UNDERFUNDED/OVERGENEROUS PUBLIC PENSIONS MEET THE K-12 IMPLOSION: In Illinois, public pensions already gobbling up education funding.

Related: High speed fail: Bankrupt Illinois buying engines that don’t exist.

NEW YORK TIMES: California’s doing really well if you ignore all those poor and jobless people.

Fittingly, the same day Egan’s hymn was published, the California State Auditor reported the state’s net worth – its assets minus its liabilities – at negative $127.2 billion. Also reported were $167.9 billion in long-term obligations, not including $60 billion in unfunded liabilities for retiree health care, or those for state employees’ future pensions. These are not just “bills.” These are benefits for public employees and services for the poor that won’t be delivered as promised.

California’s public school system, both one of the most expensive and one of the poorest performing in the country, is not improving. The state’s prison system is both so overcrowded and underfunded that the US Supreme Court deemed conditions “cruel and unusual punishment.” And despite 9.8 percent unemployment (tied for highest in the country), tax, regulatory, and zoning policies make blue-collar job creation in manufacturing and real estate development next to impossible.

Egan and other turquoise dreamers seem to look at tenured teachers, happy prison guards, and fleeced one-percenters and believe conditions are promising enough to move on to romantic dreams of the future. Over the heads of undereducated kids, the chronically unemployed, and the poor, they see a high-speed train zooming along the sparkling coast. This is not how progressives used to think.

It’s what passes for ideology now.

UNDERFUNDED / OVERGENEROUS PUBLIC PENSION UPDATE: California Teacher pension problems catch lawmakers’ attention. “The teachers pension fund had an unfunded liability of $73 billion as of June 2012, an increase from $64.5 billion the year before.”

PUBLIC SCHOOL INSANITY: My USA Today column for tomorrow is up.

MORE ON THOSE UNDERFUNDED / OVERGENEROUS PUBLIC PENSIONS: Washington State’s Pensions In Crisis Too. “The investigation found that the system as a whole was underfunded to the tune of almost $31 billion. Much like we’ve already seen in California, cash-strapped local governments will be asked to make up the difference by upping their contributions to the plans. . . . Then take a look at what’s coming, as all over America battles will erupt over whether to cut services to poor people and kids today to honor unrealistic promises made to retired workers. Will non-state workers who don’t have pension programs vote to slash the funding for their kids’ education? Will a generation that’s been systematically lied to and bilked by irresponsible Boomers tax itself to the eyeballs to give the Boomers a stress-free retirement that younger folks won’t be able to share? A world of ugly is coming in American retail politics, and the Democratic Party in particular is going to be split by conflicts among different wings of its large coalition.”

Well, they can always try to blame the Republicans. I’m sure it’s somehow George W. Bush’s fault.

GREEDY POLITICIANS ARE ALL THE SAME: Argentina Stiffs Pensioners. “The U.S. is no stranger to these problems, particularly as politicians try to force pension funds to ‘invest’ in pork belly projects. Proposals now on the table to reduce the degree to which social security pensions are topped up for inflation will have the effect of transferring money from pensioners back to the government, where it will be used again for whatever purposes politicians want. What’s needed is an actuarially sound, adequately financed, conservatively invested pension system. Anything else is a gimmick. Unfortunately, there are lots of gimmicks floating around these days.”

CALPERS CORRUPTION: The Pension Fund That Ate California. “How could a financially troubled former union leader occupy such a powerful position at the giant retirement system, which manages roughly $230 billion in assets? The answer lies in CalPERS’s three-decade-long transformation from a prudently managed steward of workers’ pensions into a highly politicized advocate for special interests. Unlike most government pension funds, CalPERS has become an outright lobbyist for higher member benefits, including a huge pension increase that is now consuming California state and local budgets.”

WALTER RUSSELL MEAD: Blue Civil War. “The different power blocks that make up the Democratic base are trampling each other in a rush to grab the last rents of the dying blue system. . . . Twentieth-century liberalism is a victim of its own success: it gave us longer and more prosperous lives, in turn putting tremendous pressure on social services and pensions. The result is the fragmenting coalition Edsall points to. Though he places part of the blame for the blue civil war on Republican-backed austerity measures, Edsall admits that demographic shifts and outmoded ways of delivering social services also played a role. The reality of blue model decline is so obvious that nobody can ignore it any longer.” Well, if Edsall is paying attention, that must be true.

THIS WILL JUST MAKE IT HARDER FOR CITIES TO BORROW MONEY, THOUGH, WHICH OVERALL IS A GOOD THING. Stockton Tries To Pull A Chrysler. “The municipal bankruptcy unfolding in Stockton, California is giving investors a bad case of deja vu. Just as the Obama Administration bailed out the United Auto Workers in Chrysler’s bankruptcy while hanging bondholders out to dry, the city of Stockton is subordinating its bond debt to worker pensions. But what’s really scary is that the Stockton case could be replayed in dozens of California cities. . . . Ratings agencies downplay the ‘systemic risk’ that the Stocktons of the United States pose to the $3.7 trillion municipal bond market. But then they also said mortgage-backed securities were Triple-A. While the market may not be in danger of blowing up soon, bondholders face a very real danger of being blown off to preserve worker pensions.”

Even the possibility that this might happen will make it harder for cities to borrow. But probably not as hard as it should be.

IN NEW HAMPSHIRE, fear and loathing of the Free State Movement. Plus, a push for “unwelcoming” legislation.

UPDATE: Reader Kristo Miettinen emails:

Your recent link to “Fear and loathing of the Free State movement” brings to the fore a belief that I have held for some time, namely that annoying nanny-state legislation is not intended to promote safety, or health, or any other such objective sort of well-being, rather it is intended to select desirable neighbors (and for Dem politicians, to select a reliable blue electorate).

Thus gun restrictions drive gun owners (and those who sympathize) to move from blue states to red; restrictions on soda serving sizes drive fast-food consumers out of cities whose power class would prefer to associate with more refined palates, etc.

My personal anti-favorite (neologism needed – brother can you spare a term?) is New York’s selective retirement tax exemption, where pensions are tax-free if they were earned working for government (state, local, or federal) but taxed if they were earned in the private sector. Retired schoolteachers are welcome to stay and vote in their sunset years, but
retired engineers are welcome to pack up and leave as soon as their economically productive years are at a close.

It is no accident that as blue states lose population to general internal migration, they also get bluer. It is deliberate demographic tinkering, designed to select for the right sort (i.e. the left sort) of people.

Interesting thesis. By this token, people in red states who don’t want to be flooded by blue-voting refugees from places like Illinois or California should be adopting laws — open carry of firearms, say — that will tend to scare those people away.

SACRE BLEU! The Collapse of French Pensions.

France is between a rock and a hard place. French public debt is almost 90 percent of GDP, and the French people are unwilling to give up any more, even though France’s average retirement rate is lower than elsewhere in Europe. Sarkozy’s original reforms met with large protests, and any change in the retirement age by Hollande is likely to engender a similar reaction.

As in America, years of disastrous blue policies and overgenerous pension promises are finally catching up with France. Now policymakers are left with with a depressing choice: renege on promises to workers or watch the system go broke. Hollande has made it clear that he doesn’t want to do anything that could be seen as an attack on the workers, but he may have no choice. When the money isn’t there, it isn’t there.

Things that can’t go on forever, won’t. Debt that can’t be repaid, won’t be. Promises that can’t be kept, won’t be.

Related: Task Force Warns of NY Budget Meltdown.

WALTER RUSSELL MEAD: CalPERS Goes After Compton. “California’s pension crisis is metastasizing. Last week we noted that the California public pension fund CalPERS was at loggerheads with the city of San Bernardino, which was using its bankruptcy filing as grounds to default on its obligations. This week, CalPERS sued the city of Compton, which owes $2.6 million to the fund. One detects its desperation here. . . . Spin it as you like, but math wins in the end. California’s retirement numbers just don’t add up, and clinging grimly to failing policies and dying institutions is not the way forward. CalPERS can sue every city in California, but that won’t fix the pension crisis — and it won’t get the California economy on track for the kind of growth that would make the tradeoff between pensions and services a little less dire.”

Something that can’t go on forever, won’t. Debt that can’t be repaid, won’t be. Promises that can’t be kept, won’t be.

MORE ON THOSE UNDERFUNDED / OVERGENEROUS PUBLIC PENSIONS: Study shows $1.2 trillion gap for public pensions. Promises that can’t be kept, won’t be.

CHANGE: China slides faster into pensions black hole.

Guo, though, is fortunate because he also has the financial support of six children. But for younger and future generations of retirees, China’s traditional family safety net is disappearing, replaced by state-backed pension schemes tailored for a graying society.

Policy makers and economists have long been worried about the financial burden of China’s expanding patchwork of pension schemes, but those concerns have recently escalated as its rural pension scheme took off in the past three years.

The funding shortage is daunting: economists say it could blow out to a whopping $10.8 trillion in the next 20 years from $2.6 trillion in 2010, towering over China’s $3 trillion onshore savings, the biggest hoard of domestic savings in the world.

Time is not on China’s side. Its fast-maturing society and economy — thanks to a one-child policy and a rapid rise in living standards — demand better pension coverage in future.

Yet China is already straining to hold things up.

It’s not going to get easier.

WALTER RUSSELL MEAD: Americans Turn on MSM: What Does It Mean?

The press is melting; circulation and ads sales at most legacy outlets are steadily falling, and the public trusts the product less and ignores it more. In a recent Gallup poll a record 60 percent of respondents replied “not very much” or “not at all” when asked how much they trusted the news media to tell the truth fully and fairly.

The public is right to be skeptical. There are some great individual reporters —like Mary Williams Walsh who covers state pensions at the New York Times— but increasingly the good stuff is hard to find. Too much of what appears falls considerably short of what journalism at its best can be. . . .

If the president were a conservative Republican rather than a liberal Democrat, I have little doubt that much of the legacy press would be focused more on what is wrong with America. There would be more negative reporting about the economy, more criticism of policy failures and many more withering comparisons between promise and performance. The contrast between a rising stock market and poor jobs performance that the press now doesn’t think of blaming on President Obama would be reported as demonstrating a systemic bias in favor of the rich and the powerful if George W. Bush were in the White House. The catastrophic decline in African-American net worth during the last four years would, if we had a Republican president, be presented in the press as illustrating the racial indifference or even the racism of the administration. As it is, it is just an unfortunate reality, not worth much publicity and telling us nothing about the intentions or competence of the people in charge.

The current state of the Middle East would be reported as illustrating the complete collapse of American foreign policy—if Bush were in the White House. The criticism of drone strikes and Guantanamo that is now mostly confined to the far left would be mainstream conventional wisdom, and the current unrest in the Middle East would be depicted as a response to American militarism. The in and out surge in Afghanistan would be mercilessly exposed as a strategic flop, reflecting the naive incompetence of an inexperienced president out of his depth.

Ya think?

SAYING GOODBYE TO THE LIBERTARIAN PARTY TO SUPPORT MITT ROMNEY: An Exit Interview With Wayne Allyn Root. Excerpt:

I believe in economic and personal freedom. I want government out of my life- out of both the boardroom and the bedroom. I believe in the limited government promised by the U.S. Constitution. I want government to get out of the way of small business owners like me- put fewer rules & regulations in our way, and allow us to keep more of our own money.

Under the Obama administration we have seen businessmen be denigrated, demonized, punished, smothered by 60,000 new rules and regulations, and attacked by the IRS. However, far too often the GOP has given only lip service to smaller government, individual rights, and the Constitution. Once elected, they ignore those ideas and grow government just like Democrats. Look at the spending under George W. Bush. Look at the 25,000 new rules and regulations under Bush (far better than Obama, but still terrible). Look at the growth of government and the rising debt under Bush. Look at the increase in compensation, pensions, and number of government employees under all GOP Presidents. This was precisely why I left the GOP.

But I believe with the birth and growth of the Tea Party, this is now changing. I was born to be part of the Tea Party.

Read the whole thing.

MATT WELCH ON Deficit Denialist Democrats at the DNC. “In this idyllic landscape of Democratic magical thinking, there is no state and local budget crises, no unaffordable and underfunded defined-benefit public pension obligations, nothing at all standing in the way of ‘investing’ in our public safety, except (in ex-Republican Stern’s words) ‘right-wing extremists.’ Vallejo, California is not bankrupt because of public employee pensions, and the rest of the state is not following suit. It’s a hell of a place, this Democrat-land. Wish I could live there. . . . One of the great ironies of this convention already is that speaker after speaker denounces Republicans for being unable to tell the truth or get their facts straight. Meanwhile, one of the most important truths of modern governance—we are well and truly out of money—sits neglected in the corner.”

SUNLIGHT: Bipartisan Group Of Legislators Demands Stronger Probe Into Delphi Pension Scandal. “Twelve lawmakers wrote to House oversight committee Chairman Rep. Darrell Issa and Senate Homeland Security and Governmental Affairs Committee Chairman Sen. Joe Lieberman asking that they expand current probes into a Department of Treasury scandal that left 20,000 non-union Delphi retirees without their pensions after the 2009 General Motors bailout. . . . This renewed investigation call comes in the wake of emails The Daily Caller obtained and first published on Tuesday showing that senior White House and Treasury officials were behind the termination of pensions for 20,000 non-union Delphi salaried retirees.”

COLDHEARTED: Emails: Geithner, Treasury drove cutoff of non-union Delphi workers’ pensions.

WALTER RUSSELL MEAD: Pension Tsunami Now Rolling over Police, Firefighters.

Once considered sacrosanct, the pensions of cops and firefighters are increasingly coming under the budget knife, says Reuters.

Even in the recent showdown in Wisconsin, Governor Scott Walker was careful not to extend the curbing of collective bargaining rights to police and firefighters. But now dire fiscal straits across the country are threatening even the pensions of public servants who put themselves in harm’s way.

From San Diego, San Jose, and Stockton to St. Louis, Detroit, and Suffolk County, the story sounds much the same.

I’ve been blogging about the underfunded/overgenerous public-pension problem for a while. But a great resource is PensionTsunami.com, which has been on the story even longer.

GEORGE KORDA WORRIES ABOUT KNOXVILLE’S FUTURE. “The population is stagnant but the costs are growing for government services, employee pay and pensions, and citizen desires. Somewhere in the future is a breaking point.” Lots of people have voted with their feet and moved outside the city to the county, which is where I live.

CHANGE: Californians Break With Unions On Pensions.

Voters want to limit and reform the pension system, and proposals like salary caps and a higher retirement age—proposals that public unions consider horrible, unfair barbarities—get solid support from Golden State voters.

To be sure, Californians haven’t embraced the Scott Walker agenda. By and large, they don’t want to make public unions illegal. Further, while there is much less support for raising pensions than there is for cutting them, there isn’t a majority for either position.

Nonetheless, this poll is very bad news for the unions. Their key demands in the pension fight have been resoundingly rejected. Voters want a salary cap for determining benefits, they want to raise the retirement age, and they support a hybrid pension system that mixes in elements of a traditional, defined-contribution plan.

What makes this all very much worse from the unions’ point of view is that if (and when) a truly major and prolonged statewide budget emergency comes, attitudes are likely to harden against them even more. When voters “get” just how much of a tradeoff they face between services for kids and old people vs. paying pensions, then sentiment will likely harden on the pension front. Better schools for your kids, or better pensions for people who taught other peoples’ kids twenty years ago?

Indeed. Meanwhile, in Scott Walker’s Wisconsin, the pensions are 100% funded. . . .

WALTER RUSSELL MEAD: Time To Occupy State Pensions? “The biggest scam going in American financial life may be the collusive effort by Wall Street, the political class, and public sector unions to use union retirement money to prop up Wall Street speculation. . . . Pension funds should not be aggressively invested. Retirement funds should be conservatively managed — and that means enough has to be paid into those funds so that with moderate investment results, retirees can be sure that their promised benefits will in fact be paid. The key to this change is stronger regulation of government pension funds, to force them to observe the same requirements that apply to private sector pension funds as well. Amazingly, the same union leaders and lefty experts who call for tough regulations elsewhere in the economy want to keep government workers chained to the roulette wheel in the Wall Street casino: they are bitterly opposed to seriously prudential regulation of government pension funds.”

UPDATE: Reader Mike Nelson writes: “Funny, I remember Democrat demagogues saying Bush’s plan to allow private investment of Social Security funds was evil and would bankrupt seniors. Guess they didn’t actually believe that at the time.”

MICKEY KAUS:

Ezra Klein posts a graph of modestly declining public sector employment that “says it all,” according to some. Maybe not! 1) First, as Keith Hennessey points out, while the graph shows a decline in public sector employment, at the federal level (outside the Post Office) public sector jobs have grown since Obama took office. The loss has been in state and local governments, whose workforces has been steadily bloating since around 1980. 2) And even that loss of public jobs pales besides the loss of private jobs (by a ratio of 11 to 1). 3) More important, there’s the issue of causality: the chart seems to show public jobs declining, unlike in other recessions. But is that because this recession has been more stubborn and persistent than previous recessions (as Paul Krugman, in other contexts, insists that he predicted)? In those prior recessions, when growth rapidly recovered, so did tax revenues–and the ability to employ government workers! (Here’s a graph showing that the recovery in output from the two prior recessions was faster than recovery from the current recession–while the recovery from basically all recessions before the last three was much faster.) In this recession, Democrats voted a temporary subsidy for state and local governments to keep up their hiring–and when it expired, those governments found they couldn’t afford to keep on as many employees–especially given the unsustainable pensions and benefits Democrats and others had granted oft-unionized public workers in good times (and that the Dem stimulus subsidized).

Maybe the chart just says it all about Ezra Klein.

ILLINOIS TEACHERS BEWARE: Your Pension System Is A Scam. “Specifically, the Illinois Teachers Retirement Fund is one of the country’s worst funded pension funds. According to accountants — who use softer methods to measure the health of public funds than they do of private pensions — teacher pensions in Illinois are only 45 percent funded — the fund is expected to be able to pay less than half the pensions Illinois politicians and union heads have been promising for years. . . . It is, in other words, a scam. Both the politicians and the unions want to fool people. They want teachers to think they have secure pensions and they want taxpayers to think that these big pension promises won’t cost them much money. Assuming unrealistic rates of return allows them to square the circle: they can promise big pensions without raising taxes to pay for them right away.”

WALTER RUSSELL MEAD: Beyond Wisconsin: Blue on Blue in California. “Although it may surprise readers of the New York Times, Wisconsin is not the only state going to the polls today. Nor is the fate of Scott Walker the only battle in the War on Blue. Six other states also vote today, and two local ballot measures in California are especially worth following. . . . The harsh realities of a looming fiscal catastrophe have a way of focusing the mind and blurring ideological divisions: San Diego’s mayor is a Republican; San Jose’s is a Democrat. Both agree on the need to reform public pensions.”

MEANWHILE, BACK IN OLD MEDIA: Stacy McCain and Forbes have “Grim News in WaPoVille:”

Washington Post, it sucks to be you:

The Washington Post Co. reported its first-quarter earnings on Friday, and the news coming out of the newspaper division was mostly grim. The unit lost $22.6 million in the quarter, with revenue down 8% and revenue from print advertising specifically falling 17%.
Meanwhile, the Post just reported one of the biggest circulation drops of any major newspaper with the lucrative Sunday edition selling 5.2% fewer copies and the daily edition skidding almost 10%. Oh, and newsroom leaders are so distressed about the way the business decline is affecting them, they held a secret meeting with the paper’s president, Steve Hills — without inviting executive editor Marcus Brauchli.

Click over to Stacy’s blog for details of that “secret meeting,” and some thoughts on the future of journalism (more on the latter in a moment).

There’s equally grim news coming out of the other end of the Northeast Corridor, where New York Times journalists “fight for [their] pensions, paper be damned,” an editorial at the Washington Examiner notes, with an embedded video that’s a series of cris de coeur from veteran Timespeople, a video that Walter Russell Mead quipped watching could cause the rest of us to have “Uncontrollable gales of laughter stemming from excessive levels of schadenfreude [that] may cause spilling and staining.”

Here’s more from the Examiner:

“What am I gonna do? Am I gonna eat cat food? Am I gonna move in with my kids? Am I gonna commit suicide?”

These complaints come not from a laid-off auto worker or a victim of foreclosure, but from longtime New York Times reporter Donald McNeil. His alarming quote expresses his fears that the New York Times Co. will freeze its defined-benefit employee pension plan and make the transition to a defined-contribution system. The Newspaper Guild, the union, which represents McNeil and other Times journalists, released his complaints and others in an Internet video as a protest against the 401(k) plans used by nearly every new worker in America who has retirement benefits.

We’ll leave it to the Times, its employees and its shareholders to settle the dispute. As spectators, we find it mind-boggling that journalists from a leading national newspaper would vigorously resist a trend they have been chronicling for years. What’s good for the rest of us is evidently not good enough for toplofty Timesmen.

In the real world of the private sector, defined-benefit pension plans have been going the way of the dinosaurs for decades. The Social Security Administration reports that between 1980 and 2008, the share of private sector workers in defined-benefit pension plans fell from 38 percent to 20 percent. By some estimates it stands at just 15 percent today. In 1985, 89 of the companies in the Fortune 100 offered traditional defined benefit plans. In 2011, only 13 did so. In the same period, the number of Fortune 100 companies offering only defined-contribution plans increased from just 10 to 70.

When not haggling over retirement plans, Stacy McCain’s post concludes with a reminder to journalists to endeavor to “write for the reader:”

This seems so obvious to non-journalists that it feels stupid saying it so simply, but too many people in the news business completely lose sight of the fact that the reader is their customer, and is under no obligation to consume your product. You must try to write something that people actually want to read, and try to keep the readership in mind. Your boss is ultimately not the editor, but rather the guy who drops 50 cents in the newspaper box.

But that can be awfully hard to remember, let alone take to heart, if you’re like so many in the MSM who “loathes the public,” as the Wall Street Journal’s David Gelernter wrote, in a snapshot that perfectly sums up the insular nature of the MSM  vis-à-vis their customers in 1996, just before first Matt Drudge and then the Blogosphere broke open the formerly closed feedback loop that was old media:

Today’s elite loathes the public. Nothing personal, just a fundamental difference in world view, but the hatred is unmistakable. Occasionally it escapes in scorching geysers. Michael Lewis reports in the New Republic on the ’96 Dole presidential campaign: ‘The crowd flips the finger at the busloads of journalists and chant rude things at them as they enter each arena. The journalists, for their part, wear buttons that say ‘yeah, I’m the Media. Screw You.’ The crowd hates the reporters, the reporters hate the crowd– an even matchup, except that the reporters wield power and the crowed (in effect) wields none.

The balance of power has shifted considerably in the years since, but that underlying attitude — “Yeah, I’m the Media. Screw You” — hasn’t changed. At the base of Bill Keller’s rants about Fox News is his anger that millions of viewers enjoy the channel (especially in middle America, which another prominent Timesman publicly referred to last year as “the dance of the low-sloping foreheads”), and have written the Gray Lady off as hopelessly out of touch with their day-to-day lives. (See also, video referenced above.)

Similarly, a recent article in the Columbia Journalism Review, the house organ of what Hugh Hewitt once dubbed “The Media’s Ancien Régime,” spends its time instructing old media journalists on “the right way to cover Joe the Plumber,” a man the MSM itself empowered by spending more time in the fall of 2008 vetting than they did the winner of the presidential race.

Finally, back in 2005, I once wrote that in the wake of RatherGate, Dan Rather had morphed into his bête noire, Richard Nixon.  (Whom the Gods Destroy, They First Render Nixonian.) Today, as he makes the rounds promoting his autobiography, Rather is reduced to sounding like a stock Scooby Do villain — I would have gotten away with it, if it hadn’t been for all you meddling bloggers!

UPDATE: Michael Malone emails in a rather prescient Silicon Valley Insider column he wrote in 2005: “Newspapers Nearing Death?”

I can’t precisely place the moment when I stopped reading newspapers, but it was sometime during the dot-com boom. My family went off to Africa for a couple months one summer, cancelled our newspaper subscriptions, and when we got home never really got around to re-subscribing. Eventually, perhaps three months later, we did start again — but by then the bloom was off.

First to go was the Times. That one was easy. I didn’t write for it anymore. The kids kept me too busy on the weekend to read it. My colleagues always pointed out the interesting articles. And, most of all, because I didn’t trust the Gray Lady’s reporting anymore.

Next was the Merc. I found that the only thing I even looked at in the paper was the headlines in the business section — and I could get those stories in other places. That, and the movie listings — and when I needed those I could just drop four bits into a local newspaper rack. A few weeks ago, when the paper reprinted a column of mine in its Sunday Perspective section, I had to depend upon my 85-year-old mother to cut out the article. Otherwise, I wouldn’t even have a hard copy.

Then came the Chron. Of all of them, that was the one I noticed most. I missed the arts section, especially the old Sunday pink section, and the columnists. But after a month or so, I didn’t even notice.

That last paper, the San Francisco Chronicle, had the opportunity to break real news in early 2008, and chose to bury it instead. Try and guess why.

WALTER RUSSELL MEAD: Democrats’ War on Blue Gets a New Recruit. “Another Democratic governor is distancing himself from the blue model: Illinois Governor Pat Quinn announced a plan to shore up the state’s pension system by reducing benefits and increasing contributions and working time by state employees. Quinn’s plan would raise the age at which pensions can be collected by two years to 67, while reducing annual cost-of-living adjustments to 3 percent or less. His proposals could save the state up to $85 billion over the next 30 years.”

YEAH, PRETTY MUCH: Are Pensions Busting Local Governments?

And since I haven’t mentioned it in a while, check out PensionTsunami.com for a roundup of news on the public pension crisis.

PUBLIC PENSION UPDATE: The unions may be dead set against it, but New Yorkers overwhelmingly support a new pension system for future government employees.

WALTER RUSSELL MEAD: The Great Minnesota Pension Scam. “If you are a current or former state employee in the state of Minnesota, watch out. Your pension depends on hot air, sketchy arithmetic, and the willingness of future taxpayers to make huge sacrifices to cover the deceit, wishful thinking and sketchy math at the heart of your pension system.” Of course, this problem isn’t limited to Minnesota. It’s endemic.

Plus this advice: “Under modern conditions, for younger workers especially plans where you make contributions matched by your employer are safer bets than defined benefit plans. In defined contribution plans, they can’t touch your money to pay pensions for older workers; in other plans they can suck you dry to keep the better connected and better organized geezers happy. Your union reps and state legislators won’t tell you about this, but it’s true: badly funded defined benefit programs will be looted to pay the oldsters in full as long as possible, and younger workers will be stiffed when the bill finally comes due.”

HIGHER EDUCATION BUBBLE UPDATE:

From the Chronicle of Higher Education comes a story that should make every mediocre academic in this country shudder in fear. Mark Bauerlein has looked under the hood of the “research” that professors in English literature conduct and he has documented what many of us know but few want to think about: nobody reads much of this stuff.

Nobody. Not even the other scholars in the field.

As Walter Russell Mead notes, this is not a good sign: “Our universities today look a lot like the monasteries in the time of Henry VIII: vulnerable targets for a hungry state. State legislators are going to be wrestling with questions like whether to cut the pensions of retired state workers, cut services for voters, or raise taxes. In this atmosphere, the research university model (in the humanities and, economics and management excepted, the social sciences) may not long survive, at least in the public sector. . . . In the humanities and most of the social “sciences”, the Ph.D and peer review machine as it now exists is a vastly expensive mediocrity factory. It makes education both more expensive and less effective than it needs to be. There are islands and even archipelagos of excellence in the sea of sludge but we needn’t subsidize the sea to preserve them.”

PUBLIC PENSION UPDATE: Chicago Union Officials Face Criminal Probe Over City Pensions. “The reports focused on a 1991 law that allowed union leaders who once worked for the city to receive credit in public pension plans for their private union work. When they retire, the union officials’ pensions aren’t based on their old city paychecks but on their much higher union salaries. That opened the door for them to land public pensions that far exceeded their pay as city employees — even as they continued to earn lucrative salaries from their unions.”

PUBLIC PENSIONS: Some Numbers And Reality. “I can get into the details of the situation where $29 billion in deposits and $62 billion in payouts aren’t a problem… but that’s not the situation that holds in NJ.”

CHANGE: Lawmakers Propose End To Congressional Pensions. “While vast numbers of the private-sector workforce have seen their pensions vanish over recent decades and find themselves with precarious, market-based 401(k) plans, members of Congress receive both a pension and a quality employer-match plan. According to at least two lawmakers, it’s time for elected officials to join the real world.”

CALIFORNIA: Kids Play With Toy Gun, Parents Lectured by Local Cops. Vote against their pensions.

SAN FRANCISCO’S pension crisis. “Adachi’s demand that city employees start paying more into their own pensions has not only defined him as a public figure but made him anathema to San Francisco’s political establishment—that is, the mayor, the Board of Supervisors (San Francisco is both a city and a county, so its board serves as city council), and the powerful public-sector unions.”

PUBLIC PENSION UPDATE: 3,000 more six-figure pensions in Calif.

It’s Iain Murray’s book, but we’re living it.

WALTER RUSSELL MEAD: Rhode Island As the Athens Of America. And not in any “Golden Age Of Pericles” kind of way:

Rhode Island is looking more and more like Greece, and not in a good way. That is one message of this important piece by Mary Williams Walsh in the New York Times. Years of blue social policy have wrecked local and state government finance in the country’s smallest state, and now the bills are coming due. Services are being cut to the bone and elderly retirees are losing money they thought was secure.

In Rhode Island, it is Democrats, not nasty union-hating Republicans, who are doing the dirty work. Democratic mayors are telling their unions that there isn’t any money — not because they are vicious corporate stooges who hate working people and want to see them suffer, but because There. Isn’t. Any. Money.

Because Rhode Island listened to timeserving blue politicians too long, and union leaders and public sector workers lost their grip on any mathematical realities beyond the numbers at the ballot box, the pension system grew more and more out of control. State and local governments lurched into a crisis. Vote yourself a raise, vote yourself a pension: why not?

But there is financial math as well as political math and in any war with financial arithmetic, the money numbers win. If there isn’t any money, the checks won’t clear. Ultimately, you will have to fire existing workers, stop paying pensions or a mix of both. That is where Rhode Island is now: its economy can’t generate the revenue to support its existing governance system and to pay its pension obligations.

That’s actually where America is, too.

MORE ON THOSE UNDERFUNDED / OVERGENEROUS PUBLIC PENSIONS: Rhode Island Is Broke. “In Rhode Island, the citizenry is being asked to spend increasing percentages of its income and assets not for the general welfare, but for the welfare of a relatively small percentage of the population who have state and municipal pensions. It’s often joked that General Motors is a pension plan which makes automobiles. Rhode Island is in worse shape. Rhode Island is becoming a public sector pension plan which doesn’t make anything.”

Related: Chicago: 2 teachers union lobbyists teach for a day to qualify for hefty pensions. “Two lobbyists with no prior teaching experience were allowed to count their years as union employees toward a state teacher pension once they served a single day of subbing in 2007, a Tribune/WGN-TV investigation has found. . . . Over the course of their lifetimes, both men stand to receive more than a million dollars each from a state pension fund that has less than half of the assets it needs to cover promises made to tens of thousands of public school teachers. With billions of dollars in unfunded liabilities, the Illinois Teachers’ Retirement System, which serves public school teachers outside of Chicago, is one of several pension plans that are in debt as state government reels in a fiscal crisis.”

LES JONES ON PENSIONS AND TAXES: “Government cheerleaders like to pretend that all of your tax money goes to teachers, police, and firefighters. The reality is that cities like San Jose and Vallejo are paying so much to retired government workers of all kinds that they’ve had to lay off teachers, police, and firefighters. That’s what happens when government becomes a pension fund that serves the unions instead of a civil agency that serves the taxpayers. The retired government workers become the zombies that terrorize the city.”

HOW STATE LAWMAKERS pump up their pensions in ways that you can’t.

