Nobody’s Gonna Pay You to Tell the Truth
Nobody’s Gonna Pay You to Tell the Truth
Written in mid-2008
Annual retrospectives seem to be the custom here at Room Eight, so I thought I’d write about what motivates me to spend my time researching data and writing essays for this site. I do so without pay or compensation of any kind, and without knowing how many people actually download the spreadsheets and read the essays, if any at all. In part I’m just doing what I was trained to do – compile and analyze information bearing on government policy. That’s a skill I found to be worth little in government because public policy generally consists of deals, favors and non-decisions rather than decisions, and for those no background information is required. And in part I’m taking the opportunity to raise questions about those deals and favors, and their effect on people I care about and our future, which is my children’s future. It is a response to my frustration that there are so many open secrets that no one dares to talk about. In general, the only way to get paid to compile public policy information is to work for a privileged group seeking to maintain or expand those privileges at everyone’s expense. A fair analysis of comprehensive information is not in their interest. No one is going to pay you to tell the truth.
The New York Times had an article recently on the type of person who thrives in our culture as it is. Actuary Jonathan Schwartz was hired by New York City’s public employee unions to produce a report that said that allowing public employees to retire with full benefits at age 55 instead of 62, receiving health insurance in exchange for not working for ten years before receiving Medicare rather than three, and being paid a pension for an additional seven years after having worked seven fewer, would cost absolutely nothing. Just as Mayor Bloomberg said allowing New York City teachers to retire at age 55 instead of 62 would cost nothing, when he cut a political deal with the teacher’s union. Just as Carl McCall said having public employees with more than 10 year’s seniority contribute nothing to the pension plans, and providing them with a cost of living increase (in many cases retroactive) that they neither worked nor bargained for, would cost nothing.
Somehow, with all these “free” pension deals the city’s spending on pensions and retiree health care has soared, property tax rates have been jacked up (and then only partially rolled back), and new public employees have been paid less. “Lawmakers have cited Mr. Schwartz’s analysis on hundreds of bills in recent years, with billions of dollars worth of potential costs,” according to the Times, even though he was being paid to produce that analysis by the beneficiaries of the pension deals. (The “lawmakers” get campaign contributions from the same interests).
I would call Mr. Schwartz an honest rogue, since he is up-front about what he does and, therefore, what he is. He told the Times he “routinely skewed his projections to favor the unions — he called his job ‘a step above voodoo” — and admitted that he had knowingly overreached on the pension bill by claiming that it cost nothing, either now or in future years.” “Back in my days as city actuary, I would go to that part of the range that would make things look as expensive as possible…As consultant for the unions, I go to the part of the range that makes things as cheap as possible.” And, of course, state legislators claimed they were shocked, shocked to find out there “voodoo” projections going on.
What do Mr. Schwartz’s analyses remind me of? Why, they are exactly like the “jobs created and retained” figures produced to justify special tax breaks for some businesses that (given our very high state and local business taxes overall) other businesses without special tax deals are forced to pay more to make up. I am familiar with some of the assumptions behind those special tax deals. Voodoo indeed.
It isn’t just what is in an analysis that is fraudulent, but also what isn’t in the analysis. Nowhere in Mr. Schwartz’s analysis, one may assume, is there a comparison between the pension and retiree benefits the public employees in question already receive, and the pension and retiree benefits of all other people who live and work in the city, often for less, and pay taxes, among the highest in the country. Why pass a bill just allowing some public employees, those near or over 55 now, to stop working and doing anything for anyone else? Why now allow all public employees, including new hires, to retire at 55 without kicking in an extra dime?
In fact, why don’t the public employee unions propose a bill to allow any worker in New York City, public or private to buy into the NYC public pension plans retroactively and receive income and health benefits for life, while only paying in as much those who would benefit from the recently proposed legislation? The same deal for everyone. Would anyone agree to the higher taxes and lower standard of living that would be required to allow everyone, not just some people, to spend more than one year in retirement for every year worked? I doubt fairness was ever analyzed. It wasn’t on the agenda. It never is.
It isn’t just special pension and tax deals that are justified by biased, highly circumscribed, if not completely fraudulent, information. Whenever the city and state budgets are discussed, the only comparison one ever sees is between this year’s taxes and spending and last year’s taxes and spending. The implicit assumption is that this year’s fiscal priorities have some standing, and that any change from those fiscal priorities must be justified. That locks in the winners and the losers. Why don’t the existing fiscal priorities have to be justified? And why isn’t information provided on what those priorities are, and who is coming out ahead and behind in New York City and State, compared with other places, right now?
