The truth about public sector pensions

Like most people, I had assumed that the shortfall in state public sector pension funds that is causing budget problems was because the states had not made sufficient contributions to the fund to met their promises. Paul Krugman says that he too bought that argument.

But a new study (pdf) by Dean Baker of the Center for Economic and Policy Research shows that the shortfall emerged only in 2007 and is largely due to the financial crisis. As Baker says:

Most of the pension shortfall using the current methodology is attributable to the plunge in the stock market in the years 2007-2009. If pension funds had earned returns just equal to the interest rate on 30-year Treasury bonds in the three years since 2007, their assets would be more than $850 billion greater than they are today. This is by far the major cause of pension funding shortfalls. While there are certainly cases of pensions that had been under-funded even before the market plunge, prior years of under-funding is not the main reason that pensions face difficulties now. Another $80 billion of the shortfall is the result of the fact that states have cutback their contributions as a result of the downturn.
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In sum, most states face pension shortfalls that are manageable, especially if the stock market does not face another sudden reversal. The major reason that shortfalls exist at all was the downturn in the stock market following the collapse of the housing bubble, not inadequate contributions to pension funds.

So the idea that the problem is caused by generous retirement giveaways by state governments to greedy unions is simply false. This serves to remind me that I should not trust any conventional wisdom that aligns itself conveniently with oligarchic interests that control the propaganda apparatus but should always ask for the data.

Problems in ‘real’ America

About a decade ago, when I was on Ohio’s advisory board that was revising the state’s science standards, there was the big debate over teaching so-called ‘intelligent design’ (ID) in science classes. One of the people attending those meetings was the superintendent of schools in a largely rural district that was in the southern part of the state close to the Ohio river that separates us from Kentucky.
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Hillary Clinton as media critic

At last she says something I can agree with when she points out that when it comes to news coverage and impact around the world, al Jazeera is eating the US media’s lunch.

“Al Jazeera has been the leader in that are literally changing people’s minds and attitudes. And like it or hate it, it is really effective,” she said.

“In fact viewership of al Jazeera is going up in the United States because it’s real news. You may not agree with it, but you feel like you’re getting real news around the clock instead of a million commercials and, you know, arguments between talking heads and the kind of stuff that we do on our news which, you know, is not particularly informative to us, let alone foreigners,” she added.

Who knew that she was such a good media critic? But she should be careful what she wishes for. It is because the US media is so awful that all her hypocrisies (and those of Obama and the rest of the ruling class) do not get exposed.

Further abuse of Bradley Manning

Glenn Greenwald highlights how the US government’s disgraceful abuse of Bradley Manning continues and how they shamelessly lie about it.

A lawyer for Pfc. Bradley Manning, the Army intelligence analyst accused of leaking secret government files to WikiLeaks, has complained that his client was stripped and left naked in his cell for seven hours on Wednesday.
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The soldier’s clothing was returned to him Thursday morning, after he was required to stand naked outside his cell during an inspection, Mr. [David E.] Coombs said in a posting on his Web site.

“This type of degrading treatment is inexcusable and without justification,” Mr. Coombs wrote. “It is an embarrassment to our military justice system and should not be tolerated. Pfc. Manning has been told that the same thing will happen to him again tonight. No other detainee at the brig is forced to endure this type of isolation and humiliation.”

First Lt. Brian Villiard, a Marine spokesman, said a brig duty supervisor had ordered Private Manning’s clothing taken from him. He said that the step was “not punitive” and that it was in accordance with brig rules, but he said that he was not allowed to say more.

“It would be inappropriate for me to explain it,” Lieutenant Villiard said. “I can confirm that it did happen, but I can’t explain it to you without violating the detainee’s privacy.”

Notice that after requiring Manning to be naked for hours on end, they touchingly say they cannot explain the reasons in order to protect his privacy!

UPDATE: Greenwald says today that Manning will be forced to be naked every night and for morning inspection for the indefinite future.

Can anyone doubt that Manning, who has not even been tried let along convicted, of any crime is being humiliated as a form of punishment and to destroy him mentally in order to warn anyone else who might think of crossing the government of its unchecked power to abuse people?

The Daily Show on attacking teachers

Jon Stewart and The Daily Show writers were really on a roll on Thursday about the campaign being waged against teachers. I find it extraordinary that public school teachers of all people are being demonized as a major cause of the country’s economic problems. It is a sign of a government, business, and media chattering class that has lost its collective mind and is seeking the destruction of the public school system.

Here are the main clips:

The interview with Diane Ravitch also dealt with education and is worth watching.

Man prosecuted for publicizing jury nullification

I have written before (here and here) about how few people know about ‘jury nullification’, which is the right of juries to acquit some one even if there is no doubt that the law had been broken, if they think that the law used to convict is itself unjust. It is thanks to jury nullification that we now have constitutional protections of freedom of the press and association and assembly.

Although the right of juries to nullify is well established, judges and prosecutors tend to not like it to be well known, the former because it means that juries have the right to ignore their instructions and the latter because they want juries to convict.

Now there is a case where a retired Penn Sate chemistry professor standing outside a courthouse handing out leaflets informing potential juries of their right to nullify has been arrested and charged with jury tampering.

Scott Horton also talks about the case and the history of jury nullification. Sam Smith also discusses the case.

How thoughtful

A Texas Republican state legislator has introduced a bill that makes hiring of undocumented workers a crime in which the employer could be punished by up to two years in prison and a $10,000 fine unless they were hired to do household chores, like maid, caretaker, lawn worker, or any type of house worker.

Because you know how hard it is so hard to get good help these days…

And the government lurches on…

So Congress has passed and Obama has signed yet another continuing resolution to extend funding to keep the government running for another two weeks, until March 18, 2011. This is the fifth such extension. The previous ones provided stop-gap funding until December 3, then December 18, then December 21, and then March 4.

These ad-hoc actions are because Congress has still, six months into the fiscal year that began n October 1, 2010, not only not passed a budget but not passed even one of the twelve appropriation bills.

We will now be subjected to another tedious spectacle of wrangling as the March 18 deadline looms, which will likely result in another temporary extension.

How long will they keep kicking this can down the road? It is quite incredible that the world’s biggest economy is being run like a struggling mom-and-pop store, not knowing whether it can pays its bills from week to week.

Complicating things is the fact that this not the only contentious budgetary issue. There is also the debt ceiling of $14.294 trillion which is now predicted to be reached some time in April or May. Expect to see another circus around that issue. There is no doubt that it will be raised (because the oligarchy will demand it) but it is an issue that allows for a lot of demagoguery and who can resist that?