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Wednesday, December 31, 2008

Even businesses admit healthcare competition is sick

Posted By on Wed, Dec 31, 2008 at 9:58 AM

Worth a look is this op-ed piece in today's Post-Gazette. Writer M. Christine Whipple, head of the Pittsburgh Business Group on Health, asks whether UPMC really needs to build a new hospital in Monroeville. Whipple notes that the facility would be built near Forbes Regional, an existing (and recently improved) factility operated by UPMC rival West Penn Allegheny Health System. 

Whipple's key contention:

Service duplication virtually ensures increased health-care costs. Instead of one emergency department adequately handling the area's patient volume, two could be available. That would mean more personnel and overhead costs for the same patient volume. The likely result would be higher overall costs, passed along to employers and consumers in the form of higher payments or increased premiums.

It's a little weird, when you think about it, to hear the head of a business group questioning the value of competition. I thought that was the "genius" of the American health-care system. Can we no longer depend on head-to-head competition to deliver the best possible care at the lowest possible price? It's one thing to hear Republicans denouncing George Bush as socialist, but now even the Chamber of Commerce is sounding kind of bolshie.

Perhaps Whipple's wariness is the result of increased scrutiny I've predicted UPMC will have to get used to. Perhaps it stems from the sense that a Monroeville hospital will be another nail in West Penn's coffin, resulting in a net decrease of competition over the long run.

But more importantly, I think, it's a symbol of how screwed up healthcare really is in this country. And Whipple's point dovetails with an argument made by financial journalist Maggie Mahar in a recent story by my colleague Bill O'Driscoll

"Our whole health-care system is designed largely for the benefit of people who make profit off it, rather than patients," says Mahar, author of the 2006 book Money-Driven Medicine: The Real Reason Health Care Costs So Much.

That creates overspending in several ways, she says. One is overcapacity: Too many hospitals compete for too few patients, whom doctors then hospitalize more than is necessary. "Once the beds are there, we fill them," says Mahar, by phone from New York.

Even if it kills us.

Monday, December 29, 2008

Who Oversees the Overseers?

Posted By on Mon, Dec 29, 2008 at 10:14 AM

I'll confess that when City Councilor Pat Dowd starts thundering about "transparency," sometimes my mind starts wandering. After he took office earlier this year, for example, he was all het up about the transfer of years-old UDAG funds, monies that he maintained were not properly being allocated on the balance sheets of ...

OK, I'll stop now. Because Dowd is onto something potentially much more interesting, and problematic: who is really calling the shots in this town.

Earlier this morning, Dowd's office sent out a copy of a proposed proposed "restricted defeasance account agreement between the city and the Intergovernmental Cooperation Authority, one of two state-appointed panels charged with overseeing the city's troubled finances. And as Dowd first began noting a few days ago, the agreement raises questions about who oversees the overseers. 

Essentially, the agreement would "irrevocably transfer" some $45.3 million in public money to an ICA-managed account, where it could only be used to pay off debt. The goal is straightforward: Put city funds in the equivalent of a "lockbox," where politicans can't get their grubby hands on them and use them for luxuries like, um, filling potholes or hiring cops.

But decisions about which debts to pay, and under what circumstances, would be made by the ICA alone (with the city controller's office facilitating transactions). Once the agreement is signed, elected officials would have no say in how the money is spent. Ordinarily, for example, city council is charged with the responsibility for approving expenditures -- right down to what it spends on photocopies. But in the three-page agreement, the words "city council" appear only once: The ICA pledges to notify council after any debts are paid.

Not surprisingly, that doesn't sit well with at least one city councilor. Of special concern to Dowd is paragraph 9 from the agreement:

The selection of trustee banks or any other professional support for
transactions under this Agreement shall be made by the Executive Director of the ICA pursuant to Act 11 of 2004, 53 P.S. 28101 et seq.

Act 11, for those following along at home, is the legislation that created the ICA. And among the powers allocated to the board is the ability

to make and enter into contracts and other instruments necessary or convenient for the conduct of its business.

It's not clear how the ICA would choose the financial advisers and other consultants who would help it manage that $45 million. The agreement says nothing about it, and ICA Executive Director Henry Sciortino told the Post-Gazette last week that "We do not have a preconceived notion of who should do what or how it should be done."

