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California is watching San Bernardino, and the nation is watching California

Original post made by jimf01, another community, on Apr 21, 2014

With an anonymous troll posting here--using the pseudonym Guvnah"--characterizing "projections" of debt as mere "fodder for fear-mongers". The attempt is to make readers believe the pension issue in CA is not a big deal. What is the impact of this problem on the citizens of CA, right now?

It is big. The shortfall of the performance of CalPERs investments is pushed directly to localities, the cities and counties we live in and depend upon for services, to backstop. Three California cities have already gone bankrupt: Stockton, San Bernardino, and Vallejo. And in no small part due to CalPERs pension obligations. San Bernardino's annual contribution was $5 million in 2000, but had risen to $26 million by 2012 due to increases in required funding after the housing crisis caused big losses in CalPERs investments.

Every citizen is aware that the city and county budgets took a pounding during the housing crisis, resulting in reduction of services to the taxpayers. A number of cities laid off firefighters and police. But CalPERs and the employee pensions haven't taken any cutbacks. Only modest reform of pension formulas affecting future employees has occurred.

During the boom years, the state employees got generous increases in pension formulas, but in the recession that ensued, they didn't give any of that up. The Governor and the Democrats in the Legislature in Sacramento, of course, depend upon those same unions to get re-elected.
Look at table 2 in this
Web Link

The Democrats are therefore very reluctant to ask these employees to take their fair share of the pain.

"The result is that roads, parks, libraries were not being funded", according to San Bernardino mayor Carey Davis. Essentialy, CalPERs says the retirees are being robbed of the additional retirement benefits the legislature approved in 1999, and the cities are saying the taxpayers are being robbed of essential services.

The New York Times has written a good accounting of where this debacle has gotten us, and what may happen in the near future

Web Link

Comments (33)

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Posted by Cholo
a resident of Livermore
on Apr 21, 2014 at 12:28 pm

alls i can say is that i'm delighted that individuals that put into calpers are receiving their fair share!

americans work hard for a living and what they receive is what they were told that they would receive.

i rest my case...VIVA AMERICA! VIVA!

ps tee hee...


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Posted by Trevor
a resident of Avila
on Apr 21, 2014 at 1:00 pm

Stockton's bankruptcy was on account of the city being hit by the highest home foreclosure rate in the nation while its city council made a series of awful decisions about what to do with taxpayer money, including building a bunch of big empty parking structures and a pro-style hockey rink for a 3rd-rate hockey team. But now we have some wind-up farm boy telling us it's all about pensions for public workers. Pretty funny.


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Posted by Trevor
a resident of Avila
on Apr 21, 2014 at 1:08 pm

Re. Table 2 which the farm boy provided with a link. It shows that the Democratic Party rec'd financial contributions from public workers, realtors, doctors and dentists, legal organizations, trade unions and coops, and a handful of corporations to boot. Which is to say, the party rec'd contributions from a very wide diversity of American citizens. I guess the farm boy would prefer parties only received contributions from big business. Because, see, big business's contributions don't have any strings attached. Now, about that ocean front property you were interested in in Central Oklahoma....


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Posted by jimf01
a resident of another community
on Apr 21, 2014 at 1:23 pm

jimf01 is a registered user.

Inventing an argument that doesn't exist, in order to make a counter argument is called a strawman. But Trevor's response wouldn't even qualify as a strawman. Because he just insulted me and said the argument was "pretty funny".

Maybe Trevor thinks cities going bankrupt, mismanagement and recession are funny? Because that would match the attitude toward this situation of the average California voter who keeps returning the same failures to the Legislature and the Governors office


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Posted by Trevor
a resident of Avila
on Apr 21, 2014 at 1:41 pm

No, I don't think cities going bankrupt are funny. I think you are funny. And that you've responded to my claims -- e.g., the significance of home foreclosures, bad city council decisions, and Americans contributing to the party of their choice -- with your insipid claim of victimhood makes you even funnier.

p.s. Public workers -- fire fighters, teachers, cops, park workers, etc. -- all pay taxes. Why someone wants to put the onus of city deficits upon public workers (and not others -- e.g., corporations who perform their operations in cities tax free), reflects a poorly disguised, poorly articlated attempt to conduct a biased political agenda. (See, for example, all of Jimbo's past efforts to promote Tea Party agenda. And the wind-up doll just keeps going, and going, and going.)


