A rare sight in hard-luck Youngstown, a new industrial plant, has generated hope that a surge in oil and natural gas drilling across a multistate region might jump-start a revival in Rust Belt manufacturing.

The $650 million V&M Star mill, located along a desolate stretch that once was a showcase for American industry, is to open by year’s end and produce seamless steel pipes for tapping shale formations.

It will mean 350 new jobs in Youngstown, a northeast Ohio city that is struggling with 11 percent unemployment.

There’s a lot more at the link above, detailing many different ways that the going after shale oil in the midwest will create real jobs, not loony-toons-pie-in-the-sky “green” jobs that Obama has been selling out of his trunk (at a huge markup) after stealing them from industries that were doing something useful and marketable.

How did he steal the jobs? If you have to ask, you haven’t been paying attention. When you over-regulate, over-spend, and over-borrow, you steal jobs. It’s very simple.

Obama’s policies have helped to create a thousand losers for every winner he personally picked. And even his picked winners are losing.  When generally supporter-of-all-things-liberal Google is pulling out of an obvious Goongoggle (read it out loud) because it’s a loser they picked in a moment of obvious miscalculation, it’s clear that everyone is catching on, except maybe Obama.

In the meantime, it looks hopeful that some people in Ohio may get to go back to work.  And Obama will have had nothing to do with it other than to just get out of the way.

If he does.

Saudi woman sentenced to 10 lashes for driving car

A Saudi woman was sentenced Tuesday to be lashed 10 times with a whip for defying the kingdom’s prohibition on female drivers, the first time a legal punishment has been handed down for a violation of the longtime ban in the ultraconservative Muslim nation.

Normally, police just stop female drivers, question them and let them go after they sign a pledge not to drive again. But dozens of women have continued to take to the roads since June in a campaign to break the taboo.

Making Tuesday’s sentence all the more upsetting to activists is that it came just two days after King Abdullah promised to protect women’s rights and decreed that women would be allowed to participate in municipal elections in 2015. Abdullah also promised to appoint women to a currently all-male advisory body known as the Shura Council.

The mixed signals highlight the challenge for Abdullah, known as a reformer, in pushing gently for change without antagonizing the powerful clergy and a conservative segment of the population.

Abdullah said he had the backing of the official clerical council. But activists saw Tuesday’s sentencing as a retaliation of sorts from the hard-line Saudi religious establishment that controls the courts and oversees the intrusive religious police.

“Our king doesn’t deserve that,” said Sohila Zein el-Abydeen, a prominent female member of the governmental National Society for Human Rights. She burst into tears in a phone interview and said, “The verdict is shocking to me, but we were expecting this kind of reaction.”

The driver, Shaima Jastaina, in her 30s, was found guilty of driving without permission, activist Samar Badawi said. The punishment is usually carried out within a month. It was not possible to reach Jastaina, but Badawi, in touch with Jastaina’s family, said she appealed the verdict.

Saudi Arabia is the only country in the world that bans women—both Saudi and foreign—from driving. The prohibition forces families to hire live-in drivers, and those who cannot afford the $300 to $400 a month for a driver must rely on male relatives to drive them to work, school, shopping or the doctor.

There are no written laws that restrict women from driving. Rather, the ban is rooted in conservative traditions and religious views that hold giving freedom of movement to women would make them vulnerable to sins.

Activists say the religious justification is irrelevant.

“How come women get flogged for driving while the maximum penalty for a traffic violation is a fine, not lashes?” Zein el-Abydeen said. “Even the Prophet (Muhammad’s) wives were riding camels and horses because these were the only means of transportation.”

Since June, dozens of women have led a campaign to try to break the taboo and impose a new status quo. The campaign’s founder, Manal al-Sherif, who posted a video of herself driving on Facebook, was detained for more than 10 days. She was released after signing a pledge not to drive or speak to media.

Since then, women have been appearing in the streets driving their cars once or twice a week.

Until Tuesday, none had been sentenced by the courts. But recently, several women have been summoned for questioning by the prosecutor general and referred to trial.

One of them, housewife Najalaa al-Harriri, drove only two times, not out of defiance, but out of need, she says.

“I don’t have a driver. I needed to drop my son off at school and pick up my daughter from work,” she said over the phone from the western port city of Jeddah.

