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California Non-Sense on Cents

Posted by Larry Doyle on August 27, 2010 5:07 AM |

If a picture spells a thousand words, then two graphs of the employment situation and future pension obligations in California far exceed the works of William Shakespeare.

Should we file these under the heading of “American Tragedy”? Would these works be referenced when somebody looks up “future default” or “unsustainable”? These future pension obligations did not happen by accident. The projected figures represent the plundering of California municipalities with subsequent tax burdens left to future generations. How did this happen? Let’s “read” the following “tomes” provided by the California Department of Finance and highlighted in The Wall Street Journal,


You might almost think you were reviewing a “Greek tragedy”.

This is no way to run a state or a country.

Larry Doyle

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I have no affiliation or business interest with any entity referenced in this commentary. As President of Greenwich Investment Management, an SEC regulated privately held registered investment adviser, I am merely a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

  • Lou

    What is the obvious mentality at work here?

    “Let me get mine and let somebody else worry about cleaning up the mess.”

    • fred


      It sounds like your talking about the elephant in the room that noone is willing to acknowledge. UNIONS.

      Unions still function with a cyclical mentality even though these times demand structural change, (the economy must delever and establish a new baseline).

      As an example, often, rather than taking an across the board paycut thereby saving jobs, union leadership “dares” management to do layoffs instead.

      Unions lobbyists are among the most powerful in Washington and in state capitals across the country. If you think lobbyists are a problem then you have to include unions in that group.

      How else can you explain how the United Auto Workers union received preferencial treatment in the GM bankrupcy and reorganization? It is anticipated that the UAW will come out whole while other unsecured creditors of the same legal status, get 30 cents on the dollar.

    • Jack Polidori

      With 6% of the private sector of our economy unionized, how can you seriously posit this pathetic argument?
      Why instead are you not asking questions of the corporate sponsors of these plans and their failure to fund them over time?
      Jack Polidori

  • Rob

    California should serve as a warning to other states with trouble around the corner, including my home state of New Jersey. State workers and special interests have used governments Luke a piggy bank while claing to work for the people. Moreover, the argument that public sector wages are lower than private has not been viable for at least a decade. There is a reason why blue chips got rid of pensions and make employees contribute to their healthcare, simply because it make sense.

    The only way to save CA and maybe NJ is to reduce spending via privitazation of non-essential state functions (car inspections for one) and reform pensions. Anyone that abused the system should have their pension modified and it maybe best get rid of the garuntee of pensions all together. The system just doesn’t work well.

  • Zee-man

    Maybe California might think about seceding so the rest of the nation does not get stuck with the tab!

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