Image courtesy New York Times
Regular readers of the blog know that Treasurer Raimondo has become a lightening-rod for criticism of the state’s recent changes to the public employee pension system.
As a tactic, I’ll admit it’s a good one, simultaneously riling up the base and drawing media attention to the union and retiree’s position. It’s also the first salvo in what’s bound to be a contentious Democratic primary for the Governor’s office. But is the General Treasurer actually at fault? Consider the duties of the office.
Duties
The General Treasurer receives and disburses all state funds, issues general obligation notes and bonds, manages the investment of state funds and oversees the retirement system for state employees, teachers and some municipal employees. She is also responsible for the management of the Unclaimed Property Division, the Crime Victim Compensation Program and the state-sponsored CollegeBoundfund.
Noticeably absent is any mention of negotiating union contracts. That’s simply not her job. What critics would have you believe is that Treasurer Raimondo should have essentially “gone rogue” and usurped the Governor’s duties and possibly those of the General Assembly. L’état, c’est Gina? I’m not convinced. This blog has even gone so far as to suggest that the General Treasurer should be more concerned with “main street” than with the state’s investments and bond rating.
I’ve been a fairly consistent Raimondo supporter, but I was also present at last year’s State House protest adding my voice to the position that the plan asked too much of the neediest pension recipients. In fact I agree, as Rhode Island Federation of Teachers and Healthcare Professionals president Frank Flynn put it, that it’s “not a simple math problem as some people describe it.” But that isn’t the job of the General Treasurer. For a treasurer, it is a math problem, and we shouldn’t expect otherwise.
And Raimondo spent an inordinate amount of time speaking with voters, union members, and retirees throughout the state before making her proposal. Oddly that’s what now seems to rile opponents. As Paul Valletta, the head of the Cranston fire fighters’ union said, “It isn’t the money, it’s the way she went about it.”
I’m not sure what else she could have done. Valletta is essentially complaining that the General Treasurer acted within the duties of the General Treasurer. That’s what we as taxpayers pay her to do! If the unions and retirees are unhappy with the absence of a formerly negotiated outcome, let’s be honest. It’s the Governor, not the General Treasurer, who’s to blame.
I’ve also been concerned that many progressives seem intent on framing the General Treasurer as some union hating, right-wing ideologue. It’s not a fair characterization given that we know little yet about what priorities Raimondo would bring to the Governor’s office, and what we do know is largely in line with progressive priorities (a social liberal who believes in marriage equality and respects the rights of immigrants). During the Carcieri years, we’d have been thrilled with a candidate with progressive credentials a fraction of hers. Yes, she has been at the forefront of a pension reform movement heralded largely by the fringe right. But to assume that makes her one of the fringe right, ignores how seriously underfunded the pensions have been here in Rhode Island. It’s quite a different thing to enact reform out of a sense of obligation than to do so because of an ideological desire to eliminate them entirely.
Ms. Raimondo also learned early on about economic forces at work in her state. When she was in sixth grade, the Bulova watch factory, where her father worked, shut its doors. He was forced to retire early, on a sharply reduced pension; he then juggled part-time jobs.
“You can’t let people think that something’s going to be there if it’s not,” Ms. Raimondo said in an interview in her office in the pillared Statehouse, atop a hill in Providence. No one should be blindsided, she said. If pensions are in trouble, it’s better to deliver the news and give people time to make other plans.
How much easier it would have been, how much less detrimental to her political future (at least with the progressives of the state) to simply enact some changes around the margins and kick the can down the road for someone else to address (historical the way most pols have handled the problem). Should we as progressives be critical of the Raimondo plan? Absolutely, but let’s not shoot down a potential rising star before she’s even had a chance to announce her platform.
Rising stars that use an Enron billionaires money to engage in class warfare against working people?
Russ, sorry man, but the more we find out about how this all went down, the more it stinks. For example, the Arnold Foundation is run by the former Chief of staff for Dick Armey…yes, THAT Dick Armey, one of the key founders of the Tea Party, a man named Denis Calabrese, who ran a far right wing group in Texas called the Patriot group.
