Underfunded Government Pensions – A Potential Problem

18 Dec 2016

Former Fed Advisor: State Pensions Time Bomb Spells Disaster For The US

Underfunded government pensions to the tune of $1.3 trillion, with a gap that just can’t be filled, is the ticking time bomb facing the US economy which faces dramatic cuts in public services – and potentially riots reminiscent of Athens six years ago – according to former Federal Reserve advisor, and President of Money Strong, Danielle DiMartino Booth.

With few people taking part in what little recovery the US has had, and given how stretched pensions are, checks are going to have to be written from Washington sooner than you think, DiMartino Booth told Real Vision TV in an interview. “The Baby Boomers are no longer an actuarial theory,” she said. “They’re a reality. The checks are being written.”

The $1.3 trillion pensions deficit just takes into account state and municipal obligations, and with promised returns of 8% and funds compounding at 3% for decades it will take nothing short of an economic miracle to recover.

The report is here.

I understand the spirit behind pensions, but it is simply is not feasible to pay people to do nothing for the long term. Offer a bonus, or a fixed amount for a benefit that can be spread out over time.


Jobs Returning to the U.S… Now What?

16 Dec 2016

Manufacturing’s big challenge: Finding skilled and interested workers

Despite the national hand-wringing about manufacturing jobs lost to automation and cheaper foreign labor, and President-elect Donald Trump’s threats of penalties against companies that offshore, some manufacturers say the industry’s health relies more on training people for the jobs that will keep their companies competitive in the future.

Convincing kids — and most of all, their parents — to consider factory careers was difficult at first because of the blue-collar associations, said Tom Steinbach, a technology engineering instructor at Wheeling. The classes are labeled “manufacturing engineering” to make them sound more highbrow, just as the terms STEM and maker movement have lent sex appeal to the industry.

“Now we’ve seen a total 180, where parents are excited,” Steinbach said, in part because huge college bills aren’t always translating to students being prepared for good-paying jobs.

Given higher unemployment rates among people without college degrees, it would seem like there should be an eager manufacturing talent supply.

This is the one thing I am concerned about as well. Young people have been told college is the way to go. These skill jobs are not marketable right now, but they are just as important as desk jobs. Not only do the young people need to understand this, but the owners and employers as well.

Krispy Kreme Purchased By European Conglomerate

9 May 2016

Krispy Kreme Being Taken Private For $1.35 Billion

Krispy Kreme is being taken private by a unit of private equity firm JAB Holding Co. for $1.35 billion, the companies said on Monday.

For JAB, the Krispy Kreme buy comes months after its $13.9 billion acquisition of Keurig Green Mountain. The European private equity conglomerate also has controlling stakes in coffee chains like Peet’s Coffee & Tea, Caribou Coffee , Espresso House and Jacobs Douwe Egberts and bagel shop Einstein Noah Restaurant Group.

The acquisition has been unanimously approved by Krispy Kreme’s board of directors and is expected to close in the third quarter. The company will continue to operate out of its Winston-Salem, North Carolina headquarters.

Thankfully operations will continue as normal in the U.S.

Small Nebraska Town Rejects

2 May 2016

Tiny Nebraska Town Says No to 1,100 Jobs, Citing Way of Life

Regional economic development officials thought it was the perfect spot for a chicken processing plant that would liven up the 400-person town with 1,100 jobs, more than it had ever seen. When plans leaked out, though, there was no celebration, only furious opposition that culminated in residents packing the fire hall to complain the roads couldn’t handle the truck traffic, the stench from the plant would be unbearable and immigrants and out-of-towners would flood the area, overwhelming schools and changing the town’s character.

Interesting perspective here. The people chose how they want their town to be, and rejected the business. Sounds like a smart move in that the plant would employ over two times the amount of people residing on the town – which means immigrants would relocate to that area. Growth is good, but large growth in a short period of time can cause unintended consequences.

Detroit – Possibly the First Majority Chinese City?

8 May 2014

Will Detroit Be The First Major Chinese City In The United States? – Economic Collapse Blog

Chinese homebuyers and Chinese businesses are starting to flood into the Motor City, and the governor of Michigan is greatly encouraging this. In fact, he has formally asked the Obama administration for 50,000 special federal immigration visas to encourage even more immigration from China and elsewhere.


Chinese immigrants could save Detroit: governor – Want China Times

What Snyder plans is to allow Chinese people to buy houses in Detroit. He believes that the state government does not have to spend a penny to save the city because of the new immigration plan, which will benefit the city significantly.


Chinese Creating New Auto Niche Within Detroit – CNBC

Dozens of companies from China are putting down roots in Detroit, part of the country’s steady push into the American auto industry.

Last year, the biggest carmaker in China, Shanghai Automotive Industries, opened new offices in suburban Detroit without any publicity, which is almost unheard-of in an industry that thrives on media coverage.

In addition to Chinese companies locating in Detroit, a cottage industry of lawyers, accountants and corporate advisers has grown up to assist them. Their numbers are small now, but the impact of the Chinese on the local economy is slowly expanding.

