It started modestly, but the design flaws were baked in the cake. I still don’t think it’s sunk in:
‘CalPERS has the exclusive power to determine the size and state and local governments’ contributions into the fund. As its investments tanked, it quickly boosted those contributions to compensate. By mid-decade, local officials were frantically telling the California press that the contributions were squeezing out other forms of spending.’
You really have to get the incentives right. It often starts with a promise of a ‘right’: To retirement, to health-care, to a living wage, to an overall standard of living. We’re all in this together. The future will be better. How can you disagree with that?
Then under the umbrella of the public good, and the promises made under contract, a CalPERS-type scenario isn’t uncommon given human nature, politics and economic scarcity.
Now just think about Obamacare.
Addition: California Democrats may be starting to address the problem.
-A link for Michael Lewis’ article about California politics, public pensions and Schwarzenegger’s time in office.
-California’s anti-immigration, anti-union Democrat: Full video and background on Mickey Kaus here.
Dream big: Via Reason: ‘California’s Public Transportation Sinkhole’ A great city deserves great art extravaganzas…: L.A.’s New Public Art Piece ‘The Levitated Mass,’ Or As The American Interest Puts It: ‘A Moving Rock’
The people who promise solutions to poverty and homlessness seem to be engaged in a utopian cost-shifting exercise which favors their interests and overlooks crime, violence and personal responsbility…hardly a way to balance the budget: Repost-Heather MacDonald At The City Journal: ‘The Sidewalks Of San Francisco’…
Some concentrated wealth on top, a stalled legislature with members who know how to play the game…and a service sector beneath…that probably can’t go on forever: …From The WSJ: ‘Joel Kotkin: The Great California Exodus’…