Fitch colluded with Wall Street. Now they use teacher pensions as a reason to lower Illinois credit rating. | Fred Klonsky

Fitch colluded with Wall Street. Now they use teacher pensions as a reason to lower Illinois credit rating. | Fred Klonsky:

Fitch colluded with Wall Street. Now they use teacher pensions as a reason to lower Illinois credit rating.

by Fred Klonsky

As expected, the credit rating agencies, private corporations, are reacting to the failure of the Illinois General Assembly to cut public employee pensions.
Greg Hinz:

The first reaction is in from Wall Street to the Illinois Legislature’s failure to enact pension reform last week, and it’s negative.
 Fitch Ratings, one of the big firms that issues reports to investors on creditworthiness, lowered Illinois’ rating to “A-” from “A.”
 In addition, ratings based on Illinois appropriations went to “BBB+” from “A-.” And the outlook on state debt is negative, meaning that the rating could be reduced further. 
Last week, Moody’s warned that its rating of Illinois could fall without pension reform.

The same credit rating agencies that are going after Illinois turned a blind eye to Wall Street according to the SEC. Senators Al Franken and Roger Wicker write:

Al Franken

Roger Wicker

Earlier this year, the Justice Department filed a $5 billion lawsuit against Standard & Poor’s — one of the nation’s Big Three credit rating agencies, which also include Moody’s 

One Daley attacks public employee pensions. The other collects a huge one.

by Fred Klonsky

Earl Shumaker writes to ask:

“So what has been the history of the Daley family when it comes to their own public pensions?”
Good question Earl.
When Bill Daley’s brother, Richie Daley, left office he ended up with quite a little pension.
As the Tribune has reported:

Two years into his reign as Chicago’s longest-serving mayor, Richard M. Daley took advantage of the state’s convoluted pension system to significantly increase his potential payout while saving $400,000 in contributions, a Tribune/WGN-TV investigation has found.
Daley, a former state senator, made it happen by briefly rejoining the legislative pension plan in 1991. He stayed there just one month before returning to Chicago’s municipalpension fund, but the switches made him eligible for benefits worth 85 percent of his mayoral salary — a better rate than all other city employees receive.

He was just 49 years old at the time. Even if Daley had never won another election, he could have started collecting a public pension at age 55 of $97,750 a year. Without the