Maybe an elite state job is bonus enough

"Investment managers who work for the State Treasurer's office "¦ earn bonuses for achieving high rates of return on state investments since 1997. State investment managers earn a base salary of $160,000 "¦ last February eleven managers received bonuses ranging from $9,860 to $57,006."

— "Outraged? Don't Be," a Mail Tribune editorial

Want to start up a conversation at your next party that won't bore anyone? If there's a story in the news about how much government workers are paid, ask people what they think about it. Few conversational buttons are easier to push.

Maybe that's always been true, but public resentment was really baked into the cake with Ronald Reagan's motto that "government isn't the solution to the problem, government is the problem," along with Rush Limbaugh's arrival on the scene. And if the work government does has little or no value, it follows that the people doing it are overcompensated whatever they're getting paid. In Oregon the Public Employees Retirement System magnified the resentment. Returns on PERS portfolios were once so high that some retirees collected more each year to golf, fish or watch TV than they did working full-time for state or local government. If you can justify that to blue-collar and service-sector Oregonians who pay taxes that help subsidize PERS, who have never had the medical and vacation benefits public workers have, and who face retirement with little or no pension payments at all, you're more persuasive than I've been in columns and radio shows over the years.

So it's no puzzle that some people aren't impressed by a consultant's finding that "Oregon [fund] managers earn 56 percent less than the median paid to managers in the private financial sector, and 16 percent less than fund managers in other states." Those are meaningful numbers, but anyone offering them as the final word validating these bonuses might want to think harder about how the world has recently changed.

Start with the fresh realization that money managers don't walk on water. Many are smart, economically skilled people, and they have a lot of responsibility. But when we reach the point that juggling other people's money earns some of them tens of millions of dollars in the private sector, and twice as much as we pay our governor in the case of a few state managers, maybe it's time to head for another point. What's also true is that management positions in government look a whole lot better than they used to, with extraordinary health and retirement benefits and very little chance that the boss will call you into his office for a sudden unexpected chat. Remember, too, that in this economy virtually none of the taxpayers footing the bill for these bonuses have the vaguest chance of seeing raises of any kind themselves. And they're not just taxpayers; they're also voters in every future election with tax measures on the ballot.

Someone reading these words is thinking "Do you want the best possible return on your tax dollars or don't you?" I do. I'm just not convinced we have to keep sweetening the pot for these folks to get it.

We could find out. Just advertise these fund manager positions in the next budget cycle at a base salary of $100,000 per year (the governor's paid $93,600), plus the standard state health care and retirement package, but with no cash bonuses. Those who hold the jobs today would be fully eligible to apply. And explain quite clearly that if their investments meet or beat the performance of 55 percent of similar funds (the standard that currently triggers these bonuses), they get to keep their jobs. If they beat fewer than 40 percent of the other funds, it's time for a career change, and in the 40 to 55 percent range they can stick around for another biennium to see if they improve.

Then carefully comb through the resumes that come in, especially evidence of the applicants' track records. If the quality's not there, jump the base salary to $135,000 and if necessary again to $150,000. At some point the results will blow to smithereens either the mainstream premise that we need Masters of the Universe to manage our money, or my theory that talented mortals can do just as well.

Now, this is chump change compared to Fortune 500 salaries. But I'm a shareholder of Oregon, not Goldman Sachs or Bank of America or Monsanto. If I owned their stock, I'd be bugging them to find out what kind of CEO talent we could attract with $500,000 a year, and who'd step up to manage investments for $300,000. If we're not asking that kind of annoying question, we're pulling the pillows back over our heads and pretending that maybe that loud alarm didn't go off after all.

Jeff Golden is the author of "Forest Blood," "As If We Were Grownups" and the novel "Unafraid," with excerpts available at www.unafraidthebook.com.

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