Billionaire Arnold’s Deceptive Campaign Against Worker Pensions

David Sirota has written a hard-hitting expose of how Enron billionaire John Arnold has managed to create the impression that the major financial crisis hitting our nation is not billionaires like Arnold ripping off the public, but instead the modest pensions and health benefits of millions of public workers.

Sirota explains that Arnold did it by paying supposedly ‘impartial’ think-tanks like the Brookings Institution to come up with position papers saying that the only solution to budget crises in various states and municipalities is to cut workers’ pension plans and their health benefits, leaving out entirely the idea of raising taxes on the very wealthy or ending subsidies for large corporations.

I strongly recommend reading the article.

An excerot:

Rule 3: [for producing deceptive advertising disguised as objective reporting] Forward prepackaged assumptions that serve the native advertiser’s goals, and do not mention facts that undermine the native advertiser’s agenda

Self-serving assumptions and strategic framing are among the most critical components of native ads. Arnold’s public television series, for example, was called “The Pension Peril” – the idea being that pensions are primarily or even singularly causing a financial crisis in states.

It’s the same technique in the Arnold-funded Brookings paper. By the paper’s own admission, it “starts from the premise that the pension systems in many states have simply become unsustainable.”  Largely ignored is the data showing that while some pension funds face problems, those problems are typically small compared to other bigger budget problems.

For instance, the Center for Economic and Policy Research notes that pension shortfalls are “less than 0.2 percent of projected gross state product over the next 30 years” and “even in the cases of the states with the largest shortfalls, the gap is less than 0.5 percent of projected state product.” Similarly, Boston College’s Center for Retirement Research reports that pension contributions “account for only 3.8 percent of state and local spending.”

Summing all that data up, McClatchy Newspapers has noted that “there’s simply no evidence that state pensions are the current burden to public finances that their critics claim.” Meanwhile, what pension shortfalls do exist are far smaller in total than the amount state and local governments arespending each year on subsidies and tax breaks to corporations.

These facts are nowhere to be found in the Brookings report. Instead, pension cutting politicians like New Jersey Gov. Chris Christie (R) are lauded for “successfully creating a sense of crisis around the pension system” and for pleading poverty to justify retirement benefit cuts. Amazingly, the paper does not contrast Christie pleading poverty with his handing out a record amount of corporate subsidies, signing legislation to expand those expensive corporate handouts and proposing expensive new tax cuts for the future.

Published in: on March 1, 2014 at 9:35 am  Comments (3)  
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