THESE ARE THE LOWEST FORM OF HUMAN BEING IMAGINABLE!
My guess is, Illinois isn’t the only state where this has happened. They do like to share their successful cons with each other:
Illinois has real problems. However, Fahner desperately hopes the public will not catch on to the fact that states are having difficulty paying out pensions because of the lack of revenue caused by a Wall Street-driven financial crisis and the deep recession it set off, regressive taxes, and the myriad bond scams financiers have already inflicted on states, cities, towns, and municipalities which have triggered funding crises for pensions and other programs. (See ” How Wall Street Fraudsters Plunder Public Finances, And 5 Ways to Fight Back.”)Fahner has tried a number of dirty tricks to attack pensions in his career. But his most recent admission is absolutely breathtaking in its brazenness: He boasted of working to scam the Illinois bond rating.During Fahner’s talk to the Union League Club, an unidentified person in the audience suggested that pressuring credit agencies to rig the state bond ratings in order to attack pensions might be a jolly good idea. Fahner gleefully replied that he had already thought about that — and his group has tried it.Audience member: “Maybe sometimes you gotta be irresponsible to be responsible. If a political solution really doesn’t produce a favorable outcome, maybe you really need a market solution. And a market solution, I don’t mean bankruptcy, I mean actually talking down the state rating even further so the state’s bonds essentially become below investment grade. And it drives up the borrowing cost to the state and all of us to a significant level enough that you really feel the public pressure…”Fahner: “The Civic Committee, not me, but me and some of the people that make up the Civic Committee… did meet with and call – in one case in person – and a couple of calls to Moody’s and Fitch and Standard & Poors, and say, How in the hell can you guys do this?”Fahner went on to take credit for downgrades to Illinois credit ratings, saying, “If you watch what happened in the last few years, it’s been steadily down.”Check out the video at minutes 46:30 to 49:43 for the full remarks on the ratings scam: “ Fahner: Civic Committee helped jaw down state’s bond rating.”
As the audience member correctly adduced, pushing down the bond rating is a great way to screw workers, the state and taxpayers. Pension funds buy bonds, often from the state, to stay financially healthy. In order for the pension fund to buy the bond, it must have a passing grade. If the grade is lowered, say from A to B, the price of the bond goes down, and the pension fund will suffer a loss. If the bond rating is dropped below a minimum standard, then the pension fund must sell the bond, and take a much bigger loss.Lowering the bond rating also has the effect of artificially inflating the interest rates that bond holders must pay on future bonds, making them more expensive to buy and reducing the state’s ability to borrow. The basic idea is to manufacture a crisis by financially starving pension funds. Fahner & Co. know this will put political pressure on Illinoisans to take away worker pension benefits.In a nutshell, here’s what the video reveals:
- Corporate honchos — some of whom may have a vested financial interest in Illinois bonds — feel perfectly comfortable calling and exerting pressure on ratings agencies.
- Ratings agencies are political entities whose supposedly impartial research can be influenced and perhaps even bought.
- CEOs think nothing of willingly and knowingly screwing the bond rating and economic standing of their home state in order to enact their anti-worker philosophy and fatten their own bank accounts.
- Proclaiming you are “fixing” state fiscal problems is a great cover for potential insider self-dealing in the bond market.
- Committing economic treason against fellow citizens and taxpayers is simply a matter of course for today’s American plutocrats.
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