By: Mark Glennon*
Our readership numbers continue to set new records and we’re sure grateful for your support. It’s especially nice to see the appetite for what we think are the stories truly important to Illinois’ economy and government. Special thanks to other publications that have quoted or reprinted us, including the Wall Street Journal, New York Times, Zerohedge and others.
I’ll be making Wirepoints a full time career now instead of just the hobby it has been over the last few years. To do that, I’ve been winding down my consulting practice and dropped off my position as co-chair of the Innovate Illinois Advisory Council. I also intend to drop any further volunteer activities for political campaigns. That’s all because I want to avoid any personal bias. Like I wrote here from the start, I’m not here to make any friends, and I want to keep it that way.
We’ll definitely be expanding, though we’re still finalizing an exact plan. Initially, you’ll probably see some experiments with additional content and, later, coverage of topics outside of Illinois. We’ll continue our emphasis, however, on the intersection between the economy and government, focusing on policies and facts instead of politics and spin. We won’t be cutting back on our Illinois coverage.
I’m very interested in your suggestions for our expansion and any other ideas. Please email me if you have any at the email address linked here. We have many very well-informed readers and commenters here, and your opinions mean a lot.
This has been a do-gooder project so far, but I’ll be tackling the universal challenge of finding a revenue model that works for this kind of publication. I’d like to make at least some scratch out of it myself and, more importantly, I intend to hire a top notch paid staff and grow our reach — bigly. To do that, I’ll put more of my own resources in but probably bring in outside investors.
One thing clear from my experience here is how badly many mainstream publications have destroyed their own credibility. Too many have fallen into a basket of discretiteds and most of you know it. But they’re not all bad all the time. I’m proud to be playing even a small role in a solution: We find the best and most significant articles and do what we can to compliment or criticize them when needed.
Thank you!
*Mark Glennon is founder of Wirepoints. Opinions expressed are his own.
A set of state lawmakers want to extend CPS’ current school closing moratorium to February 1, 2027 – the same year CPS is set to transition to a fully-elected school board. That means schools like Manley High School, with capacity for more than 1,000 students but enrollment of just 78, can’t be closed for anther three years. The school spends $45,000 per student, but just 2.4% of students read at grade level.
Hopefully, all media will get the message, in Illinois, too.
Ted joined Tom Miller of WJPF to talk about Illinois’ highest-in-the-nation property taxes, why lawmakers don’t want to touch the tax’s cost drivers, just how much Illinoisans’ tax burden has grown over the decades, why Gov. Pritzker failed to meet his promise to reform property taxes, and more.
Hey Mark. Big fan of your work.
I would like to see you focus Wirepoints on the Pension Crisis in states across the Midwest but tie in more resources that show how exactly this will impact your family in terms of tax hikes, service cuts, teachers being laid off etc etc.
Also i invite you to take a look at the state of Indiana’s and the city of Indianapolis’s finances and compare them to Illinois side by side for your readers to take note and learn from our success 🙂
Yeah, I bet I have lots of Hoosiers who like this site like you! Seriously, that’s OK, and thanks. We’re free market types here and let the chips fall where they may. And your suggestion is a good one (for Indiana, especially).
Thats my Slogan.
Free Market Capitalism. It Works!
I don’t see how Illinois can be saved. Even if bankruptcy and all that went through as long as the entrenched crooks run the state its not worth saving. Especially with Federal Bailouts.
Especially if the Bankruptcy Code doesn’t get changed in one key way: Under current law, the only ones with authority to propose a reorganization plan are the incumbent politicians (unlike private sector banktuptcy where competing plans are allowed). We need some mechanism, which perhaps could be done by state statute, to put control into the hands of a competent financial control board (or emergency manager, as in Detroit).
More of your own! Great stuff. Doesn’t waste my time and gets to the point. Just don’t let the site become too pro-Trump.
To Steve-Oh et al. There is World Bank pension simulation software called “PROST.” I can’t send a link, but a Google search yields the following result:
“[PDF]Modeling pension reform – World Bank site resources.worldbank.org/INTPENSIONS/Resources/…/PRPNoteModeling.pdf
World Bank PROST model. For more information … The World Bank’s pension reform options simulation toolkit today’s pension …. and some actuarial concepts.”
Clicking on that link opens a PDF description of the software. I don’t know if its user friendly to non-actuaries but someone in the Wirepoints universe may want to give it a go.
J.A: I’ll try it, always interesting to see what’s out there for pension plan analysis. By the way, my idea above is as easy as it gets. The usual Accrued Liability of a govt entity pension plan discounts all future benefit payments at 8%, 7.75% or 7.5%. Each 1% decrease in the interest rate used, increases the Liab by about 15%. So a 5.5% or 6% future investment earnings growth on assets would produce about 30% HIGHER Accrued Liability. That’s it. That’s all there is. Compare the Unfunded Accrued Liab to the current Payroll and you have EASY way to… Read more »
If you can access it, there is an interesting Financial Times article about valuing pension liabilities: https://www.ft.com/content/17926602-98f9-11e6-b8c6-568a43813464 It may have some similarity to your method, although I can’t say that I grasp either one! The salient text states ” the contributions that the employee and the company have made — and the projected future benefit — the sum of the cash flows the scheme has undertaken to pay out when workers retire.Once you know these two numbers, you can easily calculate the accrual rate that would over time be sufficient to turn the contribution into the final benefit. This can… Read more »
Great going Mark ! If there’s a way I can help, lemme know. I’m not sure how to best measure the actual disastrous ‘status’ of a govt-entity DB pension plan……..but one way to put it in context would be a singular model which is EASY to approximate: What’s the Accrued LIab of the promises to date measured as if assets would earn a net 6% or 5.5% return in the future for moderately conservative assump. Subtract assets for the unfunded. And compare that to the current Payroll of the actively employed participants. Most govt spending goes towards payroll and benefits……how… Read more »
You’ve been a big help. Amen on the need for a better approach to the comment system. That’s a YUGE challenge for a an expanding site.
