People wrestling with gambling debts and gambling addiction are not a new phenomenon, as these have featured as major items in literature (which I mention)… and unfortunately, too many politicians have pointed to people’s attraction to gambling via lotteries in supposedly helping to fund governmental functions.

Episode Links

National Council on Problem Gambling

FAQs: What is Problem Gambling?

What is problem gambling?

Problem gambling (sometimes referred to as “gambling addiction” or “gambling disorder”) is gambling behavior that is damaging to a person or their family, often disrupting their daily life and career. Anyone who gambles can be at-risk for developing a gambling problem. Gambling disorder is a recognized mental health diagnosis.

Some warning signs of a gambling problem are:

* Thinking about gambling all the time.

* Feeling the need to bet more money and more often.

* Going back to try to win your money back (“chasing losses”).

* Feeling restless or irritable when trying to stop or cut down.

* Feeling like you can’t control yourself.

* Gambling despite negative consequences.

* In extreme cases, problem gambling can cause bankruptcy, legal problems, losing your job or your family, and thinking about suicide.

For more information on the American Psychiatric Association’s criteria for gambling addiction, visit DSM 5 at www.psych.org.

Problem Gambling Awareness Month (PGAM)

Problem Gambling Awareness Month is a nationwide grassroots campaign, held annually in March, that seeks to increase public awareness of problem gambling and promote prevention, treatment, and recovery services.

PGAM Goals

* To increase public awareness of problem gambling and the availability of prevention, treatment and recovery services.

* To encourage healthcare providers to screen clients for problem gambling.

Literary Gambling

The Old Curiosity Shop by Dickens at Project Gutenberg

Chapter 29 excerpt to Chapter 30:

The child sat by, and watched its progress with a troubled mind. Regardless of the run of luck, and mindful only of the desperate passion which had its hold upon her grandfather, losses and gains were to her alike. Exulting in some brief triumph, or cast down by a defeat, there he sat so wild and restless, so feverishly and intensely anxious, so terribly eager, so ravenous for the paltry stakes, that she could have almost better borne to see him dead. And yet she was the innocent cause of all this torture, and he, gambling with such a savage thirst for gain as the most insatiable gambler never felt, had not one selfish thought!

On the contrary, the other three—knaves and gamesters by their trade—while intent upon their game, were yet as cool and quiet as if every virtue had been centered in their breasts. Sometimes one would look up to smile to another, or to snuff the feeble candle, or to glance at the lightning as it shot through the open window and fluttering curtain, or to listen to some louder peal of thunder than the rest, with a kind of momentary impatience, as if it put him out; but there they sat, with a calm indifference to everything but their cards, perfect philosophers in appearance, and with no greater show of passion or excitement than if they had been made of stone.

The storm had raged for full three hours; the lightning had grown fainter and less frequent; the thunder, from seeming to roll and break above their heads, had gradually died away into a deep hoarse distance; and still the game went on, and still the anxious child was quite forgotten.

CHAPTER 30

At length the play came to an end, and Mr Isaac List rose the only winner. Mat and the landlord bore their losses with professional fortitude. Isaac pocketed his gains with the air of a man who had quite made up his mind to win, all along, and was neither surprised nor pleased.

Nell’s little purse was exhausted; but although it lay empty by his side, and the other players had now risen from the table, the old man sat poring over the cards, dealing them as they had been dealt before, and turning up the different hands to see what each man would have held if they had still been playing. He was quite absorbed in this occupation, when the child drew near and laid her hand upon his shoulder, telling him it was near midnight.

‘See the curse of poverty, Nell,’ he said, pointing to the packs he had spread out upon the table. ‘If I could have gone on a little longer, only a little longer, the luck would have turned on my side. Yes, it’s as plain as the marks upon the cards. See here—and there—and here again.’

‘Put them away,’ urged the child. ‘Try to forget them.’

‘Try to forget them!’ he rejoined, raising his haggard face to hers, and regarding her with an incredulous stare. ‘To forget them! How are we ever to grow rich if I forget them?’

The child could only shake her head.

‘No, no, Nell,’ said the old man, patting her cheek; ‘they must not be forgotten. We must make amends for this as soon as we can. Patience—patience, and we’ll right thee yet, I promise thee. Lose to-day, win to-morrow. And nothing can be won without anxiety and care—nothing. Come, I am ready.’

‘Do you know what the time is?’ said Mr Groves, who was smoking with his friends. ‘Past twelve o’clock—’

‘—And a rainy night,’ added the stout man.

‘The Valiant Soldier, by James Groves. Good beds. Cheap entertainment for man and beast,’ said Mr Groves, quoting his sign-board. ‘Half-past twelve o’clock.’

‘It’s very late,’ said the uneasy child. ‘I wish we had gone before. What will they think of us! It will be two o’clock by the time we get back. What would it cost, sir, if we stopped here?’

‘Two good beds, one-and-sixpence; supper and beer one shilling; total two shillings and sixpence,’ replied the Valiant Soldier.

Now, Nell had still the piece of gold sewn in her dress; and when she came to consider the lateness of the hour, and the somnolent habits of Mrs Jarley, and to imagine the state of consternation in which they would certainly throw that good lady by knocking her up in the middle of the night—and when she reflected, on the other hand, that if they remained where they were, and rose early in the morning, they might get back before she awoke, and could plead the violence of the storm by which they had been overtaken, as a good apology for their absence—she decided, after a great deal of hesitation, to remain. She therefore took her grandfather aside, and telling him that she had still enough left to defray the cost of their lodging, proposed that they should stay there for the night.

‘If I had had but that money before—If I had only known of it a few minutes ago!’ muttered the old man.

‘We will decide to stop here if you please,’ said Nell, turning hastily to the landlord.

‘I think that’s prudent,’ returned Mr Groves. ‘You shall have your suppers directly.’

Accordingly, when Mr Groves had smoked his pipe out, knocked out the ashes, and placed it carefully in a corner of the fire-place, with the bowl downwards, he brought in the bread and cheese, and beer, with many high encomiums upon their excellence, and bade his guests fall to, and make themselves at home. Nell and her grandfather ate sparingly, for both were occupied with their own reflections; the other gentlemen, for whose constitutions beer was too weak and tame a liquid, consoled themselves with spirits and tobacco.

As they would leave the house very early in the morning, the child was anxious to pay for their entertainment before they retired to bed. But as she felt the necessity of concealing her little hoard from her grandfather, and had to change the piece of gold, she took it secretly from its place of concealment, and embraced an opportunity of following the landlord when he went out of the room, and tendered it to him in the little bar.

What next happens: Little Nell gets her coin changed in a separate room, trying to conceal the money from her grandfather and the card sharps, but after she falls asleep, somebody comes into her room and steals the money she has hidden underneath her pillow….she thinks it may have been one of the card sharps, and maybe they will attack her grandfather, so she goes to check….

The idea flashed suddenly upon her—what if it entered there, and had a design upon the old man’s life! She turned faint and sick. It did. It went in. There was a light inside. The figure was now within the chamber, and she, still dumb—quite dumb, and almost senseless—stood looking on.

The door was partly open. Not knowing what she meant to do, but meaning to preserve him or be killed herself, she staggered forward and looked in. What sight was that which met her view!

The bed had not been lain on, but was smooth and empty. And at a table sat the old man himself; the only living creature there; his white face pinched and sharpened by the greediness which made his eyes unnaturally bright—counting the money of which his hands had robbed her.

The Gambler by Dostoevsky at Project Gutenberg

Wikipedia article on The Gambler

Dostoevsky gambled for the first time at the tables at Wiesbaden in 1863.[2] From that time till 1871, when his passion for gambling subsided, he played at Baden-Baden, Homburg, and Saxon-les-Bains frequently, often beginning by winning a small amount of money and losing far more in the end.[2] He first mentions his interest in gambling in a letter he sent to his first wife’s sister on 1 September 1863 describing his initial success:[3]

Please do not think that, in my joy over not having lost, I am showing off by saying that I possess the secret of how to win instead of losing. I really do know the secret — it is terribly silly and simple, merely a matter of keeping oneself under constant control and never getting excited, no matter how the game shifts. That’s all there is to it — you just can’t lose that way and are sure to win.

Within a week he lost his winnings and was forced to beg his family for money. He wrote to his brother Mikhail on 8 September 1863:[2]

And I believed in my system ... within a quarter of an hour I won 600 francs. This whetted my appetite. Suddenly I started to lose, couldn’t control myself and lost everything. After that I ... took my last money, and went to play ... I was carried away by this unusual good fortune and I risked all 35 napoleons and lost them all. I had 6 napoleons d’or left to pay the landlady and for the journey. In Geneva I pawned my watch.

Dostoevsky then agreed to a hazardous contract with F. T. Stellovsky that if he did not deliver a novel of 12 or more signatures by 1 November 1866, Stellovsky would acquire the right to publish Dostoevsky’s works for nine years, until 1 November 1875, without any compensation to the writer.[2][4]

Pensions and Lotteries

May 2017: Stupid Pension Trick: Let’s Use Lottery Money!

This stupid trick comes courtesy New Jersey, which has been chock full of stupid pension tricks for years.

They’ve issued billions in pension obligation bonds.

They’ve gone chasing returns alternative assets to try to make up for undercontributions.

So now… what?

LET’S MONETIZE THE LOTTERY!

Here’s an explainer:

What you need to know about Christie plan to slash N.J. pension debt with lottery cash

Gov. Chris Christie’s administration on Thursday released long-awaited details of its proposal to use state lottery proceeds to boost the government worker pension fund.

In a briefing with reporters, the state treasurer emphasized the impact of the proposal, saying it said would take some of the burden off the state budget to come up with more and more money each year and will do more for improve the shaky pension fund than merely contributing the full amount recommended by actuaries.

The strategy is to inject a $13.5 billion asset into the pension fund and give it a guaranteed source of revenue for the next 30 years.

….

….

Yeah, so they’re going to take away the money from the lottery to spend on the pensions, and magically that’s going to make more money available for the things the lottery money is being spent on now.

FWIW, I saw people talking about this nifty idea back in April, and thought it dumb then.

May 2017: Geeking Out: How Dependable are Lottery Revenues? And Government Data Sources?

So I have a question: when they valued the lottery as an “asset” for the pension plan, did they assume that it would always keep growing? Linearly? Exponentially (same as constant % per year)?

I’m going to guess they didn’t fit a cubic.

There are a few other projections that may also make sense, assuming saturation of the lottery demand — cubic doesn’t really work, but something like a logistic function would probably be good.

(The reason I used exponential and cubic was because they’re built into Excel. I’m not going to do a huge amount of work here.)

June 2020: STUMP Classics: How Reliable Are Lottery Revenues?

Updated New Jersey lottery proceeds

In the old post seen above, NJ lottery proceeds had been moribund for a few years, which hit its growth rate. New York, on the other hand, had steady growth.

Well, this is what NJ lottery proceeds did once we add on three more years of experience:

Here are the 26-year growth rates for the states:

As before, New Jersey is well below the national trend.

But my main point is that proceeds from the lottery have been very variable for New Jersey, though that’s not true of the U.S. overall.

Treating their state lottery as a reliable asset to fund their pensions was a foolish decision.

Sports Betting

26 Dec 2025, Front Office Sports: 2025 Was the Year of Sports Gambling Scandals

Sports betting has expanded rapidly since the U.S. Supreme Court struck down the federal prohibition on sports betting more than seven years ago, but this year exposed vulnerabilities in the system with explosive scandals across professional and college sports.

Americans have bet “well north of” $500 billion since the 2018 Supreme Court decision, according to Legal Sports Report. Currently, 39 states and Washington, D.C. allow some form of sports betting. There have been prior controversies—like the saga with Shohei Ohtani’s former translator and the lifetime ban of NBA role player Jontay Porter—but 2025 was the year major scandals kept exploding.

23 Oct 2025, ESPN: Suspensions, arrests and lifetime bans: A timeline of sports betting scandals since the repeal of PASPA

On May 14, 2018, just after 10 a.m. ET, the United States Supreme Court struck down the Professional and Amateur Sports Protection Act of 1992, the federal statute that had restricted legal betting to primarily Nevada for 26 years.

It was a landmark decision for two of America’s favorite pastimes: sports and gambling.

States wasted little time launching -- and taxing -- legal sports betting markets, and professional leagues quickly formed partnerships with the bookmaking companies that would be taking bets on the games. Six years later, 39 states, the District of Columbia and Puerto Rico have legal betting markets, and bettors have already wagered more the $330 billion with the new state-sponsored sportsbooks. But as the betting has increased, so have the controversies that come from gambling.

In the past two years, dozens of professional and collegiate athletes and coaches have been suspended or fired for gambling violations, and at least one bettor has pleaded guilty to obstruction charges related to a college baseball betting scandal. In early 2024, a pair of investigations were launched involving suspicious betting on Temple men’s basketball and on prop wagers involving Toronto Raptors reserve center Jontay Porter. The NBA banned Porter for life after its investigation revealed he had disclosed confidential information to bettors, limited his participation in at least one game while he was with Raptors and bet on NBA games while playing in the G League.

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Episode Links

Media Obituaries

NYT, 15 Mar 2026: Paul R. Ehrlich, Who Alarmed the World With ‘The Population Bomb,’ Dies at 93

His best-selling 1968 book, which forecast global famines, made him a leader of the environmental movement. But he faced criticism when his predictions proved premature.

Paul R. Ehrlich, an eminent ecologist and population scientist whose best-selling book, ‘’The Population Bomb,’‘ was celebrated as a prescient warning of a coming age of food shortages and famine but later criticized by conservatives and academic rivals for what they called its sky-is-falling rhetoric, died on Friday in Palo Alto, Calif. He was 93.

His death, at a nursing facility in the retirement community where he lived, was caused by complications of cancer, his daughter, Lisa Marie Daniel, said.

As a young professor of biology at Stanford University in the mid-1960s, Dr. Ehrlich was known for his absorbing lectures on evolution, in which he described what plants and animals faced on a planet stressed by industrial pollution and rapid population growth. He distilled those lectures into an article published in December 1967 in New Scientist magazine.

Six months later, encouraged by David Brower, the executive director of the environmental group the Sierra Club, to write a book on the subject, Dr. Ehrlich published ‘’The Population Bomb.’‘ In 233 pages, he asserted that the planet’s condition began to deteriorate rapidly in the 1950s, when the rate of population growth exceeded the increase in food production -- or, as he put it, when ‘’the stork passed the plow.’‘ He called on couples to limit their families to one or two children.

Witty, knowledgeable and not at all reticent, Dr. Ehrlich gained a huge audience on television, especially on ‘’The Tonight Show Starring Johnny Carson,’‘ which he appeared on roughly 20 times. His forecast of food riots in the United States and of imminent global famines caused by escalating population growth found a worldwide readership.

One of the best-selling nonfiction books about the environment to date, ‘’The Population Bomb’‘ sold three million copies and transformed Dr. Ehrlich, who was 37 at the time, into one of the global environmental movement’s most recognized leaders. His influence motivated international governments to convene conferences on controlling population, and his message was heard in private homes across the industrialized world as couples conceived fewer children.

Dr. Ehrlich expanded on his thesis in ‘’The End of Affluence’‘ (1974), which he wrote with his wife, Anne H. Ehrlich, who wrote or edited 15 books with him. The book forecast a ‘’nutritional disaster’‘ in the 1970s, predicting that ‘’before 1985, mankind will enter a genuine age of scarcity.’‘

Such bold predictions, some of which turned out to be premature or in error, prompted rivals in business and academia to question the validity of his claims. In 1980, Julian Simon, an economist at the University of Maryland, challenged Dr. Ehrlich and two of his colleagues with what Stewart Brand, a founder of the Whole Earth Catalog, called ‘’one of the great revelatory bets.’‘

Convinced that the growing population would make natural resources ever more scarce and thus drive up costs, Dr. Ehrlich accepted Mr. Simon’s challenge, betting that the prices of five key metals would rise in the 1980s. Mr. Simon believed that innovation would drive prices down.

In 1990, Dr. Ehrlich and his colleagues conceded defeat and sent Mr. Simon a check for $576.07 -- an amount that represented the decline in the metals’ prices after accounting for inflation.

WSJ, editorial, 17 Mar 2026: Paul Ehrlich, the Man Who Lost an Infamous Bet

The Stanford biologist Paul Ehrlich, who died Friday at age 93, made his most important contribution to the world by losing a bet. It helped educate millions that his ideas about scarcity and human ingenuity were wrong.

Readers of a certain age will recall that Ehrlich was one of the most celebrated public intellectuals of his time. His 1968 book, “The Population Bomb,” made him famous in an era of economic and political turmoil that led to public pessimism.

The book’s opening lines capture his zero-sum Malthusian thinking: “The battle to feed all of humanity is over. In the 1970s hundreds of millions of people will starve to death.” The idea that people having babies was impoverishing nations became an article of faith on the political left and most of the press. Untold horrors were committed by governments against their own citizens in the name of population control—most notably, China’s one-child policy.

The great economist Julian Simon decided to put Ehrlich’s theories to the test. In 1980 he offered to bet on whether the price of five commodities would go down or up over the next 10 years. Ehrlich chose the five metals—chromium, copper, nickel, tin and tungsten—and took the bet.

It was really a wager over human beings and free markets. If Ehrlich was right, and people were devouring the Earth’s resources, then the price of those resources would go up. If Simon was right, human beings would respond to shortages with ingenuity, and prices would, in the long term, go down. In 1990 Simon won the bet and Ehrlich paid up.

First Things, Scott Yenor, 19 Mar 2026: Paul Ehrlich, False Prophet

Paul Ehrlich, noted author of The Population Bomb, died last week. Few people have been so consequentially wrong as Ehrlich. Ironically, his name, translated from the German, means “honest, truthful, sincere.” It is remarkable how this PhD in butterflies and Stanford professor rose to such prominence, capitalizing on a wave of popular pessimism to attack civilization from the left.

Ehrlich’s Population Bomb begins with an arresting line: “The battle to feed all of humanity is over. In the 1970s and 1980s hundreds of millions of people will starve to death in spite of any crash programs embarked upon now. At this late date nothing can prevent a substantial increase in the world death rate . . .” Indeed, in the late 1960s, American society seemed to be coming apart. The threat of nuclear war loomed. Mass migration wore away borders. Disease spread. Ehrlich’s Population Bomb more caught the wave of alarmism than created it. The Rockefeller and Ford Foundations were already promoting population control across the world, especially in India and East Asia, in the early 1960s.

Many ears heard Ehrlich’s prophecies. He appeared more than twenty times on Johnny Carson’s Tonight Show. During his 1980 appearance, Ehrlich praised Eastern European countries for reaching Zero Population Growth. Imitators arose too, most notably the Club of Rome’s Limits to Growth, a book published in 1972. Limits, a cultural marker of sorts, saw several MIT professors use computer models to prove that coming population explosion would lead to resource depletion and declines in agricultural and industrial output. The only bright spot would be the rebirth of humanity after its impending collapse.

….

Skeptics always dogged Ehrlich. Most famous was his bet with Julian Simon, the free-market economist and techno-enthusiast. I read Simon’s The Ultimate Resource as a young man. Like others at the time, he was more worried about the world’s impending labor shortage. Fewer laborers would mean less creativity. With more people, Simon thought, human ingenuity would flourish. There would be no worries about running out of commodities like copper or tungsten. Simon allowed Ehrlich to pick five commodities that he thought would increase in price during the next decade. Each ended up decreasing in price, consistent with Simon’s prediction.

Ehrlich’s predictions cannot be taken seriously today. Life expectancy climbed in most of the world after 1970. Mass famines didn’t materialize. Yet he felt no shame for being so wrong. So maybe “starvation has been less extensive than I (or rather the agriculturalists I consulted) expected,” he said in 2004. But many are still “very hungry.”

Wikipedia Entry

A lecture that Ehrlich gave on the topic of overpopulation at the Commonwealth Club of California was broadcast by radio in April 1967.[22] The success of the lecture caused further publicity, and the suggestion from David Brower the executive director of the environmentalist Sierra Club, and Ian Ballantine of Ballantine Books to write a book concerning the topic. Ehrlich and his wife, Anne H. Ehrlich, collaborated on the book, The Population Bomb, but the publisher insisted that a single author be credited; only Paul’s name appears as an author.[23]

Although Ehrlich was not the first to warn about population issues — concern had been widespread during the 1950s and 1960s — his charismatic and media-savvy methods helped publicize the topic.[13] The Tonight Show Starring Johnny Carson had Ehrlich on as a guest more than twenty times, with one interview lasting an hour.[24][25]

On Expertise

May 2017: Friday Trumpery: The Murder-Suicide of Expertise

THE SUICIDE OF EXPERTISE

But here are the hallmarks of why “experts” are not being trusted:

* The experts are not all that expert (well-credentialed, but deeply ignorant)

* The experts lack intellectual humility – they hold onto wrong claims far past reasonability as a result, and make overconfident pronouncements

* The experts are intellectually dishonest

* The experts aren’t the people who get hurt by what they get wrong

This has been a long-term problem. This is not new to the Trump era.

Yes, I know this is a “Trumpery” post, but the point is that there have been various “experts” b******g about Trump not listening to expertise… and others saying it’s okay for experts to be deceptive, as long as it’s in the service of bashing Trump (the Ultimate Evil™).

When the “experts” start saying they’re fine with lying or using politics to inform what research subjects are verboten, I really don’t want to hear about people no longer trusted their expertise.

The experts have been killing the value of expertise for some time, they’ve just ramped up their intensity.

THE KNIFE DRIVEN IN BY A KNOW-NOTHING MEDIA

That’s the suicide part, at any rate — the experts kept screwing up, and there wasn’t much of a negative feedback loop to keep them from getting out of hand.

But the thing is, there are usually competing experts. As with the dietary advice, there were researchers who supported conflicting advice.

But how do you find out about what the experts say?

It’s usually via media of some sort, and the grand gatekeepers drove the knife in for reasons similar to that of the suicide of expertise.

* Many media people are deeply ignorant, and can’t tell credible experts from know-nothing phonies

* The media needs eyeballs — so intellectually dishonest as well as overconfident experts make for a better show

* It’s not the media people who get hurt by the sensationalism they peddle

The thing is, being able to play around with words and to spin stories does sell very well — the boring expert who says “There is no nifty risk-free trick to making pensions cheaper. There’s always a trade-off” will be outdone by the bombastic person yelling “THEY WANT US TO DIEEEEEE!”

Savvy people who want their specific message to get out know what to do.

June 2021:

To build trust: admit mistakes

Perhaps some people still trust the Washington Post as a source of information. I don’t know such people.

Look, I am willing to allow for mistakes — we are all human, after all. But when I come across people unwilling to admit to any mistakes, well, I am not going to trust them in the future. I’m not that foolish (or young) any more.

….

I have no problem with admitting I was wrong, and I try to avoid making the same mistake in the future. I made my error in the full view of whoever read my stuff, and I had to correct it in the same place, making clear what had happened.

But now we have people trying to hide their screw-ups. When we remember they screwed up. It was not that long ago, dudes.

Given such behavior, why would we trust such people at all?

….

Just frickin admit error

I’m not disappointed. That would mean I had expectations of better behavior. I can’t say I did.

I’m not really angry. I save my anger for when I need energy to get things done. My energy is not going to do anything about this.

I am annoyed.

If these people just admitted they were wrong in the past, and will try not to make such mistakes in the future, that would go a long way in establishing future credibility.

Predictions

CBO Demographic Outlook: 2026 to 2056

Page of the report - published January 2026

PDF of the report

HTML document

Spreadsheet of the data/projections

Ah, that lovely net immigration. Biden was saving our hash!

Related Posts/Episodes

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

Pillar Podcast

Bonus episode for paying subscribers: Resounding gongs or clashing cymbals

Mrs. Jellyby

Quoting from the 2025 post:

Mrs. Jellyby is one of a network of charitable do-gooders, under the heading of Christian missionary work bother one of the main characters, Mr. Jarndyce. She and the others were a thinly veiled critique of various members of the charitable societies who had bothered Dickens once he was rich and famous.

Mrs. Jellyby focused on an African tribe, and her mission is described thusly, from Chapter 4, “Telescopic Philanthropy”:

We were to pass the night, Mr. Kenge told us when we arrived in his room, at Mrs. Jellyby’s; and then he turned to me and said he took it for granted I knew who Mrs. Jellyby was.

“I really don’t, sir,” I returned. “Perhaps Mr. Carstone—or Miss Clare—”

But no, they knew nothing whatever about Mrs. Jellyby. “In-deed! Mrs. Jellyby,” said Mr. Kenge, standing with his back to the fire and casting his eyes over the dusty hearth-rug as if it were Mrs. Jellyby’s biography, “is a lady of very remarkable strength of character who devotes herself entirely to the public. She has devoted herself to an extensive variety of public subjects at various times and is at present (until something else attracts her) devoted to the subject of Africa, with a view to the general cultivation of the coffee berry—AND the natives—and the happy settlement, on the banks of the African rivers, of our superabundant home population. Mr. Jarndyce, who is desirous to aid any work that is considered likely to be a good work and who is much sought after by philanthropists, has, I believe, a very high opinion of Mrs. Jellyby.”

