PBS Pimps Itself Out to Billionaire Who Campaigns Against Pensions for Gov’t Employees to Produce Scaremongering Series About Government Pensions

Now we know how much it takes to buy PBS programming: $3.5 million. It might even be less, but $3.5 million is a proven amount that will induce the soi disant public broadcasting network to fall all over itself and violate multiple written, supposedly sacrosanct policies, to produce shows with a story line consistent with the express aims of a right wing foundation.

And the ugliest part is that it was PBS that sought out and proposed this arrangement.

David Sirota reports in must-read piece at PandoDaily that a two-year (!!!) PBS series called Pension Peril which has as its biggest funder none other than than the Laura and John Arnold Foundation, that of former Enron trader John Arnold. And quelle surprise, the story line of the series just happens to fit exactly with the mission of Arnold’s foundation, that of ending pensions for government workers.

Here’s Sirota’s description of Arnold’s political campaign:

In recent years, Arnold has been using massive contributions to politicians, Super PACs, ballot initiative efforts, think tanks and local front groups to finance a nationwide political campaign aimed at slashing public employees’ retirement benefits. His foundation which backs his efforts employs top Republican political operatives, including the former chief of staff to GOP House Majority Leader Dick Armey (TX). According to its own promotional materials, the Arnold Foundation is pushing lawmakers in states across the country “to stop promising a (retirement) benefit” to public employees.

It’s important to understand that the the idea that there is some sort of crisis in public pension funds is a canard. There are particular pension systems that are in terrible shape, but that’s due to deliberate underfunding compounded by mismanagement. The worst is New Jersey, where Christie Todd Whitman started the shell game in 1995 by paying less that the actuarially required amount. And then after more than a decade of underfunding, Orin Kramer (who also happens to be a big Democratic party bundler) who was then Chairman of the New Jersey State Investment Council, pushed to put a large portion of the state’s $72 billion in pension assets with private money managers, as opposed to state employees. The money was allocated to risky strategies, and a lot wound up in investments in subprime plays, and even worse. $115 million invested in Lehman itself. And New Jersey also has the dubious distinction of being the only state ever sanctioned by the SEC for pension mismanagement.

So the understandable media interest in pension train wrecks obscures the general picture. As Sirota stresses:

Whether or not the foundation has direct editorial control of PBS news content, the series still appears to violate PBS’s rules against “pre-ordained” conclusions.

For example, the series’ title – Pension Peril – is the oft-repeated ideological buzzphrase of anti-pension campaigners. It also inherently pre-ordains the Arnold Foundation’s conclusion that public pension shortfalls are an imminent emergency (“peril”), even though data prove that is not the case. To the contrary, as the Center for Economic and Policy Research notes, the shortfalls are “less than 0.2 percent of projected gross state product over the next 30 years” and “even in the cases of the states with the largest shortfalls, the gap is less than 0.5 percent of projected state product.” That’s far less than the amount state and local governments are spending on corporate subsidies. As McClatchy Newspapers has noted: “There’s simply no evidence that state pensions are the current burden to public finances that their critics claim.”

Similarly, in each episode of the Arnold/PBS series that has aired, the reporting has followed the Arnold Foundation’s rhetorical lead by forwarding the idea that pension benefit cuts should be the primary policy solution to public budget problems. It does this by promoting the need for cuts to guaranteed retirement incomes and/or by refusing to mention that pension shortfalls are dwarfed by the amount state and local governments collectively spend each year on corporate subsidies (many of which do not create jobs).

Moreover, as this section suggests, this deal, which allowed Arnold to lever his spending with taxpayer dollars, violated numerous PBS policies. Here is Sirota on the policy on accepting funding from groups with clear policy agendas:

PBS seems to be defying its own rules and regulations about conflicts of interest….Along with barring editorial control and program financing from funders who want to “pre-ordain” conclusions, PBS’s rules also state that “when there exists a clear and direct connection between the interests… of a proposed funder and the subject matter of the program, the proposed funding will be deemed unacceptable regardless of the funder’s actual compliance with the editorial control provisions.”

As one example, PBS says “a series of documentaries, interviews, and commentary on the subject of drug abuse would not be accepted if funded by a special purpose nonprofit corporation whose principal mission is to foster the understanding of drug-related community programs.” As another example, PBS says “a nonprofit organization whose mission is to eradicate heart disease or to raise money for leukemia research could not fund a program designed to educate the public about these respective illnesses.”

Hhm, looks like a pretty flagrant violation, no?

In addition, PBS’s rules and FCC guidelines stipulate that “All underwriters must be identified in video by their name and/or logo,” and programs on controversial subjects require even more disclosure. But Sirota tells us:

Despite those rules and regulations, though, Pando could find no explicit disclosure in any PBS “Pension Peril” episodes that the series is directly financed by the Laura and John Arnold Foundation, much less that the foundation’s benefactor, John Arnold, is one of the nation’s biggest financiers of the ongoing legislative push to slash public pension benefits.

The only notification that Arnold supports PBS comes “occasionally” in a lengthy list of supporters at the end of PBS News Hour and in another long list of donors of flagship station WNET, which is producing the series.

Finally, remember that PBS conceived of and pitched this deal:

…the Arnold Foundation spokesperson tells Pando that it was PBS officials who first initiated contact with Arnold in the Spring of 2013. She says those officials actively solicited Arnold to finance the broadcaster’s proposal for a new pension-focused series. According to the spokesperson, they solicited Arnold’s support based specifically on their knowledge of his push to slash pension benefits for public employees.

And an indignant statement released by the foundation, which fails to dispute any facts in the article while trying to depict it as inaccurate, and provides further support for how Sirota depicted the relationship. From the foundation’s letter:

The agreement with WNET is in all respects our standard grant agreement, which LJAF has signed with virtually all of our grantees (for a list of such grantees, see www.arnoldfoundation.org/grants). As we explained to Mr. Sirota, that standard grant agreement provides LJAF with the ability to stop funding in the event of extraordinary circumstances, such as fraud or the change of leadership of a grantee.

The stated purpose of the grant, as set forth in our grant agreement with WNET, was to “educate millions of Americans on the implications of looming debt and the tough choices ahead as these unfunded liabilities threaten to crowd out funding for education, public safety and other essential public services.” The project sought to “raise awareness of which cities and states are in the direst situations and how further crisis and/or bankruptcy might be averted, with a special focus on leaders confronting the issue head-on, proposed solutions and models of reform.”

The fact that the money was given in the form of a grant means it was expressly to further the objectives of the foundation. And most grants are structured to provide for periodic payments, based on progress of the grantee in fulfilling the statement of work. Thus, while Sirota was originally told that the the foundation had the right to halt funding in the event of extraordinary circumstances such as fraud, it’s almost certain that the grant itself contains provisions that allow funding to be halted for nonperformance. Given that the purpose of the grant was narrow, to “educate…..on the implications of looming debt and the tough choices ahead as these unfunded liabilities threaten to crowd out funding for education, public safety and other essential public services” deviation from this message would count as nonperformance. No wonder PBS and the foundation are continuing to refuse to release the text of the agreement.

