Category Archives: generation greed

Fannie’s Mae and Freddie Mac’s Stealth Economic War on the Millennials

During the past 35 years we have had a buy now, and hope someone else will be stuck paying later economy. And as a result the generations born after 1957 or so have been left much poorer. But leaving the generations born after 1957 or so much poorer is apparently not enough for those older and more powerful to get everything they have promised themselves, but refused to pay for.

The millennials already receive lower pay, have higher debts, will be forced to pay higher taxes, will need to pay privately for what older generations had received as public services, and will need to save for what older generations had received as public old age benefits, at their expense. But for Generation Greed to finish cashing in, the millennials also have to keep spending money they do not have – to prop up consumer sales so the economy doesn’t finally collapse.  And to prop up stocks prices and housing prices at a level high enough for Generation Greed to sell. I recently found out just how crazy things have gotten just to keep the party going just a little bit longer. It is now federal policy that young homebuyers should pay so much for houses that 50 percent of their income goes for debts. Think I must be joking? Think that can’t be true?  Read on.

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Will New Jersey’s Phil Murphy Be the First To Tell The Truth about Generation Greed?

Coming into office eight years ago, New Jersey Governor Chris Christie faced a fiscal disaster, following decades of shortsighted but popular policies that robbed the future. He talked like a problem solver, and could have made difficult choices to raise taxes and tolls, and reduce public services for everyone, not just for transit riders.   But since the majority of New Jersey residents don’t follow state and local government closely, this would have meant Christie received all the blame for all that had gone before. So he punted, and shifted costs from the past further into the future, to the extent that this was possible. As a result he won a second term. But the future continues to become the present, and the bills continue to come due. He is leaving office as one of the most despised politicians in the country.

Coming into office today, therefore, New Jersey Governor-elect Phil Murphy also faces a fiscal disaster, this time at the peak of an economic cycle rather than in a deep recession. A fiscal disaster that is certain to get even worse when the next recession hits and the stock market corrects to something like fair value. And he faces those same two options. Raise taxes, cut services, and perhaps tell his public employee union supporters that they have to give up more to get back in solidarity with their fellow state residents. And be blamed for all of the above. Or hope that state residents have gotten used to how bad things are under Christie, kick the can a little further, and try to sneak into a second term before the additional bills come due. And then leave office as despised as Christie and outgoing Connecticut Governor Malloy.

But there is a third option.   Interested Phil?

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Thanksgiving Excerpts from Two Books

Those who read this blog or know me personally know that a relatively small share of my contemporaries, and a those in generation or two older, think like I do. There are, however, some people who have some ideas in common, and below I’ve excerpted from books by two of them.

Amy Dacyczyn lives in a rural area and set out to prove that by using resources efficiently she could eventually have a home with plenty of space and nice stuff, and stay home to care for her children rather than work elsewhere. An urban dweller, I value ease and experiences, sought a minimum of space that needs to be cleaned and maintained, and see things that have to put away the say way Jacob Marley saw links in his chain in A Christmas Carol. I have never even been in a fistfight, or at least not one where I threw any punches back. Andrew Bacevich is a former Army colonel. As for the perspective we have in common, the excerpts follow.

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Term Limits: Impact On The Operation of New York’s Governing Bodies

During my Don Quixote protest campaign against the state legislature back in 2004, the only member of the media who paid attention to what I was trying to say was Erik Engquist, then of the Courier Life papers, now with Crain’s New York Business.   But he didn’t quite get it right. In one column, he said I was someone who cared deeply about the process of government. I e-mailed him and said that to be honest, like most people I never really cared about or paid attention to the process, I only cared about the results. He wrote back and said while that may be so, unless New York gets a better process, it isn’t going to get any better results.

This is the third and last post in a series on New York City’s double-blind experiment with democracy – a City Council that has term limits, and a state legislature that does not. In the first, I noted that thanks to term limits and public campaign financing there are actual elections for the City Council every eight years, with the would-be members forced to pay attention to the general public, whereas in the state legislature competitive contest elections almost never happen.

https://larrylittlefield.wordpress.com/2017/09/10/term-limits-new-york-citys-double-blind-test-of-democracy/

In the second I examined the personal and professional background of the City Council and state legislature members, and found less difference than I would have supposed, due in part to a surprisingly large amount of recent turnover in the State Assembly, and due in part to the fact that ordinary citizens cannot, or do not, run for office.

https://larrylittlefield.wordpress.com/2017/09/24/term-limits-impact-on-the-characteristics-of-nyc-representatives/

This is post is not about who the members are or how they get there, but what they do when they arrive. With regard to corruption, transparency, and the value they place on the common future, the one interest all of us (other than the most selfish seniors) share.