Generally, financial advice falls under the category of "professional service" -- and contracts for such services do not require competitive bidding. In the past, that has often led to "pinstripe patronage," in which politically connected lawyers and other professionals get lucrative contracts. And it would be ironic if the ICA decided to ignore such procedures: The legislation which created the board stressed the need for "improvement of procurement practices, including competitive bidding procedures."

Or as Dowd noted in a statement: "In a matter so critical to the city’s financial recovery, the ICA shows a blatant disregard for the
need for reform."

Personally, I'd feel a lot better if the draft agreement didn't commit everyone to wrapping up this whole deal by the day after tomorrow. (The agreement reads: "On or before December 31, 2008, the City and the City Controller shall irrevocably transfer $45,300,000 from its unrestricted general funds into the Restricted Defeasance Account.")If the mayor tried to sneak through an 11th hour transfer of $45 million to anyone else, we'd all be howling.

I'd also feel better if the ICA didn't already have a track record for playing fast-and-loose with the Sunshine Act, which requires advance public notice about its meetings. I'm sure everything the ICA does complies with the letter of the law. But the same could be said of a lot of objectionable behavior by elected officials. 

In recent months, the mayor and city council have been going through an almost proctological amount of scrutiny for almost everything they do. It'd be ironic as hell if the ICA -- whose unelected board is supposed to hold officials accountable -- was able to avoid practicing what it preached.  

But hey, maybe that's just me. And, I guess, Pat Dowd.


Wednesday, December 24, 2008

Happy Holidays -- with a SPECIAL wish

Posted By on Wed, Dec 24, 2008 at 11:05 AM

Usually, the City Paper offices are constantly thrumming with the sound of consent being manufactured, but this morning a quiet calm has settled in. It's the sort of magical silence that descends on only the holiest of days -- those which our salespeople take off for vacation. So let me take a moment to wish a happy holiday to the folks who read this blog. The three of you are what the season is all about. 

Oh! And a special shout-out, as the kids say, to state Rep. Chelsa Wagner and longtime League of Young Voters political activist Khari Mosley, who recently got married. (I'm always the last to find out about these things. No fondue set from me, you two.)

Earlier this year, Rep. Wagner broke some hearts by deciding not to run for mayor in 2009, but look at it this way:

Not being mayor of Pittsburgh means you won't have to contend with massive financial headaches. Or an aging infrastructure in constant need of repair. Not to mention constant carping from people who second-guess every decision you make. And if you find yourself missing any of that, well, take it from me -- getting married is the next best thing! 

Thank you! Thank you! You've been a great audience! Happy holidays! I have to go home and apologize to my wife!

Tuesday, December 23, 2008

Cullen It In

Posted By on Tue, Dec 23, 2008 at 8:03 AM

Wondering what Lynn Cullen is up to these days? Fans will be distressed to hear that, since being ousted from WPTT earlier this year, she's been reduced to hanging out with the likes of ... me. 

Last week, Cullen and I did one of those John McIntire-organized panel discussions in the Cultural District. It was less successful than some of the previous ones I've done -- one of those things where the number of panelists nearly outnumbers the number of people in the audience. On the bright side, I was sitting right next to Lynn Freakin' Cullen. And in tough times like these, I find her wry, even antic, outrage especially appealing.

In such circumstances, my role is to to sit quietly and let the stage lights reflect off my giant forehead, bathing Cullen in a warm glow as she holds forth. That gives me a lot of time to listen to what people are saying -- and judging from her remarks, Cullen wants to put aside the partisanship that characterized her presence as local radio's "Lone Liberal."

When the topic was a controversy like evangelical minister Rick Warren's participation in Barack Obama inauguration, for example, Cullen expressed impatience with pundits on both sides of the debate. Pundits "make their living" exaggerating the importance of such issues, she contended ... but Obama's election proved that Americans across the political spectrum want to put aside such divisiveness. 

Of course, cynics might contend that Cullen wants to drop partisanship now only because the president-elect is a Democrat ... whereas when George Bush was in office, her criticism was unrelenting. Or they might say Cullen is only dropping the partisan shtick because, since she's no longer on the radio, it's no longer how she makes her living. But I don't agree. Based on stuff Cullen said before and after the discussion, and her obvious passion all evening long, I have a feeling she really is sick to death of it.

