When it comes to governments and fiscal responsibility, the two go together like chalk and cheese. That is, they don't mix at all.
One reason why is that few individuals are held accountable for failures of a noncriminal nature. Even when that is not the case, the punishments tend to be very limited in comparison to what happens in the private sector.
Another reason why is that those who are supplying the funds -- taxpayers -- have little direct influence over how, where, or why their hard-earned money is being spent. That leaves control in the hands of people with a mixture of agendas, motives, and mores, which is not exactly a recipe for good decision-making.
There are plenty of other factors, of course, but all tend to lead to the same conclusion. So can anyone really be surprised when the New York Times reports that the "Ex-Chief of S.E.C. Says Pension Funds in Danger"?
As New York State comptroller, his father “saved the retirements” of countless workers, Arthur Levitt Jr. said in a speech yesterday — but he added that now those pensions, along with those of millions of other Americans, are again at risk.
In remarks to pension officials from New York and several other states, Mr. Levitt, the longest-serving chairman of the Securities and Exchange Commission, said their world was fraught with problems, including conflicts of interest, opaque accounting and a tendency among elected officials to promise valuable benefits, then fail to set aside enough money to pay for them.
“As the baby boomers begin to retire, we cannot tolerate a shaky pension system,” said Mr. Levitt, who stepped down from the S.E.C. in 2001 and is now a senior adviser to the Carlyle Group, a large private equities firm.
The Carlyle Group is one of the investment firms to be questioned by investigators in an inquiry into the New York State pension fund. Mr. Levitt alluded to that inquiry, which has focused on whether associates of New York State’s most recent former comptroller, Alan G. Hevesi, improperly benefited from his sole direction of the $156 billion fund, the nation’s second largest.
But Mr. Levitt said New York’s pension woes were just the latest in a series of scandals at public funds all over the country, including those in the cities of Chicago, San Diego and Philadelphia and the states of Illinois, Ohio and California.
Mr. Levitt was speaking at an annual conference for public pension trustees sponsored by the Pacific Corporate Group, an investment management company that specializes in private equities.
He said he was speaking in the dual capacity of a private equities executive and the son of Arthur Levitt Sr., who was widely admired for refusing to use the New York State pension fund to bail out New York City during its fiscal crisis in the 1970s.