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Posted by jimf01
a resident of another community
on Apr 21, 2014 at 1:56 pm

jimf01 is a registered user.

I will give this much credit to Trevor, he is persevering with the strawman argument. But falls short yet again in constructing one.
"someone wants to put the onus of city deficits upon public workers and not others -- e.g., corporations"

This was not something I ever tried to say should occur. The fact is that the FULL "onus" of the cities and counties deficits are on the cities and counties. And a good portion of CalPERs deficits from its poor investmment choices. And what portion of this have public workers absorbed? Quite near zero.

And should the public workers, who were granted very nice increases in their pension formulas in 1999, during an economic boom, be forced to absorb SOME of this loss during a recession? My argument is yes.

And lo and behold, Tevor discovered that this is a political argument! Why yes, it is. Because it is our politicians, who granted these employees a nice increase in their retirement in 1999, the same politicians who now depend HEAVILY upon the same groups of employees for campaign cash, who would have to decide to rescind some of those increases. Clever Trevor, you discerned this IS in fact a political issue.


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Posted by Cholo
a resident of Livermore
on Apr 21, 2014 at 2:44 pm

You can put cute twist on anything you please. A few of my buds have absolutely no intention of allowing even one cent to be taken away...it's their money...they earned it fair 'n square...

dream on...it ain't gonna happen!

let the brawl begin!


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Posted by Gordith Lancaster
a resident of Rosewood
on Apr 21, 2014 at 4:53 pm

I've never heard anything but a political argument from Jimfol. But a political argument, contrary to what Jimfol mistakenly believes, doesn't hinge on its subject matter; rather, it hinges on whether interlocutors are pledged to finding out truth through dialogue with one another. I doubt Jimfol is capable of a genuine, nonpolitical argument -- about politics or any other matter. He's convinced when he goes in, and he's convinced at the end of the day. Does he learn anything from bantering back and forth with others on these sites? I doubt it very much. He's got an agenda. Period.


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Posted by jimf01
a resident of another community
on Apr 21, 2014 at 5:07 pm

jimf01 is a registered user.

Yes, I typically do get attacked personally when the other side has no refutation for what I put forth.
You see Gordith, what I have posted herein is not an argument per se. I informed on the facts of the matter, these are some very important subjects, but generally they are undercovered by our media.
Now, what I do see is a purely political position on the part of the collection of anonymous trolls here who attack, distract, deride, and otherwise scoff at conservative positions. In fact, your description of me better fits these folks.
But if I am misreporting something, feel free to identify that, and we can seek truth together, we'll hold hands around the campfire and sing kumbayah my brotha


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Posted by Cholo
a resident of Livermore
on Apr 21, 2014 at 5:18 pm

Gor...jim has a very constricted affect...always angry. He can only relate to others in a vertical manner. sad...if he's not on top he freaks out...be advised...tee hee hee

BUSTED!


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Posted by Gordith Lancaster
a resident of Rosewood
on Apr 21, 2014 at 5:28 pm

Yes, you really don't present an argument, and your facts are usually highly selective and self-serving. Your 'facts' are quite extensively covered by the right-wing echo machine, Fox News being the first that jumps to mind.

Since you have no argument, but only self-serving 'facts', you have no credibility. You remind me of the Soviet Union hacks that used to occasionally come to the United States to "talk" with U.S. scholars. They were a laugh a minute, spewing the Party line while having no facility in constructing well-crafted, thoughtful arguments or dealing with a full array of facts, friendly and unfriendly. Forgive me, but since your arguments never amount to anything, and your 'facts' are usually not facts, it is impossible not to laugh at you as others have done on this site.