Should be interesting where this leads. Not surprising that another culture would fill that void. It is interesting that Americans chose not to rebuild Detroit… maybe lack of resources, or lack of desire, who knows.

In Context – LightSquared

22 Sep 2011

2011.09.21 – LightSquared: Obama’s Dangerous Broadband Boondoggle [National Review]
2011.09.21 – Soros turns up in Obama’s LightSquared imbroglio [Wash. Examiner]
2011.09.20 – Issa to launch probe of Obama actions on Solyndra, LightSquared [The Hill]
2011.09.20 – Politically-connected LightSquared pushes wireless Internet plan despite GPS concerns [Center for Public Integrity]
2011.09.19 – White House’s Testimony ‘Guidance’ [The Daily Beast]
2011.09.16 – Emails show wireless firm’s communications with White House as campaign donations were made [Center for Public Integrity]
2011.09.15 – White House Pressure for a Donor? [The Daily Beast]
2011.03.16 – FCC Chairman Julius Genachowski “The Clock is Ticking” – Remarks on Broadband [US FCC]
2010.11.13 – Authorities Probe a Top Hedge Fund [Wall St. Journal]
2010.09.23 – E-mail from LightSquared lawyer Henry Goldberg [Document Cloud]
2010.09.23 – E-mail from LightSquared rep Dave Kumar [Document Cloud]
2010.07.17 – Philip Falcone – Campaign Donations [News Meat]
2007.03.07 – Obama Says His Investments Presented No Conflicts of Interest [NY Times]

In Context – Solyndra

22 Sep 2011

2011.12.26 – Solyndra docs: Politics infused energy programs [CBS News]
2011.12.01 – The Solyndra Scandal’s Key Players [National Review]
2011.10.13 – Solyndra CEO Brian Harrison resigns [Washington Post]
2011.10.07 – Warning about legality came from within Obama administration [Wash. Post]
2011.10.07 – Obama Fundraiser Pressed on Solyndra Aid at Energy Department, E-Mails Say [Bloomberg]
2011.10.06 – Wall Street Corruption, Solyndra, and Fast & Furious: Today’s Q’s for O – 10/6/2011 [ABC News]
2011.10.06 – Amid Solyndra controversy, head of federal loan program resigns [Wah. Post]
2011.10.05 – E-mails show Energy Department was moving toward second loan for Solyndra [Wash.Post]
2011.10.05 – Obama blames career bureaucrats for Solyndra loan [Wash. Examiner]
2011.10.03 – Obama was advised against visiting Solyndra after financial warnings [Wash. Post]
2011.09.29 – Chu takes responsibility for a loan deal that put more taxpayer money at risk in Solyndra [Wash. Post]
2011.09.29 – Obama Fundraisers Tied to Green Firms That Got Federal Cash [ABC News]
2011.09.28 – Solyndra violated loan terms in 2010 but got more federal money, DOE confirms [Wash. Post]
2011.09.22 – Solyndra employees: Company suffered from mismanagement, heavy spending [Wash. Post]
2011.09.22 – Solyndra Deal Violates ‘Fundamental Laws of Economics’ [Fox News, Cong. Ryan]
2011.09.20 – Law firms representing Solyndra executives are major Democratic donors [Yahoo/Daily Caller]
2011.09.19 – House Judiciary chair: Justice should probe Solyndra bankruptcy [Wash. Post]
2011.09.19 – Skipping safeguards, officials rushed benefit to a politically-connected energy company [Center for Public Integrity, updated from 2011.05.24]
2011.09.08 – FBI searches offices of Solyndra; lawmakers say they were misled about firm’s finances [Wash. Post]
2011.09.02 – Solyndra Filing a Disaster for Obama [NBC Bay Area]
2011.09.02 – Solyndra to Declare Bankruptcy [NBC Bay Area]
2011.09.01 – Obama Stands by Renewable-Energy Aid After Panel Maker Solyndra’s Failure [Bloomberg]
2011.09.01 – Bankrupt solar company with fed backing has cozy ties to Obama admin [Daily Caller]
2011.08.31 – China’s solar rise seen in Solyndra’s fall [EE Times]
2011.08.31 – Solyndra Suspends Operations to Evaluate Reorganization Options [Solyndra]
2011.08.19 – Chris Gronet Takes on Advisory Role for Solyndra [Solyndra]
2011.07.14 – Lawmakers seek White House documents on Solyndra loan guarantee [Wash. Post]
2011.06.25 – Obama’s focus on visiting clean-tech companies raises questions [Wash. Post]
2010.07.xx – GAO Report – Further Actions Are Needed to Improve DOE’s Ability to Evaluate and Implement the Loan Guarantee Program [US GAO]
2010.07.10 – Our Tough-Luck President [Barrons]
2010.05.26 – Remarks by the President on the Economy at Solyndra [The White House]
2010.05.26 – Obama at Solyndra: I’ll Fight to Pass A Climate Bill This Year [GigaOM]
2009.03.21 – U.S. Offers $535 Million Loan Toward Solar Energy Plant [Wash. Post]