Thursday, May 24, 2012

Don't Fence Me In

As you may remember Facebook co-founder Eduardo Saverin has renounced his U.S. citizenship (see an earlier post in this blog The wretched refuse of our teeming shore).  This has caused a reaction in Washington D.C.  Senator Charles Schumer and Senator Bob Casey have decided that more penalties are in order and have proposed  the "Expatriation Prevention by Abolishing Tax-Related Incentives for Offshore Tenancy” Act (Ex-PATRIOT Act).  The following letter was posted on the Cafe Hayek blog:


Dear Sen. Casey and Sen. Schumer:

Irked that Facebook co-founder Eduardo Saverin has renounced his U.S. citizenship, you propose, with your “Ex-Patriot Act,” to punitively tax and to permanently bar from ever again entering America men and women who, to reduce their tax liabilities, renounce their citizenship in the U.S.

The very fact that sitting U.S. senators issue such a proposal – the sick reality that representatives of an allegedly free people act as if individuals are serfs bound to a master – the noxious yet proudly paraded assumption by American government officials that a peaceful man’s or woman’s freedom of movement can properly be restricted by a government jealous that it misses the opportunity to seize a huge chunk of that man’s or woman’s earnings – does nothing other than to confirm the wisdom and justice of Mr. Saverin’s decision.

Sincerely,
Donald J. Boudreaux
Professor of Economics
George Mason University


A summary of the  Ex-Patriot Act is at this link:

Ex-PATRIOT Act

Ron Paul was correct in his answer to a question about border security during a televised debate.  He said that someday a border fence would be used to keep us in.  It seems that his prediction came true sooner than even he expected.  Watch the video at this link:

Wednesday, May 16, 2012

The despotism of public opinion

The following article is written by Daniel James Sanchez editor of Mises.org and director of the Mises Academy:


The concept of the bottom 99% of society versus the top 1% has been promoted for the last year by the "Occupy Wall Street" movement.  The above article dissects this topic and puts it into historical perspective.