Anyway, put aside whether Cullen really means what she says about post-partisanship: It's obvious that Obama meant it. And honestly, I've never been sure that was such a great thing. I was one of those people who always found Obama's post-partisan appeal to be kinda vacuous. That said, I'm a little surprised that anyone else is surprised by what's happening.

When Obama would talk about how there were no red states or blue states, and promised to reach out to people in the former ... just who did we think he was talking about? Did we think he was going to transcend partisan differences by including only the people we already agreed with?

A lot of us, I think, interpreted his post-partisan message in partisan terms -- when he complained about divisiveness, that message resonated in a special way with everyone who'd been scapegoated over the past 8 years. When he talked about inclusion, we assumed he only meant us -- because we thought that we were the only ones who felt excluded. 

And right now, there are people who still feel that way -- including some of Obama's glbt supporters. (Local blogger Sue Kerr's nuanced take is here.) They wonder why Obama is trying to console the feelings of evangelicals, of all people. Haven't they been calling the shots for the better part of a decade already? And this isn't just an issue for pundits to kick around. There are glbt folks out there for whom outrage over Rick Warren isn't just a way to make a living -- it's about the very fabric of their lives.

It's easy for straight white male like me to applaud Obama's outreach to evangelicals as a political masterstroke. I may even be right in hoping that this is a largely symbolic gesture that -- who knows? -- may make it easier for him to pass health-care reform, or even civil unions. Cullen (who called herself "the original Fag Hag" during the panel discussion) is right that Obama deserves a chance to actually, you know, get into office before we open up on him.

On the other hand, it seems deeply unfair that the first people to be sacrificed in the name of "post-partisanship" are the people who've been the most demonized by partisans on the other side. 

In any case, I hope 2009 redeems Obama's decision, and the hopes so many of us, including glbt voters, vested in him. I hope we don't replace bitter partisanship with bitter post-partisanship.  And I hope Lynn Cullen regains an audience commensurate with her talent.

Monday, December 22, 2008

It's A Burgh(er) Thing

Posted By on Mon, Dec 22, 2008 at 8:27 AM

So it's come to this: Pittsburgh's finest local-politics blog, The Burgh Report, has gone dark. As you'd expect, there's been some online gnashing of teeth. But whereas the departure of PittGirl attracted a front-page story in the Post-Gazette, and Teacher.Wordsmith.Madman author Chad Hermann got a full-page op-ed piece to explain his departure, the Burgh Report merely received an online-only write-up. Apparently, it doesn't even warrant a mention in this week's "Cutting Edge," the P-G's wrap-up of internet gleanings. (Though in fairness to the P-G, news of the BR's demise may have reached the paper after its Sunday op-ed section was already laid out.)

So I guess it's my turn to be the paid journalist who makes a big deal out of a blog shutting down. Which is fine by me, because I think this one really does matter. 

Let me say right off that I don't see any great conspiracy here. I have a pretty good guess about who The Burgher is, and what I know about that person's life circumstances makes shutting down the blog a totally natural thing to do. (You can find The Burgher's own explanation here.) Those looking for the Hand of Zober in this are probably wasting their time. 

Even so, this is a blow. When previous blogs shut down, I was in the camp of those who said, "For every blog that goes dark, 10 more will arise in their place." Now, I'm not so sure. 

For a time, it was easy to believe (or at least hope) that Internet technology would be a new machine, one that could effectively contest with the mid-20th century technology of Pittsburgh's party-machine politics. And it would be nice to think that progressive voices on the internet were self-replenishing -- the way that, say, Democrat-endorsed candidates for City Council District 2 are. But not so.

As corroded as its cogs and gears may be, the Democratic machine in town doesn't ask a lot of its constituent parts. Almost anyone could fill in for outgoing councilor Dan Deasy -- who heads off to Harrisburg without having made an impression on anyone or anything. Any flunky or hack will do. 

But it isn't that easy for the rest of us. When you don't have access to power, you need numbers and smarts. And the Burgh Report, along with a couple other blogs going silent, is a case where we've lost the latter especially.

