Mainstream Papers Applaud Contract-Breaking as Long as it’s With Public Pensioners

Washington Post on Public Pensions: People Should Refuse to Pay for Their Washington Post Ads

The Washington Post thinks its fantastic that Rhode Island broke its contract with its workers. It applauded State Treasurer and now Democratic gubernatorial nominee Gina Raimondo for not only cutting pension benefits for new hires and younger workers, but also:

“suspending annual cost-of-living increases for retirees and shifting workers to a hybrid system combining traditional pensions with 401(k)-style accounts.”

In other words, Ms. Raimondo pushed legislation that broke the state’s contract with its public employees. The Post‘s argument is that these pensions were expensive and the state couldn’t afford them. This is not clear. (The Post again played the Really Big Number game telling readers about the $1 trillion projected shortfall in state pensions. That is a really big number and is supposed to scare readers. If it was interested in informing readers it would have told them the shortfall is equal to about 0.2 percent of projected GDP over the thirty year planning horizon of public pensions.)

Anyhow, if the state of Rhode Island really can’t afford to pay its bills, why should public sector workers be the only ones to pay the price. The state has hundreds or even thousands of contractors. Why not short them all 10 or 20 percent of their payments? That would be the fairest way to deal with the situation if the state really can’t pay its bills or raise the taxes needed to do so. Obviously the Post doesn’t believe that contracts with workers are real contracts.

New York Times Does Mind Reading on Rhode Island Gubernatorial Candidate

The New York Times engaged in some mind reading on Gina Raimondo, the Democratic nominee for governor of Rhode Island. In reference to Raimondo it told readers:

“Growing up in a Democratic household, she believed in activist government. (Her father had gone to college on the G.I. Bill.) She also thought pension benefits needed to be curbed to save other government services, not to mention the pension system itself.”

It’s great that the New York Times is able to tell us what Raimondo actually believes about activist government and cutting pension benefits. Most newspapers would just have to report what Raimondo said about her views.

As long as the New York Times was doing mind reading it might have been helpful if it told readers whether Raimondo thinks that Rhode Island can break contracts with anyone or whether she only thinks the state has the right to break contracts with its workers. It could also have told readers whether she believes the state has the obligation to respect the law in other areas.

For example, if she wants to provide government services but doesn’t want to raise the taxes to pay for them, does she think the state should just seize property to cover the cost, and if so, whose property?

Instead of spending so much effort on mind reading, it might have been more useful to readers if the paper had spent more time examining the specifics of Raimondo’s pension proposal. In addition to taking back part of the money the state had committed to pay workers, Raimondo’s pension plan also will mean giving hundreds of millions of dollars in fees to Wall Street hedge funds. These fees could easily reduce the pension fund’s return by more than a full percentage point.