PBS is following in the footsteps of other established, once highly revered organizations like Demos in the UK and the Roosevelt Institute here, having conservative parasites gaining control of once-liberal hosts. These organizations are highly prized targets, since loyal audiences accept what their trusted source tells them and finds it hard to believe that their interests are being betrayed. But anyone who is still regularly listening to PBS is either wishful or not paying attention. Its new CEO Paul Haaga is a heavyweight conservative propagandist, having been a financial services industry lobbyist, patron of conservative think tanks, and Republican donor.

If you watch or listen to PBS, you need to stop. Now. If you’ve ever given money to them, you need to tell them they are never getting a dime from you again. And send this post to all your family members and colleagues who still might be consuming this toxic-to-ordinary-Americans product.

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  1. timoetheus

    Completely appalling. However, public broadcasting is sensitive to pressure (they work hard to retain their donor base), so indignant letters to your local PBS station and letters to the editor of local print media will embarrass them a lot. Starting mine now.

    1. RAY

      There should not be 2 different classes in USA, one for government employees and one for everyone else. There should not be any guaranteed pensions. Government employees are paid better the private employees, are not subject to layoffs or have to worry about being fired for doing nothing. They should have 401K plans with out any taxpayer match. And the salaries of a lot of top government employees should be given a 20% pay cut. Unfortunately, the pension crisis is real, not a product of right wing anything. It is a product of something liberal never heard of…MATH! And I could not care less why there is a crisis because politicians didn’t fund properly. They did the same thing with SS

      1. Lambert Strether

        “… the salaries… should be given a 20% pay cut.” That’s a sentence that only a non-native speaker (or a poorly educated one) could have written. Are you should you’re not a paid troll?

      2. kimsarah

        In general, (non-political) government employees in departments and agencies have received pay and benefits that put them at least in the lower rung of the middle class.
        Rather than punish them, why can’t the private sector raise its social consciousness and try to meet the minimum standards we’d hope to see for a resurgance of the middle class. Rise up rather than tear down.

  2. j gibbs

    PBS hasn’t been objective for at least twenty-five years. It runs mostly bleeding heart elitist twaddle. Doing well by pretending to do good. I don’t know why anyone watches it’s programs.

    1. pretzelattack

      i’m pretty sure the Arnold Foundation can’t be described as “bleeding heart”; well, except for oppressed billionaires.

    2. Carla

      “Elitist twaddle” — absolutely. “Bleeding heart” — not a bit of it. PBS has marched steadily to the Right over the last several decades, as it has been privatized into virtually a commercial network. The “public” in Public Broadcasting, as in so many other aspects of American life, has become a sad joke.

      Thanks for this post, Yves.

    3. Ed Ciaccio

      Obviously, you don’t watch PBS, which has grown more right-wing over the years. Having David H. Koch, notorious oil billionaire Climate Catastrophe denier as a funder of the science series NOVA is absurd.

      Also, I would rather have a “bleeding heart” than NO heart, as so many corporate psychopaths and politicians (BOTH Wall Street parties) have.

      Compassion and empathy are traits to be valued, encouraged, and taught, instead of the cut-throat, profit-is-all mentality which has pushed our survival to the brink on this planet.

    4. Waking Up

      Regardless of how PBS has evolved, and definitely not for the better, it still is one of the rare networks that provides shows such as Bill Moyers (who obviously still cares about the public interest), Frontline (which had a show on being “Sick around the World” at a time when other media acted as if there were no other systems of health care), and numerous interesting travel and cooking shows (which I guess could be considered elitist). Their “news” programs have decidedly moved rightward leaning and less in the “public” interest. I’m still wondering, and have for years, the impact of David H. Koch’s funding on NOVA.

      But, if they are writing programs on the “perils of pension” to scare the public, that is not only wrong but may just alienate the audience they have. Is that part of the point, to get rid of PBS once and for all?

      1. Yves Smith Post author

        Moyers produces his show at separate facilities from any PBS outlet. If you go to his site, you can also see he is independently funded.

        You can watch him online and send donations to him directly.

        1. Waking Up


          You make a good point about Bill Moyers show. But, here is one of my concerns. We still have an entire generation in which some never fundamentally learned how to use the internet or use it primarily as an “e-mail service”. Then you have the issue of an extra cost for use of the internet in your home (unless you go to a free public source such as the local library or an internet cafe). There are millions of people whose only source of information is from public television networks. Do we want them to rely on ABC, CBS, NBC, or Fox for “news”? Even the pro-intelligence, pro-military, pro-American exceptionalism entertainment on the networks is propaganda to get Americans to think one way. I’m appalled at the direction PBS has been going for years and always watch shows with a jaundiced eye, but, I’m not completely convinced that sending it down the toilet is the solution…at least yet. But, I’m sincerely glad you are bringing this to all of our attention.

          1. Yves Smith Post author

            Those people are not watching PBS. PBS targets people with college educations.

            You seem to be in utter denial that PBS has been captured by the right wing. Do you really want people watching right wing propaganda that has the veneer of being “centrist” and objective? Go look at this link on who the new CEO is.


            This is just another variant of the lesser evilism that justified voting for Obama in the last election.

            1. Waking Up

              As clarified by the PBS Ombudsman, both organizations (PBS and NPR), while part of public broadcasting in this country, are separate organizations and separate public media entities. Paula Kerger is the CEO of PBS and Paul Haaga is the CEO of NPR. I’m not going to argue that NPR isn’t right wing…that’s why I haven’t listened to their radio station in over a decade. As for PBS, maybe it’s my local member station, but, there are a number of quality programs which are still focused on the “public good”. I no longer watch the “news” on PBS, and usually get the news from a variety of “alternative” sources on television and the internet. Can’t other targeted educated PBS watchers also make this distinction?

              I also don’t want people watching right wing propaganda with the “centrist” veneer which is why I appreciated your bringing this to our attention in advance. However, if you look back at my comments over the years, I think it will be obvious that I’m one of the last people you need to accuse of falling for “lesser evilism”.

    1. cwaltz

      Yes, by all means, let’s race to the bottom already. I mean, after all, if $100 a month in income is good enough for the Chinese………..

      1. MyLessThanPrimeBeef

        We should be for

        1. race to the top by strengthening SS
        2. so that that one plan is good enough for all.

        1. cwaltz

          By all means strengthen Social Security. However, some of us have been sinking our money into a Federal pension system and don’t qualify for Social Security. I’ll be darned if our household should have to lose out on the money in excess that we’ve paid to the Federal Pension system involuntarily (that’s right amounts exceeding Social Security are taken out of RR workers pay to cover their generous pensions)simply because someone else is mad that we get a pension. That’s ridiculous.

        2. cwaltz

          Oh and for the record, our household already lost out because what we sunk into Social Security isn’t transferable to the Federal Pension system.

          1. MyLessThanPrimeBeef

            CWaltz, if we go to a one system for all, all these issues you mentioned should be addressed.

            In addition, there should be grandfathering for the transition period.

