Hedge fund billionaire, John Arnold, unions trade blows in Phoenix pension fight by Tim Reid

“A push to reform Phoenix's retirement system has become the latest front in a battle between union-backed groups and a Texas hedge fund billionaire over the future of America's public pensions. Hundreds of thousands of dollars, much of it anonymous out-of-state money, has been flowing to backers of a November 4 ballot initiative in Phoenix that aims to end traditional public pension plans for the city's new hires.

“The fight demonstrates the distrust and antipathy that exists between union-backed defenders of public pensions, and reformers who believe the unfunded costs of such plans need to be reined in. ‘Both sides have a very strong sense that we are at a tipping point when it comes to public pensions,’ said David Skeel, a bankruptcy law professor at the University of Pennsylvania. ‘The outside groups funding these fights are not mistaken to think there is a lot at stake.’

“Pension costs and debt were significant factors in the bankruptcies of Detroit, and California's Stockton and San Bernardino, where the bankruptcy judges have said public pensions are no longer inviolate. Efforts to reform pensions are ongoing in California and Illinois.

“In the Phoenix battle, over $40,000 has come from the Action Now Initiative, a non-profit fund run by John Arnold, a former trader at Enron, the defunct energy company. Arnold went on to make an estimated $3 billion running Centaurus, a Houston-based natural gas trading hedge fund.

“Arnold is a marked man by unions. The National Public Pension Coalition, which is mostly funded by national unions, asserts that through his philanthropic foundation, personal gifts and donations from the action fund, Arnold has given over $53 million to groups backing pension reform efforts in 17 states since 2008, including California, Rhode Island, New York, Florida, and now Arizona.

“An NPPC spreadsheet of purported Arnold pension-related donations ‘lays out for the first time in a very compelling way how bent on eliminating public pensions John Arnold is,’ said Jordan Marks, the NPPC's executive director. ‘Money speaks louder than words. John Arnold may claim that his aim is not to gut public pensions, but financing nearly every effort to attack pension benefits definitively proves otherwise.’

“Arnold, in an interview and through emails, denied allegations that he wants to eliminate public pensions. He said the NPPC spreadsheet is riddled with errors, shoddy methodology and bias, and has grossly and falsely inflated his pension-related giving. It is the latest in a long line of smear tactics to discredit his work and attack him personally, he said.

“Private Money: fierce fights, with successes and failures on both sides and bankrolled with tens of millions of dollars, have already been waged in Rhode Island and Kentucky, where laws altering retirement benefits for public workers were passed in 2011 and 2013, and California, where an effort for a statewide pension reform initiative faltered this year. Arnold bankrolled reform efforts in all three states.

“A ballot initiative to change the public pension system was overwhelmingly rejected by voters in Cincinnati last year, despite almost $500,000 in contributions, mostly from outside non-profit groups who did not disclose their funding sources. An effort in Tucson was knocked off the ballot after a lawsuit. The Liberty Initiative Fund, a Virginia non-profit organization which has given the Phoenix pension reform campaign $15,000, gave $100,000 to both the Tucson and Cincinnati efforts, according to the fund's founder, Paul Jacob. Jacob declined to identify his fund's donors. According to Arnold's own website, he and his wife made personal contributions of between $1 million and $5 million to the Liberty Initiative Fund between 2008 and 2014.

“One of America's most expensive ballot initiatives next month comes in Michigan: a constitutional amendment to guarantee collective bargaining, pitting unions against big business. Proponents have raised about $22 million, with opponents amassing $26 million.

“Addressing the NPPC spreadsheet, Arnold said some of the grants it cites have not even been made. Millions of dollars included have nothing to do with pensions, he added. The spreadsheet also assumes the absolute maximum for grants when a range of giving is reported…

“In 2012 Arnold turned full-time to running a philanthropic foundation with his wife Laura. According to the most recent tax filings the Laura and John Arnold Foundation has assets of almost $1.3 billion. Its goals are to improve outcomes for criminal justice, education, public accountability and research integrity. Arnold said the foundation also seeks to address the historical underfunding of public pensions, which he says is harmful to workers, taxpayers and cities and states, and to help find long term structural solutions fair to all parties…”

For the complete article: ANALYSIS-Hedge fund billionaire, unions trade blows inPhoenix pension fight by Tim Reid

Higher Education and the New Brutalism by Henry A. Giroux

“…In the United States and England, in particular, the ideal of the university as a vital public good no longer fits into a revamped discourse of progress, largely defined in terms of economic growth. Under the onslaught of a merciless and savage financialization of society that has spread since the 1980s, the concept of social progress has all but disappeared amid the ideological onslaught of a crude, market-driven fundamentalism that promises instant gratification, consumption and immediate financial gain. If dissident intellectuals were the subjects of right-wing attacks in the past, the range and extent of the attack on higher education has widened and become more insidious.