Note, the concept was they would take some of the “superabundant home population” — aka that “excess population” Scrooge notes in “A Christmas Carol” — ship them over to Africa, and then have those poor people work in African missions.

….

That is, she wants to ship off 50 — 200 poor families from England to Africa, supposedly to make their living by growing coffee (and Mrs. Jellyby herself consumes a great deal of coffee to power her letter-writing campaigns). They are also supposed to evangelize the people already living there to Christianity.

Other “charitable” people appear, whether they are involved in the Africa scheme or not. Similarly, they abuse the responsibilities they have to their families and neighbors to supposedly do good to a larger sphere. In general, they engender resentment in their children and sometimes despair in their spouses (though, in some cases, the spouses are on board and completely smug about it all.)

….

The African king wanted to sell all the missionaries (all who survived the tropical diseases) into slavery for his personal benefit. After Mrs. Jellyby sighs, she moves on to women’s suffrage as her next cause, which wouldn’t be successful in the UK until well after her death. In the meantime, she has a disabled granddaughter she could have done much to help… but no, she has decided that it’s better to keep on writing letters.

….

But that is not nearly as grand as the “telescopic philanthropy” that is completely futile, as Mrs. Jellyby does not understand anything whatsoever about the people in Africa, what they want or need.

Mrs. Jellyby could have been more effective by helping both her family and the poor who surrounded her in London, where she lived. What Esther Summerson was able to accomplish among different people directly contrasts with the futility of Mrs. Jellyby’s pile of messy letters.

If Mrs. Jellyby had ordered her responsibilities properly, by her capabilities and knowledge, she could have done so much more good.

Dickens Adaptations

Bleak House

2005 miniseries, Gillian Anderson as Lady Dedlock, Charles Dance as Mr. Tulkinghorn

IMDB listing: Bleak House

Amazon listing: Bleak House

Martin Chuzzlewit

1994 miniseries, Tom Wilkinson as Pecksniff, Pete Postlethwaite as Tigg Montague/Montague Tigg, Paul Scofield as old Martin

IMDB listing: Martin Chuzzlewit

Amazon listing: Martin Chuzzlewit

USCCB: Works of Mercy

Corporal Works of Mercy

* Feed the hungry

* Give drink to the thirsty

* Shelter the homeless

* Visit the sick

* Visit prisoners and ransom the hostage

* Bury the dead

* Give alms to the poor

Spiritual Works of Mercy

* Instructing the ignorant

* Counseling the doubtful

* Admonishing the sinner

* Comforting the sorrowful

* Forgiving injuries

* Bearing wrongs patiently

* Praying for the living and the dead

DST Post

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Episode Links

NY Times op-ed, 23 Feb 2026, Nicholas Bagley and Robert Gordon: Mamdani Will Need to Change How He Governs

Mayor Zohran Mamdani of New York, in his inaugural address, offered a pledge to create a government “where excellence is no longer the exception.” He now must do so while closing a $5.4 billion deficit, in a state where the governor rejects higher taxes on the rich.

Big budget gaps are not uncommon in American cities. Nor is New York’s high cost of living — one reason that California, New York and Illinois top the list of states with declining populations over the past five years.

If blue-state governors and mayors want to get serious about delivering excellent public services, they will need to do more than battle billionaire elites or embrace abundant housing and energy.

They will have to push back against a core constituency within the Democratic Party that often makes government deliver less and cost more: unions representing teachers, police officers and transit workers.

Bloomberg, Matt Levine, Money Matters, 26 Feb 2026: The DOGE Doubt Trade

This product exists. It is conventionally called a “bar bet.” You can walk into a bar in the right part of Texas, say “I’ll bet anyone $1,000 that Elon Musk won’t do the thing he said he’d do on the timeline he promised,” and someone will stand up and say “them’s fightin’ words” and take your bet. And you will negotiate the terms and odds and resolution method, and in six months you’ll check back in and he won’t have done the thing and you’ll make $1,000. And you will get to say to the Musk fan on the other side of the bet, “nyah nyah nyah nyah nyah,” which is what you really wanted.

Of course there is a market structure problem, which is that you have to find the right bar and then laboriously negotiate the terms of the bet, so you can’t actually pour your life savings into Being Skeptical About Elon Musk’s Promises. Or you couldn’t until recently. But now we have prediction markets, which are centralized electronic exchanges, regulated by the US Commodities Futures Trading Commission, for coordinating bar bets. Here’s a Wall Street Journal story about a guy who can justifiably say “nyah nyah nyah nyah nyah”:

Alan Cole put his life savings, all $342,195.63, into a prediction-market wager. … Until Elon Musk’s Department of Government Efficiency came roaring into the nation’s capital last year, he was largely a plain-vanilla investor or, as he puts it, a “normal, conventional Wall Street Journal-reading adult.”

But Musk’s boasts and his eager fans brought an unusual opportunity into the burgeoning U.S. prediction markets: People willing to bet that the world’s richest man would transform and shrink the federal government.

Cole took the opposite position, one he didn’t see as a gamble at all. If federal spending in each quarter of 2025 exceeded federal spending in the fourth quarter of 2024, he would win big. …

From Cole’s perspective, even if Musk cut government contracts and shrank the federal workforce—which he did—he couldn’t meaningfully dent Social Security and Medicare benefits. And that left no plausible path for cutting overall federal spending. ...

The key feature of the prediction market offered on the Kalshi website was that it measured federal spending in annualized, seasonally adjusted nominal dollars. To win, Cole didn’t need spending to stay above a past projection. He just needed federal spending to go up, as it almost always does.

He made like $128,000, or 37%. Notice the features of this product:

* If you have a view like “federal spending will go up,” it is immediately obvious whether and to what extent the market incorporates that view: The market price just is the market’s expected probability of that happening.

* This product reflects only one fact, whether federal spending goes up or not.

* Investor psychology will affect the price at which you get into the trade — if Musk’s “eager fans” think he will cut federal spending, then you will pay a relatively low price for the spending-will-go-up contract — but not the price at which you exit, because the trade resolves: Eventually, spending either goes up or it doesn’t, there’s some resolution mechanism to establish the fact, and if it went up you get paid. Tom Gara wrote on Threads: “He knew that it’s basically mathematically impossible to reduce federal spending, but he also knew Elon fanboys are often morons.” With Tesla stock, that is a problem; with prediction markets, it’s an opportunity.

It is the opposite of a stock investment.

I guess the point I would make here is that this is still somewhat childish. The stock market exists to allocate capital to productive businesses, and those businesses are irreducibly messy. You do not decide how to allocate capital by understanding one isolated fact about a company’s business; you have to figure out which facts are important and then do your best to understand all of them. Financial markets are not bets on individual facts; they are bets on the economic consequences of those facts.

Prediction markets are a “truth machine”; they let you isolate a fact and make money by being right about it. In many ways this makes them less useful: They don’t fund economic growth, and they are imperfect hedges to real economic risks. But sometimes they do give you the satisfaction of being right.

WSJ, 25 Feb 2026: The Tax Nerd Who Bet His Life Savings Against DOGE

WASHINGTON -- Alan Cole put his life savings, all $342,195.63, into a prediction-market wager. He insists he’s not really a betting man.

Cole is a 37-year-old tax economist with Ivy League degrees, a mortgage and a young child. Until Elon Musk’s Department of Government Efficiency came roaring into the nation’s capital last year, he was largely a plain-vanilla investor or, as he puts it, a “normal, conventional Wall Street Journal-reading adult.”

But Musk’s boasts and his eager fans brought an unusual opportunity into the burgeoning U.S. prediction markets: People willing to bet that the world’s richest man would transform and shrink the federal government.

Cole took the opposite position, one he didn’t see as a gamble at all. If federal spending in each quarter of 2025 exceeded federal spending in the fourth quarter of 2024, he would win big.

….

From Cole’s perspective, even if Musk cut government contracts and shrank the federal workforce -- which he did -- he couldn’t meaningfully dent Social Security and Medicare benefits. And that left no plausible path for cutting overall federal spending.

“It’s almost like the government has, you know, 19 elderly employees for every actual employee,” Cole said.

The key feature of the prediction market offered on the Kalshi website was that it measured federal spending in annualized, seasonally adjusted nominal dollars. To win, Cole didn’t need spending to stay above a past projection. He just needed federal spending to go up, as it almost always does.

This was far different, he decided, than other prediction-market options. Some of those are equivalent to betting in the already efficient sports-gambling market. Others are susceptible to competition against people with insider knowledge, like gambles on whether Lady Gaga will appear during the Super Bowl halftime show.

Cole gradually amassed more than 3% of one particular $12 million federal-spending prediction market. He spread risk across several sub-bets, structured so he landed in the red only if spending declined by more than $50 billion. He wasn’t betting against Kalshi itself, just against people betting on Musk.

….

The government published the final 2025 figures Feb. 20. It wasn’t even close. The lowest spending quarter in 2025 was $66 billion above the bet’s target level. Cole collected $470,300, for a profit of more than $128,000, or 37%.

“There’s a little bit of that feeling of vindication,” Cole said.

Our World in Data: Births v Deaths

Our World in Data, 5 Jan 2023: How many people die and how many are born each year?

The world population has grown rapidly, particularly over the past century: in 1900, there were fewer than 2 billion people on the planet, and in 2025, there were around 8.2 billion.

Two metrics determine the change in the world population: the number of babies born and the number of people dying.

….

As the number of deaths approaches the number of births, global population growth will end

How do we expect this to change in the coming decades? What does this mean for population growth?

Population projections suggest annual births will remain around 135 million in the next two decades before declining slowly in the second half of the century.

As the world population ages, the annual number of deaths is expected to continue increasing in the coming decades until it reaches a similar number as annual births, at which point the world population will stop increasing.

The annual number of deaths is then expected to surpass the annual number of births. This is when the world population will start decreasing.

United States

Japan

France

South Korea

United Kingdom

China

Related Posts

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Episode Notes

Netherlands Investment Tax: “Box 3”

NL Times, 13 Feb 2026: Dutch parliament greenlights new Box 3 tax, set to take effect in 2028

Despite considerable resistance, a large majority in the lower house of the Dutch parliament approved a new system for taxing the returns on assets, also known as the Box 3 tax. The new system, which taxes returns based on the actual increase in the value of assets, is set to take effect in 2028.

The Dutch government had to change the Box 3 tax after multiple courts ruled that the current system is unlawful. The current system taxes assets based on fictive gains - how much the Tax Authority assumes assets have increased in value over the taxable period, based on past returns. The Tax Authority also calculated the tax based on an assumed distribution of assets across savings and other investments, called the “asset mix.”

….

The Tweede Kamer greenlighting the Box 3 reform is not the end of the issue. A majority asked the new Cabinet to, once the new system is implemented, change the way in which returns on things like stocks, bonds, and cryptocurrencies are taxed.

The new system taxes the unrealized gains on these assets - the profits of investments that have increased in value, but haven’t been cashed out yet. Parliamentarians don’t like that this will result in people paying tax on money they don’t have yet. A majority, therefore, asked the government to come up with a way in which investors only pay tax on realized returns - money in their pocket once they sell the asset involved. They want the government to present that plan by Budget Day 2028 at the latest.

The Box 3 reform is costing the government billions. Not only does it have to refund overpaid capital gains taxes, but affected taxpayers may also be entitled to interest on those repayments. The Ministry of Finance has not yet formally decided whether the interest—known as belastingrente in Dutch—will be paid.

NTL Trust International, accessed 17 Feb 2026: Netherlands Box 3 Reform: Structural Shifts and the 36% Tax

Liquidation Contagion

Balaji Initial Post

15 Feb 2026, X/Twitter:

Text:

LIQUIDATION CONTAGIONWealth taxes are even worse than you think. Any asset held by Californian billionaires or Dutch citizens is now at risk of experiencing forced liquidation pressure.So: it’s not just that you don’t want to hold assets as a Dutchman. You also don’t want a Dutchman to hold your assets. Because the logic of forced liquidation is contagion.Let’s think it through.(1) First, suppose there is an asset with a total market cap of $10,000, with 10 shares total, of which 1 share each is held by 10 different holders, all in the Netherlands. To simplify the math, assume the Dutch holders bought those shares at par, or close to $0.(2) Now suppose today is the unrealized cap gains tax day, and the share price is $1,000 per share. Each Dutch guy is hit with a 36% tax, and owes $360. The first guy sells his one share, gets $1,000, and pays $360 in tax while retaining $640.(3) But the first guy’s sale reduces the market price to $960 per share. So when the second guy sells, he only retains $600 after paying $360 in tax.(4) Now assume that by the 7th guy, all the selling has pushed the share price to collapse to $200 per share. This is a very reasonable scenario if 60% of the cap table has suddenly been dumped. Indeed it might go much lower.(5) At $200 per share, the 7th guy actually has to go into debt to pay the tax as he owes $360. He sells his one share, pays all $200 of the proceeds in tax. And still owes $160 more in tax.(6) The 8th, 9th, and 10th guys are even more screwed. By the time they sell, the price will likely have crashed to $100 per share or less. As with the 7th guy, even 100% liquidation will not cover their tax burden.(7) So we immediately see many negative things about the Dutch unrealized cap gains tax bill.(a) First, it will cause large simultaneous forced liquidations. Everyone must sell 36% of their stake near the same time.(b) Second, it may be literally impossible to pay if a critical mass of the cap table is all subject to it at the same time. In the example above it was 100% Dutch holders, but has it been just 60% the result would have been much the same: a collapse in the share price.(c) Third, that means it would be disastrous to have too many Dutch citizens (or Californian billionaires!) on the cap table. Their forced sales will crash your share price.(d) So, you might have to start mass blocking those resident in wealth-taxing jurisdictions from investing in your companies.(e) This in turn makes the poor Western European guy even poorer, as he gets locked out of high growth assets.To be clear: I really do feel bad for the formerly Flying Dutchmen, now Crying Dutchmen. They invented much of modern capitalism. They founded New Amsterdam, now New York. They’ve punched way above their weight. I wish them only the best.Nevertheless…they should prepare for the worst. This may be a tough century for Western Europe. The first ones out might get to freedom, while the slowest may be stuck behind a new Iron Curtain, spending a century paying off the debts their states incurred over the last century.Because the long run fruits of Western Keynesianism are the same as Soviet Communism, in the sense of wealth seizure and pauperization.I mean, if you knew the future, you wouldn’t want to co-own a farm with a Russian in 1916. For similar reasons, you might not want to co-own a share of stock with Dutch national in 2026. Or with anyone in a seizure-curious jurisdiction…which unfortunately includes much of Western Europe, Canada, and Blue America.You instead want assets that are not held by those subject to forced liquidations. Now, I grant that this is an unusual way to rank assets…Dutch holders considered harmful?!? Yet it might sadly be necessary to minimize your exposure to liquidation contagion.PS: guess which crucial stock is most held by the Dutch? ASML. So: this unrealized cap gains tax may not literally be a communist plot, but it would have the same effect.

In the replies:

Doesn’t tell you, of course, how one has to keep track of the investments one holds via ETFs/mutual funds via companies such as BlackRock.

BlackRock, etc., “owns” these assets on behalf of OTHER people. “But it’s for a pension fund!”

Which, again, is for OTHER people… but I assume pension funds are out of scope for this tax….. [maybe I shouldn’t assume… all governments are hungry for tax revenue]

Cross-contamination of systems

15 Feb 2026, Reddit: Box 3 in 2028: taxed on unrealized gains in NL and realized gains by US | how do people deal with this?

Not copying the text — but keeping on with the having to liquidate assets theme to pay a wealth tax on UNREALIZED gains, but when liquidating, one REALIZES the gains…. which triggers REALIZED GAINS TAXES in other tax jurisdictions.

WHUPS

California Wealth Tax

NYPost, 8 Jan 2026: Wealth tax threat prompts at least six billionaires to cut ties with California, as about 20 more mull exit: report

The threat of a steep new wealth tax in California has reportedly prompted at least six billionaires including Larry Page and Peter Thiel to cut their ties with the state — and as many as 20 others could be heading for the exits.

The half-dozen billionaires made their moves before New Year’s Day — the cutoff date to avoid a potential one-time tax of 5% on fortunes exceeding $1 billion — which California residents will vote on in November, according to Bloomberg News.

David Lesperance, a tax adviser who specializes in relocating ultra-wealthy clients out of high-tax jurisdictions, told the outlet he personally helped four billionaires end their California residency before the proposal’s Jan. 1 cutoff date.

Related Posts

* March 2022: Podcast — Income taxes and wealth taxes

* June 2023: Taxing Tuesday: Wealth Taxes in Norway and SALT Cap Review

* September 2024: Taxing Tuesday: Taxes on the Ballot, Revenue Challenges, and the French Wealth Tax Impact

* August 2020: Taxing Tuesday: California Nuts and New York... Whatever We’ve Got - the prior attempt in California… which failed

* August 2024: Taxing Tuesday: Demonstration on Stupidity of Unrealized Gains Taxes, Illinois Property Taxes, and More

* Nov 2023: Taxing Tuesday: Bezos Moves Back to Florida, Thwarting Washington State’s New Capital Gains Tax, Migration Stats Distorted by Pandemic Issues

* Oct 2023: Taxing Tuesday: Gaming, Chicago Mansions go Downscale, and D*****s Tax Research

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

Here are the places you can donate to the Movember Foundation, which supports men’s health, specifically focusing on prostate cancer, testicular cancer, and men’s mental health:

* Mary Pat Campbell’s MoSpace – a place to donate at Movember itself

* My Movember Facebook fundraiser – my officially linked fundraiser, if this works better for you

And here’s a QR code if that works better for you:

While prostate cancer was my initial impetus for supporting Movember, I support all of Movember’s causes, which include men’s mental health and suicide prevention.

Some Movember-funded projects

Ironman Registry - USA

IRONMAN is an international, population-based registry of 5,000 men with advanced prostate cancer across ten countries. It seeks to understand clinical outcomes associated with management of advanced prostate cancer and understand the biological and clinical diversity of the disease.

USA - Mass market, multi-platform public media documentary series & campaign

This project uses a mass market, multi dimensional campaigns to shift populations understanding, attitudes and intentions and ultimately improve health outcomes on a large scale. Focusing on Youth Mental Health we will be working in partnership with PBS to deliver a documentary series supported with educational, digital and in person elements delivered across the USA.

Veterans and First Responders - United States

To improve the mental health/wellbeing and prevent suicide of first responders and veterans in Australia, Canada, Germany, Ireland, United Kingdom, United States and New Zealand. This will be achieved through funding research proposals aimed at building the case to develop and implement effective prevention programs and/or test new evidence-based programs.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

I explore the political negligence surrounding the Tier 2 sweetener bill and the task force’s proposed “solutions”—a mix of new taxes, fees, and the risky use of Pension Obligation Bonds (POBs)— and contrast with the argument that Chicago’s core problem is a runaway 62% spending surge since 2019. Then there’s the absurd defense of the benefit increase from State Senator Robert Martwick, who claimed it was a service to the city.

Finally, there’s the question: where are pensions for Chicago (and Illinois) ultimately going, given their history of underfunding? Now, with their benefit boost? Will they go cap in hand to the federal government for a bailout (again), and should their poorly funded, non-Social Security systems be allowed to continue? The Chicago pension crisis isn’t just local news—it’s a bellwether for the rest of the nation.

Episode Links

STUMP related links

* 19 Sep 2025: Chicago Pension Squeeze: Fire Pensions Get a Loan as Tax Revenue Delayed; Pritzker Warned Against Signing Sweetener Bill, Signed Anyway

* 4 Aug 2025 Podcast: Chicago Pension Artificial Sweeteners

* 25 July 2025 More on Chicago Pension Finance: Those Pension Sweeteners Sure are Sour

* 18 July 2025 Chicago Finances Update: Other People’s Money Doesn’t Go Too Far, Does It?

* 19 Apr 2020 Illinois Asks for $10B(+) for Pensions -- Most Disgusting COVID-19 Bailout Yet?

* 20 Jun 2022 Podcast: Pension Obligation Bonds

* 16 Feb 2015 Why are Pension Obligation Bonds OF THE DEVIL? A Lesson from the Dollar Auction

This is why I say POBs are of the devil — whether or not you believe in a literal devil, the literary devil is the kind that helps you rationalize the bad behavior you already did and are determined on continuing.

Ask Faust about how that worked out for him.

Austin Berg and The Last Ward

State lawmakers passed—and Gov. JB Pritzker signed—one of the most irresponsible bills in modern Illinois history this year: a suite of pension sweeteners for Chicago police and fire. The sweeteners added $11 billion in new benefits to the city’s police and fire pension systems, which were already the worst-funded in the nation, with no new revenue to pay for them.

In the waning days of session, sources said several leaders attempted to contact Johnson to request that he tell the governor’s team to step in and kill the bill. But the mayor was missing in action. A newly unearthed memo published this week by Paris Schutz at Fox32 confirmed Johnson’s negligence.

Specifically, Chicago CFO Jill Jaworski wrote to the governor’s team that the bill would make Chicago’s police and fire pension funds “technically insolvent.”

….

Bloomberg broke news last week that the city was forced to provide emergency lending for Chicago’s firefighter pension fund in order to avoid asset sales. Between a delay in Cook County property tax bills4 and alarmingly low funding levels, the fund literally did not have the necessary cash on hand to pay current retirees. This is what insolvency looks like.5 And this is exactly why Jaworski and Johnson should have been screaming from the rooftops to oppose the pension sweetener bill.

Bond Buyer on Chicago Task Force

18 Sep 2025: Taxes and cuts advised in Chicago finance task force report

Chicago should resume annual inflation-based adjustments to its property tax levy.

That’s one recommendation from a task force Mayor Brandon Johnson assembled and charged with coming up with ways to strengthen Chicago’s long-term financial health.

It doesn’t call for other major property tax hikes, but the report, prepared on Aug. 31 and released this week, also raises the possibility of re-amortizing and reducing pension debt, including through the issuance of pension obligation bonds.

….

The task force’s interim report puts forth a mix of efficiencies and revenue solutions in the $1 billion to $2.1 billion range to close the city’s $1.15 billion budget gap.

The group identified between $630 million and $1.65 billion in potential revenue-related opportunities, and between $372.4 million and $455.5 million in efficiencies.

As part of the efficiencies, the task force recommended extending the supplemental pension payments policy beyond 2028; re-amortizing and reducing pension debt through pension obligation bonds and pension buyouts; and shifting the timing of pension contributions.

Illinois Policy

22 Sep 2025: Chicago budget rises over 2X faster than other big cities

Not enough revenue? How about too much spending. Chicago outpaces many of America’s biggest cities with a 62% spending spike since 2019. That’s what’s driving deficits.

Chicago faces a $1.15 billion projected deficit in 2026, and the city’s budget task force’s answer is $1.6 billion in new tax hikes.

But the numbers show the city’s true budget problem isn’t a “revenue challenge,” as Mayor Brandon Johnson and his task force claim. It’s overspending.

24 Sep 2025: Uber surcharge, property taxes, liquor prices: Chicago’s push for new taxes

New taxes on Uber, automatic property tax hikes and higher liquor taxes are all being pushed as Chicago leaders seek to spend $1 billion more than they will have.

Chicago is short by $1 billion what it wants to spend in its upcoming budget, so a city task force recommended new or higher taxes and fees on rideshares, property taxes, liquor and more.

….

Mayor Brandon Johnson has claimed the city has a revenue problem, but city spending has grown at twice the rate of other large cities.

These proposals amount to the same old playbook: rather than streamlining government, leaders are again reaching deeper into taxpayers’ pockets. Chicago’s structural deficit is driven by rising pension and personnel costs that have grown faster than revenues for a decade, as well as from using temporary funds to create permanent costs.

No matter how much taxpayers give up, Chicago leaders will certainly find a way to spend more.

Twitter/X threads on Martwick’s “Reasons”

(click on pictures to go to X — there are embedded videos you can play and see what Martwick said.)

A thread (off Stu Loren’s post):

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

News on Pritzker Signing

1 Aug 2025, Chicago Tribune/Yahoo: Illinois Gov. JB Pritzker signs police and fire pension bill expected to cost Chicago billions

CHICAGO — Gov. JB Pritzker signed into law on Friday a measure that will provide some Chicago police officers and firefighters with higher pensions, an adjustment that will eventually cost the city’s taxpayers billions of dollars.

The new law aims to bring parity between Chicago and downstate first responders and help bridge a shortfall in benefits for employees hired after 2010. Chicago police officers and firefighters argued they deserved the same benefits as downstate first responders.

