Community

CalPERS unfunded pension deficit approaches $1 trillion. Who is counting?

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California Public Employee Retirement System (CalPERS) lost around 2% of its funds in 2015/16. The fund assumed an aggressive 7.5% return. Dr. Joe Nation of Stanford Institute for Economic Policy Research thinks unfunded liabilities have surged to $150bn from $93bn in the last two years. He suggested the use of a more realistic 4% rate of return last year. At that rate, CalPERS had a market based unfunded liability of $412bn (or the equivalent of 2 years’ worth of California state revenue). At present Nation now thinks the number is just shy of $1 trillion using a 3.25% discount rate. He expects that the 2017 data for CalPERS will be out in a week or so which should give some interesting perspective as to how much deeper the pension hole is for Californian public servants.

N.B. California collects $232bn in state taxes annually in a $2.3 trillion economy (around the size of Italy).

 

Ocasio-Cortez’s DC dilemma

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One would hope that newly elected Democrat Alexandria Ocasio-Cortez would be quick on her feet when it comes to dazzling her colleagues. She is complaining she can’t afford a property in DC before her $172,500pa salary kicks in 3-4 months down the line.

She could do three things:

1) ask her multi million dollar gated mansion, rent-a-cop guarded Democratic colleagues to let her stay in one of the spare rooms. Obama has an $8.5mn 8-bedroom mansion in DC. Surely she won’t cramp them too much especially with Malia at college and Sasha likely to move out soon.

2) crowd fund for the 3 months which will likely win her millions  so she can buy a place of her own.

3) or in her own words to justify everything that costs money  – “you just pay for it”

How long will it take to learn from Chuck, Nancy, Maxine, Elizabeth and so on that some pigs are more equal than others? My guess isn’t very long. First world problems for someone with third world policies.

 

Losing my Virgin-ity to the veteran community

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Virgin Australia has copped a lot of flack over its unsolicited offer to prioritize veterans when boarding and to announce gratitude for their service. Sadly the plan has been savaged in the media as virtue signaling and riding the political wave of the PM to back discounts for those who served. Many veterans have come forward saying they have not asked to be saluted in this manner. Many of them wish to be thought of like you and I.

We can sit back and criticize the airline for not doing more due diligence with the veteran community, yet we should not overlook that CEO John Borghetti would have made this decision with absolute rock solid sincerity, thinking of the vets, not how he could win free publicity which is often the norm these days. Had preferential boarding treatment been given to an oppressed minority community he would have probably been championed as a hero of social justice. All of the media that smashed the airline – The Guardian, Fairfax et al would have praised the progressive action. Let us not forget that Virgin’s move was above all made with “good intentions.”

My first recollection of John Borghetti happened almost 20 years ago after some utterly dreadful Qantas service, where he happened to be working at the time. Despite receiving a relatively textbook letter of apology from the Chairman, John personally called me to “connect” with this disgruntled customer. No excuses were given. No attempts were made to cover up the pitiful customer service. He listened because he wanted to learn. He was authentic. No training manual could have taught John what he did. You cannot learn sincerity from a textbook. You either are or you aren’t. The veteran community should know that they will undoubtedly get the exact same ‘ear’ from the CEO to best address needs going forward and I encourage them to speak frankly to him.

As a civilian who is now working alongside veterans I’ve learnt more this year about how wrong many of my preformed notions were with respect to former service men and women. I’ve met veterans suffering from PTSD. I’ve met a war widows who lost veteran husbands to suicide. I spent a week at the Invictus Games seeing how these amazing warriors were ‘unconquered.’ I’ve met veterans, young and old, who are struggling to reintegrate into the workforce at an event. The issues are real. I have seen the amazing work done by veterans trying to find unique ways to help their former mates reintegrate into society. I suggest we embrace Virgin and refocus their positivity.