Your very disdain for a genuine dialogical seeking of truth reveals your rather severe inadequacy as a dialogical participant who expects to be taken seriously. Eric Hoffer would call you a 'true believer'; I'd call you a hack, a rather inadequate propagandist.


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Posted by jimf01
a resident of another community
on Apr 21, 2014 at 5:44 pm

jimf01 is a registered user.

Ah yes, my self-serving facts (oops forgot the single quote around the word facts), in this case from the New York Times. Nice try.


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Posted by john
a resident of Another Pleasanton neighborhood
on Apr 21, 2014 at 7:09 pm

Oh come on and fess up. There is only one person doing all these posts and just talking to himself. It is too ridiculous to be more than one person.


 +   Like this comment
Posted by Rick tock
a resident of Bonde Ranch
on Apr 21, 2014 at 7:54 pm

Lets just wait and see what happens and enjoy the ride


 +   Like this comment
Posted by Right
a resident of Another Pleasanton neighborhood
on Apr 21, 2014 at 8:13 pm

Fellow posters, it's time to face facts: as you've seen from a majority of the lame excuses for posters above, the one thing they have in common is that they don't want their place on the gravy train impacted. They have no concern for anyone but themselves, like desperate drug addicts unwilling to do anything that keeps them from getting their next score (cholo knows exactly what I'm referring to).
We all thought the 80's were the 'me generation'; it certainly was, but these folks never grew up from those days of their childhood. It is way past time to grow up and face reality. The state govt is not your mom, it's time to move out of your basement and stand on your own.


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Posted by Rick tock
a resident of Bonde Ranch
on Apr 21, 2014 at 8:27 pm

Right you are wrong. Why not live others for awhile? If you are a republican or conservative you should leave this state. No room for you and take your ideas elsewhere. We have all libs in every meaningful position in this state and will continue to do so. Live with it.


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Posted by Megan Moore
a resident of Another Pleasanton neighborhood
on Apr 22, 2014 at 3:41 am

It's hilarious that Jimfol and other right-wing hacks want public workers to give back to the state part of their salaries and pensions. But do the hacks pledge to pay additional taxes with their own money? Nope. Do they maintain that corporations that exist and operate in cities but which pay no taxes begin paying taxes? Nope. Only public workers are expected to sacrifice. Why? Because public workers are very, very bad. It is not enough that they pay their fair share in taxes. Unlike right-wing hacks and corporations, which are all very, very good, only very naughty, naughty public workers who hacks say make too much money are expected to erase city and state deficits. This sounds like very clear and fair-minded thinking to me....


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Posted by right
a resident of Another Pleasanton neighborhood
on Apr 22, 2014 at 8:49 am

rock tock, are you also including the libs in meaningful positions (pun intended) in prison currently? Yes, you are all fine examples of liberalism and what it wrought to our once great state.
How long before the leeches figure out they are slowly killing their host?
Megan Mittens, everyone is making sacrifices, as most of us had to face on April 15th. Once you site your sources regarding these evil private sector employers who allegedly pay no taxes at all, I might take you seriously as something other than a mouthpiece for public union drones.


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Posted by jimf01
a resident of another community
on Apr 22, 2014 at 9:44 am

jimf01 is a registered user.

Megan - Serious questions for you. Do you maintain that the public (the right wing being part of that) are not already paying more in taxes than in 1999? Is it not true that a larger percentage of local budgets are already going to CalPERs?
Are you incapable of observing the reduction in public services the entire public has seen in California as a result of the economic crisis? The New York Times article I linked explains what has occurred. Is this not a shared sacrifice?
I work for a very very good corporation, one that employs lot of California residents (and therefore pays a lot of taxes), and the employees take a shared sacrifice when profits and revenues are down, due to things like economic cycles.
The state can just demand more and more from the citizens in the form of taxes, and more and more from cities and counties to backstop CalPERs poor investment results, even after the employee pensions were increased in 1999 with the promise that it would be paid for with projected profits on the investments. When the projections do not work out, are the employees expected to share in the sacrifice? Not in your view, apparently.