“As Ellen Schrecker succinctly notes: ‘Today the entire enterprise of higher education, not just its dissident professors, is under attack, both internally and externally. The financial challenges are obvious, as are the political ones. Less obvious, however, are the structural changes that have transformed the very nature of American higher education. In reacting to the economic insecurities of the past forty years, the nation's colleges and universities have adopted corporate practices that degrade undergraduate instruction, marginalize faculty members, and threaten the very mission of the academy as an institution devoted to the common good’ (Ellen Schrecker, The Lost Soul of Higher Education, (New York, N.Y.: The New Press, 2010), p. 3.).

“Memories of the university as a citadel of democratic learning have been replaced by a university eager to define itself largely as an adjunct of corporate power. Civic freedom has been reduced to the notion of consumption, education has been reduced to a form of training, and agency has been narrowed to the consumer logic of choice legitimated by a narrow belief in defining one's goals almost entirely around self-interests rather than shared responsibilities of democratic sociability…”

from Higher Education and the New Brutalism by Henry A. Giroux

“Freedom of the press is as empty a cliché as democracy itself” by Chris Hedges

“…The mass media blindly support the ideology of corporate capitalism. They laud and promote the myth of American democracy—even as we are stripped of civil liberties and money replaces the vote. They pay deference to the leaders on Wall Street and in Washington, no matter how perfidious their crimes. They slavishly venerate the military and law enforcement in the name of patriotism. They select the specialists and experts, almost always drawn from the centers of power, to interpret reality and explain policy. They usually rely on press releases, written by corporations, for their news. And they fill most of their news holes with celebrity gossip, lifestyle stories, sports and trivia. The role of the mass media is to entertain or to parrot official propaganda to the masses. The corporations, which own the press, hire journalists willing to be courtiers to the elites, and they promote them as celebrities. These journalistic courtiers, who can earn millions of dollars, are invited into the inner circles of power. They are, as John Ralston Saul writes, hedonists of power…

“The mass media are plagued by the same mediocrity, corporatism and careerism as the academy, labor unions, the arts, the Democratic Party and religious institutions. They cling to the self-serving mantra of impartiality and objectivity to justify their subservience to power. The press writes and speaks—unlike academics that chatter among themselves in arcane jargon like medieval theologians—to be heard and understood by the public. And for this reason the press is more powerful and more closely controlled by the state. It plays an essential role in the dissemination of official propaganda. But to effectively disseminate state propaganda the press must maintain the fiction of independence and integrity. It must hide its true intentions...”

From The Myth of the Free Press by Chris Hedges

(Nation of Change)

401(k) s Are a Fraud by Helaine Olen

“‘For retirement, the answer is 4-0-1-k,’ proclaimed Tyler Mathisen, then editor of Money magazine in 1996. ‘I feel sure that someday, like a financial Little-Engine-That-Could, it will pull me over the million-dollar mountain all by itself.’ For this sentiment, and others like it, Mathisen was soon rewarded with an on-air position at financial news network CNBC, where he remains to this day. As for the rest of us? We were had.

“The United States is on the verge of a retirement crisis. For the first time in living memory, it seems likely that living standards for those over the age of 65 will begin to decline as compared to those who came before them—and that’s without taking into account the possibility that Social Security benefits will be cut at some point in the future.

“The culprit? That same thing Mathisen celebrated: the 401(k), along with the other instruments of do-it-yourself retirement. Not only did they not make us millionaires as self-appointed pundits like Mathisen promised, they left very many of us with very little at all.

“You might be tempted to ask ‘what went wrong,’ but a better question might be ‘why did we ever expect this to work at all?’ It’s not, after all, like we weren’t warned. As early as 1986, only a few years after the widespread debut of the 401(k) and the idea that American workers should self-fund their own retirement accounts based on savings and stock market gains, Karen Ferguson who was then, as she is now, the head of the Pension Rights Center, warned in an op-ed published in the New York Times, ‘Rank-and-file workers have nothing to spare from their paychecks to put into a voluntary plan.’

