Editorial Garbage in New York Times ... How Dumb Do They Think We the People Are?

The New York Times is a liberal newspaper. No news there.

It has an opinion page where mostly liberal writers express their views on various matters. No news there either.

But Friday they outdid themselves in two editorials concluding that (1) providing public pensions for all workers would be essentially free and (2) further efforts to accelerate our North American energy supply wouldn't be helpful.

My question is simple: How dumb or ignorant do they believe We the People are? Politics sucks but their conclusions go way beyond that. They're absurd.

First up is an editorial titled Don't Cut Pensions, Expand Them, written by a professor of economics at the New School:

" ON Thursday morning the New York State Legislature agreed to a deal limiting pensions for future public employees. The state thus joins 43 others that have recently enacted legislation curtailing public retirement benefits.

• New York Lawmakers Vote to Limit Public Pensions (March 15, 2012)

Though New York needs to reduce its spending, the cuts come at a particularly bad time: over a third of New York workers, both public and private, approaching retirement age have less than $10,000 in liquid assets. . . .

Fortunately, there’s an easy solution. Rather than curtailing public and private pensions, New York and other states could save millions of workers from impending poverty by creating public pensions for everyone.

While the recession bears some blame for the looming retirement crisis, experts agree that the primary cause is more fundamental: Most workers do not have retirement accounts at work. Over half of the workers in New York State, more than four million people in 2010, do not participate in retirement plans with their current employers, while over half of American workers do not have pension plans at work.

Private-sector pensions have been on the retreat for decades. In fact, in the late 1970s and early ’80s, Congress, worried about the dismal rate of pension coverage, tried to remedy the situation by extending 401(k) plans, originally designed for executives, to everyone, while also passing a law to create individual retirement accounts. . . .

Meanwhile, despite extensive commercial advertising for retirement planning, coverage for ordinary people stalled. And even many of those who do save for retirement fail to consistently put away the 5 to 10 percent of their pay necessary to adequately supplement their Social Security benefits. . . . public pension plans usually outperform 401(k) plans and individual retirement accounts . . . .

By some estimates, costs for public pensions are over 45 percent lower than for individual 401(k) plans. Of course, since these plans would be financed by workers and their employers, there would be no cost to taxpayers.

Saving for retirement is never easy. But finding a safe place to put your money these days is even harder. Opening up public pension options to everyone is a cheap, simple way to help."

Discussion and Analysis

WOW! How easy!

Now all we have to do is get employers to accept as true the professor's assertion that "costs for public pensions are 45 percent lower than for individual 401(k) plans."

And the following piece of unsupported propaganda as well: "Fortunately, there's an easy solution (to low retirement savings and benefits for many workers). Rather than curtailing public and private pensions, New York and other states could save millions of workers from impending poverty by creating public pensions for everyone."

Those are simply two incredible statements. And coming from an economics professor, they're remarkable.

If in fact employers, public or private, could offer pension plans to employees that cost 45% less than 401(k) plans and provide higher and guaranteed benefits upon retirement, what employer would be stupid enough not to do so? I can't think of a single one.

And if in fact employers, public or private, could save millions of workers from poverty by providing low cost pensions to all, who would be stupid or heartless enough not to do so? Again, I can't think of one.

Apparently financial illiteracy is rampant, even at the professorship level. Either that or straightforward political gamesmanship. You choose.

Now let's move on to drilling and Natural Born Drillers by liberal columnist Paul Krugman:

" To be a modern Republican in good standing, you have to believe — or pretend to believe — in two miracle cures for whatever ails the economy: more tax cuts for the rich and more drilling for oil. And with prices at the pump on the rise, so is the chant of “Drill, baby, drill.” More and more, Republicans are telling us that gasoline would be cheap and jobs plentiful if only we would stop protecting the environment and let energy companies do whatever they want.

Thus Mitt Romney claims that gasoline prices are high not because of saber-rattling over Iran, but because President Obama won’t allow unrestricted drilling in the Gulf of Mexico and the Arctic National Wildlife Refuge. Meanwhile, Stephen Moore of The Wall Street Journal tells readers that America as a whole could have a jobs boom, just like North Dakota, if only the environmentalists would get out of the way.

The irony here is that these claims come just as events are confirming what everyone who did the math already knew, namely, that U.S. energy policy has very little effect either on oil prices or on overall U.S. employment. . . .

As I said, this was totally predictable.

First up, oil prices. Unlike natural gas, which is expensive to ship across oceans, oil is traded on a world market — and the big developments moving prices in that market usually have little to do with events in the United States. Oil prices are up because of rising demand from China and other emerging economies, and more recently because of war scares in the Middle East; these forces easily outweigh any downward pressure on prices from rising U.S. production. And the same thing would happen if Republicans got their way and oil companies were set free to drill freely in the Gulf of Mexico and punch holes in the tundra: the effect on prices at the pump would be negligible. . . . giving the oil companies carte blanche isn’t a serious jobs program. Put it this way: Employment in oil and gas extraction has risen more than 50 percent since the middle of the last decade, but that amounts to only 70,000 jobs, around one-twentieth of 1 percent of total U.S. employment. So the idea that drill, baby, drill can cure our jobs deficit is basically a joke."

Discussion and Analysis

Krugman says that "U.S. energy policy has very little effect either on oil prices or on overall U.S. employment." He also argues that if "oil companies were set free to drill freely in the Gulf of Mexico and (Alaska) . . . the effect on prices at the pump would be negligible." He has a lot of other nonsensical stuff to say as well.

So according to Krugman, finding, producing, refining, distributing and selling more North American oil and gas means nothing. Supply doesn't matter. Profits don't get taxed. Neither do earnings. And more employment won't come to those workers doing the finding, producing, refining, distributing or selling the additional energy coming from North America. Nor will there be more jobs for grocery stores, car dealers, restaurants and others. Krugman has simply repealed the laws of supply and demand.

Summing Up

Everybody gets a pension and nobody pays. We have enough oil and even if we found more, prices would be unaffected.

That's the story being told on the opinion pages of the New York Times: that markets don't matter, earnings don't matter, savings don't matter, investments don't matter, prices don't matter, government regulations don't matter and everybody is entitled to everything.

And the best part of the fantasy is that we can have all this without generating any additional private sector jobs or accelerating efforts to increase our energy supply. All we need to do is get the rich to pay their fair share and keep the air clean.

My Perhaps Simplistic Point of View

Here's my take. Real spendable money comes from someone's earnings. Even donations and borrowings are preceded by earnings.

Money is earned when someone does something which is of value to someone else.

In that regard, we can earn money by selling oil at global prices if we have oil to sell.

And we can invest money in pensions or 401(k) plans if we have earnings to save and invest.

There never has been, isn't now and never will be a free lunch society, no matter what the editorial writers of the Times may say.

While reading the two editorials wasn't fun, it speaks volumes about how the elitists underestimate the knowledge of We the People.

They believe we'll believe anything that they choose to call the truth. They're wrong about that.

Thanks. Bob.