Wednesday, January 17, 2018

Homophobia, Racism, Sexism (HRS)




Homophobia, Racism, and Sexism were all in the news this past week. The Connecticut Post, for example, never tires of bemoaning the existence of these three terrible scourges in our society. Recently, it ran a large banner editorial complaining that someone had dared to criticize the nomination by Dannell Malloy, the lame-duck Democrat Governor, of Andrew McDonald, a State Supreme Court justice, to the position of Chief Justice.

In its editorial the Post characterized McDonald as “openly gay” and sharply blamed a politician who dared to object to the nomination. The politician had claimed that Mc Donald’s past indicated that he would be a highly partisan Chief Justice. After all, Mc Donald has been mired in Democrat politics all of his political life. His career began in the city of Stamford where he was a close associate of then Mayor Malloy. When Malloy was subsequently elected Governor, practically his first political act was to take Mc Donald out of the State Legislature and appoint him as his chief attorney with a nice six-figure salary. Not long after, Malloy raised Mc Donald to his current position on the State Supreme court.

Nevertheless, the Post was shocked that anyone would question Mc Donald’s impartiality, and raised the dreaded issue of homophobia. Apparently, any criticism of an “openly gay” person had to be motivated by homophobia. Moreover, implicit in the Post editorial was the belief that anyone who is “openly gay” may not be criticized for anything or for any reason.

In fact, anyone with their eyes and ears open these days must be aware that “openly gay” has become a badge of honor and that members of the LGBT community are not just equal to everyone else, but superior. I am not a follower of popular TV programs, but I suspect that gays are rarely portrayed in a bad light. How many criminals or offenders on Law and Order are gay? How many villains on Masterpiece theater are gay?

Racism is a much a weapon as homophobia in the hands of progressives. In a recent op-ed in the Wall Street Journal, black scholar Shelby Steele, a senior fellow at Stanford University’s Hoover Institute, wrote that complaints about racism in America have grown despite the substantial progress blacks have made in the past few decades.

“The oppression of black people is over with. This is politically incorrect news, but it is true nonetheless. We blacks are, today, a free people. It is as if freedom sneaked up on us and caught us by surprise.”

He argued that this freedom has difficult consequences. Freedom “meant we had to look at ourselves without the excuse of oppression.” The fact that “more than 4000 people were shot in Chicago in 2016 embarrasses us because this level of largely black-on-black crime cannot be blamed simply on white racism.” Those who cannot bear the responsibility of freedom, he argued, fall back on charges of structural or systemic racism.

Steele also noticed a potential backlash to NFL and Black Lives Matter protests:

“We blacks have lived in a bubble since the 1960s because whites have been deferential for fear of being seen as racist. The NFL protests reveal the fundamental obsolescence—for blacks and whites—of a victim-focused approach to racial equality. It causes whites to retreat into deference and blacks to become nothing more than victims. It makes engaging as human beings and as citizens impermissible, a betrayal of the sacred group identity.”

What Steele wrote about Racism could also apply to Sexism especially with all the charges emanating from the entertainment world. Women have also arrived and found unprecedented freedom and opportunity in American society, but now it is impossible to criticize any woman without being branded a sexist. Even liberal darling Matt Damon was practically tarred and feathered for daring to suggest that there might be different levels of sexual abuse.

Billionaire Oprah Winfrey has been virtually canonized as an American saint. Would anyone dare question her qualifications for the office of President in the same way that Donald Trump was lambasted during and after his run for the Presidency? Where are the insulting cartoons or blog posts?


During my lifetime homosexuals have come out of the closet, blacks have come out of the ghetto, and women have come out of the kitchen. They all sought equality but now activists among them cannot stop at equality but must gain superiority. In George Orwell’s “Animal Farm”, a classic study of revolution, the animals overthrew the oppressive farmer and raised the flag proclaiming that “ALL ANIMALS ARE EQUAL.” It didn’t take long for the crafty and strong among them to become leaders and proclaim that “ALL ANIMALS ARE EQUAL BUT SOME ARE MORE EQUAL THAN OTHERS.”

Thursday, January 11, 2018

Unfunded Pension Liabilities 2018




States all over the country are grappling with ever increasing unfunded pension liabilities. My home state of Connecticut trails such pension liability behemoths like Illinois and New Jersey but still ranks high on the danger list. In June 2010 the Connecticut public pension fund had $9.3 Billion in assets but its actuaries calculated that the State still needed an additional $21.1 Billion to meet all its pension obligations. It was only 44% funded.

By June 2016, six years later, State pension assets grew to $11.9 Billion, a 28% increase, largely because of the increase in the stock market. Nevertheless, despite Governor Malloy’s tax increases and commitment to funding pensions, the pension liability had grown to $32.3 Billion, a whopping 53% increase. After six years under Governor Malloy, the pension system was only 37% funded. What caused the increase?

The Governor, who will not seek re-election this year after serving two terms, has placed the blame for rising pension liabilities on his predecessors in office, as well as on the Legislature which has been controlled by fellow Democrats throughout his tenure. His complaint is a common one heard all over the country. If only previous politicians had had the guts to face up to reality and popular pressure, pension liabilities would be manageable. Instead, politicians just pushed the day of reckoning down the road.  

There is some truth in Malloy’s assessment but actually there is no way that any of these state public pension plans can ever be adequately or fully funded. To understand we can use a very simple illustration. Suppose you were to go to a financial advisor and state that your goal was to have $40000 a year in income when you retired. It would be simple for the advisor to say that assuming a 4% rate of return, you would need to have about $1 Million dollars at retirement. $1,000,000 times 4% provides $40000 per year. However, if you only assume a 2% rate of return, you would need $2 Million dollars in your retirement account. $2,000,000 times 2% equals $40000.

In other words, the expected rate of return that the actuaries use has a great deal to do with their assessment of future pension liability. Despite the increase in Connecticut pension assets during Governor Malloy’s tenure, the pension liability has grown even faster largely because of the low interest rate environment during those years. If the expected rate of return is reduced, actuaries must indicate that pension liability is growing. Politicians have no control over interest rates.

Lack of control is one of the reasons why most business corporations have dropped their defined benefit pension plans over the past few decades. A business could be thriving but its pension actuary could kill its balance sheet by claiming that it had to put billions more into the pension plan because of a decline in expected rate of return due to circumstance entirely beyond control. In a defined contribution or 401k type plan, a corporation’s contribution is a manageable percentage of payroll.

Businesses changed their pension plans years ago because they lived in a very competitive environment. States and municipalities were not in the same situation. Not only did public entities not worry about profits and losses, politicians had little incentive to strike hard bargains with public service unions. In business, management and labor sit across the negotiating table from one another. In government, the politicians negotiating with the unions are usually on the same side of the table.   

Not only do governors and legislators rely heavily on union votes and campaign contributions, but also they, their families, and friends usually gain from any benefit they grant to union members. For example, during his tenure Governor Malloy has appointed a number of Democrat legislators to high paying positions in his administration or on the judicial bench. While these politicians served in the legislature, actuaries would determine their pension liability as a percentage of their $35000 part-time salary.

But they need to serve only three years in their new positions to throw all pension calculations out the window. Instead of getting 60% or 70% of $35000, the actuaries will have to figure that they will receive the same percentage of some six figure salary. The governor has recently nominated his long-time Stamford Democrat friend Andrew McDonald to serve as Chief Justice of the State Supreme Court. McDonald’s minimal contributions to the pension fund during his eight years in the legislature will come nowhere near providing a six-figure pension.

What incentive did Governor Malloy have to change the pension system for non-union employees in his administration or in the state court system? In the last eight years he could have put all of them into a 401k plan with the stroke of a pen. While he talked about unfunded pension liabilities, his actions belied his words.


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Tuesday, January 2, 2018

Year End Review 2017


I’ve learned from experience not to make predictions or resolutions at New Year’s. But there is no harm in looking back over the past year and trying to assess whether it was a good year or not. In my opinion I rate 2017 as a good to very good year. Here are some reasons.

The World did not come to an End.

There are still real problems facing the world today but 2017 turned out to be a pretty good year despite dire predictions following the Trump victory. War still goes on in the Middle East but tensions in the Ukraine did not boil over. The North Korean nuclear threat is still there but 2017 did not see one of their missiles hit anyone.

The United States did not go down the Drain.

Predictions of doom did not materialize after Donald Trump was sworn in as President. Somehow, the nation has survived his first year as President. Despite unprecedented and vitriolic hatred on the part of his enemies, President Trump and his administration have chalked up a number of achievements. I said at the beginning of the year that it would be wise to see what Trump does as President rather than obsess over his words and tweets.

The Stock Market hit an all-time high with the Dow Jones Industrial average up 25%. Most global markets also hit record highs. At the same time, unemployment dropped to almost record lows. Interest rates remained relatively low. President Trump cannot be given all the credit for this economic boom but his election did not cause the economy to collapse.

In foreign affairs President Trump and the U.S. military must be given credit for the defeat of ISIS in Iraq, Syria, and the Philippines. The numbers of this terrorist organization have dropped from a high of 40000 in the Obama years to less than 1000 today.

Despite unanimous Democrat opposition, the Republican Congress passed a Tax Reform Bill.  Although it is still too early to tell, it would appear that the bill will benefit low income workers more than the well to do. With the increased standard deduction those living at or below the poverty level will pay little or no income tax. The so-called deductions for state and local income taxes (SALT) were cut back but that will largely hurt only high income taxpayers.

After some initial turmoil, President Trump seems to have put together a skilled and experienced set of advisors at the Cabinet level and on down. It appears as if adults and not ideologues are now in vital government offices. No one can seriously doubt that Judge Neil Gorsuch was fit to serve on the Supreme Court. Even a handful of Democrats were able to break the Schumer chains and vote for him.

Sexual Predators were exposed in 2017. The nation was “shocked, shocked” at the revelations and accusations especially when some of the accused turned out to be noted liberal supporters of women’s rights. Why were we surprised to discover that those in the entertainment industry who made movies filled with sexual abuse actually had “hands on” knowledge of abuse?

The New England Patriots won the Super Bowl and the Houston Astros won the World Series. Both teams are remarkable success stories that no one else seems willing or capable of emulating. In particular, the Astros managed to become a contender after being mired in last place only three years ago. Interestingly, while most major league scouts will not even look at a player less than six feet tall, the Astro’s second baseman, Jose Altuve became the league’s MVP at only 5’ 6”.

All in all, 2017 was not bad.  Just compare it to 1917 when Communist revolutionaries took over Russia. Last year there were celebrations of this history making event in certain parts of the world and on our own college campuses. However historians are still counting, and it would appear that over 100 Million lives were sacrificed on the altar of Communism.


I know a lot of bad things happened in 2017 and that things could get worse in 2018, but personally I will be very happy with another 2017. At the close of the year I even discovered a charming commercial with Goldilocks as spokesperson for the Purple mattress. Click on this link or see the video below.

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