Dems cry foul over pay raises for state's investment managers

Nov 29, 2013

This week, on our tryptophan recovery edition of It’s Just Politics, we’re talking money: salaries, wages, and how they’re becoming an issue in the campaign for governor.

Last week, gubernatorial-hopeful and former Democratic Congressman Mark Schauer, called for an increase in the state minimum wage. Schauer wants to increase the rate to $9.25 an hour over three years.

And, like we talked about last week - this is a subtle twist, not just hammering Governor Rick Snyder over his support for a pension tax, and school funding, but trying to give voters something to support, not just be against.

But giving voters things to be against is still an important part of any campaign narrative, and this week, for Democrats and Mark Schauer it was all about serendipity; a nexus of timing and opportunity.

The Detroit Free Press revealed over the weekend that the state’s pension and investment fund managers – these are the people that invest the state’s money – just got whopping pay hikes (we’re talking 80-90 percent raises). This now makes these investors some of the highest state workers in Michigan. At the same time, state employee unions and the Snyder administration have deadlocked in contract talks. They were in arbitration and the whole mess is now before an impasse panel.

So, Democrats are taking advantage of the optics of the situation, saying this is just more of the same from the Snyder administration: ‘Snyder - a money guy - respecting investment experts, but not the little guy.’

This fits quite snugly into the Democrats narrative: that the Snyder administration’s biggest paychecks go to the business development director, the budget director, and now, fund managers while it takes union contract bargaining down to the wire.

But is it really so crazy to pay these funds managers so much?

Rick Snyder, before he was governor was an accountant, CEO and investor. He has an almost obsessive focus on stabilizing the state’s pension obligations.  Familiarity sometimes breeds respect, not contempt, and Rick Snyder is someone who knows finance.

And, there’s a lot at stake here. If pension funds aren’t invested well, it’s taxpayers who are on the hook. But if public salaries are supposed to reflect public values, should fund managers’ salaries be so far ahead of everyone else? Or should it be a cold-hearted marketplace calculation to win the best talent?

You can’t really say it’s entirely one way or the other. So, let’s bring this back to a cold-hearted political calculation.

This is the period of the campaign - it’s the pre-campaign, really - when both sides would really like to get a head start defining their opponent and not being defined by their opposition.

It’s very much like putting brushstrokes on a canvas. As a candidate, you have an idea what you want your political portrait to look like when it’s done. But there’s another painter - not a friendly painter - who’s putting brushstrokes on the canvas at the same time as you are.

That’s one reason why the art of politics looks more like a Jackson Pollack than the Mona Lisa.