“The legislation codifies adjustments the city of Chicago has been implementing over the years to tackle pension system challenges and represents a proactive step to prevent more significant financial or legal issues in the future,” Pritzker spokesperson Alex Gough said in a statement. “The Governor remains committed to maintaining fiscal responsibility at all levels of government and expects the city of Chicago to implement these changes with careful planning and fiscal discipline.”

1 Aug 2025, Center Square: Pritzker signs 124 bill impacting Chicago pensions, AI, buses, bicycles and more

Illinois Gov. J.B. Pritzker signed 124 bills Friday impacting everything from Chicago police and fire pensions to the use of artificial intelligence for mental health therapy.

Effective immediately, House Bill 3657 makes changes to Tier 2 Chicago Police and Firefighter pension benefits. Chicago Mayor Brandon Johnson said the measure was incomplete when asked how the city will pay for the bill of increased pension costs for retirees hired after 2011.

“Absent progressive revenue, it’s impossible to maintain that expectation, so the best way to put it is this is incomplete,” Johnson said last month before the measure was signed.

The city faces a billion dollar budget deficit for the next fiscal year starting in January.

Reactions from Commenters

John Arnold on Twitter/X: [plus commenters]

Austin Ward:

This raises two questions:

* What did Pritzker’s evaluation of the bill reveal?

* Why is it not being published?

Chicagoans who will be picking up the tab for billions of dollars in pension sweeteners through higher taxes or service cuts deserve answers to those questions. What they got instead was a two-sentence quote from Pritzker spokesperson Alex Gough, who tried to spin that the bill was actually responsible:

“The legislation codifies adjustments the city of Chicago has been implementing over the years to tackle pension system challenges and represents a proactive step to prevent more significant financial or legal issues in the future. The Governor remains committed to maintaining fiscal responsibility at all levels of government and expects the city of Chicago to implement these changes with careful planning and fiscal discipline.”

If that’s true, the governor has an obligation to prove it.2

That’s why the Chicago Policy Center sent a formal demand to the governor’s office this weekend for all records related to the evaluation of this bill. You can read the full Freedom of Information Act request letter here.

Jeffrey Carter:

I was at a Chicago Economic Club lunch in 2007 when I first became acutely aware of it. There was a way out then. However, at that lunch, a person stood up in the Q&A and asked about the “constitutionality” of the two public company CEO proposals. Clearly, he was a government operative.

Illinois Supreme Court Judge Anne Burke (Combine), and wife of convicted felon Democratic Alderman Ed Burke, put the nail in the coffin of the ballot initiative Illinois voters approved to reform pensions. From that point on, Illinois’ solution was a Tier 1 and a Tier 2 pension system based on seniority.

Pritzker blew that to pieces, and now every single public sector union will want the same deal. There is no way Pritzker won’t give it to them, and there is no way the Democratic supermajority won’t give it to them.

Illinois and Chicago have some of the worst-rated muni bonds in the US. I cannot fathom how the ratings agencies do not downgrade them to junk status now. That means even higher interest rates with even more covenants in the bonds, which fall directly on taxpayers. You are deceiving yourself if you think the response of all governments in Illinois will be to cut spending. It’s not happening.

Government in Illinois and the towns, counties, and cities of Illinois isn’t about governing. It’s about political patronage. Patronage allows politicians to stay in power and rule like dukes, lords, and kings over citizens. It allows them to decide where the money goes. Because they have the power of government at their fingertips, they can use the tip of the spear to enforce any decision they make, and people have to bend the knee to them.

Wirepoints: The whopping lie behind huge, new pension liability imposed by Springfield on Chicago – Wirepoints

Which is worse, financial malfeasance or a flagrant lie to justify it? Take your pick. Both are nothing short of astonishing when it comes to Gov. JB Pritzker’s signature Friday on a bill hiking benefits for two of Chicago’s pensions that already had been bled nearly dry.

A City of Chicago actuarial analysis of the bill says the change “would increase the city’s pension liabilities by more than $11 billion across the Police and Fire funds,” the Chicago Tribune reported, while dropping the funding levels of both down to less than 18%.

Those funds were already desperately underfunded, having had only 25% of the money necessary to pay out pension benefits for work already performed. They have the lowest funded ratios for local pension plans in the country.

They are so poorly funded that their combined unfunded liabilities are larger than 43 states — including New York, Michigan, and Florida, according to a recent study. If Chicago does nothing and lets its pension problem continue, then “Chicago becoming the next Detroit is not just a possibility — it’s inevitable.” That’s from an op-ed last week by a former chief financial officer of the city.

So, what does the state, which makes the law for city pensions, do about it? It expanded benefits while providing no funding source. Next year alone, Chicago will have to come up with an extra $60 million on its $1.5 billion pension tab in 2027, and that increase will grow to more than $753 million for 2055. That’s according to the city’s actuarial analysis, but the state didn’t even bother do its own actuarial analysis on the cost.

What possible excuse does the state have for the new law?

STUMP posts

5 Feb 2025: Chicago and Illinois Update: Job Posting, Tier 2 "Reform", Casino Shenanigans, and More

That has my fave Eric Allie Rahm-can-kicking gif.

9 May 2015: Illinois Pensions: A Court Ruling and on How Promises Fail

11 May 2015: Illinois Pensions: How Did We Get Here? The 1970 Constitution

Some nice lettering, at least.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

I will have more to say about Mathcamp and fun math another time — I LOVE MATH!

Episode Links

Howie Hua

It was Howie’s post that I was responding to.

Howie Hua puts out lots of short math education videos for a general audience, but may be especially useful for math teachers at a variety of levels. He teaches at Fresno State, and I believe he trains K-12 math teachers.

Howie’s YouTube Channel

Howie’s Learning Math Facebook page (and he is a mean rifle twirler)

Howie’s Twitter (X) feed

Meep Links

25 Aug 2000: A tirade against calculators in math classes

False proofs: [Remember—- they’re not true!]

Screenshots of the two proofs I read in the podcast:

Meep’s Math Writings at my old website

I gave some math book recommendations in prior posts, too:

Richard Gottesman

Richard Gottesman is the author of the first false proof (and he was a teenager when he wrote it, knowing it was false, and I thought it was a very clever false proof.

Richard Gottesman’s Facebook page

I’ve shared this post from Dr. Gottesman (he’s no longer a teenager… 25 years later!)

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Let’s look at Social Security change (not reform) proposals, too. Something will be done… but likely not until the Trust Fund is nearly exhausted. Both benefit cuts and revenue increases seem likely…but maybe some targeted benefit increases as well.

Episode Links

Interlude: Social Security Benefit Spike and Drop

BEA: National Income and Product Accounts, Monthly, 2024-May 2025

Trustees Report

The 2025 OASDI Trustees Report

The 2025 OASDI Trustees Report, officially called "The 2025 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds," presents the current and projected financial status of the trust funds.

The Trustees Report includes many tables containing historical data and projections. For convenience, we provide the reader with links to view all of these tables in one place, without the accompanying text of the report. Note that the tables in the report generally present results only for every fifth year. Therefore, we also provide links to supplemental tables by single year for readers requiring more detail. Reference should always be made to the published report for context and explanation of terminology.

Projections of the OASI Trust Fund (just Social Security retirement fund operations by itself)

I think the Trustees' Report figures are somewhat busy, so I’ve re-plotted them in Excel.

WSJ, 18 Jun 2025: Social Security’s Potential Insolvency Date Moves Up One Year

WASHINGTON—With an aging U.S. population and a smaller share of American workers who pay into it, Social Security could become unable to pay full retirement and disability benefits in 2034, one year earlier than reported last year, the program’s trustees said Wednesday.

The Social Security outlook worsened for several reasons, according to the report. Notably, in a bipartisan vote, Congress changed benefit formulas in a way that is providing more money to certain public-sector workers, including many teachers, firefighters and police officers.

In many cases, those retirees had faced limits on benefits because they worked for part of their careers in jobs outside the Social Security system. In addition, the government adjusted its expectations for fertility rates.

Without congressional action in the next decade, elderly and disabled Americans who receive Social Security could see their payments reduced by 19% in 2034, the report found. To shore up the system, lawmakers could raise taxes, reduce benefits or reach an agreement that combines both measures.

“It’s a problem that the Trump administration and the Congress need to get their arms around,” said Wendell Primus, a visiting fellow at the Brookings Institution.

OASI Trust Fund: Income and Cost History

Proposals for Social Security Reform

26 Jun 2025, Andrew Biggs: Fix Social Security, Reduce the Trade Deficit

Say, imagine a high-income couple, retiring in 2025 at the full retirement age of 67. Together, they’ll collect $94,836 in annual Social Security benefits. (I kid you not.) Assuming they each live an additional 15 years and ignoring interest, that’s $1.4 million in benefits they’ll get from Social Security.

Now, imagine that couple’s Social Security benefits were reduced. Is it plausible that they wouldn’t save more to make up the difference?

It’s not, and research from various countries concludes there is a substantial trade-off between government pension benefits and personal savings. In the table below I summarize some of their findings.

….

Note that this trade-off isn’t dollar-for-dollar. Low-income individuals don’t seem to respond very much to changes to government pension benefits. If you reduce future benefits for low-income working Americans, they don’t increase their savings very much – probably because they have so little income to save, and because they may be less financially informed regarding the benefits they would receive in the future.

That’s why we have a Social Security program in the first place: to ensure a decent retirement income for people who otherwise wouldn’t save much on their own.

But middle- and high-income households treat government pensions more as part of their overall retirement savings portfolio. They have a rough idea of the income they need in retirement as well as the income they’ll receive from Social Security. If Social Security benefits are increased, they’ll save a bit less on their own; if benefits are cut, they’ll save a bit more. (Retirement ages may also be affected, but I’m trying to keep things simple.)

January 2025, NIRS: Roadmap for the Program’s Future

The report finds:

* Americans are united in support of Social Security. Across party lines, generations, income, and education, Americans value Social Security and see it as the cornerstone of retirement security. Just four percent of Americans say it will not be important to their income in retirement.

* Rather than closing Social Security’s financing gap through benefit reductions, Americans strongly prefer bringing more revenue into the system. Eighty-five percent say we should ensure benefits are not reduced, even if it means raising taxes on some or all Americans. The most strongly preferred of all options tested is eliminating the cap on payroll tax contributions for those earning more than $400,000 per year. Additionally, Americans across all groups, including a majority of Republicans, say they are willing to pay more themselves by gradually increasing the payroll tax rate to strengthen the program’s finances.

* Americans are broadly opposed to benefit reductions. Given a broad set of options to address Social Security’s financing gap, respondents reject benefit reductions such as further increases to the retirement age or switching to a slower cost-of-living adjustment.

* Americans want to strengthen Social Security benefits. They support several targeted improvements including adding a caregiver credit for workers who take time out of the workforce to care for young children and a “bridge benefit” to protect from the early claiming reduction of those in physically demanding jobs who may be unable to continue working up to full retirement age.

* Americans need and value Social Security’s disability benefits. Ninety percent of Americans say that they will need Social Security’s disability benefits if they become disabled and unable to support themselves through work, and only four percent support cutting disability benefits. The survey also finds strong bipartisan support for updating outdated rules in Supplemental Security Income, including its $2,000 asset limit.

PDF of full report

More specific on the numbers:

● Eliminate the payroll tax cap for earnings above $400,000. The existing cap, currently at $176,100, would be preserved, while those making more than $400,000 per year, and their employers, would contribute to Social Security via payroll taxes on wages above that amount. Those affected would not receive additional benefits. This policy option was the most popular of all policy options tested.

● Gradually raise the payroll tax rate from 6.2 percent to 7.2 percent for both employers and employees. A worker earning $50,000 per year would contribute an additional $42 per month. This policy option was nearly as popular as reforming the payroll tax cap.

● Adjust the annual cost-of-living adjustment (COLA) to more accurately reflect inflation and the spending habits of older Americans.

● Provide a caregiving credit for people who take time out of the workforce to care for children under 6 — a group of workers who receive significantly lower benefits than other workers under current law.

● Provide a bridge benefit for older workers with a history of physically demanding work, to protect them from Social Security’s early retirement reduction.

● Reduce benefits for beneficiaries with higher incomes in retirement. The preferred package also included an option to reduce Social Security benefits for beneficiaries whose retirement incomes, not including Social Security, are $60,000 or more per year, or for married couples, $120,000 or more per year.

PDF of report on general population attitudes

26 Jun 2025, American Academy of Actuaries: Highlights from the 2025 Social Security Trustees Report

WHAT CAN BE DONE

The Trustees report shows it is unlikely that demographic or economic experience will extend the life of the reserves much beyond 2034. Therefore, policy changes will be necessary to address the impending depletion of the reserve fund.

Lawmakers have a range of policy options that could close or reduce Social Security's short-term and long-term financial shortfall. Policy options include increasing system revenue, decreasing system benefits, or a combination of both.

Ideas for increasing revenue include increasing tax rates on all workers, removing the cap on taxable wages, and increasing taxes paid by high-wage earners.

Ideas for decreasing benefits include gradually raising the full retirement age to reflect increased longevity, increasing the number of years used in the Average Indexed Monthly Earnings (AIME) calculation, and changing the inflation index used to adjust benefits.

Implementing changes sooner rather than later will allow more people to share in the needed revenue increases or reductions in scheduled benefits. The chart to the left indicates the percentage of the 75-year deficit “solved” by a few selected reform changes. Check out the Academy’s Social Security Challenge for further explanation.

American Academy of Actuaries’ Social Security Challenge

Other Social Security Posts

* 6 Jan 2025: Social Security Tinkering: No, It's Not Been Made Fairer (or More Solvent)

* 30 Aug 2024: Podcast: Social Security and Election 2024

* 7 Nov 2022: Podcast: Social Security Politics

* 10 Feb 2025: On Social Security Old Age Benefits Fraud(?)

* 17 Feb 2025: Visualization of Social Security Fraud(?): A STUMP Geeking-Out Special

* 13 Jun 2022: Podcast: Social Security Trust Fund Running Out

* 27 Feb 2023: Podcast: Doing the Math on Social Security and Medicare

* 6 Sept 2021: Social Security: Benefit Terminations and the Trust Fund Running out

* 18 Mar 2024: Podcast: Retirement Age, Life Expectancy, and Social Security

* June 2018: Social Security and Medicare Trust Funds – What’s Real? – lots of graphs!

* July 2017: Social Security: The Annual Trustee Report – Cash Flows, Tardiness, and Other Views – more graphs! [I like graphs]

* May 2018: A Modest Social Security Proposal – spoiler: move the minimum eligibility age up from 62 to 65.

* January 2017: Actuaries on Social Security: Bruce Schobel on Reforms, Robert Myers on History, and Richard Foster on Medicare/ACA

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Notes and Links

988 Lifeline

Graphs

Tables

Spreadsheet

Selected Prior Posts

* Jan 2025: 2023 U.S. Top Causes of Death by Sex and Age Group, Finalized

* Nov 2023: Movember 2023: Men's Trends with Suicide by Age

* Sep 2022: World Suicide Prevention Day: U.S. Suicide Trend Update through 2021

* Nov 2024: Movember 2024: Veterans and Suicide

* Nov 2022: Podcast — Movember 2022: Men and Suicide

* May 2022: Video: U.S. Mortality Trends 2020-2022 part 8: External causes of death

* Nov 2021: Movember Fundraising: Men and Suicide

* May 2017: Literal Suicide and Media

* July 2017: Mortality Monday: Suicide -- the Absolute Numbers

* July 2017: Mortality Monday: Suicide -- Rates

* Nov 2022: Read the News with Meep: On Suicide Trends by Race (and Sex) in 2021 (and Earlier)

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

Biden announcement

18 May 2025, updated 19 May 2025, NBC News: https://www.nbcnews.com/politics/joe-biden/former-president-joe-biden-diagnosed-prostate-cancer-rcna207571

Former President Joe Biden diagnosed with aggressive form of prostate cancer

The cancer has metastasized to the bone, according to the former president's personal office.

….

Biden's personal office shared Sunday that he had been diagnosed with an aggressive form of prostate cancer, prompting an outpouring of support from politicians and allies.

“Last week, President Joe Biden was seen for a new finding of a prostate nodule after experiencing increasing urinary symptoms,” his personal office said in a statement. “On Friday he was diagnosed with prostate cancer, characterized by a Gleason score of 9 (Grade Group 5) with metastasis to the bone.”

Metastasis means the cancer has spread from its primary site (in Biden’s cancer, the prostate) to other tissue in the body.

Related STUMP posts:

That second one has contrasting recommendations on prostate cancer screening.

Scott Adams announcement

19 May 2025, The Hill: https://thehill.com/homenews/5307779-dilbert-creator-scott-adams-reveals-same-cancer-diagnosis-as-biden-says-he-has-months-to-live/

‘Dilbert’ creator Scott Adams reveals same cancer diagnosis as Biden, says he has months to live

Scott Adams, the creator of the ‘Dilbert’ comic strip, has revealed he has been diagnosed with prostate cancer that has metastasized to his bones.

Adams, 67, brought up the diagnosis Monday during a stream on his Rumble account, while discussing former President Joe Biden’s similar prostate cancer diagnosis.

“I’ve decided that today’s the day that I’m going to take the opportunity, since a lot of you are here, to make an announcement of my own,” Adams said during his podcast. “Some of you have already guessed, so this won’t surprise you all. But I have the same cancer that Joe Biden has.”

“But I’ve had it longer than he’s had it. Well, longer than he’s admitted having it,” Adams added. “So my life expectancy is maybe this summer. I expect to be checking out from this domain sometime this summer.”

Adams told viewers that he had been using a walker for months due to a tumor near his spine and was in near-constant pain, describing the condition as “intolerable.”

“Every day is a nightmare, and evening is even worse,” he said.

Livejournal links

21 August 2017: https://meep.livejournal.com/2017/08/21/

An announcement

While others were watching the solar eclipse, I was sitting at the White Plains Cancer Center.

Stu has metastatic prostate cancer. He will be doing chemo & hormone therapy. No, the survival rates aren't good for prostate cancer this advanced and at his age (55). It's like getting breast cancer young -- it's more likely to be aggressive. And this one is aggressive. As far as we can tell, no tumors in the prostate itself.

We will appreciate any prayers, well-wishes, etc. For those who are Catholic, St. Peregrine may be of interest.

April 2019: https://meep.livejournal.com/2164910.html

September 2024: https://meep.livejournal.com/2164910.html

Note: I really edited that one down for the podcast. There is a lot of other stuff in the original. Stu’s death was not that surprising when it came.

Movember links

* 17 Nov 2024: Movember 2024: Prostate Cancer Mortality Trend Update, 1968-2023

* 17 Nov 2023: Movember 2023: Racial Gap in Prostate Cancer Mortality

* 1 November 2024: Movember 2024 Kickoff: In Memory of Stu

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

The Pillar

2 May 2025: UK court orders Vatican to pay Mincione millions in legal costs

The High Court of England and Wales has ordered the Vatican Secretariat of State to pay millions of dollars in legal fees to Raffaele Mincione, the investment manager who sold the Vatican the building at the center of the London property scandal.

19 Mar 2025: Vatican court: Auditor cannot bring ‘immoral and indecent’ evidence at appeal

Judges told the Vatican’s former auditor general that his termination lawsuit can not move forward unless his lawyers exclude from their case evidence that judges consider “immoral and indecent” — including evidence of alleged financial misconduct that could harm the “good name” of high-ranking Vatican officials.

The directive came from Vatican City judges considering whether to admit former Vatican auditor Libero Milone’s appeal against the 2024 rejection of his wrongful termination lawsuit.

15 Apr 2025: Does Pope Francis need to appoint a Vatican ‘special prosecutor’?

Messages exchanged between witnesses in the Vatican financial crimes trial appear to show collusion between them as they prepared to give evidence, according to new Italian media reports.

The Pillar’s Vatican Finances category

STUMP Related Links

30 March 2017: Pensions at the Supreme Court: Church Plans

I am not a lawyer, but this is pretty bad that it was allowed to go along in uncertainty for so long.

But there’s a reason it was never brought up legally before now.

It’s because now, many of these pensions are bankrupt. And the pensioners are finding they have no backstop whatsoever, unlike with regular private pension plans, which provide cover via ERISA and the PBGC.

There’s also the issue of multiple mergers, orphaned plans, etc.

….

I’m fine with cutting down the various departments making new law via their rules-making (and the wiggle room people have found is that the letters aren’t official offical rules-making. Though they come from the IRS. And interpret the rules.) But many government-career-types might not like this.

I am not looking forward to millions if not billions of increased liabilities on Catholic parishoners in the case of an adverse ruling, but if they really are church plans, the Church needs to be fulfilling its promises.

12 Sept 2018: Trying to Deflect the Blame: Calpers and the Catholic Church (and Trump!)

No, you cannot be silent in the face of evil. I understand there is repentance, but ffs, when alcoholic priests were treated and repented… nobody was so foolish to tell nobody of that weakness, and definitely not to allow the priest full run of the sacramental wine. Similarly for priests who embezzled — they no longer were allowed to handle any parish finances… or ANY finances… under church authority.

21 Oct 2020: Read the News with Meep: Vatican Credit Bets, Trump Taxes, Houston Pension Governance, and More!

Speaking as a Catholic who has donated to not only my local parish, but also my archdiocese (New York), and global Catholic concerns (Catholic Relief Services), I have a simple question: why are any clergy running church finances? There’s a reason each parish is supposed to have a lay finance council. (The reason: actual experience with priests absconding with church funds). Indeed, I am far more likely to suspect churchmen over money than any other shenanigans, except possibly alcoholism.

Given the even-swampier aspects of Vatican politics, I would be surprised if the Vatican tries Becciu on any financial shenanigans. I don’t even care if they do.

Turns out, they did try Becciu, and convicted him.

From farther down in that post:

By the way, Today’s Mass reading is from the Gospel of Luke [Luke 12:39-48]:

[47] That servant who knew his master’s willbut did not make preparations nor act in accord with his willshall be beaten severely;[48] and the servant who was ignorant of his master’s willbut acted in a way deserving of a severe beatingshall be beaten only lightly.Much will be required of the person entrusted with much,and still more will be demanded of the person entrusted with more.”

The cardinals would do well to remember that. And remember why Dante placed so many cardinals and Popes in Inferno.

23 Aug 2022: Podcast - Public Pensions, ESG, DeSantis, and The Catholic Church

22 Nov 2024: Post-Election Public Finance and Pension Round-Up

12 Apr 2025: Podcast - Vatican Pensions: Will the Participants Get Their Promised Benefits?

I look at recent coverage from The Pillar, which had gotten a report from 2015 on the parlous state of Vatican pensions for lay employees, and updated reporting in 2025 on the current state of pensions. I discuss the problem of unfunded pensions from a Catholic perspective, given these are pensions sponsored by the Vatican sovereign.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

The Pillar Coverage

7 April 2025: Vatican pension deficit estimated at 1.4 billion euros — 10 years ago

Vatican officials warned the fund would be 'unmanagable' in a decade, ten years before Pope Francis warned of 'difficult decisions' to come.

The Holy See pension fund had an unfunded liability of almost 1.5 billion euros a decade ago, according to internal Vatican financial reports obtained by The Pillar.

The same documents show that Vatican financial authorities proposed measures to address the pension problem in 2015, while sources say that “virtually nothing” was done to implement those measures in the intervening years.

Meanwhile, the fund has continued into the red, in line with the Holy See’s broad financial crisis, raising serious doubts about the Vatican’s ability to pay the pensions of lay and clerical employees.

The Vatican has not confirmed the size of the current unfunded liability, but Vatican financial officials warn that the situation has only deteriorated in recent years.

The magnitude of unfunded liability — dating back years sheds — new light on Pope Francis’ decision in November last year to appoint Cardinal Kevin Farrell to oversee the fund as sole director, and to warn that the pension fund would be unable to meet its obligations “in the medium term.”

22 Nov 2024: Vatican union wary of pension fund ‘maneuver’

Vatican City’s trade union expressed concern Thursday at Pope Francis’ announcement of sweeping changes to the Vatican’s pension fund.

The Association of Vatican Lay Workers, known by its Italian initials ADLV, complained Nov. 21 that Vatican’s management of the pension fund has long been opaque, and said employees were “exhausted by cuts.”

The ADLV was responding to Pope Francis’ declaration that the Vatican needed to introduce “urgent structural measures” to ensure the sustainability of its pension fund.

In a Nov. 21 letter to cardinals and heads of curial departments, the pope said independent experts had highlighted “a serious prospective imbalance in the fund,” which meant “the current system is not able to guarantee in the medium term the fulfillment of the pension obligation for future generations.”

21 Nov 2024: Francis names Cardinal Farrell as Vatican ‘pension czar’

Pope Francis announced Thursday that he has appointed Cardinal Kevin Farrell as the sole director of the pension fund for the Holy See, covering former employees of both the Roman curia and the Vatican city state.

Francis took the decision, he said in a letter to the College of Cardinals and officials of curia, in the light of “a serious prospective imbalance of the fund” leaving it unable to meet its obligations.

