What’s Wrong With Expecting a 28,000,000 Dow?

Listen, it’s not THAT unrealistic, look at the Dow from March 2009 to now! It’s a miracle!

Schwarzenegger economic adviser David Crane writes about the bizarre situation in WSJ saying in 1999, then governor Gray Davis signed into law a bill that made looting California legal and gave state pensioners quite a boost in income based on completely unrealistic projections of fund performance (you know, the sort of stuff prospectuses warn about).

WC Varones shares a bit of CalPERS math (via WSJ):

What Calpers failed to disclose, however, was that (1) the state budget was on the hook for shortfalls should actual investment returns fall short of assumed investment returns, (2) those assumed investment returns implicitly projected the Dow Jones would reach roughly 25,000 by 2009 and 28,000,000 by 2099, unrealistic to say the least (3) shortfalls could turn out to be hundreds of billions of dollars, (4) Calpers’s own employees would benefit from the pension increases and (5) members of Calpers’s board had received contributions from the public employee unions who would benefit from the legislation. Had such a flagrant case of non-disclosure occurred in the private sector, even a sleepy SEC and US Attorney would have noticed.

Hahahahahahahahaha a 28,000,000 Dow by 2099! Now that’s funny.

F%$k schools, f&*k roads, f*%k social services, as long as our state employees are taken care of, what the hell do we need the rest of that sh*t for?!