Larnet Yelmers

Zero Hedge, we are taking away your photoshop license. You have created a monster that contemplates a bombastic action.

Liberal legislature in New York Steals from Teachers

The pension system in New York, and most other school systems, heavily backloads retirement compensation. Teachers accrue very little wealth during their first two decades of service, then suddenly become eligible for much larger payouts if they remain in the classroom for 30 years or more.
Perhaps this model made sense once upon a time. But it has many negative consequences, especially in the modern economy.
Take, for example, a 25-year-old entering a Gotham classroom for the first time this year. Were she to leave the system 20 years later — perhaps her spouse took a job in the Midwest or she decided two decades in the classroom was enough — she would take with her the equivalent of only about $60,000 in employer-provided retirement savings. If she were to remain in the school system until age 63, on the other hand, she would have earned the equivalent of about $610,000, a more than 10-fold increase in just 18 years.

Read more: http://www.nydailynews.com/opinion/teacher-pensions-fair-article-1.1448229#ixzz2eLkqJ7Sg

Translation: If you are a young educator, run away from New York as fast as possible.

And did the Gubinator decide that theft is fine and dandy:

In 2010, Gov. Schwarzenegger insisted the FY 2011 budget pare pension benefits for newly hired state workers to pre-1999 levels as part of any budget agreement.[61] The governor was successful, as the FY2011 state budget created a two-tier system that scaled back pensions for newly hired workers.[2] In addition, the budget included new reporting requirements that CalPERS must justify the need to the governor, state treasurer and Legislature when it needs more money from taxpayers.[2]Ballotpedia

In business, the idea of a two tiered benefit system has been proved a failure time and again. In the case of politics, it is a method for liberals to skate by on their responsibility for some fiasco

Jack Dean misses a key point

Pension Reform Goes Off-Track:

Few pension reformers will blame Governor Jerry Brown for agreeing to support the federal government’s demand to temporarily exempt union transit workers from the pension reforms he championed. The standoff between the governor and the Obama Administration’s Labor Department over transit funds and pension reform was spelled out by the State Budget Solution’s Bob Williams last week in F&H. The bottom line for the state: Lose billions of dollars in transit funds or pull back on the requirements that transit workers donate to their pensions and that new hires work longer before retirement. While Brown will take the money, he also will take his fight to court against the half-century old law that the Obama Administration is relying on to force the issue. Another thing he should test in that court battle is the strength of federalism. The situation is another sign that states are losing rights said Jack Dean, editor of the website Pension Tsunami, which closely monitors activity related to pension reform. Dean agreed that the governor should not be blamed for backing off. He said he expected local governments were pushing the governor, saying they needed the transit money.

The story is the federal intervention in Brown's pension reform. The real issue that Jack Dean misses is why did California politicians agree to send their transit taxes back to DC when they knew that California only gets 75 cents back on the dollar. Unions are not the issue, ignorant local politicians and illiterate Democrats kept telling cities that DC money was a freebee. It is not, we are a doner state, and how did CA liberals agree to steal from a poor state, like CA and give the money to DC in the first place? The real problem with transit is that light rail is a loss maker. If CA voters had to pay for this stuff directly with their own taxes, we never would have gotten into this mess. Now we are stuck, DC is broke and in the medium term will be unable to subsidize these global warming monsters. CA liberals lied to the voters of CA, and now we are doomed.

LA TIme acknowledges its own corruption

When we read the rags in California, they must be interpreted through the lens of sixth graders taking their copy from the Democratic oligarch.  We have seen this in the Sac Bee, as it advocates the policy of poverty and ignorance relative to light rail.  But finally, the LA Times had to confess to its own corruption on the Global Warming emissions market, which is not working. Calwatch takes us through the whole affair, showing first how the LA Times simply copied the Doonesbury version of CapnTrade, then how the LA Times finally reached a seventh grader who explained the problems:

“If others don’t go green, California could become an outlier, saddling businesses with costly new power while neighboring states continue to use traditional, cheaper energy, experts say. If the efforts under way in California spread to become the new normal, however, all will benefit from economies of scale. “If more states order power companies to limit their use of fossil fuels, for example, the incentive will grow nationwide for firms to develop cheaper alternatives, leaving California consumers less exposed to spikes in electricity rates.”

Cal Watch then goes on, quoting someone who can count:

The ‘underlying flaw’ that’s obvious to outside observers “The price of carbon in California hit its lowest point this year at the most recent quarterly auction of emissions allowances. The price per metric ton of carbon was lower than expected, down 13 percent from the last auction in May. As Bloomberg reports, the low price was likely due to California’s stated plan to give away permits for free to avoid harming struggling industries . …

“So what does this mean? One green blogger sees the auction in a positive light, pointing to the fact that all available credits were sold as a sign of the market’s health. But the drop in the price of carbon must be worrying to state regulators. They have to be aware of the fact that in Europe, the price of carbon plummeted due to over-allocation of permits. Europe’s carbon market is currently broken because planners are wary of the effect a high price might have on energy-intensive industry. And that’s the fundamental problem with carbon markets: if the price is too low, companies lose the incentive to curb emissions, but if it’s too high, many companies will simply up and move to a location where they don’t have to pay for carbon.