Here is the historical analysis:
Whatever one thinks of the current plight of the 99%, throughout almost all of history, things were much worse for the vast majority of the population. In precapitalist ages, the average member of the economic 99%, if lucky enough to survive infancy, was consigned to a life of back-breaking work and poverty, constantly on the verge of famine, disease, and death.
The only individuals who did not have such a wretched life were the "1%" of old. This economic 1% was virtually identical with the state. It was made up of the French kings, the English lords, the Roman senators, the Egyptian viziers, and the Sumerian temple priests. The members of this elite lived in Olympian splendor: servants at their beck and call, as much food as they could possibly want, spacious homes, an abundance of jewelry, and a tremendous amount of leisure time.
Everything the Occupy Wall Street protesters say today about the 99% and the 1% was completely accurate then.
Why did the 99% of old put up with the 1% lording it over them? Why did they not rise up, and overthrow their masters? Were they simply cowed by the mailed fists and the flashing sabers?
No; as David Hume pointed out, since "those who are ruled" always vastly outnumber "those who rule," a regime's power can never be about brute strength alone. The ruled many must believe that the power of the ruling few is somehow good for them.
Perhaps the temple priests have convinced the people that the gods would be angry if the rulers were disobeyed: that the rains won't come, and the crops won't grow. Or maybe the populace believes that the rulers are responsible for the peace and order in society.
Not only do the 99% put up with the ruling 1%; they put them up on their lofty pedestals. The 99% give the 1% their power.
As Ludwig von Mises made clear, real power, what he called "ideological might," always lies in the support of public opinion. If public opinion were ever to turn on any regime, its days would be numbered.
Mises went even further to argue that public opinion not only determines who is in charge but the general character of the legal order, or as he put it, "whether there is freedom or bondage."
Ultimately the only kind of tyranny that can last is a tyrannical public opinion.
The struggle for freedom is ultimately not resistance to autocrats or oligarchs but resistance to the despotism of public opinion.
...throughout most of the history of civilization, the ruling 1% took for itself a huge portion of what the 99% produced. And if any private person ever accumulated enough wealth for it to be noticeable, some potentate would snatch that too.
With such rampant government confiscation, there was never enough incentive for large-scale capital accumulation. Without large-scale capital accumulation, there can be no mass production. And without mass production, there can be no great improvements in the lives of the masses.
And that is basically why the 99% had such shabby lives for almost all of history.
Then in the 18th and 19th centuries, something revolutionary happened......"Laissez faire et laissez passer," the economists said. Let people control as much of their property as completely as possible, and everybody will be more prosperous.
Through this process, public opinion shifted toward the belief that government should be as limited as possible, and property rights as sacrosanct as possible.
Again, the way society is organized ultimately depends on public opinion. So, since public opinion changed, policy changed too. Private capital became more secure. Trade restrictions were lifted. Business barriers were abolished. Private property reigned supreme as never before.
And the results were miraculous. As never before in history, the productive energies of humanity were unleashed. Items that were once reserved for the elite 1% were soon mass produced for the 99%. Amenities that did not even exist before were developed, first for small markets, but ultimately for the mass market.
In the new order there was still a 99% and a 1%. But the 99% of this period lived better than the 1% of times past. And the chief way to ascend to the 1% was to become a successful capitalist-entrepreneur: to strive to serve the 99% (the masses of consumers) better than one's competitors.
In the old order, most would-be one-percenters, in order to get ahead in life, would have had to apply their smarts and ambition to become conquerors, rulers, and government administrators, and in those roles to exploit the masses. In the new order, under what Mises called the "consumer sovereignty" of the market, their capabilities were turned toward providing for the masses of sovereign consumers.
The masters became servants: wealthy servants, but servants nonetheless.
Now, the 99%, under the thrall of unsound ideas, are once again oppressing themselves. Thanks to the calamitous state of public opinion, the ranks of the 1% are once again increasingly being filled, not by capitalist-entrepreneurs serving the 99%, but by the state and its cronies exploiting and impoverishing the 99%. And the redistributionist remedies that the self-styled 99% clamor for would only accelerate this trend.
 Daniel James Sanchez delves beyond a historical discussion of the "Occupy Wall Street" movement.  He suggests actions to combat the assault on society by the proponents of redistribution and state control.
These economic philosophers, people like Richard Cantillon, Adam Smith, and J.B. Say, were theorists. They wrote brilliant, if sometimes turgid, books that changed the minds of communicators: individuals whom F.A. Hayek called "secondhand dealers of ideas."
These included professional communicators: writers, like Richard Cobden, and speakers, like John Bright. These writers and speakers wrote pamphlets and gave speeches that changed the minds of many thoughtful, if less eloquent, individuals, who might be called amateur communicators. And this thoughtful stratum, in turn, led their nonthoughtful fellows (who, in modern parlance might be called "sheeple") to change their positions on public affairs.
If our civilization is to be rescued — if the tide of public opinion is ever to turn again — it will be thanks to the sound ideas formulated by theorists like Mises and the scholars who work in his tradition. But that can only happen if those ideas are effectively disseminated by a new generation of communicators.
And so dear reader it is time to decide if you will become an active participant in the struggle for freedom.  As Daniel James Sanchez so eloquently reminds us this struggle is ultimately not resistance to autocrats or oligarchs but resistance to the despotism of public opinion. To join this struggle you must become a "secondhand dealers of ideas".  You do not need to write books, author blogs or host radio shows.  You need only to be an "amateur communicator".  Speak openly, honestly, and without fear about your belief in limited government, property rights, the rule of law, free markets, and personal freedom.