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Median Household Income: It Takes Five Minutes to See Beyond the Happy Horseshit

American Community Survey data was released for 2016 yesterday, and the news was reportedly good.

https://www.washingtonpost.com/business/economy/us-middle-class-incomes-reached-highest-ever-level-in-2016-census-bureau-says/2017/09/12/7226905e-97de-11e7-b569-3360011663b4_story.html?utm_term=.6b0de01d116e

The incomes of middle-class Americans rose last year to the highest level ever recorded by the Census Bureau, as poverty declined and the scars of the past decade’s Great Recession seemed to finally fade. Median household income rose to $59,039 in 2016, a 3.2 percent increase from the previous year and the second consecutive year of healthy gains, the Census Bureau reported Tuesday.

While it is not a surprise that income is rising in an economic upturn, the claim is that this is more than a cyclical increase in income – even though wages are not rising.

The income increase extended to almost every demographic group, Census Bureau officials said. The figure the agency reported Tuesday was the highest on record. The agency reports that in 1999, median household income, adjusted for inflation, was $58,655.

Really? I immediately went to American Factfinder

https://factfinder.census.gov/faces/nav/jsf/pages/index.xhtml

And downloaded median household income for 2016 and 2006, a year at a similar point in the economic cycle. Adjusting the latter into 2016 dollars for an inflation-adjusted comparison. Downloaded it by age of householder. And found almost exactly what I expected.

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Long Term Pension Data for New York and New Jersey to 2016: Teacher Pensions

Across the country taxpayer pension costs for public schools are soaring, and state and local taxes are being increased while money actually spent on education is being cut to pay for it. You see it in California, where a huge tax increase “for education” went exclusively to pensions, and in Illinois, where the City of Chicago’s schools are on the brink of bankruptcy. You see it in Kansas and Oklahoma. In some cases soaring pension costs are the result of past taxpayers’ unwillingness to fund the pensions teachers had been promised, promised for some in lieu of Social Security, which those teachers will not be eligible to receive. In other cases pension costs are soaring because politically powerful teachers’ unions cut deals with the politicians they controlled to drastically increase pension benefits, beyond what had been promised and funded. In many cases there is a mix of both factors.

New York City happens to be the place where the teachers’ union, the United Federation of Teachers (UFT), is perhaps the most guilty, and taxpayers are the least guilty, with regard to the pension crisis. And it the place where the burden of teacher retirement is the greatest. The result is large class sizes despite extremely high public school spending, and a host of services that New York City children do not receive. With virtually all New York politicians in on the deals that have left the New York City Teachers’ Retirement System (NYC TRS) among the most underfunded in the country, however, there has been a desperate attempt to cover up the damage. So the consequences of retroactive pension increases for NYC teachers (and police officers and firefighters) have shown up not so much in education (and policing and firefighting), but in every other public service in New York. And all of this is under Omerta.

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Long Term Pension Data for New York And New Jersey to 2016: Police and Fire Pensions

In 2016, according to data reported to the U.S. Census Bureau, the New York City Employees Retirement System (NYCERS) had 263,235 active members who were working, and 149,940 beneficiaries receiving periodic benefit payments, a ratio that implies just 1.75 years worked for each year in retirement. And it is much less than that if workers who depart early in their careers and don’t receive pension benefits are excluded. That year, the New York City Police Pension Fund Article 2 and the New York City Fire Department Article 1B Pension fund combined had just 45,047 active members working and yet had 66,374 beneficiaries receiving active pension benefit payments, a ratio that implies a little over two-thirds of a year work for each year in retirement.

In 2016, New York City taxpayers contributed $3.4 billion to NYCERS. NYC taxpayers also contributed $3.4 billion to the police and fire pension funds, the same amount even though NYCERS covered nearly six times as many city workers. According to City of New York budget documents, in FY 2018 taxpayer pension contributions equaled 52.5% of wages and salaries for the NYC Police Department, where most workers are covered by the New York City Police Pension Fund Article 2, and 71.8% of wages and salaries for the New York City Fire Department, with most workers covered by the Fire Department Article 1B Pension Fund. But just 13.0% to 17.0% for the most of the non-uniformed city agencies, with workers covered by NYCERS. What is more, and what is worse, is that the current level of NYC taxpayer pension contributions to the police and fire pension plans are not enough.

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