“California is trying to walk that line, and so far it’s in better shape than Europe. But there’s little reason to expect California’s greens will find the solution to that underlying flaw.”-

This shit is the reason California is a poor uneducated economy, the local rags simply too stupid to transmit any valid, worthwhile information.

Mark P. Mills is a smart person

His post, American Technologists and Entrepreneurs Re-Set Russian Relations, get the American system. Here he talks about Putin bragging on Russian energy doominance, which went away with the shale revolution:

The United States today is the world’s fastest growing oil and gas producer and is already eroding Russian revenues and influence. With production gushing out of the heartland, America has pushed Russia aside to become number one in global gas production. The prospect of future U.S. LNG exports is now exerting downward pressure on prices of Russian gas exports to Europe. Russia is increasingly being forced to abandon the, once sacred, gas-oil price link to maintain market share. The new state of affairs has visibly emboldened European policymakers. Even the Germans are taking a tougher stance on Russian human rights practices. Europe has finally found the nerve to launch a major antitrust suit against Gazprom. And while much of Europe has reacted querulously to the coming shale boom, those with the most painful experience of Russian energy dominance, Poland and Ukraine, are determined to unlock their own shale reserves. The International Energy Agency’s labeling the U.S. the “new Middle East” underlines the fact that shale can no longer be written off as a marginal fluctuation. North American gas exports to Europe are not a matter of if, but of how soon and how much. The US is already a net exporter of gasoline and diesel fuel, much of it to Europe. There is even the possibility of U.S. crude exports as production there exceeds domestic refinery capacity.

None of this comes from new discoveries – American, indeed global shale fields have existed for millennia – nor just from fracking alone. The game changer is largely the result of information technology. Sub-surface imaging and big data have made finding, drilling and operating wells (both land-side fracked ones, and in deep water) vastly more productive. Such technologies were once available only to majors but are now used by the thousands of small and mid-sized U.S. oil and gas businesses that have driven the boom. Add to all this the uniquely American feature of private ownership of mineral rights. The economic alignment between tens of thousands of small parties – land-owners and producers -- is quite unlike anything else in the world. (We expect some nations will emulate this through creative profit sharing.) In short, we are witnessing an historic shift in world energy production resulting from the unique dynamism and creativity of U.S. style capitalism.

I have italicized the essential passage. We, the global economy, is right now being dominated by the spread of digital technology in areas beyond the web and personal computing. Think of this as web bots getting a whole lot smarter.

The correct method to analyze SS updates

Since I criticize the Christina for get things backwards social security and gold inflows, perhaps I should explain the correct model.

If you want to analyze the affect of SS updates, then please determine the nominal update probability, and work from deviations to that. Here is what I mean. Congress looks over thirty year processes, and operates on a finite set of changes that can fit into the 30 year window. We know that because Congress does not offer a 40 year bond, but it offers a 30 year bond.

The computation of the most probable SS update is simple, 30 years is the working persons time constant of work and retirement, we alter our demographics at a 30 year rate. Using DGSE methods, on a 30 year schedule, how often should Congress update retirement programs? Simple, every 15 years, twice the bandwidth of the life cycle.

 This result falls out of DSGE analysis. When Congress is mostly accurate with 15 year updates to retirement programs, then there is no noticeable change in the stability of the programs, the DGSE analysis shows nothing out of balance, the updates should have no effect on GDP. But Congress does not meet the schedule, in fact no one operates for long on a regular schedule except slaves.

However, if Congress is reasonably correct on its update rate, then small, acceptable changes happen to SS, but SS remains within a fair error of stability. So we can see the research approach. When Congress is noticeably late in its update, the GDP gets out of balance, forcing Congress to address the issue. The multiplier appears to be greater than one, but what really happens is Congress has let the SS multiplier lapse, then realizing its predicament, makes a correction, which appears to Christina as a multiplier greater than one.  Really, it is a nominal multipler following years of multipliers less than one.

Consider California, someone told public sector unions that pension updates never need happen. Unions enforced that deal until California went bankrupt. Now that Brown is trying, and failing, to correct the stability problem with an update, his administration looks like good government. But that is relative to 20 years of bad government, bad government enforced mainly by UC Berkeley Keynesian professors.

