In recent years, state pension funds and other social insurance funds lost $477 billion dollars. One of the key reasons for the decline was the recession, a direct result of conservative policies and a huge decline in tax revenues and other fees to the states, which declined half a trillion dollars in 2009 alone.

California suffered one of the biggest losses in 2009, with $136 billion being lost from their pension fund, 21 percent of national losses that year, despite having only 12 percent of the national population. The state lost nearly $100 billion the year before that.

The conventional wisdom response to the pension losses is to claim that it shows that pensions are too expensive and we should get rid of them. The problem with that is that if state governments invested money more wisely and raised revenue in a responsible way, the pensions are easy to fund and, more importantly, they are part of the promise that has already been made to state workers. These pensions are part of the compensation that was offered to workers to get them to take on jobs that are vital and often thankless. Cutting pensions effectively means cutting compensation for state employees, who are already under assault from every direction. It also means that we, as a society, renege on our promises and it means that high quality employees are likely to find work elsewhere, something that drives down the quality of services provided by government, further eroding the economy and the quality of life of all Americans.

Beyond this, the problem is that most of the losses were avoidable. Poor investments have been a major problem. States like Ohio and New York are suing BP for misleading investors, including state pension funds, about the state of the company even prior to the Deepwater Horizon spill. And investing in BP was far from the only bad investment choice made by states.

A much bigger problem has been a lack of regulation on investments and with the companies that make them and the agencies that rate them. So much fraud, deception and other crimes have been committed by these entities that the list of lawsuits currently in the works is too long to print in full.

Alaska is suing Mercer. California is suing Countrywide. And Standard and Poor's. And the New York Stock Exchange. Chicago and Atlanta are suing Northern Trust. Detroit is suing UBS. New Jersey is suing Lehman. Ohio is suing Wachovia. Oregon is suing Countrywide. We could go on and on.

Continue reading »

Among other places, I write at Calitics, the progressive site covering California politics. This is often a punishing experience. Since 1978, Proposition 13 has tilted the very structure of government in an unassailably conservative direction - 2/3 votes are needed to raise taxes, but only a simple majority to cut. As a result, politicians invariably take the path of least resistance, and as the Norquistian right rose to prominence in the state GOP, they learned that they could simply hijack the budget process for their own ends. State leaders compensated with borrowing and various gimmicks to put off the costs until after they left office. Servicing the debt became a bigger and bigger slice of the budget pie. Stakeholders who couldn't rely on the state used the ridiculously easy initiative process to pass unfunded spending mandates for themselves and all sorts of ballot-box budgeting. In good times, this uneasy balance worked... sort of. In even the most mild recessions, it would collapse.

That sets the stage for yesterday's horrendous budget deal, which closes a $26 billion dollar deficit with almost no new revenue, making steep cuts that amount to a reinvention of government's promises to its people, along with the usual gimmickry and a harsh, counter-productive set of raids on local government resources.

A local government official made a comment Monday afternoon, a few hours before the $25 billion deficit deal was reached, that seems to encapsulate everyone's feelings.

"As this budget hits the street today and people look at it," said San Mateo County Supervisor Rich Gordon, "I think Californians are going to say, 'How did we get in this mess?'"

It relies on about $15.5 billion in cuts and $11 billion in, well, other stuff (more on that in a moment).

Almost two-thirds of the cuts are in K-12 education, colleges, and universities (though it also includes a one-time supplemental payment to K-12 and community colleges of $11.2 billion). Other sizeable cuts are in corrections ($1.2 billion), state worker salaries ($1.3 billion in the current furloughs) and Medi-Cal services ($1.3 billion). Welfare assistance, health care for low-income kids, and in-home support services (IHSS) would also see cuts.

Also cut: funding for state parks, though nowhere near the level Governor Schwarzenegger proposed in May. Legislative staffers say a few parks would close, and the ones in question will be picked by the

administration.

Continue reading »

Paul Krugman: (reg req)

Apologists for the administration will doubtless claim that blame for the lack of progress rests not with Mr. Bush, but with the inherent inefficiency of government bureaucracies. That's the great thing about being an antigovernment conservative: even when you fail at the task of governing, you can claim vindication for your ideology. But bureaucracies don't have to be this inefficient. The failure to get moving on reconstruction reflects lack of leadership at the top.

Mr. Bush could have moved quickly to turn his promises of reconstruction into reality. But he didn't. As months dragged by with little sign of White House action, all urgency about developing a plan for reconstruction ebbed away.

Mr. Bush could have appointed someone visible and energetic to oversee the Gulf Coast's recovery, someone who could act as an advocate for families and local governments in need of help. But he didn't. How many people can even name the supposed reconstruction "czar"?

