NOTE, 1 p.m.: Lockyer aide’s response is now posted at the end of this item. So Stanford professor Joe Nation — a former state lawmaker with impeccable liberal credentials — and Stanford researchers put out a report that looks at the unfunded liabilities for the state’s three-largest pension agencies — CalPERS, CalSTRS and the University of California Retirement Plan. So the Stanford team uses slightly less rosy scenarios on future returns than the pension agencies and comes up with an estimate of nearly $300 billion in underfunding. Then it uses a more conservative, safer estimate of future returns that puts the unfunded liability at $498 billion. This sort of analysis is prudent, given that CalPERS, CalSTRS and UC pension officials have proven they can’t be trusted. So how does state Treasurer Bill Lockyer respond? By quitting the Stanford research team’s advisory board in a huff. Yo, Bill, that’s so Maviglian. Yo, BIll, that’s so 2008. Yo, Bill, how is it helpful to pretend the pension tsunami’s not real?
This is from a Steve Maviglio press release Tuesday:
In yet another confirmation of the questionable methods and conclusions in a new so-called study on public pensions by Stanford students, State Treasurer Bill Lockyer has resigned from a pension advisory panel of the Stanford Institute for Economic Policy Research (SIEPR). The panel supposedly was to help provide facts and information for the report.
“When it comes to public pensions, maybe SIEPR should stand for “Stanford Institute to Eviscerate People’s Retirement,” said Lockyer Press Secretary Joe DeAnda. DeAnda said Lockyer agreed to join the advisory panel because he believed SIEPR was interested in producing more thoughtful, evidence-based reports. “Unfortunately, that turned out not to be the case. While (study author Joe) Nation may have listened selectively to certain advisers, Lockyer certainly wasn’t one of them, and his concerns about methodology and other issues were ignored. SIEPR clearly has a public pension agenda, and it doesn’t include legitimate research.”
Yo, Bill, how does this help your reputation for candor and independence? You’re now on Team Maviglio. Yo, Bill: Do you, like Maviglio, intend to downplay the extremes of the pension crisis at the local government level by talking instead about the state’s comparably less severe problems? Yo, Bill: Do you, like Maviglio, plan to start touting the “average CalPERS pension is tiny” narrative that’s based on the people who only worked for the state for a few years and who thus bring down the averages? Yo, Bill: Do you, like Maviglio, pretend that this problem is primarily an invention of “out-of-state billionaires” who want to target “California’s middle class”? Yo, Bill: You do understand that when you’re on Team Maviglio, you’re teaming up with the status quo’s premier spin master, the loudest defender of the state’s broken ways, the reactionary who views every single policy issue in terms of whether or not it discomforts public employees?
The day in 2003 that Lockyer warned Gray Davis against using “puke politics” to fight those seeking to recall him, I joined the Bill Lockyer Occasional Fan Club. I was proud of my BLOFC membership in summer 2010 when his candid remarks to me in an interview about the bullet-train fiasco made headlines around California and on Wall Street.
Well, I hereby resign from the BLOFC. When it comes to public pensions, maybe BLOFC should stand for “Bill Lockyer’s Obfuscating Fools Californians.” (I was going to use a different verb for F, but we stay classy here in San Diego.)
Thanks so much, Bill, for siding with the status quo and trashing Joe Nation for the sin of suspecting CalPERS, CalSTRS and the UC pension agency might be using funny numbers to downplay their problems. This is principled leadership at its best.
Bill, you are the finest public servant that public employees could want. Congratulations on your decision to help accelerate California’s decline. Mr. Treasurer, we are all in your debt.
Response from Lockyer’s aide:
It’s so sad you’ve left the Bill Lockyer fan club. As tragic as it is, however, I think the organization will survive. You say folks in San Diego “stay classy.” Based on this blog item, I think it’s time for you to move.
As it tried to process the errors in your item, my fact-check machine exploded. First, the author of Stanford’s latest fictional report on public pensions, Joe Nation, does not have “impeccable liberal credentials.” As a legislator, Nation belonged to the “mod caucus,” the contingent of moderate Democrats that sides with business as often as not on big issues. Joe Nation is a lot of things, but liberal is not one of them.
Second, Lockyer doesn’t control what Steve Maviglio does. We independently sent out our statement and the letter informing Nation of Lockyer’s resignation from the advisory panel. Maviglio then re-distributed it himself. That didn’t stop you from creating the false impression Maviglio was doing Lockyer’s press work for him.
You say Lockyer’s criticism of SIEPR somehow undermines his reputation for “candor and independence.” Hmmm. Let me see if I have this straight. For Lockyer to show his “candor and independence” on this issue, he has to swallow whole SIEPR’s bogus research, applaud its phony numbers and regurgitate its propaganda. Lockyer’s not gonna do that for anyone, for anything, under any circumstances.
You want to know if Lockyer intends to downplay public pension problems at the local level and divert attention to the less severe problems at the state level. Answer: No. If you knew anything about Lockyer’s record on the issue, or cared to tell the truth, you wouldn’t have asked the question. He has time and again stressed policymakers should focus more on fixing local pensions because that’s where the biggest problems lie.
Finally, you cast Lockyer as a defender of the status quo. You know that is a wholly false characterization.
Lockyer led the effort to root out placement-agent corruption at CalPERS. He spearheaded the move to curb PERS staff’s discretion to make investment decisions on their own, and increase the Board’s control over those decisions. He has been a staunch opponent of pension spiking, and opposed labor-backed anti-spiking legislation because it wasn’t tough enough.
He has said the gap between public-sector and private-sector pensions must be narrowed. Toward that end, he has called for major reforms of public pensions, including moving to a system that combines a less generous defined benefit component with a well-managed, secure defined contribution component. But the fundamental issue that must guide reform efforts, Lockyer believes, is what constitutes an adequate retirement. Nation and SIEPR have no interest in this question. They don’t care if we turn retirees into paupers after a lifetime of work. They don’t concern themselves with the problem of taxpayers having to pony up more money to provide impoverished retirees health and welfare services.
Bill Lockyer is not an enemy of public pension reform. He is, and always has been, a critic of shoddy work, of agenda-driven, pseudo research masquerading as evidence. That’s what SIEPR’s report is, plain and simple. Lockyer makes no apologies for telling that truth.
Take care, Chris. And have a real happy holiday season.
State Treasurer Bill lockyer