The unsaid is far more misleading and fraudulent that the said.
The public sector is full of people like Jonathan Schwartz. And there are many who do his sort of work on a consulting basis, or who work for lobbyists for groups with a financial interest in city and state policy. They generally aren’t consulted before a deal is made. Rather, they are brought in after the fact and told to somehow prove that the deal is reasonable and fair to everyone -- just in case someone finds out about it. And if I wanted to be paid to do public policy analysis the last time I was looking for a job, that’s what I would have had to do. Many of the advertised jobs available then were with the lobbying organization of the Greater New York Hospital Association and Local 1199. Now on those rare occasions when the data shows a fact that might be considered favorable to those groups’ interest in higher taxes, lower spending on other priorities, and a diminished future for everyone through a degraded infrastructure and higher debts (they would claim they just want more for themselves not less for others, but the two go together), I’m perfectly willing to report that information, and have done so. But work for them? One might just as well work for the mafia.
The private sector is apparently no different.
CEOs and other top executives put their cronies on company boards, and the boards hire consultants to “prove” that the CEOs and other top executives deserve more pay. Those board members are top executives elsewhere, and have their pay raised in turn. The CEOs also hire the accountants to show how profitable the company is. The higher the pay the consultants recommend, and the more profits the accountants show, the more often those consultants and accountants are hired, and the more they themselves will be paid. Later, when the profits are found to have been inflated, the accounts are restated, and the investors lose money, neither the executives, nor the pay consultants, nor the accountants ever give any of their money back.
I’m not a big TV watcher in general, and haven’t watched any award shows in years, but I vaguely recall the organizations that sponsor them announcing early in the show that all the ballots for the awards were in sealed envelopes and had been tabulated by one or another of the public accounting firms. It must be the truth and it can’t be rigged -- it’s from a public accounting firm! Well, we found out all about the public accounting firms, stock analysts and underwriters in the bubble.
And, after a big effort to “restore faith in the markets,” which may have only served to set people up to be victimized again, we have found out all about a whole additional set of actors in the housing bubble. The borrowers who falsified their income to take cash out of their house and then blow it keeping up with the Joneses. The mortgage brokers, who advised people to falsify their incomes to qualify for mortgages they couldn’t pay back, while disguising the terms of those mortgages from the borrowers, to reap more and bigger commissions. The National Association of Realtors, which assured people that housing prices never go down despite a huge bi-coastal housing bust as recently as 1987-1995, feeding a speculative frenzy to bubble up prices and commissions. The real estate appraisers, who were only hired to do appraisals if they were willing to over-value the houses so the mortgage bond underwriters were willing to buy the mortgages. The mortgage bond underwriters, who were happy to package those mortgages into bonds without looking too closely at the mortgages themselves, as long as some sucker was willing to buy them, because they could book profits -- which led to executive bonuses -- on the assumption that housing prices only went up, so they could get their money back by selling after foreclosing on borrowers who couldn’t afford to pay. The rating agencies, who only got paid to rate bonds if they were willing to rate bonds which were absolutely guaranteed to lose money AAA. Etc. Etc. Etc.
Everybody knew. It was an “open secret,” in which most of those who knew what was going on made money on what was going on, and the few who spoke up were ignored until it was too late. As someone told me, once the Wall Street greed machine gets rolling, it’s pretty hard to stop. Get on board or get fired for underperforming.
One might say none of this is new, although it does seem to be more common. Take the case of some I know well. An accountant and sole breadwinner, he was laid off in the deep 1970s recession and unemployed for nearly a year, savings dwindling away, before getting a job with a subsidiary of a major corporation. That subsidiary wasn’t doing so well, and its top executive feared the axe, and thus ordered the accountant to cook the books, violating SEC laws. He refused and was fired right before Christmas, but decided not to blow the whistle because his family had sacrificed enough, and doing so might make it hard to get another job. He got another job eventually, but had to move his family halfway across the country. I told him once that in business there is no right and wrong, just winners and losers. I went into the public sector where, guess what…
Someone else I know, who was cynical when cynicism wasn’t cool, puts it this way -- the country is being run by people who cheated on their exams in school, and they have been cheating ever since.
