Yup, Harry Wilson Just Wants to Run the State Pension Fund So He Can Dismantle It

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10/20/2010 12:01 PM |

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Yesterday, I found myself curious about the race for state comptroller and reported on my findings. There were a couple of things about Harry Wilson, the ex-Goldman Sachs millionaire and Times-endorsed Republican candidate, which worried me. Specifically, the presumption that this member of the investor class is magically, objectively the best man for the job… it just reeks of a “step back and let the pros take over” complacency, and a fetish for the appearance of rationality.

It’s our fetish that Wilson plays up in a new Reuters interview: “I spent my entire career coming into failed organizations, which I had no prior experience with; identifying the problems and then working to create collaborative solutions to fix those problems.”

Well, except that this market-based professional creativity and “unsentimental objectivity” is more or less what led to the complete disintegration of American industry and the middle class which it supported. An outcome Harry Wilson seems to welcome: he also tells Reuters that the state pension fund is hurting from “costs that grew out of control, increasingly more expensive commitments to retirees they couldn’t afford and didn’t properly plan for.”

“Expensive committments to retirees [we can't] afford” is exactly what I was afraid of: the war on pensions, and the social safety net in general, currently being mounted by GOP think tanks.

I noted yesterday that the Voice‘s Wayne Barrett noticed some worrisome patterns in ex-auto czar Steve Rattner’s account of Wilson’s role in the GM restructuring, specifically in his treatment of unions:

[Wilson] pushed a GM proposition that it leave Detroit for the suburbs, a small-ticket, cost-cutting, idea with Katrina-like consequences for the city that was unceremoniously shot down from the White House. Wilson also opposed a “vitality agreement” for GM barring it from cutting its workforce after the $50 billion infusion, arguing that such a ban was “bad economics” and would tie GM’s hands. He lost that case too, with other Obama officials asking the logical question of what the point was of saving GM “if we weren’t going to safeguard American jobs.”

Rattner says that Wilson “scarcely needed encouragement” from him to get tough with United Auto Workers in his GM dealings, but tells the separate tale, without ever acknowledging the irony, that Wilson pushed him to be precisely twice as generous in payments to bondholders as Rattner wanted to be, giving them a 10 percent stock stake in the new GM…

Wilson was so much tougher on the UAW than he was on bondholders that he crossed the line from being independent of unions, a potentially admirable characteristic in the comptroller’s race, to appearing anti-union. Rattner says his deputy Ron Bloom, one of Time Magazine’s 100 Most Influential People who now oversees auto and manufacturing policy in the Treasury Department, “felt that Harry was in outer space about what the United Auto Workers could possibly accept.” Bloom, who won the war with Harry on the viability agreement and was Wilson’s superior in the chain of command, had to take over-the-top guff from Wilson. Harry resisted Bloom’s involvement in the GM negotiations, writes Rattner, and told Bloom that the bondholders “think you totally sold out to the unions” in the Chrysler deal, and “don’t think you can be an honest broker.”

Wilson’s union problems, though, went far deeper than Bloom. UAW president Ron Gettelfinger “would have none of Harry,” writes Rattner, interrupting Wilson when he mentioned that his mother had worked in upstate textile mills and snapping: “Harry, I don’t want to hear your stories about factories.” At another point, Gettelfinger belittled the 36 year-old Wilson’s lack of industry or labor experience: “I know you are an expert on autos, but have you ever met my retirees?”

Earlier this year, Wilson told the Times that GM needed to be a “nimbler” corporation, like Toyota—Japanese carmakers being frequently held up as a models for the American auto industry, presumably for the way they tells their American workers they’re treated so well they don’t need to unionize, and then lay them off with impunity when times get tough.

Reuters reports that Wilson “favors a more activist approach for comptroller… and said the post has ‘enormous untapped fiscal powers to drive real reform. The comptroller needs to be the leading financial advocate in the state.'”

Advocate for what, exactly? I don’t think he means a more progressive income tax. Given that state pension benefits are constitutionally guaranteed, I’m guessing he means “reforming”—cutting—benefits, his dire audits appealing to the bizarrely outsized pride many of us seem to take in deferring to the expertise of someone who tells us how ruthless we need to be with other people.

The goal of government, though, is not to make it a more nimble business with a robust balance sheet—it’s the well-being of the people who depend upon it. Yes, we are spending a lot of tax dollars to support a growing pool of retirees who are living longer than ever. But that’s the social contract.

It’s like in the GM deals, when Wilson had to be told that the goal was saving the jobs, not the corporation. He seems to care more about the efficiency of the pension fund than he cares about the people who live off its payouts.

2 Comment

  • Clever how you pretended yesterday to be neutral in the Comptroller’s race, with merely some nagging reservations about Wilson, and now 24 hours later you’ve come back with such a full throated denunciation of the man.

    Setting up a straw man, only to kick him down, may feel like an effective rhetorical conceit but it’s not ethical journalism.

    As to your definition of the goal of government

  • If Wilson’s PR team writes long-winded paragraphs in defense of him after you write a praise poem to him, you know something doesn’t smell right. I’ve read enough about Steve Rattner and his self-serving book to know that this guy’s shady. Another Government Sachs clone. Check out Malcolm Gladwell’s review in the New Yorker this week.

    Where’s the analysis on the attorney general races?