Tuesday, May 15, 2012

The Taylor Rule

In the 4/23/12 issue of Barron's Gene Epstein interviews Stanford University economics professor John Taylor.   The complete interview is at this link:




John Taylor is perhaps best-known as the creator of the "Taylor Rule," which seeks to determine the Federal Reserve's interest-rate target according to a simple formula.  This is a very informative interview, here are some of the most important points:


Barron's: What's the best case you can make on behalf of those who defend the recent fiscal stimulus?

Taylor: The case that has been made for the discretionary fiscal stimulus is based on quite conventional Keynesian theory. It is basically that, if the government gives people a lot of extra money on a one-time basis, they will spend it. Not all of it, but most of it. Similarly, when the federal government gives money to states and localities as part of the temporary fiscal stimulus, it will be spent in such a way as to boost gross domestic product. And that will greatly help when economic activity is otherwise either contracting or stagnant.


My own view is that the theory is flawed, and the evidence that the fiscal stimulus achieved the desired result is practically nonexistent. The surge in federal spending only increased the burden of the already burdensome   federal debt.
Let's start with consumer spending. It's basic economic theory that most people look beyond the very short-term. To expect them to rush out and consume more when the government cuts them an extra check on a temporary basis is not realistic. Instead, they will bank most of the extra money or use most of it to pay down debt.
But let's even imagine that, with temporary tax cuts, consumers do spend all the extra money at the malls. Can we expect business to respond by hiring more workers on a lasting basis? Of course not. Businesspeople will know better than anyone that the pop in spending won't last.


Barron's: But if, as you say, consumers and local government used to the money to reduce borrowing and pay down debt, could that be a completely bad thing?

Taylor: It can't be bad to reduce the debt of consumers and of state and local government. But it can't be good to boost federal debt in the process by the same amount. So that's a wash. It's really hard for me to see it as a net positive.


Barron's: Right now, the Federal Reserve's official interest-rate target on federal funds is 0% to 0.25%. Is that where the target should be according to the Taylor Rule?

Taylor: No, the interest-rate target would be at 1%, or a little higher. That is based on starting with a multiple of the inflation rate, and then adjusting up or down for the growth rate of the economy compared with its potential growth rate. Right now, the growth-rate part of the formula would call for a downward adjustment, so you end up around 1%.

The Taylor Rule is based on empirical research about what tends to work best for the short-term interest rate. It is far from perfect. It just works better over the long run than the discretionary tinkering of imperfect human beings. And in fact, through most of the period from the early 1980s through 2002, when the economy performed relatively well, the central bank's interest-rate target tracked the Taylor Rule fairly closely.


Barron's: But not since then. You have said that during the period from 2003 through 2005, the fed-funds rate violated the Taylor Rule by being too low.

Taylor: Yes, at times by as much as three full percentage points. And that helped cause the financial crisis, as I have argued in my book Getting Off Track.


Barron's: On another important component of Fed policy, what do you think of quantitative easing?

Taylor: I opposed the large-scale asset purchases of QE1 and QE2, and believe it's unfortunate that the central bank is still publicly considering a QE3. They were ineffective, and potentially harmful.

These massive purchases of mortgages and medium-term Treasuries were aimed at lifting the value of these fixed-income securities, and thereby bringing down the relevant interest rates. At best, that was the short-term effect. But how long can such an effect last? What basically determines these interest rates are expectations about future interest rates, which in turn are partly determined by inflationary expectations.


Barron's: You don't believe purchases by the Fed have any long-lasting influence?

Taylor: Let's suppose something even more misguided: For QE3, the Fed decides to buy the stock of publicly traded companies in order to lift stock prices. Equity prices would rise. But how long could that last, unless the earnings of these companies rise proportionately? Price-earnings ratios would become unsustainably high, and the market would soon correct for the Fed's aberrational influence. The same dynamics work for the bond market.

But my real worry is that quantitative easing may become a pillar of Fed policy. If the economy speeds up, you do less of QE; if it slows down, you do more. Quantitative easing may become not just the wave of the present, but of the future, which could be very damaging.