            Finally, this should be in conjunction with

            1 GPD sharing
            2 Single payer health insurance
            3 A wealth tax
            and, last but not least,
            4. Money creation by the people spending it into existence, which, means, for the first time in history (to my knowledge), when new money is created, you, me and everyone gets a check or some cash, not the banks nor the king (that is, his government and/or his modern day successors).

    2. trish

      “If SS is good enough for me …” This is a perfect example of one of the right wing’s tactics working (or a right-winger using the tactic). Pit the non-public-pension schleps against the public-pension schleps and distract from the lack of any kind of progressive tax on the wealth elite.

        1. cwaltz

          Not everyone qualifies for Social Security.

          I’m more than happy to help others get better benefits but I don’t think its fair to tell me that the system we’ve been paying into over a decade should be dismantled. It’s a very Paul Ryan thing to suggest that all the money that exceeded what would have been put into Social Security be given as a gift to the Federal government.

          I’m hoping that your statement is a fundamental misunderstanding of who does and doesn’t qualify for Social Security and what is and isn’t put into a federal pension program.

          1. MyLessThanPrimeBeef

            There are unfair provisions that should be eliminated, things like losing Social Security due to one’s spouse.

            1. cwaltz

              Did you know that Social Security was originally modeled after the RR retirement system? It seems to me that perhaps the better thing to do would be to convert the Social Security system into something modeling RR retirement where you do contribute more but the return is more generous.

          2. Bruno Marr

            If you have over a decade (40 quarters) paying into SS then you qualify for a pension. However, if you work for an entity (Feds?) that doesn’t deduct for SS then you will only qualify for a partial SS pension. (Any other pensions are unaffected.)

            1. cwaltz

              Actually when we became eligible for RR retirement we became ineligible for SS. The over a decade we spent putting in income from our time in the military was lost.

              With RR retirement you exceed what is put into SS in order to guarantee that you’ll get a decent pension. The first tier of payment is what regular SS recipients get taken out of their checks. The second tier of money taken out is to cover the fact that your pension IS more generous than what you’d receive for SS. My pension will be “half” of my spouses since I don’t “work”(my job has been raising 4 human beings for the past almost 10 years.) The fact that I’ve been out of the job market for over a decade means that what I’d collect in SS would not be very large and since my spouse doesn’t qualify for it, that avenue would be closed to me as well. I’ve come to terms with the fact that the money I sunk into it will go to others. I’m good with it. As a matter of fact, despite the fact that Social Security doesn’t affect me and my spouse doesn’t mean I don’t want a better system that ensures my children will not grow hungry when they get older or if they were to become ill. That being said, I’m not anxious to “convert” to system where we’d lose all the tier 2 contributions we’ve made over the past 9 years(which coincidentally is what Paul Ryan proposed so that he could rob the RR pension system and use that money for his 1% er friends.)

            2. cwaltz

              That is to say with RR retirement you get an either/oe situation. You can’t collect SS AND the money from the RR.

              We’ve also got a different unemployment process. It heralds back to when the states were arguing over who would be responsible for paying out benefits because the job requires crossing state lines.

    3. bob

      It’s the politics of spite, the only true ‘merican value.

      Don’t pay your mortgage? Deadbeat. Don’t pay your workers? Philanthropy.

  3. middle seaman

    PBS didn’t get off the tracks with Arnold nor will it get back on track after him. Similarly to many social institutions, PBS and NPR have turned right and commercial starting with Reagan. They have their own version of ads, sponsorship and salaries. Top personnel make many hundreds of thousand of Dollars a year while having the chutzpah to ask us to donate money to make these salaries possible.

    Public radio and TV aren’t what we expect and need anymore.

    1. Alejandro

      “the chutzpah to ask us to donate money to make these salaries possible.”
      That’s why what little I can afford goes to NC and similar sites. It has developed a model of Relentless, Relevant Reporting with a platform for honest conversation (A Real think tank). A trend well-worth supporting that could and should make the MSM increasingly irrelevant and makes the issue of net neutrality that much more urgent. It might be wishful thinking but given a choice I’d rather focus on and support efforts that are evolving into better ways of serving and caring for each other v. the BS spewed “vision” of an atomized society of “I’s” and “Just me’s”.

  4. squasha

    Thanks for this, will definitely pass it along. PBS has long been a kind of insidious pablum.
    BBC corp is also among those news organizations to which people erroneously lend credence. Discussion panels are often stacked with corporatist and/or right-wing thinktankers. The radio broadcast seems to have retained some degree of impartiality, however.
    Were some sort of word-of-mouth bucket brigade to become habitual, something of a beachhead against this sort of invasion of reliable press institutions might begin to be built. To speed transmission along, people would need to wean themselves of the habit of detailing the exploits of their best friend’s stepfather’s dead uncle, but humans historically have certainly set themselves to more daunting challenges.

    1. McMike

      It’s not necessarily supposed to be public oriented per se, it is supposed to be non-commercial.

      That horse left the barn a long time ago.

  5. psychohistorian

    Thanks for the posting about this manipulation of what is suppose to be a public oriented information source.

    It is bad enough that consolidation of big media as evidenced by the Comcast/Time Warner deal in your links today will serve to further limit control of both the message and messenger but examples like this of plutocratic influence of public discussion of our society just shows how far down the rabbit hole we have wandered.

    I wish more of the public would wake up to the manipulation and dumbing down of public discourse by the current media.

  6. Gil Smart

    I don’t doubt the perniciousness of Arnold’s intentions, but the whole idea that public pension funds will be just fine, they were underfunded and then suffered when the stock market tumbled is a pretty slippery slope – that’s an argument for more and sustained QE, isn’t it? The need to permit municipal/state/federal pension plans to meet actuarially unrealistic projections (my local city here is projecting returns of 8 percent as far as the eye can see. Uh – isn’t that a bit optimistic? If tapering occurs as scheduled and the return is just 4 percent or less, where does that leave you?)

    Moreover, the idea that the shortfalls represent just X percent of gross state product is misleading – that’s just the shortfall, and apparently doesn’t count the actual contributions. And in any event – what state has the surplus revenues to sink into the pension funds to make them whole? Here in Pennsylvania we just kicked the can down the road yet again,

    Bottom line, these pension funds do face an uncertain future, though the likes of Arnold are using that to stick it to workers

      1. Gil Smart

        So Bob, you going to sit there and tell me that assumptions of 8 percent returns this year and next and the year after that, coupled with – in this case – Pennsylvania’s decision to allow school districts and municipalities to put off big increases in pension contributions – all that bodes well for public pensions, does it. Good luck with that.

        1. Yves Smith Post author

          I see you did not read the article we linked to. It makes very clear that state and local governments spend way more on corporate giveaways than the modest pension shortfalls at the state and local level. And you point out that a big part of the problem is the governments choosing not to fund pensions, as opposed to being unable to

        2. bob

          It seems like you’re sitting there and telling me, and everyone else, a whole lot more than I am trying to tell you. But, since now we can speak for each other-
          Why are you trying to tell me that the earth revolves around the moon? The facts and numbers just don’t work!