The person who writes all of the “research” that advocates for pension reform at Arnold sits in the George W. Bush Education Reform Chair at SMU in Texas and used to work for Mitt Romney when he was Governor of Texas.
The intersection of corporate education reform and Wall Street trying to re-direct power away from working people back into their own hands should be enough to give progressives pause. The fact that the argument was made along the lines of “its either your kids school or your teachers pension” should make every progressive cringe, especially now that we know that that message was bought and paid for by right wing billionaires from out of state with a well known anti-union, anti-progressive, anti-Progressive agenda.
The real question is…who was using who?
Out of curiousity, did you vote for Obama? What kind of foundations fund advocacy for Race to the Top? Thomas Friedman and the WSJ certainly love the program. Should we consider Obama anti-union and anti-progressive? I think I might be quicker to make that leap than you!
Even David Koch is pro gay marriage. Does that fact alone make him progressive? I don’t think so.
Don’t compare Gina to Obama. Compare her to RI state officers.
What other state officer has attracked outside, conservative, billionaire, anti-union dark money into Rhode Island?
What other state officer has threatened members of the General Assembly with ouster if they don’t vote how (s)he wants (against unions)?
What other state officer has delivered and viciously attacked any member of the House that didn’t align with his/her agenda (because they were too liberal)?
What other state officer has accepted adoring national press from Peggy Noonan and the rest of the Roger Alles crew?
What other state officer has accepted awards from the Ayn Rand Inspired Manhattan Institute, and then gone on stage and promoted the privatization of our public goods to the billionaires in the room?
What other state officer has pumped their fist in joy at the prospect of real middle class workers losing their retirements?
What other statewide officer used Texas Billionaire money to buy and iPad and offer Brown students free pizza along with the chance to win said iPad if they come to the statehouse and watch her pump her fist in joy as “supporters”?
What other state officer has outright lied, said people keep all they earn (if they did, there would be no savings), and then structures a bill that doesn’t allow people with their biggest life savings in the system to take it out before she makes changes?
What other state officer calls for middle class sacrifice and says nothing of upper class sacrifice (this is like Obama just asking for the mortgage interest deduction, no taxes on the wealth)?
What other state officer was so noticeably silent on tax equity? (It costs little to way in, and she has deep, deep pockets)
What other state officer worked for Bain Capital?
What other statewide officer had ethics hearings because they ‘invested’ public money in the company they just ran prior to being elected (and in which they are still the primary shareholder)?
When’s the last time Liz Roberts was so proud she’d accept a hyper conservative award for stripping the middle class of retirement benefits? I don’t think she would. I don’t think Chaffee, Kilmartin or Mollis would do it either.
Face it. She is being judged by her actions as a general officer of the State of Rhode Island.
And she has acted exactly 100% like the Koch brothers. Like a private equity plutocrat. Everything she has done is what they would do. Every bit of praise she gets comes from those who would praise them.
If it walks like a duck
If it talks like a duck
It’s probably a duck
Gina has built herself a narrative through her actions that most charitably can be characterized as that of the Wall Street wing of the Democratic Party, demonstrating the incredible political tone-deafness of an attention-seeker in her Manhatten Institute and business media forays. And the Right has gladly used her appropriately.
I love her family’s social roots and her academic and career accomplishments. But at age 40 she is already firmly an establishment figure.
This in my mind is the best that can be said of her. It doesn’t matter if there’s anything worse. She has already disqualified herself to be governor of this state.
Who is Gina Raimondo? I think that is the main question. She hasn’t even been in office for two years. She became a folk hero about two months after she was sworn in. How does anyone rise that quickly?