Barron's: What's the basic lesson for both fiscal and monetary policy?

Taylor: Both policies should be predictable, not discretionary and unpredictable. It is always possible that some brilliant policy maker can do something unpredictable that will yield a better outcome. But history has shown us repeatedly that this usually yields worse outcomes. My new book, First Principles, names "policy predictability" as one of five key principles.


Barron's: And the other four?

Taylor: Rule of law, strong incentives, reliance on markets, and a clearly limited role for government.

John Taylor makes a broad statement that “conventional Keynesian theory is flawed and that the evidence that the fiscal stimulus achieved the desired result is practically nonexistent”.  It is time that we toss this failed policy into the waste bin of history.  He also says that the Federal Reserve kept interest rates too low for too long igniting the housing market bubble.  His five principles for prosperity are intuitively obvious but unfortunately are considered radical by many of our fellow citizens.

Sunday, May 13, 2012

The wretched refuse of our teeming shore

The following link is to a Bloomberg news article published on 5/11/12:


This is a very troubling story.  Here are some of the details:

Eduardo Saverin, the billionaire co- founder of Facebook Inc. (FB), renounced his U.S. citizenship before an initial public offering that values the social network at as much as $96 billion, a move that may reduce his tax bill.
Saverin, 30, joins a growing number of people giving up U.S. citizenship ahead of a possible increase in tax rates for top earners.
“Eduardo recently found it more practical to become a resident of Singapore since he plans to live there for an indefinite period of time,” said Tom Goodman, a spokesman for Saverin, in an e-mailed statement.
Besides helping cut tax bills stemming from the Facebook IPO, the move may also help him avoid capital gains taxes on future investments since Singapore doesn’t have a capital gains tax.
Saverin won’t escape all U.S. taxes. Americans who give up their citizenship owe what is effectively an exit tax on the capital gains from their stock holdings, even if they don’t sell the shares, said Reuven S. Avi-Yonah, director of the international tax program at the University of Michigan’s law school. For tax purposes, the IRS treats the stock as if it has been sold.
Renouncing your citizenship well in advance of an IPO is “a very smart idea,” from a tax standpoint, Avi-Yonah said. “Once it’s public you can’t fool around with the value.”
It is demoralizing to contemplate how far we have strayed from the original intentions of our founders. This country was the beacon of liberty that attracted talented, creative, hardworking entrepreneurs from around the world. Today our most successful entrepreneurs are being advised that it is "a very smart idea" to renounce their citizenship prior to leading their company to an IPO.

The following poem is engraved on a bronze plaque, mounted inside the lower level of the pedestal of the Statue of Liberty:

The New Colossus

Not like the brazen giant of Greek fame,
With conquering limbs astride from land to land;
Here at our sea-washed, sunset gates shall stand
A mighty woman with a torch, whose flame
Is the imprisoned lightning, and her name
Mother of Exiles. From her beacon-hand
Glows world-wide welcome; her mild eyes command
The air-bridged harbor that twin cities frame.
"Keep, ancient lands, your storied pomp!" cries she
With silent lips. "Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.
Send these, the homeless, tempest-tost to me,
I lift my lamp beside the golden door!"

Emma Lazarus, 1883

Today the poem and plaque needs to be updated.  I suggest we add the following lines:

"Get out, you who have reaped the rewards of this great land,
you are no longer welcome on these shores, as you have committed the sin of success."