In post after post, the Burgher demonstrated an obvious knowledge both of law and the inner workings of government. You're not going to find that many people who bring such expertise to bear -- and who want to share it with the rest of us so openly (albeit under cover of anonymity). It would be equally difficult to imagine someone replacing, say, Chris Briem at Null Space. How many people can write knowledgeably about bond issues, in a way that makes you want to read about them? If the Pittsburgh Comet were to stop posting on those interminable city council meetings, how many people out there would bring Bram Reichbaum's zeal (or flexible work schedule) to the task? 

It's worth remembering that Pittsburgh's original political blog, the notorious Grant Street 99, started in 1999 and went dark after legal action against its anonymous author commenced. It was years before any site rose up to replace it. 

I don't think it will take that long to replace the Burgh Report: Blogging is a much bigger part of the discourse than it was in the late 1990s. But I do think we may be witnessing a sea-change here.

Perhaps we simply got spoiled by an initial spate of bloggers who, under cover of anonymity, were willing to make use of obvious gifts that they were ALSO using in their day jobs. Something was bound to give: Either the threat of losing that anonymity, or the more mundane demands of their working lives, was bound to intrude. 

And now, perhaps, it's up to the rest of us. 

The mythos of blogging is that it is a "crowdsourced" phenomenon, in which a whole bunch of independent voices at some point swell into a thunderous consent, and drown out the chorus of doubters and hacks. But so far, it hasn't played out that way. Instead, we've ended up with a handful of blogs that a crowd of readers rely on. Even now, internet hopes have turned toward the Comet, with Bram Reichbaum playing the part of the Ringbearer, carrying progressive hopes into the depths of Mordor. Which is a hell of a burden to put on Bram.

This is the mirror image, really, of the local progressive approach to politics. We don't seem to have a ton of numbers behind us, and despite our best efforts, we don't seem to be building the massive grassroots progressive campaign that will allow us to storm the halls of power en masse. So instead, we go looking for the Great Hope -- Bill Peduto? Chelsa Wagner? -- who will slay the Democratic Goliath with a sling fashioned from $25 Paypal contributions. Yet the champion departs the field, in large part because there aren't enough of us behind him or her. 

There's a chicken-and-egg thing going on here: Do we not have the right champion because there aren't enough of us, or are there not enough of us because we don't have the right champion? Barack Obama seems to have resolved the conundrum on the national level, but I don't think anyone knows how to pull it off here. 

In any event, my prediction is that there won't be another Burgh Report. But this may actually be a good thing. What could happen is the rise of a chorus of voices -- perhaps none bringing the singular expertise The Burgher had, but perhaps not constrained by anonymity either. Perhaps those voices will prove more robust, and the debate they spawn will be more robust as well.

If that doesn't happen, well ... maybe that little itch should be telling us something. If we can't even maintain a decent stable of blogs, it's hard to imagine how anything is going to get done offline either.  Just as you can't run anonymous candidates for office, you can't rely on an online movement to effect real political change.


Friday, December 19, 2008

Blogs That Aren't Here Any More

Posted By on Fri, Dec 19, 2008 at 1:10 PM

This space laments the departure of The Burgh Report, which has inarguably been the city's premiere blog for local news junkies

Why did the shadowy Burgher depart the scene? He e-mailed both WTAE's Bob Mayo and I the following a few minutes ago:

You have to choose your enemies wisely because they will come to define you.
At some point you have to realize that certain caves are too dark for your flashlight. Either change caves or get a bigger flashlight. I couldn't get a bigger flashlight in my current situation.
I could do a thousands posts detailing how a former D-III placekicker is unqualified -- ethically and professionally -- to be the Mayor, but I've come to the conclusion that the best way to move Pittsburgh forward would be for me to direct my energy elsewhere.
Maintaining my anonymity was too much stress to deal with.


Scam Artists

Posted By on Fri, Dec 19, 2008 at 11:30 AM

There's been some buzz lately about Pennsylvania adopting "early voting" procedures in future elections. In other states, such procedures -- which include measures like making it easier to vote by absentee ballot -- reduced long lines in the 2008 election.

The advantage of early voting: It makes it easier for hard-working family-raising Americans, to get to the polls. 

So of course, the party of "family values" opposes it. 

I've been getting a trickle of statements from Republicans opposing early-voting reforms. Among them are these insights from Stan Saylor of York, the chair of the Republican Policy Committee: 

"We have election fraud constantly taking place. And we in Pennsylvania, particularly in the Republican Party have been advocating for years that we need to reform the election process. While early voting sounds great, until you reform the process and take out the corruption that's there now, it's tough to trust the idea of early voting and who's going to make sure that the ballots that are being cast are being cast by the actual people that are registered to vote."