My advice to anyone concerned would be not to directly attack Raimondo. Gina is just one of the hydra’s heads. Follow the money instead. She is a public relations phenomenon. The forces behind the various neo-lib movements, with the Orwelliam “reform” twist inserted into the name for these movements, are hoping the focus will be on Gina when anyone questions the pension deal promoted by a local, very politically connected advertising agency with the help of just about all the corporate media and, of course, Engage Rhode Island which has become synonymous with the ad agency in question. The most frightening thing about the pension reform putsch is the way public opinion has been so effectively manipulated by turning the public against anyone whose compensation has kept pace with the economy through the massive inflation of the seventies and the boom and bust cycles, thereafter.
I think it is important to realize this is not just about teachers’ unions. I think it is important to understand R I’s place in all these so called “reform” movements. Rhode Island, and particularly places like Central Falls, is being used as a petri dish to see how far finance, real estate and insurance (FIRE) can push their neo-liberal policies so these policies can be tried elsewhere. This new player, Arnold, indicates very clearly how that works. I think the people here should be very resentful of the shock doctrine tactics used by the pension “reformers” and education “reformers”.
There needs to be change, for sure. Unions have been asleep at the wheel for decades, unconcerned with anyone outside their own narrow interests. That is why they have so much trouble getting the public behind them. Unfortunately, the public does not understand just how well financed the neo-libs are, whether they be social conservatives or social liberals. The “let them eat wedding cake” talking point is patronizing. As has been pointed out elsewhere, both David Koch and Lloyd Blankfein support marriage equality.
BTW, I voted for Jill Stein but would have voted for Obama if I lived in a swing state. I consider that choice little more than extortion. Free Bradley Manning.
Can we all agree that Gina is to blame for the very poor performance of our pension fund? She only got a shockingly low 1.4% return.
We would have done better if she just went to treasuryonline.gov and bought t-bills or bonds.
Actually, the whole state would have done better if we followed that advice from the get-go.
Agreed! Or why not Rhode Island bonds, which have slightly higher interest rates. That would have the added benefit of driving down our borrowing costs.
This isn’t birthday money that is being invested, its a $7.5 billion funds with diverse investments. There is also a 10 member investment committee, which the general treasurer is the chair of, that decides what institution manages the funds, Raimondo doesn’t actually picks the long term investments.
The fund already invests about 20% of its assets in fixed income, which included things like municipal bonds and t-bills. Maybe she would have done an fraction of a percent better buying 10 year t-bills, but everything less than are selling at less than 1%, including a practical 0% return for 1 months notes. Perhaps she could have doubled the returns by using all of the the funds’ assets to buy $7.5 billion worth of 30 year notes which are selling at 3%, but we would then have to lower the expected rate of return down to 3%, which would make the unfunded liability explode. Also, there funds would just barely keep up with inflation.
Sorry if I sound like a broken record, but would you similarly blame Obama for the economy in 2009? Notably Raimondo decreased the expected average return (and was criticized by some for it). Even if we assume she is responsible for the return, a single year is not the same as the long term average. Some years are good. Some not so good.
What would Raimondo have to do to make her progressive credentials suspect in your eyes?
Take a seat on the board of Cato? Join the Heritage Foundation? Appoint Madoff the head of the retirement board?
What exactly would it take?
And Russ, I know you didn’t answer this, but I thought about it, and I want to be fair.
So I’m going to list some things Gina could do to help convince me that she is indeed a progressive, rather than an economically regressive, socially liberal libertarian.
1) Come out publicly in favor of tax equity, and put a significant chunk of the multi-million dollars she has towards a media blitz the size and scope of what she did for pensions.
2) Admit that accepting praise from right-wing ideologues was a mistake. Apologize. Stop doing it.
3) Apologize for any public money that gets funneled to Point Judith Capital, and immediately and voluntarily stop any investment that perpetuates potential conflicts of interest.
4) Apologize for using EngageRI as a tool for threats and retribution upon Democrats in the house who didn’t vote her way. Stop doing it.
5) Consider investing a chunk of the pension fund into in-state infrastructure that benefits the middle class rather than Point Judith Capital (which moved out of state) and the other special interest deals. Bill Clinton was just promoting something like this.