Saturday, May 12, 2012

Involuntary servitude

The following article appears in the 5/10/12 issue of the Washington Times:

Labor bosses demand their dues

This article describes some of the battles workers are fighting to free themselves from the corruption of organized labor.  Some of the highlights of this article are:

Labor bosses are fighting to keep people in unions against their will, forcibly collecting dues from unwilling members and using those dues to line their own pockets. In effect, labor leaders have imposed their own system of “involuntary servitude” on recalcitrant union members.
In California, for example, Service Employees International Union (SEIU) bosses in Fresno are engaged in a war to keep disgruntled members from defecting.
For their part, Fresno correctional officers created another union and petitioned for a union election.
Fresno Department of Social Services workers also have petitioned for a decertification vote from SEIU. Kandy Gonzalez, head of the new Fresno County Employees Association, compared cutting ties with SEIU to a “bad divorce.” But SEIU thus far has refused to sign the divorce papers, to Ms. Gonzalez’s dismay. “They’re going to invest whatever money they’re going to invest to keep us in this marriage,” she says. “And what’s sad is they’re probably going to be using our money to fight us. They’ll be using our dues to fight us.”
 Kandy Gonzalez is correct, the union will use dues collected from the members to pay for legal action against those same members.

Indeed, the Fresno correctional officers’ decertification election, which had been scheduled for April, will be delayed for months because of an SEIU complaint with the Civil Service Commission. In the meantime, the workers literally are working for the union bosses against their will.
Even more outrageous, unions are maintaining that free-labor policies are the real perpetrators of modern forced servitude. In Indiana, for example, International Union of Operating Engineers (IUOE) union bosses have filed a lawsuit charging that the state’s new “right to work” law forces union members into “involuntary servitude.” IUOE claims the law forces unions to negotiate for nonunion (non-dues-paying) workers, violating the 13th and 14th amendments to the Constitution. But this is merely union chutzpah at its most egregious - IUOE is not obligated to negotiate for exclusive representation.
The 13th Amendment to the U.S. Constitution:
Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.

Union membership should always be voluntary.  Unions are using all legal means to fight their own members to prevent them from leaving.  At the same time unions are filing a lawsuit claiming that giving people the right to choose union membership is a form of slavery.

Thursday, May 10, 2012

Which way for the west?

In his latest book, "Civilization, The West and the Rest", economic and financial historian Niall Ferguson argues that Western civilization's rise to global dominance over the past 500 years was due mainly to six killer apps, (as he calls them): competition, science, rule of law, modern medicine, consumerism, and the work ethic.

The following link will take you to an interview of Niall Ferguson  By Vito J. Racanelli published in the 4/30/12 issue of Barron's:



 Niall Ferguson makes several comments that you should read:
In terms of institutional policy, the U.S. is a relatively less attractive destination for investment than it used to be. A large body of literature shows a strong relationship between the quality of institutions and the growth rate. When countries improve rule of law, property rights, and investor protections, and when regulation becomes more transparent and corruption reduced, there are major payoffs. The World Justice Project says the U.S. has been deteriorating for close to 10 years by all these measures, which contrasts with improvements in some emerging markets, like Hong Kong.
The rule of law has become more expensive in the U.S. without becoming more efficient. Any business, particularly small to medium-size, that has had encounters with litigation in the past 10 years will know what I'm talking about. The rule of law in the U.S. has become, at some level, dysfunctional. One reason for that is the way Congress works. It is a honey pot for lobbyists. The result is that complex legislation is riddled with ambiguities that—guess what?—only lawyers can resolve. Dodd-Frank is designed to improve regulation, but what it actually does is institute a massive job-creation scheme for lawyers. There isn't a financial institution in this country that doesn't now require its compliance department to retain a whole bunch of lawyers to explain to them what this 2,000-plus-page monster means for their business. That concerns me.
For anyone wondering why you have the feeling that the USA is less prosperous and dynamic today than  in the past you should reread the 2 paragraphs above.  The natural state of mankind is to live in poverty.  Prosperity is only attained by respect for property rights, enforcement of contracts, and free markets.  These 3 principles allow the division of labor to lift us out of a state of squalor.  Unfortunately the USA has been moving backwards on all three of these principles of prosperity.

