Pension Raiders Are Preparing To Attack

Earlier this week, the long awaited report on the state pension system finally came out. Lo and behold, the pension system was found to be strong and it was advised that no changes be made.

Scott Walker made a huge announcement that he currently had no plans to make any changes to the system. This was dutifully echoed by the Koch employees with a "See? Nothing to see here!" approach.

I warned the gentle reader not to their guard down:

I need to point out that there is no way in Fitzwalkerstan that Walker would not have let this release be issued, much less stand pat, unless he approved of it first.

It clearly indicates that the Walker administration will not be satisfied to leave it alone for long.

Indeed, history shows that Walker has an infinity to mucking up pension systems and that he has telegraphed his intention to do the same with the state's system.

Perhaps feeling the heat from the knowledge that Walker's day of reckoning with John Doe approaches nigh, the corporate interests which support Walker have no interest in waiting around to get their hands on the fully-funded pension system.

Indeed, the Koch-sponsored and directed propagandist group Wisconsin Reporter is laying the groundwork which will serve as the base for their attack on the pension system. Just days after the Pew report declared the pension system strong, they come out with this:

State officials might want to take a second look at the highly touted Wisconsin Retirement System.

The costs and transparency of state and local pensions may soon be on the rise in Wisconsin and across the nation, driven up by proposed changes from Moody’s Investors Service, the global credit rating agency.

The changes could mean that Wisconsin Retirement System is underfunded by nearly $30 billion – and that could ultimately drag on government bond ratings.

Among other adjustments, Moody’s proposes to standardize the public pension discount rate (or rate of return) at that of a high-grade, long-term corporate bond – currently yielding 5.5 percent. The changes will bring public pension reporting in line with the private sector, which uses the same corporate bond rate for valuing its liabilities.

States currently value their pension obligations based on how much they assume assets will return over the long haul. Wisconsin now uses a 7.2 percent discount rate.

The difference between 7.2 percent and Moody’s proposed standardized rate could mean a gap of billions of dollars in investment expectations.

Now, of course, the propagandists are expecting the people to take this as gospel truth, even though Moody's doesn't have the best track record, giving "the highest 'aaa' ratings to "toxic" instruments such as collatoralized debt obligations (CDOs) that later turned out to be very low quality debt instruments. The high rating enticed institutions to purchase these instruments, leading to defaults that spread throughout the financial system."

To bolster this hyperbolic claim, we can soon expect that the Franklin Institute (which oversees Wisconsin Reporter), the MacIver Institute, WPRI, squawk radio and the other propagandists to start parroting this doom and gloom forecast. When they repeat the lie enough, it will give enough faux credence to the lie that the corporate media will pick it up and run with it.

And thus the stage will be set for Walker and his Republican cronies to feign that there is a problem and do their full on assault on the pension. You can count on them using this excuse to try to convert the pension to a 401K and to raise the costs so high that public sector workers will be forced into the lower quality plan designed to channel the money to Wall Street.

Walker would have probably already called for a special session "to focus like a laser on job creation" in order to ramrod through the pension raid if they were foiled by the people in Racine who were able to overcome all the hanky-panky the Republicans had pulled in the recall election, knocking out the disgraced and disgraceful Van "Double Dipper" Wanggaard.

I still wouldn't put it past the Republicans to wait until there is a lull and call an emergency session during the summer lull in the hopes to catch enough Democrats unprepared and thus unable to exert their majority power in the Senate.

I've said it over and over, with Walker and his motley gang of thugs, there's more. There's always more.

It's up to us to be ready for it and squash it before it starts.