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James V. DeLong on Ending "Big SIS" (The Special Interest State)

Tue, 03 Jul 2012 00:00:00 EDT

"Obamacare is not, as one judge says, a national solution to a problem," argues James V. DeLong. "It's 2,000 pages...of special-interest-written law."

As such, it exemplifies what DeLong, a long-time Washington insider who has worked for many think tanks and government agencies, denounces as "Big SIS" or the "special-interest state." In his scathing - and utterly convincing - new book, Ending Big SIS and Renewing the American Republic, Reason Contributing Editor DeLong traces how "the political system creates economic advantages for special interests and then demands that part of the profits be fed back into the political system, where they are used to enhance the power of the political incumbents."

Whether the topic is defense spending, agricultural subsidies, health care, or the financial sector, DeLong documents the pervasive rot at the core of Washington's way of doing business - and provides ideas for cutting Big SIS down to size.

For more information on the book and DeLong, go to here. For his Reason archive, go to here.

About 6 minutes. Produced by Joshua Swain. Interview by Nick Gillespie. Camera by Meredith Bragg, Jim Epstein, and Swain.

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Adam Summers Discusses Unions Battling American Airlines on Pajamas Media

Mon, 02 Jul 2012 00:00:00 EDT

Unions are trying to reach a deal with the now bankrupt American Airlines. Reason Foundation analyst Adam Summers discusses what this means for the airline industry with PJ Media's Bryan Preston.

Air Date: June 30, 2012.

Approximately 6 minutes.

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Tim Cavanaugh Talks CA Budget Deal on Fox News

Mon, 02 Jul 2012 00:00:00 EDT

On June 28, 2012, Reason's Tim Cavanaugh discussed California's fiscal problems, the state budget deals and Jerry Brown on Fox 11 News.

Approximately 3 minutes.

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The Truth about Public Servants: Adrian Moore at Reason Weekend 2012

Sat, 31 Mar 2012 01:00:00 EDT

"The problem [with government workers] really is the unions," says Adrian Moore, who is Reason Foundation's vice president for policy. "These are organizations whose mission is to oppose the taxpayers and get a better deal for their members. That's their mission."

At Reason Weekend, the annual donor event held by Reason Foundation (the nonprofit that publishes this website), Moore challenged the misperception that public-sector workers are underpaid. In fact, government workers do better than their private sector counterparts in terms of wages, benefits, pensions, and job stability. And the size of the government workforce expands, Moore argued, whether the economy is up or down, a phenomenon he calls "fair weather Keynesianism."

Approximately 33 minutes. Filmed by Joshua Swain and Anthony Fisher. Edited by Jim Epstein.

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Tim Cavanaugh Talks Unions and SEIU on Freedom Watch

Thu, 22 Dec 2011 00:00:00 EST

Reason Senior Editor Tim Cavanaugh appeared on Freedom Watch with Andrew Napolitano. Tim discussed unions and how SEIU is trying to co-opt the Occupy movement and protect their "ruinous public sector pensions."

Air Date: Dec 21, 2011.

Approximately 5:20 minutes

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Pension Reform and Union Shenanigans in San Diego

Thu, 17 Nov 2011 10:00:00 EST

"Carl DeMaio, the councilman who's the primary author of [the comprehensive pension reform ballot measure] could be the Howard Jarvis of the pension reform movement."

--Chris Reed, San Diego Union Tribune

On November 8, 2011, San Diego's Comprehensive Pension Reform ballot measure qualified for the June ballot. Like so many other cities around the country, San Diego is facing a fiscal crisis. Currently, the city's pension fund budget is facing an unfunded liability of over $2 billion. The Comprehensive Pension Reform ballot measure, if it passes in June, will switch new public employees to 401(k)-style plans, put an end to "pension spiking" and cap pensionable employee compensation for five years.

As mayoral candidate Carl DeMaio puts it, "all eyes are on San Diego" because San Diego could become a national model for pension reform.

The labor unions didn't sit back and watch the signature gathering process. Instead, they created a fake organization that took out ads warning people that their identities could be stolen if they sign a petition and sent burly men to initimidate people at signature gathering locations.

Approximately 6.5 minutes.

Produced by Paul Feine and Alex Manning.

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Marc Eliot on Reagan in Hollywood

Wed, 10 Aug 2011 09:00:00 EDT

At FreedomFest this July, Reason's Matt Welch spoke with Marc Eliot, author of Reagan: The Hollywood Years. The book chronicles Ronald Reagan's journey from sportscaster to actor to union president to politician.

