Commentary by Rich DeColibus: A Simple Version of Economics
Rich is a Cleveland retiree (former chemistry teacher) and was president of the Cleveland Teachers Union for his last 16 years.
A forum for Ohio educators, sharing thoughts regarding their health care and pension system (STRS Ohio). Researcher John Curry manages a clearinghouse of related e-mails, articles, announcements, etc. His daily mailings include many items that do not make it to this blog. Contact John (firstname.lastname@example.org) if you wish to be on his e-mail list. Kathie Bracy: email@example.com.
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Office of Senator Keith Faber, President Pro Tempore
From: John Curry [mailto:firstname.lastname@example.org]
Sent: Wednesday, August 17, 2011 2:58 PM
To: Senator Faber
Subject: Senator Faber....
It's been over one week now and I am still awaiting a reply concerning a letter (below) that I sent to you on August 8. I am awaiting your listing of the "red flags" exhibited by Ohio's public pensions that indicate the existence of a Ponzi scheme that you referred to in the Hamilton Journal. Are you having difficulties finding any or....do you need more time? Thousands of (voting) retirees of Ohio's pension funds are eagerly awaiting your answer. They want to see if you really can back up your claim or if you are simply uttering "hot air."
P.S. Have you "tipped off" the SEC about your belief that Ohio's public pensions are, in fact, Ponzi schemes? After all, if they are then justice needs to be served, doesn't it?
From: John Curry
Sent: Monday, August 08, 2011 1:00 AM
Subject: Senator Faber...are you sure you know a Ponzi scheme when you see one?
It is with interest that I read in the Hamilton Journal News that you refer to Ohio's public pensions as Ponzi schemes.
Faber said, “I call it the pension Ponzi scheme. I mean, (the pension funds) all anticipate that they’ll have new members coming in to pay the liabilities of the old members. Well, I think that’s bad public policy. In the long term I think you need public policy that essentially says ‘My contributions over my career are going to be what pays for my retirement.’ And I want to make sure that we set up a system that does that — my contributions plus a reasonable investment return.”
Sir, I beg to differ with you and wish to call your attention to the U.S. Securities and Exchange Commission...a governmental body which knows a whole lot more about "Ponzi schemes" than you'll ever know in a lifetime. The SEC addresses the issue of how to recognize "Ponzi schemes" and provides a list of "red flags" or "common characteristics" that identify a Ponzi scheme. Ohio's public retirement systems exhibit none of these red flags or characteristics. If you feel that they do, please list which of the following seven "red flags" that Ohio's public pension systems exhibit. Documentation would be appreciated. Thank you.
a benefits recipient of one of Ohio's public pension systems
P.S. Keith, why don't you just be honest with all Ohioans and tell them, up front, that you want to convert their pension investments from the current Defined Benefits system into a Defined Contribution system so that you can enrich the coffers of your friends in the banking and investments arenas so that they can in turn donate even more toward your future campaign contributions? Oh, there's an SEC 1-800 number listed below. The SEC wants tips from the public when those in the public think they see a Ponzi scheme in action. Feel free to call it.
What are some Ponzi scheme “red flags”?
Many Ponzi schemes share common characteristics. Look for these warning signs:
If you are aware of an investment opportunity that might be a Ponzi scheme, contact the SEC by phone at (800) 732-0330 or online at http://www.sec.gov/complaint.shtml.