WC Varones

Don't lend your hand to raise no flag atop no ship of fools

Dow 28,000,000

... by 2099. That's the implicit assumption CalPERS used when selling the legislature a massive pension increase in 1999. Schwarzenegger economic adviser David Crane in the WSJ:
What Calpers failed to disclose, however, was that (1) the state budget was on the hook for shortfalls should actual investment returns fall short of assumed investment returns, (2) those assumed investment returns implicitly projected the Dow Jones would reach roughly 25,000 by 2009 and 28,000,000 by 2099, unrealistic to say the least (3) shortfalls could turn out to be hundreds of billions of dollars, (4) Calpers's own employees would benefit from the pension increases and (5) members of Calpers's board had received contributions from the public employee unions who would benefit from the legislation. Had such a flagrant case of non-disclosure occurred in the private sector, even a sleepy SEC and US Attorney would have noticed.

HT: JF

2 comments:

Anonymous said...

When you wish upon a star
Makes no difference who you are
Anything your heart desires
Will come to you

If your heart is in your dreams
No request is too extreme
When you wish upon a star
As dreamers do

Anonymous said...

yikes - kind of a bad day for dreaming dow 28,000,000 whoooduhthunkit????

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