Unlike critics who make sport of Reagan's Hollywood output (Bedtime for Bonzo, anyone?), Eliot documents how backlot politics helped transform the once-proud "New Deal Democrat" into the embodiment of Goldwater conservatism. His tenure as head of the Screen Actors Guild was punctuated by episodes such as the time when he received death threats by one of Al Capone's henchmen over a union dispute and his starring role in the negotiations that led to actors receiving residuals. And while Reagan's film career ultimately petered out, he was for a time among the highest-paid contract actors of his day.

Shot by Jim Epstein and Zach Weissmueller. Edited by Anthony L. Fisher. About 9.15 minutes.

Held each July in Las Vegas, FreedomFest is attended by around 2,000 limited-government enthusiasts and libertarians a year. Reason.tv spoke with over two dozen speakers and attendees and will be releasing interviews over the coming weeks.

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Michelle Fields Discusses Teacher Tenure with Judge Napolitano

Tue, 09 Aug 2011 00:00:00 EDT

Journalist Michelle Fields discusses her interview with Matt Damon and how teachers unions and government bureaucracy is harming education with Judge Napolitano. Air date: August 5, 2011.

Approximately 4.12 minutes.

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Michelle Fields Discusses the Lowest Approval Rating for Congress on the Alyona Show

Tue, 09 Aug 2011 00:00:00 EDT

Journalist Michelle Fields discusses a CBS/New York Times poll that 82% of Americans dissaprove of Congress and her viral hit interview with Matt Damon on the Alyona Show. Air date: August 5, 2011.

Approximately 4.12 minutes.

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What We Saw at the Save Our Schools Rally in Washington D.C.

Sat, 30 Jul 2011 20:00:00 EDT

On July 30th, 2011, teachers, parents and advocates such as actor Matt Damon, author Jonathan Kozol, and historian Diane Ravitch gathered for the Save Our Schools Rally outside the White House.

The purpose of the event: "To put the public back in public schools."

Reason.tv was on hand to talk tenure, the role of money in education, and whether parents should have the right to choose where their kids go to school.

Approximately 6 minutes.

Produced, shot and edited by Jim Epstein. Hosted by Michelle Fields. Additional editing by Joshua Swain; production assistance from Kyle Blaine.

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Damon Root Discusses Myths Surrounding Unions and the Great Depression on Stossel

Tue, 26 Jul 2011 00:00:00 EDT

Reason Associate Editor Damon Root discusses on Stossel how many "truths" about unions and the Great Depression are in fact myths, including the ideas of Hoover as a small-government zealot and unions helping minorities. Airdate July 21, 2011.

Approximately 9.07 minutes.

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Nick Gillespie Discusses the Latest Marijuana Bill, Anthony Wiener and a Union Puppet Show w/ Adam Carolla on Red Eye

Thu, 30 Jun 2011 00:00:00 EDT

Reason.tv editor in chief Nick Gillespie appeared Fox News' Red Eye to discuss various topics, including Barney Frank and Ron Paul's marijuana bill, a strange Brazilian cartoon ad that references pedophilia, the science behind Anthony Wiener's actions, and a pro-union puppet show for kindergarteners. Airdate: June 25, 2011.

Approximately 41 minutes.

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Tim Cavanaugh Discusses Unions and the Federal Reserve with Judge Napolitano

Mon, 27 Jun 2011 00:00:00 EDT

Reason columnist and Hit & Run contributor Tim Cavanaugh appeared on Freedom Watch to discusses why union membership is in decline and whether the Federal Reserve will continue to recieve skepticism. Air Date: June 24, 2011.

Approximately 7.16 minutes.

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LA Rally: Don't Believe What Teachers Tell You

Fri, 20 May 2011 09:00:00 EDT

Teachers unions say California must not roll back annual increases in public school spending. And they're not too careful about facts when they make that case.

Teachers frequently claim, for example, that California is in either 49th or 50th place among the 50 states in per-pupil spending. In fact, the Golden State is 31st in per-pupil spending.

Teachers also say the Golden State could solve its chronic budget shortfalls by raising tax rates on the rich. But California is already unusually dependent on taxes collected from high earners. This is why revenue collections can drop sharply during recession, while spending -- which has increased 37 percent since 2001 -- continues to grow at rates exceeding inflation and population growth.

Last Friday, May 13, teachers all over Los Angeles left school early to attend a Downtown rally. Reason TV tagged along to find out what other whoppers teachers are telling (outside the classroom, that is).

Approximately 4:16 minutes.

Filmed by Zach Weissmueller and Paul Detrick; Edited by Detrick.

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The War on Walmart

Thu, 28 Apr 2011 12:00:00 EDT

Retail giant Walmart is planning to open its first stores in New York City and Washington, D.C.

