Tuesday, March 1, 2011

Chris Christie: Rising Star or Opportunist/Demagogue?

Matt Bai’s fawning coverage of the Governor of New Jersey and star stand up of the Republican party, Chris Christie, in last Sunday’s New York Times cover story, is leavened with unintended humor and leaves out some pertinent facts.

Matt Bai is being a little cute and/or naïve when he talks about Christie’s campaigning:

About the only thing [Christie] had going for him was that Corzine was pervasively unpopular. And so rather than come up with a lot of actual ideas, which Corzine would then be free to oversimplify and distort in a barrage of television ads, Christie simply offered up a bunch of conservative platitudes and tried to make the campaign a referendum on the Democratic governor.

I am bolding the pertinent clause for emphasis. First of all, all politicians oversimplify and distort in TV ads. That’s why their campaign contributors are the first persons who’s calls they take. They need the money for lots of ads. Secondly, Bai makes it sound almost as though it was preferable to have platitudes and nothing but attack dog ideas than actual long-term planning.

Another funny bit from Bai is:

[W]hat Christie has done, essentially, is to blast his way into the final frontier, taking on the public-sector unions that have come to wield enormous political power.

If he’s looking to find sources of “enormous political power”, I suggest he look at some of Christie’s contributors.

One major reason (the elephant in the room) there is a $1 trillion gap between what the states have promised in pension and benefits for their retirees and what they have on hand to pay for them is that pension plans were the fat dumb cows for Wall Street speculators.

One example is CALPERS (California Public Employees Retirement System), the largest public workers union, which provides retirement and health care benefits to more than 1.6 million public service workers in California. Its total fund market value as of 2/25/11 is $229 billion. Very tempting. During the go-go years of the 00s leading up to the economic collapse in 2008, CALPERS was sold land that turned out to be worthless and of course, the structured financial vehicles that turned out also to be worth pennies on the dollar.

Governors and others jumping on the band wagon will tell you that teachers, policemen, firemen and others are responsible for their budget shortfall. That is malarkey. The problem is that pension plans were irresistible. What entities do you think were the cash cows gleaming in the eyes of Wall Street financial wizards? Who do you think bought all the collateralized debt obligations (CDOs), the pooled subprime mortgage-backed securities that were tied up in a triple-A labeled bow by credit rating agencies like Moody’s and Standard and Poor’s, which were then downgraded faster than a bungee plunge?

Investors are suing banks to get their money back for being sold a bill of goods. Maybe Governor Christie and everyone else decimating the lives of public service workers for political gain should follow the lead of savvy investors and sue the banks. That will certainly make up for budget shortfalls (which in the case of Governor Walker of Wisconsin, didn’t matter anyway because the unions agreed to his cost concessions).

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