“But her voice, and that of other critics like economist Teresa Ghilarducci, who is now at the New School and described our upcoming retirement crisis as ‘an abyss’ in 1994 congressional hearings, were drowned out by the money and power of the financial services industry, combined with their enablers in the personal finance media who proclaim even today that if we don’t have enough money set aside for retirement, it is all our own fault. It’s not.

“No one less than John Bogle, the founder of the Vanguard Group, might come forward to declare the American way of retirement savings ‘a train wreck’ — but no matter. A train wreck for you and me is a gravy train for the financial services sector. And in the United States, they are the only group that matters.

“Folly, Fees and Frauds: On their own, the amount of money Americans have put aside for their post-work lives sounds extraordinary. According to the Investment Company Institute, the lobbying arm of the mutual fund industry, we had $20.8 trillion in retirement savings, divided between individual retirement accounts, defined contribution plans, defined benefit plans, government plans and annuity reserves.

“When broken down to the individual level, those numbers add up to nowhere near enough money. According to a recent report issued by the National Institute on Retirement Security, the median amount a family nearing retirement has saved for their post-work lives is $12,000. As for the magical 401(k)? If a household where the earners are between the ages of 55 and 64 does have a retirement account, they barely hit the six-figure mark at $100,000—a far cry from $1 million we’re told we need.

“Yet whether the stock market goes up, down or sideways, the financial services sector makes out when it comes to your retirement accounts. How much do they earn? Astonishingly, we don’t know the answer. In 2008, Bloomberg magazine polled a group of pension consultants and came to the conclusion that 401(k) fees alone totaled $89.1 billion annually. Ghilarducci, who recently took a more all-encompassing look at American retirement assets, and included IRAs and pensions in her total, pegged the number at $500 billion.

“The industry gets away with this because it has what amounts to a captive audience. While there is some evidence that the recent Department of Labor requirement to reveal 401(k) plan fees to participants—something that was not even enacted till last year—has brought expenses down, knowledge does not leave consumers in the driver’s seat. If you discover your company plan is sub-par — the fund choices are poor, or the expenses are too high — all you can do is complain to your human resources department and hope they decide to change plans…

“Half of Americans have no workplace retirement accounts at all. As for the claim that those without workplace retirement savings plans can simply use Individual Retirement Accounts instead? Well, the fees the industry earns on IRAs puts the 401(k) money into the shade. Brokers not working in the best interests of their clients make the vast majority of IRA investment recommendations. Not only is this quite legal, the financial services industry is actively fighting attempts by the Department of Labor to change the situation, claiming it would not be able to afford to offer many low- and middle-income investors advice under an enhanced standard of care.

“Think about this for a moment: the retirement industry is actually admitting it doesn’t have a viable business model if it needs to put its customers first. So instead, the current situation allows for the indiscriminate marketing of all sorts of financial products as long as they meet the standard of ‘suitability,’ which could best be described as ‘okay.’

“Nowhere is this clearer than in the marketing of annuities to the public. Annuities are among the most confusing financial products in existence. When the academic experts discuss the need for Americans to consider purchasing annuities with their retirement savings so they don’t run out of money, they are talking about mean immediate or deferred annuities that is a product that gives you a guaranteed stipend for life in return for a one-time payment of money.

“But the products that make the big money for insurance brokers are the infinitely more complicated variable and equity indexed annuities. These are stock-market based investments. They come with multiple fees for consumers—and, high commissions for those selling them.

“Not surprisingly, the combination of consumer confusion and money incentives causes no small amount of bad behavior by the sellers of annuities. All too many people are sold annuities they have no business purchasing…

“Reality Check: The response by the financial service industry to our retirement crisis has not been self-examination. There has been no attempt to ascertain if it held out a false mirage to millions of Americans. Instead, financial hustlers and their media mouthpieces say the fault lies with Americans who either did not invest their savings properly or don’t have enough money saved up because we spend too much of it.

“This, frankly, ignores reality. Salaries for the majority of us are, when translated into constant dollars, falling. The median household is earning eight percent less income adjusted for inflation today than it did in 2000. In the first quarter of 2013, wages fell by the greatest amount ever recorded.