“Unfortunately,” said the pope, “at the end of the latest in-depth analyses carried out by independent experts, indicates a serious prospective imbalance of the fund, whose dimension tends to widen over time in the absence of interventions.”

“In concrete terms, this means that the current system is not able to guarantee in the medium term the fulfillment of the pension obligation for future generations.”

Pillar coverage categories

Vatican finance

Vatican finances

Prior STUMP pieces

Vatican coverage in November 2024 in here:

On church plans not covered by ERISA:

Oh wait, what isn’t covered by ERISA?

Public pensions.

(also “church plans” which also controversial…. but I will drop that for now)

Catholic content

Catechism for the Catholic Church: Article 7, The Seventh Commandment

Article 7 The Seventh Commandment

THE SEVENTH COMMANDMENT

You shall not steal.

2401 The seventh commandment forbids unjustly taking or keeping the goods of one's neighbor and wronging him in any way with respect to his goods. It commands justice and charity in the care of earthly goods and the fruits of men's labor. For the sake of the common good, it requires respect for the universal destination of goods and respect for the right to private property. Christian life strives to order this world's goods to God and to fraternal charity.

Other paragraphs:

2410 Promises must be kept and contracts strictly observed to the extent that the commitments made in them are morally just. A significant part of economic and social life depends on the honoring of contracts between physical or moral persons - commercial contracts of purchase or sale, rental or labor contracts. All contracts must be agreed to and executed in good faith.

2411 Contracts are subject to commutative justice which regulates exchanges between persons in accordance with a strict respect for their rights. Commutative justice obliges strictly; it requires safeguarding property rights, paying debts, and fulfilling obligations freely contracted. Without commutative justice, no other form of justice is possible.

One distinguishes commutative justice from legal justice which concerns what the citizen owes in fairness to the community, and from distributive justice which regulates what the community owes its citizens in proportion to their contributions and needs.

2412 In virtue of commutative justice, reparation for injustice committed requires the restitution of stolen goods to their owner:

Jesus blesses Zacchaeus for his pledge: "If I have defrauded anyone of anything, I restore it fourfold." Those who, directly or indirectly, have taken possession of the goods of another, are obliged to make restitution of them, or to return the equivalent in kind or in money, if the goods have disappeared, as well as the profit or advantages their owner would have legitimately obtained from them. Likewise, all who in some manner have taken part in a theft or who have knowingly benefited from it - for example, those who ordered it, assisted in it, or received the stolen goods - are obliged to make restitution in proportion to their responsibility and to their share of what was stolen.

2434 A just wage is the legitimate fruit of work. To refuse or withhold it can be a grave injustice. In determining fair pay both the needs and the contributions of each person must be taken into account. "Remuneration for work should guarantee man the opportunity to provide a dignified livelihood for himself and his family on the material, social, cultural and spiritual level, taking into account the role and the productivity of each, the state of the business, and the common good." Agreement between the parties is not sufficient to justify morally the amount to be received in wages.

The Parable of the Wise and Foolish Virgins

Matthew 25: 1 - 13, KJV

25 Then shall the kingdom of heaven be likened unto ten virgins, which took their lamps, and went forth to meet the bridegroom.

2 And five of them were wise, and five were foolish.

3 They that were foolish took their lamps, and took no oil with them:

4 But the wise took oil in their vessels with their lamps.

5 While the bridegroom tarried, they all slumbered and slept.

6 And at midnight there was a cry made, Behold, the bridegroom cometh; go ye out to meet him.

7 Then all those virgins arose, and trimmed their lamps.

8 And the foolish said unto the wise, Give us of your oil; for our lamps are gone out.

9 But the wise answered, saying, Not so; lest there be not enough for us and you: but go ye rather to them that sell, and buy for yourselves.

10 And while they went to buy, the bridegroom came; and they that were ready went in with him to the marriage: and the door was shut.

11 Afterward came also the other virgins, saying, Lord, Lord, open to us.

12 But he answered and said, Verily I say unto you, I know you not.

13 Watch therefore, for ye know neither the day nor the hour wherein the Son of man cometh.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

CONTINUING THE REDUCTION OF THE FEDERAL BUREAUCRACY

https://www.whitehouse.gov/presidential-actions/2025/03/continuing-the-reduction-of-the-federal-bureaucracy/

By the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered:

Section 1. Purpose. This order continues the reduction in the elements of the Federal bureaucracy that the President has determined are unnecessary.

Sec. 2. Reducing the Scope of the Federal Bureaucracy.(a) Except as provided in subsection (b) of this section, the non-statutory components and functions of the following governmental entities shall be eliminated to the maximum extent consistent with applicable law, and such entities shall reduce the performance of their statutory functions and associated personnel to the minimum presence and function required by law:(i) the Federal Mediation and Conciliation Service;(ii) the United States Agency for Global Media;(iii) the Woodrow Wilson International Center for Scholars in the Smithsonian Institution;(iv) the Institute of Museum and Library Services;(v) the United States Interagency Council on Homelessness;(vi) the Community Development Financial Institutions Fund; and(vii) the Minority Business Development Agency.(b) Within 7 days of the date of this order, the head of each governmental entity listed in subsection (a) of this section shall submit a report to the Director of the Office of Management and Budget confirming full compliance with this order and explaining which components or functions of the governmental entity, if any, are statutorily required and to what extent.(c) In reviewing budget requests submitted by the governmental entities listed in subsection (a) of this section, the Director of the Office of Management and Budget or the head of any executive department or agency charged with reviewing grant requests by such entities shall, to the extent consistent with applicable law and except insofar as necessary to effectuate an expected termination, reject funding requests for such governmental entities to the extent they are inconsistent with this order.

Daily Wire on FMCS

https://x.com/lukerosiak/status/1902412374318923833

19 March 2025, Daily Wire: Inside The Now-Shuttered Federal Agency Where Employees Lived ‘Like Reigning Kings’

One of the seven small federal agencies that President Donald Trump ordered downsized or eliminated on Friday was rife with corruption, with its employees hiring friends and relatives, commissioning paintings of themselves, and using government credit cards to indulge in constant luxuries.

The Federal Mediation and Conciliation Service (FMCS) occupied a nine-story office tower on D.C.’s K Street for only 60 employees, many of whom actually worked from home, prior to the pandemic. Its managers had luxury suites with full bathrooms; one manager would often be “in the shower” when she was needed, while another used her bathroom as a cigarette lounge. FMCS recorded its director as being on a years-long business trip to D.C. so he could have all of his meals and living expenses covered by taxpayers, simply for showing up to the office.

FMCS is a 230-employee agency that exists to serve as a voluntary mediator between unions and businesses. As an “independent agency,” its director nominally reports to the president, but the agency is so small that in effect, there is no oversight at all — and it showed, becoming a real-life caricature of all the excesses that the Department of Government Efficiency has alleged take place in government.

….

FMCS seemed, quite clearly, to exist for the benefit of those on its payroll, and not much else. One employee told me: “Let me give you the honest truth: A lot of FMCS employees don’t do a hell of a lot, including myself. Personally, the reason that I’ve stayed is that I just don’t feel like working that hard, plus the location on K Street is great, plus we all have these oversized offices with windows, plus management doesn’t seem to care if we stay out at lunch a long time. Can you blame me?”

“Recreation and reception fund.”

Top FMCS official George Cohen used a “recreation and reception fund” to order champagne and $200 coasters for his office, and to purchase artwork painted by his wife. The tiny agency commissioned paintings of its top employees — as one employee told me, “like they were reigning kings or something…I’ve never seen anything like it before.” It spent $2,402 retouching the portrait of someone who briefly held the top job in an acting capacity.

….

When Charles Burton retired from FMCS, he incorporated an LLC to which another FMCS employee paid $85,000 using his purchase card, listing it as a “Call Center Service,” even though the company had neither a website nor a working phone.

When an accountant, Carol Booth, blew the whistle on financial abuses to the General Services Administration, which manages purchase cards and contracting, Cohen forced her to send an email (which he wrote under her name) rescinding her statement.

Like something out of “The Office,” the employees spent an inordinate amount of time and money congratulating one another for being employed there and engaging in “work” that really amounted to pampering themselves.

….

What surprised me most about my FMCS investigation was what happened afterward: nothing. An inspector general made a referral to the FBI, but there were no prosecutions. Instead, President Barack Obama nominated a chief subject of the investigation to the top job.

A decade later, Trump has done what even the agency’s own employees said should happen: shut it down.

Circumlocution Office

Little Dorrit, Project Gutenberg

There’s a good miniseries from 2008: IMDB Listing

It stars Clare Foy and Matthew McFayden. Andy Serkis is the villain.

The miniseries is available on Prime: Little Dorrit - alas, I don’t think the Circumlocution Office comes up in this adaptation.

That’s the benefit of reading the book.

CHAPTER 10. Containing the whole Science of Government

The Circumlocution Office was (as everybody knows without being told) the most important Department under Government. No public business of any kind could possibly be done at any time without the acquiescence of the Circumlocution Office. Its finger was in the largest public pie, and in the smallest public tart. It was equally impossible to do the plainest right and to undo the plainest wrong without the express authority of the Circumlocution Office. If another Gunpowder Plot had been discovered half an hour before the lighting of the match, nobody would have been justified in saving the parliament until there had been half a score of boards, half a bushel of minutes, several sacks of official memoranda, and a family-vault full of ungrammatical correspondence, on the part of the Circumlocution Office.

This glorious establishment had been early in the field, when the one sublime principle involving the difficult art of governing a country, was first distinctly revealed to statesmen. It had been foremost to study that bright revelation and to carry its shining influence through the whole of the official proceedings. Whatever was required to be done, the Circumlocution Office was beforehand with all the public departments in the art of perceiving—HOW NOT TO DO IT.

Through this delicate perception, through the tact with which it invariably seized it, and through the genius with which it always acted on it, the Circumlocution Office had risen to overtop all the public departments; and the public condition had risen to be—what it was.

It is true that How not to do it was the great study and object of all public departments and professional politicians all round the Circumlocution Office. It is true that every new premier and every new government, coming in because they had upheld a certain thing as necessary to be done, were no sooner come in than they applied their utmost faculties to discovering How not to do it. It is true that from the moment when a general election was over, every returned man who had been raving on hustings because it hadn’t been done, and who had been asking the friends of the honourable gentleman in the opposite interest on pain of impeachment to tell him why it hadn’t been done, and who had been asserting that it must be done, and who had been pledging himself that it should be done, began to devise, How it was not to be done. It is true that the debates of both Houses of Parliament the whole session through, uniformly tended to the protracted deliberation, How not to do it. It is true that the royal speech at the opening of such session virtually said, My lords and gentlemen, you have a considerable stroke of work to do, and you will please to retire to your respective chambers, and discuss, How not to do it. It is true that the royal speech, at the close of such session, virtually said, My lords and gentlemen, you have through several laborious months been considering with great loyalty and patriotism, How not to do it, and you have found out; and with the blessing of Providence upon the harvest (natural, not political), I now dismiss you. All this is true, but the Circumlocution Office went beyond it.

Because the Circumlocution Office went on mechanically, every day, keeping this wonderful, all-sufficient wheel of statesmanship, How not to do it, in motion. Because the Circumlocution Office was down upon any ill-advised public servant who was going to do it, or who appeared to be by any surprising accident in remote danger of doing it, with a minute, and a memorandum, and a letter of instructions that extinguished him. It was this spirit of national efficiency in the Circumlocution Office that had gradually led to its having something to do with everything. Mechanicians, natural philosophers, soldiers, sailors, petitioners, memorialists, people with grievances, people who wanted to prevent grievances, people who wanted to redress grievances, jobbing people, jobbed people, people who couldn’t get rewarded for merit, and people who couldn’t get punished for demerit, were all indiscriminately tucked up under the foolscap paper of the Circumlocution Office.

Numbers of people were lost in the Circumlocution Office. Unfortunates with wrongs, or with projects for the general welfare (and they had better have had wrongs at first, than have taken that bitter English recipe for certainly getting them), who in slow lapse of time and agony had passed safely through other public departments; who, according to rule, had been bullied in this, over-reached by that, and evaded by the other; got referred at last to the Circumlocution Office, and never reappeared in the light of day. Boards sat upon them, secretaries minuted upon them, commissioners gabbled about them, clerks registered, entered, checked, and ticked them off, and they melted away. In short, all the business of the country went through the Circumlocution Office, except the business that never came out of it; and its name was Legion.

Sometimes, angry spirits attacked the Circumlocution Office. Sometimes, parliamentary questions were asked about it, and even parliamentary motions made or threatened about it by demagogues so low and ignorant as to hold that the real recipe of government was, How to do it. Then would the noble lord, or right honourable gentleman, in whose department it was to defend the Circumlocution Office, put an orange in his pocket, and make a regular field-day of the occasion. Then would he come down to that house with a slap upon the table, and meet the honourable gentleman foot to foot. Then would he be there to tell that honourable gentleman that the Circumlocution Office not only was blameless in this matter, but was commendable in this matter, was extollable to the skies in this matter. Then would he be there to tell that honourable gentleman that, although the Circumlocution Office was invariably right and wholly right, it never was so right as in this matter. Then would he be there to tell that honourable gentleman that it would have been more to his honour, more to his credit, more to his good taste, more to his good sense, more to half the dictionary of commonplaces, if he had left the Circumlocution Office alone, and never approached this matter. Then would he keep one eye upon a coach or crammer from the Circumlocution Office sitting below the bar, and smash the honourable gentleman with the Circumlocution Office account of this matter. And although one of two things always happened; namely, either that the Circumlocution Office had nothing to say and said it, or that it had something to say of which the noble lord, or right honourable gentleman, blundered one half and forgot the other; the Circumlocution Office was always voted immaculate by an accommodating majority.

[chapter passes]

‘Mr Clennam?’ said Mr Barnacle. ‘Be seated.’

Mr Clennam became seated.

‘You have called on me, I believe,’ said Mr Barnacle, ‘at the Circumlocution—’ giving it the air of a word of about five-and-twenty syllables—‘Office.’

‘I have taken that liberty.’

Mr Barnacle solemnly bent his head as who should say, ‘I do not deny that it is a liberty; proceed to take another liberty, and let me know your business.’

‘Allow me to observe that I have been for some years in China, am quite a stranger at home, and have no personal motive or interest in the inquiry I am about to make.’

Mr Barnacle tapped his fingers on the table, and, as if he were now sitting for his portrait to a new and strange artist, appeared to say to his visitor, ‘If you will be good enough to take me with my present lofty expression, I shall feel obliged.’

‘I have found a debtor in the Marshalsea Prison of the name of Dorrit, who has been there many years. I wish to investigate his confused affairs so far as to ascertain whether it may not be possible, after this lapse of time, to ameliorate his unhappy condition. The name of Mr Tite Barnacle has been mentioned to me as representing some highly influential interest among his creditors. Am I correctly informed?’

It being one of the principles of the Circumlocution Office never, on any account whatever, to give a straightforward answer, Mr Barnacle said, ‘Possibly.’

‘On behalf of the Crown, may I ask, or as private individual?’

‘The Circumlocution Department, sir,’ Mr Barnacle replied, ‘may have possibly recommended—possibly—I cannot say—that some public claim against the insolvent estate of a firm or copartnership to which this person may have belonged, should be enforced. The question may have been, in the course of official business, referred to the Circumlocution Department for its consideration. The Department may have either originated, or confirmed, a Minute making that recommendation.’

‘I assume this to be the case, then.’

‘The Circumlocution Department,’ said Mr Barnacle, ‘is not responsible for any gentleman’s assumptions.’

‘May I inquire how I can obtain official information as to the real state of the case?’

‘It is competent,’ said Mr Barnacle, ‘to any member of the—Public,’ mentioning that obscure body with reluctance, as his natural enemy, ‘to memorialise the Circumlocution Department. Such formalities as are required to be observed in so doing, may be known on application to the proper branch of that Department.’

‘Which is the proper branch?’

‘I must refer you,’ returned Mr Barnacle, ringing the bell, ‘to the Department itself for a formal answer to that inquiry.’

‘Excuse my mentioning—’

‘The Department is accessible to the—Public,’ Mr Barnacle was always checked a little by that word of impertinent signification, ‘if the—Public approaches it according to the official forms; if the—Public does not approach it according to the official forms, the—Public has itself to blame.’

Mr Barnacle made him a severe bow, as a wounded man of family, a wounded man of place, and a wounded man of a gentlemanly residence, all rolled into one; and he made Mr Barnacle a bow, and was shut out into Mews Street by the flabby footman.

‘I want to know—’

‘Look here. Upon my soul you mustn’t come into the place saying you want to know, you know,’ remonstrated Barnacle junior, turning about and putting up the eye-glass.

‘I want to know,’ said Arthur Clennam, who had made up his mind to persistence in one short form of words, ‘the precise nature of the claim of the Crown against a prisoner for debt, named Dorrit.’

‘I say. Look here. You really are going it at a great pace, you know. Egad, you haven’t got an appointment,’ said Barnacle junior, as if the thing were growing serious.

‘I want to know,’ said Arthur, and repeated his case.

Barnacle junior stared at him until his eye-glass fell out, and then put it in again and stared at him until it fell out again. ‘You have no right to come this sort of move,’ he then observed with the greatest weakness. ‘Look here. What do you mean? You told me you didn’t know whether it was public business or not.’

‘I have now ascertained that it is public business,’ returned the suitor, ‘and I want to know’—and again repeated his monotonous inquiry.

Its effect upon young Barnacle was to make him repeat in a defenceless way, ‘Look here! Upon my SOUL you mustn’t come into the place saying you want to know, you know!’ The effect of that upon Arthur Clennam was to make him repeat his inquiry in exactly the same words and tone as before. The effect of that upon young Barnacle was to make him a wonderful spectacle of failure and helplessness.

Office Space

IMDB listing for Office Space

Quotes:

Peter Gibbons: The thing is, Bob, it's not that I'm lazy, it's that I just don't care.

Bob Porter: Don't... don't care?

Peter Gibbons: It's a problem of motivation, all right? Now if I work my ass off and Initech ships a few extra units, I don't see another dime, so where's the motivation? And here's something else, Bob: I have eight different bosses right now.

Bob Slydell: I beg your pardon?

Peter Gibbons: Eight bosses.

Bob Slydell: Eight?

Peter Gibbons: Eight, Bob. So that means that when I make a mistake, I have eight different people coming by to tell me about it. That's my only real motivation is not to be hassled, that and the fear of losing my job. But you know, Bob, that will only make someone work just hard enough not to get fired.

Bill Lumbergh: Hello Peter, what's happening? Ummm, I'm gonna need you to go ahead come in tomorrow. So if you could be here around 9 that would be great, mmmk... oh oh! and I almost forgot ahh, I'm also gonna need you to go ahead and come in on Sunday too, kay. We ahh lost some people this week and ah, we sorta need to play catch up.

Dom Portwood: Hi, Peter. What's happening? We need to talk about your TPS reports.

Peter Gibbons: Yeah. The coversheet. I know, I know. Uh, Bill talked to me about it.

Dom Portwood: Yeah. Did you get that memo?

Peter Gibbons: Yeah. I got the memo. And I understand the policy. And the problem is just that I forgot the one time. And I've already taken care of it so it's not even really a problem anymore.

Dom Portwood: Ah! Yeah. It's just we're putting new coversheets on all the TPS reports before they go out now. So if you could go ahead and try to remember to do that from now on, that'd be great. All right!

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

American Airlines, 401(k), ESG and ERISA

Reuters, 11 Jan 2025: American Airlines' focus on ESG in retirement plan is illegal, US judge rules

A federal judge in Texas on Friday said American Airlines (AAL.O), opens new tab violated federal law by basing investment decisions for its employee retirement plan on environmental, social and other non-financial factors.

The ruling by U.S. District Judge Reed O'Connor appeared to be the first of its kind amid growing backlash by conservatives to an uptick in socially-conscious investing.

O'Connor said American had breached its legal duty to make investment decisions based solely on the financial interests of 401(k) plan beneficiaries by allowing BlackRock (BLK.N), opens new tab, its asset manager and a major shareholder, to focus on environmental, social and corporate governance (ESG) factors.

….

BlackRock, which on Thursday said it was leaving an environmentally focused investor group under pressure from Republican politicians, is not involved in the lawsuit.

In November, BlackRock and two rival asset managers were sued by 11 Republican-led states who claim the firms violated federal antitrust law through climate activism that reduced coal production and caused energy costs to increase. BlackRock called the claims baseless.

WSJ, 23 Nov 2022: Biden Puts Your 401(k) to ESG Work

The Biden regulatory machine doesn’t rest, even in Thanksgiving week. On Tuesday the Labor Department finalized a rule that empowers retirement plan sponsors to invest based on environmental, social and governance (ESG) factors and put your 401(k) to progressive political work.

The Labor Department casts its rule as a mere clarification of the 1974 Employee Retirement Income Security Act (Erisa), which requires that retirement plan sponsors act “solely in the interest” of participants and beneficiaries. A Trump Labor rule barred retirement managers from considering factors that weren’t material to financial performance and risk.

Asset managers and union pension plans claimed the Trump rule limited their discretion to consider such ESG factors as climate, workforce diversity and labor relations. The Biden DOL says it created a “chilling effect” on ESG investing. Its replacement rule gives plan sponsors nearly unlimited discretion and legal protection to invest based on these often political considerations.

“A fiduciary may reasonably conclude that climate-related factors” including “government regulations and policies to mitigate climate change, can be relevant to a risk/return analysis of an investment,” the rule says. Ditto workforce diversity, inclusion and labor relations since they may affect employee hiring, retention and productivity.

STUMP, Nov 2022: ESG and ERISA: Pity the Poor Tort Lawyers Their Lost Business as Biden Gives a Safe Harbor For Now

The ESG funds already existed, for what it’s worth. They’ve existed for decades. But they were niche, having to sell via retail, attracting customers one-by-one. Some people are willing to pay the extra fees these funds charge, but it also costs more to acquire customers one-by-one.

The big money is attracting big buckets of money at a time — i.e., official retirement accounts through employment. But that’s why we have legislation like ERISA, because yes, we know that big piles of money attract all sorts of players.

One of the results of ERISA is that tort lawyers can seek big paydays via class action lawsuits against ERISA fiduciaries. It keeps the fiduciaries in line, usually the deep-pocket employers, who select the fund managers and funds for private pensions and 401(k)s. In general, for 401(k) funds, the lawsuits were around fee levels being too high. There had been a few lawsuits over default fund choices.

The point of all this is to help the inherent principal-agent problem at the heart of all this — the principal here is the employee who is having deferred compensation invested on their behalf, and multiple agents are acting for them: the employer and the fund managers in particular.

The employer may have something of an aligned interest, but they may care more about their reputation as an “enlightened” player in using ESG funds in their pension. So watch out, those with DB pensions!

As for fund managers, no, they don’t necessarily align their interests with those with 401(k)s. They get their fees as a percentage of the assets under management, usually, no matter the performance. They can lose assets if customers aren’t happy, but many people don’t change their allocations once their money is deposited.

ERISA imposes a fiduciary duty on these players, and in one particular, the employers in selecting appropriate funds for default choices in 401(k)s. Before this latest move by the Biden admin, the fiduciary duty meant the focus was the financial performance of the fund (and thus focused on the investment strategy and the fees charged), and so this kept a rein on how outlandish the funds could get.

The balancing powers were the tort lawyers who could break out class action lawsuits against these sponsoring employers. I have seen what I considered absurd lawsuits over a few basis point difference in fees (0.01 percentage point = 1 basis point — a standard unit for asset management fees).

Given that ESG funds definitely have higher fees, and by necessity will have lower returns than other funds, of course, prior ERISA interpretations of fiduciary duty requiring a focus on investment returns would have deterred sponsors from chasing the ESG dream.

Ohio Public Pensions and ESG

15 Jan 2025, ALEC: New Ohio Law Follows ALEC Model to Protect Pensioners and Taxpayers

In December, Ohio Governor Mike DeWine signed Senate Bill 6, which codified the gold standard of state fiduciary rules to protect public pension beneficiaries and taxpayers. The legislation follows the principles laid out in the ALEC model State Government Employee Retirement Protection Act, one of the ALEC Essential Policy Solutions for 2025.

Senate Bill 6 was sponsored by the late Ohio State Senator Kirk Schuring. His legislation requires that fiduciaries only consider pecuniary factors—those having a material effect on the financial risk and return—when making investment decisions. This standard ensures that funds contributed toward pension benefits are used solely for the financial interests of participants and beneficiaries. Other states including Arkansas, Florida, Kentucky, Montana, New Hampshire, South Carolina, Utah, and West Virginia have implemented similar protections.

