What if a corporation raised $500 million in a securities offering on the premise that the proceeds would go for operating expenses, then disclosed a few months later that $300 million of this amount would instead be used to service a debt that wasn’t disclosed in the offering document? This would be false advertising, subject [...]

Crossposted on Sacramento Bee Anyone who reads the papers knows that cities and states are being hit hard by fast-rising pension and retirement health care costs for public employees. Cities such as Stockton and San Bernardino have even declared bankruptcy. But few of those papers make clear that this crisis was not caused by the [...]

Crossposted on Bloomberg Governor Jerry Brown’s proposed $50 billion tax-increase initiative won’t solve California’s budget problems. Neither will anything else on the state’s ballot in November, nor will more cuts to child care, courts, parks, college and welfare programs repeatedly slashed by the state Legislature. Solving California’s budget woes requires addressing five root causes: unfunded health-care [...]

Crossposted on Bloomberg Congress ordered JPMorgan Chase & Co. (JPM)’s chief executive officer, Jamie Dimon, to testify about $2 billion that his bank lost on an investment bet. Worrisome as that gamble was — after all, the banking crisis was largely due to bad bets by banks — it is unfortunate that Congress has never [...]

Crossposted on Bloomberg Who do you think has more influence over the education, safety, health, welfare, transportation, justice, recreation and economic well-being of 40 million Californians? U.S. Senator Dianne Feinstein or California State Senator Loni Hancock? That’s easy: Loni Hancock. How can it be that someone so powerful is so unknown? The answer is that few [...]

Crossposted on Bloomberg Most Californians would be surprised to learn that 100 percent of education’s share of the tax increase proposed by Governor Jerry Brown will go to pensions instead of classrooms. But that would be no surprise to longtime observers of the California State Teachers’ Retirement System, which administers teacher pensions. Here’s why: After retirement, [...]

Crossposted on Sacramento Bee In an effort topreserve existing services, Gov. Jerry Brown has proposed a temporary tax increase to generate new revenue of $9 billion per year for seven years. The Legislative Analyst’s Office says the proposed tax increase will yield less. Either way, little of the new money will help existing services for [...]

Originally Published in the Washington Post President Obama has proposed that the federal government provide $35 billion to assist state budgets. It’s a fine idea — provided there’s a carrot. Many states have been hit hard by fast-rising retirement costs for public-sector employees, forcing those states to divert money from services such as education and [...]