No 'conflict of interest' as State Rep. Darlene Senger tries to push defined benefit pensions into 401K type plans... It's how the 'free market' system works, after all
To understand free market economic theory is to recognize the schemes of the Civic Committee of the Commercial Club of Chicago and its connection to legislators such as Darlene Senger, who is a “licensed financial advisory and investment advisor” (by Glen Brown)
Illinois State Representative Darlene Senger of suburban Naperville is one of the most reactionary conservatives in the Illinois House of Representatives and now the co-sponsor of legislation that she claims will solve "corruption" in Chicago public worker pension funds by giving complete control over the management of the funds to Chicago Mayor Rahm Emanuel. Free market principles, supported by neo-conservatism or neo-liberalism and perpetuated by a “corporatists’ crusade,” are align with the policies of the “Chicago School” ideologues, the World Trade Organization and the International Monetary Fund. These doctrines perpetrate a blitzkrieg deconstruction of the middle class, privatization of public ownership and industry (downsizing and parceling out public companies and services to private interests), government deregulation and cuts to spending (thus, stimulating deep economic recessions) and cutbacks or the elimination of the public sphere and all social funding — hence, turning the working middle class into the “disposable poor” — to loosen control of the flow of money and to produce “freer trade” in the global market marked by an intransigent belief that “it should be left to correct itself.” Global free market theory has surfed “the waves of fear and disorientation” while advancing an ideology of “unfettered capitalism,” leaving inequality and degradation in its wake, (Naomi Klein, award-winning journalist, fellow at the London School of Economics, author and filmmaker).
The free market theory caters to self-interested desires and profit to the detriment of other peoples’ lives, all the while promising “freedom and prosperity.” Free market principles advocate that the rich and poor should be taxed at the same flat rate, despite creating a vast inequity; that, for example, education, health care, retirement pensions, national parks (and most any function intrinsic to essential governing) become privatized; that publicly-owned companies, services and their assets be auctioned off to private investors; and that besides allocating vast amounts of wealth and resources from public to private ownership, that in the free market the transfer of private debts to the public sector while public ownership is systematically dismantled ironically continue.
The free market economic theory was developed by Milton Friedman in the 1950s at the University of Chicago. It has come to underlie the basis for the exploitation of ecological, economic, political, and/or social catastrophes, documented in such places as Chile, Argentina, Brazil, Uruguay, Southern Cone, Poland, Falkland Islands, Bolivia, China, South Africa, Russia, Thailand, Malaysia, South Korea, Philippines, Indonesia, former Yugoslavia, “New Orleans,” Canada, Iraq, Sri Lanka… (Klein) – all attempted transformations through invasion, occupation, and deconstruction, in other words, the ransacking of a country’s natural resources, its culture and industries, and thus forcing austerity on masses of people, while further dispossessing the poor. (Resultant violence, theft, and torture are often “thriving industries” in the world of global free market philosophy).
Whether inadvertently or not, Friedman’s theory results in a concentration of wealth and the creation of a plutocracy through unregulated corporate profits at the expense of eradicating the middle and lower classes’ rights to earn a decent income, public pension and the opportunity to acquire any semblance of dignity or satisfaction of basic human needs. This is also referred to as the “busting of unions, the slashing of payrolls and the shredding of employee benefits, without any attempt by government to constrain or reverse these practices…,” as stated by Robert Reich, Professor of Public Policy at the University of California at Berkeley and former secretary of labor in the Clinton administration.
The method employed by “corporatist crusaders” includes unilaterally imposing the free market ideology and its creed that freedom without government regulation (or unlimited, avaricious profit for a few people) will create the greatest benefits for everyone. Historically, it has been exercised with such corruptive force that it generates “economic genocide” (Klein). Often times, this is accomplished by manufacturing a “pseudo crisis” to be later used as leverage for such opportunism. This “crisis” is then transmitted vigorously through the media and funded by big banks and corporations. Moreover, the method has also been known to employ the “divide and conquer” strategy (to break unions) and hyperinflation to forward the free market crusade.
It is said that the free market economy is built upon “planned misery” for the masses, where the majority of the population is excluded from reaping any benefits despite promises for “freedom” and “shared wealth.” The notorious effects of global free market principles at work are the elimination of subsidies, layoffs or the loss of millions of jobs, especially in the public sector, and decreased or frozen wages while the corporate elite continue to procure exorbitant financial gains through the demolition of the public sector, the consistent outsourcing of jobs and inundation of cheap imports, tax loopholes, untaxed off-shore bank accounts (a “theft ex post facto”) and from laws, that David Cay Johnston, Pulitzer Prize-winning journalist and Syracuse University law and business schools’ lecturer, says “continue to enrich the wealthy few at the expense of the many through auctions that are called markets but act instead like bid-rigging systems approved by government.”
We have witnessed legislators who pass corporate-sponsored reform bills that support privatization and deregulation (the destruction of unions, public jobs and pensions) in order to garner money for their re-election bids. We should ask: might there be a conflict of interest when it comes to some policy changes for politicians who have moved from the corporate world into public office and whose motive for service is market-based profit and/or self-interest?