And of course, I've also heard from the Pride of Cranberry, Daryl Metcalfe: 

"The effort by some of my colleagues to push early voting in Pennsylvania as some other states have done, really brings up that phrase that we've heard so often over the years of "vote early vote often." ... And I think the most important thing that we have to do as state legislators is to insure that the process is one that has as many protections as possible against fraudulent votes being cast." 

What's surprising about these statements is that they allege sweeping corruption without citing a single concrete example. If Republicans are aware of cases in which people "voted often," shouldn't someone have filed charges? Or at least a press release?

I'll open it to the floor. Can someone tell me, please, about this election fraud "constantly" taking place in Pennsylvania? Or even that took place this year? Anyone?

For that matter, how many allegations of voter fraud have there been in OTHER states, states where they have early voting? 

I'm talking about bona fide election fraud here, in which somebody showed up at the polls to vote more than once, or to vote under a name other than their own. You get no credit for citing accusations against ACORN -- all of which predate Election Day, to the best of my knowledge. It's clear that some signature-gatherers paid by ACORN padded their paychecks by registering imaginary voters. But I'm not aware of a single case in which an imaginary voter actually appeared at the poll. And as I've argued before, there's a real difference between making up false names on a form, and actually trying to vote under that name. Only the latter threatens the outcome of an election. 

And let's say, just for the sake of argument, that we could find a handful of Mickey Mouses who showed up at the polls this year. As we ponder our approach to elections, wouldn't it worth putting those incidents of fraud in some context? When we contemplate taking measures to restrict access to the polls, shouldn't we weigh the danger of fraud against the danger of driving away legitimate voters? 

Because that danger is at least as real as the threat of fraud. Consider, for example, this finding conducted by the Census Bureau after the 1996 elections. Of the people who didn't vote that year, more than one out of five said "they could not take time off from work or school or were too busy to vote."

For all we know, of course, many of these folks were just making excuses. But let's assume at least some of those people are telling the truth ... and that some of those would vote if they had more than just a single day to work with. If early voting made it possible for an extra, say, 5,000 people to vote in Pennsylvania elections next year, would that be worth the risk of encouraging, say, an extra 10 fraudulent votes? Wouldn't such a system be a more accurate reflection of the public's will than a system in which those 5,010 votes were never cast?

To be honest, I'm not entirely comfortable with that sort of math. But Republicans ought to be, because they do just this sort of algebra all the time.

They were, after all, willing to deregulate financial markets -- putting our retirement funds at risk -- in the theory that while this may make fraud easier, the "invisible hand" of the market would eventually weed the bad guys out. Earlier this year, meanwhile, the Bush Administration recalculated the cost/benefits analysis of environmental regulations. The EPA decided that when it comes to passing new laws to protect us, a human life was actually worth $1 million less than previously assumed. That means that, when we have to choose between costly regulation and protecting human life, the scale is now tipped in favor of pollution. So much for life being sacred. 

So in the name of economic growth, the GOP will put flesh-and-blood humans at risk of death ... but they aren't willing to take a chance on letting more of those humans vote. Because of the supposed danger that a handful of fictitious humans will vote as well.

To me, though, it's obvious what's going on here. The GOP isn't really afraid of more fake people voting. They're afraid of more real people voting. Conservatives have straight-up acknowledged that "[e]xpanding voter turnout is key to Democrats." Which means that suppressing voter turnout is key to Republicans.

And that, I think, is the real crime taking place here. 

Thursday, December 18, 2008

Tuning Out Santorum

Posted By on Thu, Dec 18, 2008 at 8:17 AM

Back during the Depression, Americans used to tune in to the radio and listen to escapist entertainment like, say, Little Orphan Annie and The Shadow. These radio serials created alternate universes, dreams spun of gossamer, that could divert us from the hardship of the real world.

In the midst of our own economic collapse, similarly, we have former Senator Rick Santorum's column in the Philadelphia Inquirer. And today brings us another gripping installment of Santorum's craziness.