Continuing with the highlights of the interview:
What made the West unusual was that risk takers were not only rewarded but honored, whether in science, exploration, or in trade. Spreading across the Atlantic from Europe is an anti-risk culture that manifests itself in two ways. One is the welfare state, designed to remove risk from your life by guaranteeing you an income from the cradle to the grave. That's great because it means that nobody is starving in the streets for want of work. But it isn't great if you create poverty traps and disincentives, so that people in the bottom quintile never work, which is the case in much of Europe.
The other way in which the anti-risk culture manifests itself is with the manic regulatory mentality that tries to prescribe rules for every eventuality, including the tiny, tiny risk that an asteroid will hit this building. Regulations that protect from every eventuality end up being paralyzing because the more things are proscribed, the more the ordinary entrepreneur has to be afraid that if he doesn't comply, he will get sued.
If you locate a new plant in the U.S., you encounter this increasingly unfriendly regulatory and tax environment. You don't know what the taxes are going to be, because Congress is playing a game of chicken about the deficit. It ought to be solvable. However, there are vested interests in the political system that have no interest in solving this problem because they profit from it. It is a classic problem of rent-seeking behavior triumphing over profit-maximizing innovation and entrepreneurship. If you only look at monetary and fiscal policy, it is incredible that the economy isn't growing faster [since] it has had more stimulus than at any time since World War II.
 The anti-risk culture is the single greatest threat to our future well being.


Wednesday, May 9, 2012

Cancerous pensions

The nature of the encroachment upon American constitution is such, as to grow every day more and more encroaching. Like a cancer; it eats faster and faster every hour. The revenue creates pensioners, and the pensioners urge for more revenue. - John Adams, February 13, 1775

President Adams probably would not be surprised at the rate that government retirees' pensions are consuming revenue today, but the rest of us are.

Once again we are enlightened by the political system in the City of Chicago and the State of Illinois.  Pensions were the subject of two recent articles in the Chicago Tribune:




In January 1991 the Illinois legislature passed a law that would have a long term devastating effect on the financial future of the State of Illinois and all Illinois municipal governments.  The law vastly expanded pension benefits and greatly reduced vesting requirements for elected municipal officials.  Without any public vetting, legislation creating the plan was slipped into a larger bill before it was signed into state law on the last day of the session. Last year, the Tribune and WGN-TV detailed how another provision added to that same legislation allowed many union officials to land six-figure city pensions.

