A Voice Every Californian Should Listen To on Pensions
When I was a junior speechwriter working in Governor Schwarzenegger’s administration, one of the great pleasures I had was working with and getting to know David Crane. David was the Governor’s advisor on economic issues and his office was right next to the speechwriting office.
Time after time, many self-proclaimed pro-business individuals would come to David with their hands out, seeking money from the state for their company or cause. It was refreshing to see a self-proclaimed liberal Democrat rebuff them every time, and then challenge them on their commitment to free-market principles. The conversations would routinely end with David proclaiming, “You say you’re a businessman, yet I’m more free market than you!”
Many of you may know David lately through his work on California’s pension crisis. He makes the case to anyone who will listen that our public employee pensions are woefully underfunded. Every dollar that taxpayers must spend shoring up the system, he argues, is money that we don’t have to spend boosting K-12 and higher education, public safety, and social services.
Retired from the business world, David now lectures on these issues at Stanford, and has written extensively on pensions at his Medium.com blog.
One of my favorite stories involving David goes back to his appointment by Governor Schwarzenegger to serve on the State Teachers’ Retirement System board.
As a board member, he had a front row seat to ask the leaders of the state’s teacher pension system about their investment levels and the actions they were taking to prepare for projected funding shortfalls.
In this week’s episode of PRI’s podcast, Crane told me of his time on the STRS board, “It doesn’t take a genius to understand the math associated with pensions, but the people who have been setting the rates for paying in on those pensions are self-serving and self-interested, and it is in their interest to keep investment returns assumptions too high because it keeps their costs lower, which creates a bigger deficit for citizens.”
Legislators and their union allies were shocked that a pension board member dare ask such tough but realistic questions. In what was perhaps the greatest confirmation hearing ever held, David challenged their irresponsible thinking of these leaders right to their faces. Shocked by such heresy, majority Democrats looked a self-proclaimed liberal Democrat in the eye and voted down his nomination.
What a shame for taxpayers. Perhaps if David had been confirmed and his honest voice given a seat at the table, California wouldn’t be in the pension mess that it is today.
In the years following, David formed an organization called Govern for California, which is devoted to funding legislative candidates who will act courageously on difficult issues like pensions. Their work is critically important during this time of many challenges for our state.
Thanks to the efforts of David and his supporters, maybe we’ll soon have enough legislators who are willing to show some courage and make the tough votes needed to finally get our pension crisis under control.
Tim Anaya is communications director for Pacific Research Institute.