When calculating from December 2007 -- the month that the National Bureau of Economic Research determined was the start of the Great Recession -- state and local government employment has fallen by 703,000 jobs amid a downturn that cost the nation more than 8 million jobs overall. In other words, almost 10% of unemployment is caused by state and local governments firing people. Wow. That is scary.
That's one of the tidbits from an excellent McClatchey article that speaks truth to talking points. It turns out there *isn't* an immediate pension crisis -- as with Social Security, if not a single thing were changed about state and local pensions, they're solvent for the near future and can pay at least 80% of benefits in the far future. And unlike Social Security, state and local pension funds will gain value as Wall Street goes up again and as they win their lawsuits against the bond rating agencies for rating trash as AAA securities, meaning that even that pessimistic take on their solvency probably isn't true.
-- Badtux the Fact-based Penguin
People can sue the ratings bureaus? That's excellent news! First step, remove all their money. Second step, no one ever, ever, ever believe anything they have to say, again.
ReplyDeleteThey are proven to be complicit in confidence games. Don't trust them to give you the time of day.
All Republicans and many Democrats walk on little hoovers.
ReplyDeleteI am not sure rating agencies can be sued I was under the impression that they were just offering an opinion or best guess and if they were wrong well those are the breaks, it was a self contained and obvious scheme for failure though the rating agencies are largely responsible for the economic fiasco, I place the blame squarely at the feet of the american people and our lack of due diligence.
ReplyDeleteYeah, she was asking for it, all right. Who could blame the guy?
ReplyDeleteFrogbreath, it’s already clear that ratings agencies can’t use the First Amendment if judges find that the companies didn't actually believe the grades they were selling. As legal scholars put it, there is no free-speech protection when it comes to matters of fraud. It is already known fact obtained via discovery of internal documents in current lawsuits that the ratings agencies were awarding investment grades to bonds that even analysts in the company thought were risky. It's hard to describe that as anything other than fraud.
ReplyDeleteThe ratings agencies have spent a large fortune these past two years fending off legal and political attacks upon their fraudulent ratings. Fraud -- willful deceit -- is not free speech. Fraud is crime -- a crime in all 50 states of the United States. And it is a fact that the ratings agencies were awarding investment grades to toxic mortgage pools that even analysts in the company thought were risky.
The only legal question with the ratings agencies is that to prove fraud, you have to prove that they personally benefited from the ratings they provided. That is the main difficulty with the current hoard of lawsuits that the ratings agencies are facing from investors -- *and pension funds* -- who were defrauded that has led to most of the lawsuits being dismissed. But there's still plenty of balls in the air here, including the huge billion-dollar CALpers lawsuit, so we'll see...
- Badtux the Legal Penguin
And the lawsuits being dismissed is a bright red sign a hundred meters tall, that they can lie again with impunity. No punishment, no fear.
ReplyDeleteThey won.