“The day the king gave his speech, I was sitting at the prosecutor’s office and was asked why I needed to drive, how many times I drove and where,” she said. She is to stand trial in a month.

After the king’s announcement about voting rights for women, Saudi Arabia’s Grand Mufti Abdel Aziz Al Sheik blessed the move and said, “It’s for women’s good.”

Al-Harriri, who is one of the founders of a women’s rights campaign called “My Right My Dignity,” said, “It is strange that I was questioned at a time the mufti himself blessed the king’s move.”

Asked if the sentencing will stop women from driving, Maha al-Qahtani, another female activist, said, “This is our right, whether they like it or not.”

The case is presented in a very clear way.  No rhetoric, just facts.

The policies of President Obama are having a significantly negative effect on our economy.

» California Admits to Almost $1 Trillion in Unfunded Pension Obligations

 

The three largest California public retiree plans (CalPERS, CalSTRS, and UCRS) that administer pensions of approximately 2.6 million State and Local public current and retired employees have been under tremendous scrutiny since last year’s release of the Stanford University Institute for Public Policy report: “Going For Broke”. The study concluded that California retirement plans liability was under-funded by over $500 billion.

The report blamed most of the shortfall on the pension plan’s expectation of future annual investment returns of 7.75%; versus a realistic expectation of a 4.14% annual return. The cabal of California politicians, bureaucrats, and crony consultants that justified granting lucrative benefits to employees while failing to contribute enough to support the true pension costs; solemnly dismissed the Stanford report as unsophisticated reflections by academics. But now that a swarm of local governments want to abandon the floundering retirement trusts; the State plans are only willing to credit a 3.8% expected return. If the California State pension plans adopted the same 3.8% rate they are only willing to credit when participants want to leave; their published $288 billion in pension shortfall would metastasize into an $884 billion California State insolvency.

It doesn’t take a Stanford MBA to realize producing consistently high investment returns since 2007 has been a difficult in the extreme. The California State pension plans that currently control $432 billion in assets, suffered a $109.7 billion in losses during the 2008 to 2009 recession. Pension plans normally require employers and their employees to mutually increase contributions to make up pension shortfalls. But public pension plans are notorious for not requiring employees to make significant contribution. California police, prison guards, firemen, and lifeguards can retire at age 50, but have never been required to contribute to fund pensions. With headlines that California plans are in big trouble; many government agencies applied to withdrawal from the State plans. But as calculated below; compounding investments at 7.75% grows to more than three times the amount of compounding investments at a 3.8% rate of return.

When I was elected as Orange County, California Treasurer in 2006, I was flabbergasted to discover that the County’s $8 billion of retirement investments was covertly leveraged up by $22 billion of derivatives. I quickly learned that many unions see pension benefits as contracted rights; and pension investing as a no risk crap-shoot for extraordinary returns.

 

If the pension investment returns sky-rocket, the unions will bargain for increased benefits. If the pension investment returns crash; the public employees are protected by rock-solid contract law that prevents any reduction in benefits. In 2007, I was fortunate to gain the support of enough OC Pension Trustees to reduce speculative derivative use by 90%. At the time, Trustees for the California public pension plans solemnly dismissed Orange County as unsophisticated. Shortly thereafter the stock market crashed and the State Pension Trustees stopped making comments.

Once famous as the Golden State for leading the nation in high tech growth industries that provided excellent wages; California is now tarnished for having the second highest unemployment and worst state credit rating in the nation. Forbes recently quoted a top venture capitalist that compared the California business climate to France: “I try not to hire here, and I certainly would not launch a company here. But the wine is good.” Tripling of the burden for under-funded pension liability to almost $1 trillion will probably ruin the taste of California wine for most taxpayers.

 

California state pension funds going broke, Stanford study finds

L.A. Cicero
 

 

Students Howard Bornstein and Lisha Wang spoke with reporters after a news conference where they and the other members of their research group announced their findings about the state retirement system.

BY GWYNETH DICKEY

California public employee pension systems are worse off than anyone previously projected, according to a new report generated by five graduate students in Stanford’s graduate Public Policy Program. The result could be greater pressure on the state budget and a shortage of pension funds in the future.

“This is a really dire situation,” graduate student Howard Bornstein said today at a press conference at the Stanford Institute for Economic Policy Research (SIEPR), which is publishing the students’ findings. “If we don’t do something now, we’re going to have major issues in just a few years.”

