel like I’m in a scene from Nineteen Eighty-Four. Tettamant is duckspeaking doubleplusgood about how the fund borrowed money and yet still got the bank to pay for the building. So I ask him: who is on the hook if the project fails?


“Oh, the Dallas Police and Fire Pension System,” he says.

 Kudos to the reporter for asking the right question (who is on the hook if the project fails?), and a special gasp of wonderment for the pension fund minder who was thoughtless enough to answer it.  Note the numbers: $3.24 billion and 12,500 participants.  That pencils out to a bit under $260,000 per worker.  It's a bogus computation because most of those participants aren't retired yet and I haven't any idea how many more years they may have to work and save.  But in an arena where a private-market annuity might easily cost a couple of million, $260,000 doesn't sound like a lot.  I asked my friend Ignoto how Dallas compares with CalPers, the California Public Employee fund. "Our plan has 1.6 million current and retired employees (100 times as many) and $238B of assets (75 times as much)," Ignoto said, "so that sounds like a decent ratio." Um, really? But I don't suppose I understand this business very well.

Generational

"The ‘old-age dependency ratio’ demonstrates the proportion of the population aged 65+ relative to the working-age population (15-64)."  By 2050 in the United States and China, the ratio is predicted to be about 39 percent.  Comparatively speaking, this is low: the ratio in Japan is forecast to hit 74 percent, and Korea, 77 percent (link).

A labor-baiting, poker-playing, whiskey-drinking, evil old man.

--John L. Lewis on John Nance Garner.

A savage old Nabob, with an immense fortune, a tawny complexion, a bad liver, and a worse heart.

--Thomas Babington Macaulay, discussing the men who pillaged India.

As I sat opposite the Treasury Bench, the Ministers reminded me of one of those marine landscapes not very unusual on the coasts of South America. You behold a range of exhausted volcanoes. Not a single flame flickers on a single pallid crest.

--Benjamin Disraeli on the Liberal party leadership.

O, I have ta'en
Too little care of this! Take physic, pomp;
Expose thyself to feel what wretches feel,
That thou mayst shake the superflux to them,
And show the heavens more just.

--William Shakespeare, King Lear 3, IV

So Many Kinds of Pension Mess

There's a fascinating, if somewhat indeterminate, thread over at Lawyers, Guns and Money, where all sorts of folks voice their bewilderment, perplexity and dismay over disappointments with the pension system.  Hard to quarrel with the premise here; there is a lot to be disappointed about.  Indeed that may be part of the policy problem: sorting out which kind of problem you're dealing with.  Let me see if I can catalog a few:

• The promisor may go broke.  Who would have guessed that crown jewel of corporate America--like, say, Studebaker--would just dry up and blow away and leave its retirees (present and potential) holding a bunch of empty IOUs?  

• Somebody may steal all the money.  As, it appears, the friends of Jimmy Hoffa did with the funds of the Teamsters Union. 

• The giggle test.  Self-dealing pension schemes may make (and honor) promises that don't pass it. The canonical figure here would be the cop who retires on disability at 45 and goes off to run a gym in Florida (the pension policy equivalent of the welfare queen). This works best in places like, say, The City of Vallejo, or the State of Rhode Island, where the blue-collar voters with a high tolerance for unions let the pension scheme tank up on obligations they never should have taken on in the first place.

• The market may not behave.  Market misbehavior can take many forms.  Example: inflation can turn gold into base metals, dependable income into paper.  Example:  As more and more money chases fewer and fewer investment opportunities, even diligent managers find that they can't get the returns they are supposed to.   Even conscientious or well-intentioned planners can get in trouble here.  The lazy or the corrupt, oh boyoboy.

• We promised what?  If the pension fund is a "public obligation" (rather than a "fund"), the voters may just change their mind.  Pensioners and pensioners will howl that they are breaking a promise, nay a sacred trust.  The voters, un- or underemployed and trying to figure out how to deal with their nondischargeable student loans,  aren't paying attention.

• Mañana.   I suspect maybe "the tomorrow factor" underlies every one of these problems, perhaps others as well.  Freud says it is impossible to imagine our own death.  It is almost as impossible for a 25-year-old to imagine that he'll ever need a pension. Indeed a kid that age who fully funds his IRA--he looks pretty weird.   Or a 30- or a 40-year-old, come to that.    One corollary is that they're not packing away enough.  But a more insidious truth is that nobody is watching: nobody is counting the beans, nobody is making sure the strongbox is locked.   You might say: that's why we have governments.  True; but it is also why we have to watch our governments.  They say that eternal vigilance is the price of liberty.  It also helps to promote solvency in the pension pot.

 I don't pretend to have offered any magic beans here, nor indeed any beans at all.  Pensions are another of our many economic train wrecks, and it is a good generalization about train wrecks that people tend to get hurt.  You can feel some of the hurt over at LG&M, and it is real.  

