(Should I start numbering these posts?)
We begin with an ominous post from Megan McArdle on the subject of investment-funded pensions:
Here’s the cheery news:
Private pensions are heavily regulated to protect workers. But regulation hasn’t stopped the plans from being underfunded, in part because the regulators, who worried that companies would use pensions as a slush fund to smooth their earnings, kept them from overcontributing in flusher times. Even before the latest financial crisis hit, the government-run pension insurer estimated that, on average, plans had less than 90 percent of the assets needed to meet their liabilities. Now those figures are much worse, and workers who have been depending on those pensions may see them slashed if their companies go under and the government takes over their plans.
The idea of regulators preventing companies from “overcontributing” reminds me of mortgage-backed investment risk being rated based on the chances of homeowners paying down the principal “too soon”. But at least this terrible fortune is confined to the private sector, right? I mean, we can still construct a fairy tale where they got what they deserved because, um, profit and greed?
And yet the private plans are in good shape compared with state and local pension funds. For decades, politicians have promised lavish pension benefits in return for the support of the public-sector unions—promises that they, unlike their counterparts in the private sector, did not have to cover by setting aside a reasonably large asset base. Now the bills are coming due, and many funds are disastrously underfunded. The California state pension system, for example, has only 60 percent of the assets needed to pay its obligations through 2042. With a $19 billion budget deficit, the state is unlikely to be able to make up the shortfall unless the stock market starts zooming again.
I don’t know about you, but I stopped expecting to be able to retire when I was… twelve or so.
Next we have some vitriol from David Henderson:
No points for guessing. This is all about the Cordoba Center, of course, and I’m mostly linking it for this excerpt:
The headline, “Obama Defends Plan to Build Mosque Near Ground Zero” is inaccurate. At no point in his speech on that Friday night did he defend the plan. Instead, he defended people’s right to carry out the plan.
It’s not really surprising that neither Shields nor Gerson nor the headline writer understands the difference between defending someone’s right to do something and defending the doing of it.
Well, they have plenty of company. Sadly, the distinction between the two is only obvious if you have some idea of what negative liberty means; positive liberties imply endorsement.
I also linked to Henderson’s article for the phrase “politics between the 45-yard lines“, which (a) is an outstanding use of metaphor and (b) reminds me how happy I am that college football season is right around the corner.
Finally, we have a pair of good posts by Arnold Kling. First, giving a dead horse a few more whacks:
- Parking, once again (EconLog)
He notes this, which makes me think I wrote unfairly of him:
But if you read chapter one of Shoup’s book, it seems that what ticks him off is the fact that people use cars. Hence, the relevant margin is the mode of transportation. But peak-load pricing, by ensuring drivers that parking spaces will be available, might increase the use of cars. When I have to get to a meeting in the area, I am more worried that parking lots will be full than that they will be expensive. That is one reason I usually take the subway.
Shoup strikes me as one of those people who would like to see American locales looking more like Berlin. As I wrote here, it is not clear that taking away public parking will generate that outcome.
(The comment thread might provoke some good discussion on free-market mass transit if the commenters involved remove the chips from their shoulders. Yeah, yeah; like I’m one to talk.)
Next, this delightful nugget of carnassial observation:
- In the name of “affordable housing” (EconLog)
Pretty much every policy undertaken in the name of “affordable housing” does little or nothing to help the intended beneficiaries. Instead, these policies have major adverse unintended consequences and persist because of the large rents they give to industry participants. If there were any justice in the world, anyone who came to this sort of conference and uttered the words “affordable housing” would have their clothing instantly disappear and be replaced by a huge sandwich-board sign that says, “I shamelessly exploit sympathy directed toward poor people for my own profit and self-aggrandizement.”
It flabbergasts and astounds me that this isn’t more obviously credited in Vancouver. We have a dismayingly large homeless population, but no matter how much money the municipal, provincial, and federal governments throw at community activists and well-credentialed consultants and advocacy groups and special contractors we just can’t seem to build any — I’ll risk a sandwich board — affordable housing for them.