This time, Santorum spins a familiar fable about how America is a "center-right" country. The evidence for this, I guess, is the massive ass-whooping Democrats put on the GOP a couple weeks ago. Santorum, of course, has an explanation for that: 

Our governing philosophy was not rejected in the last two elections; rather, we could not plausibly explain how our ideas and actions matched that philosophy.

This is of course the story a lot of Republicans have been telling themselves as they clutch the pillow over their heads. "It's not our actions and policies people have rejected -- we just didn't do a good enough job of bullshitting them."

So after eight years of right-wing ideology, Santorum contends, voters rejected Republicans because the GOP wasn't ideological enough.  The party's

problem continues today, as the government considers whether to borrow and print more money to bail out the Big Three auto manufacturers, which are even less worthy of a bailout than the financial sector.

A couple things are worth noting here. First off, let's recall -- again -- that if Rick Santorum had had his way, that financial sector would have frittered away much of our Social Security funds, along with our 401(k)s. 

But more importantly, this just shows how crazy any Republican would be to listen to Rick Santorum. The auto companies -- and the millions of working-class families they support -- are less worthy of support than financial secort? Really? In whose book? Where are all the voters who want to help the Lords of Wall Street, but not the Ford employees of Lordstown, Ohio? In what universe are people more sympathetic to Daddy Warbucks than to Annie herself? 

Delusions like these are the reason Santorum is freelancing for pocket change, while less blinkered Republicans, like local Congressman Tim Murphy, are still drawing a federal paycheck.

Murphy, as you may know, voted for the auto bailout but against bailing out the financial sector. In other words, his preferences were exactly the opposite of those Santorum recommends. 

Now you could argue that Murphy was just playing politics here -- opposing a massively unpopular banking-industry bailout shortly before an election. And then he voted for a measure to benefit an industry that the working folks in his district feel they have a stake in. But if Murphy was just playing politics ... doesn't that prove something?

Murphy's an ideologue, but unlike Santorum, he doesn't assume that the voters are. He may be a weasel, and Democrats like me might dearly love to get rid of him, but that's not the issue here. The issue is that Murphy, whatever his faults, has maintained some sort of connection with political reality -- which is to say he has maintained some sort of connection with the people he represents. His continuing political success puts paid to Santorum's bizarre notion that, in the midst of an economic collapse, what people really want is a purer form of the ideology that caused the crisis in the first place.

But by all means, I invite GOP operatives to continue tuning into Santorum's messages. In a future episode, perhaps he'll be able to explain the setbacks of 2010 and 2012. 

Wednesday, December 17, 2008

Steel: Small Enough to Fail

Posted By on Wed, Dec 17, 2008 at 2:41 PM

A friend just passed this installment of NPR's "Planet Money" to me. First broadcast last week, it features historian John Steele Gordon talking about how Pittsburgh's steel industry was apparently NOT too big to fail (The segment starts at roughly the 5-minute mark.) As Gordon points out, when the collapse of American steel was at hand, manufacturers didn't jet off to Washington to get a massive federal cash infusion, the way automakers have been doing. They mostly sought tariffs and other trade sanctions against foreign producers instead. 

You could argue that this is a distinction without a difference: If Detroit gets its bailout, it will be underwritten by taxpayers ... whereas the burden from tariffs was passed along to the customers having to pay for domestic steel. In either case, the industry's problems are being put on someone else's shoulders.

Then again, Gordon notes that much of steel's competition came from Japan, which rebuilt its industrial base from scratch after World War II, using more up-to-date equipment. And of course, Japan was able to do that thanks in part to help from the US government. So perhaps asking the government to protect its own industries wasn't so outlandish.

But maybe the big difference between cars and steel is the timing. Since the time since steel collapsed, we saw the rise of Reagan and three Bush terms, interrupted by a two-term Democratic presidency which believed strongly in free trade and financial deregulation. But after nearly 30 years of touting the virtues of the free-market -- mostly under Republican rule -- the government is considering levels of intervention that weren't even contemplated when steel went under.

Maybe excessive amounts of deregulation lead to excessive bailouts when it all goes awry? Maybe this money isn't intended to bail-out not the decades-old screw-ups of Detroit, but the decades-old screw-ups of Washington D.C.?

Incidentally, following the Gordon interview is a 5-minute rebroadcast of a "Planet Money" segment from the year before, in which correspondent Adam Davidson visits Pittsburgh to see what the decline of steel hath wrought. It's a surprisingly nuanced piece that notes steel's collapse wasn't quite as complete as popular myth would have it.  And it explores, somewhat superficially, the slur "cake-eater," which is one of those insults I keep meaning to use more often in columns. 

