Tuesday Musings

A special edition of musings which are typically on Sunday.

A story today in the New York Times highlights that people who no longer get Unemployment checks have a financial hardship.  Well that is the point of unemployment checks and welfare checks having an end date.  To make you realize any income is better than no income and figure out a way to earn an income.  When unemployment checks end, you apply for welfare.  When welfare ends, I don't know what happens, but ever since the Clinton Administration reformed welfare with a GOP led Congress almost 20 years ago (ah, the benefits of working together in Congress), the number of people on welfare has been in decline.

A story bemoaning the decline in competition in local TV news as small market stations combine news rooms to remain profitable.  How much creative news occurs in a small market? How much investigative reporting is done by TV local news anywhere?  What happens to news dissemination if the broadcast of news is not profitable?  There will be no dissemination of news.  By the way, this is apparently happening in BTV.  This is not a problem worthy of a front page.

Sally Krawcheck agrees with me for banks on compensation but fails to extend it to the corporate world.

Joe Nocera column on Sally K's idea

David Brooks on the philosophical political debate that is going on but not being discussed because it doesn't fit into sound bites on the campaign trail and neither liberals nor conservatives want to debate it.  The column makes the case that the government has a traditional role in paying for infrastructure to facilitate commerce that improves economic well being and provides the tax revenue to pay for it.  It also makes the case that expanding the social safety net has to have limitations.  However, it does not address the issue that if you are going to limit the social safety net, you have to campaign on that point so the voters understand exactly what is going to happen and can make a conscious decision.

It also does not address the need to pay for the War on Terror, which has been 100% borrowed, by raising revenues or campaigning explicitly on the point that we are going to cut entitlements to pay for the War on Terror.  I, for one, do not want to see entitlements cut to pay for Borrowed War on Terror.

David Brooks on Alexander Hamilton's views applied to today

And lastly, an article that appeared on the need for pension plans to reduce their assumed rate of return and fund the pensions appropriately. Well, neither the public nor the private sector can be accused of managing this one appropriately and it is time for them to get real.  How are investments going to produce the assumed return of 7% or 8% over the next 10 years?  They are not going to generate those returns and it is time to get realistic with this and manage it accordingly.  What will happen is unfunded liabilities will become apparent and either pension expense will go up or pensions will have to be negotiated down.  Both happen in the private sector when pension expense reduces earnings causing declines in share prices and in extreme cases reduces pensions when a company goes into bankruptcy.  However, the public sector does not have the bankruptcy option. It must be done either politically through an honest open process (see Wisconsin & Ohio for a failure to openly campaign on their plans) and or through the yet to be seen or tested bankruptcy of a state.  We are seeing bankruptcy at the city level and pensions are being reduced.  Welcome to capitalism municipal employees.  This is why workers need to be active participants in understanding the competitiveness of their employer and working with them to maintain competitiveness.