Quoted in Insurance News.Net

Brian O'Connell quotes me in Insurance News.Net in this piece about government intervention with respect to retirement plans.  

'Government has considerable experience with administration of employee benefits, and the public has ample evidence of its track record, including Social Security, Medicare, Medicaid, state public sector pension plans, and various state insurance funds,' said Mitchell B. Langbert, a business instructor at Brooklyn College Koppelman School of Business.

Langbert worked for the New York State Legislature in the 1990s. Political leaders would regularly use the workers' compensation State Insurance Fund and state pension funds to manipulate the state budget.

“That is a national pattern,” he said. “Pew reports that the average public sector pension fund is only 72 percent funded.”

Poor History

The history of Social Security is similarly subject to political risk, Langbert said. “Benefits were raised in the early 1970s, then they were reduced in the early 1980s,” he said. “As of today, future liabilities are expected to be underfunded in 16 years.

Medicaid and Medicare have had repeated fraud problems, Langbert said.

“Given this record, why would you expect that the public would be eager to have government entities manage employee benefit money?” he asked. “Do France and Greece offer better examples? Or does the USSR, which devalued the ruble and destroyed its citizens' savings?”

Suffice to say, Langbert echoes what many Americans are feeling about the ability of U.S. political leaders to be effective.

An Honorary Degree for Sacco and Vanzetti?

I am reading Stephen Edward Epler's book Honorary Degrees, published in 1943. Epler wrote the book after finishing his doctorate at Teachers College; he was working at Southern Oregon College of Education when he wrote it. Epler went on to found Portland State University.

The book offers a window into the history of American colleges, and there is much of specialist interest, but one quotation caught my eye.

Epler points out that through the 1930s, honorary degree recipients tended to be conservatives. In that regard, he notes that in 1838 Harvard gave an honorary degree to James T. Austin, who as Massachusetts attorney general praised a lynch mob that had murdered the abolitionist Elijah P. Lovejoy. He adds that 100 years later, in 1938, Smith College gave honorary degrees to two of Lovejoy's descendants. Ex-president Herbert Hoover spoke at the occasion. Epler concludes this:

In 1922 Harvard gave an LL.D. to a Massachusetts attorney who soon after aided in the conviction of Sacco and Vanzetti. It may be wondered if, in 2022, a college will honor descendants of these men at a celebration memorializing the struggle for freedom of speech.

Epler could not have conceived the extent to which the left would have subsequently triumphed on campus or its future opposition to freedom of speech. His prediction, though, is perspicacious. I'm surprised Harvard hasn't erected a memorial statue to Sacco and Vanzetti.

Monetary Sources of Real Wage Stagnation

 

The left-wing Economic Policy Institute posts the chart below, which shows that real wages and productivity began to diverge in 1973, two years after President Nixon's abolition of the secondary gold standard and in the midst of a 15-year period of massive regulatory expansion, including workplace regulation such as ERISA, OSHA, and Medicaid. Before 1971 the average real hourly wage increase was .5% to 2% per year, resulting in 65% real wage growth in 50 years. That relationship began with the Jacksonian (no central bank) era or even earlier, in the colonial era, and it ended in 1971. The pre-1971 path shown on the chart (1948-1971) was characteristic of the laissez faire, Progressive, and New Deal eras.Since 1971, a period of about 47 years, there has been zero real wage growth. Although unions have declined in proportion to the work force, there was a similar level of unionization during the laissez faire era, when inflation-adjusted wages grew at .5% to 2.0%. In addition, because there were no (zero) income taxes in the laissez faire period, workers kept their wages and saved, to the tune of 30% of income in the late 19th century. The interest on that savings was higher than during the Fed era. Stock and bond market returns were, however, lower.            https://www.epi.org/publication/charting-wage-stagnation/

2018 APEE Meeting a Success

I just attended the Association of Private Enterprise Education (APEE) meeting at Caesars Palace in Las Vegas. I presented a paper on the political affiliation of liberal arts faculty and had organized a separate session "Political Correctness and the Constitution of Higher Education." The keynote speaker, the famed Alan Kors, spoke on related topics. Overall, it was an enjoyable and beneficial experience.