CBC Is Just NPR, Eh?

In this long drive through the western provinces and the Yukon, radio is sparse and mostly FM, and I’ve been listening to a lot of CBC.

Basically, it’s NPR with slightly Ontario accents.   The production values of studio and phone interviews are identical.  The intonation, speech patterns, measured tone of voice are cloned.  Even the light-hearted, free-spirited political sketch comedy show (The Irrelevant Show) could be produced by Minnesota Public Radio but performed for a live audience in Alberta.

There’s one woman who hosts a culture show similar to Fresh Air, who sounds as though she grew up listening to Terry Gross and said, “I want to sound like that,” and spent her formative years practicing with a recorder.  There’s another, a news reader, who would easily retire the prize in the annual Korva Coleman Impersonation Contest, which, given the uniformity of both NPR and CBC anchors, might actually be a thing.

The politics are roughly the same – ranging from the center-left to the left, with a little hard-left and center-right thrown in for the appearance of inclusivity.  There’s slightly less emphasis on the racial and ethnic horrors of the past, but the source material is a little poorer there, though sexism real, imagined, and past, gets plenty of airtime.

And in case you were wondering, there’s always time to pick on Israel.  In a segment about whether or not candidates’ families and personal lives were fair game in their campaign ads (not attack ads, mind you, but their own ads), one of the examples was a Conservative candidate who had mentioned his being the child of Holocaust survivors.  This is a riding that’s 22% Jewish.  The ads were eventually pulled, and one of the panelists found that remarkable, since, and I’m paraphrasing, but not much, “up until now, the Tories have pretty much been no-holds-barred in going after the Israel issue with Jewish voters.”  Another show gave an approving nod to a pro-Palestinian version of Birthright Israel, which sends visiting Jewish youth to the West Bank for self-defense shaming.

Of course, from a Canadian point of view, NPR is just the CBC with slightly Midwest accents.  I’m not sure if anyone’s ever been asked, but it’s entirely possible that NPR consciously sees itself as the CBC of the South.  Certainly the CBC was well-established by the time NPR started doing All Things Considered in the 70s.  Also possible, but less likely, is that NPR sees itself as the BBC of the colonies, and ended up in roughly the same place as the CBC, albeit slightly more Americanized.

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Call Western Union

“If you want to send a message, call Western Union.” – Samuel Goldwyn

Much if not all of the Trump boomlet is fueled by a frustration with and distrust of a party establishment that seems not only cozy with progressives, but comfortable with progressivism.  Articles by both Reihan Salam and Glenn Reynolds have made this point, and it’s one that Mark Steyn has talked about.  Americans are happy to play politics between the 40-yard-lines.  Given a perpetual choice between 49-yard-lines, though, they rebel.

The problem is that this rebellion isn’t necessarily coherent, and is usually destructive.  In 1968, Democrats sent a message to Lyndon Johnson, and got Richard Nixon elected.  In 1992, Republicans sent a message to George H.W. Bush in the form of Pat Buchanan, and got Bill Clinton elected.

A close analogy is here in Colorado in the 2010 governor’s race.  Unpopular incumbent Democrat Bill Ritter decided not to run for re-election amid rumors of personal scandal.  The Republicans, with festering dissatisfaction at the “establishment” after losing marquee statewide races in 2004, 2006, and 2008, had a choice between stalwart conservative, but presumed establishment favorite, Rep. Scott McInnis of Glenwood Springs, and unknown, blank-slate, self-professed Tea Party businessman Dan Maes.  When fellow Republicans satisfied a personal vendetta by leaking allegations of plagiarism just before the primary election, many Republicans registered their complaints by either not voting for McInnis or voting for Maes, who squeaked by with a major upset win.

The other factor was a widespread, small-l libertarian-fueled distrust and honestly hatred of the party officials and party officialdom.  I was at Denver party breakfasts in 2008 when Dick Wadhams was raked over the coals by the Ron Paul people, and that resentfulness has percolated (and been stoked by the large-l Libertarians) ever since.  It certainly was around in 2010.

Maes, frankly, had no business being the nominee, and no business being a statewide candidate.  He had no idea what he was doing, no interest, apparently, in the nuts and bolts of an active campaign, no willingness to spend endless hours on the phone raising money.   And the Republican party blew as good an opportunity as we ever had in the Tea Party year of 2010 to reassert control over state government.

The current national dynamics eerily and scarily resemble those of 2010 here in Colorado.  Candidates actually capable of uniting the various factions of the party, or bringing a unique and valuable message, are getting shut out of the process because it’s All Trump All The Time.

