Cum dilectione hominum et odio vitiorum

By Jay Wolman

As the newest Satyriconista, with a practice of civil litigation and employment law in Boston, I thought I’d begin my first post with something high-brow.  Everything sounds better in Latin.  This was St. Augustine’s way of saying “Hate the player, not the game”.  Fast forward 1500 years and the message remains relevant.

David Madden, the now former mayor of Weymouth, Massachusetts, a small town about a half hour south of Boston, is the player.  The public sector pension system is the game.  He is getting a lot of flack for manipulating the system to his benefit.  Unlike most private sector pensions (union pensions excluded), public sector pension benefits in many jurisdictions, including Massachusetts, are not determined solely by how much the worker contributes to the system (defined contribution), but rather include benefits based on status or job classification (defined benefit).  [Yes, pensions are far more complicated than that, but nuance does not matter for this discussion.]  It seems that Mayor Madden would make an extra $30k per year by retiring as Fire Chief rather than Mayor.  So, Mayor Madden did some nifty maneuvering with the help of his pals:  He takes leave from the position of Mayor at the end of his second term, appointing his buddy, the Town Solicitor (i.e. the top lawyer) as interim Mayor.  The incumbent Fire Chief takes a voluntary demotion and the Solicitor (now Mayor) appoints Mayor Madden as Fire Chief.  Two days later, without showing up to work, Fire Chief Madden retires and puts in for the higher pension.  And the Town approves it (the State is fighting it, but has lost in Court so far).

Now, not every Mayor can get away with this–Mr. Madden actually was the Fire Chief before becoming Mayor.  He technically took a leave of absence, meaning he had this in the works for eight years.  And his buddies go along with it.  Sure, it looks bad, but this is the system that was set up and no laws appear to have been broken.  I actually feel bad for Mayor Madden; he has to pay legal fees to defend what the law allowed him to do (although I am a lawyer, it is a personal pet peeve that “loser pays” is not the American Rule.)  If my fellow Massachusetts residents don’t like what he did, they shouldn’t take it out against Mayor Madden, they should change the rules.  Hard to do when the legislators also game the system, but not impossible.

Here’s a thought for my first post as a Satyriconista:  eliminate pensions.  I’m not saying we renege on current promises, but I’ve wondered why we even have this complicated mess. (I know, they are the result of WWII wage freezes.)  As we are no longer at war with the Axis powers, I don’t know anyone who really thinks “Hey, boss, I know I’m doing all this hard work for you now, but I don’t want you to pay me for all of it now.  I think it would be great if you held on to a portion so you could give it to me in thirty years.  I trust you to handle it more than I trust myself.  And I know you’ll pay every penny.


11 Responses to Cum dilectione hominum et odio vitiorum

  1. Jay Wolman says:

    So much for showing off. I meant “Don’t hate the player, hate the game”. Not sure why I wrote the reverse. Sorry folks.

  2. One small quibble – he’s getting a lot of “flak”, not “flack”. “Flak”, a German abbreviation for Fliegerabwehrkanone, means “anti-aircraft fire”. A flack, on the other hand… would be somebody who could make Mr Madden seem a a bit less like a scheming d-bag.

  3. deadcenter says:

    Why should he be any different than these two d-bags:

    I agree. Pensions, like Social Security and Witholding, need to go away. People need to grow up and learn to accept that there ain’t no free lunch and they’re just going to have save their own money and provide for their own retirement. Witholding needs to go away so that every tax payers realizes just how much their paying to government every pay check.

    • Jay Wolman says:

      Personally, I like withholding, for exactly the reason you say it needs to go away. With every pay stub, people see how much of their income goes to the Feds. If you just postpone it to April (or October), then there is a cognitive dissociation between paychecks and taxes.

      I presume you are referring to the Social Security retirement benefits and the individual mandate associated with it (actuarial problems are a separate issue). It is a similar analysis, though historically the credit rating of the Federal government has been higher than the private sector’s. The problem is worse than healthcare, since too many people fail to save for retirement (thus, the individual mandate is an actuarial necessity to avoid moral hazard. And, of course, this is in part because $ they could have saved is diverted to the SSA.) But, if we are willing to let people die prematurely for failing to either pay for health insurance or save for retirement, then the mantle of responsibility is placed back on the individual. Though, if we are going all libertarian, there is a ton of other stuff that would be eliminated as well, and that is for a much longer discussion.