I am honoured to be given the opportunity to work alongside veterans to make this journey and learn every day. In a sense my mission is in part to represent the civilian community to make them understand veteran needs. There are so many positive ways to affect change and move away from the growing negativity thrown at events like Anzac Day as a celebration of warmongers where our media can be as brazen to criticize brave diggers as rapists, murderers and thieves.

Put simply, we civilians absolutely owe a debt of gratitude to those who have served. How we do it is open to debate. This is at its very roots of the Virgin move. To see the board cower to public pressure and look to rescind the offer on the basis of the constant negativity so prevalent today is the wrong move. Better still, Borghetti’s sincerity should be front and centre here. There is no market collapsing “damage control” risk for Virgin at stake. It is doubtful that veterans will desert the boarding gates of Virgin to punish it.

It would be nice to see that corporate governance today teaches that holding firm on the courage of their convictions is paramount. If the board learns that it must do more due diligence, then so be it. Learn and move on. Don’t wave the white flag. I sincerely hope that the Virgin board doesn’t flake. The board represents shareholders, not the mainstream media.

If I know John Borghetti from my own personal experience, Virgin Australia can achieve what it set out to do. Helping vets.  Does Virgin divert its planes to alternative airports when bad weather arises or do they ditch the aircraft into the sea?  The board should approach this episode with the same attitude.

How well do Americans know their Defense budget?

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The US spends more than the next 9 countries combined when it comes to defence. What is probably lost on many Americans is the spiraling cost of funding the veterans who served. The US is forecast in 2020 to spend almost as much on the Dept of Veterans Affairs (VA) as China does on military spending. The direct cost of wars in Iraq and Afghanistan has driven the indirect costs of treating those who served almost 5-fold since the war began. US politicians have passed increase after increase.  Have these increases been thought of in context of the trend? Or do annual increases just get signed off as a reflex action?

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If we put the VA budget next to the defence budget, the former has grown from 14.8% of the latter to around 29% between 2000 and 2020. The number of veterans receiving disability compensation has grown 2 million in 2000 to 4.3 million in 2016. A total of 7.2 million veterans are actively seeking services or payments from the VA, up from 5.5 million in 2000.

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Spending per veteran by priority group also reveals sharply higher costs. This is not an exhaustive list of priorities, but the main 7.

Priority 1

• Veterans with VA-rated service-connected disabilities 50% or more disabling
• Veterans determined by VA to be unemployable due to service-connected conditions.

Priority 2

• Veterans with VA-rated service-connected disabilities 30% or 40% disabling

Priority 3

• Veterans who are Former Prisoners of War (POWs)
• Veterans awarded a Purple Heart medal
• Veterans whose discharge was for a disability that was incurred or aggravated in the line of duty
• Veterans with VA-rated service-connected disabilities 10% or 20% disabling
• Veterans awarded special eligibility classification under Title 38, U.S.C., § 1151, “benefits for individuals disabled by treatment or vocational rehabilitation
• Veterans awarded the Medal Of Honor (MOH)

Priority 4

• Veterans who are receiving aid and attendance or housebound benefits from VA
• Veterans who have been determined by VA to be catastrophically disabled

Priority 5

• Non service-connected Veterans and non-compensable service-connected Veterans rated 0% disabled by VA with annual income below the VA’s and geographically (based on your resident zip code) adjusted income limits
• Veterans receiving VA pension benefits
• Veterans eligible for Medicaid programs

Priority 6

• Compensable 0% service-connected Veterans.
• Veterans exposed to ionizing radiation during atmospheric testing or during the occupation of Hiroshima and Nagasaki.
• Project 112/SHAD participants.
• Veterans who served in the Republic of Vietnam between January 9, 1962, and May 7, 1975.
• Veterans of the Persian Gulf War who served between August 2, 1990, and November 11, 1998.
• Veterans who served on active duty at Camp Lejeune for at least 30 days between August 1, 1953, and December 31, 1987.
• Currently enrolled Veterans and new enrollees who served in a theater of combat operations after November 11, 1998 and those who were discharged from active duty on or after January 28, 2003, are eligible for the enhanced benefits for five years post discharge.