      2. Jess

        No, it’s not concern trolling. There are three factors at work here:

        a) Yes, state governments have not made the required and prudent annual contributions and have instead engaged in unrealistically rosy ROI projections such as the 8% annual compounded number Gil Smart referred to and which the California funds are so enamored with. (Despite decades of real returns around 3%.)

        b) Yes, in a desperate attempt to make up for the shortfalls described in (a), pension funds have sought returns in high-risk investments which end up enriching mostly (or only) Wall Street types.

        c) At the same time, the rank-and-file workers have shown (as far as I know) NO interest in combating any of these problems, of taking their own leadership to task, or spearheading reforms. Here’s a classic example: In most situations the professional negotiators representing the employer (municipality, school district, etc.) are in the same pension plan and therefore benefit from the same increases in pension bennies that are given to/”won by” the employees in contract negotiations. So the same percentage benefit increase that goes to the $40K a year city employee goes to the $400K a year City Manager. My little city — 6 square miles, 66,000 residents — has two retired fire chiefs whose combined annual pension benefits total nearly $400,000. ($220K for one, $165K for the other.) The average monthly pension benefit for the lower of these two is about $14,400, which is almost exactly equivalent to the average ANNUAL benefit received by a Social Security retiree.

        Think this is an exception, that my city is unique? Well, we are — we’re on the low side! Here’s from a recent article in Forbes: (I’d post the link but it appears to be roughly fourteen miles long. The article title is, “Hundreds Of California Government Employees Are Paid Over $400,000 A Year”, published on 2/7/14,)

        “Consider Redwood City, where three fire captains and one firefighter made between $434,274 and $452,733 in total compensation in 2012. One police officer made $463,690 in total compensation. In all, nine employees made over $400,000 in total compensation with a total of 33, mostly police and fire department employees, making over $300,000 in total compensation in 2012.

        Those are staggering sums anywhere, but in a city with a population of just 79,009, they’re a recipe for fiscal disaster.

        Redwood City is hardly alone. The city manager in Temecula, population of 105,208, made over $497,000, while the advisor to the city manager made over $436,000, both in total compensation. The Fire Battalion chief in the city of Milpitas, population of 68,800, had a compensation package that topped $494,000 in 2012.

        Then there’s the Orthopedic Surgeon in Kern County who took home over $1 million in pay and benefits in 2012.

        While compensation for public employees keeps driving up taxes, it’s also pushing California tuition sky high. Two University of California Directors made over $900,000 each in 2012, excluding the cost of any benefits. Thousands of UC and California State University employees made over $200,000 in 2012, excluding benefits.

        A Monterey County Secretary made over $146,000. An Alameda County sheriff took home over $541,000. The Parks and Recreation Directors in San Jose, Santa Rosa, Cupertino and San Mateo each made over $240,000.

        Thousands of firefighters made over $200,000 in salary and benefits in 2012, with hundreds taking home over $300,000.”

        That’s not a typo: a secretary made $146,000. $20K a month for Parks & Rec directors. (Maybe one of them is Amy Proehler?)

        Of course, the counter-argument to this is that the “average” public employee compensation is much lower, often cited in the $40K range. Of course, “average” includes new hires, part-time workers, and others that pull the figure down. And anyone who tells you that the cost of funding these pensions isn’t really a problem, that the unfunded liability shortfalls aren’t a serious concern, ask them (or yourself) this: If funds aren’t short of money to pay CURRENT (forget future) retiree benefits, why has CalPers annual assessment contribution for my little local city gone up by $3 million over the past few years?

        Another example of the employee unions themselves contributing to the problem? Two years ago (under Gov, Brown) CA passed some very modest pension reform aimed at eliminating “spiking” where unused vacation and sick days and compensatory time off was used to inflate the final year’s salary used to calculate pension benefits. So, now several cities and employee groups are suing to overturn that. Never mind that some employees accumulate these benefits amounting to the equivalent of TWO YEARS salary. That’s right: earn $100K a year, add two additional years in accumulated unused time off, get pension calculated at $300K. Awesome! For everyone except taxpayers, including folks where pension fund assessments have squeezed out funds for current services, from public safety and infrastructure to teachers and school supplies.

        1. Waking Up

          I wonder if Forbes possibly had an agenda when it published that “info”….hmmm. Propaganda for those who fall for the “welfare queen” analogy.

          1. Jess

            Of course, Forbes has an agenda, and it’s definitely anti-union, anti-worker, and anti-pension. But that doesn’t change the facts, the reality on the ground. Just ONE of those $400K pensions is the equivalent of TEN regular employee pensions of $40K per year.
            Pensions were invented (and augmented by social insurance like SS) to insure that retirees could lead a decent life without having to worry about keeping a roof over their heads or food on the table or being able to visit the grandkids, maybe even help with college. They were not intended so that high level public employees could retire and live like mandarins.
            The only war a person earns a $400-$450K pension is by getting that type of salary. Then he/she retires, their replacement gets the same general salary, and suddenly a municipal government is paying a combined total of close to $1 mil dollars a year to…TWO people. Taxpayers end up paying one person to do the job and another one the same amount for having done it in the past.
            BTW, IIRC, the new pension reform that passed her in CA a couple of years ago caps pensions at $75K per year, which I believe is inflation-adjusted. So somewhere along the line, enough folks seemed to have figured out that public pensions should not be the gift that keeps on giving in unlimited amount.

        2. bob

          Your diatribe demonstrates itself.
          PBS? Their ethics? Nothing. Just moving on to another point that “everyone knows”

          “Pensions!!! BAD!! Kill them!!!”

          1. Jess

            No, that is not my point. Here are few facts about me and my family:

            1. I’m in a union, and have been a proud member of two previous unions.

            2. My parents were staunch union members. They actually met at the union hiring hall where my mother was the secretary to the Business Manager.

            3. My father served three terms on the Exec Board of his union local, and two terms on the regional AFL-CIO Building Trades Council Political Committee that determined which candidates the unions would back.

            4. Later my mother worked for a local city for 25 years and retired with a modest CalPers pension as well as SS accumulated from her private sector days.

            Sooo, no, pensions are not bad. They are GREAT. Everyone should have a Defined Benefit Pension that is regulated and insured so that retirees never get shafted when companies go out of business or when management finds some creative way to shaft them. (See Bethlehem Steel, what’s happening in Detroit to public employees, and the shafting of GM and Chrysler retirees on health care.)
            That said, rank-and-file public employees do themselves, and the overall union/pension movement, NO GOOD when they allow these kinds of excesses to occur. It just gives the Arnold’s and the Koch Bros and the Pete Petersen types ammunition.

            If you’d like to offer an apology, I’ll graciously accept.

            1. bob

              All you offer is “ammunition” to back up Mr. Arnold, then claim to not support him.
              You and your apology are confused.

              This post is about how an guy who doesn’t like pensions is paying PBS to spread memes similar to ALL OF YOUR POINTS above.

              “I love pensions, but they do rape and murder, as seen here X and here X”

              You are the very definition of a concern troll.