“At the same time, costs of things we can’t do without continue to rise. College costs have tripled since the early 1980s. The amount of money students are borrowing to pay tuition bills is skyrocketing, and all but doubled from 2005 to 2012 to $1.1 trillion. Healthcare costs have also soared. The New York Times recently reported the cost of giving birth has tripled since 1996. At the same time, patients are increasingly responsible for ever greater amounts of their medical expenses: credit reporting agency Transunion recently claimed an astonishing 22 percent rise in out-of-pocket hospital expenses over the past year.

“People find it all but impossible to save in this environment. Our national savings rate hovered around 10 percent in the late 1970s and early 1980s. Today, it is a little more than 2 percent. Just take a look at what happened when companies began to adopt automatic enrollment plans for 401(k) s, which is, forcing people to opt-out of retirement plans instead of filling out papers to join up. Yes, the number of people contributing to deferred contribution accounts increased – but so too did what industry insiders call ‘the leakage’ rate – that is, people borrowing against or withdrawing the monies in their accounts (and if that money isn’t repaid, the consumers withdrawing it need to pay penalties for accessing it). That number is now close to 25 percent.

“The truth is this: the concept of a do-it-yourself retirement was a fraud. It was a fraud because to expect people to save up enough money to see themselves through a 20- or 30-year retirement was a dubious proposition in the best of circumstances. It was a fraud because it allowed hustlers in the financial sector to prey on ordinary people with little knowledge of sophisticated financial instruments and schemes.

“And it was a fraud because the mainstream media, which increasingly relies on the advertising dollars of the personal finance industry, sold expensive lies to an unsuspecting public. When combined with stagnating salaries, rising expenses and a stock market that did not perform like Rumpelstiltskin and spin straw into gold, do-it-yourself retirement was all but guaranteed to lead future generations of Americans to a financially insecure old age. And so it has.”

Helaine Olen is the author of "Pound Foolish: Exposing the Dark Side of the Personal Finance Industry" and writes The Money Blog for The Guardian. 

To read the complete article, Click Here.

Second Amendment Foundation, Illinois State Rifle Association, Illinois Carry... Sue Illinois Over Restrictive Conceal Carry Weapons Residency Requirements

BELLEVUE, Wash., Oct. 23, 2014 /PRNewswire-USNewswire/ -- The Second Amendment Foundation has filed a lawsuit in federal district court in Illinois, challenging that state's concealed carry statute that restricts otherwise qualified non-residents the rights and privileges of carrying concealed firearms based solely on their state of residence.

Joining SAF in this legal action are the Illinois State Rifle Association, Illinois Carry, Inc., and ten individual plaintiffs, all residing in other states and who are licensed to carry in those states. Under the restrictive Illinois statute, only residents from states with "substantially similar" requirements to obtain a carry license are allowed to apply for non-resident licenses. 

Only four states currently qualify under that provision. They are Hawaii, New Mexico, South Carolina and Virginia. None of the individual plaintiffs reside in those states.

According to SAF founder and Executive Vice President Alan Gottlieb, this situation is not simply unfair, it is untenable and we believe unconstitutional. 

"Our plaintiffs have qualified for carry permits or licenses in their own states," Gottlieb said, "which means they have gone through background checks and other requirements that show they are responsible, law-abiding citizens. Yet, because of the current Illinois statute, their self-defense rights are suspended immediately after they cross the Illinois state line."

Named as defendants in the lawsuit are Attorney General Lisa Madigan, Illinois State Police Director Hiram Grau and Jessica Trame, bureau chief of the State Police Firearms Service Bureau. Plaintiffs are represented by attorney David Sigale of Glen Ellyn, Ill.

"This lawsuit," said Sigale, "is brought because it is unfair that otherwise qualified people from states outside Illinois, who work and travel in Illinois are barred from obtaining means to defend themselves in public solely based on their state of residence. We expect to correct that."

"We're asking the federal court for a declaratory judgment on equal protection and due process constitutional grounds," Gottlieb stated. "It makes no sense at all for Illinois to enforce such a narrowly-defined law that seems to recognize the rights of some non-residents, while dismissing the rights of most other non-residents. We can't allow that kind of discriminatory situation to stand."

The Second Amendment Foundation (www.saf.org) is the nation's oldest and largest tax-exempt education, research, publishing and legal action group focusing on the Constitutional right and heritage to privately own and possess firearms.  Founded in 1974, The Foundation has grown to more than 600,000 members and supporters and conducts many programs designed to better inform the public about the consequences of gun control.  

SOURCE: Second Amendment Foundation