      • deadcenter says:

        I should have been more clear on my view of withholding and that is that it should be replaced with the individual having to write that check or make that online payment every pay period, weekly, bi-weekly, monthly, whatever. Too many people only look at the bottom line of their paystub rather than reading all the squiggles listed above it. Making them write the check repeatedly should drive the point home. For too many people, withholding is like a 401(k) or other pension deduction; you never see the money so you don’t miss it.

        Yes, I was speaking of the retirement benefit. The way I see the history of the program is that FDR had a choice to make, either educate the population that 1) saving money for a rainy day is good and 2) buying stocks on margin with money you don’t have is bad; or, treat the population like children and politely tell them, “you don’t know how to manage your money so I’m going to take a portion of it and give it back to you when you retire”. And, social insurance programs were all the rage in Europe so let’s jump on the bandwagon too.

        No, I’m not going full libertarian, I do think we need a basic social safety net. Operative word being basic. Get back to local charities helping out the local population because they do a better job of it with less money than government. I donate thousands to the local faith based charity because they do great work here and I’m an atheist.

  4. wda says:

    1) I know nothing about the “real facts” of this case.

    2) If Madden had previously previously spent the majority of his career in the Fire Department and ended as the Fire Chief (at undoubtedly a high rate of pay) then moved over to the Mayor’s office (at a lower rate of pay) I see no reason why he should not be able to retire at the higher rate. What is wrong with that?

    3) I disagree with your assertion that we should get rid of pensions. The idea that you can effectively have 6-8 different jobs in a career is a canard designed to placate the masses and soothe the hurt over being unemployed for 6 to 12 months for 6 to 8 times in your careerl. The 401(k) scam that was pulled on the American public only led to fewer people actively interested in managing their retirement money and blew up an already inflated Wall Street (and yes, I’ll argue this point). Finally, to suggest that we should privatize Social Security is just insane and further continues this scam.

    There is no such thing as “financial innovation.” The guy’s on Wall Street don’t make anything yet recieve huge pay for shuffling money back and forth ala three card monte and the american public continues to buy into it.

    • wda says:

      Wow, a first time satyrist and no response within 24 hours.

      For someone who likes to post blog titles in latin, you seem awfully afraid of serious dialogue on law based financial issues.

      Do you really belong here?

      • wda says:

        Grab some sack and make some response. That’s what a legitimate lawyer would do.

        Oh, it’s friday? I’m too busy to maintain a continuous dialogue about contentious statements I make.

        Jay, you should have thunk that stratergy thru before posting that drivel about having something “high-brow” to say which turned out to be not.

        Latin make you not.

    • Jay Wolman says:

      Hey, buddy, chill out. I don’t owe you any responsibilities; you are not a client and I do not have to respond within 24 hours. Moreover, the fact that you preface your discussion with point 1 means I shouldn’t take any argument you make seriously.

      As to your question in #2, why there is outrage, it shows you do not understand the difference between what is legal and what is right. Just because someone can do a thing does not mean they must do that thing. I agree, as does the Court, that it is legal. What is wrong is that by virtue of “working” 2 days in a no show job, achieved through political maneuvering neither you nor I could similarly attain, he gets a significant retirement raise at taxpayer expense. That is why people are upset. If he actually retired from real performance of the fire chief role, no one would have a problem with it.

      Point three is just argument without substance behind it. As there are no facts to rebut, the only appropriate response is “no, you’re wrong”. Btw, if you have 6-8 different jobs, do you really trust 6-8 companies with your pension? Most people don’t want to manage their money; markets are complex. However, people should have a choice in who manages it–their employer, the government, or a money manager of their own choosing.

      If you think Wall Street is all about shuffling money back and forth, then you have no idea what the word “investment” means. You cannot be taken seriously. Money is not shuffled. It is given to people to buy a house or run a business, or given to lenders to give to people to buy houses or run a business, or given to the people who give it to lenders, etc. It is all about managing risk of a bad investment while generating as much return from that investment as possible. If you don’t like Wall Street, don’t patronize Wall Street. You’re the one choosing to take out a mortgage–you could buy a home outright. You’re the one investing for retirement–you could keep it under a mattress or loan it to your brother with interest and hope he pays you. You’re the one buying an iPhone–smoke signals are nearly as effective, though you should ensure you plant your own tree, build your own axe, and find your own flint. Wall Street exists because we, the people, need Wall Street to ensure funds are available. Columbus would have discovered the New World sooner if he could have gotten venture capital rather then petition heads of state for funds.

      There is no financial innovation, but Wall Street ensures innovators have the means to acquire food, clothing, water, tools, and a workforce, as well as…money for retirement.

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