Politically motivated investment strategies do not help public pension systems provide for retirement security. In recent years, some investment firms and pension systems have focused on strategies like ESG (environmental, social, and governance) rather than maximizing returns. They have also used their control of proxy votes to influence company decisions in ways that go against the financial interests or workers, retirees, and taxpayers. The latest edition of ALEC’s Unaccountable and Unaffordable reports that state pension liabilities total nearly $7 trillion, or just under $21,000 for every man, woman, and child in the United States. Using these funds for political crusades instead of prioritizing investment returns can exacerbate the problem of unfunded liabilities, requiring additional contributions from taxpayers and pensioners.

As Andy Puzder and Mike Edleson explained in The Wall Street Journal, and as ALEC research shows, politicized investing yields lower returns than investing without political constraints – a story that California knows all too well. CalPERS, California’s largest pension system, decided to divest from all tobacco-related stocks in 2001. Two decades later, the tobacco stock divestment has cost California public sector workers and retirees at least $3.5 billion.

Pensions are designed to securely provide retirement to public employees. Contributions are paid out during employment and benefits are paid out after retirement. To operate according to their design, the funds must be invested with this focus on financial risk and return. Thanks to the enactment of Senate Bill 6, taxpayers in Ohio can be sure that political and social objectives are not being prioritized over the health of public pension plans.

12 Dec 2024, ai-CIO: Ohio Passes Bill Barring State Pension Funds, University Endowments From Prioritizing ESG in Investing, Stakeholder Activism

A bill passed in Ohio seeks to limit the state’s five public pension funds, the workers’ compensation bureau and university endowments in the state from perusing investments influenced by social and environmental policy. Ohio Senate Bill 6, passed on Tuesday, will also aim to ban funds from engaging in shareholder activism.

The bill passed in the Ohio Senate in May 2023, by a vote of 26 to 7. The House passed the bill on Tuesday, 62 to 27, and it now awaits a signature from Ohio Governor Mike DeWine.

The bill cites the fiduciary duty of the governing boards of the pensions, compensation bureau and endowments and requires them to “make investment decisions with the sole purpose of maximizing the return on its investments.”

It goes on to order that each of the named funds’ boards “shall not adopt a policy, or take any action to promote a policy, under which the board makes investment decisions with the primary purpose of influencing any social or environmental policy or attempting to influence the governance of any corporation.”

STUMP, Dec 2024: Pensions Round-Up: ESG, Skipping Payments, Technological Debt, and More!

Poor corporate governance can lead to all sorts of bad results. You want to influence corporate governance as a large investor. It will affect the value of your investment!

I can give all sorts of examples — in terms of corporate governance with poor alignment with investors when you get management capture. (aka the good ole principal-agent problem.)

You want to influence how the top executives are compensated (that’s governance). You want to influence how the board of directors, especially outsider directors, are selected (that’s governance). You want to make sure that interests are aligned and that you don’t get, say, a bunch of people snowed by a charismatic CEO in an area they know nothing about.

Maine PERS Divestment

11 July 2024, Maine Morning Star: Activists and Maine Public Employee Retirement System at odds over fossil fuel divestment progress

Roughly 50 activists and beneficiaries of the Maine Public Employee Retirement System rallied in Augusta on Thursday outside the MainePERS board meeting to demand that its members make more progress in fully divesting from fossil fuels. However, according to MainePERS officials, the system has made the changes required by state law.

“We felt like we were making progress but after this last rebuttal that was released, it’s clear that it was superficial progress,” said Hope Light, campaign manager for Divest Maine, the coalition of MainePERS beneficiaries and climate advocates, associated with groups such as the Sierra Club and Third Act Maine, behind the demonstration.

At the request of the coalition, MainePERS had agreed to look into public equity indexing approaches that balance financial targets and lower fossil fuel exposure, which have been used by other pension funds, such as CalSTRS. However, in a board of trustees public meeting packet released this week, MainePERS concluded that its current passive approach to investing in public equities remains optimal for meeting the system’s investment goals.

….

In a presentation to the Legislature’s Labor and Housing Committee about divestment in March, MainePERS officials said the system’s fossil fuel investment exposure fell from 7.8% of the fund’s assets in 2022 to 6.5% in 2023, decreasing by $193 million. MainePERS’ exposure to fossil fuels is likely to decline by a third by 2026 as investments expire, the officials estimated. However, MainePERS CEO Rebecca Wyke said that fully divesting would not be in the best financial interests of beneficiaries.

16 Dec 2024, P&I: MainePERS cuts fossil-fuel holdings but won't divest completely by Jan. 1, 2026, deadline

The Maine Public Employees Retirement System, Augusta, reduced its fossil fuel investments to 6.1%, or $1.21 billion, of total pension assets for the fiscal year ended June 30, down from 6.5% for the year-ago period, said a pension system report describing the progress mandated by a 2021 fossil-fuel divestment law.

Although the law directed MainePERS to divest all fossil fuel holdings by Jan. 1, 2026, the report, like previous annual reports, said total divesting by that deadline would incur significant costs and hamper the $20 billion pension system’s investment strategy.

“Achieving and maintaining a completely fossil fuel-free portfolio by 2026 would require both disposing of significant existing investments as well as making undesirable fundamental changes to MainePERS’ investment approach,” said the report presented Dec. 12 at the pension systems’ trustees’ monthly meeting.

“MainePERS’ holdings of fossil fuel investments are widespread, with a majority of asset classes containing at least some fossil fuel exposure,” the report said.

9 Jan 2025, Maine PERS, Board of Trustees, Public Meeting Packet

Fiduciary Duty of Trustees

As noted above, the MainePERS Board of Trustees owes fiduciary duties to MainePERS’ members, retirees, and beneficiaries.

First, the Board owes a duty of loyalty, which means to follow the exclusive benefit rule established in the Maine Constitution by acting solely in the interests of the members, retirees, and beneficiaries as recipients of retirement or related benefits. This duty includes not using the Board’s position of trust for personal gain or to advance other causes.

Second, the Board owes a duty of prudence. This requires the exercise of reasonable care, skill, and caution. In making investment decisions, prudence requires considering the portfolio as a whole, the role each investment plays in the portfolio, and diversification. See 18-B M.R.S. §§ 804, 902, 903. Additionally, the Board “may incur only costs that are reasonable in relation to the trust property, the purposes of the trust and the skills of the” Board. 18-B M.R.S. § 805.

The fossil fuel divestment statute does not alter these fiduciary duties. Analyzing this and the for-profit prison divestment statute, the Attorney General’s Office explains:

The subject statutes do not affect the Board’s exercise of its fiduciary duties. And they do not require the Board to either cease investing in or divest such holdings unless sound investment criteria and fiduciary obligations require such actions. Both statutes specifically condition their directives on “accordance with sound investment criteria” and “consisten[cy] with fiduciary obligations.” As such, they reiterate rather than modify the Board’s fiduciary obligations as a trustee – both constitutional and statutory.

The Attorney General’s Office further explains:

The Board’s focus should remain on adhering to sound investment criteria and fulfilling its fiduciary obligations. However, if the Board encounters a situation where the application of sound investment criteria and its fiduciary obligations neither favors nor disfavors either of two potential investment options, the Board shall pursue the option that more closely complies with the directives of [the divestment statutes]. (Appendix D). This analysis echoes that provided by the Attorney General to the Joint Standing Committee on Labor and Housing when the bills that became the divestment statutes were under consideration. (Appendix C).

At that time, the Attorney General also alerted the Legislature that fiduciary duties would render the bill’s divestment requirement “essentially hollow.” “Unless a failure to divest an asset would be a breach of the Trustees’ existing fiduciary duties (i.e., not in best interest of the members), any attempt to enforce the statutory requirement to divest would be meritless.” (Appendix C).

Alex Edmans on ESG via InvestOrama

The End of ESG - Alex Edmans (2/2)

On ESG Metrics

So if ESG was just objective, then it'd be really hard to get a competitive edge. You wouldn't even need people, you could just have a computer algorithm doing it. So what I really think is the really exciting potential of ESG, is it's messy. You need to get your hands dirty. These are difficult things to understand, and this is where human experience and business judgment really comes to play. This is why I do believe that ESG can still outperform even in a world in which we have big data and artificial intelligence. […] Anything important about investing is subjective.

On Diversity

There's so many other aspects of a person than their diversity, and in fact, this is actually bad for minorities, because then people think, okay, you're a good director because of your minority characteristic, and this actually underplays the actual experience and challenge that you might be bringing to the board

On drivers of company value

 ESG is often put on a pedestal compared to other drivers of company value. ESG is very important. But many other things are important, such as strategy, operational performance, capital allocation, and so on. So why is it that we are just looking at the ESG characteristics of an investment and not all these other characteristics which could be just as or even more important than ESG?

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

The Secret Poisoner and Linda Stratmann

The Secret Poisoner: A Century of Murder

Murder by poison alarmed, enthralled, and in some ways even defined the Victorian age. Linda Stratmann’s dark and splendid social history reveals the nineteenth century as a gruesome battleground where poisoners went head-to-head with scientific and legal authorities who strove to detect poisons, control their availability, and bring the guilty to justice. Separating fact from Hollywood fiction, Stratmann corrects many misconceptions about particular poisons and their deadly effects. She also documents how the motives for poisoning—which often involved domestic unhappiness—evolved as marriage and child protection laws began to change. Combining archival research with vivid storytelling, Stratmann charts the era’s inexorable rise of poison cases.

Linda Stratmann’s website:

https://www.lindastratmann.com/

About Linda Stratmann:

After taking my O levels, I left school, and trained to be a chemist’s dispenser with Boots. I was first married at the age of 18 and my son was born when I was 20. Whatever I was destined to be it was not a housewife, and I took my A levels and went to Newcastle University in 1971, graduating with first class honours in psychology three years later. I then joined the civil service, and trained to be an Inspector of Taxes.

….

In 2001 I left the civil service, and in 2002 was commissioned to write my first published book on the history of chloroform.

Since then I have written several more books on historical true crime, and three biographies; also two crime fiction series set in Victorian England featuring female sleuths, Frances Doughty and Mina Scarletti. I am currently writing a series about the cases of a youthful Sherlock Holmes. I have been a member of the Crime Writers Association since 2004 and was Chair from 2019 to 2021.

Washington Post Interview with Xavier Becerra

12 Jan 2025, WaPo, by Dan Diamond: ‘I can’t go toe to toe with social media.’ Top U.S. health official reflects, regrets.

As they entered office at the height of the coronavirus pandemic in early 2021, Xavier Becerra and his allies had a plan to restore Americans' faith in the nation's beleaguered public health agencies.

Becerra, tapped by President Joe Biden to lead the Department of Health and Human Services, empowered career government scientists and experts muzzled under the Trump administration. Biden officials took on social media posts they said spread disinformation about coronavirus vaccines, urging Facebook and other companies to remove them. The White House mounted a nationwide vaccination campaign, convinced the results would win over skeptics.

….

"I can't go toe to toe with social media," Becerra said in a wide-ranging interview Wednesday, arguing that even a Cabinet secretary can be hemmed in. As examples, Becerra cited the lawsuits the Biden administration faced after urging social media companies to take down posts the White House considered disinformation. And he noted that officials can't formally disclose many details about negotiations to lower prescription drug prices. "I don't get to write whatever I want," he said.

….

Becerra, who was a congressman for more than two decades before becoming California's top lawyer in 2017 and then the nation's health secretary in 2021, is a veteran of Washington battles.

Some of the more recent fights concerned his own job: The Post and other outlets reported on internal frustrations with Becerra's leadership during the pandemic and his agency's response to unaccompanied children at the border. Some officials mused about replacing him with someone they said would be more proactive.

Becerra acknowledged the learning curve when taking charge of HHS, which oversees programs such as Medicare and Medicaid; approves drugs, medical devices and vaccines; regulates hospitals, physicians and other health-care providers; and steers many other initiatives affecting food and medicine. It also plays a central role in the nation's human services, such as caring for unaccompanied migrant children.

"I didn't realize how vast this agency's jurisdiction is," Becerra said, reflecting on how HHS found itself at the center of various crises, such as a 2022 baby formula shortage. "Since when has HHS been the administrator and distributor of infant formula?"

….

Rebuilding trust

Becerra acknowledged that his team struggled to win back the support of skeptical Americans, who he said are being bombarded by "instantaneous information and disinformation" on social media.

The health secretary contended that the government is outmatched, suggesting that Congress should set aside more resources for his nearly $2 trillion agency.

"I don't have a budget that Pfizer has to do marketing and advertising," Becerra said, invoking the pharma giant that spends billions of dollars to promote its drugs. "Will [Congress] give me some money to compete out there with all the disinformation?"

….

Becerra said the difficulties his team faced reflect a deep distrust of institutions.

"Do I think the American public has come back to a point where they trust, whether it's the ACA or vaccines, as much as they trust their priest or their rabbi? No," Becerra said. "But then again, I don't think priests … have the same standing they used to have before, either."

The health secretary wound down his interview with a frank plea about how public health experts can better reach Americans.

"I don't know what more we can do," Becerra said. "I'm more than willing to listen if somebody's got some great ideas."

Gallup Polls Press Releases on Federal Agencies

Sept 2024: Secret Service's Job Rating Tumbles 23 Points to New Low

Sept 2021: Job Ratings of Many Key Federal Agencies Decline

Nov 2014: Americans' Ratings of CDC Down After Ebola Crisis

May 2013: Americans Sour on IRS, Rate CDC and FBI Most Positively

July 2009: CDC Tops Agency Ratings; Federal Reserve Board Lowest

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

Taylor Lorenz

The tweet that started it:

Comments:

Real Food and Traditionally-Fermented Food

Real Food by Nina Planck - Amazon link, I get a commission

Yes, Virginia, you can butter your carrots. A farmer's daughter tells the truth about cream, eggs, fish, chicken, chocolate―even lard.Everyone loves real food, but they're afraid butter and eggs will give them a heart attack―thus the culinary abomination known as the egg-white omelet. Tossing out the yolk, it turns out, isn't smart. Real Food reveals why traditional foods are actually healthy: not only egg yolks, but also cream, butter, grass-fed beef, wild salmon, roast chicken skin, and more.Nina Planck grew up on a vegetable farm in Virginia and learned to eat right from her no-nonsense parents: lots of fresh fruits and vegetables, along with beef, bacon, fish, dairy, and eggs. Later, she wondered: was the farmhouse diet deadly, as the cardiologists say? Happily for people who love food, the answer is no.In lively, personal chapters on produce, dairy, meat, fish, chocolate, and other real foods, Nina explains how ancient foods like beef and butter have been falsely accused, while industrial foods like corn syrup and soybean oil have created a triple epidemic of obesity, diabetes, and heart disease. Real Food upends the conventional wisdom on diet and health and explains our taste for good things.

Traditionally Fermented Foods: Innovative Recipes and Old-Fashioned Techniques for Sustainable Eating

Harnessing traditions from previous generations to preserve food is not only a passion for Shannon Stonger, but a way of life. Shannon walked away from a career in chemistry to raise her family. Shortly thereafter, she and her husband moved their family off the grid to discover a more simple, agrarian life. With only minimal solar-powered electricity, Shannon relies on practical food preservation techniques, such as fermentation, to provide nutritious food for her family while cutting food costs.In Traditionally Fermented Foods, Shannon shows readers how to preserve food using traditional fermentation techniques, often without refrigeration. An alternative to canning and freezing, traditionally fermented foods do not require modern technology to preserve. You can learn Shannon’s authentic preservation technique, which she depends on daily to put food on the table, so you know they work. You can also learn how fermented foods work, how to make fermented foods and how to use fermented foods in recipes. This book contains over 80 recipes with corresponding photos.

Research Paper on Fried Foods

Association of fried food consumption with all cause, cardiovascular, and cancer mortality: prospective cohort study

BMJ 2019; 364 doi: https://doi.org/10.1136/bmj.k5420 (Published 23 January 2019)Cite this as: BMJ 2019;364:k5420

Abstract

Objective: To examine the prospective association of total and individual fried food consumption with all cause and cause specific mortality in women in the United States.

Design: Prospective cohort study.

Setting: Women's Health Initiative conducted in 40 clinical centers in the US.

Participants: 106 966 postmenopausal women aged 50-79 at study entry who were enrolled between September 1993 and 1998 in the Women's Health Initiative and followed until February 2017.

Main outcome measures: All cause mortality, cardiovascular mortality, and cancer mortality.

Results: 31 558 deaths occurred during 1 914 691 person years of follow-up. For total fried food consumption, when comparing at least one serving per day with no consumption, the multivariable adjusted hazard ratio was 1.08 (95% confidence interval 1.01 to 1.16) for all cause mortality and 1.08 (0.96 to 1.22) for cardiovascular mortality. When comparing at least one serving per week of fried chicken with no consumption, the hazard ratio was 1.13 (1.07 to 1.19) for all cause mortality and 1.12 (1.02 to 1.23) for cardiovascular mortality. For fried fish/shellfish, the corresponding hazard ratios were 1.07 (1.03 to 1.12) for all cause mortality and 1.13 (1.04 to 1.22) for cardiovascular mortality. Total or individual fried food consumption was not generally associated with cancer mortality.

Gayelord Hauser

I didn’t mention Gayelord Hauser in the episode, but I came across him years ago, and I believe he was an influence on Stuart’s own nutritional research. I don’t think Stu noticed the names of people… and Hauser was well before Stu’s time. It could be that Hauser influenced the people Stu was reading.

Here’s the Wiki article: Gayelord Hauser

Benjamin Gayelord Hauser (May 17, 1895 - December 26, 1984),[1] popularly known as Gayelord Hauser, was an American nutritionist and self-help writer, who promoted the 'natural way of eating' during the mid-20th century. He promoted foods rich in vitamin B and discouraged consumption of sugar and white flour. He rose to fame as a self-help author, popular on the lecture and social circuits, and was nutritional advisor to many celebrities.

Hauser was supported by many film stars but was often in conflict with the medical community.[2] He promised people they could add years to their life by eating five "wonder foods": blackstrap molasses, brewer's yeast, skimmed milk, wheat germ and yogurt.[3] He was criticized as a "food faddist" and his dieting ideas were described by medical doctors as pseudoscientific and quackery.[3][4][5][6]

Stu didn’t partake of skim milk, being a vegetarian, but definitely used brewer’s yeast as a source of B vitamins. It’s also known as nutritional yeast.

Livejournal links

3 Dec 2024: I have turned into Stu

(note: I have not turned into Stu. This is a story of a diet change to fix a health problem.)

18 Sept 2006: ....drooooooool.....[Real Food]

Okay, I've got to make a book plug: Real Food: What to Eat and Why by Nina Planck is a serious must-read for anybody having diet-related trouble. I picked it up a few weeks ago (I believe I mentioned it in a link to Instapundit on the matter) and Stu read it first, then I read it, and then we started implementing it. Here's a short run-down of my personal results, and perhaps Stu will post his own later.Background: Stu has had all sorts of diet-related trouble in the past, which made him go vegetarian a long time ago. He first cut out meat, and when that didn't do the trick, he cut out dairy. This would have been in the late 80s. I, on the other hand, have survived a pretty crappy diet; it wasn't so bad when I was at home (though I did get plenty out of the Chef Boyardee food group), but at NCSSM I lived off of Cheerios and apple juice (and pizza, when I could scrounge it off of people who could afford to buy it), and at State I had a taste for all things noodley. I got some money later on, and ate out a lot, opting for burgers and steak. Since I moved to NYC, the diet has run the gamut from $1.50 slices with Coke to high-end sushi.

Stu’s comment on that post:

More from Stu, 11 Aug 2005: On diet and prostate cancer

Vegan diet, exercise shown to help slow prostate cancerYou don't know how many times I've been told that as a 'true or strict or complete' vegetarian I was risking numerous health problems and possibly an early death. Ha!FWIW, I hate that the phrase 'vegan diet' is used to mean what vegetarian meant not too long ago.Speaking of veganism, did you know that most plastics (which includes pleather) are most likely made using chemicals obtained from rendered animals? That's right, plastics found in every day items such as shirt buttons, computers, TVs and most definitely cars. I'm glad to see that the inedible bits of cow, which meep can't eat, don't go to waste.Remember kids, if you can hunt and kill an animal with a sledge hammer, it's just begging to be eaten.

22 Mar 2001: stupid PETA tricks

i really hope the PETA people are getting adequate nutrition. When the Fishkill stink came out, Stu thought that perhaps the kiddies hadn't gotten enough B vitamins, because there seemed to be a lack of cognitive function. Of course, I would want a baseline comparison with =before= they became vegetarian, so we could get a good idea of whether there has been mental loss or perhaps (as i conjecture) a simple plateau.

22 July 2008: Everyone's a hero in his own way....

Reminds me of how Stu pointed out to an annoying vegan (keeping in mind that Stu was a vegetarian at this time) that there were bugs smeared all over his car. And then I had a very educational time at agriculture week at State one year, when I got to find out that yes, they use all of the cow except for the moo. Even if one carefully avoids eating any foods with animal-derived products inside, eschews wool and leather, buys cruelty-free makeup, yadda yadda, it's pretty damn impossible to buy any modern stuff that uses no animals parts at all. It's in paint, adhesives, paper manufacturing, you name it.I think there's nothing wrong with attempting to avoid as much animal products as one can, but it helps to be realistic and to not be a pain in the ass about it. Of course, the vegans and vegetarians I have personally known have been fine in terms of not being annoying (the most annoying thing a vegetarian has done to me is become a meat-eater. Dangit, Stu). It's the crazy PETA people who never do their cause any good.

19 Oct 2006: Omega-3 deficiency can have some bad effects

Some dietary experiments occurring in British prisonsI have no doubt. Reminds me of previous experiments that showed that a strictly vegetarian diet had a bad effect on violent male prisoners.I have been eating a teensy more fish, but I have determined I have an iron stomach. If the crap I ate as a kid didn't kill me, I doubt my lack of sardines will kill me now.I have cut out corn, soy, and canola oil as much as I can, and did note that regular bacon had some bad effects; so I'm sticking to the raw milk cheese, grass-fed meats, and the like...early results: huge drop in blood pressure. My BP used to range from 120/60 - 130/70. Lately when I take it, it's been 100/60 or so. Haven't tested the cholesterol levels yet, but they were pretty damn low before I started this new diet (diet as in way of eating, not diet as in trying to lose weight).

Episode Links

Alzheimer’s Research Fraud

Dan Elton post: 20 Oct 2024

Profiles:

Berislav Zlokovic

* Number of papers found with suspicious images - “dozens”

* Influential papers with fraud - Nature Medicine (2004), Stroke (2013), The Journal of Neuroscience (2013), Frontiers in Neuroscience (2022)

* Taxpayer money lost as a result - at least 30 million

* Pharma company impacts - ZZ Biotech received 30 million from the NIH to explore drug candidate 3K3A-APC for stroke recovery based on Zlokovic’s work. The drug didn’t work and there were six deaths in the active group compared to one in the placebo group. Suspect papers have been cited in 49 patents by 30 companies, universities, and foundations.

Notes: As explained in Science’s expose, Zlokovic is the top-ranked researcher in the world when it comes to Alzheimer’s and the blood-brain barrier, both in terms of number of papers (25) and number of citations (14,341). Suspect papers affect both the Alzheimer’s and stroke research fields. Two former lab members say that Zlokovic instructed them to make sure their lab notebooks were “clean”, meaning making sure they did not have data and results that challenged their paper’s conclusions.

….

Hoau-Yan Wang

* Number of papers found with suspicious images - 20

* Influential papers with fraud - The Journal of Neuroscience (2012)

* Taxpayer money lost as a result - at least $16 million, probably a lot more.

* Pharma company impacts - Cassava Biosciences based their clinical trials of Simufilam off of Wang’s work. Wang served as an advisor to the company.

Notes: The fraudster remains a professor at CUNY, despite CUNY doing a 50 page investigation that found “highly suggestive” evidence that he is culpable for 14/31 allegations. A June 2024 indictment by the Department of Justice states that he also committed fraud on grant applications between 2017 to 2021. The fraudulent applications led to $16 million in grant funding to Wang from the NIH.

Science: Top Alzheimer’s researcher goes ‘on leave’ amid misconduct concerns, 8 Nov 2024

Berislav Zlokovic, a prominent Alzheimer’s disease and stroke researcher who has long headed a major neuroscience institute at the University of Southern California (USC), is now on an indefinite leave of absence, according to a school official. USC declined to clarify a reason for the leave, but Zlokovic has faced scrutiny since a 2023 Science investigation described evidence that he had engaged in scientific misconduct for decades. Science has also learned that a planned $30 million clinical trial of a stroke drug candidate Zlokovic helped develop has been formally called off by its company sponsor, and the National Institutes of Health (NIH) has required that USC return nearly $2 million in funding for the trial.

USC Keck School of Medicine Dean Carolyn Meltzer announced Zlokovic’s leave in a 22 October email to USC faculty, obtained by Science. She named neuroscientist Steve Kay as acting director of the university’s Zilkha Neurogenetic Institute and its Department of Physiology & Neuroscience, both of which Zlokovic previously headed.