That's got local politicians and activists up in arms.

"Walmart, keep your plantation because there are no more slaves," says New York City Councilman Charles Barron.

Walmart will make criminals of our children, argues Washington D.C. commissioner Brenda Speaks, because "kids are kids" so they'll shoplift and then "security will grab them."

If we're tricked into welcoming Walmart through our city gates "wrapped up in a shiny package," explains New York City Public Advocate Bill de Blasio, it will take over and destroy us.

So what's getting anti-Walmart activists so riled up?

The answer: cheap groceries.

Written and produced by Jim Epstein, with help from Joshua Swain. Narrated by Nick Gillespie.

Approximately 7.30 minutes.

Click here for past Reason coverage of Walmart and its enemies.

Nick Gillespie Joins Ann Coutler and Michael McDonald on Greg Gutfeld's Red Eye

Tue, 26 Apr 2011 00:00:00 EDT

Reason.tv editor in chief Nick Gillespie appeared Fox News' Red Eye to discuss various topics, including union activists advocating violence, accessing pornography in New York City libraries, Lindsey Lohan earning prison time and the beating of a transsexual woman at a Baltimore McDonald's. Airdate: March 26, 2011.

Approximately 40 minutes.

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Sandy Springs, Georgia: The City that Outsourced Everything

Tue, 12 Apr 2011 09:00:00 EDT

While cities across the country are cutting services, raising taxes and contemplating bankruptcy, something extraordinary is happening in a suburban community just north of Atlanta, Georgia.

Since incorporating in 2005, Sandy Springs has improved its services, invested tens of millions of dollars in infrastructure and kept taxes flat. And get this: Sandy Springs has no long-term liabilities.

This is the story of Sandy Springs, Georgia—the city that outsourced everything.

Approximately 8 minutes.

Produced by Paul Feine and Alex Manning.

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What We Saw At The "Our Communities, Our Jobs" Labor Rally

Tue, 05 Apr 2011 09:00:00 EDT

On March 26, 2011, the Our Communities, Our Jobs Rally in Los Angeles brought together the Teamsters, AFL-CIO, SEIU, the United Teachers of Los Angeles, and many, many more to protest a local Ralph's grocery store and to show solidarity with public-sector unions in Wisconsin.

Reason.tv was on hand to document the rally and speak with some of the thousands present. While the protest ostensibly targeted various businesses such as Ralph's and Chase Bank, there was a continuity in the overarching message: Collective bargaining rights are under attack, and they must be saved—both for private-sector and public-sector workers. According to participants in the rally, enemies of organized labor include big business, foreign labor, Republicans, the Koch brothers, and the capitalist system itself.

Approximately 4 minutes long. Shot and edited by Zach Weissmueller. Interviews by Tim Cavanaugh.

For Reason.tv coverage of other rallies (inlcuding Glenn Beck's Restoring Honor Rally, the 9/12 Freedom Works Rally, and One Nation Working Together Rally), go here.

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Veronique de Rugy on the Truth About the State Pension Crisis on Bloomberg

Fri, 11 Mar 2011 00:00:00 EST

Editor’s Note: Reason columnist Veronique de Rugy appears weekly on Bloomberg TV to separate economic fact from economic myth.

Myth 1: Unfunded state pensions do not represent an immediate threat and are therefore not in crisis.

Fact 1: In the best case scenario, some state pension funds will run out as soon as 2017. And the longer the states wait to fully fund their pensions, the more drastic the financial consequences will be.

The fact that state pensions only represent a small share of state budgets doesn’t mean that they aren’t in crisis. Take the case of New Jersey. According to Joshua Rauh, professor of finance at Northwestern University, under the best case scenario, New Jersey’s pension funds (there are 5 of them) are scheduled to run out as soon as 2017. Once those state pension plans run out of money, pension payments will have to come out of the state’s general fund revenues—that is, out of the pockets of state taxpayers.

Furthermore, there is reason to believe these estimates are too conservative. When private-sector accounting methods are used to show the true market value of state pension liabilities, the situation becomes even more critical than it initially appears.

According to Andrew Biggs of the American Enterprise Institute and my Mercatus Center colleague Eileen Norcross, the state of New Jersey reports that its pension systems are underfunded by $44.7 billion. Yet when those pension plan liabilities are calculated in a manner consistent with private-sector accounting requirements—methods that economists almost universally agree to be more appropriate—New Jersey's unfunded benefit obligation rises to $173.9 billion.

In other words, New Jersey has made a $173 billion promise without any idea of how it will pay for it. I would say that’s a crisis.