Priority 7

• Veterans with gross household income below the geographically-adjusted income limits for their resident location and who agree to pay copays.

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Countries have an obligation to look after the troops that sustain injury, physical, mental or otherwise. The question is whether politicians are cottoning on to the mounting relative increase in healing the veteran community to the spending on weapons of war?

There are 19.6 million veterans in the US. By 2045 this is expected to dip below 12 million. With 2.1 million serving active duty military personnel and reserves, the overall costs of healing may not come down anytime soon.

What it does say is that there is a massive need to work out how to reduce the costs to the VA without impeding improving healthcare and benefits for veterans.

Banned documentary – Let There Be Light, 1946

In compiling the book of letters from the battlefields of WWII by Lt. Norman Peterson, researching PTSD in that era has unearthed some interesting facts. A documentary made by John Huston in 1946, which chronicled the treatment of troops suffering from neuro-psychiatric conditions, was banned by the Army from release to the public until 1981. The excuse made was that it was necessary to protect the identity of the patients, despite Huston having received signed waivers. It would seem the top brass did not want to have the extent of the problem acknowledged by the broader public.

The first published book related to what we now know as PTSD was the Diagnostic and Statistical Manual of Mental Disorders of 1952. It listed the condition as “gross stress reaction.” It wasn’t until 1980 that PTSD was properly recognized as a psychological issue. After WWII, veterans were told to just tough it out.

WWII British Army veteran, Victor Gregg, wrote the following in The Telegraph newspaper article on 9th November 2015 with respect to PTSD like conditions.

“I remember one day during the Battle of Alamein when my friend Frankie Batt, a man I had enlisted with in 1937, was blown to pieces. I recall trying in vain to put the bits together, to somehow bring Frankie back to life. As I picked up what was left of him I could feel the hate burning inside me. For the next three or four weeks our section never brought in a single prisoner, in spite of the fact that the battle was nearly over and the enemy were surrendering in droves. So long as no officer was there to witness, we shot as many as we could until our anger died its own death…by the time I got home I had witnessed things that I had not thought possible, and my brain was filled with images of suffering that were to haunt me for the next forty years…When I was demobbed, people didn’t talk about what was going on in their minds. It just was not the done thing; you straightened your shoulders and got on with life. The men who did try to raise the subject were treated with scorn…It was only after many years that I realised how much heartache and misery my anger caused to those I loved. 

The Cambridge History of the First World War contains an article by Jay Winter, Professor of History at Yale University, where he suggested that shell shock in WWI comprised around 20% of all troops, not the 5% often reported. His contention was that the truth was deliberately suppressed otherwise sufferers would not have received a disability pension if not accompanied by physical wounds.

In 1993, MA Kidson, JC & BJ Holwill wrote in the Medical Journal of Australia a piece titled, ‘Post-traumatic stress disorder in Australian World War II veterans attending a psychiatric outpatient clinic’. Out of 108 veterans who participated in the study 45% were shown to carry symptoms of PTSD – as defined by DSM-III – 48 years after it had ended. The study claimed, The presence of PTSD was significantly associated with the taking of casualties (an indicator of severity of war stress as reported by the veterans themselves) and with combat stress as rated by their treating doctors.”

A 2007-08 study at the University Michigan looked at 78 WWII veterans being treated for depression and discovered that 38% of them had significant PTSD symptoms.

Dr. Helen Kales, principal investigator of the geriatric psychiatry section at the University of Michigan wrote,

World War II veterans come from a generation in which expressing psychological symptoms or distress was pretty stigmatized. So these cases may have gone untreated as the vets did not seek treatment and were able to somehow suppress their symptoms and function.

Reading into Traumatic Brain Injury (TBI) reveals even more concerns about the problems we face dealing with returning soldiers.

While PTSD does not necessarily require physical damage to occur, TBI, in the military, tends to occur when exposed to blast-related injuries such as artillery, improvised explosive devices (IED), land mines and rock-propelled grenades (RPG).