The results of wealth being transferred to “disaster capitalists” while hundreds of thousands of people are subject to human rights’ abuses, mass poverty, repression, and other forms of political, economic, psychological and physical terrorism – “policies of dispossession” – are fully substantiated and documented. As many of us are aware, free market strategies have capitalized on national emergencies to meet objectives by initiating a “manufactured” debt crisis or through price and currency “shocks” crafted by a volatile and deregulated economy.
The global free market economy has proliferated unchecked corruption manifested in lucrative private contracts, tax cuts, and redistribution of public wealth to existing (and bygone) profit-driven corporations and banks such as Halliburton, Blackwater, Lockheed Martin, FEMA, Fluor, Shaw, Bechtel, CH2M Hill, New Bridge Strategies, Ash Britt, Service Corporation International, Entergy, CACI, Booz Allen Hamilton, Koch Industries, Searle Pharmaceuticals, Monsanto, Wal-Mart, Intel, Caterpillar, Microsoft, IBM, Exxon Mobil, Shell, BP, Chevron, Goldman Sachs, Morgan Stanley, JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Merrill Lynch, Washington Mutual, Arthur Andersen, AIG, Fannie Mae, Freddie Mac, Bear Stearns, Lehman Brothers, Enron, WorldCom, Adelphia, Global Crossing, Tyco, Sunbeam, ImClone, to name just a few. The list is endless.
Behind the entire “corporatist crusade” are also “think tanks” such as the Heritage Foundation, Cato Institute, Americans for Prosperity, American Enterprise Institute, Hoover Institution, Carlyle Group, Milken Institute, Mercatus Center, Heartland Institute, Reason Foundation, et al. Sources:
Johnston, David Cay. Free Lunch: How the Wealthiest Americans Enrich Themselves at Government
Expense (and Stick You with the Bill). New York: Penguin Books, 2007.
Klein, Naomi. The Shock Doctrine: the Rise of Disaster Capitalism. New York: Picador, 2007.
Reich, Robert B. Aftershock: the Next Economy & America’s Future. New York: Vintage Books, 2010.
Comments:
By: James Beran
Senger
Sure, turn it over to the Mayor. There have never been corrupt politicians. All politicians want to do is reduce their obligation to the pension plans (which are sustainable even with the under funding) so government can borrow more. Do the math: TRS pays out 4.9 billion and receives 6.9 billion. Does your house hold save 25% a year? Annuities will help the corporations that sell them and take money away from TRS. Government sees a fat cat and wants to skin it. Sure, there are abuses, but all the big winners are NOT union members, but some form of administration that had a sweet heart deal to pump the salary to pump the pension. A flat rate cut of 20% will hurt most on a pension that make $25k as compared to those making $200K on the pension. A few bad apples and everybody pays. People bet the rest of their lives on the promised pension and now it is too inconvenient for government to make good on those promises made without union pressure. Meanwhile, the maximum tax is 38% as compared to the pre-Reagan maximum tax of 95%. Even before Reagan, the rich were doing well. Now they are 3xs richer. Read: America: A Third World Country. Feel sorry for the rich that create jobs in other countries because there is a \"docking dilemma\" in Florida. There are so many yachts and no place to dock them.
By: bob busch
Sister Bills
THe end game
The new bill to place ownership of our pension funds in the hands of
The mayor is not only an insult to every present board member it is a
very bad idea. If this bill passes along with SB512, the pension reform
Bill the results will be catastrophic for a couple of reasons.
If both pass it will cause one of the largest transfers of wealth
In American History that will affect new, old and retired teachers.
The corner stone of SB512 is the elimination of the defined benefit.
It offers only three options beginning in 2012.old teachers can keep what they earned
Till then and pay merciless deductions estimated as high as 60% of salary.
Plans two and three allow members to direct individual accounts into
Investment vehicles approved by a new state board. It will take five years
To become vested .If you resign after that you get your money and what the board
contributes plus interest. If you resign before five years this happens:
That is pretty slick but it gets better, this paragraph will be the kiss
Of death:
If we lose your investment money too bad we are not responsible.
Giving the Mayor the power to invest the vast sums of money this
Change will create is criminal.
By: Bob Busch
A close look at SB512
The end game
The new bill to place ownership of our pension funds in the hands of the mayor is not only an insult to every present board member it is a very bad idea. If this bill passes along with SB512, the pension reform bill, the results will be catastrophic for a couple of reasons.
If both pass it will cause one of the largest transfers of wealth in American History that will affect new, old and retired teachers. The corner stone of SB512 is the elimination of the defined benefit. It offers only three options beginning in 2012. Old teachers can keep what they earned till then and pay merciless deductions estimated as high as 60% of salary.
Plans two and three allow members to direct individual accounts into investment vehicles approved by a new state board. It will take five years to become vested. If you resign after that, you get your money and what the board contributes plus interest.
If you resign before five years this happens: If a participant who is not vested in employer contributions terminates employment, the participant shall be entitled to a benefit based solely on the account values attributable to the "employee's contributions and any investment return on those contributions, and the employer contributions and any investment return on those contributions shall be forfeited."
