Monday, August 24, 2015

Stock market crash exposing Walker idiocy on another issue

You may have heard there was some wackiness on Wall Street today, with the DOW Jones industrial average going down as much as 1,000 points this morning, before gaining 900 of those points back in the midday, and then plummeting again at the close to end up down nearly 600 points on the day. The crazy day followed large drops on the previous Thursday and Friday, which means the DOW has now shed nearly 10% over the last week, and nearly 2,300 points since peaking a couple of months ago.

Naturally, our fair Guv couldn't avoid making an ass out of himself in light of the bloodletting on Wall Street.

First of all, who the fuck is Scott Walker to tell President Obama to cancel this meeting, especially on such specious grounds? Walker also shows remarkable ignorance about the reasons for the stock market's fall, because it implies that somehow the Chinese are interfering in the U.S. market to cause the selling. And it also shows a reckless disregard for diplomacy and a lack of understanding about the interconnectedness between our two countries- scapegoating a major trading partner every time a shaky economic period comes along does not make for steady policy or good outcomes.

But the bigger reason our Governor looks like a complete moron with this statement is because he completely contradicts his past actions, as well as the plans of his administration back in Wisconsin. WKOW's Greg Neumann was among many noting the pathetic irony.

Even Dan ("Scott Walker's a Good Guy") Bice tweeted out what an absurd flip-flop Walker's new "blame China" statement represents. Just four months ago, Bice noted that Walker was all about attracting investment and talent from China.
The program — known as EB-5 — puts wealthy foreigners on the path to U.S. citizenship if they invest at least $500,000 in an American commercial project that will create or preserve 10 jobs.

Critics have called the abuse-riddled program a "scam" that essentially sells green cards to the affluent and their families, with more than 80% of those in the program coming from China.

But Walker has long been a champion of EB-5 visas, which grant permanent U.S. residence.

You can find Walker prominently featured on the website of FirstPathway Partners, a Milwaukee firm that helps foreigners find local development projects in which they can park their half-million dollars.

Walker was the featured speaker at events for several Milwaukee-area projects involving the company, including the opening of the Global Water Center and the downtownMilwaukee Marriott. In addition, FirstPathways sponsored the Republican governor's reception in Shanghai during his 2013 trade trip to China, describing it as a "historic moment" for the firm and the state....
And what makes Walker's reaction to the stock market crash even more stupid is because it should remind you that Walker and his fellow Republicans have consistently tried to monkey with the fully-funded pension system that Wisconsin public workers currently are entitled to. You may recall this part of the notorious 999 motion that the Legislature's Joint Finance Committee tried to jam through at the end of state budget deliberations.
Changes the state’s pension board: One provision would alter the composition of the state board tasked with assessing any potential changes to Wisconsin’s retirement system for public employees. Currently, the board, known as the Joint Survey in Retirement Systems Committee, is made up of a mix of lawmakers of both parties, representatives from relevant state agencies and a citizen who is not participating in the state retirement program. If Motion 999 becomes law, it will instead consist of only legislators, with the number chosen by the majority party proportional to the ruling party's majority on other legislative committees, in effect politicizing the board.

The change comes as Walker has struggled to push through measures that would alter the state’s current pension plan. Though Wisconsin’s retirement program is one the most financially sound in the nation, Walker has signaled he would be willing to overhaul the system, only to receive pushback. Officials at the agencies represented on the board have previously said changes to the state’s retirement plan weren’t necessary, however a board made up of entirely partisan legislators might be more likely to greenlight such a plan. Both houses of the Wisconsin legislature and the governorship are currently controlled by Republicans.
That provision was later dropped from the state budget after an outcry from numerous groups, but as Bruce Murphy of Urban Milwaukee notes, Walker has long wanted to modify and/or sell off the fully-funded pensions, and even snuck in a provision in 2011's Act 10 to try to open the door to changing the system- an option that was quickly shot down once the evidence showed how foolish an idea it was.
Nevertheless, Walker and other Republicans believed the state should consider a 401(k) system like most private companies now have. To that end, the language of Act 10 commissioned a study of the state’s current pension system that would also compare its “defined benefits” plan for employees to an optional “defined contribution” plan like a 401(k) option.

The study found Wisconsin has “one of the lowest pension system costs for taxpayers in the nation” and “contains many pension policy best practices, such as a disciplined funding model and risk-sharing mechanisms that have allowed it to minimize the risks for taxpayers.”
Naturally, this report was revealed one month after the recall election of 2012, keeping Walker from having egg put on his face before the election for trying to mess with something that worked for both taxpayers and retirees.

But you can bet Scotty would want to help out campaign contributors who would love to get their hands on managing those pensions, or to use the excess funds in the pension to fill budget holes. And that's where the recent stock market drop should set off warning lights, because moving people from pensions to 401k's puts them in a lot more danger of losing their retirement security, and damaging the economy from the changes that would result from people being forced into the poor house from another Wall Street crash. That type of distress for constituents and economic upheaval is something that Scott Walker and the Wisconsin GOP do not care about, and in a sick way, they may welcome it. Because reducing retirement security forces people to be more desperate when it comes to seeking and accepting work- which is just the way the ALEC puppetmasters like it.


  1. The entire point of Walker's study of the Wisconsin Pension Plan was to provide the usual conservative talking points to switch all current working participants in the Wisconsin Retirement Fund to a new pension plan administered by one of Walker's campaign contributors. Thankfully, the trust fund nature of the WRF protects all the funds currently held by the trust from political mischief of the type contemplated by Walker--perhaps he didn't realize that Wisconsin Trust Law applied equally to the WRF as it does the Bradley and Uihlein Trusts, and that those institutions might become concerned if Walker started mucking about in those statutes. However, that leaves future contributions vulnerable to corruption of the Walker variety. From a financial standpoint however, the state's obligation to the WRF for employee contributions (as well as the matching portion) is almost precisely like that facing a 401(k) plan sponsor. Only if there is a market collapse about half again GREATER IN MAGNITUDE than the 2008-2009 event would the state owe additional funds to the WRF. So, of course, the study found that the chances of that are pretty remote, and, naturally, setting up a new defined contribution retirement plan run by a commercial plan administrator would be more expensive than the current arrangement. Don't disregard the fact that the protective service employees might get a little upset when their magnificent pension benefits get put on the table for sale to the highest bidder.
    So in the end Walker goes silent on the whole issue of the state pensions (except to try and claim credit for their 100% funding), sort of the same thing he tried on immigration until lately. (Ever wonder why there been ZERO immigration bills introduced into the Wisconsin legislature?--maybe the fact that 50% of the dairy work force being illegal immigrants has something to do with that.)

    1. Heck, Scott wanted unhindered immigration and a Mexican consulate in Wisconsin...until he decided he needed the racist vote more.

      As the most recent WRS audit showed , there was around a $2billion surplus in the account at the end of 2014. It would make for a nice target for Walker to fill in a budget hole, but I'm guessing the $2 billion surplus us a lot less after the plummeting in the marker over the last 8 days

  2. Jake, The People's Plea: Can you replicate the Kansas statistician's methodology with Wisconsin data? Pretty please?

  3. That stuff is way above my pay grade, but check out this BradBlogreat article from today. It's got a good update on the Kansas case, and links to similar studies (and fishiness) in Wisconsin.