TBI can be the result of occurrences where an object (bullet, bomb fragments) causes the scalp/skull to break or fracture. Sometimes it is a closed injury where the outside force impacts the head but no objects manage to penetrate. Even in the case of closed injuries, the brain can experience such considerable force that it can result in torn tissues, bleeding and other physical damage which can be irreversible in severe cases.

TBI was better recognized in Operation Enduring Freedom (OEF) and Operation Iraqi Freedom (OIF) where 1.64 million served. 60% of blast injuries in those conflicts resulted in TBI. According to the US Veteran Affairs (VA), 59,000 (c.10%) Iraq and Afghanistan veterans who used the Veterans Health Administration (VHA) from 2009 to 2011 were diagnosed with TBI.

VA now records that 4.3mn receive disability benefits, up 2mn from 2000. The total budget for the VA in 2019 will total $198.6bn, up from $97.7bn in 2009. It was $43.6bn in 2000. The VA is asking for $212bn for 2020. The VA budget relative to the defense spending budget was 14% in 2000. It is now 30%. The cost of war is obscene. The cost of looking after veterans is hot on defence spending heels.

Building the Education Revolution the right way

AWM at night.

Is the $500m upgrade to the Australian War Memorial (AWM) to honour recent conflicts too exorbitant? It is a lot of money. The current building is worth $140mn. The AWM cultural/heritage collection alone is worth over $1.2 billion. Only 4% of it is on display. While some will look at the expense as extreme it is worth considering some facts. Before that let’s not forget the $442mn to protect the Great Barrier Reef.

The Department of Veterans Affairs (DVA)  allocates $42.7mn of the entire $11bn budget annually to operate the AWM. Donations of $13.8m (+150% year-on-year) were made in 2017, $4.3mn in merchandise, $2mn in interest and $2mn in net GST receipts make up the balance. If one wants to be properly cynical the expansion project is only 1% of the current amount to upgrade our submarine fleet!!

As much as the complaints will flow around wasting money on glorifying war, the stats show that interest in the museum has been rising over time.

1.12 million visited the AWM in the 2017 fiscal year. A total of 844,899 people visited the Memorial in 2007. That is a 33% increase. Time spent on the AWM website totaled 5.61mn up from 4mn in 2007. Anzac Day related searches in the period just past were up 47.7% year over year. Facebook followers hit 100,000, a 27% year on year increase. So much for those who think nobody cares anymore and that there is a drop off in interest in honouring our military history. Clearly not.

Honouring the brave soldiers who have defended our freedom in recent conflicts are no less worthy of being shown respect. Should we scale the funding dependent on the number of deaths. Should we pro-rata the investment based on the 64 killed in action in armed conflicts since Vietnam to the 102,792 prior?

The AWM is already an exceptionally well designed and curated museum. The reality is there is no space to augment the collection without a rebuild.

Canberra got 4.95mn visitors annually in 2017 (+10.6% on 2016) adding $2.26bn to the ACT economy.

Expensive yes, but to ensure the aesthetics are kept tasteful and in the spirit of the 76yo AWM, it is hardly going to be worth erecting a corrugated iron shed with a few ceiling fans. Building underneath the current site will take some pretty serious engineering feats.

And to the Anzac haters whose cheap shots remain too frequent.  Even our own state broadcasters can’t resist the temptation to demean those who served. Anzac Day is treated more and more as one of resentment, not honour and sacrifice.

ABC presenter Jonathan Green protested by saying Anzac Day is “our collective quest for a military history that we can drape around us”.

Scott McIntyre, formerly of the taxpayer funded SBS, tweeted with respect to those commemorating Anzac Day,

Wonder if the poorly-read, largely white, nationalist drinkers and gamblers pause today to consider the horror all mankind suffered.

He had also tweeted,

Remembering the summary execution, widespread rape and theft committed by these ‘brave’ Anzacs in Egypt, Palestine and Japan.