          2. jonboinAR

            That’s not an adequate response. What he’s describing sounds like a fairly severe skimming off of our taxpayer dollars. It may be true or not, pervasive or occasional, but those are real-type questions to be answered. Dismissing him with the epithet of “troll” does not begin to help.

      1. Jim Haygood

        QE cut the yields on Treasury securities by a couple of percentage points, producing a period of negative real rates. This forced pension funds not only to double up on equities, increasing their risk, but also to seek out alternative investments such as (illiquid) private equity, (illiquid) venture capital, (illiquid) timber, and (illiquid) real estate.

        When the easy money of decent AA yields is taken off the table, pension managers are forced to hike risk and sacrifice liquidity. When the equity tide recedes in the next bear market, it will become painfully apparent who was swimming naked.

        1. cwaltz

          Considering the Treasury has had absolutely no problem back stopping banks or covering the costs of waging war I find the “concern” over funding pensions rather amusing in a sick way.

          Apparently we always have plenty of money for private profiteers but when it comes to fulfilling our promise to people who worked all of their lives we should be very, very afraid because THAT is where we draw the line on spending. *shrugs*

          I was reading an article the other day about how companies are trying to get people to consider their retirement and “save” for it. I wonder how many more rubes they’ll manage to con into funding the next batch of offshoring for corporate America while cheering the exodus of American jobs and actual benefits of labor. You can bet that any “concern” coming from corporate America about retirement of the people they have no problem exploiting and complaining about paying for over the years is only going to be steeped in disingenuity.

          1. McMike

            Oh absolutely. The estimated of the value of subsidies, guarantees etc for the banks is valued in the tens of trillions – as if you can value actions (and inactions) that saved the banks from literal extinction. The value of catching wile-e-coyote in mid air as he falls off a cliff. But in any case, trillions in gifts and backstops to be sure.

            Not a penny for pensions.

            That’s a good name for a book: trillions for banks; not a penny for pensions. A sequel to: trillions for banks, not a ha-penny for homeowners.

        2. swendr

          “When the easy money of decent AA yields is taken off the table, pension managers are forced to hike risk and sacrifice liquidity.”

          Bullshit. When yeilds go down, the employer can simply increase funding. No need for the pension manager to go to the casino.

    1. Jim Haygood

      Both the linked Reuters article and the CEPR study date from 2011. Long in da tooth, as it were. The CEPR study contains this knee-slapping truism:

      ‘Most of the pension shortfall using the current methodology is attributable to the plunge in the stock market in the years 2007-2009. If pension funds had earned returns just equal to the interest rate on 30-year Treasury bonds in the three years since 2007, their assets would be more than $850 billion greater than they are today.’

      Well, duh! And if my aunt had balls, she’d be my uncle. If pension funds had simply been in all Treasuries, all the time (like the Soc Sec Trust Fund), they would have earned far less over the preceding decades.

      In a desperate attempt to trade their way out of the hole they’re in, many pension funds have doubled down on equities. Giant Calpers now is two-thirds in equities:


      When the next bear market comes along, this wounded dinosaur is gonna be groaning and trumpeting, as it flops like a beached whale on the bank of the tar pits.

      1. McMike

        Guess who made billions of dollars first advising the funds get into equities, then betting against them, then advising them to get back into equities and also now into private equity scams….

        By the way, are you seriously suggesting that it would have been politically palatable in 2004 for the state governments to keep its money only in treasuries?

        1. Jim Haygood

          No. The CEPR paper implies that, with perfect foresight, pension funds could simply have sidestepped the 2008 crisis by hunkering down in Treasuries.

          But pension funds don’t do that sort of large-scale, drastic strategic timing. Most, as a matter of policy, have half to two-thirds of their assets in equities.

          That’s been great for the past five years. But in the next market decline, the bloodbath returns and the underfunding gets worse.

          1. McMike

            I served on a small pension board. Here’s how it works:

            – You hire a wall street firm to be your adviser.
            – The adviser advises you to invest in wall street.
            – The adviser rakes advisory fees, and also steers you into investments where they rake management and transaction fees. (While using your money to screw you in favor of their favored clients).
            – The pension board goes back to their regular work after their quarterly meeting, happily following the advice of their adviser.

            The only benchmark to watch is how are your peers doing. Not how is the fund doing; how are your peers doing. Up or down does not matter, you only must stay within sight of the pack.

            In fact, should you go out on a limb, and do what the pack is not doing (i.e contrarian investing), you expose yourself to legal liability and unwanted scrutiny.

            1. j gibbs

              The whole pension fiasco never should have happened. Companies and governments ought to pay people decently and allow them to finance their own retirement. Instead, we have a regressive income tax that forces people to jump on tax boondoggles that funnel billions into every Wall Street scam euphemistically called investing. The SEC provides a public relations front for this and savers are compelled to waste half a lifetime studying bogus stock reports and phony accountants’ reports. A few people luck out and become rich doing this; most end up with a handful of dust. The lucky few congratulate themselves on being smart, but the fact that a person made money yesterday in the market doesn’t mean he will make it tomorrow. Stock investing is speculation and nothing else; anyone who believes otherwise has never done it.

              1. MyLessThanPrimeBeef

                Private workers have a public retirement plan called Social Security.

                Public workers (I guess not all of them) have their private pension plans.

                Why not just go to one plan for all? And if people want more, try the different IRAs.

                  1. cwaltz

                    So let me get this straight, it isn’t bad enough that my spouse and I LOST over $10,000 when we became ineligible for Social Security since he gets a federal pension. Now we should also have to lose out on another $10,000 in money that was taken from his paycheck as tier 2 contributions to cover his federal retirement while converting us back to a system that we were ineligible for? That sounds fair. NOT.

                    1. MyLessThanPrimeBeef

                      The goal is to have one system that is good enough for everyone that we all want to fight for it, to be in it.

              2. McMike

                Well, it is true that tax preferences drive the current system, which ends up largely as a way to drive cattle to the killing floor.

                But it remains a fact that the reason we are where we are includes this:

                (1) companies used to desire pensions because it was actually a cheaper way to pay (i.e. deferred through the time value of money) and retain employees. Back when employees did not live so long.

                (2) Left to their own devices, most people won’t save. And having a lot of old people laying around begging on the street is a public nuisance.

                The solution to this was… wait for it… social security.

                1. MyLessThanPrimeBeef

                  I don’t know how secure is Social Security (because you never know), but so far, no one has to go through the torture some of these private pensioners have to go through.

                  Moreover, if all of us are in SS, the stronger we are to defend (and hopefully) improve Social Security.

                  1. McMike

                    Once the banks get done raiding the pensions, SS is next.

                    You can bank on that. (It’s the only pot of money left to pilfer).

                    1. MyLessThanPrimeBeef

                      The best defense is to unite together.

                      We can put SS people on these pensions or put these pensioners on SS.

                      Otherwise, we are just dividing ourselves, only to lose sight of the rich who don’t need any of these retirement schemes.

                2. jrs

                  of course whether or not people will save if left to your own devices becomes kinda meaningless in a world where “saving” = a stock market propped up with QE or a savings account that earns ZIRP.

