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  • Wildfire Containment Percentage – Say What??!!

    George Rebane

    ForestFire The newspaper’s headline blares that ‘The Yuba Fire 30% Contained’, you nod your head thinking that it is good news since yesterday the fire was reported to be only 5% contained.  But then you take a look at the published burn area maps for the last two days and see that today’s fire area is significantly larger.  And then you realize that you still have no idea what it means when someone tells you that a wildfire is X% contained.

    Jo Ann and I have lived in wildfire zones almost all of our lives, and have experienced the range of emotions as wildfires raged near our homes in Simi Valley and the Santa Monica Mountains.  One of them (1993 Malibu fire) actually swept over our property and burned our house after having incinerated our four nearest neighbors down to the foundation bolts.  A fire crew from Placerville put out the fire and saved our house that was pretty much trashed with a 12 foot hole in the living room ceiling.  But it was a lot better than being greeted by just foundation bolts.

    During all those years we kept hearing the various ‘percent containment’ reports.  Being a techie, early on I asked both fire fighters and on site journalists what such reports meant.  No one could give me an answer.  The fire fighters kept asking each other and their local team leaders, and always concluded that it was some kind of number that was generated in some mysterious fire fighting control headquarters in the sky.  None of journalists were interested in the question and begged off, saying they just reported what they were told by fire fighting public relations wonk.

    (more…)

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  • ‘Public Pension Ponzi’ – Some Reflections (updated)

    George Rebane

    I would like to offer a few observations on some comments that responded to my column ‘Public Pensions – a breakdown’ in the 15aug09 Union.  For openers, I don’t know any of the commenters either personally or as individuals in the public round.  Specific comments by people claiming to be or to have been public employees confirm and illustrate the points I have been making regarding government and their workers.  Most of these comments defend hills not attacked and vigorously assault hills undefended.

    The following is to be taken as characterizations of the government employee in the aggregate.  Certain individual (topical) cases may always be advanced in the counter argument.  I believe the statistics where available will show them to be outliers.

    We start with some compelling observations:
    • Governments at all levels – federal, state, local – have been running large deficits and/or accumulating unfunded liabilities the repayment of which is uncertain at best and impossible at worst.
    • The single largest element in the cost of government is the salaries and benefits paid to government employees – in short, government labor.
    • Government employees are a favored class of labor in the country.  The average government employee annually earns about $66,558 compared to the $42,635 average earned by the private sector employee.  Government employees’ pension, healthcare, and other benefits are unmatched in the private sector.  When total benefits are considered, these numbers become $100,178 and $51,876 respectively (Cato Institute).
    • An alarming fraction of today’s youth seek careers in non-wealth producing sectors that are primarily in ‘public service’.  Our public education system promotes, directs, and enables them to go into fields funded by charity (e.g. foundations) and taxpayers.
    • A ponzi scheme is characterized by making contracted payouts to early participants using monies collected from the growing cohort of the most recent participants.  It collapses when monies from new participants doesn’t cover current obligations.

    My columns have dealt with the facts relating to the operation of the California Public Employees’ Retirement System or Calpers.  These illustrated the generous benefits afforded by the state and local governments, how the system could be gamed, how the unfunded liabilities can grow, and how the whole system works in a fog that ultimately puts the taxpayers AND the expectant government employees at risk.

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  • Public Pension Ponzi

    George Rebane

    [This is the full length piece the first part of which was published today in the 15jul09 Union under the less dramatic title ‘Public Pensions – a breakdown’, although the latter part could be taken as a double entendre.  (updated 16aug09) The full length version appears in the newspaper’s online edition.  gjr]

    Sophistry – a deliberately invalid argument displaying ingenuity in reasoning in the hope of deceiving someone.

    The public pension ponzi is rapidly coming unglued as already pointed out in this newspaper and many others across the land.  Only the most glaciated or glazed minds still believe the public sector has not been overpaid and over pensioned.    The damage radius of the pension ponzi is much greater and more immediate than Madoff’s, and you are in it whether or not you pay taxes, and especially if you are a government employee.

    In this short piece we’ll take a look at a typical pension formula and see how it is ‘used’.  Without this basic knowledge, all you can do is react emotionally to the crisis.  With it, hopefully, you will be able to direct your efforts productively.  California and its pension fund manager Calpers will again be our poster child.