Plus, this is serious money. As Biggs and Norcross note,

This amount is equivalent to 44 percent of the state's current GDP and 328 percent of its current explicit government debt. This calculation applies a discount rate of 3.5 percent (the yield on Treasury bonds with a maturity of 15 years) to reflect the nearly risk‐free nature of accrued benefits for workers. It is estimated if state pension assets average a return of 8 percent, New Jersey will run out of funds to meet its pension obligations in 2019. If asset returns are lower than 8 percent, they will run out of funds sooner.

This has real implications. State actuaries estimate that under certain assumptions, New Jersey’s pension plans will run out of enough assets to make benefit payments beginning in 2013.

The irony is that New Jersey, like other states, has put itself in a financial binder even before the pension crisis really hits. That says a lot about the state’s future ability to address the problem.

Myth 2: State debt accurately reflects state liabilities. And state default is not a concern because the federal government will bail the states out before they reach that point.

Fact 2: Many government pension liabilities are kept off the books, so most states and cities underestimate their actual debt.

Consider Connecticut. Bonds are only a small part of its total debt. Like many other states, Connecticut also owes to its pensions and retiree health care funds, which are not clearly disclosed, and which will cost even more in the long run.

Northwestern's Joshua Rauh and Robert Novy-Marx, an assistant professor of finance at the University of Rochester, have added Connecticut’s unfunded liability to the state’s debt. As you can see in the chart above, the state’s reported debt is roughly $23 billion. The official estimated value of its unfunded pension liabilities is $48.4 billion. That’s $71.4 billion. On top of that amount we should add another $28.2 billion in underestimated liabilities due to poor accounting standards. Now you have a total state debt of almost $100 billion.

Would the federal government really have the ability to bail out 50 states whose individual debt often exceeds $100 billion? That would cost roughly $5 trillion. And while all of that money wouldn’t be paid out at once, it is still unrealistic for the states to count on a federal bailout.

Myth 3: State and local workers are not overpaid. And even if they are, changing their compensation won’t make a difference.

Fact 3: While this is a complex issue, the total compensation package for state workers does tend to exceed that of their private-sector counterparts.

Take the case of Ohio.

The Buckeye Institute for Policy Solutions has an interesting report out called “The Grand Bargain is Dead.” As we see in this example from Ohio, compensation costs for state and local employees begins at a higher level than that of their private-sector counterparts and continues to diverge throughout the employees’ careers. According to the Buckeye Institute, for 26 careers in state and local government paying around the median wage rate, government employees were consistently and significantly paid above the corresponding private-sector wage rate.

Ohio has an on-the-book $8 billion budget gap. The data shows that in the Buckeye state, where almost one new public-sector job was added to the economy for each private-sector job from 1990 to 2010, realigning state worker compensation packages to match those of their private-sector peers would save taxpayers over $2.1 billion in the next two years (or 28 percent of this year’s $8 billion deficit).

It is true that comparing compensation is a tricky business. While taking a closer look at the differences between public and private-sector employees explains some of the compensation differential, it is not great enough to explain the difference in wages between comparable public and private employees.

This chart from The New York Times shows that there are 12 percent more white-collar workers in local government than there are in private employment and 19 percent more white-collar workers at the state level. Some argue that this is the reason for the difference in compensation. It’s the diplomas stupid! Maybe, but all the diplomas in the world can’t explain the 221 percent difference in lifetime employment costs witnessed by workers in Ohio.

Myth 4: The financial crisis, which caused a depreciation of pension assets, is the real culprit behind pension underfunding.

Fact 4: While the recession dealt a severe blow to state pensions, the problem of pension underfunding dates back to the early 2000s. Many states had already failed to cover the cost of promised benefits even before they felt the full weight of the Great Recession.

The problem started long before the recession. A 2010 Pew study called “The Trillion Dollar Gap,” found that in 2000, slightly more than half of the states had fully funded pension systems. By 2006, that number had shrunk to six states. By 2008, only four states—Florida, New York, Washington and Wisconsin—could make that claim. The chart above, taken from the Pew study, illustrates this point.

Here’s the bottom line: We can argue endlessly over when the pension plans will run out of cash, or what the true value of the unfunded liabilities is. We can even debate what the true meaning of being broke. But there is one issue where there is no room for debate. Once the pension plans run out of money, the payments will have to come out of general funds, meaning out of the pockets of taxpayers. If the states want to avoid this, they must push through reforms as soon as possible. A good first step would be to switch to accounting methods that show the true market value of their liabilities. Once those methods are in place, lawmakers should consider moving away from defined benefit pensions.

Contributing Editor Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.

Approximately 6.47 minutes.

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