Here are some of the details from the first article above:
An analysis of pension fund documents for 21 aldermen who retired under the plan to date shows they are in line to receive nearly $58 million during their expected lifetimes, though contributions and assumed investment returns are predicted to cover just $19 million, or a third of that sum.
Former Ald. Thomas Allen is a prime example. After retiring from the City Council in 2010 at age 58, Allen went on to become a Circuit Court judge while also collecting roughly $90,000 a year from his city pension. During his lifetime, he stands to receive more than $4.2 million in benefits, though contributions and assumed investment returns are expected to cover only $1 million.
The perk for aldermen also shows how the Daley administration leveraged city pension funds for political purposes rather than protecting the modest, sustainable retirement benefits promised to city workers.
Under the plan, aldermen and other elected city officials became eligible to receive up to 80 percent of the salary they earned during their last month of work. All other employees in the municipal pension plan — including top managers — receive 70 percent of their average monthly salary over the previous four years.
Aldermen can also reach the maximum benefit with just 20 years of service, compared with nearly 30 years for everyone else in the municipal pension plan.
The result is that many aldermen will end up making more in retirement than they did when they served on the council.
Council members argue that they deserve to earn credit more quickly because they face re-election every four years. "Once you become (a city employee), you have to commit murder to lose your job. And an alderman can get tossed out in the next election," said Ald. Richard Mell, 33rd, who has been on the council for nearly four decades.
If you are not familiar with Chicago Alderman Richard Mell you probably have heard of his son in law former Illinois Governor Rod Blagojevich.  (I do agree with Mell that to lose your city job you do have to commit murder).
The pension revisions came as Daley was running for his first full term as mayor. He went on to dominate city government for five more terms with frequent support from organized labor and the acquiescence of the City Council. During his tenure, Daley appointed nearly three dozen aldermen, many of whom went on to earn full aldermanic pensions.
When pension benefits for aldermen were boosted in 1991, their salary was $40,000 a year. Since then, it has grown to as much as $115,000 — rising at nearly double the rate of inflation.
That six-figure salary, and the large pension that goes with it, isn't even for full-time work. By law, the job of a Chicago alderman is part time.
Now some of the highlights of the second article:
Two years into his reign as Chicago's longest-serving mayor, Richard M. Daley took advantage of the state's convoluted pension system to significantly increase his potential payout while saving $400,000 in contributions.
Daley, a former state senator, made it happen by briefly rejoining the legislative pension plan in 1991. He stayed there just one month before returning to Chicago's municipal pension fund, but the switches made him eligible for benefits worth 85 percent of his mayoral salary — a better rate than all other city employees receive.
He was just 49 years old at the time. Even if Daley had never won another election, he could have started collecting a public pension at age 55 of $97,750 a year. Without the steps he took, his public pension benefits at that age would have been worth just $20,686.
The same legislation, rushed through the General Assembly on the last day of the session, also gave private labor leaders public pensions based on their much higher union salaries. Under Daley's watch, former Chicago Federation of Labor President Dennis Gannon was given a one-day city job that allowed him to collect a public pension based on his $200,000 private union salary.
In 1995, when Daley wanted to fund his school reform package, his administration pushed legislation that allowed it to divert $1.5 billion from the Chicago Teachers' Pension Fund over a 15-year period.
All the while, Daley blessed benefit increases for city workers without ensuring that payments into the funds would cover the costs, a problem worsened by the economic downturn. Today, the combined unfunded liabilities of Chicago's four pension funds have grown to nearly $20 billion, which doesn't include the $6.8 billion shortfall at the teachers’ fund.
Please note that the City of Chicago has unfunded pension liabilities of $26.8 billion.

Taxpayers United of America has published a study about Illinois public pension plans.  This study is at this link:



Here are some highlights from this study (all quotations below are from Jim Tobin, President of Taxpayers United of America):
If you want to see why the pension funds in Illinois are lurching toward insolvency, look no further than the State University Retirement System, said Tobin. The pensions are so mind-boggling that if I didn’t have our list of the Top 100 SURS pensions, no one would believe it.
The highest of the ‘Top 100’ list again is Tapas Das Gupta, of the University of Illinois-Chicago, whose annual pension is an absolutely astounding $426,885 (as of 4/1/12). Each month he pulls in $35,574. His monthly pension is about the same as the median full-time annual wage in Illinois, which is $35,256.
Since 1/1/98, Gupta’s total pension payout is $3,001,481.
Who says teachers are underpaid?
The way to fix the broken pension system is to replace pensions for all new government hires with social security and 401(k)s, and increase current employee contributions. This is the only way to eliminate the unfunded liabilities that plague taxpayers.
The link to the Top 100 pension recipients of the  State University Retirement System is at this link:


A brief analysis of this list reveals:

2 retirees earning over $400,000 per year
5 retirees earning over $300,000 per year
63 retirees earning over $200,000 per year

How do your pension benefits compare?

I agree with Jim Tobin.  We must drive a stake through the heart of defined benefit pension plans.  Give the employees an individually managed account to accumulate their pension benefits.

Wednesday, May 2, 2012

If I wanted America to fail

With the recent celebration of "Earth Day" this is a good time to reflect on the evolution of the environmental movement. April 22, 1970 was the first "Earth Day" event. In 1970 The primary goals of the environmental movement were clean air and clean water. These were goals that were easily embraced by a majority of citizens. These goals gave birth to a new federal agency, the Environmental Protection Agency. Today the goals of the environmental movement have dramatically strayed from its origins.

Today the environmental movement has transformed into anti-capitalist fascism. The following video describes the consequences: