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Schwarzenegger: Public Pensions and Our Fiscal Future

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Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#71

Post by ericb »

pg wrote: post #20

I have a feeling these graphs do more to explain the problems that Berkeley professor wrote about ( http://blogs.berkeley.edu/2010/08/24/a-letter-to-my-students... ) than the explanations he proposed.

I think this is a game theory problem. CEOs (looking at you, GM) and politicians up against tough unions have an easy out with no "cost" to themselves. They pass the buck by placating unions with pension concessions so all seems well during their tenure. Long after they've collected their bonuses or enjoyed reelection, someone else gets to deal with the unsustainable consequences.

Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#72

Post by dpifke »

CWuestefeld wrote: post #28
pragmatic wrote: post #23

Earlier quoted context omitted.

That was before federal workers earned twice as much as their private counterparts. "Federal civil servants earned average pay and benefits of $123,049 in 2009 while private workers made $61,051 in total compensation, according to the Bureau of Economic Analysis. The data are the latest available." http://abcnews.go.com/Politics/federal-workers-earning-doubl...

I'm sympathetic to your point, but you can't really make this comparison, because it's apples-to-oranges. The set of jobs in each set is quite different. For example, there are few farmers in the government employ. However, we can still reach interesting conclusions from the data. For example, I would expect that regardless of the salary of the job, benefits such as healthcare insurance would be fairly constant for e…

Even when broken down by industry group and job type (apples-to-apples), public-sector employees make significantly more than their private-sector counterparts, see this Department of Labor press release:

http://www.bls.gov/news.release/pdf/ecec.pdf

(On page 3 is a comparison of % spent on different benefits for public- vs. private-sector; not sure what conclusions can be drawn from it.)

Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#73

Post by itsgoats »

CWuestefeld wrote: post #56
lr wrote: post #52

Earlier quoted context omitted.

This is a GOP strategy called "starve the beast", and Paul Krugman has been writing about it for years: http://www.google.com/search?q=starve+the+beast+krugman

This same thing is also an extreme Liberal strategy. Sorry, I can't remember the name to look it up. The theory is that you can so overload the government that it simply can't stand up anymore (like the USSR I suppose). It crumbles, and that gives you the opportunity to erect a new one in its place, doing away with all those things that stand in your way, like Constitutional restrictions on the government. UPDATE: th…

Except there's no mainstream, tea-party-a-like leftists loudly advocating that strategy in the US.

Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#74

Post by _delirium »

illumin8 wrote: post #67
kenjackson wrote: post #65

Earlier quoted context omitted.

I knows probably more than 100 private tech employees that regularly make more than $1M/year (salary plus stock/bonus). I don't know any federal tech employees that make more than $150k/year. Either you only know private tech code monkeys or have found the highest paying federal agency that no one has ever heard of.

Yes, but those private employees making more than $1M are probably some of the best talent in the industry, where as the federal employees could have any range of talent from "breathes, and has a pulse" to "rockstar developer." Also, the private employees when they retire get no health benefits and have to fund their own retirement from a 401k, whereas the federal employees have guaranteed health care for life and a…

I don't think that assumption is usually true. Knowing a lot of people in finance, it doesn't seem hard to me to conclude that the employees making over $1M can have any range of talent from "breathes, and has a pulse" to "rockstar finance guru". To the extent talent is required, it's often bureaucratic ladder-climbing talent.

Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#75

Post by _delirium »

noahlt wrote: post #36
muzz wrote: post #31

Earlier quoted context omitted.

Yes but then it wouldn't make the (largely political) point that he wanted to make. The comparison itself seems odd. If the state's private sector loses 1.2M jobs, should the public sector shed a proportional number of employees i.e. teachers, firemen, policemen, prison guards, etc?

His point isn't that the public sector should shed a proportional number of employees, but that the collective income of private sector taxpayers has decreased, yet they are forced to sustain public-sector pensions with that decreased income.

How is that particular graph making that point? I can see for the 2nd pension-cost graph, but the job-losses graph appears to me to be implying "private-sector employment is falling much faster than public-sector employment". But, by using absolute numbers, it implies that the "correct" outcome, where the two curves would roughly track each other, would be for public-sector job losses in raw numbers to be equal to private-sector job losses, which would be absurd given the large difference in total jobs. With those scales, there is almost no economic situation that would result in the public-sector line being anything but flat, because its raw numbers are far too small to register much of a blip in either direction.