Pension Assets: Let 'em Burn

Thanks to Bruce for flagging me to Robert Novy-Marx' study of pension accounting.  It's hyper-wonky but it offers the provocative suggestion that we might improve our position with respect to some pension assets by just setting fire to them.

The Wichita Bureau on the 99 Percent

UB's Wichita Bureau is no fan of the one percent, but he directs his attention elsewhere:

When is the lower 99 going to figure out that we've been screwed by the 'greatest generation' - which having survived the war seems to have decided it was entitled to life time care - and proceeded to vote it. Aren't most of our real problems - public pensions, social security and Medicare (including long term care) - a result of the greatest voting themselves (and now the Boomers) a great retirement? I have only one friend who is willing to admit that he will take a cut in his pension to help out the fiscal problems - my brother (Retired CSRS annuitant) is adamant that he won't give up anything - he earned that pension.

I agree with a lot of this (and both Wichita and I are, of course, in different ways riders of this great wave).  But I can think of complications.   One, recall that the first pension train wreck involved not public pensions but private--or more precisely, "public company," as distinct from "sovereign." Indeed, I suspect one reason so many non-enjoyers are so shirty about sovereign pensions today is they saw their own (or their parents') dreams immolated in the notorious round of defined-benefit failures back in the 80s and 90s.  Two: whatever Wichita's brother may think, it ain't gonna happen.  Lots of public pensions are nominally a "fund"--a trove  of securities assembled as part of the the compensation package over a career.  Few or none of these funds are really solvent.  Degrees of solvency my run from "more or less, okay, maybe" down to "man the lifeboats!"  (Illinois).  Many/most also have a backup put option from the sovereign, but when time comes to honor the put the sovereign will find a way to say "no."  In counting pension largesse, I'd say we ought to mark to market.  On that standard, the greatest generation is not quite so great after all.  

If You Didn't Want to Go to Providence, Why Did you Get on the Train? Bondholders Get Themselves Paid Twice in Rhode Island

Honestly, am I the only person (outside of the Rhode Island public employees) outraged at the insolence and arrogance of the bondholders who have decided they won't be getting enough on their contracts in prospective Rhode Island municipal bankruptcies? Faced with the prospect of a shortfall the bondholders have just shoved through a piece of legislation that bumps them to the head of the queue.  As Reuters explains:

The law adopted last month gives municipal bondholders a lien on taxes and general revenues collected by the cities and towns whose bonds they buy.

This means the bondholders would be repaid before other creditors such as workers, suppliers and pension fund beneficiaries if the municipalities went bankrupt.

I've got a better idea.  Let's pass a law giving first priority to all bloggers whose screen names begin with "B."   It would make about as much sense as prioritizing precisely those people most likely to have the motive, the opportunity and the wherewithal to estimate this risk and (this is important) to price it into their original loan?  Assuming (as I should think we are permitted to assume) that they have already charged for this bankruptcy haircut, if we now let them stick it to the general fund, aren't we just paying them twice?


I suppose I could be wrong if we find a document in the file that says "and besides, boss, if there ever arises a real risk of default, we just get our lapdogs friends in the legislature to change the law."  Then again, I guess if they really did plan it that way, then they weren't getting double paid after all.

Wealth Transfer and the Public Pension Crisis

I think I'd mentioned before that in all our caterwauling about the public-employee pension crisis, we might as well start from the recognition that a good deal of this money will never be paid: not funded now, and not going to be funded by voters with tar buckets and pitchforks.

My friend Taxmom adds another filllip, addressing the issue of what happens to that money after it goes out of the public trough to fatten the retiree.  She points out that a fair amount of it just keeps right on moving until it lands in the pockets of the pensioners' dependent adult children.  In this sense, at least, public pension money is beginning to look like a more general form of off-the-books welfare.

Phantom Pensions

I've rattled on before about the illusory nature of public pensions--how a goodly chunk of those dollars (as a first guess, say 30-70 percent) are never going to get paid anyway, for one reason or another. But it occurs to me: what about those glorious defined-benefit private pensions we all harken back to so  nostalgically?  How many of them unraveled, with or without falling into the clutches of the  Pension Benefit Guaranty Corporation? I've  never seen a dollar value on this one but wouldn't the correct answer be "most"?

Pensions Again: Raising the Retirement Age

I agree with thoe who say (a) in a world where we all live longer, it is only reasonable to raise the retirement age and (b) (inconsistently?) that it's an outrage to try to solve our fiscal problem on the backs of those who work the hardest for the least money at the worst jobs.  There is a good end run around this problem, though I don't expect anybody to be pushing it soon: means testing.  The people least able to provide for themselves are the ones most likely to work in the kinds of jobs where they are least able to take care of themselves.  A lucky few (that would be me) have the disposition and the opportunity to keep working indefinitely at jobs they love and might well (but don't tell my boss) be happy to carry one with for far less money.    For the most part we are the ones that shouldn't be part of a state safety net scheme anyway (except by way of contingency) and you could save a lot of bucks if you'd just cut us off.