Finally, in a "these are industries that died" vein, I recommend Jason Togyer's post on the Post-Gazette's recent layoffs ... and its poorly timed price hike a couple days later. (Seriously -- did these guys get their marketing strategy from the people who advise the Pirates?) Jason's argument is that in the face of serious challenges, our local papers have often focused most on the stuff they are least equipped to provide -- like providing gossip or world news people already have caught on CNN.

That criticism dovetails with one Jason's former colleague, Dave Copeland, made in CP a few years back--

[T]he office drones we were targeting wouldn't pick up a newspaper if it just had stories they'd already read on the Internet when their boss wasn't looking. What the paper needed, I argued, was content that people couldn't get anywhere else.

-- and about the only place where I disagree with Jason is his denunciation of the P-G's comics page. Sure, features like "Rex Morgan" and "Family Circus" are every bit as awful as he says. I can't imagine anyone under the age of 60 ever reads such tripe. But then again ... guess which demographic increasingly makes up the print edition's bread-and-butter? Hard to blame a paper for trying to protect the readers it still has. 

Friday, December 5, 2008

Pension for Destruction

Posted By on Fri, Dec 5, 2008 at 9:39 AM

Is it possible to be appalled by something, and yet not at all surprised? If so, I guess that's the proper reaction to today's news that the city's pension fund has lost $124 million so far this year

As Chris Briem, the resident genius on these matters, points out, none of this is terribly unexpected. The pension fund was shaky even when the market was riding high, and everyone knows what the past few months have been like on Wall Street.

The temptation in some quarters will be to blame current Mayor Luke Ravenstahl for all this: After all, folks like City Councilor Bill Peduto have been warning that the past couple years, which have seen relatively pain-free budgets, have been the "eye of the storm." And yet, little has been to solve the problem.

But there's plenty of blame to go around. For one thing, the city's budgets have all met with the approval of not one but two state-created financial oversight boards. And by the time Ravenstahl took office, the pattern of ignoring pension problems was already well established. As City Paper reported way back in 2005, Mayor Tom Murphy -- for all his claims of fiscal responsibility -- left behind pension problems that were even worse than they appeared. 

As we noted, Murphy was claiming a pension budget that was only 40 percent funded -- which, as bad as that sounds, was probably too optimistic:

The estimate relies upon a whole range of assumptions that may or may not be correct... For example, the city assumes that through skilled investment, its pension fund can earn a return of 8.75 percent on its own. That's an optimistic number, one based on returns from the stock market before the 2001 crash.

Murphy established a trend that his successor has been only too happy to continue: Marking time, with the consent of the city's financial overseers, and making payments from one year to the next. But ultimately, doing nothing more about the pension time bomb than crossing fingers. 

And to be fair, it's not clear they had any real options. The catastrophic collapse in markets means that even if Ravenstahl had sought to shore up the city's pension fund by cutting services, a lot of that money would have disappeared anyway. You could argue that at least this way, Pittsburghers got the benefit of city services they otherwise would have lost. Ironically, doing the "responsible" thing -- cutting operating budgets and raising taxes -- might have just compounded the disaster. We'd still have a dramatically underfunded budget, except we'd probably have a lot more potholes to boot.

It's also worth noting that state-appointed financial overseers were willing to look the other way. Maybe the pension problem is so large that the city simply can't do anything about it? Maybe anyone who really looks at this problem would throw up their hands?

In any case, this isn't just a problem for the city. As we noted not long ago, plenty of city retirees move into suburban communities, where they spend money and pay taxes. If you live in a suburb, it's tempting to say "screw those greedy retirees, and the dummies who gave them their benefits!" But it might be worth reflecting that the foreclosed home we're talking about may someday be the one next door.

And luckily -- if that's the word -- other municipalities are screwed as well. As the P-G story linked above notes, plenty of other governments have watched their pensions evaporate, even if the problems aren't quite as severe as Pittsburgh's. It may be that the financial crisis is so big that it will do what years of speeches and newspaper columns have failed to do -- encourage Harrisburg to come up with an across-the-board solution. Nothing else is going to work. 



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