Bornstein and his fellow graduate students examined public records of past performance of three pension funds – the California Public Employees’ Retirement System (CalPERS), the California State Teachers’ Retirement System (CalSTRS) and the University of California Retirement System (UCRS), which together administer pensions for approximately 2.6 million Californians.

The students ran computer simulations to predict the unfunded liabilities of the pension funds over the next 16 years.

Major investment needed

“The simulation shows that the state would need to invest more than $200 billion, and possibly as much as $350 billion, today to return the fund to a minimum responsible level of funding,” said Bornstein, who noted that the figure is approximately four times the current state budget.

“It’s an enormous number,” said Joe Nation, a public policy lecturer at SIEPR and the adviser for the research team. He said it’s important to look at the shortfall relative to state resources. Pension funds fluctuate with market performance, but state employees are guaranteed a fixed pension regardless. If the market performs poorly, the state is obligated to step in and provide the missing pension funds. That takes money away from other public projects, such as education and healthcare, Nation said.

“The students did an amazing job providing a better sense of unfunded liability for those three pension funds, and I hope observers out there will begin to understand that this is a financial train wreck that is not very far down the tracks,” Nation said.

In the report, Bornstein and his fellow graduate students suggest policies to fix the shortfall and prevent a similar one in the future.

They propose that the managers of the pension funds project more realistic rates of return, which would indicate higher liabilities in the future.

“The whole approach that the state currently uses is inherently flawed. They look at averages as opposed to a fan of outcomes,” said Bornstein. “If you instead look at the range of outcomes in the future, you’d see there’s over a 60 percent chance of a deficit greater than $250 billion for CalPERS alone. This is something that really scares us.”

The students suggest that the minimum level of caution should be for the pension systems to aim for an 80 percent probability of having at least 80 percent of the funds necessary to cover the pensions. They also advocate investing more conservatively, taking fewer risks.

“Funds in other parts of the country are in similar situations, and they are beginning to invest in riskier assets,” Nation said. “That’s exactly the wrong thing to do. If the market doesn’t perform well, the taxpayer ends up paying.”

Suggested fixes

The students suggest either reducing pension benefits or moving to a hybrid system in which retirees receive a smaller fixed pension combined with a 401(k)-style plan. This would relieve some of the burden on the state and give employees more responsibility for their retirement. Two-thirds of Californians would support such a plan, according to a poll by the Public Policy Institute of California.

“The biggest challenge with this is making sure elected officials understand the severity of the problem,” Nation said. “It’s a political hot potato and most politicians shy away from the issue because you offend a lot of the constituencies by acknowledging the problem exists.”

But, he said, citizens and institutions are increasingly aware of the situation and are speaking out.

“The University of California is engaged in this debate because they finally understand that as pension fund benefits grow, there will be fewer dollars for higher education,” Nation said.

The report was prepared for the Office of Gov. Arnold Schwarzenegger as part of the Graduate Practicum in Public Policy, a two-quarter sequence required for master’s degree students in the Public Policy and International Policy Studies programs.

In addition to the masters’  program in Public Policy, Bornstein will earn his Masters in Business Administration degree this June.

SIEPR conducts research on important economic policy issues facing the United States and other countries. SIEPR’s goal is to inform policymakers and to influence their decisions with long-term policy solutions.

What’s funny is the heading above, “major investment needed.”  The left wants to make a major investment, alright.  An Obama-style investment, called enormous tax hikes to fund impossible promises made to public employee unions.

Something will have to give.  Higher taxes to fund impossible-to-fulfill promises will just postpone the disaster, and not by very long.  A complete, structural, top-to-bottom readjustment is needed, and people have to lose the idea that they can work for 30 years and retire at the age of 55 and still get paid till they die at 95.

It’s called “Mock The Spending,” obviously a takeoff on “Rock the vote.”

Here’s one of the videos, but there are many, and the whole channel is pretty entertaining.

This is an especially funny one called, “If the government patched World of Warcraft”:

You can see many more entries in the Powerline Blog YouTube Channel, along with Money Madness.

Here is another of the great entries to the Powerline Prize contest to create media that dramatizes or illustrates the enormous danger of the 14 trillion and growing national debt. We really have to stop deficit spending. Right away.