Continue reading »

"U.S. Rep. Tom Tancredo, R-Colo., asked House Speaker Dennis Hastert not to send federal disaster aid to officials in Louisiana, calling state and local government there incompetent and corrupt. In a letter to Hastert on Wednesday, Tancredo urged the speaker to create a "bipartisan select committee" of members of Congress to oversee federal disaster spending in Louisiana....read on "

Where's that bi-partisan committee looking into the handling of Katrina? Thanks for trying to slow down the recovery effort even further Tom.

"Senate Republicans on Wednesday scuttled an attempt by Sen. Hillary Clinton to establish an independent, bipartisan panel patterned after the 9/11 Commission to investigate what went wrong with federal, state and local governments' response to Hurricane Katrina...read on"

Republicans always complain that Democrats are obstructionists; well this is the worst kind of obstructionism because the country needs an honest look at what happened no matter where the blame falls. If they felt that it was just the locals you can be sure that Bill Frist would have led the charge. Not one Republican voted for it.

Mike's Blog Round Up

~ The Mahablog: Knight Ridder reporters Jonathan S. Landay, Alison Young and Shannon McCaffrey report that Homeland Security Director Michael Chertoff is at least as guilty as former FEMA head Michael Brown for the delays in federal Hurricane Katrina response.
",0] ); D(["ce"]); D(["ms","d381"] ); //-->

~ The acting executive director of the Office of State and Local Government Coordination and Preparedness within the Department of Homeland Security, Matt A. Mayer, may have something in common with departed FEMA Michael Brown: resume padding. Petrelis Files has the story.

~ Thomas Mc Blog: This what a military dictatorship looks like.

~ "Bring 'em on": All the war news at the invaluable Today in Iraq.

The Huffington Post has some interesting quotes by Bush's Brain:

On Katrina: "The only mistake we made with Katrina was not overriding the local government... On The Anti-War Movement: Cindy Sheehan is a clown....read on"

A divided Supreme Court ruled Thursday that local governments may seize people's homes and businesses against their will for private development in a decision anxiously awaited in communities where economic growth often is at war with individual property rights..."

Just another fine example of the new ownership society that President Bush's led America is all about. Corporate ownership I mean. Hell.. they need your house for that new parking lot. You're hurting America if you don't want to give it up. Traitors!

That reminds me of the story when Bush screwed a lot of people so he could build his stadium for the Texas Rangers. In 1993, while walking through the stadium, Bush told the Houston Chronicle, "When all those people in Austin say, 'He ain't never done anything,' well, this is it." But Bush would have never gotten the stadium deal off the ground if the city of Arlington had not agreed to use its power of eminent domain to seize the property that belonged to the Mathes family...read on

Georgia prevents cities from raising wages

Move Left

When a city in Georgia decides which company to hire for work, it can consider many things.

However, whether the company pays its workers a decent wage isn't one of them.

From David Sirota:

Georgia Gov. Sonny Perdue signed a law barring "any city from seeking to require their contractors to pay higher minimum wages to employees than the $5.15 per hour federal standard."
Atlanta had been considering requiring a $10.15 "living wage" for government contractors, but that was apparently unacceptable to Big Business - so they bought this wretched piece of legislation, meaning Georgia taxpayers have to continue subsidizing companies that provide poverty-level wages.

It would be one thing for the state to try to help workers by setting a floor for workers' rights in city contracting.
It's another thing for the state to set a ceiling on workers' rights, which is the purpose of this legislation.

The law says, "no local government entity may through its purchasing or contracting procedures seek to control or affect the wages or employment benefits provided by its vendors."

Gee, wouldn't want a city to try to improve wages and benefits.

Better that cities just seek the lowest bid, and depress wages and benefits.

This awful bill was passed by a Democratic House and Republican Senate, and signed by a Republican governor.

Bipartisan greed-gone-wild.

The Forceful Men Of FORCE Ministries    A Tiny Revolution

Atlanta had been considering requiring a $10.15 "living wage" for government contractors, but that was apparently unacceptable to Big Business - so they bought this wretched piece of legislation, meaning Georgia taxpayers have to continue subsidizing companies that provide poverty-level wages. It would be one thing for the state to try to help workers by setting a floor for workers' rights in city contracting.

It's another thing for the state to set a ceiling on workers' rights, which is the purpose of this legislation.

The law says, "no local government entity may through its purchasing or contracting procedures seek to control or affect the wages or employment benefits provided by its vendors."

Gee, wouldn't want a city to try to improve wages and benefits.

Better that cities just seek the lowest bid, and depress wages and benefits.

This awful bill was passed by a Democratic House and Republican Senate, and signed by a Republican governor.

Bipartisan greed-gone-wild.

via Kos: It's not just the FEC bloggers need to worry about. Local governments will likely try to get into the act, as this ridiculous San Francisco effort proves....read on

Steve Gilliard points out: Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances

So why, exactly, is some second rate pol in SF trying to abridge the constitution? What exactly is the goal here? Are they trying to force people who occasionally comment on politics to have to register? So when do the newspapers register and have their sales audited.