No Child Left Behind still trashing CA public schools

Read the following post by Dan Walters.  Our school financial bills are a mess in the legislature, and behind the scenes is that crap called NCLB, a program pushed on to us by the Califorina Undemocrats using their lobby in DC.  Now we pay the price:

California is simultaneously implementing two major – even historic – changes in its 6-million-student public school system, and all adults involved pledge that they have the best interests of those kids at heart.
They may be telling the truth about their motives.
Nevertheless, the adoption of Common Core academic standards and Gov. Jerry Brown's plan to give more money to districts with large numbers of poor and English learner students are venues in which old adversaries can renew their old power struggles.

Read more here: http://www.sacbee.com/2013/09/08/5716658/dan-walters-old-school-battles.html#storylink=cpy

Once again, parents, reformers, unions, administrators, school board members, etc., are sparring over such issues as academic standards, testing, teacher accountability and charter schools. State schools Supt. Tom Torlakson and teacher unions, for example, are pressing legislation (Assembly Bill 484) to abolish the current accountability system, based on testing, with the promise to create one aligned to Common Core standards. School reform groups such as EdVoice fear that the shift will undermine the legal tools used by parents to take control of failing schools and convert them to charters – a process that the unions have long opposed. Not coincidentally, the Legislature has passed and sent to Brown a bill (Assembly Bill 917) that would expand union influence over charter school creation. Meanwhile, the same groups are sparring over the State Board of Education's implementation of the school finance overhaul – specifically over whether extra money will be tightly allocated and monitored, or given to districts with wide flexibility, thus putting more on the table for staff salaries. Legislation (Senate Bill 344) that would have tightened the allocation of the funds was watered down due to opposition from school officials, who want maximum flexibility. A lengthy hearing before the state school board last week put the sharp differences on display, with civil rights groups demanding that the extra money be concentrated on kids it's meant to help. Read more here: http://www.sacbee.com/2013/09/08/5716658/dan-walters-old-school-battles.html#storylink=cpy

It is legislative corruption, mismanagement by union leaders, and most importantly we have a clearly uneducated force of teachers that created this mess. Add to the mix is the inherent racism and hatred of the Anglo minority. The source of the ignorance and racism? UC Berkeley combined with John Pwerex and Darrel Steinberg. Three institutions who we can blame for 20 years of floundering government in California.

Why the Romer paper on social security is bogus

From the early 1950s to the early 1990s, increases in Social Security benefits in the United States varied widely in size and timing, and were generally not undertaken in response to short-run macroeconomic developments. Romer and Romer

Wrong, social security benefits are updated when Congress has the bandwidth to OK, and when it is out of balance with the economy. If Social Security has meant anything, it means it is updated when the stars are aligned  in Congress. If an SS update did not appear like a random even, then Congress is likely out of balance, right? I mean good things Congress does will always be mildly surprising, and mildly surprising rebalancing acts by Congress have been increasingly rare as the Romer philosophy of fraud permeates the Undemocratic party. The problem with Keynes is he is not unexpected, thousands of bloggers devote their lives to protecting the economy from Romer and Romer.

England enters growth!

First let me talk about growth. People may not realise how strong recent numbers have been, particularly surveys. The purchasing managers’ index (PMI) showed manufacturing output rising at its fastest since July 1994, and orders at their most rapid since August that year. Britain’s factories “are booming again” said Rob Dobson of Markit, which compiles the data.
The equivalent survey for construction, responsible more than any other sector for reducing growth last year, showed the fastest rise in construction output since September 2007. Construction, lifted initially by housebuilding, appears to be enjoying a broad-based recovery.
You cannot have a modern-day recovery without the service sector playing its part. Fortunately it is. Service sector activity in August rose at its sharpest pace since December 2006, with growth in new business its best for 16 years. It was, according to Markit, “a stellar performance”. Economics UK

David Smith notices:

The return of growth in Britain means the debate has moved into a new phase. The argument that has, often tediously, dominated over three years - whether or not George Osborne should abandon his deficit-reduction strategy and have a “Plan B” fiscal stimulus - now looks dead and buried.

They evidently had the Keynesian debate, Dave thinks the un-Keynesians won. What does the British deficit look like from Trading Economics:
Looks just like the US deficit, you know, the one Krugman claims is too small. So evidently we have yet another moment in which the Christina Romer and Company are wrong about  stimulus. Christina's problem is she has no concept of cause and effect, she thinks there is a random number generator in DC making policy in a vacuum.

Speaking of Romer, I did look at the relationship between Gold inflows and growth in 1933, growth started then gold followed, just the opposite of what she thinks.  And no, I am not going to read her paper on SS benefit increases coming from a random number generator, they do not, and any results she has claiming to have found a random event in DC is absurd.

Keynes proven wrong, sorry. You want to know why world growth is happening now? My best guess is the world is relieved that the California Undemocracy has managed six months of sanity, out of 20 years of floundering. California is mainly composed of idiots, and any sign of modest brains in the state causes worldwide jubilation.

Oil up, $110

In the danger zone. This causes a downgrade to the next GDP report. I suspect economists will expect a growth of 2.1%, down from expectations of 2.5 and up,  on this bad news.