    The basic Calpers formula that calculates a government employee’s annual pension is very simple –

    Annual Pension = (# of Years Worked) x (Highest Annual Salary) x (Multiplier)

    The multiplier is somewhere in the two to three percent range, and is usually set by the jurisdiction (city, county) or agency (CARB, NID).  Grass Valley recently raised its multiplier from 2 to 2.5%.  The multiplier will also vary for categories of work and retirement age – police and fire usually have higher multipliers.

    Important to note right away – any percent change in any of the three factors in the formula becomes the percent change in the annual pension.

    To nail it down, let’s use some numbers.  Say Sam worked 30 years for Agency37 and maxed his annual salary at $90,000 somewhere along the way (the highest salary doesn’t have to be the one you have at termination or retirement).  The current multiplier for Agency37 is 2.5% for retiring at 55.  Sam’s annual pension from Agency37 then calculates to

    30 x $90,000 x 0.025 = $67,500.

    If Sam is expected to live until, say, 83, then Calpers has to have more than $1,062,000 in Sam’s name earning interest at 4.5% per year to throw off 28 yearly pension payments of $67.5K until Sam is expected to die.  Calpers will invest this amount in a portfolio with thousands of other retirement accounts, and at retirement, handles Sam’s account as an annuity.  An annuity is a fixed amount invested at a given interest rate that starts being drawn down by regular payments made to its owner.  At the end of a stipulated number of payments the annuity amount is drained to zero.  When Sam retires, this $1,062,000 needs to be in place at Calpers.  (And yes, Sam is now a millionaire.)

    This ‘given interest rate’ is another big bugaboo and source of a lot of mischief.  The higher you assume it is, the less you have to have at the start of Sam’s retirement, and the less Agency37 thinks it must cough up when Sam does retire.  For example Agency37’s books cook much better by simply assuming that Calpers investments will appreciate at 7.5% annually instead of the more realistic 4.5% used above.  Why?  Because with 7.5% Agency37 needs to provide only $781,200 for Sam’s retirement.

    But we all understand that this is a game.  Agency37 must pay Sam $67,500 a year for life, regardless of what numbers are used to cook the books.

    And if somewhere along the way Agency37 decides to ‘upgrade’ its retirement program by increasing the multiplier from, say, 2 to 2.5%, as Grass Valley recently did, then this automatically incurs a huge and instant unfunded liability for the city.  The jurisdiction will be underfunded by 20% for increasing the multiplier by ‘only a measly 0.5%’.  The uninformed voters, ignorant of the basic formula, will focus on this seemingly insignificant fraction, and go back to their knitting without a clue that their liability just increased 25%.  And this has happened thousands of times across California in recent years.  

    So far this has been pretty simple stuff, but absolutely required if you want to understand and discuss the major cost of government.  But this is just the start of where the fun begins on public pensions.  We will now see how the future cost of the pension system becomes an unknown to all concerned, how government employees game the system, and how the accountable jurisdictions make it into a ponzi scheme as they hope that the music never stops.

    (more…)

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  • On Different Worlds

    George Rebane

    Debate To maintain some perspective on the national debates, I regularly read, view, and listen to leftwing media.  Debate may be too fine of a word for the type of exchange that today goes on between conservatives and liberals.  In fact, we do live on two different worlds.

    This was again made clear in the recent issue of the liberal flagship Nation where Katha Pollitt (‘Healthcare We Can Believe In’) laments that Team Obama is not taking us to the promised workers’ promised land fast enough.  She writes “Healthcare is a right, part of the common good, something everyone should have, and if you can’t afford it in the marketplace, the government will provide it.”

    This is a woman from the liberal legions who see every human need as an automatic ‘right’ without evincing a clue that she knows what is a right versus, say, a privilege (more here).  In her panoply of state provided and guaranteed goodies, rights bloom from every nook and cranny.  She sees no cost or convenience hindering the provision of rights to the people, all we need is proper political orientation and will.  People who are too dimwitted to understand any of this are immediately marginalized beyond the social pale.

    As of this writing, it is far from clear how much of the vocal opposition to reform represents wider popular feeling and how much is a mobile mob of gun nuts, birthers and teabaggers paid for and organized by lobbyists and Republican outfits like Americans for Prosperity, Conservatives for Patients’ Rights and FreedomWorks.