As well as,

“The cultification of an imperialist invasion of a foreign nation that Australia had no quarrel with is against all ideals of modern society.”

Not to be outdone the left leaning mainstream media journalists stepped into the fray. Geoff Weinstock of Fairfax wrote on his twitter page with respect to the sacking of McIntyre,

“Ridiculous. Frightening. I also think Anzacs were racist yobs and Anzac Day is a death cult. Sack me Fairfax.”

Michael Leunig’s Anzac Day cartoon in The Age, depicted medals with a legend against each: Fear, Hate, Anger, Violence, Homicide.

Guardian columnist Catherine Deveny called Anzac Day a

“Trojan horse for racism, sexism, toxic masculinity, violence, homophobia and discrimination.”

Perhaps these people might reflect on the reality of Lt Norman Martin Peterson’s letter of 7 May 1943 which reflected on Anzac Day

“Perhaps you may think, at times, that I’m a moaner. — but it’s not that the life here (in spite of a few hardships) doesn’t agree with me, but the fact that wharfies, and coal miners, and munition workers go on strike, or want extra pay for working on Anzac Day , while the soldier (for whom Anzac Day is for), puts up everything with a wisecrack and forgets days and dates. I though finely, when we brought in a wounded bloke on Easter Monday, shot like a sieve, while in his homeland his fellow countryman strike for more pay, or holidays. Was his shocking wounds worthwhile in keeping his country safe for racecourse wages, “sportsmen (?)”, strikes, and absentees?—What do you think!!!!”

or just the general conditions these soldiers endured under constant attack by an enemy sworn to kill them. From his despatch of 5th February 1942,

“This bloody war is a terrific mental strain, you can get shot anywhere by snipers, (who never live more than two hours anyway, after they’ve climbed the trees, because our blokes comb the branches with Brens and they dangle like rabbits from their perch). I’ve lost about 2 stone {he was 154lb at the start] since I’ve been in action here, it’s tough, believe me…

“I decided to risk it and make a dash for it, a man every two minutes. Without mock heroics, my knees were knocking as I got to my feet and darted around the 200 yard long bend, expected to get one in the guts any moment. To my sorrow, around the corner we came across poor old George Jenkins, who had been guide, —shot, —our first casualty and we had only been in the place 5 minutes and a sniper had got him. The bullet had plowed through his scalp from ear to ear, and his face was a mess. Poor buggar, all he was worrying about was that he wasn’t able to tell us about the sniper and was we alright. I slapped a shell dressing on his skull, and we carried him back, —lucky buggar, he’ll go home now.”

We spent $16.2bn on Building the Education Revolution. $500m for the “educational” value in a society in desperate need of waking up to how good they have it is quite frankly cheap at twice the price.

The power of last place at Invictus

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Here is a picture of Dutch Invictus athlete, Alina Zoet. She was in the Women’s Heavy Weightlifting today. She finished stone cold last. However she got the biggest cheers and dragged out what is so important at Invictus. She had to bench press 50kg.  She failed first go. When she failed the second time she burst into tears as a failure. Distraught wasn’t even close to capturing her emotions. The packed crowd applauded her none-the-less. She was giving her best

Third attempt. Bundle of nerves. Crowd going absolutely bonkers in support.  Then silence as she prepared her last attempt. The bar comes down.  Her left side was letting her down again. The crowd goes completely apeshit as she battled with the bar. Two whites and one red light. Alina has done it! While the Aussie lifters cleared the podium for medals everyone in that hall knew the biggest winner had been the last place. But a personal best and tears of being unconquered. An emotional moment.

We got to congratulate her afterwards and she was overwhelmed with tears of joy. It was powerful.

As a general observation just wandering around the games, the sheer number of prosthetic limbs boggles the mind. Yet those who have them aren’t moaning about all the garbage that clogs our social media feeds on how hard we think we have it. We’ve got it easy.

Deepest respect for those who serve.