Tag: Bob Purkey
Readily available information is insufficient to determine if future Virginia retirees should consider themselves fortunate, but they seemed to have dodged the bullet during a flight to risk taken by their pension trust. Standard accounting and reporting procedures have changed since the meltdown of 2008, but what is clear is that at the end of the last available reporting period (June 30, 2011) the fund had unwound itself from a derivatives position of nearly $7 billion reported in 2009 to a much more reasonable (but not necessarily justifiable) $1.3 billion.
What Delegate Purkey (R-Virginia Beach) has claimed is the result of his committee's hand on the steering wheel, The Virginia Retirement System reported a one year return on investment of 19.1% last year. But what the fund holds in assets is an amount less than that reported three years earlier: $51.3 vs $51.7 billion. So a three year decline of half a billion dollars. Not bad at all, considering the turmoil during that time.
But here are some questions:
- What was the net return on the derivatives?
- Was the risk inherent in the derivatives justified?
- If the return has justified the risk, why unwind?
- Would a flight to quality have provided a similar return without the risk?
One other question: Will Bob McDonnell repay VRS with the 33% two year gain the funds would have earned had they been paid when obligated?
Quite possibly Purkey means well. At the very least, he's subtle. For years Purkey has talked about the need for Republicans to bring minorities into the Republican tent. He always approaches the subject in a manner similar to this:
"It's interesting, you know when you look, the future of our country is our young people and the future of our country is diversity." - Delegate Purkey
It seems important for Purkey to emphasize that the Republican Party should reach out to non-whites. When he explains how Jim Cheng came to be the Secretary of Trade and Commerce in the McDonnell administration, McDonnell's ability to identify and recruit talent is cited as the reason. Somehow it must be Jimmy's work that attracted the Governor's attention. But conveniently:
Really, that is what the sea-change to the state pension plan portends. It is also part and parcel of another Republican Ponzi scheme. The brilliant idea to go into debt to build highways is another. Oh, and selling off revenue generating assets for a one time "windfall" without a strategic plan to replace the recurring revenues is one too. There is a clear pattern here: make promises someone else will pay for. Jim Gilmore redux.
"The legislature also is likely to discuss whether to offer state employees the option of contributing to a 401(k) plan they can manage themselves instead of a defined-benefit plan run by the state." as reported in today's Richmond Times Dispatch
Delegate Chris Jones (R-76th) says he is disappointed that localities decided to pay the new employee share of the defined-benefit plan cost. What would he say if they hadn't paid and the employees rose up? That it was a local decision and he is disappointed that localities hadn't fulfilled their obligations to employees? There's your savvy political posturing. It isn't as though we have the highest paid teachers in America and aren't competing with other states and within the state for the best.
"It's going to make it that much harder to get good people in the classroom," said Robley S. Jones, lobbyist for the Virginia Education Association
"Right now, it's totally dead in the Senate. We're not going to give up $100 to $200 million a year for a one time shot at $150 million. We'd have to be some kind of idiots to do that." - Senator Dick Saslaw (D-35th)Saslaw's estimated value is $350 million less than the Governor's sale advocates' and must now be further discounted with the creation of the coalition. This effort looks like support for the Governor's idea and on the face it is. But it also is a veiled attempt to change the retail liquor landscape in a way that diminishes the value of the monopoly to almost nothing. Look at the reported members of the coalition: Wal-Mart, Costco, Kroger, Safeway and Food Lion. Think they are looking to help someone else grab the monopoly? Or that they need those storefronts at an average of $1 million each?
"For 70 years, we've distributed beer and wine in every 7-Eleven, every Food Lion. But we've controlled the distribution of spirits. From a free market stand point, it doesn't make sense to continue to control only one part of the distribution." - Governor McDonnellMoving beyond the fact there were neither 7-Elevens nor Food Lions 70 years ago, is the Governor suggesting, then, that controlling all of the distribution makes sense? And if we are going to license everyone, who needs to buy the stores? Babbling Bob Purkey, meet babbling Bob McDonnell. This state has a surplus, but it's not a budget surplus. It's a free market hoax surplus. And either it has the Governor bamboozled or he's playing us.