    The ‘debate’ has now gotten so sharp and angular that the usually civil and measured Peggy Noonan, WSJ columnist, has just penned a piece – From ‘Yes, We Can,’ to ‘No! Don’t!’ – that finally takes to task the blizzard of Obama’s lies which in polite company were formerly known as ‘continued campaign rhetoric’.  Here Noonan makes the case that Obama has slid to the “slippery” level as a politician, and is now seen as such by all who are not gathered under his messianic robe.

    When Mr. Obama stays above the fray, above the nitty-gritty of specifics, when he confines his comments on health care to broad terms, he more and more seems … pretty slippery. In the town hall he seemed aware of this, and he tried to be very specific about the need for this aspect of a plan, and the history behind that proposal. And yet he seemed even more slippery. When he took refuge in the small pieces of his argument, he lost the major threads; when he addressed the major threads, he seemed almost to be conceding that the specifics don’t hold. …When you seem slippery both in the abstract and the particular, you are in trouble.

    There are probably some semantic strides between ‘slippery’ and ‘sleaze’.  But I find myself among those having already taken those steps in their assessment of the current administration.  And so we send our unheeded missives from one world to another.  E Pluribus Unum, but what kind of Unum?

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  • Song Without Words … or Money

    George Rebane

    NCARRA090814

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  • Schooling – Where to Send Your Kids?

    George Rebane

    Publicschool Here are some local school ratings done within the context of California.  Not sure how these can be interpreted in a national context.  And here is a compilation of state public school rankings.  So at 46 out of 50, California is pretty much near the bottom of the pile.  Does that mean that when California ‘educators’ (love that term) rate our state’s schools, those ratings should be taken in the ‘bottom of the barrel’ context?  I don’t know.  Our public educators nationwide play these things fairly close to the vest, job security and all that.  Would love some illumination from the more informed readers.

    But given the data, what information can I make out of it?  (Recall that ‘data’ is facts and beliefs about the real world, and ‘information’ is data formatted to support specific decisions.  Example – white pages are data, yellow pages attempt to be information in the sense that they support your decision to choose a specific plumber.  Data and information are NOT the same thing.)

    So, looking at the intra-state ratings, I don’t know.  It seems that our local Nevada County schools score pretty high, relatively speaking – but we have to remember where we’re located in the big pile.  And these ratings are probably because we’re out of the metropolitan area crapola mills with a lot of gangs and drugs and … .  But if you talk to local educators, and then talk to LA educators (our experience), you find out that our teachers are no smarter or motivated than the city teachers.  And if you look at their skill sets, they can and mostly will motivate youngsters to go into fields supported by public (read political) funding.  The teaching of wealth creation skills, and motivating such careers is hard to find in our politically informed and directed age.

    Given this, where today would I send my kids (who are now in their forties)?  If I could afford it, I would never let them set foot in a 2009 ‘normal’ public school.  It would be a private school, a parochial school, or even home schooling.  I wouldn’t want them graduating high school not knowing the elements of history – the unique meaning of America (note flag in the figure), the impact of  WW2 on our world, the history of socialism vs capitalism, etc.  I wouldn’t want them speaking in sentences like ‘Mom gave those tickets to Pat and I.’ I wouldn’t want them to unabashedly tell their friends that ‘I don’t do numbers.’

    A mind is a terrible thing to waste, especially if it also sports a part of your own double helix.

    (Full disclosure – I come from a poor and lower middle-class background, and am a product of only public schooling, albeit of a different age.)

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  • Next Tea Party in Sacramento – Y’all Come!

    George Rebane

    As reported in the 6aug09 Union (details here), the next Sacramento tea party will be on 28 August 2009 with four busses leaving Nevada City at 10AM.  Bring chairs, vittles, and liquids; and, of course, the most communicative signs you can muster to get your personal message out.  Important to note that bus tickets must be purchased before 5PM on 13 August 2009.

    TeaPartyOrig

    (Full Disclosure – this notice was motivated by the tons of crap coming out of Washington designed to convert America into a second rate autocracy, and paid for by the monies still left to Jo Ann and George Rebane from their life’s work, savings, and investments which now stand in danger of being taxed and inflated to oblivion.  Any contributions from rightwing conspiracies, protest manufacturers, corporations large and small, and faith-based organizations will be gratefully accepted and applied fully to keeping the TypePad blog server bills for Rebane’s Ruminations paid.)

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  • Stimulus NOT!!