Of course Megan, you have twisted the truth saying that "corporations that...pay no taxes" AND "Only public workers are expected to sacrifice"

Of course, all for profit corporations pay taxes. Corporations pay a wide variety of taxes. Of course, the public have already made multiple sacrifices, even approving prop 30 last year, increasing taxes on high earners and increasing sales tax rates for everyone. Californians now pay the highest income tax and sales tax rates in the US.

As I said in my original post, CalPERs and the employee pensions haven't taken any cutbacks. Only modest reform of pension formulas affecting future employees has occurred. During the boom years, the state employees got generous increases in pension formulas, but in the recession that ensued, they didn't give any of that up.


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Posted by Cholo Pololo Mololo
a resident of Livermore
on Apr 22, 2014 at 10:09 am

The tea party has little to no power in Ca at present. Lets keep it that way.

The best way to shut them up on this blog is to IGNORE THEIR CHEERLEADERS!


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Posted by Megan Moore
a resident of Another Pleasanton neighborhood
on Apr 22, 2014 at 11:43 am

I'm not sure the public is paying higher taxes now than in 1999. But if they are, that means public workers are paying higher taxes, too. But this fact fails to satisfy those who have an obsessive fixation on public workers' wages/salaries. The obsessive fixation with public workers' salaries and pensions, itself, seems like an unhealthy fetish to me.

Most public workers I know have not rec'd wage or salary increases for many years now. Yet the right-wing fetishists who call for public workers to 'give back' ignore public workers' flat wages/salaries over the past decade or so. Pant-pant fetishists seem incapable of acknowledging this as fact.

Just because one person -- or, probably more correctly stated, one person's wife -- works for a corporation that pays taxes does not mean that many (perhaps most) large corporations situate themselves in cities without paying any taxes. But the right-wing fetishists don't call upon corporations to pay higher taxes. How come?

I don't see an argument here. All I see is a repetitive bemoaning that public workers are employed and making a higher salary than some unemployed right-wing hicks who, having a lot of time on their hands, watch too much Fox News, listen to too much Mark Levin.

JimFo1 has already admitted he doesn't have an argument. A couple of selective facts and reference to a conservative mainstream news article that offers very little of substance about San Bernadino or Stockton gets the fetishist nowhere. Pant, pant. No one is acknowledging the fetishist as having any credibility. Rather than using his repeatedly failed efforts to convince others as a call for self reflection, he continues the same rocking horse mantra.


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Posted by Megan Moore
a resident of Another Pleasanton neighborhood
on Apr 22, 2014 at 11:53 am

Web Link

Zero tax rate for so many companies. Yes, claim the right-wing hicks who spend their days listening to Mark Levin, let's all engage in a collective bellyache about public workers who teach our children, protect our streets, save our homes from fires and other hazards.

Confession: I have only listened to Mark Levin once. On that day, he was talking about how his kid was majoring in Communication Studies -- a responsible choice, he claimed -- since Communication Studies is one of the 'top sciences' in our society. I quickly turned the channel, but not before gagging in disgust.


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Posted by jimf01
a resident of another community
on Apr 22, 2014 at 1:15 pm

jimf01 is a registered user.

What our wonderful progressive friends fail to mention is that without these corporations, the tax base would cease to exist. Government at every level collects most of the money that sustains it due to economic activity, and much of that is from corporations.
And only a portion comes from taxes. The cost of regulation, the capital gains tax, the sales tax collected when an item manufactured by a corporation is sold are just a few categories of revenue for government that is not captured when looking at the effective tax rate of a corporation.

And of course, corporations employ and are owned by people. The profits are used to create jobs and return dividends to investors. Those employees and shareholders pay taxes on their earnings.
People intuitively understand these things.
Progressives like Megan want us to hate corporations because they take legal tax deductions. But if they didn't take them, they would be sued by stockholders, they have fiduciary duty to them to operate efficiently.