She has the power to do any or all of the above things. But I’m willing to bet dollars to donuts that she won’t (at least she won’t unless a Taubman poll comes out showing she’s slipping).
She could even just offer to sit in the Room with the economically regressive, socially liberal, former Republican Lincoln Chaffee and talk for chrissakes. It isn’t that hard to go to a meeting. At least it’s not when you’re in state.
@Russ: It’s two years of bad returns now. Maybe things will pick up in the future, but you should never be underperforming Rhode Island bonds.
Define bad returns? Returns are relative, the only way to determine if they are good or bad is to compare them against other funds or an index. 1.4% would probably be a bad return during a bull market, but just about anyone would have signed up for 1.4% while the financial markets collapsed in 20. Municipal Pension funds generally returned between less than 1% to 1.8%, so the returns were more average than bad, and that’s is over a one year period. Also, its not like the general treasurer is directly managing the funds, picking the stocks and bonds to buy.
No.
www.reuters.com/article/2012/07/23/us-usa-pensions-finreturns-idUSBRE86M1AA20120723
Russ,
This is just another example of union retaliation plain and simple. It has nothing to do with her being a progressive and they certainly don’t care to hear her platform. Where was Pat and Rhody Town back in November when Fox and Paiva-Weed breezed through their respective elections unscathed. They’re the ones that introduced this legislation. Ironic they’re accusing Raimondo of attacking, bullying, fist pumping, and lying. It’s just more union lies and bullying. If they want to picket her fundraisers and scream from the hills, then it will only make her more appealing to everyone else.
Dog,
I’m just a lowly student. I’m not in any union. And frankly, I don’t like the Fox connection to EngageRI either. I don’t know what, if any, connection Paiva Weed has. Perhaps you could enlighten me.
But I really don’t like Citizen’s United and the dark money groups.
And there really is a billionaire somewhere in Texas who’s out to affect change in Rhode Island law.
If you think that’s a-ok, then good for you.
But I reserve the right to strongly disagree.
Obama has been HORRIBLE on union issues. Radically so in some cases. Arne Duncan has set education back in this country decades. His support for the firing of the CF teachers was unconscionable. Race to the Top is one of the worse things to happen to education since No Child Left Behind. I think his embracing of corporate education reform is a reason I would not consider him a progressive and is a real reason why a unified progressive movement cannot launch in this country.
I truly hope a second term changes course.
Well, maybe I shouldn’t even get you started on Rahm Emanuel.
dianeravitch.net/2012/09/06/rightwing-foundation-in-chicago-backs-rahm/
People have gotten accustomed to disgrace. Benumbed.
Therefore, to some, the Enron scandal was just a blip on the radar screen.
And, besides, John D. Arnold was not prosecuted.
Does that mean that he was not involved?
Did he go to work most days?
Did he take money and bonuses out of the company?
Did Enron, when it finally went down, take multi-billions of public pension money with it?
Did it pretty much bankrupt its own privately pensioned employees?
Was Arnold interfering with California public pensions, even as another wing of his company fraudulently created rolling electrical blackouts and brownouts in order to make billions?
Does John Arnold produce wealth or does he merely make bets in order to benefit, primarily, himself?
The answers are researchable, but most of them are obvious–and disgusting.
Eighty thousand million dollars, conservatively rounded off, I’m sure, is too much money to just go up in smoke. That’s what Enron cost the economy and the regular people who worked for it.
All too many financial criminals just walked away–some with bonus money.
Russ Conway, straighten somebody else out.
We now know that Gina Raimondo is a good mom, a rising star politician, and a person who takes filthy money from even filthier billionaire gamblers, in her job as state treasurer.
Anyone who has some shred of ethics and morals knows that she is disgracing herself, her job, the pensioners and active public workers of Rhode Island, and the state itself.
Progressive? Hell no.