    2. McMike

      No, it’s an argument for the States to spend less money on costly privatization schemes and on fund adviser fee ripoffs, and step up and pay their existing bills as promised.

      If the States walk away from an interest rate swap con job, it costs them hundreds of millions of dollars in fees. If they walk away from privatization deals, it costs them billions in fees. If they walk away from their pension contracts – contracts – it costs them nothing but some pissed off retired teachers and plow truck drivers.

      Or, they can just follow the corporate model, declare bankruptcy, and walk away from their obligations to decades of employees who worked for less pay in exchange for retirement benefits. Foolishly thinking that the government would keep its promises, and that Wall Street would leave a fat pot of money un-raided. They saps practically deserve to be fleeced.

  7. Dino Reno

    Obama’s MYIRA is the foot in the door to self fund retirement benefits leading up to the elimination of SS and government pensions. And you thought he was just being silly and nice.

  8. rob

    This is a good article about our current propaganda matrix.

    While PBS is not as explicitly bad as say FOX “info-tainment”,in a way it is worse.Only the most ignorant, and fundamentalist minded believe what they see on fox info-tainment, and those people will never see the light of day or reason.While people who consider themselves “educated”, watch and trust PBS.Even if they don’t agree with something, they still allow what is being shown before them to be weighted to as actually having a “point of view”,i.e.an opinion….not one they agree with, but valid because someone else has it…. blah blah blah..Right there the fix is in. Propaganda , works because it gets under and behind peoples defenses. The BBC has been doing this for decades.They are generally open and right minded,EXCEPT every time the establishment needs them to pass off disinformation to assure the status quo.Carroll Quigley had detailed some of the instances back in his 1966 book, “Tradgedy and Hope”.And it has been true for the last hundred years,in its current form.Look at what the hearsts and Pulitzers of this world, like at the ny times or wash post have been saying and doing.
    But now what those british roundtablers really perfected 120 years ago, is the history everyone knows..
    These new right wing versions are every bit as dangerous as the old establishment liberal ones,all of which have been against labor, pro corporatist, (though the old anglo’s were british federalists, which is the same as fascist/corporatist;since they all heralded private industry/corporations in a world that their investments were secured by tax payments and military might/state support of private money).
    What really bugs me as to PBS and NPR, is that they always have these funding drives. They always tell everyone that “MOST” of their operating dollars come from viewer’s. The collective public accounts for the biggest share of their income. But time and again, so much that it is the norm. Almost all of their content caters to the viewpoint of the minority of donors.i.e. the corporate donations and foundation money.Both organizations cater to the establishment, while crooning to the public.What is worse. Their content blindly supports those whose purposes are diametrically opposed to what is good for the masses, and planet, and every other living thing.PBS isn’t exxon mobil television for nothing.
    This is shameless propaganda, and why I never would give them a dime.Though If I could, I would give bill moyer’s operation something, or some of the individual outlets like pro-publica stations, who actually do good journalism. To attempt to go around the “front office”.
    What is really dangerous, with organizations like these that “seem” good. Is that they fill a perceived void in information dissemination. People want a “good” “commercial free” viewpoint. One that is light on dogma, and heavy on investigation and reason….They feel that what the corporate media doesn’t provide is done by these good folks at the public radio and tv broadcast outlets.The reality is that these public organizations are just another layer of the propaganda onion.
    And like hitler said in his “mein Kampf”, most people just can’t grasp that they are being lied to everywhere. That inability to fathom how debased some are, because they aren’t like that, is key to gaining their trust, and instituting “the big lie”.And we all know hitler was damn good at it…. good job PBS (and NPR), you have met the hitler sniff test.

  9. Banger

    I haven’t liked PBS for decades for all the usual reasons. It is not a “public” broadcasting enterprise and hasn’t been for a long time. It was once called “educational” broadcasting but after American oligarchs decided that exposing the public to the classics or contemporary drama/comedy was too risky and people wouldn’t understand it (how can they understand it if they never know about it?).

    Anyway, in “news” PBS along with NPR gradually lost their independence as producers, editors, and reporters realized that there was no future in pursuing the public interest or upsetting GE and other corporations–so the career path they followed was NPR/PBS with hopes of moving up to the majors like Fox or other large corporate news operations.

    These public broadcasting organizations are aimed at an upper-middle and upper-class demographic which attracts corporate donors and it is what it is. Full of mediocre entertainment featuring nostalgia for the rigid class system of the Britain of a century ago and news shows featuring an opportunity for officials in and out of government to spout their one-dimensional views.

    NPR is far worse than PBS in its worshipful adherence to the official Washington Consensus which makes it useful to monitor for those of us interested in the twists and turns of the latest official “line.” That is not to say that decent shows don’t exist there are still a few left.

    1. jrs

      PBS propaganda mostly struck me as the omission variety. Major issues that were occuring in the U.S. would be omitted so that the talking heads could announce the partisan ballgame and burn up the time talking about whether x helped or hurt this polician or the D or R party.

  10. The Derivative Project

    Thank you very much for this critical post. I had not realized the scope of the issue with PBS. The same issues are true with public radio. We believe MPR was instrumental in perpetuating the myth with the rise of defined contribution plans of a “trusted advisor”, who is none other than a snake oil salesmen, skimming profits from American’s retirement nest egg and delivering no value.

    Why Financial Literacy Failed: Wall Street Wrote the Curriculum and Spread the Message with the Help of Public Radio


    Public Radio Blocking Comments from the Public Defeats the Public Purpose

  11. Steve Roberts

    “Whether or not the foundation has direct editorial control of PBS news content, the series still appears to violate PBS’s rules against “pre-ordained” conclusions.”
    Ever watched a Bill Moyers interview?
    I love Frontline but their episode “Retirement Gamble” had some preconceived ideas about 401-k versus pension.

    1. Yves Smith Post author

      Reading comprehension fail. The issue is the connection of funding to content.

      Is anyone Moyers interviewed a program sponsor?

  12. OMF

    Coming from Ireland, I have a slightly more jaded view of public pensions, and semi-state and big-corporate pensions as well.

    In short, certain people are getting paid too much in the pensions for not enough lifetime contribution. This affects both management and the workforce. The idea that these pensions are “sacrosanct”, while created for very good reasons, has in effect been exploited by managers and employees to raid their own companies/public sector departments.

    I’m not familiar with the situation in the US, but that is certainly the situation in Ireland. The trouble for workers — not management — is that when the ponzi scheme collapses, the ordinary pensioners are left with nothing after management runs off with the entire fund.

    I am increasingly skeptical of the idea that mass adoption of pensions, private or public, in society is a sustainable proposition. Too much money ends up in the hands of too many incompetent managers who give it to too many young and boorish traders. This is a bigger problem than just public pensions. Is it a good idea for every worker in the western world to have a pension: Think before coming to an answer.

  13. nick

    In second to last paragraphy I think you’re looking for Paul Haaga as new ceo of NPR, not Gary Knell as new ceo of PBS.