That’s good news but just don’t sacrifice quality for growth. You do a great job picking good articles and that’s really important. Try to free up more time to write more of your own wp original articles. Those are the best! I think you are already doing it but get a new comment system too.
Glennon is the only guy in the world who reports on the pension crisis as a hobby. Congrats on your new gig.
Just don’t dilute the quality of the presentations. Your filtering of the good from the bad content is excellent. I rarely see an item on your site that isn’t worth reading. And the more you can do to point out the inadequacies of the mainstream media– the better. I believe the media is largely responsible for the pols getting away with so much sloppy management because they know the media isn’t a tough enough/smart enough/aggressive enough chaperone.
Some articles I’ve read lately written by bond traders, praising a states desire to tax us more are disturbing. It seems wrong to have a financial market based on a system where the very value of the commodity being traded is rooted in taxing. Not rooted In manufacturing or growing crops, but in that states willingness to tax more to be favored in the market. As states become more beholden to borrowing, market makers may push policy toward taxing to create their returns. It is disturbing to me that when a state says it will raise taxes, then their bond… Read more »
Absolutely. Same for rating agencies and the whole muni bond industry. They love taxes. They’re also far ahead of the game, along with unions, in shoring up their positions to the detriment of taxpayers.
That’s why I think someone, maybe you, need to come up with a bond rating that runs counter. A rating that actually goes down if taxes go up, or go up when tax ncreses are put to vote. a rating that considers how borrowed money is spent, ROI. A rating that is fair to both the taxpayers who is ultimately the provider of the commodity, and the investors. This is different than a wirepoints index, which would just be a way to position the relative health of pensions in a way that considers, objectively, all the things we read here… Read more »
Agreed.
I have no problem with government borrowing, if that borrowing results in a proveable ROI. Meaning it resulted in a capital improvement that later attracted business to expand the tax base. Then it’s like a business investment in inventory or machinery, that later results in profit. But I have a big problem with borrowing that has a multiplied negative ROI. Like borrowing for operational costs. Or borrowing that puts the next 3 generations of kids in bind. Today’s ratings don’t consider the states ROI for its borrowing, they don’t consider total generational debt. They only consider the obvious cash flow… Read more »
I’d like to see you create your own index algorithm for pension health and a ticker on the site that registers the 10 worst in country. You’re great with the math of all this to develop a “Dow Jones” of pension health index. The bond raters I fear use letters instead of numbers and too subjective. I fear that the bond traders and government will next collude in how to profit from taxpayers by creating financial instruments based on the states ability to tax, no longer based on risk. The bond traders will begin to pusuade government to tax us… Read more »
I would like to see you set up interviews with people like Greg Hinz and Rich Miller from time to time on here; others as well. Put them on the spot, and force them to give facts for their views on things. You have a much more realistic view on everything. It would be very interesting. We all know the pensions are doomed, and the pensions are the main reason for Illinois’ problems. It’s too bad so few other journalist know this for one reason or another.
General Patraeus used to talk about our opponents in Afghanistan as being divided between the “redeemables” and the “irredeemables.” Hinz and Miller are irredeemables. They know full well what we write here but they are committed to spinning the news in a very different way. Miller is particularly clever about it. It’s a waste of time trying to convert them.
I did not mean trying to convert them; I just meant exposing them with facts. It is obvious they have agendas behind what they do to some degree; they are not total idiots. Hinz seems more ignorant, while Miller plays to his subscribers.
Congrats! Give us more solutions to IL pension problems
Only two constitutionally permissible ones that would make much difference: Federal bankruptcy and an IL constitutional amendment (though that one would still be subject to a US constitutional challenge).
Cool, something else to celebrate at the Wirepoints Christmas Party this year! Gene and Georgetti’s again, right?
Link to reader suggestions is not working and same display problems as yesterday being encountered at 4:41 eastern time
Thank. Most of it fixed now.
1) Articles authored by readers (with credentials disclosed) pertinent to pension underfunding, actuarial and legal analyses, etc. 2) Articles (by readers or by you) specifically rebutting folks like Fred Klonsky. 3) Articles calling out fake news or incomplete facts. 4) Consideration of other publicly funded pension and benefit programs such as military and congressional pensions (not to mention social security and medicare) and an inquiry regarding the fairness [to taxpayers] of those programs when compared to state and local programs. Check out the risks you face if your success leads to defamation suits. noisy demonstrations in front of your house,… Read more »