What about the fourth estate, the press? Well the mainstream media has its advertisers to please, along with its dwindling band of aging paid customers it cannot afford to offend. So there are some things the newspapers never get around to talking about, no matter how much I try to prod them to do so. Mostly, however, the MSM tries to save money by relying on press releases, offset perhaps by a contrary quote from one of the usual suspects. And who creates the “studies” and related press releases? Lobbying organizations funded by those with a financial interest in public policy; the “studies” are produced by “team players” like Mr. Schwartz. Hiring their own experts would cost the press too much money, and the tendency of journalists to become independent experts after years of reporting on a particular area of concern seems to be slipping away. And the alternative media, the blogs? They mostly get their information from the newspapers.
Despite the financial interests and constraints of the media itself, and its reliance of self-interested parties for information, however, there in fact remains a lot of truth in the newspapers, and some truth in all of them, at least for now. But very few people seem to be interested. Perhaps no one is willing to tell the truth because the truth is something no one is willing to pay for. They’d rather be told what they want to hear, and otherwise entertained. Meanwhile they are vaguely dissatisfied, and they don’t know why. (Well, the investors who buy data and analysis from the real estate research firm I now work for do seem to be interested in the truth, because it helps them make money, but that seems to be an exception).
So what is the truth? To me, it is wrong for those who already have advantages that other, less well off people do not have, to manipulate institutions to gain even more advantages that those other, less advantaged people will have to sacrifice to pay for.
Wrong for those who already have rich pensions to seek even richer pensions, even as those who pay taxes to fund those pensions, and work to provide them with goods and services, have nothing but an increasingly tenuous Social Security system to look forward to.
Wrong for those who are already highly paid, ridiculously high paid, to grab even more riches not by innovating or putting their own capital at risk, but through deception and mutual back-scratching deals.
Wrong for those whose marginal and average tax rates are already lower than many other people with the same or lower incomes, but fewer special preferences, to receive more special tax breaks.
Wrong for school districts that are already spending far more than most other school districts to increase their spending even further, and then demand that those in other, less well funded school districts pay taxes for state aid to help offset the increase.
Wrong for those who already receive extensive government funded health insurance to benefit from a huge expansion in the scope of those health insurance even as those who are made to pay taxes to fund that insurance are increasingly uninsured.
Can’t people be satisfied and worry about someone else for a change?
Not only do those with advantages demand that they be maintained, not only do those with advantages demand that they be expanded, but also those with advantages become outraged and belligerent when anyone makes the link between what they have and want to get and what others lack and stand to lose. “We’re for them also,” those with the advantages will say, and the more then get now the more others will “have to” be given later. And later. And later. They grab more advantages today, while others are given promises and I.O.U.s, to be cashed later when they are gone, and paid for by whom? (For the private-sector equivalent, the dividend yield on the S&P 500 is two percent, but with all those future profits, think of the capital gains!) Unlike Mr. Schwartz, most of those with advantages refuse to acknowledge what they have done and, therefore, what they are. They don’t want the truth. They can’t handle the truth. “La la la I’m Not Listening!”
Who am I thinking about when I write about public policy? My kids, and their friends and acquaintances. And the kids of our friends and acquaintances. Young adults just getting starting now, the way I was 25 years ago. The people working in low- and moderate-wage jobs such as retail and services, presumably with neither a pension of employer provided health insurance, and entirely dependent on public services like the public schools, since they can’t buy their way out with private alternatives. And everyone who will be in my city, in my country, or on the planet 20 or 30 years from now.
There is actually a profession whose code of ethics actually condones, if not requires, that biased and highly circumscribed information be presented to advance the interests of those who pay for the privilege, with anything other than an outright, black and white lie considered fair game. The legal profession, which is also highly represented in another profession -- politicians. The idea is that with competing self-interests putting up half- or quarter-truths and being deceptive as possible, the whole truth will somehow emerge. But where are the advocates for those I am concerned with? Which is their political party? Who is their lobbyist? They don’t have one, as far as I can tell.
For the rest, you don’t have to read, but you can’t stop me from writing on Room Eight. And that’s why I do it. I don’t know if it does any good, but I can only do what I can do.
................
................
In order to avoid copyright disputes, this page is only a partial summary.
To fulfill the demand for quickly locating and searching documents.
It is intelligent file search solution for home and business.
Related download
- nobody s gonna pay you to tell the truth
- bac essay writing a toolkit
- test the first and second steps in essay writing
- analogy essay samples
- writing your business plan is a lot of hard work however
- top ten tips
- name
- phl318 hegel essay questions
- children s ideas about what it means to get better at
- argument analysis and evidence in academic writing in