Pension Data Porn

I enjoyed the New York Times' Friday data mashup on public versus private earnings, though it's a shame they weren't about to come up with something by way of an estimate on pension/benefit compensation,  It does occur to me, however, that there is at least one problem with measuring pension/benefit compensation, both public and private, and that is for any calculation to be meaningful, you'd have to estimate the likelihood that the promised benefits will actually be paid.  I don't think that the remotest likelihood that public entities will be able to honor their more fanciful promises to teachers, prison guards, fire fighters, etc.  Perhaps a good rule of thumb (though imperfect) would be to scale the number down to the current level of funding.  This isn't perfect: you need to make all kinds of guesstimates, not least as to the appropriate interest rate (and I sign on with those who believe tht the rates currently used most places are too high).  You'd want to do the same with private sector obligations, of course, but since the private sector has pretty much killed off its defined-benefit obligations, it shouldn't be much of a problem.

Scarciest Thing I've Read All Week

 Rule of thumb, when a piece of journalism opens with an Escher analogy, you know it is not going to end with "The Sound of Music."  So this week's Buttonwood, and the spectacle of water running uphill and downhill st the same time.  The particular subject is pensions; in two unvarnished sentences:

• Sovereign default cripples pension funds.

• Pension shortfall triggers sovereign default.

There now, we can't put it any more bluntly than that, can we?    Fun followup: maybe this just reflects on my abilities as a teacher, but I've tried this one on a couple of folks who, though not particularly hip on finance, are functionng adults, entirely capable of tying their shoes in the morning.   The summary response is--wha?  How can water run uphill and downhill at the same time?  Actually, the real point is that it runs uphill both ways.

How to Solve All Our Problems

The New York Times has an entertaining wrapup about our public budget problem, and  how its' all the union's fault:

No, no, that was deliberate snark.  But the Times does highlight one device whereby public officials and public employee unions have been able to aggravate our common malady.  That would be: their joint skill at exercising the fine art of kicking  the can down the road:

[A] growing cadre of political leaders and municipal finance experts argue that much of the edifice of municipal and state finance is jury-rigged and, without new revenue, perhaps unsustainable. Too many political leaders, they argue, acted too irresponsibly, failing to either raise taxes or cut spending. 

That strategy is particularly appealing when it comes to "invisible" costs like present promises to pay future pensions or health care.   In plenty of places, unions have agreed to trade away present benefits for future, and government officials have avidly bought into the scheme because it shifts the problem onto the agenda of their successors.

Which leads to the suggestion of my friend Marc, who knows a thing or two about municipal unions: he thinks all local government officials should be elected for life, so at least they would have to clean up after themselves.

I suppose we could generalize: require that all public officials of any sort be elected for life, or at least until they flee to a jurisdiction without an extradition treaty.  Oh, right, that's been tried.

George Will and the Pension Paladin

George Will gasps this morning at the horror of the state and local pension calamity: the shortfall in funding, the chaotic accounting and disclosure, and the overall grabbiness of employes on the public payroll.  He's on the right track with respect to each of these issues, although he neglects to notice the extent that one may solve the other: given the relative (in)solvency of so many public pension programs, it beggars all expectation that employees, present or future, will ever see anything like the money they thought they were promised.

But Will has picked an odd choice of ally in his campaign for fiscal rectitude:  Rep. Devin Nunes of Tulare County, California, one of the most successful and effective exploiters of farm subsidies in Congress.    According to data from the Environmental Working Group,  Devin ranks third among California Congressmen in his capacity to bring home Federal dollars for the horny-handed sons of the soil in his rich farming district.

Credit Devin for talking a good case: back in Bush 43 days, he made a big deal out of voting against (and failing to stop) a farm pork bill.  But some guys just can't cut a break: the dollars keep rolling in.  Too bad: if only he could take all the cotton, rice and dairymen, etc., off the dole, the chances are he could solve the public pension problem right now.  George Will, feel free to copy.

More Pension Underfunding: The Wrong Message?

Here's yet one more study on pension underfunding, this one from The Manhattan Institute, no friend of public pensions anywhere. The subject for the moment is pensions public education but the data is remarkably similar to the AEI study that I linked the other day on public employees in general (and also to the Stanford study, discussed in the same link).

I don't doubt the general drift of the data, and do I detect a note of exultant schadenfreude here? Pensions so small we can drown them in a bathtub! Oooh, look at those rapacious schoolteachers squirm! Well enough, but I wonder if outfits like Manhattan have thought through their strategy. Seems to me that sooner or later the victims recipients of all these absurdly fanciful pension "commitments" might finally get off their collective backsides and start some pushback, start demanding a bit of substance with all the hot air.

Meantime, it seems to me that data like this goes a long way to discredit the general proposition that public employees are overpaid. They are often paid well, but if they are being paid in empty promises, then maybe it is time to face reality and mark to market.