    Gary Knell was ceo at Sesame Workshop before leaving for NPR in ’11 then leaving for National Geographic in ’13. Haaga recently replaced him at NPR and is indeed a republican hack.

  14. simjam

    A complaint to PBS is likely a waste of time in smoking out “corruptibles.” Better yet write the NY Times suggesting they run a story..

  15. rob

    While PBS and NPR are just another layer of the propaganda onion,.Even this blog chooses a certain group of subjects it deems not safe to discuss. Anyone who seems to see fit to point out why MMT isn’t a real “appraisal of how money is created”, and chooses to discuss alternatives to our monetary system that are not part of “the banker’s monetary system”,seem to be censored on this site. I guess yves and lambert have a viewpoint, and everyone else is only allowed to wander in the darkness, they provide..Maybe it is not intentional, maybe they just don’t know any better.

    Maybe there has never been a rebuttal as to why the Kucinich bill(HR 2990 112th congress) is the best plan around now, because they can’t think of one that would stand up to public review.Maybe they are too vested in the myth that MMT actually describes how and why money is created,and can’t go back on what they have already said. maybe they can’t see the difference in what has been around for 100 years, and what has been around for 10 years.

  16. McMike

    This is hardly the first blatant shameless piece of right-wing propaganda garbage PBS has enthusiastically broadcast.

    PS. Without checking, I would be willing to bet that PBS gets less than a quarter of its income from the actual public.

  17. Gregg

    We quit giving to PBS and NPR in the run-up to the Iraq invasion. Both were some of the most enthusiastic cheerleaders for war and they remain so.

    It has only gotten worse since then; the financial crisis reporting has been particularly biased through omission of basic facts.

    Always keep barf bags handy when listening to NPR; I need to use them when I make the mistake of turning on their blather. At least FOX does not make a pretense of objectivity.

    1. peace

      Call WNET to express your opinion
      E-mail WNET: programming@thirteen.org
      (212) 560-1313, then press 1#, then press 0 to speak to someone.

      I said, “I understand that your series “Pension Peril” is funded by the Laura and John Arnold Foundation and by law PBS is required to mention that in the video. Yet you do not do that. Can you tell me why not?” Agent, “Please hold.” 9 minutes later: Agent, “This is regarding the pension initiative?” Me, “Excuse me?” Agent, “Hold on.” 1 minute later, “By law PBS should mention who funds your programs, correct?” Agent, “Yes.” And by law you should mention that the Laura and John Arnold Foundation funds Pension Peril, correct?” Agent, “Hold on.” 2 minutes later, “What do you want? I’ll pass along your message to the manager?” Me, “Please respond to me at (my email address) why PBS and WNET does not follow the law and report in the video that Pension Peril is funded by the Laura and John Arnold Foundation.”

      1. Carla

        Good job, peace. I emailed your comment to myself so I will know what to say when I call my PBS affiliate (WVIZ in Cleveland) tomorrow. Thanks!

  18. Bri

    A pension system is no more or less benign than a 401-K. The problem is the unreasonable pension amounts promised are out of line with reality. Part of that is an actuarial issue due to a shrinking tax base as a result of decent paying private sector jobs being shipped overseas and replaced with Walmart greeters and fry-cooks (thanks Republicans and Clinton) and a near zero interest rate environment for over the past two decades (thanks Fed Reserve). The other major problems are the shell games like those used by Whitman in NJ and the quid pro quo of votes for benefits that exists between the public unions and politicians -typically Democrats. In the last instance you have a pro-union administration selecting a pro-union “arbitrator” to “arbitrate” the employment contract and pension promises between the union and the government entity. That’s how you get all the crazy stuff like employees retiring at 53 with a full pension and pocketing two years of paid vacation etc.

    It clearly isn’t a right/left issue.

    It is clearly a mismanagent and faulty design issue.

    The right wingers want to do away with them completely.

    The left wingers want to return to the unsustainable “glory days” that existed briefly post WWII when we had the only undecimated manufacturing base in the developed world.

    Neither wants to deal with reality.

  19. LillithMc

    PBS has been under threat of extinction from the right for a generation. The McNeil-Lehrer News Hour lost the left when McNeil was forced to resign due to his being a Canadian and ex-employee of the BBC. Way too left for the GOP and Lehrer caved.

    1. teejay

      Can you fill in any more detail on how McNeil left. This is the first I heard of this. He’s been
      “retired” for something over fifteen years. Can you point to any article/report etc. ?

    2. savedbyirony

      i don’t know about McNeil being forced to resign. He retired from being on air, but is still involved in the McNeil/Lehrer Productions business which started the show. And “The News Hour” has a long history of being a Corp. funded sanitizer of the news. This article dates all the way back to 1982.

  20. JTFaraday

    “You can bank on that. (It’s the only pot of money left to pilfer).”

    Yeah, “pilfer” is the key word. This is why these people needed to get put away behind bars, en masse, in the wake of 2008.

    At least George Bush put away Enron top execs Ken Lay and Jeff Skilling, some of his biggest energy industry campaign funders and his Texas cronies.


    They also put away people from WorldCom, (also located in some Deep Red state):


    Then the Bush Administration passed the Sarbanes–Oxley Act, which the Obama Administration chose to never use. Instead, the Obama Administration passed out Get of Jail Free cards all over Wall Street all over again, and then everybody started squawking about “Teh Austerity.”

    Way to miss the point.

    The point is that these people run scams. The “Austerity story” is the cover for the scams. Once they’ve redirected the cash flows where they want, so they can do what they want, there won’t be any “austerity”–at least not for them.

    Either we’re going to tolerate criminal scams or not. End of story.

    1. Waking Up

      “Once they’ve redirected the cash flows where they want, so they can do what they want, there won’t be any “austerity”–at least not for them.”

      In the early 1980’s many employers began replacing established company retirement plans with 401-k’s or simply dropping employee retirement plans. Supposedly this would allow employees greater control of of their retirement, but actually it was an intentional money making scheme for Wall Street. What it really did was provide greater cash flows to Wall Street through fees, etc.

      1. JTFaraday

        Well, in the 1980s they took the fees. They’ve moved on quite a bit from there. Now they take whatever they want.

  21. Cru

    Television is dead. The History and Science channels spend very little time tending to shows related to their namesake, PBS takes private funding, and reality programming is STILL here. Television has become a gigantic cesspool of commercial interest and viewers into a corporatist’s dream.

  22. steelhead23

    There is an interesting connection between this piece and the ones yesterday about lotto winners turning rightward and the money-grubbing by the Democratic Party causing it to turn rightward. That is, entering into the free market for donations, including donations from the mega-rich is likely to cause a disproportionate level of funding to be derived from the mega-rich and a rightward swing in organizational behavior. Even organizations as outwardly egalitarian as the Nature Conservancy are subject to this phenomenon.

    If one views a swing from egalitarianism toward hierarchicalism as immoral, then one has to conclude that extreme wealth is a force for immorality and extreme wealth inequality a force for moral conflict.

    Interesting direction you’ve been going lately, Yves et al.

  23. smartstrike

    It’s important to understand that the the idea that there is some sort of crisis in public pension funds is a canard.

