Matt Bai’s long profile of Chris Christie in this week’s Sunday NY Times Magazine is interesting and thought-provoking–Christie does not appear, contrary to popular opinion, to be just a bull in a china shop–but Bai doesn’t question many of Christie’s assertions, many of which are factually incorrect or seriously misleading:
In the end, Christie won by about four points on Election Night in 2009, with little notion of what he was going to do next. When I asked him if there was any one moment of clarity that put him on the path from cautious candidate to union-bashing conservative hero, Christie pointed to a meeting about a month into the transition, when his aides came to him brandishing an analysis of the state’s cash flow produced by Goldman Sachs. They advised the governor-elect that, without some serious action, the state could fail to meet payroll by the end of March. After scrutinizing the budget, Christie told me, his team came to the conclusion that the only way to get control of local taxes and state spending was to go after the pension and health care benefits that the public-sector unions held sacrosanct. From that point on, it seems, Christie has conducted his governorship as if he were still a grandstanding prosecutor, taking powerful unions on perp walks with evident enthusiasm.
Seeing as how New Jersey spends only 3.5 percent of its state and local budget on pensions, and Christie recently decided he could afford $637 million in tax cuts for millionaires, it’s not exactly true that pension costs are bankrupting the state. Christie’s story, as good as it sounds, doesn’t pass muster.
Later in the article Bai has this great quote:
What’s done is done, he told me, and it’s time for someone to tell these workers the truth, which is that the state is simply never going to have the money to make good on its commitments. “Listen, if they want to travel in the Michael J. Fox time machine and change time, I guess we could try that,” he said. “We could get the DeLorean out and try to go back there. But I think realistically that that was just a movie and make-believe. So we’ve got to live with what we’ve got.”
This, too, is a great story. Any politician who can casually reference Back to the Future and the DeLorean in a conversation about public policy is one step closer to my vote. But, unfortunately, it’s not an accurate metaphor. There’s an important backstory that Bai never mentions. Nor does Bai mention that Christie is proposing to cut pension benefits but is not considering other long-term financial obligations the state is party to, like general obligation bonds. Worst of all, Bai neglects to mention that New Jersey had a fully funded pension system only eight years ago. We have a short memory for things like that.
Just for good measure, Bai makes a similar mistake later in the piece:
It’s also true, though, that what used to be unspeakable, politically, simply isn’t anymore. It’s not as if the problem of public pensions suddenly got so much worse than it was before (the shortfalls have been building steadily for years, after all), nor is this new crop of governors somehow genetically bolder than their predecessors. If politicians of both parties are suddenly willing to go after the pensions and health care plans of teachers and cops and firefighters, it’s probably not only because they’re out of budgeting options, but also because suddenly they see it as politically advantageous. In other words, not only are public employees’ contracts no longer untouchable for any politician who wants to stay in office, but it turns out that the opposite is true; taking the fight to the unions is a good way to bolster your credentials as a gutsy reformer with voters who have been losing faith for years in public schools and government bureaucracies.
It’s actually not true that the current pension shortfall has been “building steadily for years,” unless by “steadily” you mean “dramatically” and by “years” you mean “the 18 months of one of the worst stock market crashes of all time.” Over this period, if state pension plans had averaged nominal earnings of 4.5 percent, as they have historically done, their assets would be $857 billion higher than they actually are today. That would have more than closed the entire funding gap. Additionally, if states had made their regular contributions along the way (New Jersey is one of the worst offenders in this regard), they would have had another $77 billion.
Bai’s main argument–that Christie seems to have hit on a viable political tactic–does seem plausible, but part of the reason it’s working in places like New Jersey and Wisconsin is that reputable national journalists, like Matt Bai, aren’t challenging political leaders on their claims. Readers aren’t getting the whole story.