    George Rebane

    And after the Postal Service, Amtrak, Social Security, the Fed, Fannie and Freddie, … , now these turkeys want to run how much more of our economy?  The stimulus beat goes on, but no one here with 12% unemployment can hear it.

    NCARRA090807

    When this economy finally starts to recover, in spite of all the impediments that Obama and Congress have devised for it, the Dems will take full credit for that and the rising sun, on each of which their policies will have had equal effect.

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  • Now Playing at ‘Townhalls’ Near You

    George Rebane

    TownhallMtg When the schools no longer teach, you can feed their ‘graduates’ any garbage you want; they have no means to tell the difference.  The American townhall meeting is a piece of history still alive in a few places, but now totally distorted into national political theater.  A townhall meeting was where local people met to discuss local issues and candidates, and make local decisions.  In such meetings the low and the high of the community could stand up and make themselves heard equally on the matter at hand.  Such meetings usually ended in a vote being taken to resolve some issue – grassroots democracy.

    A townhall meeting distinguished itself from a speech or a circuit lecture by an outsider – politician, academic, entertainer – which may or not have involved a Q&A.  Such gatherings were more controlled and tightly staged.  No one in the past would have mistaken them for a town hall meeting.

    Today our political betters are squeezing out the last drops of historical democracy from the townhall label as they spread across the nation to hold these theatrical plays where the fare served is usually pure fiction or outright lies.  In spite of this, it is heartening to see some of these meetings get out of hand when the politico-in-charge doesn’t control the audience and their questions.

    The people at these meetings who still have the gumption to question and disagree are then called mobs, rabble, and paid lackeys of corporate special interests.  Our MSM requires no evidence to pass on as news such assessments from the producers of these townhall theaters.

    ObamaLies As an example of the disrepute we hold our political leaders at all levels, in the latest poll/study just published, over 72 percent of Americans believe Obama lied and will raise taxes on the middle class.  And this is just one lie out of an outpouring legion.  Yes indeed, it’s gonna take a lot of them ‘townhall’ meetings to get the lipstick right on this heard of pigs coming out of Washington.

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  • Social Engineering Scattershots

    George Rebane

    1984 Since we’re heading for the ‘European Model’, we should look at some of its practices.  In Great Britain the government is expanding its program of putting CCTV cameras in the homes of the country’s “worst families”.  These will be monitored by government agencies to make sure that they are raising their kids properly – “to ensure that children attend school, go to bed on time and eat proper meals.”  These and other mandated helpful government services are described here.

    MIT’s Technology Review reports (here) research showing that in many technology areas no government touted and funded “transformational” breakthroughs are needed.  Citing the photovoltaic solar panel industry as a prime example, the research shows that more bang (i.e. watts) for the buck can be achieved by continuing the present pace of development in the industry.  This is turning out to be a little embarrassing for Steven Chu the new social engineer and Secretary of Energy.  We recall that the Department of Energy has proven to be one of the most worthless government enterprises since its inception 25 years ago, eating up billions upon billions, and accomplishing no worthwhile energy objective.  They’ve had a hard time going beyond “tracing (their) lineage to the Manhattan Project”, and funding transformational solar energy was finally going to be high on its new brag sheet.  And then these jokers from MIT show up; who asked them?

    RR readers are familiar with my alarums about adult literacy, numeracy, and the competitive abilities of the American workforce in a global economy.  Some local wits have even described such concerns as those of a crowing elitist which have no basis in fact.  While that has only exposed their own ignorance about the mightiest challenges facing our country, now we have a new and very large piece of corroborating evidence to add to the pile.

    This evidence comes from Michigan and its auto industry layoffs, but as much could also be attributed to so many other narrowly construed, historically union protected jobs that have now disappeared.  The state’s Council for Labor and Economic Growth reports that “One out of three working-age adults in Michigan — 1.7 million people — cannot read well enough to be hired for a job that will support a family. More than 40% of those potential workers, who all read below a sixth-grade level, also lack a high school diploma or GED.” 

    The problem, as this article points out, is that the laid off workers from many of these manufacturing jobs simply don’t have the minimal skills to get a job that can survive in our economy.  And neither the funds nor the facilities are available to teach them just to read, as if reading were enough to get a new job.  The only way for them to maintain their quality of life is to become a ward of the state.  They all know it, and even some of us know it.  But the important thing is that these unemployed will vote for candidates who will promise to maintain their QoL.  And our country is overabundant in politicians who know how to make those promises and thereby pocket those constituencies.

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