GINA, SERIOUSLY, GIVE BACK THAT FILTHY MONEY. YOU ARE DISGRACING US.
Russ, I’m not sure I understand your argument that “there are other Democrats who do things that suck, so progressives in RI should like Raimondo.”
Rahm Emanuel is actually very similar to Raimondo, it would seem to me–socially liberal, but highly conservative on labor and economic issues. He sucks. I’d do anything in my power to keep him from being RI’s Governor. Why should the same not apply to Raimondo? (And by the way, I feel the same way about Obama as Pat does–but, to be fair, that comparison doesn’t work either; it’s a lot easier to be a progressive statewide official in deep-blue RI than a nationwide official).
Well, you all still liked David Cicilline so why not?
Let us please not forget to blame the Democratic leadership of the General assembly for enacting Raimondo’s travesty. we can blame her all we want, but Gordon fox (the fake progressive if ever there was one one) and Paiva-Weed are to blame. they made it happen, just like they let 38 studios happen, just like they let kids get cut off RIte Care, just like they supported tax cuts for the rich elite, just like they sided with predatory payday loan vultures over working people, just like they mutilated funding for higher education, just like they…you get the point.
It is time for progressives to actually hold accountable the two people who have done the damage, with Raimondo and the rest as accomplices.
I agree insofar that Ms. Raimaondo is not solely to blame. However I see her as the most outspoken and ambitious member of the pension reform team and is doing her best to bully this through by any means necessary in order to further her political career. She has embraced the role of spokesmodel for pension reform. Chafee, Fox, Paiva-Weed, DaPonte and a number of other GA members are equally as guilty of acceptance of less than forthright tactics in order to disenfranchise those with contractual retirement entitlements at the in exchange for the support of the RI masses who have clung to their last place aversion mentality due to poor economic circumstances caused mostly by those same Wall Street investors with whom Gina shares her bed.
Comparing Obama to Raimondo is like comparing the little league pitcher for East Greenwich’s All Star Team to Josh Beckett. Bad argument. Bad.
I think one of the reasons the backlash against Raimondo is so impassioned is for just the reasons laid out in previous responses. Progressives do not, once again, want to be fooled by a wolf in sheep’s clothing. We want real reform on tax equity, pension-moral obligation, union ressurection and rebirth of Rhode Island’s middle class.
And what the heck does Rahm Emannuel have to do with anything when it comes to RI pension reform and Gina Raimondo? I can’t remember ever having the opportunity to vote for or against that man. Perhaps you would like to blame Obama’s re-election on ACORN as well.
As a fighter one is taught that, when assaulted by multiple assailants, take down the strongest one first and the rest will be wary to even continue the fight. Raimondo, with her outspoken ambitious nature and actions is the strongest assailant right now and progressives will fight her in order to make an example of the leader of this pack. We’ve already turned our back on the spineless Governor. He’s not even worth it.
What concerns me is that she constantly repeated how important it was to her to have a process that was inclusive of all with a stake in pension reform, yet when the consultant actuaries were brought to tell their story, no one was able to question or challenge any of the assumptions used in the model she approved.
For example, survival curves for different classifications of state employees would show that not everyone is living as long as some suggest. Solutions that force blue collar workers of low education and less privileged backgrounds to retire at a later age only looks fair if one assumes they will live as long as Gina.
Just curious but did the unions hire any actuaries? I don’t recall any testifying.
I do not believe the unions hired their own until recently. You would have to get that from Mr. Walsh or someone at the Local 93.
Indeed one was hired. And testified.
www.wpri.com/dpp/news/big-turnout-as-pension-hearings-begin
Looks like there were three assumptions tested, survival of state employee, re-amortization of pension liability, and performance projections. Hard to tell whether these were addressed in the drafting of the original legislation or whether the union consultants were outlining their case for the courts that there were other more reasonable options that could have made less draconian changes in the pensions for state workers. Thanks for sharing, I must have missed this when i canceled my subscription to the ProJO.