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There Is a Vast Oligarch Conspiracy Afoot to Destroy the Retirement Plans of Millions of Workers

October 10, 2013 in Blogs

By David Sirota, AlterNet

Pretending public pensions are the primary cause of state budget problems allows greedheads and ideologues to distract attention from their beloved corporate welfare.

As state legislatures prepare for their upcoming sessions, you will no doubt hear a lot about public pensions. More specifically, you will hear allegations that states are going bankrupt because of their pension obligations to public employees. These claims will inevitably be used to argue that states must renege on their pension promises to retirees.

This is what I've called the Plot Against Pensions in a report I recently completed for the Institute for America's Future. Engineered by billionaire former Enron trader John Arnold, championed by seemingly nonpartisan groups like the Pew Charitable Trusts and operating in states throughout America, this plot is not designed to strengthen pensions or to save taxpayer money, as its proponents claim. It is designed to slash public employees' guaranteed retirement income in order to both protect states' corporate welfare and, in some cases, enrich Wall Street.

Consider the math of state budgets. According to Pew's estimates, “The gap between states' assets and their obligations for public sector retirement benefits (is) $1.38 trillion” over 30 years. As the Center for Economic and Policy Research notes, this gap was not caused by benefit increases, as conservatives suggest. Data prove that most of it was caused by the stock market decline that accompanied the 2008 financial collapse.

Of course, regardless of cause, a $1.38 trillion shortfall sounds like an emergency. But it is a relatively tiny problem — one that may require small changes, but does not require radical schemes to entirely eviscerate retirement benefits. That's because, as CEPR points out, in most states the shortfall “is less than 0.2 percent of projected gross state product over the next 30 years.”

To put those numbers in perspective, remember that the 30-year $1.38 trillion pension shortfall is just $46 billion a year — and “just” is the operative word in comparison to the amount states give away in the form of corporate subsidies.

According to a 2013 study by the U.S. Public Interest Research Group, states lose …read more


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The Public Demonization of Bisphenol-A: I Smell a Rat

October 10, 2013 in Economics

By Patrick J. Michaels

Patrick J. Michaels

I’ve been following the saga of Bisphenol-A, aka BPA, for over three years now, ever since I used it as a case study in my course “Public Science and Public Policy.” BPA is a current rage as a cause of all things evil: cancer, diabetes, obesity, heart disease and probably flatulence.

BPA in tiny amounts is in a lot of things that we eat that come out of a can. It’s a popular liner that prevents corrosion and extends shelf life, no doubt contributing to some reduction in cases of food poisoning.

In fact, it’s reasonable to say that health-conscious individuals (or, rather, individuals who think they are health-conscious) probably make some effort to minimize their BPA exposure by staying away from canned foods, and the restaurants likely to use a lot of them. They probably also watch other aspects of their diets, substituting plant protein for animal sources.  More vegan=less BPA.

Define a problem, pay a problem, and it stays a problem.”

More vegan also equals more soybeans, which just happened to be chock-full of phytoestrogens like isoflavones. You can even buy concentrated isoflavones—with the estrogen-blocking potential of hundreds of canned tomatoes—at the health foods store. Concentrated BPA, perhaps?

BPA has an additional property of being absorbed in the digestive tract, which means there is a first-pass metabolism through the liver, and the metabolite is not or only minimally active.

So, you’d think if we were going to study, say, the carcinogenicity of BPA, we’d round up some rats and feed ‘em a bunch of BPA, right?

Wrong! Recognizing the problem with first-pass metabolism, instead, we’ll inject it directly into their bloodstreams. That’s what Ana Soto, from Tufts School of Medicine did. And she got what she was looking for–signs that the rats developed cancerous or pre-cancerous conditions (though the statistics and sample size were a little dodgy).

From their classic human history “We’re All Bozos on this Bus,” the Firesign Theatre might have called this an example of Fudd’s First Law of Opposition, which states that “if you push something hard enough, it will fall over.” And so the rats fell over.

How hard were they pushed? The average human dietary exposure is about 0.3 micrograms/kilogram of body weight for infants. The rats got 250. Not through the tummy, either.

The results were published in Environmental Health Perspectives, a journal “published with support from the National Institute of Environmental Health, …read more

Source: OP-EDS

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Mises’s Legacy Continues

October 10, 2013 in Economics

By John P. Cochran

My introduction to Austrian ideas was Hayek under the guidance of Fred Glahe. Hayek led me to Mises and Rothbard. It was Mises, much more than Hayek, that enhanced my understanding of real world economics. When I first began my own intellectual journey, it required diligence and luck to develop a library of the important contributions of the leaders in Austrian thought. Now   thanks to the Mises Institute it is easier and easier to share the insights of these intellectual, Mises, Hayek, and Rothbard, Salerno etc. with students, the public at large and “professional” economists.

To help make sure the Mises legacy continues to expand over the next 40 years do as I have done; donate to update and improve this important webpage.

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The Fed Is in Desperate Need of Change – Sadly Janet Yellen Won’t Be It

October 10, 2013 in Economics

By Mark A. Calabria

Mark A. Calabria

President Obama has now officially announced his intention to nominate Janet Yellen, current vice chair of the Federal Reserve, to succeed current chair Ben Bernanke.

And while Yellen is likely to receive a frosty reception from Republicans, she has a very good chance of garnering the necessary 60 votes needed to achieve Senate confirmation. She will of course break new ground as the first female head of the Fed, but will also sadly represent a continuation of the Fed’s current policies and long history of repeated failures. If you’ve made a fortune riding the various Fed-induced asset bubbles, Yellen is the woman for you. But just make sure to exit the rollercoaster before the next downturn.

Yellen has done little to make anyone believe she is ready to challenge that institution in any serious way.”

Washington has a long history of gifting positions to those who patiently wait and serve their time within the establishment. And it is harder to find a candidate more within the Fed’s institutional mainstream than Yellen. In addition to her early career as a Fed economist, and her time as a Fed board member in the mid 1990s, she did a long stint as president of the San Francisco Fed. Clearly this is someone who knows the institution.

But despite that long history, Yellen has done little to make anyone believe she is ready to challenge that institution in any serious way. When asked about her time at the San Francisco Fed, a district which covers not just California but also Nevada and Arizona, she responded that regulatory oversight during the housing boom was “careful and appropriate.” Perhaps that explains why she missed the greatest housing boom in US history, despite sitting right on top of it.

The Beige book reports from Yellen during this time also repeatedly reflect a regulator who perceived mortgage credit quality as strong. If some of us could spot an overheated housing market from Washington, you really have to wonder how anyone could miss it sitting in San Francisco. 

The answer is that she wasn’t even looking for it. Just as we now repeatedly hear concerns about a weak US labour market, which is true, we heard the same concerns after the Dot com bubble. But the Fed reaction was to keep the pedal-to-the-metal with loose monetary policy for far too long, and the result was a massive …read more

Source: OP-EDS