The place to direct your anger is to our corrupt government. A big (and growing) part of the tax code is what is written for corporations, mainly in exchange for tax deductions.


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Posted by Megan Moore
a resident of Another Pleasanton neighborhood
on Apr 22, 2014 at 2:11 pm

Nope, Jibfol, you started this mud fight. And according to you, all the blame for city govt deficits comes from those public workers demanding the wages/salaries they have bargained fairly for in the past. When I pointed to how corporations aren't contributing their fair share -- as well as noting that you/your wife hasn't sacrificed by sending a greater part of her paycheck to the govt -- you start with your pap about how dependent the economy is on corporations. You seem not to be able to _formulate_ an argument, as you admit above; and, now here, you demonstrate an unfortunate inability to _follow_ an argument. I might add that you fail at this consistently, across virtually every thread you insert yourself into. I believe another poster tended accurately, in my judgment, to refer to your "argumentative" style as scrambled eggs.

About your revered corporations.... When they blow up because of illegal chemical mixes in their plants, when their mines explode because of a failure to provide adequate ventilation, when their oil spills into our oceans, it is your nefarious public workers who are first at the scene to rescue survivors and to clean up the mess created by the greedy ones. And guys like you? You're too busy checking on whether those corporate-created human disasters are going to affect your wife's investments.

Next time you get mugged on the street, or your home catches on fire, call a corporate CEO. See how quickly they respond. Nitwit.


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Posted by jimf01
a resident of another community
on Apr 22, 2014 at 4:04 pm

jimf01 is a registered user.

Megan states I cannot follow or formulate an argument when she distorts or outright lies about every single point I have made

"according to you, all the blame for city govt deficits comes from those public workers"
- That's a lie, I stated clearly in the post "city and county budgets took a pounding during the housing crisis"

"wages/salaries they have bargained fairly for in the past"
- That's a distortion mixed with a lie, the issue is not wages negotiated in a contract, I clearly stated the issue is "During the boom years, the state employees got generous increases in pension formulas...the legislature approved in 1999" these were not the result of contract negotiations.

And finally, you make me out to somehow have attempted to villainize public workers in general, which is untruthful. I clearly put the issue on the legislature to resolve. The unions are the entity the legislature must do battle with. The employees of the unions are really the pawns in this game.


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Posted by jimf01
a resident of another community
on Apr 22, 2014 at 4:29 pm

jimf01 is a registered user.

Here is an article with more details on the information I have put forth here. And introduces a new wrinkle. The corruption of CalPERS own board, which led to the disastrous 1999 legislation
Web Link


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Posted by Megan Moore
a resident of Another Pleasanton neighborhood
on Apr 22, 2014 at 4:33 pm

Oh, okay, I didn't realize you were calling for foreclosed home owners or the bankers who financed them to start giving back to governments. I thought you were calling for public workers to begin giving back portions of their wages/salaries.

Not contract negotiations? Then did the public workers extort their wages/salaries? Your claims are utter nonsense.

Yes, you demonize public workers, repeatedly and consistently. Are you calling for legislators to forfeit part of their salaries? Are you calling for corporations to pay higher/fairer taxes? Have you asked your wife to give to the state a higher portion of her salary? No. It's only public workers you think should give back. Why public workers but not your wife? Why public workers but not the corporations that public workers bail out after one predictable screw up after another?

So, now we have ol' Jimfol unable to even retrace the steps of his own argument. "Liar this, liar that!" "You fail to understand me!" "Why don't you respond to what I mean rather than what I say? My mother does!" Like some other poster accurately stated, this guy's thought processes and argumentative skills amount to little more than scrambled eggs.


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Posted by Cholo Vato
a resident of Livermore
on Apr 22, 2014 at 9:36 pm

Governments workers should be able to get the same amount of money that is promised to them, regardless of the investment mistakes that calpers makes, regardless of the condition of the rest of the California economy, regardless of whether the money being collected from cities or not. A contract is a contract, and even if the Global Warmings happens and the state dries out to a dust bowel those people better get their money, or you can kiss your highways and your firehouses and your school buildings goodbye.


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Posted by john
a resident of Another Pleasanton neighborhood
on Apr 22, 2014 at 10:11 pm

"... or you can kiss your highways and your firehouses and your school buildings goodbye."

Just like those air traffic controllers that we couldn't fire...

Web Link


 +   Like this comment
Posted by Cholo
a resident of Livermore
on Apr 24, 2014 at 11:18 am

i think that it is waaaaaaay cute that the air controllers weren't fired..........tee hee...such is life


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Posted by Pensions Are NOT the Problem
a resident of Another Pleasanton neighborhood
on May 4, 2014 at 8:02 am

The problem is that government employers got a free ride when times were good.

When interest rates were very high, pension funds were invested so well that governments were allowed to reduce or stop paying toward employee's pensions, because of the interest or return on the investments.

They did so well that PERS did not have to pay or charge the employees for many YEARS and was worried that the State of Ca would "borrow" their money.

Facts here:
Web Link

But when interest rates came down, pension funds just burned away their funds, and did not promptly ask employers to pay, or to pay enough. Eventually that caught up to them, and employers not only have to pay, they need to make up for some of the prior free ride. CalPERS and teachers pensions are similar.

Yes, the employers need to pay more. But it is interesting CalPERS is now getting a 16.2% rate of return on investments, (while my bank offers less than 0.1%!) so perhaps there's hope that can help offset the years of underpayments.

If you ask the employees to pay more, it really just costs more in the long run because that money comes out of their salaries, which the employer pays,and is taxed, too,

Employees did not cause the recession, and cutting the pensions that they are entitled to, based on years of service, will not solve today's problems.

Look at that same CalPERS Site under Income Totals over the past 10 years:
For 2012-13
Members contributed: $3,896,078,000
Employers: $8,123,833,000
and Investments and Other income: $30,284,807,000
AGAIN: Last year CALPERS made over $30 billion on investments of money they got in advance to pay for employees retirements.
Maybe if they can keep this up, cities and employees retirements can live on just the investments again.


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Posted by jimf01
a resident of another community
on May 4, 2014 at 9:03 am

jimf01 is a registered user.

A return of 16.2% is great, but that is for 2013.
Joe Nation, professor of the practice of public policy for the Stanford Institute for Economic Policy Research, and a former Democratic state assemblyman.

"The short answer is that a 7.25% assumption is still too high," he says. "I think a range of 5% to 6% is more appropriate given historical returns. [But] if they assume a lower rate of return, their unfunded liability increases." By how much? Nation believes that could be north of $170 billion — or more.

Web Link


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Posted by john
a resident of Another Pleasanton neighborhood
on May 4, 2014 at 11:53 am

"I think a range of 5% to 6% is more appropriate given historical returns. "

But then again, it might not be. But all of this is small potatoes compared to the threat to our economy posed the current state of our large financial companies.

I think we have more pressing financial problems as a nation, that in turn cause us problems in California. I think it is instructive to remember that the financial crisis of 2008 was largely caused by unregulated speculation in the derivatives market (centered around AIG and its counter-parties). Dodd-Frank was supposed to fix that, but in many ways it hasn't. The derivatives rules have been largely watered down as the result of industry lobbying, and a meltdown like the one we experienced in 2008 is still a possibility.

Until we restore trust and transparency in the financial markets, worries of unfunded pensions liabilities or even growth in the federal deficit really need to be thought of as secondary, lower priority issues.

Remember that the financial meltdown had nothing to do with pension liabilities or excessive government spending. The financial crisis was all about opacity and lack of government oversight in the derivatives market. AIG collapsed because it speculated wildly and irresponsibly in derivatives, and its counter-parties (like Goldman Sachs and Morgan Stanley) started to implode (before they were bailed out) as a result.

We need to fix this problem first before we start worrying about pensions and deficits. If we do that, we're also likely to see better long term average returns on investments.


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