According to a USC professor who requested anonymity, Kay has taken over Zlokovic’s laboratory. Zlokovic also stepped down as co-director of USC’s federally funded Alzheimer’s Disease Research Center, according to its website. Zlokovic could not be reached for comment on his leave.

DOJ Press Release: Professor Charged for Operating Multimillion-Dollar Grant Fraud Scheme, 28 June 2024

A federal grand jury in the District of Maryland returned an indictment yesterday charging a Pennsylvania man for defrauding the U.S. National Institutes of Health (NIH) of approximately $16 million in federal grant funds.

According to court documents, Hoau-Yan Wang, 67, was a tenured medical professor at a public university’s medical school, as well as a paid advisor and consultant to a publicly traded Texas biopharmaceutical company. From approximately May 2015 through approximately April 2023, Wang allegedly engaged in a scheme to fabricate and falsify scientific data in grant applications made to the NIH on behalf of himself and the biopharmaceutical company. As alleged, the fraudulent grant applications to the NIH sought funding for scientific research of a potential treatment and diagnostic test for Alzheimer’s disease and resulted in the award of approximately $16 million in grants from approximately 2017 to 2021, part of which funded Wang’s laboratory work and salary. 

The indictment alleges that Wang’s work under these grants was related to the early developmental phases of the proposed drug and diagnostic test, typically referred to by the U.S. Food and Drug Administration as Phase 1 and Phase 2. Wang’s alleged scientific data falsification in the NIH grant applications related to how the proposed drug and diagnostic test were intended to work and the improvement of certain indicators associated with Alzheimer’s disease after treatment with the proposed drug. 

Wang is charged with one count of major fraud against the United States, two counts of wire fraud, and one count of false statements. If convicted, he faces a maximum penalty of 10 years in prison for the count of major fraud, 20 years in prison for each count of wire fraud, and five years in prison for the count of false statements.  

NSF OIG

Semiannual Reports

Most recent report: Semiannual Report to Congress, October 1, 2023 – March 31, 2024

NSF OIG page on Research Misconduct

Research Misconduct by the Numbers

Jeremy Fox: What I learned about scientific misconduct from reading the NSF OIG’s semiannual reports, 17 Mar 2021

The National Science Foundation’s Office of the Inspector General (NSF OIG) investigates misuse of NSF funds by individuals and organizations that receive awards from or conduct business with NSF. That includes, but isn’t limited to, researchers who commit scientific misconduct in the course of NSF-funded research. The OIG reports on its activities to Congress every 6 months. The reports are public, you can read them online. As part of my ongoing efforts to educate myself about scientific misconduct, I skimmed the five most recent OIG reports. Here’s what I learned. [MPC: I am shortening this to the first sentence of each bullet, except the third, so you have the link]

* Misspending and fraud detected by NSF OIG amounts to something like ~0.1% of the NSF budget.

* Most of the misspending and fraud detected by NSF OIG does not involve scientific misconduct.

* The large majority of allegations of scientific misconduct to OIG involve plagiarism. This semi-annual report includes helpful tables (Tables 3-5) breaking down all allegations of scientific misconduct received, and investigated, by OIG from 2010-2019, and how those investigations were resolved.

* Scientific misconduct allegations to OIG have dropped a lot since 2013.

* OIG finds scientific misconduct in ~24% of the allegations it investigates.

* As allegations of scientific misconduct to OIG have dropped, a greater fraction of allegations have been substantiated.

* There’s some terrible scientific misconduct out there, and some bizarre excuses for it (even if it doesn’t cost NSF much money in the grand scheme of things).

Prior Episode:

“My” peer-reviewed paper:

(The one I could find — the other one is a summary version, I think.)

High strain rate fracture and C-chain unraveling in carbon nanotubes

B.I. Yakobson, M.P. Campbell, C.J. Brabec, J. Bernholc

Computational Materials Science

Volume 8, Issue 4, September 1997, Pages 341-348

Abstract

Nanotube behavior at high rate tensile strain (~ 1 MHz) is studied by molecular dynamics using a realistic many-body interatomic potential. The simulations performed for single- and double-walled nanotubes of different helicities, and at different temperatures, show that nanotubes have an extremely large breaking strain. It decreases somewhat with increasing temperature and smaller strain rate, while the influence of helicity is very weak. At later stages of fracture, the nanotube fragments are connected by a set of unraveling monoatomic chains. The chains ‘compete’ with each other for carbon atoms popping out of the original tube segments. The interaction between chains eventually leads to a single chain, which grows up to hundreds of atoms in length before its breakage.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

My Movember fundraising links

Here are the places you can donate to the Movember Foundation, which supports men’s health, specifically focusing on prostate cancer, testicular cancer, and men’s mental health:

* Mary Pat Campbell’s MoSpace – a place to donate at Movember itself

* My Movember Facebook fundraiser – my officially linked fundraiser, if this works better for you

And here’s a QR code if that works better for you:

Movember History: Wikipedia

Seven Nightly News aired a story in 1999 including a group of young men in Adelaide, South Australia who coined the term "Movember" and the idea of growing moustaches for charity throughout the month of November.[16] In the news report, members of the Adelaide-based "Movember Committee" explained how they came up with the idea for Movember one night in the pub. The group started with 80 men from Adelaide and soon became a nationwide phenomenon. They also aimed to raise money for the RSPCA through selling T-shirts in what they termed "Growing whiskers for whiskers".[16]

In 2004, an unrelated group in Melbourne organised an event where 30 men would grow a moustache for 30 days in order to raise awareness for prostate cancer and depression in men.[17][18] Adam Garone, Travis Garone, Luke Slattery, and Justin (JC) Coughlin inspired 26 other friends with a desire to "bring back" the trend of growing moustaches, the movement was born. The next year, nearly 500 people raised over $40,000 for the Prostate Cancer Foundation of Australia. At the time, it was the largest donation the PCFA had ever received. This group would later become the Movember Foundation charity. Three years after starting the Movember movement, the organization was granted official charity status in Australia.

Straight Talk from ER Doc

STUMP Movember Links

1 November 2024: Movember 2024 Kickoff: In Memory of Stu

2023: Movember 2023 - Current Status and Trends

2022: Movember 2022: Men and Drug Overdoses (and Giving Tuesday!)

2021: Movember Fundraising: Men and Suicide

2019: Happy Thanksgiving! Wrapping up Movember and a Little Sumo, Books, and More  

2017: Movember Campaign -- Prostate Cancer and Suicide Prevention  

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

Dan Elton from More is Different

When "weak links" in science matter -- high profile fraud in Alzheimer's disease research

Oct 20, 2024

About a year ago I wrote a post trying to gauge how much of the peer-reviewed literature in non-predatory peer-reviewed journals has deliberate fraud. A number that often comes up is 2%. However, according to forensic metascience expert James Heathers, that number is flawed and out of date. According to a recent review article by Heathers, the true number is likely around 14%.

I find many people are either not aware of this issue, or they acknowledge the issue but wave it away as not important.An example is someone who I met recently who works at the National Science Foundation. From their vantage point, fraud is mostly being committed in China, not in the USA, which they described as having far superior systems for grant dispersal and oversight. This is largely true, but it doesn’t mean fraud from the US is not an important issue.

One example of retracted article

Original article

APP binds DR6 to trigger axon pruning and neuron death via distinct caspases

Nature, 2009 Feb 19;457(7232):981-9. doi: 10.1038/nature07767.

Abstract

Naturally occurring axonal pruning and neuronal cell death help to sculpt neuronal connections during development, but their mechanistic basis remains poorly understood. Here we report that beta-amyloid precursor protein (APP) and death receptor 6 (DR6, also known as TNFRSF21) activate a widespread caspase-dependent self-destruction program. DR6 is broadly expressed by developing neurons, and is required for normal cell body death and axonal pruning both in vivo and after trophic-factor deprivation in vitro. Unlike neuronal cell body apoptosis, which requires caspase 3, we show that axonal degeneration requires caspase 6, which is activated in a punctate pattern that parallels the pattern of axonal fragmentation. DR6 is activated locally by an inactive surface ligand(s) that is released in an active form after trophic-factor deprivation, and we identify APP as a DR6 ligand. Trophic-factor deprivation triggers the shedding of surface APP in a beta-secretase (BACE)-dependent manner. Loss- and gain-of-function studies support a model in which a cleaved amino-terminal fragment of APP (N-APP) binds DR6 and triggers degeneration. Genetic support is provided by a common neuromuscular junction phenotype in mutant mice. Our results indicate that APP and DR6 are components of a neuronal self-destruction pathway, and suggest that an extracellular fragment of APP, acting via DR6 and caspase 6, contributes to Alzheimer's disease.

Retraction notice

Retraction Note: APP binds DR6 to trigger axon pruning and neuron death via distinct caspases

The authors have retracted this article1. Our subsequent work confirmed aspects of the article, notably that DR6 and APP interact and function in a genetic pathway involving caspases to control axon pruning and neuron death2,3. However, our later research also showed that certain conclusions reached in the article were incorrect, notably the role of caspase-3, the necessity for beta-secretase enzyme activity for APP-DR6 binding, and the model for the APP-DR6 interaction2,3.

More recently, the following anomalies were identified:

* Figure 1d: the NGF-deprived +IgG panel appears to be identical to the NGF-deprived, 24h + Control IgG panel of Figure 5e.

* Supplementary information Figure 9c: the NGF-deprived + Bax inhibitor control panel appears to be identical to the + anti-NGF control panel of Supplementary information Figure 17c.

* Supplementary information Figure 6d: the fourth beta-Actin blot for Casp-3 siRNA appears to be identical to the first beta-Actin blot for Casp-6 siRNA.

* Certain biostatistical calculations underlying some figures contained errors.

We believe that these additional anomalies do not affect the conclusions presented in the affected figures. However, given the lack of original data for several of these figures due to the age of the paper, and since our subsequent research showed that certain specific claims in the original article were not correct and we reported a correction for those claims elsewhere2,3, we consider that the appropriate course of action is to retract the article. All the authors agree with this retraction.

Figure 1d:

Figure 5e:

Ben Landau-Taylor from Palladium Magazine

The Academic Culture of Fraud

August 2, 2024

In 2006, Sylvain Lesné and seven coauthors published a paper on Alzheimer’s disease, “A specific amyloid-beta protein assembly in the brain impairs memory,” in Nature, the world’s most prestigious scientific journal. This was a major paper in the development of the “amyloid hypothesis,” a proposed mechanism for how Alzheimer’s disease afflicts its victims. About 50 million people suffer from Alzheimer’s disease, more than the entire population of California, making it the world’s most common cause of dementia. This population will grow as the world’s average population gets older. There is no effective treatment for Alzheimer’s disease, and its pathology is poorly understood. Any progress in understanding this disease represents a massive humanitarian victory. Encouraged by this paper and other promising studies, funding and talent poured into investigating the amyloid hypothesis. By 2022, such research had received over $1 billion in government funds.

That year, neuroscientist Matthew Schrag discovered doctored images in this and many of Lesné’s other papers, including others purporting to provide evidence for the amyloid hypothesis. These images had been manually edited and cropped together to falsely show support for the papers’ hypotheses. Notably, these frauds all made it through the formalized “peer review” processes of Nature and six other academic journals undetected, before eventually being uncovered by unrelated channels.

Schrag’s investigation that uncovered the fraudulent papers began as a tangent from his work uncovering doctored images used in studies supporting simufilam, an experimental drug for Alzheimer’s disease. The suspicion would prove vindicated when in June 2024 Hoau-Yan Wang, a paid adviser to simufilam’s developer, was indicted by a federal grand jury for fabricating data and images in simufilam studies for which he obtained $16 million in National Institutes of Health (NIH) grants, following a 2021 petition to the Food and Drug Administration, a method of reporting research fraud which is highly unusual if not unique.

Theo Baker in The Stanford Daily

Internal review found ‘falsified data’ in Stanford President’s Alzheimer’s research, colleagues allege

Feb 17, 2023

In 2009, Marc Tessier-Lavigne, then a top executive at the biotechnology company Genentech, was the primary author of a scientific paper published in the prestigious journal Nature that claimed to have found the potential cause for brain degeneration in Alzheimer’s patients. “Because of this research,” read Genentech’s annual letter to shareholders, “we are working to develop both antibodies and small molecules that may attack Alzheimer’s from a novel entry point and help the millions of people who currently suffer from this devastating disease.”

But after several unsuccessful attempts to reproduce the research, the paper became the subject of an internal review by Genentech’s Research Review Committee (RRC), according to four high-level Genentech employees at the time; two were senior scientists and two were scientists who also served as executives. Three spoke on the condition of anonymity because of the sensitivity of the allegations and non-disclosure agreements. The scientists, one of whom was an executive who sat on the review committee and all of whom were informed of the review’s findings at the time due to their stature at the company, said that the inquiry discovered falsification of data in the research, and that Tessier-Lavigne kept the finding from becoming public.

Tessier-Lavigne denies both allegations. Genentech said in a statement that “as part of our diligence related to these allegations, we reviewed the records from that November 2011 RRC meeting and saw no allegations of fraud or wrongdoing.” The company acknowledged that “given that these events happened many years ago … our current records may not be complete.”

After the review, which began in 2011, Genentech canceled research based on the paper’s findings. Till Maurer, a senior scientist at the company from 2009-2018 who said he was assigned to develop drugs based on the 2009 paper, told The Daily that his superior informed him that, in Maurer’s words, “the project is being canceled and it’s because they found falsified data.”

Alzheimer’s Mortality in the U.S. via the Society of Actuaries

U.S. Population Mortality Observations – Updated with 2021 Experience

Tableau dashboard:

https://tableau.soa.org/t/soa-public/views/USPop2021-Final/BySex?%3Aembed=y&%3AisGuestRedirectFromVizportal=y&%3Aorigin=card_share_link

Twixter Comments

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Episode Links

Christopher Rufo

Christopher Rufo: Kamala Harris’s Plagiarism Problem

Taken in total, there is certainly a breach of standards here. Harris and her co-author duplicated long passages nearly verbatim without proper citation and without quotation marks, which is the textbook definition of plagiarism. They not only lifted material from sources without proper attribution, but in at least one case, relied on a low-quality source, which potentially undermined the accuracy of their conclusion.

Of course, Harris, like many other public figures, may have relied entirely on a ghostwriter to draft her book. But that is not exculpatory: Harris, at the end of the day, put her name on the cover.

On that point, one might recall the title of her book: Smart on Crime. There is nothing smart about plagiarism, which is the equivalent of an academic crime. The publisher, as well as the sitting vice president, should retract the plagiarized passages and issue a correction. There should be a single standard—and Kamala Harris is falling short.

Kamala Harris's Book, Smart on Crime

Amazon Link: Smart on Crime: A Career Prosecutor's Plan to Make Us Safer

Two top reviews:

(I didn’t find that review very interesting)

I was one of the 4 people who found the above review to be helpful.

The Amazon listing of the co-author’s (Joan O’C. Hamilton) books - only 3, including Smart on Crime

Judgment in Moscow

Book listing at Amazon: Judgment in Moscow: Soviet Crimes and Western Complicity

Blurbs:

“Vladimir Bukovsky uses the Kremlin's own documents to show how the Soviet Union provided a false face to the world and how Soviet leaders used Western leaders as dupes or willing actors. Judgment in Moscow provides the written Nuremberg trial the Soviets never got when the USSR fell.” —Anne Applebaum, author of Gulag: A History (Pulitzer Prize)

“An essential warning of the dangers of collaborating with authoritarian regimes.” — Garry Kasparov, former world chess champion and author of Winter is Coming

“The most important work to appear for decades on the Soviet empire and its aftermath.” — Edward Lucas, former senior editor of the Economist, from the introduction

Related posts:

Oct 2021: Remembering Vladimir Bukovsky, 1942 - 2019, Soviet Dissident

Oct 2022: Memorial: A Well-Deserved Nobel Peace Prize

Feb 2024: The Week in Meep, 18 Feb 2024: Navalny, Insurance Fraud, and Lent Begins

AI Slop

Futurism.com by Maggie Harrison Dupré: Wikipedia Declares War on AI Slop

As 404 Media reports, a team of Wikipedia editors has assembled to create "WikiProject AI Cleanup," which describes itself as "a collaboration to combat the increasing problem of unsourced, poorly-written AI-generated content on Wikipedia."

The group is clear that they don't wish to ban responsible AI use outright, but instead seek to eradicate instances of badly-sourced, hallucination-filled,  or otherwise unhelpful AI content that erodes the overall quality of the web's decades-old information repository.

….

In some cases, the editors told 404, AI misuse is obvious. One clear sign is users of AI tools leaving well-known chatbot auto-responses behind in Wikipedia entries, such as paragraphs starting with "as an AI language model, I..." or "as of my last knowledge update." The editors also say they've learned to recognize certain prose patterns and "catchphrases," which has allowed them to spot and neutralize sloppy AI text.

"A few of us had noticed the prevalence of unnatural writing that showed clear signs of being AI-generated, and we managed to replicate similar 'styles' using ChatGPT," WikiProject AI Cleanup founding member Ilyas Lebleu told 404, adding that "discovering some common AI catchphrases allowed us to quickly spot some of the most egregious examples of generated articles."

June 2024, CNET: The New AI Buzzword Is 'Slop,' and It's Messing With You. What to Watch Out For

Fake images of former and current world leaders getting arrested. Glue as a pizza topping. AI-generated images that just can't stop adding extra fingers to hands.  It's junk, and now there's a catch-all term for bad, useless or misleading artificial intelligence: "slop." The term is spreading across tech blogs, mainstream media and Reddit, where countless threads point out egregious instances of AI gone wrong.

If slop sounds familiar both as a term and in its meaning, that may be because it's a cousin of spam, which emerged way back in 1993 as a word for unwanted, often auto-generated emails that have been clogging up digital inboxes for decades.

….

One problem with bad AI, however, is that people may not be able to tell it apart from legitimate content. When AI "hallucinates," or offers up bad or out-of-context information, it's not always obvious. 

Sometimes AI can be misled by satirical or purposefully misleading data pulled from websites or other sources, or it can simply be biased by the type of data it's been trained on. 

It's can be hard to verify whether an image or video is faked by AI sometimes, and with text, it's not always clear how the information is being sourced. It's always worth making sure that information offered up by, say ChatGPT is current and that it's been sourced from a reputable site or set of data.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

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Ig Nobel Prizes

DEMOGRAPHY PRIZE [AUSTRALIA, UK]Saul Justin Newman, for detective work to discover that many of the people famous for having the longest lives lived in places that had lousy birth-and-death recordkeeping.REFERENCE: “Supercentenarians and the Oldest-Old Are Concentrated into Regions with No Birth Certificates and Short Lifespans,” Saul Justin Newman, BioRxiv, 704080, 2019. REFERENCE: “Supercentenarian and Remarkable Age Records Exhibit Patterns Indicative of Clerical Errors and Pension Fraud,” Saul Justin Newman, BioRxiv, 2024. WHO CAME TO THE CEREMONY: Saul Justin Newman

2024 Paper: Supercentenarian and remarkable age records exhibit patterns indicative of clerical errors and pension fraud

Abstract

The observation of individuals attaining remarkable ages, and their concentration into geographic sub-regions or ‘blue zones’, has generated considerable scientific interest. Proposed drivers of remarkable longevity include high vegetable intake, strong social connections, and genetic markers. Here, we reveal new predictors of remarkable longevity and ‘supercentenarian’ status. In the United States, supercentenarian status is predicted by the absence of vital registration. The state-specific introduction of birth certificates is associated with a 69-82% fall in the number of supercentenarian records. In Italy, England, and France, which have more uniform vital registration, remarkable longevity is instead predicted by poverty, low per capita incomes, shorter life expectancy, higher crime rates, worse health, higher deprivation, fewer 90+ year olds, and residence in remote, overseas, and colonial territories. In England and France, higher old-age poverty rates alone predict more than half of the regional variation in attaining a remarkable age. Only 18% of ‘exhaustively’ validated supercentenarians have a birth certificate, falling to zero percent in the USA, and supercentenarian birthdates are concentrated on days divisible by five: a pattern indicative of widespread fraud and error. Finally, the designated ‘blue zones’ of Sardinia, Okinawa, and Ikaria corresponded to regions with low incomes, low literacy, high crime rate and short life expectancy relative to their national average. As such, relative poverty and short lifespan constitute unexpected predictors of centenarian and supercentenarian status and support a primary role of fraud and error in generating remarkable human age records.

The Conversation: ‘The data on extreme human ageing is rotten from the inside out’ – Ig Nobel winner Saul Justin Newman

But your work is actually incredibly serious?

I started getting interested in this topic when I debunked a couple of papers in Nature and Science about extreme ageing in the 2010s. In general, the claims about how long people are living mostly don’t stack up. I’ve tracked down 80% of the people aged over 110 in the world (the other 20% are from countries you can’t meaningfully analyse). Of those, almost none have a birth certificate. In the US there are over 500 of these people; seven have a birth certificate. Even worse, only about 10% have a death certificate.

The epitome of this is blue zones, which are regions where people supposedly reach age 100 at a remarkable rate. For almost 20 years, they have been marketed to the public. They’re the subject of tons of scientific work, a popular Netflix documentary, tons of cookbooks about things like the Mediterranean diet, and so on.

Okinawa in Japan is one of these zones. There was a Japanese government review in 2010, which found that 82% of the people aged over 100 in Japan turned out to be dead. The secret to living to 110 was, don’t register your death.

The Japanese government has run one of the largest nutritional surveys in the world, dating back to 1975. From then until now, Okinawa has had the worst health in Japan. They’ve eaten the least vegetables; they’ve been extremely heavy drinkers.

What about other places?

The same goes for all the other blue zones. Eurostat keeps track of life expectancy in Sardinia, the Italian blue zone, and Ikaria in Greece. When the agency first started keeping records in 1990, Sardinia had the 51st highest old-age life expectancy in Europe out of 128 regions, and Ikaria was 109th. It’s amazing the cognitive dissonance going on. With the Greeks, by my estimates at least 72% of centenarians were dead, missing or essentially pension-fraud cases.

….

What’s your best guess about true human longevity?

Longevity is very likely tied to wealth. Rich people do lots of exercise, have low stress and eat well. I just put out a preprint analysing the last 72 years of UN data on mortality. The places consistently reaching 100 at the highest rates according to the UN are Thailand, Malawi, Western Sahara (which doesn’t have a government) and Puerto Rico, where birth certificates were cancelled completely as a legal document in 2010 because they were so full of pension fraud. This data is just rotten from the inside out.

MedRXiV: The global pattern of centenarians highlights deep problems in demography

Posted 6 Sept 2024

Abstract

Accurate age data is fundamental to medicine, social sciences, epidemiology, and good government. However, recent and heavily disputed debates on data quality have raised questions on the accuracy of demographic data at older ages. Here, we catalogue late-life survival patterns of every country in the world from 1970-2021 using comprehensive estimates of old-age populations provided by global governments and curated by the United Nations. Analysis of 236 nations or states across 51 years reveals that late-life survival data is dominated by anomalies at all scales and in all time periods. Life expectancy at age 100 and late-life survival from ages 80 to 100+, which we term centenarian attainment rate, is highest in a seemingly random assortment of states. The top 10 ‘blue zone’ regions with the best survival to ages 100+ routinely includes Thailand, Kenya and Malawi – respectively now 212th and 202nd in the world for life expectancy, the non-self-governing territory of Western Sahara, and Puerto Rico where birth certificates are so unreliable they were recently declared invalid as a legal document. These anomalous rankings are conserved across long time periods and multiple non-overlapping cohorts, and do not seem to be sampling effects. Instead these patterns suggest a persistent inability, even for nation-states or global organisations, to detect or measure error rates in human age data, with troubling implications for epidemiology, demography, and medicine.

Puerto Rico Birth Certificates Law 191 of 2009 Fact Sheet

In December 2009, the government of Puerto Rico enacted a new law (Law 191 of 2009) aimed at strengthening the issuance and usage of birth certificates to combat fraud and protect the identity and credit of all U.S. citizens born in Puerto Rico. The new law was based on collaboration with the U.S. Department of State (DOS) and the U.S. Department of Homeland Security (DHS) to address the fraudulent use of Puerto Rico-issued birth certificates to unlawfully obtain U.S. passports, Social Security benefits, and other federal services.

In the past, many common official and unofficial transactions in Puerto Rico unnecessarily required the submission, retention, and storage of birth certificates. As a result, hundreds of thousands of original birth certificates were stored without adequate protection, making them easy targets for theft. Subsequently, many birth certificates have been stolen from schools and other institutions, sold on the black market for prices up to $10,000 each, and used to illegally obtain passports, licenses, and other government and private sector documentation and benefits.