It's hard for me to come up with a good reason for that particular choice of graph other than "political spin". One of many reasons I've switched to reading The Economist rather than the Wall Street Journal for economics-meets-politics news, since the Economist makes a more conscientious effort imo to avoid slanting their data or infographics in the direction of their editorial line (and they do take roughly the same free-market editorial line).

Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#76

Post by [deleted] »

LargeWu wrote: post #34
alecco wrote: post #24

Earlier quoted context omitted.

Your down votes signal you read those facts and it upsets your beliefs. I didn't write this for people who agree with my point of view. I wrote this for you. Thank you.

You're probably getting downvoted because you seem to be implying, without real evidence, that California is bankrupt because Arnold was complicit in cheating California out of billions because of shady dealings with Enron. These are the sorts of allegations that one would typically see in a political forum populated by partisans and hacks. Downvoting is just HN's way of saying this sort of discussion belongs elsewhe…

[deleted]

Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#77

Post by richieb »

dpifke wrote: post #72
CWuestefeld wrote: post #28

Earlier quoted context omitted.

I'm sympathetic to your point, but you can't really make this comparison, because it's apples-to-oranges. The set of jobs in each set is quite different. For example, there are few farmers in the government employ. However, we can still reach interesting conclusions from the data. For example, I would expect that regardless of the salary of the job, benefits such as healthcare insurance would be fairly constant for e…

Even when broken down by industry group and job type (apples-to-apples), public-sector employees make significantly more than their private-sector counterparts, see this Department of Labor press release: http://www.bls.gov/news.release/pdf/ecec.pdf (On page 3 is a comparison of % spent on different benefits for public- vs. private-sector; not sure what conclusions can be drawn from it.)

Really it is the private sector employees that make much less than public employees. Except of course the CEOs and other way over paid executives.....

Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#78

Post by dantheman »

shin_lao wrote: post #53
pg wrote: post #20

I have a feeling these graphs do more to explain the problems that Berkeley professor wrote about ( http://blogs.berkeley.edu/2010/08/24/a-letter-to-my-students... ) than the explanations he proposed.

I was thinking exactly the same thing. In addition when you know an employee is going to cost you a lot of money in pension, the incentive to reduce the work force as much as possible is high. You end up in a situation where your budget is used to pay for the retired employees and you have nothing left for active employees. One of the reasons you are there is that it's pretty tempting for someone in command to offer…

Just don't allow future expenses.

Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#79

Post by kenjackson »

aswanson wrote: post #70
kenjackson wrote: post #65

Earlier quoted context omitted.

I knows probably more than 100 private tech employees that regularly make more than $1M/year (salary plus stock/bonus). I don't know any federal tech employees that make more than $150k/year. Either you only know private tech code monkeys or have found the highest paying federal agency that no one has ever heard of.

I knows probably more than 100 private tech employees that regularly make more than $1M/year (salary plus stock/bonus) Where? Serious question.

The simplest way is to simply go to Yahoo Finance and look at stock for insiders for tech companies. You'll find plenty of techies. From Sergey to Bill to Jerry.

But even non-founders, those in purely technical roles. People like David Cutler or Jeffrey Dean or Amit Singhal. At virtually ever major tech company you'll find a continuum of these.

Go to the federal gov't and you'll see much flatter pay structure. I don't care how rockstar you are in the Air Force, you are never going to see Sergey or even Jeff Dean type of money. Never.

Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#80

Post by kenjackson »

illumin8 wrote: post #67
kenjackson wrote: post #65

Earlier quoted context omitted.

I knows probably more than 100 private tech employees that regularly make more than $1M/year (salary plus stock/bonus). I don't know any federal tech employees that make more than $150k/year. Either you only know private tech code monkeys or have found the highest paying federal agency that no one has ever heard of.

Yes, but those private employees making more than $1M are probably some of the best talent in the industry, where as the federal employees could have any range of talent from "breathes, and has a pulse" to "rockstar developer." Also, the private employees when they retire get no health benefits and have to fund their own retirement from a 401k, whereas the federal employees have guaranteed health care for life and a…

You're right on most counts. But this is the tradeoff.

Private: Can make it rich. Really rich, And on average probably make more money while working, assuming the same type of work. OTOH, if you don't make it rich your retirement may not be as nice as you'd like.

Public: Will never be rich. You can solve P=NP, factor large numbers in constant time, and create a revolutionary new UI that every loves, and you'll still get paid as a GS-13, but you'll get a level bump next time your promotion comes up. But when you retire, you'll be comfortable.

It's kind of like the same deal judges get. Almost all federal judges would make a boatload more money as attorneys. But they take the lower pay with job security, salary for life, and a different kind of prestige.

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