LIFE AFTER DEBT: In this month’s market upheavals in the United States and Europe, we are witnessing the end of a seven-decade economic experiment. But does anyone have any clue what comes next? “The post-war era witnessed not only the triumph of Keynesian economics, but also the establishment of public pensions throughout the Western world. Almost all these pension plans were set up on a pay-as-you-go basis that provided high rates of return to the first generation of pensioners (which, perhaps not coincidentally, was the generation that voted them into existence) at the cost of an unfunded commitment to later generations. Public pension plans are the biggest element in the off-balance-sheet obligations of states, which also include unfunded health-insurance liabilities and the 2008 guarantees to the banking system. In most countries these ‘implicit’ public debts dwarf their traditional obligations traded in the bond market. In the United States, the total long-term commitments for Social Security, public sector pensions, and Medicare have been estimated at over 300 percent of GDP on the basis of current policies.”

Debts that cannot be paid, won’t be. Commitments that cannot be honored, won’t be. Guarantees that can’t be followed through on, won’t be.

BAD BOYS! Mark Halperin And the Growing List of MSNBC Suspensions.

I KEEP WARNING PEOPLE NOT TO PICK ON BLOGGERS: Righthaven Loses As Federal Judge Rules Reposting Entire Article is “Fair Use.”

The lawsuit decided Monday targeted Wayne Hoehn, a Vietnam veteran who posted all 19 paragraphs of November editorial from the Las Vegas Review-Journal, which is owned by Stephens Media. Hoehn posted the article, and its headline, “Public Employee Pensions: We Can’t Afford Them” on medjacksports.com to prompt discussion about the financial affairs of the nation’s states. Hoehn was a user of the site, not an employee.

Righthaven sought up to $150,000, the maximum in damages allowed under the Copyright Act. Righthaven argued that the November posting reduced the number of eyeballs that would have visited the Review-Journal site to read the editorial.

“Righthaven did not present any evidence that the market for the work was harmed by Hoehn’s noncommercial use for the 40 days it appeared on the website. Accordingly, there is no genuine issue of material fact that Hoehn’s use of the work was fair and summary judgment is appropriate,” Judge Pro ruled.

The judge also said he took into consideration that only five of the editorial’s paragraphs were “purely creative opinions” of the author. . . . Pro’s decision came a week after a different Las Vegas federal judge threatened to sanction Righthaven, calling its litigation efforts “disingenuous, if not outright deceitful” when it came to standing. Standing is a legal concept that has enabled Righthaven to bring lawsuits on behalf of the copyrights owned by Stephens Media.

That blistering decision by U.S. District Judge Roger Hunt, the chief judge in Nevada, places into doubt Righthaven’s year-old business model, which is also under a Colorado federal judge’s microscope.

Hunt gave Righthaven two weeks to explain why he should not sanction it for trying to “manufacture standing.”

I hope these guys wind up broke and in jail. And that’s looking likelier all the time . . . .

ABOUT FREAKING TIME: More Schools Are Rethinking “Zero Tolerance” Discipline. “Nearly two decades after a zero-tolerance culture took hold in American schools, a growing number of educators and elected leaders are scaling back discipline policies that led to lengthy suspensions and ousters for such mistakes as carrying toy guns or Advil. This rethinking has come in North Carolina and Denver, in Baltimore and Los Angeles — part of a phenomenon driven by high suspension rates, community pressure, legal action and research findings.”

Since this was obviously a dumb idea from the beginning, why are we allowing our kids to be taught by people who took two decades to grasp the obvious?

GREAT: Treasury To Tap Pensions To Help Fund Government.

TEN STATES WHERE PENSIONS ARE RUNNING OUT OF MONEY.

UNDERFUNDED / OVER-GENEROUS PUBLIC PENSION UPDATE: States face $1.26 trillion shortfall in funds to pay retiree benefits. “The study, to be released Tuesday by the Pew Center on the States, found that the pension and health-care funding gap increased by 26 percent over the previous year. Pew officials said the growing shortfall was driven by inadequate state contributions, an aging population and market losses that accompanied the recession.”

UPDATE: Public Pensions, Once Off Limits, Face Budget Cuts.

CARTER WOOD: Attacking For-Profit Schools Threatens Training, Opportunity. But it defends a traditional Democratic constituency.

Sen. Tom Harkin (D-IA) has chaired a series of hearings by the Senate Health, Education, Labor, and Pensions Committee to pummel for-profit, private colleges as exploiters of students and the working class. The hearings reinforce the Obama Administration’s regulatory “crack down” on the institutions, which attempts to deny their students access to federal financial aid.

One of the primary documents used to justify these attacks was a report delivered last August to the Senate HELP Committee from the Government Accounting Agency. As Mark Hyman chronicles at The Washington Examiner, the report, which lambasted the colleges’ financial aid practices, proved to so flawed — a “fraud” — that the GAO withdrew it and quietly reissued a new report. Still, the continuing attacks and Obama Administration’s regulations caused the educational companies’ stocks to drop. And now we learn of serious allegations of insider trading at the Department of Education.

As Hyman calls it, it’s “the biggest GAO scandal you never heard about.”

It hasn’t gotten nearly the attention it deserves.