As a result of this growing problem, approximately 40 percent of the passport fraud cases investigated by the DOS Diplomatic Security Services in recent years involved birth certificates of people born in Puerto Rico. This left Puerto Rico-born U.S. citizens vulnerable to identity theft, ruined credit, stolen Social Security benefits, and increased “random” security checks at airports, among others.

Understanding the enormous risks to all individuals as well as the very significant homeland and national security concerns, the government of Puerto Rico took action to improve the security of all birth certificates and to better protect the public from fraud and identity theft.

Pension Fraud Stories

DiNapoli: New York City Man Charged with Stealing Over $50,000 in Pension Benefits Meant for Deceased Sister-in-Law

September 16, 2024

A 69-year-old Manhattan man, Randy Ray, was arrested today for allegedly stealing more than $50,000 in pension benefits meant for his deceased sister-in-law, New York State Comptroller Thomas P. DiNapoli announced.

“Randy Ray allegedly took advantage of his sister-in-law's death to fund his lifestyle,” DiNapoli said. “I will continue to safeguard the pension system and partner with law enforcement across the state and country to prosecute those who attempt to defraud it. I thank Albany County District Attorney David Soares and the New York State Police for their partnership in bringing Ray to justice.”

The pensioner, Ray’s sister-in-law, retired on disability retirement in October 1986 from the Supreme Court, Appellate Division, where she served as a confidential legal stenographer. She retired choosing the state retirement system’s single life allowance option, meaning at the time of her death in January 2019 her monthly pension payments of $1,341.78 should have ended. Instead, the retirement system was not informed of and did not learn about her death until July 2022. Once the system discovered her death, payments were stopped, and an investigation launched.

A forensic analysis was completed on the bank account where the pension payments were being deposited, which was a joint account in the name of the pensioner and Ray. The investigation found that Ray diverted over $50,000 in pension payments made after his sister-in-law’s death and used the money to pay credit card bills, travel, and make online purchases.

Ray was arraigned on a charge of grand larceny in Albany County Court. He is due back in court on October 30.

NY Post, 2012: Mama’s boy jailed: son gets up to 41 years in ‘Psycho’ fraud

He’s not going to the Bates Motel.

A “Psycho” scammer who dressed up as his dead mom so he could collect her Social Security benefits will instead be checking into state prison for 13 2/3 to 41 years after being sentenced yesterday for the bizarre Norman Bates-like stunt.

Thomas Prusik-Parkin, 52 was convicted this month of grand larceny and mortgage fraud for posing as Irene Prusik for several years in order to pocket more than $44,000 of the dead woman’s benefits.

“It’s amazing — it’s amazing!” Justice Vincent Del Giudice said as he sentenced the frail, bearded man. “It borders on ludicrous that you expected to get away with this.”

Prusik-Parkin’s actress mom, Irene, was 73 when she died in 2003. Within days of Prusik’s death, authorities charged, her son changed her Social Security numbers and doctored other documents.

The admitted Norman Bates admirer’s kooky cross-dressing caper fell apart in 2009 when he donned the matronly getup to tell Brooklyn prosecutors he was being ripped off by a man who bought out of foreclosure the $2.2 million Park Slope building deeded to him by his mom.

Del Giudice shook his head as he recalled how the elderly “woman” claimed she had cataracts when an investigator from the Brooklyn DA’s Office asked why the lights in her apartment were dimmed.

Jurors in the trial were shown a video of Prusik-Parkin in a platinum woman’s wig, sunglasses and a dress during a visit to a Department of Motor Vehicles office.

“It just boggles the mind that you continued this plan of deceit by impersonating her and committing a fraud at the DMV,” Del Giudice said.

Prusik-Parkin, maintained that it wasn’t him in the videos.

During a rambling statement before he was sentenced, Prusik-Parkin insisted he hadn’t rejected a deal from prosecutors that could have sprung him from jail, rather than face up to 41 years in prison.

Japan Pension Fraud

July 2010, BBC News: Tokyo's 'oldest man' had been dead for 30 years

He was thought to be the oldest man in Tokyo - but when officials went to congratulate Sogen Kato on his 111th birthday, they uncovered mummified skeletal remains lying in his bed.

Mr Kato may have been dead for 30 years according to Japanese authorities.

They grew suspicious when they went to honour Mr Kato at his address in Adachi ward, but his granddaughter told them he "doesn't want to see anybody".

Police are now investigating the family on possible fraud charges.

Wikipedia: Sogen Kato, Aftermath

After the discovery of Kato's mummified corpse, other checks into elderly centenarians across Japan produced reports of missing centenarians and faulty recordkeeping. Tokyo officials attempted to find the oldest woman in the city, 113-year-old Fusa Furuya, who was registered as living with her daughter. Furuya's daughter said she had not seen her mother for over 25 years.[12] The revelations about the disappearance of Furuya and the death of Kato prompted a nationwide investigation, which concluded that police did not know if 234,354 people older than 100 were still alive.[13] More than 77,000 of these people, officials said, would have been older than 120 years old if they were still alive. Poor record keeping was blamed for many of the cases,[13] and officials said that many may have died during World War II. One register claimed a man was still alive at age 186.[14]

Following the revelations about Kato and Furuya, analysts investigated why recordkeeping by Japanese authorities was poor. Many seniors have, it has been reported, moved away from their family homes. Statistics show that divorce is becoming increasingly common among the elderly. Dementia, which afflicts more than two million Japanese, is also a contributing factor. "Many of those gone missing are men who left their hometowns to look for work in Japan's big cities during the country's pre-1990s boom years. Many of them worked obsessively long hours and never built a social network in their new homes. Others found less economic success than they'd hoped. Ashamed of that failure, they didn't feel they could return home,"[13] a Canadian newspaper reported several months after the discovery of Kato's body.[13]

August 2019: Mortality with Meep: How to Get Lots of Supercentenarians? Pension fraud!  

December 2019: Can the Government Tell If You're Dead or Alive?  

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

Thomas Day

Wikipedia article

Thomas Day (c. 1801–1861) was an American furniture craftsman and cabinetmaker in Milton, Caswell County, North Carolina.[1] Born into a free African-American family in Dinwiddie County, Virginia, Day moved to Milton in 1817 and became a highly successful businessman, boasting the largest and most productive workshop in the state during the 1850s.[1]: 1, 8, 21, 23 [2][3] Day catered to upper-class white clientele and was respected among his peers for his craftsmanship and work ethic.[1]: 27 [2][4] Day came from a relatively well-off family and was privately educated.[1]: 2, 5, 7  Today, Day's pieces are highly sought after and sell for high prices; his work has been heavily studied and displayed in museums such as the North Carolina Museum of History.[5][6][3][7] Day is celebrated as a highly skilled craftsman and savvy businessman, specifically in regards to the challenges his race posed to his success in the Antebellum South.[7][2]: 35, 58 [6][8]

Smithsonian: Thomas Day: Master Craftsman and Free Man of Color - includes videos and online gallery

Book (which I own): Thomas Day: Master Craftsman and Free Man of Color (Richard Hampton Jenrette Series in Architecture and the Decorative Arts)

Candace Wheeler

Wikipedia page

Candace Wheeler (née Thurber; March 24, 1827 – August 5, 1923), traditionally credited as the mother of interior design, was one of America's first woman interior and textile designers. She helped open the field of interior design to women, supported craftswomen, and promoted American design reform. A committed feminist, she intentionally employed women and encouraged their education, especially in the fine and applied arts, and fostered home industries for rural women. She also did editorial work and wrote several books and many articles, encompassing fiction, semi-fiction and non-fiction, for adults and children. She used her exceptional organizational skills to co-found both the Society of Decorative Art in New York City (1877) and the New York Exchange for Women's Work (1878); and she partnered with Louis Comfort Tiffany and others in designing interiors, specializing in textiles (1879-1883), then founded her own firm, The Associated Artists (1883-1907).[1][2][3][4]

….

Society of Decorative Art in New York

[edit]

Wheeler co-founded the Society of Decorative Art with Caroline E. Lamson (Mrs. David) Lane in New York in 1877.[30][31] She hired the recently widowed Elizabeth Bacon (Mrs. General George Armstrong) Custer as secretary: the two women became fast, life-long friends.[2][5][32] The Society was intended to help women support themselves through artistic handicrafts including needlework and other decorative arts. It served the thousands of women who were left indigent at the end of the Civil War. Wheeler called on prominent New York society matrons to support a shop in which the high-quality, custom-made goods could be sold to produce income; they had five hundred subscribers within three years.[30][32][23]

Leading artists were hired to teach or judge exhibits at the Society in New York, including Louis Comfort Tiffany and John LaFarge. Wheeler helped to start branches in Chicago, St. Louis, Hartford, Detroit, Troy, New York and Charleston, South Carolina.[29][33] Although she described resigning in a huff from the Society of Decorative Arts in 1879, she actually remained involved and supportive for the next several years.[34]

New York Exchange for Women's Work

In 1878 Wheeler helped launch the New York Exchange for Women's Work, where women could sell any product that they could manufacture at home, including baked goods and household linens.[30][34] To serve a broader range of women, no artistic ability was required. The Exchange opened in March 1878 with a consignment sale of thirty items at the home of Exchange co-founder Mary Atwater (Mrs. William) Choate. In April, the Exchange moved to a rented facility and by May it was successful enough to employ two part-time sales women. In its first year, it paid out nearly $14,000 in commissions. By 1891, there were at least 72 Exchanges across the United States.[32] The New York Exchange continued to operate until 2003.[35]

The Panic of 1873: Library of Congress

The Panic of 1873 triggered the first 'Great Depression' in the United States and abroad. Lasting from September 1873 until 1878/9, the economic downturn then became known as the Long Depression after the stock market crash of 1929. Currency in the nineteenth century was based on specie. Metal money circulated, and banks issued paper banknotes backed by the supply of gold and silver. In the United States, this system began breaking down in the face of financing the Civil War. President Lincoln authorized the printing of paper money, called "Greenbacks," to pay ballooning expenses. Widespread use of fiat External money continued into the Reconstruction Era, fueling the rapid expansion of railroads and wild speculation.

Banks, especially Jay Cooke and Co. raised millions of dollars through selling bonds to finance construction. Speculators 'bet' on the railroad, gambling on the fact that settlement and opportunities to make money would follow behind the completed railway. However, construction expenses ballooned and outpaced financing. Efforts to raise more funding failed. When they could no longer pay the bills, Jay Cooke and Co. and other banking houses folded. The collapse of the railway financiers sparked high bank withdrawals, the failure of brokerage firms, and railway construction halted. By September 20th, the New York Stock Exchange suspended trading for the first time.

Prior podcast mentioning Wheeler: Failure, Sunk Costs, and Candace Wheeler, June 2023

Julia Child

July 2022: Training Lessons from the French Chef: Being Resourceful and Making Mistakes

Julia Child on PBS YouTube Channel - the French Chef also available at Pluto TV currently

UPDATE: Prior post mentioning Julia Child: Oct 2022 - Geeking Out: Chatting with a Fellow Actuary about Writing - I often write (for free) for actuarial publications, and I like to push what I can get away with. (I’ve been inserting sumo references lately… and I’ve got an extended sumo metaphor I would love to try out in my next piece….)

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

Democratic Party Platform

Party platform page

PDF version — I know it says it’s from 2020 when you download it, but this is the document on the site, and I don’t think they’ve actually changed anything. I make no further comment about this.

Screenshots from the PDF:

Republican Party Platform

GOP about our party

PDF link

PDF screenshots:

Separate page(s):

American Academy of Actuaries on Social Security

Academy page on Social Security

9 May 2024: Committee Releases One-pager on 2024 Social Security Trustees Report

22 July 2024: An Actuarial Perspective on the 2024 Social Security Trustees Report

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

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WSJ: Tim Walz’s and JD Vance’s Personal Finances Couldn’t Be More Different

Tim Walz doesn’t own a home or many investments outside of pensions and a college-savings plan, according to past financial disclosures and tax returns. Getting elected vice president as Kamala Harris’s Democratic running mate—a job that pays $235,000—would mean a more than 50% pay bump.

….

Tim and Gwen Walz together earned $166,719 before taxes in 2022, according to a tax return that year. About $116,000 of that came from Tim’s salary as governor. The governor’s salary has since increased to $149,550, according to the Minnesota Legislative Reference Library. 

A little over $51,000 of the couple’s income came from Gwen’s work as an educator, which she reported as a self-owned business. She has worked at Augsburg University since 2019, where she has taught education and served as a special assistant to the president.

The couple, who have two children, had a 529 plan, worth between $1,001 and $15,000 in 2019, according to a financial disclosure Walz filed for his final year as a House representative. They also held two life insurance policies totaling $30,002 to $100,000. 

The couple is largely relying on pensions to fund their retirement, based on his disclosures. They have four pensions with an estimated lump sum value of between $81,000 and $215,000, as of the 2019 filing.

Survey of Consumer Finances

Survey of Consumer Finances landing page

SCF Interactive Chartbook

Before-tax family income by percentile of income

Stock holdings by percentile of income

Ed Seidle and the Minnesota Teachers Pension

4 April 2024: Minnesota Teacher Pension Forensic Investigation Invites Whistleblower, Expert And Public Participation

18 Jul 2024: Toledo Blade Exposes National Effort to Undermine Investigations Into Public Pension Wrongdoing

31 July 2024: Minnesota Governor Walz Warned Of "Many Serious Risks" Facing State Pensions Under His Watch

On March 11, 2024, Jay Stoffel, the Executive Director of the Teacher Retirement Association of Minnesota—a state pension with $28 billion in assets—blasted out an email entitled “An Important Matter” to all trustees of the TRA Board and staff. This same alarming email would, within days, be sent by him to state legislators and officials, including the offices of Governor Walz, Attorney General and Legislative Auditor. (Walz, as Governor has long been chairman of the pension board and the Attorney General is also a board member.)

A “situation” posing “many serious risks to the agency and pension fund” had arisen which they “should be aware of and concerned about,” Stoffel wrote.

The seriously risky situation Stoffel was warning Governor Walz and others about was a proposed forensic investigation into potential mismanagement or wrongdoing at the pension, conducted by a nationally-recognized expert and commissioned by educators who were participants in the pension.

That’s right, the impending “grave danger” was: State workers and retirees who contributed their hard-earned savings to the pension and whose retirement security was potentially at risk—the very same individuals for whose exclusive benefit the plan (under applicable law) is supposed to be managed—were fundraising to get a “second opinion.”

Worse still, the opinion they were seeking was that of a seasoned forensic investigator of their own choosing.

7 Aug 2024: Minnesota And Kentucky Open Government Experts Applaud Ohio Magistrate's State Teacher Pension Records Decision

10 Aug 2024, NY Post: Teachers’ Minn. pension fund under Tim Walz ‘cooking the books’ by vastly underreporting fees: ‘Madoff miracle’

A Minnesota retirement system for public school teachers under Gov. Tim Walz  is “cooking the books” by vastly underreporting annual fees paid to Wall Street investment managers — and posting near-impossible gains tantamount to a “Madoff miracle,” a top pension investigator said.

The state-run Teachers Retirement Association, or TRA, has publicly disclosed less than 10% of an estimated $2.9 billion spent on fees in the past 10 years, said Edward Siedle, a former US Securities and Exchange Commission lawyer and independent pension investigator. 

The TRA also posted gains claiming it beat its own custom benchmark over periods of one, five, 10, 20 and 30 years by exactly 0.2%, which Siedle called “virtually impossible.”

Teacher testimony linked from NY Post piece: dated 7 Feb 2024

My name is Katie Dickerson and I am 55 years old and have been teaching for 31 years. 28 teaching in Hopkins and 3 in NH. As I’am getting closer to retirement I realize the state never made improvements to our retirement system. Not only do we have a high contribution rate to TRA, but we don't have a rule and are forced to work many more years unless we are willing to be hit with huge penalties. This is not how I ever imagined educators would be treated.

[More at link]

Toledo Blade Editorial: 18 July 2024

STRS Minnesota meddling

A cursory look at the Minnesota Teachers Retirement Association leads to the conclusion they’re either a world class pension or they’re cooking the books. Minnesota reported investment fees on the $26.7 billion teacher pension fund of $24.1 million. The teachers fund has a $6.6 billion private equity portfolio that would be expected to pay at least $132 million a year to fund managers. Moreover, a comprehensive study of 54 public pensions from 2008 to 2023 conducted by investment expert Richard Ennis shows fees average 1 percent of assets under management. By that metric Minnesota Teachers Retirement Association would be expected to pay over a quarter billion dollars a year to fund managers.

The national response from public pension advocacy agencies reflects the crisis these incredibly noteworthy numbers create. Either Minnesota has a special deal with Wall Street paying fees 90 percent under the going rate or an investment board made up of the governor, attorney general, secretary of state, and auditor, has massively massaged the truth.

A long term look at Minnesota’s pension math is just as perplexing. The teachers retirement fund purports to beat a composite index they created by 0.2 percent measured over 1, 5, 10, 20, and 30 years. The odds of that level of consistency over each measure of time are infinitesimal.

Earlier STUMP Podcast

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Ohio STRS: Public meeting notice for July 19, 2024

* Last item: Investment Committee Meeting Presentation

Slide exhibits I referenced:

Boston College Paper: How Do Public Pension Plan Returns Compare to Simple Index Investing?

June 2024, by Jean-Pierre Aubry and Yimeng Yin

Key Findings:

Public pension plans are increasingly relying on alternative investments and active management.

But how does plan performance compare to a simple 60/40 index over various periods from 2000-2023?

Over the full period, plan returns are virtually identical to the simple index strategy, but plans have done much worse since the Global Financial Crisis.

If the current approach doesn’t yield higher long-term returns, a strong argument can be made for sticking with a simple, transparent strategy.

Here are the key graphs from the report:

Richard Ennis Paper

Girard Miller: How ‘Alternative Investments’ Are Dragging Down Pension Performance

Commenting on the Ennis paper, in case you can’t download from SSRN.

SSRN Link: How Hidden Costs Undermine Public Pensions in the US

Abstract

Public pension plans in the US incur exorbitant asset management costs. Most spend a lot and get nothing for it. High cost has hindered efforts to realize their actuarial return requirement. It has resulted in poor performance pretty much across the board. And yet, very few plans provide a full accounting of the costs they incur. Some still fail to net all their investment expenses from the returns they report. High cost is the Achilles heel of the public pension system in the US. It’s time to bring costs down, way down.

Alternative Asset Allocation by Public Pensions … and Ohio STRS

The orange line shows the Ohio STRS allocation. Yes, it’s pretty much in line with the median allocation for the database.

Prior Ohio STRS Posts

6 May 2024: Public Pension Governance Drama in Ohio

10 May 2024: Ohio Pension Drama Continues: Investigation Called on "Hostile Takeover"

16 May 2024: Ohio State Teachers Pension Drama Continues! Board Turmoil!

17 May 2024: More Ohio STRS Commentary: Alternative Assets in Pensions, Anonymous Memos, and Teachers Pensions in General [corrected/updated on May 22]

1 June 2024: Corrections and Clarifications on Ohio STRS: Audits and Investments

27 June 2024: Ohio STRS Drama Continues: No Bonuses and Board Member Resigns

15 July 2024: Ohio STRS Update for 15 July 2024: More Legislative Action, Advisor Resignation(s), Research on Public Pension Asset Returns

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

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Coverage of Bobby Bonilla Day

Fox Sports: What is Bobby Bonilla Day? Explaining the New York Mets' ongoing contract saga

Major League Baseball might be intertwined with July 4, but another early-July holiday holds special significance for a significant portion of baseball fans.

That day is July 1, also known as "Bobby Bonilla Day." It's the day when the New York Mets pay their annual deferred fee to former player Bobby Bonilla — who last played an MLB game in October 2001.

Bonilla was owed $5.9 million when the Mets cut the aging player in 1999 and bought out the rest of his contract. Instead of paying him the sum up front, however, then-Mets owner Fred Wilpon cut a deal with Bonilla's camp. The Mets would pay Bonilla in installments, with annual interest, every year from 2011-2035. Those installments will eventually total nearly $30 million, much more than what Bonilla was owed, according to ESPN.

But there were several upsides for the Mets to pursue this strategy as well — at least, that's the way it looked at the time. The Mets used the $5.9 million to create an annuity with a securities investor they were heavily in business with at the time that would pay them back in annual dividends. By doing so, they also freed up that money from their payroll for MLB bylaws purposes, meaning that they could use it to sign other players without adding to the total roster payroll that the league could potentially levy taxes against. 

The investor with whom they created the account was known for paying back those dividends with high interest, so the Mets themselves thought they would reap the profits of millions of dollars over the course of the deal even when subtracting all the money they would pay Bonilla.

Just one problem — that investor's name was Bernie Madoff, and in 2009, Madoff was convicted of running the largest Ponzi scheme fraud in recorded history and sentenced to 150 years in prison. In other words, the profits that the Mets were counting on in their Bonilla strategy likely never came. The fallout of Madoff's crimes financially devastated the Mets, whose dealings with the corrupt money manager went far beyond their Bonilla agreement. The Mets struggled financially for the rest of Wilpon's tenure as owner until the team was sold to current owner Steve Cohen in late 2020.

(2022) ESPN: What is Bobby Bonilla Day? Explaining why the former Met gets paid $1.19M every July 1

How rare is this arrangement?

Bonilla last played for the Mets in 1999 and last played in the majors for the Cardinals in 2001, but he will be paid through 2035 (when he'll be 72).

Here are some other notable deferred-money contracts, courtesy of ESPN Stats & Information's Ryan Milowicki:

• Bobby Bonilla (again): A second deferred-contract plan with the Mets and Orioles pays him $500,000 a year for 25 years. Those payments began in 2004.

• Bret Saberhagen: Will receive $250,000 a year from the Mets for 25 years (payments also began in 2004; this was the inspiration for Bonilla's deal).

• Max Scherzer: Will receive $105 million total from the Nationals that will be paid out through 2028.

• Manny Ramírez: Will collect $24.2 million total from the Red Sox through 2026.

• Ken Griffey Jr.: Will receive $3.59 million from the Reds every year through 2024 as the deferral from his nine-year, $116 million deal signed in 2000.

• Todd Helton: Will get $1.3 million from the Rockies every year through 2023 as the result of $13 million deferred when he signed a two-year extension in 2010.

Wikipedia: https://en.wikipedia.org/wiki/Bobby_Bonilla

Bonilla signed with the New York Mets during the 1991-92 offseason, becoming the highest-paid player in the league at the time, earning more than $6 million per year. However he struggled to live up to expectations with the Mets (which made the contract the subject of much criticism)[5] and throughout the rest of his career. He played with the Baltimore Orioles from 1995-1996, reaching the American League Championship Series with the team in 1996. He earned two additional All-Star appearances and helped the Florida Marlins win the 1997 World Series.[4] After being traded to the Los Angeles Dodgers part way through the 1998 season, he signed for a second time with the New York Mets in 1999. When the Mets wanted to release him at the end of the year, he negotiated a settlement whereby the Mets would pay him $1.19 million every year from 2011 through 2035 on July 1, a date that has become known in Mets fandom as "Bobby Bonilla Day". He is also paid $500,000 by the Orioles every year from 2004 to 2028 due to them also having a deferred contract with him.[6] After two more lackluster seasons, one each with the Atlanta Braves and St. Louis Cardinals, he retired at the end of the 2001 season. Through his 16 years in professional baseball, Bonilla accumulated a .279 batting average, with a .358 on-base percentage and a .472 slugging percentage.

Mets and Bernie Madoff

Curbed, April 2021: One More Thing Bernie Madoff Helped Ruin: The Mets

When you see Bobby Bonilla’s name trending on Twitter on a day like this, as a Mets fan, do you laugh, or do you cry?

I always laugh because it’s, like, my professional requirement at this point. But you know, it starts with a cry, right? There are certain phrases in the Mets vernacular that when you see them trending your heart just sinks and you’re like, Oh, what now? So, you know, if that’s a long way of asking, did I find out that Bernie Madoff had died because of Bobby Bonilla trending — Yes, I did.

ESPN, April 2021: Bernie Madoff, whose Ponzi scheme affected New York Mets, dies at 82

NEW YORK -- Bernie Madoff, whose Ponzi scheme led to the former New York Mets owners being embroiled in a $1 billion lawsuit, has died in prison at age 82.

Madoff burned thousands of investors, outfoxed regulators and received a 150-year prison term. He died of natural causes at the Federal Medical Center in Butner, North Carolina.

Among his victims were director Steven Spielberg, actor Kevin Bacon and Nobel Peace Prize winner and Holocaust survivor Elie Wiesel. But he had ties to sports figures as well. Hall of Fame pitcher Sandy Koufax was a client. And former Mets owners Fred Wilpon, Jeff Wilpon and Saul Katz were major investors. Their involvement changed the trajectory of the franchise.

Wilpon and Katz had over 500 accounts with Madoff and were sued for $1 billion by the trustee for the victims who claimed they knew, or should have known, about the fraudulent returns from Madoff's scheme, according to The New York Times.