While I remain convinced that there’s no way on God’s green earth the party will actually nominate Donald Trump as its presidential candidate, he’s sucking oxygen from as deep and talented a field as I’ve seen in my lifetime at the national level.

That depth, by the way, is also in large part the result of a 20-year effort to grow the party at the state legislative level.  It’s meant letting each state party find its way and find horses for courses, as the saying goes.  That’s resulted in Republican government in states as diverse as Michigan and Alabama, but it’s also meant that those state parties differ much more from each other than they might once have.  The only person capable of uniting a national party is a presidential candidate, and the nominating process is a means of having the debate to decide where we want to go nationally.

A political party is a coalition of diverse interests, but there are elements outside the party who can’t stand that fact, and would be perfectly delighted to see the national party dissolve into factional bickering and resentfulness.  There’s absolutely no good reason to let that happen, or to nominate less than our best this year.

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But What Did They Learn?

Ted Cruz supporters are seizing on comments made by Carly Fiorina at the time of the 2013 government shutdown to try to paint her as a tool of the party establishment.  Jake Tapper quoted her as saying:

“There’s no honor in charging a hill that you know you can’t take, only casualties, although Ted Cruz maybe got name recognition and money along the way,” said Fiorina. “But President Obama wanted this shutdown. And Ted Cruz played right into his hands.”

While Cruz himself has been silent on Fiorina’s remarks, his own recent comments on the Senate floor, where he took Majority Leader Mitch McConnell to task over both an Obamacare vote and a vote to reauthorize the Export-Import Bank show that he maintains that leading the shutdown was the right thing to do.  Since it was his signature moment – much as Rand Paul’s filibuster to save us from the imminent threat of drone warfare on Main Street was his – it’s hard to see where he has any other choice.

He and they may think that, but ultimately, this was and remains a fight over tactics, not goals.  With the exception of Jeb Bush, I can’t think of another Republican candidate who doesn’t want to repeal Obamacare outright, and even Bush’s hedging is usually on the way to a discussion about what to do next, instead of leaving things as they were.  Cruz led the shutdown effort which was a polling disaster for Republicans, and could well have led to failing to take the Senate yet again, had the Obamacare and healthcare.gov rollouts not be such a train wreck themselves.

In my mind, while losing the fight was demoralizing, the shutdown tactic more or less resembled the famous Sidney Harris cartoon.  There was a start, and an end, but step 2 was always more than a little fuzzy; there was no chance that then-Majority Leader Reid was going to pass a bill on to the White House defunding Obama’s signature domestic legislation.  For Fiorina to say at the time that the shutdown played to Obama’s favor was to say no more than many others were saying at the time.  Revisiting what was a fight over strategy and trying to cast it as a willingness to accept the status quo may be clever – Fiorina will have to come up with a strong response to avoid looking defensive.  But I’m not sure that it’s good for the party.

For me, Cruz would earn a lot of points by at least realizing that the strategy was doomed, that it did indeed fail, and that the cry of, “It would have worked if only everyone had followed me,” fails to take into account reasons that Republicans might not have followed him.  Instead, I’d like to see him discuss why it failed, and what he learned from the experience.

Fiorina has a “What I learned from my failure” story of her own to tell from her signature career moment, and likewise, so far has been reluctant to tell it.  Fiorina’s tenure at HP was controversial, but appears to have been on the whole successful.  Nevertheless, she was fired by the board in what she describes as a “boardroom brawl,” where the knives came out after many years of making enemies at the company.

Fiorina’s strength thus far has been the ability to take negative questions and turn them on their heads, a skill that would be priceless in confronting Madame Hillary and her media minions in the general election campaign.  She’s tried to spin that as a result of making hard decisions, and no doubt that’s true.

But it’s only half the story.  Success usually breeds loyalty, not hostility.  And if her failure was one not of business but of politics, well, she’s running for president, not CEO.  She would also do well to discuss what went wrong, what she learned from the experience that would serve her in this most political of jobs.

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Can’t Anybody Here Play This Game?

The 1962 Mets were awful, going 40-120.  They were so bad that Jimmy Breslin wrote a classic baseball book, Can’t Anybody Here Play This Game?, describing manager Casey Stengel’s exasperation at his Amazin’ Mets.  In New York Baseball terms, the Mets were the Stupid Team, committing 210 errors and giving up 948 runs, 137 of them unearned.  The Yankees, by contrast, continued to be the Evil Team, winning another World Series, 4-3 over the Giants.

One gets the sense that, “Can’t anybody here play this game?” is the constant groan of the Republican managers in the stands of national politics these days.  Obama continues to chug along, reinterpreting or flat-out ignoring the law, Congress seemingly powerless to stop him.  Indeed, this Republican Congress seems to go along with his plans with dismaying regularity.  It’s understood that it would require  2/3 vote to overcome a veto, but they could at least put the Democrats on record as opposing common-sense ideas, force them to take some uncomfortable votes, and set the table for the eventual nominee with some vetos to complain about.  And confirming Loretta Lynch, on top of it.

Nevertheless, sometimes there’s more going on than a simple vote.  Steve Heyward over at Powerline, in a couple of posts, nicely dissects Mitch McConnell’s strategy regarding the execrable Export-Import Bank.  A powerful symbol of cronyism, it’s also know as the Bank of Boeing, since Boeing alone typically receives about 80% of its benefits.  It wasn’t tied to any other funding legislation.  It wasn’t a piece of some other appropriations or authorizations bill.  Killing it didn’t require a special vote. It just required doing nothing.  Which, shockingly, Congress did.

Killing it didn’t require a special vote.  Keeping it alive did.  And a special vote is just what Mitch McConnell organized, an amendment tacked onto an appropriations bill.  It passed overwhelmingly, and was sent to the House, where Majority Leader Kevin McCarthy of California pronounced it DOA.  The Senate will take up the House version of the appropriations bill after the August recess, without the ExIm Bank.

It should have been apparent that this was set up beforehand, in order to give cover to Sen. Mark Kirk of Illinois.  Boeing is headquartered in Chicago.  Kirk will be in a tight re-election race, and it would be nice to keep the Senate.  Nevertheless, the Republican grassroots, frustrated at so many other capitulations, screamed that McConnell was in the pocket of the cronies, and no better than the Democrats.  In fact, he had just managed to kill the bank while letting a vulnerable Senator take credit for trying to save it.  And yes, while people are aware of that, what would change the outcome is a change in the House, not the Senate, and there are probably few Republican pick-ups to be had in Chicago at this point.

Instead of recognizing that this was a win disguised as a loss, too many of the Republican peanut gallery assumed McConnell was actually trying to throw the game.  Personally, I think McConnell and Boehner have been way too easy, and way less aggressive than they need to be.  They’ve missed opportunities to pick winnable fights, put telegenic and capable spokesmen out there to make the case, and force the Democrats to take unpopular and irresponsible positions.  And who knows but that the crying over the ExIm Bank doesn’t actually give additional cover to McConnell’s gambit.

But we should also look at the long game sometimes.  McConnell didn’t get where he is by really being stupid.  And people are only going to elect a Republican president if they think the party is serious about governing.  (That last is why I would love to see Sen. Mike Lee of Utah be the Majority Leader in 2017.)  There’s plenty of stuff going on at the committee level where the Democrats and Obama don’t get their way.  Good luck, for instance, getting any more judges through.  There won’t be any more major initiatives, at least not legal ones.  And they are planning on passing a bill for Obama to veto that would start to reclaim some of the regulatory authority that Congress has given up over the years.  Ultimately, though, this just emphasizes the need for a Republican president, and one who’s energetic, and willing to devolve power back to Congress and to the states, which won’t be an easy task.

Sometimes, it’s not the leadership, but the party they’re trying to lead, who can’t play this game.

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Colorado to Pay for Drunken Artists Colonies

In what has to be one of the worst misappropriations of public funds since that study about why lesbians are fat, Colorado is going to sponsor “affordable housing” (sic) for artists in rural communities:

Gov. John Hickenlooper announced the plan Monday at an artists’ community in Loveland. The governor says that the state will help sponsor a $50 million plan to create artist housing in nine rural communities, starting with Trinidad.

Why should Denver have all the bad public art?

The housing will have income caps. Artists who qualify for housing can’t make more than 60 percent of their area’s median income.

Well, at least we have some standards.

Private foundations are joining the effort. A state spokeswoman says it’s not clear how much of the $50 million will be paid by the government.

How about $0?  Does $0 work for you?

The program will have a generous definition of “artist.” The program will accept architects, filmmakers – even beer and liquor makers.

Gotta get those creative juices flowing somehow.

The argument we hear from the Democrats all the time is, “We need to have a conversation about what we want the government to do, and then fund it appropriately.” This is the sort of nonsense you get when you start from that end of the deal.  Of course when you start by asking, “What is it you want?” you end up with a wish list like me in a book store.  The phrasing completely hides the fact that you’re actually making choices – either about what the government will do with its limited resources, or with what you can do with your own.

Try ph
rasing it differently: “We need to decide how much we really want to pay for government, and then use that money appropriately.”  Aha, now it’s clear that there’s only so much money to go around, and if you want to spend your own money on this sort of thing, you’ll be paying for it before you fund your food, your mortgage, your kids’ education, and your retirement.

Naturally, the Democrats hate that part of the conversation, so much so that they try, every step of the way, not to let you have it.  They want to have the “What do you want us to do for you?” part of the discussion, and then, once you’ve committed to buying Pierre the Failed Art Student his rent and bitters, tell you how much it costs.  And when you decide maybe your dental bill is more important, they want to insist that, no, we’ve already decided that IPAs for Pierre are in the budget, and it’s no fair going back on that and changing the deal on poor Pierre, once he’s pulled up stakes and moved to Ouray.

It’s the main reason they hate TABOR so much.  Unless it’s a really good budget year, and the government just happens to have money sitting around burning a hole in its pocket, TABOR makes them actually ask you whether or not you want to pay for Pierre’s studio loft.

The next time someone comes up with a harebrained idea like this, the first question should be: “Instead of what?”

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As Colorado’s Pensions Add Risk, California Seeks to Reduce It

Even as Colorado’s state public pensions seek to add risk to their portfolio, California CalPERS is seeking to reduce risk and volatility in its own plan.  In doing so, it sends up a flare for other pension plans.  It also confirms one of the key assertions of defined benefit plan critics: the aggressive return assumptions, combined with permissive discount rate assertions, in US public pension plans incentivize those plans to chase those returns, and add risk in doing so.

In a piece I wrote back in March for Watchdog Arena, I noted that Colorado PERA’s Board of Trustees had voted to shift several percentage points of investment from stocks and bonds into riskier alternative assets and real estate.  This portfolio isn’t necessarily out of line with the majority of US public pension asset allocations, but it does represent adding risk – and therefore volatility – in an attempt to increase returns.

Yesterday, Pensions and Investments reported that CalPERS is looking at reducing its expected 7.5% rate of return to as low as 6.5%.  Doing so, the plan says, would allow it to shift its investments out of stocks and alternative assets into more predictable, less volatile bonds.

“It is essential that we do this,” said California Controller Betty T. Yee in an interview with P&I. Ms. Yee added that if CalPERS does not reduce volatility, it could jeopardize its ability to pay retirees in the future….

Ms. Eason said lowering the rate of return would also enable officials to build a portfolio less vulnerable to market swings. The current 7.5% rate of return has a 12% volatility rate. Reducing the rate to 7%, as one scenario does, would translate to a 10% volatility rate. A 6.5% rate of return would equate to a volatility level of 8.5%, she said.

In doing so, CalPERS doesn’t implicitly accept the critics’ assertions – it explicitly accepts them.  They would lower the expected rate of return specifically so they could “safely” move assets into less risky (albeit less remunerative) investments.  Public pension officials in the US have long denied a linkage between the two, so it will be interesting to see how they react to this admission.

By most measures, CalPERS is better funded that Colorado PERA, although not particularly well-funded.  It admits to a funding level of 77%, compared to PERA’s claimed funding level of 62%.  These claims both discount the pension liabilities at 7.5%, the assumed rate of return.  Lowering CalPERS’s expected rate of return to 6.5% would, correspondingly, lower its funded level by lowering its discount rate.  A study by State Budget Solutions, however, using the states’ cost of borrowing as the discount rate, placed the funding levels at 39% and 32%, respectively.

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All Things Considered, It’s a Bad Deal, But Only Israel Thinks So

Last night, NPR’s All Things Considered ran a report by Eleanor Beardsley about the eagerness of European businesses to get back into Iran after the lifting of sanctions.  Such a story could and should have been reported without passing judgment on the merits of the agreement itself.

Instead, over a minute of the report is devoted to explaining that the deal is uncontroversial in France, that this is because it’s a strong deal, Iran “can’t even think about making a bomb for 15 years,” and that France deserves credit for helping to make it so.  These assertions by the French Foreign Minister are simply accepted at face value.  In fact, the assertions about the strength of the deal are demonstrably false; and so, therefore, and the claims that France extracted any worthwhile concessions from Iran during the negotiations.   Left implied, but unasked, is the conclusion that if the agreement is solid because of French-demanded concessions, it have been weak and unverifiable had the US been left to negotiate on its own.

But the next quote is even worse, from Thierry Coville of the French Institute for International and Strategic Affairs:

Most of the newspapers consider it a good agreement, and it’s good for peace.  But, let’s say you have some experts which are taking the Israeli line, criticizing Obama, but it’s a minority.

Coville, whose focus of studies is Iran’s economics, politics, and the historical interplay between the two, ghettoizes criticism of the deal into Israeli criticism of Obama.  There’s no valid debate, no valid critique, and indeed, even though it was the French who allegedly gave the agreement its teeth, the criticism is of Obama.

Beardsley let this characterization go without objection.

Let’s review Beardsley’s options.  She could have asked for another quote that didn’t take the discussion off into anti-Bibi Land.  She could have continued the discussion with Coville until she got such a quote.  She could have talked to another expert.  She could have not used a quote at all, since she reads the French press and knows perfectly well what they’re saying about the deal.  She could have not devoted 25% of her report to selling the deal to us in the first place.

Instead, she did none of those things, and let the words of an allegedly independent authority indict criticism of the deal as emanating from Jerusalem.

It would appear, then, that the editorial position of NPR is the same as that of Obama: opposition to the deal will come only from Israel and her lobbyists.

Your tax dollars at work.

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Fools and Knaves: Iran Edition (with apologies to Powerline Blog)

The willful foolishness of our leaders and what passes for their foreign policy continues.  Today, Reuters reports that the US is “disturbed” by Ayatollah Ali Khameini’s sermon on at Saturday’s “al-Quds Day” prayers.

“I don’t know how to interpret it at this point in time, except to take it at face value, that that’s his policy,” [Kerry] said in the interview with Saudi-owned Al Arabiya television.

“But I do know that often comments are made publicly and things can evolve that are different. If it is the policy, it’s very disturbing, it’s very troubling,” he added.

While a full translation of the sermon isn’t available, you can get the flavor of the remarks from Khameini’s official website.  As you might imagine, if you weren’t living in a dream world of US-Mullah cooperation, there is only confrontation and aggression towards the US and Israel, and a reiteration of Iran’s regional ambitions.

The speech, given only days after the Vienna Agreement was announced, echo the victorious tone of Hitler’s speech at Saarbrücken, given on October 9, 1938, barely more than a week after Munich.  (There’s a text of the speech available online, but I’m not comfortable linking to the site that has it.  Google, if you like.)  The New York Times gave the following assessment of that speech:

Those who had hoped that giving in to virtually all of Hitler’s demands at Munich would lead to European appeasement will find little consolation in the speech of the Fuehrer at Saarbruecken. The moral that Hitler draws from the events of the past few weeks is that only by military strength and threats of war can Germany get what she wants.

Since Kerry is having a hard time figuring out what’s going on here, let me help: the Ayatollah, as befits a man of the cloth, is a True Believer.  That is, he really, truly believes in his cause, really truly believes that it is right, really truly believes that God is on his side, guiding history in his direction.  Indeed, he may well believe that all of history up to this point is nothing more than prologue to Iran’s ascendancy.

From his point of view, the Western collapse in the face of Iranian resolve is nothing less than divine vindication.  Yes, the West is weak, decadent, and lost.  But it is materially and militarily strong.  What else, other than Allah, could have prompted it to collapse so thoroughly, to accede on virtually every substantive point?  What else, other than divine intervention, could have brought a President Obama, so friendly to the Iranian cause, to power just in time to rescue the regime from its own people?

To such a mind, the outcome of the talks is a ratification of his genocidal ideology, not a reason to modify it.  It’s been disturbing and troubling for 35 years.

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Presidential Temperament

The first substantive debate of the Republican primary has broken out between Scott Walker and Jeb Bush, over the Iran Deal.  Both Walker and Bush have denounced the deal, and called on Congress to reject it.  Walker, however, has said that he would nullify the agreement “on day one.”  Bush has called that position unrealistic, and arguing that a newly-sworn-in President wouldn’t be positioned to undertake such a potentially complex arrangement.

Bush has a point – the policy implications aren’t simple, and such a move would have to be part of a broader strategy.  That said, there’s no reason that a President-elect couldn’t get that into place before January 20.  He’ll have a good idea who his foreign policy team will be, and he’ll have been receiving intelligence briefings almost since election night.  If he puts his foreign policy advisors on the job now, they should be able to come up with a strategy by then.

More than anything, this confirms my own fears about electing Jeb president.  To be sure, Bush has a lot of assets as a potential president.  Unlike some on the right, I’ve never considered Bush to be “progressive” or “lefty.”  Anyone who paid the least bit of attention to how he governed in Florida would be hard-put to characterize him that way.  His own experience as governor, as well as his discussions with both his father and brother about what it’s like to be president have prepared him better than almost anyone else in the field to serve in the Oval Office.

That said, the two most important qualifications for the White House are temperament and judgment.  My own sense that Bush’s temperament, while it might have served well through the bulk of the 20th Century, is ill-suited the situation we find ourselves in.

In the past, periods of Progressive expansion have been followed by periods of consolidation.  The changes effected had be largely popular, even if the Presidents implementing them had not.  There was an incentive for the succeeding Republicans to be happy keeping things the way they were, and to execute the powers of the office in a relatively conservative way.  Coolidge, Eisenhower, and Nixon all followed that pattern.  Even Coolidge, who lowered taxes and reduced regulation, and referred to the more activist Hoover as “boy wonder,” didn’t succeed in legislatively rolling back any of Wilson’s 1913 “progress.”

Today, we don’t have that luxury – Obamacare will eat us alive, and our overseas situation will likely be the worst inherited by a President since at least 1981.  The EPA has grown into an unelected super-government, and along with its partner in crime, the Department of Interior, is depriving millions of Americans of the ability to make a living, or to better their lives.  Moreover, these changes are wildly unpopular.  The Iran Deal flies in the face of public opinion; Obamacare was the prime mover in the 2010 elections, and will only become more hated as tens of millions of Americans are forced onto Medicaid.

A Republican president will almost certainly have the backing of a strongly Republican House and Senate.  He will likely find state governments that remain overwhelmingly Republican.  It’s hard to imagine a better situation in which to devolve power back to the states and away from the executive.

The American people may be exhausted of drama, ready for a period of quietly being able to get on with their lives.  What they don’t realize is that neither our enemies abroad, nor our bureaucracy at home, are willing to grant us that.

Bush’s comments suggest that, rather than confront this opportunity head-on, he would maneuver cautiously, and likely end up ratifying most of Obama’s changes.  His temperament is one of caution, rather than boldness, at a time when boldness is called for.

Which is why judgment is temperament’s partner.

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PERA’s 2014 CAFR – Situation Normal…

Colorado PERA released its 2014 Comprehensive Annual Financial Report on Tuesday, and there were no real surprises, which isn’t to say it was particularly good news for the state’s retirees, government employees, or taxpayers.  For the most part, it showed more of what we already knew: a system in trouble, and unlikely to earn its way out of that trouble any time soon, if ever.

The rate of return on investment was 5.7%, which is 1.8% short of the expected rate of return of 7.5%.  PERA will no doubt point to the fact that it met the benchmark return, but all that means is that the funds weren’t grossly mismanaged.  The net result is that the unfunded liability, as acknowledged by PERA, climbed from $23.3 billion to $24.6 billion.

In reality, the future liability should be discounted not at the expected rate of return – an accounting gimmick that is only available to US public pensions – but by the borrowing cost of the governments involved.  In this case, that would mean a discount rate of about 4.5%.  Running that out 15 years, we end up with an eye-popping unfunded liability of $60 billion.  A 30-year window raises it to an almost unimaginable $116 billion.  That’s the unfunded liability – the promises made for which we have no money.

Overall, the funding levels fell to 64.2% from 65.2%, but the two biggest funds are much worse off than that.  The State Fund’s funding level slipped to 59.8%, the School Fund to 62.8%.  These calculations are done using the market value of the assets, rather than the smoothed actuarial value, as they have in the past.  That actually makes the funding levels look better, as the investments age out the miserable 2011 investment year, but it gets the direction right, and funds can only spend and invest actual dollars, not smoothed ones.

The amortization periods – how long it would take to get to full funding – also ballooned to 45 years for the State Fund, and 48 years for the School fund, after accounting for the future increases in the AED and SAED supplemental payments.  PERA rightly points out that these numbers don’t account for the decrease in benefits for future hires, which probably shorten the amortization periods by a few years.

I’ll have a lot more to say about this, but the short version is that there’s nothing to be cheerful about here.  PERA will claim that everything is still on track to be fully-funded decades hence, but then, PERA always thinks nothing’s wrong right up until the point that they come to the legislature for more money.

Photo Credit: Todd Shepherd & Complete Colorado

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