The RI pension mess round 4

To my great surprise this morning in the newspaper there was an op-ed from the wackos at the RI Center for Freedom and Prosperity that I mostly agreed with. It happens to be an issue that I have written about previously and have talked to the General Treasurer’s office about as well. What the author pointed out was that the return on the investments for the RI state pension fund in the last year was about 0.88% and that the expected return of 7.65% is totally unrealistic, and has been unrealistic for years.

The author provides much data to corroborate his point, and I totally agree that the pension crisis is far from over because returns on the investments have not matched what the state predicts for years.

The wackos of course do not offer any explanation of why returns are so low, and my guess is that they think if we just let the dogs of capitalism loose that the returns would be better, but all they do is point out that the taxpayers are on the hook for the difference.

It is my opinion that the pension fund investments will NEVER again reach 7.65% because the economy will never work that way again. We have reached the end of economic growth and therefore a return of 0.88% is about what will be generated. If you look at what are the conditions necessary for rapid economic growth, and therefore high rates of returns on investments, the US meets none of those criteria. And never will again as the ecosystems collapse due to over exploitation.

The right wing wackos say we can never find the money to make up for the slow investments, so I am guessing that they would like to cut pensions for the working people. But that is just stupid and would trash the RI economy even worse than their policies usually do.

What we find is that the rich are still getting VERY comfortable retirements, and are quite happy to keep stealing from the community to pay for it. What Rhode Island actually needs to do to make up for the shortfalls in the pension funds is raise taxes on the rich, raise taxes on corporations, and quite giving tax breaks to the rich for real estate speculation. That would allow us to fund the pensions for the workers who deserve them, and restore a bit of equity and justice into the economy, which will help it to work better.

Finally we need to be very clear that economic growth has gone away, and is not coming back. We need to figure out how to have more prosperous communities in a world of shrinking economies. Unfortunately the General Treasurer, the Governor, and the leaders of the legislators are all wearing blinders and are unwilling to admit the looting by the rich, when combined with ecological collapse, is harming our communities.

The intersection of ecological collapse and looting by the rich, fueled by the desire for ever faster growth is a killer. The best thing RI could do is ban all fossil fuel use and take serious steps to increase by 2000% the amount of food grown in RI. Nothing less will actually help the RI economy or prepare us for the storms ahead.

The RI economy index misses the boat

To the Editor, On Tuesday December 15 2015 the Providence Journal published its monthly report on Professor Len Lardaro’s RI monthly economic index “RI takes hit in economic index”. I have followed the discussion of the RI economy for quite some time, and more and more Professor’s Lardaro’s index reflects a lack of understanding of the conditions Rhode Island is immersed in. The very fact that the index is biased towards growth, at the same time that the long term growth machine of modern economies is grinding to a halt is indicative of a economics profession that has lost touch with what is actually needed in our communities.

The index is biased towards the desires of the rich and completely ignores how climate change and ecological collapse are being driven by the demands of growth. It also completely misses the economy most Rhode Islanders are living in, as what is reported as growth is usually just the poor getting poorer as the economy becomes less equal.

What is even more problematic is reports like this are then used to bludgeon the community into giving even more goodies to the rich. Considering the amount of information now coming out that says giving tax breaks to the rich is among the dumbest ways to try to make an economy work, Professor Lardaro would be doing Rhode Island much more of a service if he started measuring the things that are really going to help our communities.

letter to the editor December 4 2015

I have never found the essays of Peter Morici to be of much value, he is a strict ideologue. But his most recent offering in the December 3, 2015 Providence Journal, “Another bad deal for America” takes the cake. Morici is an economist, and most mainstream economists have totally missed the boat on the relationship between climate change and the economy. Morici tells us that only polluting is good for the economy, while all the evidence tells us that solar power and wind power are the future, and that pollution kills economies as well as people. Even in China folks are protesting.

Morici, acknowledges that climate change is real, and the world is on track for a really bad time. Where he goes off track is by saying that if other folks do not commit to reducing carbon enough to really stop climate change, then we should and just use our money for mitigation so we can grow our economy faster. Morici has apparently missed the ever building evidence that the growth machine has permanently gone off the tracks, not only here, but throughout the world. Polluting more is not going to bring back American jobs or the economies of our communities any more than more tax cuts for the rich will. Healing our ecosystems and creating more justice are the road to future prosperity.