    I strongly disagree. Government pension are the big untold crisis in the making. The Federal Government obligations mostly for Social Security and various government retirees and related benefits amount to $4.6 trillion dollars. Out of that total only $2.7 trillion is owed to Social Security Trust Fund, but $1.9 trillion is owed for government bureaucrats’ benefits mainly to Civil Servants and Dept of Defense.

    I don’t think that many people realize that government obligations for pensions and benefits could become a bigger problem than Social Security. At $2.7 to $1.9 trillion that the government owes for intergovernmental debt, the ratio of US Federal Indebtedness is at 1.4( which is an incredible amount that’s owed to Federal employees when compared to Private sector.) The ratio of private vs public employment is 28:1, which means that Government debt for each Civil Servant and military retiree increased 39 times that of Social Security recipient.

    The future cost of government retirees is going to go through the roof as Public wages like CEO salaries ballooned.

    Public Civil Servant and military obligations pose a funding threat to Social Security and welfare of future retirees–this is not a canard.

    1. Yves Smith Post author

      Reading comprehension fail. The post is about the pensions of state and local government employees, and many of them are not eligible for Social Security.

      And we’ve discussed Social Security at length. It’s NOT in trouble. The concerns raised are regarding shortfalls more than 20 years out, which is far too long in the future for reliable reporting (particularly given the drift of policy to kill old people faster). The CBO has been partisan in promoting the scaremongering (it’s even worse regarding Medicare). If Social Security does look like it is going to have a shortfall after 2035, the very simple fix that should have been implemented a long time ago, ending the cap on incomes subject to FICA, will take care of it.

      1. FederalismForever

        While removing the FICA cap may be “a simple fix” in theory, just how “simple” do you think it will be to actually pass such a large tax increase? You’re talking about an effective 13% surtax on all income above the current cap. As a matter of political reality, that doesn’t appear to be simple at all, with no recent precedent of any similarly large tax increase being enacted simply.

        Simplicity aside, the solution you propose flagrantly violates principles of inter-generational justice. The fact is Social Security would be in fine shape for far longer than 2035 if Congress had just left the 1983 reforms in place and refrained from systematically raiding the “trust fund” for general revenue purposes. But they couldn’t leave the trust fund alone (more precisely, they “issued” non-marketable treasury securities that will be redeemed via future tax increases – effectively the same thing as if they had simply “raided” the trust fund), and as a result the generation that enters the workforce when your “simple” end-the-FICA-cap solution takes effect will have to labor under a much higher tax burden but with no corresponding increase to the SS benefits they will receive when they eventually retire. How is that a just result? Why should future generations have to pay the price for the budgetary failures of prior generations? If one generation fails to adequately budget for benefits that it votes for itself, why shouldn’t that generation have to bear the burden in the form of reduced benefits?

        1. Carla

          “While removing the FICA cap may be “a simple fix” in theory, just how “simple” do you think it will be to actually pass such a large tax increase? You’re talking about an effective 13% surtax on all income above the current cap. As a matter of political reality, that doesn’t appear to be simple at all, with no recent precedent of any similarly large tax increase being enacted simply.”

          As a matter of political reality, when the 99% realize that we ARE the 99%, removing the FICA cap will be a slam-dunk.

  24. Banger

    PBS and NPR both had a golden age and then went down–we are now at the tail end of the Iron age–time to bail on them.

  25. savedbyirony

    The Bill Moyers’s website posts a weekly round-up of “money and politics reporting”. Would LOVE to see this article appear in that forum.

    1. Yves Smith Post author

      Moyers produces his own content. The show under discussion was produced by WNET, the flagship station for PBS. Moyers is funded separately, see the banner at the bottom of his site:

      Funding for Moyers & Company is provided by Anne Gumowitz; Carnegie Corporation of New York; Ford Foundation; The Herb Alpert Foundation, The John D. and Catherine T. MacArthur Foundation; Park Foundation; The Kohlberg Foundation; Barbara G. Fleischman; and by our sole corporate sponsor, Mutual of America.

      1. savedbyirony

        That comment wasn’t intended as a criticism towards his show or website. I just think 1.) NC readers would be less surprised by this article than regular Bill Moyers followers 2.) his outfit has the gumption to post such an article on their news outlet and it fits their ongoing work well and especially 3.) i would love to see what type of responses it would illicit from his readers/viewers. (i also suspect that Moyers and Co gets more daily eyes on it than the NC site, but i don’t know or hope that this is true)

        1. Yves Smith Post author

          Moyers walks on the wild side a bit, but I don’t think he’s willing to poke a stick in the eye of the network that distributes his content. And he’s 79 or 80. He was supposed to retire at the end of December and I’m surprised (and pleased) to see he’s still doing shows.

          This isn’t moral cowardice on Moyer’s part as much as a style issue. He’s not into being openly confrontational (this would be seen as a personal attack by people at PBS). He seems to think it’s less effective than being a Texas cross between Mr. Rogers and Walter Cronkite. He plays a long-term game and it’s served him well.

          1. kimsarah

            I am glad Moyers, a true gem, has come out of retirement. We need more like him. When he first started covering these issues a couple years ago, he seemed stunned, and unconvinced. Being the sharp guy he is, he picked up on it quickly and the more bad news that comes out, the angrier he seems to get and the thirstier to get to the bottom of what’s wrong. His wit and insight are priceless.

  26. avg john

    How depressing. Money is power and power corrupts absolutely. I think I will put on some music, go to bed, and forget this type of corruption is everywhere we look.

  27. Bogwood

    Retirement was an interesting illusion supported only by cheap fossil fuels. The best to hope for Is support for true disability. Government employees should have no advantage as the extravagant pension promises evaporate.

    1. jrs

      Of course a lot of retirement funding does support true disability, how many 80s could work even if they could get hired?

  28. Benedict@Large

    It’s time to return to a HARD 90% tax rate. The wealthy have PROVEN beyond any doubt that they cannot be trusted to act responsibly with their money. That any person should even THINK that this is a responsible use of his wealth should be enough to have that person drawn and quartered in the public square. Maybe we can even make a PBS series based on the event.

  29. kimsarah

    PBS represents the neoliberal elitists and plutocrats — the big funders.
    Sounds a lot like the Democrat and Republican parties, doesn’t it.
    Follow the advice given in the last paragraph of this article. Withhold your donation. They’ll make their fundraising goals from the likes of the Koch Sisters, since that’s who they and the Dick Armeys of the world cater to anyway.

  30. kimsarah

    Looking at the larger picture, what we’ve seen thus far in under-funding public pensions and letting cities go bankrupt is just a little bad taste of what’s to come, if the too-big-to-fail Blobs like JPMorgans, Morgan Stanleys and Goldman Sachs have their way. They want to suck every public dollar they can, be it education, environmental protection, pensions or social security. To enable that, they’ll do whatever they feel is necessary to stack the political parties and gain the progaganda edge by taking over outlets such as PBS and the Wall Street Journal.
    Unfortunately for them, the NSA tool has been popped.

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