Any employer contributions that are forfeited shall be held in escrow by the company investing those contributions and shall be used as directed by the System for future allocations of employer contributions.
That is pretty slick but it gets better, this paragraph will be the kiss of death:
"The participant shall not be deemed a fiduciary by reason of providing investment direction. A person who is a fiduciary, including the plan sponsor, shall not be liable for any loss resulting from the investment direction of the employee and shall not be deemed to have breached any fiduciary duty by acting in accordance with that direction. The retirement system, the Illinois State Board of Investment, and the employer do not guarantee any of the investments in the employee's account balances."
If we lose your investment money too bad we are not responsible. Giving the Mayor the power to invest the vast sums of money this change will create is criminal.
By: John Kugler
Scamsters
How can rahmm be making any finical decisions for Chicago after this record? everything he does is a conflict of interest, past association, and violates all normal ethical standards.
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A conflict of interest (COI) occurs when an individual or organization is involved in multiple interests, one of which could possibly corrupt the motivation for an act in the other.
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After serving as an advisor to Bill Clinton, in 1998 Emanuel resigned from his position in the Clinton administration and joined the investment banking firm of Wasserstein Perella, where he worked until 2002.[35] Although he did not have an MBA degree or prior banking experience, he became a managing director at the firm’s Chicago office in 1999 and, according to Congressional disclosures, made $16.2 million in his two-and-a-half-years as a banker.[35][36] At Wasserstein Perella, he worked on eight deals, including the acquisition by Commonwealth Edison of Peco Energy and the purchase by GTCR Golder Rauner of the SecurityLink home security unit from SBC Communications.[35]
Emanuel was named to the Board of Directors of the Federal Home Loan Mortgage Corporation (Freddie Mac) by President Clinton in 2000. His position earned him at least $320,000, including later stock sales.[37][38] He was not assigned to any of the board's working committees, and the Board met no more than six times per year.[38]
During his time on the board, Freddie Mac was plagued with scandals involving campaign contributions and accounting irregularities.[38][39] The Obama Administration rejected a request under the Freedom of Information Act to review Freddie Mac board minutes and correspondence during Emanuel's time as a director.[38]
The Office of Federal Housing Enterprise Oversight (OFHEO) later accused the board of having "failed in its duty to follow up on matters brought to its attention." Emanuel resigned from the board in 2001 when he ran for Congress.[40]
References
[35] Sanati, Cyrus; Sorkin, Andrew Ross (November 7, 2008). "Rahm Emanuel, Former Investment Banker". New York Times. Retrieved November 8, 2008.
[36] Easton, Nina (September 25, 2006). "Rahm Emanuel, Pitbull politician". Fortune.
[37] Poor, Jeff (November 6, 2008). "Obama's Chief of Staff Pick a Freddie Mac Alum". Business & Media Institute. Retrieved November 8, 2008.
[38] a b c d Secter, Bob; Zajac, Andrew (2009-03-26). "Rahm Emanuel's profitable stint at mortgage giant". chicagotribune.com. Retrieved 2010-07-10.
[39] Sweet, Lynn (January 3, 2002). "Too much money a bad thing? 5th District House candidate Rahm Emanuel tested voter reaction to $6 million salary". The Chicago Sun-Times.
[40] Ross, Brian; Rhonda Schwartz (November 7, 2008). "Emanuel Was Director Of Freddie Mac During Scandal". ABC News. Retrieved November 7, 2008.
from http://en.wikipedia.org/wiki/Rahm_Emanuel
By: Kimberly Bowsky
Mobilization
All of the employee groups listed in HB3827 should conduct a mass mobilization and base our re-education of the public on the information in the article and above-listed comments.
I just fired off several letters to the reps, not knowing if they read or not. I will fire up my colleagues at our next meeting.
By: Raymond Wohl
HB 3827 will give green light for Mayor to Merge Pension Funds
HB 3827 now being debated in Springfield will give the Mayor of Chicago the voting control of the 117 year old Chicago Teachers Pension Fund and nearly 10 billion in assests. He has two choices: 1) to stack the pension board with Controlling Conflict of Interest Banksters and Billionaire Investors who in themsleves have a Conflict of Interest in handling decisions to control the fate of Public Pensions. And 2) Mayor Emmanuel can have the New Pension Board immediately vote to Merge with the State's TRS, Teacher Retirement System and move his contractually required Billions in Pension obligations from Chicago to the State who can then mortgage all teachers futures to oblivion. Nice move..and the Mayor is a master of Bi-particianship..he has the Republicans from the collar counties do his dirty work. And this was all hatched this Fall in Rep. Mike Madigan's offices at a series of Fall meetings with key influentials. Scandalous.
By: Luis Gabriel Aguilera
Great Article
This is truly a must read article which exposes what BOTH domineering political parties, hijacked by neoconservatives and neoliberals over the last 30 years, have on the agenda.
As someone versed in Latin American political history, studies, etc., many here in this country will unfortunately not be able to readily see the telltale signs -- though it's obvious that something is terribly wrong with our socioeconomic and political systems. But for those who understand free market theory and what corporatization of societies means in their own research, this is a worthwhile article to pass around to family and friends who are not in the know.