Mets and Bond Ratings

Feb 2010, Reuters: New York Mets stadium debt falls deeper into junk

June 2020, Forbes: New York Mets’ Citi Field Debt Is Downgraded To Below Investment Grade

It may have just gotten a little tougher for Fred Wilpon to hang on to the New York Mets.

This afternoon, credit rating agency S&P Global Ratings announced it was lowering its ratings to BB+, from BBB, on the New York City Industrial Development Agency’s series 2006 $547.4 million payment-in-lieu-of-taxes (PILOT) bonds, $58.4 million installment purchase bonds, $7.1 million lease revenue bonds, and series 2009 $82.28 million PILOT bonds issued for Queens Ballpark Co. LLC (Citi Field), the baseball team’s ballpark. S&P said it was also assigning a recovery rating of 1, reflecting an expectation for very high (90-100%; rounded estimate: 95%) recovery in the event of a default.

The team made a PILOT bond payment of $44 million in 2019. The BB+ rating is the first step toward being rated below investment grade. Specifically, an insurer rated BBB has good financial security characteristics but is more likely to be affected by adverse business conditions than are higher-rated insurers while an insurer rated BB or lower is regarded as having vulnerable characteristics that may outweigh its strengths.

The Mets—owned by Sterling Equities, which is controlled by Jeff Wilpon, his son Jeff, and Saul Katz—have been on the block for a while. A deal with Steve Cohen broke down in February. Most recently, former MLB All-Star Alex Rodriguez and Jennifer Lopez were trying to raise money to buy the team, which Forbes valued at $2.4 billion in early April. In early May, I wrote that the couple had ended their attempt to buy the team because they couldn’t get sufficient funds. But it was reported five days ago that Rodriguez and Lopez are taking another shot.

Oct 2023, Fitch Ratings: Fitch Affirms Queens Ballpark Company LLC (Citi Field, NY Mets) at 'BBB'; Outlook Stable

Fitch Ratings - New York - 04 Oct 2023: Fitch Ratings has affirmed the 'BBB' rating for the New York City Industrial Development Agency's (NYCIDA) PILOT $551.5 million revenue bonds, series 2021; $6.0 million lease revenue bonds, series 2006; and $49.2 million instalment purchase revenue bonds, series 2006, all issued on behalf of Queens Ballpark Company, LLC (QBC). The Rating Outlook is Stable.

RATING RATIONALE

The rating reflects Major League Baseball's (MLB) solid league economics and the historical franchise strength of the New York Mets which play at the Citi Field stadium in Queens, New York City. The QBC retained rights revenue stream provides strong coverage of operating costs and stadium PILOT and lease obligations, although ticket and suite revenues have shown historical variations in attendance levels based on team performance. Rating case coverage of all debt averages 3.7x from 2023-2045, while net revenue coverage of PILOT payments averages 3.3x over the same period.

Older STUMP Posts/Links

Dec 2023: Let's Make a Deal! Ohtani Restructures His Pay

Google spreadsheet with the present value calculation

2023: Happy Bobby Bonilla('s Agent) Day 2023!

2022: Happy Bobby Bonilla Day for 2022!

2021: Happy Bobby Bonilla Day! In Praise of Valuable Annuities

2020: Classic STUMP: Happy Bobby Bonilla Day! And Independence Day! Make Mine a Valuable Annuity!

2018: Mornings with Meep: Happy Bobby Bonilla (and Bruce Sutter) Day!  

2016: Happy Bobby Bonilla Day! and more Americana  

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

Wells Fargo News

Bloomberg, Matt Levine: Wells Fargo Mouse Jigglers

In 2016, Wells Fargo & Co. got in trouble for opening fake accounts. What happened was that Wells Fargo’s senior management had decided that it wanted its branch employees to cross-sell products, to push each checking customer to open up a savings account and a credit card and sign up for online banking and maybe get a mortgage, because this would deepen the bank’s relationship with the customer and ultimately lead to more revenue. But instead of hiring and training employees who would holistically assess each customer’s needs and suggest suitable products, Wells Fargo had “strict quotas regulating the number of daily ‘solutions’ that its bankers must reach,” and its managers would “constantly hound, berate, demean and threaten employees to meet these unreachable quotas.”

….

Ahahaha come on. You want a lot of mouse movement, you get a lot of mouse movement, but in a bad way. Imagine deciding how to measure and manage the productivity and value added of your wealth and investment management employees while they are working from home. What might you measure?

….

Which of those do you think is the best proxy for, like, contributions to Wells Fargo’s return on equity? Which is the simplest to measure? Which is the simplest to game?

CNN Business: Wells Fargo fired a dozen people accused of faking keyboard strokes

See here: Wells Fargo this week disclosed that it had fired more than a dozen employees for “simulation of keyboard activity,” Bloomberg reported, citing filings to the Financial Industry Regulatory Authority. CNN confirmed that multiple people were let go after a review of allegations that they created an “impression of active work.”

In other words, they were faking work, perhaps with the kind of mouse jiggler that you can buy online for $20.

Those devices — which keep your screen active and move your cursor in convincingly random ways — took off during the early days of the pandemic. With employees no longer huddled together under fluorescent lighting, eating sad desk salads, bosses suddenly had to wonder whether their teams were actually working or slacking off.

Even though most workers said they were more productive from home, many executives  adopted “bossware” to monitor their staff’s laptops. (And to be fair, yes — sometimes we did step away, selfishly tending to our own personal business, like walking the dog or staring out the window while contemplating our mortality. We hope you can forgive us.)

….

But firing people over mouse movers may not be the best way to foster a culture of trust and inclusion.

“Managers often assume the worst when they see someone’s away, and so they’re looking for any type of data to show that that’s true,” Herd says. “So, team members are going to innovate around that.”

Mashable: Wells Fargo reportedly fired people for alleged 'simulation of keyboard activity'

There are many ways to fake being online while working, including the use of gadgets that imitate computer activity, or "mouse jigglers." Mouse jigglers are pretty easy to get; they're selling on Amazon for under £10 right now. They're mechanical devices that physically move your mouse around to prevent your computer from going into sleep mode. TikTokkers have been recommending these devices for years, while folks on Reddit have shared horror stories of being caught by their managers using them.

It's unclear how the company actually figured out staff were allegedly undertaking "simulation of keyboard activity" at all. An increasing number of companies are surveilling employees since the COVID-19 pandemic prompted the rise of working from home. Some companies have installed keylogger software on their computers to recorded characters typed, and biometric monitoring is on the rise, despite privacy concerns and employee backlash.

A 2021 study by Express VPN found 78 percent of employers engage in remote work surveillance, with 73 percent of employers using email, calls, messages, or videos to inform performance reviews — yes, your boss can read your Gmail drafts (and that's not all) — and 46 percent using it monitor the potential formation of workers' unions.

But as Jack Morse writes for Mashable, "While your boss monitoring your every move is definitely creepy, it's perfectly legal."

Reddit: r/news Wells Fargo fired a dozen people accused of faking keyboard strokes

The Various “Laws”

Wikipedia: Goodhart’s Law

Goodhart's law is an adage often stated as, "When a measure becomes a target, it ceases to be a good measure".[1] It is named after British economist Charles Goodhart, who is credited with expressing the core idea of the adage in a 1975 article on monetary policy in the United Kingdom:[2]

Any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes.[3]

Campbell’s Law

The more any quantitative social indicator is used for social decision-making, the more subject it will be to corruption pressures and the more apt it will be to distort and corrupt the social processes it is intended to monitor.[1]

….

In 1976, Campbell wrote: "Achievement tests may well be valuable indicators of general school achievement under conditions of normal teaching aimed at general competence. But when test scores become the goal of the teaching process, they both lose their value as indicators of educational status and distort the educational process in undesirable ways. (Similar biases of course surround the use of objective tests in courses or as entrance examinations.)"[1]

Campbell's Law: Something Every Educator Should Know

The cobra effect

The term cobra effect was coined by economist Horst Siebert based on an anecdotal occurrence in India during British rule.[2][3] The British government, concerned about the number of venomous cobras in Delhi, offered a bounty for every dead cobra. Initially, this was a successful strategy; large numbers of snakes were killed for the reward. Eventually, however, people began to breed cobras for the income. When the government became aware of this, the reward program was scrapped. When cobra breeders set their snakes free, the wild cobra population further increased.[4] This story is often cited as an example of Goodhart's law or Campbell's law.[5]

Check out the talk page:

This was told by my dad, who happened to work in the central planification ministry during early socialist Czechoslovakia (until he managed to escape).

Czechoslovakian crystal glass is famous worldwide, and thus chandeliers were produced, for export to get foreign currency. Problem is, there is a limited market for luxury chandeliers, which are purchased by the unit, some of them bespoke, all of them handmade, certainly not from one single design. Thus, worker productivity (very important in socialist countries, for any kind of bonus) cannot be measured by the unit, so let's measure the total weight produced... As a result, Czech crystal chandeliers grew to be so heavy, that clients were having engineering issues when trying to install those. YamaPlos talk 23:50, 28 February 2024 (UTC)[reply]

Winner’s Curse

The winner's curse is a phenomenon that may occur in common value auctions, where all bidders have the same (ex post) value for an item but receive different private (ex ante) signals about this value and wherein the winner is the bidder with the most optimistic evaluation of the asset and therefore will tend to overestimate and overpay. Accordingly, the winner will be "cursed" in one of two ways: either the winning bid will exceed the value of the auctioned asset making the winner worse off in absolute terms, or the value of the asset will be less than the bidder anticipated, so the bidder may garner a net gain but will be worse off than anticipated.[1][2]

Fake Philosophy Journals

Retraction Watch: How a widely used ranking system ended up with three fake journals in its top 10 philosophy list

We checked the Scopus philosophy list and discovered three journals published by Addleton Academic Publishers – which we had never heard of – are in the top 10 of the 2023 CiteScore ranking: Linguistic and Philosophical Investigations (3rd on the list of 806 philosophy journals indexed by Scopus in 2023), Review of Contemporary Philosophy (5/806), and Analysis and Metaphysics (6/806). All three also are in the top 100 of the 2023 SJR ranking. 

….

How was it possible to get into the Scopus top 10 in philosophy? The trick is simple: The Addleton journals extensively cross-cite each other. For example, of 541 citations to Linguistic and Philosophical Investigations used to calculate the 2023 CiteScore, 208 come from journals published by Addleton. Additional citations come mostly from Frontiers and MDPI journals.

Predatory publishing in Scopus: Evidence on cross-country differences

Abstract:

Predatory publishing represents a major challenge to scholarly communication. This paper maps the infiltration of journals suspected of predatory practices into the citation database Scopus and examines cross-country differences in the propensity of scholars to publish in such journals. Using the names of “potential, possible, or probable” predatory journals and publishers on Beall’s lists, we derived the ISSNs of 3,293 journals from Ulrichsweb and searched Scopus with them. A total of 324 of journals that appear in both Beall’s lists and Scopus, with 164,000 articles published during 2015–2017 were identified. Analysis of data for 172 countries in four fields of research indicates that there is a remarkable heterogeneity. In the most affected countries, including Kazakhstan and Indonesia, around 17% of articles were published in the suspected predatory journals, while some other countries have no articles in this category whatsoever. Countries with large research sectors at the medium level of economic development, especially in Asia and North Africa, tend to be most susceptible to predatory publishing. Policy makers and stakeholders in these and other developing countries need to pay more attention to the quality of research evaluation.

Quantitative Science Studies (2022) 3 (3): 859–887.

https://doi.org/10.1162/qss_a_00213

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Episode Links

The Pillar: Massive parish theft calls for more internal control, expert says

The Pillar also has been great in covering the Vatican financial problems. A few sample articles: [all articles are free — some podcasts and other items are for paid subscribers only]

November 2022:

February 2022:

Nov 2023:

Rita Crundwell and Dixon, Illinois

Wikipedia: https://en.wikipedia.org/wiki/Rita_Crundwell

Rita A. Crundwell (née Humphrey; born January 10, 1953) is the former Comptroller and Treasurer of Dixon, Illinois, from 1983 to 2012, and the admitted operator of what is believed to be the largest municipal fraud in U.S. history. She was fired in April 2012 after the discovery that she had embezzled $53.7 million from the city of Dixon for over 22 years to support her championship American Quarter Horse breeding operation, as well as a lavish lifestyle away from work.[1][2][3] Crundwell pleaded guilty to her crimes and was sentenced to 19 and a half years in prison.[4]

Crundwell used the stolen money to turn her Quarter Horse breeding operation, RC Quarter Horses, into one of the best-known in the country; her horses won 52 world championships and she was named the leading owner by the American Quarter Horse Association for eight consecutive years prior to her arrest.[5][6] She spent less than 8+1⁄2 years (43% of her sentence) in prison before being released in mid-2021 to serve the remainder of her sentence in home confinement at her brother's 80 acres (32 ha) farm in Dixon.

Wikipedia: https://en.wikipedia.org/wiki/Dixon,_Illinois

Dixon is a city and the county seat of Lee County, Illinois, United States.[2] The population was 15,274 as of the 2020 census. The city is named after founder John Dixon, who operated a rope ferry service across the Rock River, which runs through the city.[3] The Illinois General Assembly designated Dixon as "Petunia Capital of Illinois" in 1999 and "The Catfish Capital of Illinois" in 2009.

….

In April 2012, Dixon Municipal Comptroller Rita Crundwell was indicted by a Federal Grand Jury for embezzlement. She used the embezzled funds to pay for her lavish lifestyle and what became one of the nation's best-known quarter horse-breeding programs, among other things. Crundwell's crimes, thought to be the most substantial municipal theft in U.S. history,[8][9] impacted Dixon's finances severely. Federal prosecutors estimated the amount embezzled at $53 million since 1990.[10] The city sued the auditors who had failed to detect the embezzlement and the bank at which Crundwell maintained a secret account, and received $40 million in settlements.[11] In February 2013, Crundwell was sentenced to almost 20 years in prison.[9][12]

Politico: She Stole $54 Million From Her Town. Then Something Unexpected Happened.

This is a very good, in-depth article from 2023. I used this excerpt:

Another intangible change: Dixon voters didn’t just throw out their council but their form of government itself, separating the legislative role of the City Council from the executive role of the city manager (whom the council appoints). Langloss, the current city manager, said the job functions like a that of a CEO, with a code of ethics not to get involved in politics. “The council really becomes a board of directors and the staff are in charge of running the operation day to day.”

More checks and balances, yes, but still no matter the form of government, someone has to hold power, and there’s no inherent reason an appointed city manager would be immune from abusing it. (The former city manager of Bell, California, was convicted of corruption, along with six other city officials, in 2014.) Meanwhile, the city has also instituted new financial controls, separating out functions once all concentrated in the person of Rita Crundwell. And one study suggests that city manager-run governments are indeed less susceptible to corruption; for one thing, an appointed city manager does not depend on campaign contributions the way an elected mayor does. Then again, though, neither did Crundwell.

What I did not use: the mayor died within a year, from cancer, and the whistleblower who found the issues during Crundwell’s vacation, Kathe Swanson, retired soon after all this.

All this is very stressful on those exposing the wrong-doing. It’s better if the wrong-doing never happens in the first place. (This is for another time)

Bell, California

Wikipedia: https://en.wikipedia.org/wiki/City_of_Bell_scandal

London Whale

The Modeling Platform: April 2016

How to Keep Your Spreadsheets Out of the Headlines: A Summary

In spring 2012, a prominent trader at JPMorgan was nicknamed the “London Whale” due to the size of the trading positions he took in credit default swaps. The risk management oversight for this trading desk relied on value-at-risk (VaR) limits calculated in a spreadsheet model.

Within this spreadsheet, there was a key error. The formula in calculating the VaR limits inadvertently divided by the SUM of two numbers as opposed to their AVERAGE.1 As a result, the volatility measure being used in calculating VaR was off by a factor of two. That error led to a significant understatement of the trading risk.

This was unlikely to be the only error in the spreadsheet, though. A report released in 2013 showed there was a series of spreadsheets being used for the risk management controls on these trades that involved several manual processes. Information was copied and pasted manually from one spreadsheet to another.

The result of these errors: $6 billion in trading losses over a two-month period.

To be sure, the risk management and governance problems found in this report went well beyond spreadsheets. However, lax spreadsheet practice did contribute to the loss.

Baseline Scenario, Jame Kwak, 2013: The Importance of Excel:

The issue is described in the appendix to JPMorgan’s internal investigative task force’s report. To summarize: JPMorgan’s Chief Investment Office needed a new value-at-risk (VaR) model for the synthetic credit portfolio (the one that blew up) and assigned a quantitative whiz (“a London-based quantitative expert, mathematician and model developer” who previously worked at a company that built analytical models) to create it. The new model “operated through a series of Excel spreadsheets, which had to be completed manually, by a process of copying and pasting data from one spreadsheet to another.” The internal Model Review Group identified this problem as well as a few others, but approved the model, while saying that it should be automated and another significant flaw should be fixed.** After the London Whale trade blew up, the Model Review Group discovered that the model had not been automated and found several other errors.

….

This is why the JPMorgan VaR model is the rule, not the exception: manual data entry, manual copy-and-paste, and formula errors. This is another important reason why you should pause whenever you hear that banks’ quantitative experts are smarter than Einstein, or that sophisticated risk management technology can protect banks from blowing up. At the end of the day, it’s all software. While all software breaks occasionally, Excel spreadsheets break all the time. But they don’t tell you when they break: they just give you the wrong number.

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Episode Links (Updated)

Matt Bivens, M.D. piece:

Drug Overdose Death Stats

Dashboard of U.S. Population Mortality — Opioid Deaths

SOA Research page: U.S. Population Mortality Observations – Updated with 2021 Experience

Historical Items

Laudanum: is a tincture of opium containing approximately 10% powdered opium by weight (the equivalent of 1% morphine).[1] Laudanum is prepared by dissolving extracts from the opium poppy (Papaver somniferum) in alcohol (ethanol).

Innumerable Victorian women were prescribed the drug for relief of menstrual cramps and vague aches. Nurses also spoon-fed laudanum to infants. The Romantic and Victorian eras were marked by the widespread use of laudanum in Europe and the United States. Mary Todd Lincoln, for example, the wife of the US president Abraham Lincoln, was a laudanum addict, as was the English poet Samuel Taylor Coleridge, who was famously interrupted in the middle of an opium-induced writing session of Kubla Khan by "a person on business from Porlock".[14] Initially a working class drug, laudanum was cheaper than a bottle of gin or wine, because it was treated as a medication for legal purposes and not taxed as an alcoholic beverage.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

Ohio STRS media coverage

1 May 2024, Pensions & Investment: Ohio State Teachers loses Aon as consultant amid board turmoil

Ohio State Teachers’ Retirement System, Columbus, has lost Aon as a governance consultant after the firm resigned from the assignment, according to people familiar with the matter.

The $94 billion pension fund’s board recently tilted to a majority of self-proclaimed reformers who want to gut investment staff and move the pension fund to all index funds, citing a desire to restore a permanent 3% cost-of-living adjustment.

At the April 18 board meeting, Trustee Wade Steen reclaimed his seat after the 10th District Court of Appeals earlier that day ruled that Ohio Gov. Mike DeWine did not have the authority in May 2023 to remove Steen as his appointed investment expert on the STRS board before the completion of his four-year term.

5 May 2024, Toledo Blade: Editorial: STRS got fired

The State Teachers Retirement System of Ohio needs a new fiduciary governance adviser. The $92 billion retirement fund for 500,000 Ohio teachers was effectively fired by Aon Fiduciary Services over the chaos on the STRS board.

When the 10th District Court of Appeals ruled that Gov. Mike DeWine acted outside his constitutional authority in firing his appointed investment expert Wade Steen, there suddenly was a 6-5 board majority in support of reforms first advocated by Mr. Steen.

STRS Board Chairman Dale Price, a Toledo Public School teacher, abruptly ended the April 18 meeting without the procedural norms of a motion to adjourn and a vote that supports the motion. The reform majority on the STRS Board was left to sputter in outrage as Mr. Price raced out of STRS headquarters.

April 2024: Ousted STRS member makes dramatic return to board, armed with court ruling

COLUMBUS, Ohio (WCMH) – The governor overstepped his authority when he removed a member of the state teacher pension board, a court has ruled. 

Ohio’s 10th District Court of Appeals sided with ousted State Teachers Retirement System investment expert Wade Steen on Thursday, ruling that Gov. Mike DeWine did not have the constitutional authority to remove Steen from his position on the pension board. The decision cements a magistrate’s recommendation that Steen be reinstated to the board to complete his term.

….

Steen’s presence on the board gave a faction of reformers a majority, allowing them to make desired changes to the state’s teacher retirement fund. But the board chairman called a sudden adjournment of the meeting and left, effectively ending it.

December 2023: Math doesn’t add up – Retired teachers denied 3% COLA increases while some STRS staff get huge bonuses

The images of smiling retired teachers on the screen painted a different picture than the reality faced by Kathy Foster, who retired after teaching 32 years in Findlay.

Despite promises from the State Teachers Retirement System of Ohio, Foster said she has received only one 3% raise since retiring 10 years ago.

“I got one cost of living wage,” said Foster, who lives in Wayne.

Meanwhile, the STRS investment staff has been handsomely rewarded for their work, she said.

“They have gotten millions of dollars in bonuses,” Foster said. “They lost billions of dollars last year, and they are still getting bonuses.”

“We haven’t gotten the money we were promised. I just want the 3% that I was promised,” she said.

STRS is not being good fiduciaries, said Foster, who in retirement has taken on a part-time job at the Wayne Public Library to make ends meet. “I’m not going to be able to work forever,” she said.

“They keep asking the members and the employers for even more,” while the system is spending money on the slick public relations blitz showing teachers seemingly thrilled with their retirement benefits, Foster said, shaking her head.

Public Plans Database: Ohio Teachers

All graphs sourced from the Public Plans Database

STRS 2022 Actuarial Valuation Report

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Graphs and spreadsheet below.

Episode Links, Graphs, and More

Data and Assumptions

Population Estimate

Released 11 April 2024: 2023 Population Estimates by Age and Sex

Social Security Mortality Cohort Projections

2023 Social Security Trustees Report Life Tables, Cohort by Age and Sex, based on the Alternative 2 mortality probabilities used in the 2023 Trustees Report.

Survivorship Projections

First, here are the graphs of the original population in 2023, and how many of them survive to 2033 (10 years), 2048 (25 years), 2073 (50 years), and 2098 (75 years).

This is ignoring any new immigrants or births, just focusing on the current U.S. population and projecting into the future, looking at survivorship.

You can see all the weird peaks, and especially, the steep drops in old age.

But let me simplify the survivorship understanding with this table:

While 15% of the overall population of 2023 makes it to 2098, you can see that is primarily those currently age 20 and younger.

Let’s make it even more apparent:

Again, this is just projecting the current population. In 75 years, of the current population still around, 93% will be those currently 20 and younger, 7% will be 21-40 years old now, and those of us over 40 will have been long gone.

Spreadsheet

Related Posts

May 2015: Illinois Pensions: How Did We Get Here? The 1970 Constitution  

This is the relevant section of the 1970 Illinois State Constitution:

SECTION 5. PENSION AND RETIREMENT RIGHTS

Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.

That section has not been amended since 1970.

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* Be a good animal

* The universe is stranger and more wonderful than you can imagine

* Never pay retail!

* You can try anything once OR Risk is Opportunity

* It’s not about you (or me)

Episode Links

Be a Good Animal

2015 LinkedIn: Best Advice: Be a Good Animal

Battling Cognitive Bias, reprint in 2018

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Francesca Gino

Science, 9 Apr 2024: Embattled Harvard honesty professor accused of plagiarism by Cathleen O’Grady

Harvard University honesty researcher Francesca Gino, whose work has come under fire for suspected data falsification, may also have plagiarized passages in some of her high-profile publications.

A book chapter co-authored by Gino, who was found by a 2023 Harvard Business School (HBS) investigation to have committed research misconduct, contains numerous passages of text with striking similarities to 10 earlier sources. The sources include published papers and student theses, according to an analysis shared with Science by University of Montreal psychologist Erinn Acland.

Science has confirmed Acland’s findings and identified at least 15 additional passages of borrowed text in Gino’s two books, Rebel Talent: Why it Pays to Break the Rules at Work and in Life and Sidetracked: Why Our Decisions Get Derailed, and How We Can Stick to the Plan. Some passages duplicate text from news reports or blogs. Others contain phrasing identical to passages from academic literature. The extent of duplication varies between passages, but all contain multiple identical phrases, as well as clear paraphrases and significant structural similarity.…Debora Weber-Wulff, a plagiarism expert at the Berlin University of Applied Sciences, says Science’s findings are “quite serious” and warrant further investigation by the publishers and universities. HBS and Harvard Business Review Press, which published Sidetracked, declined to comment. Dey Street Books, a HarperCollins imprint that published Rebel Talent, and Guilford Press, publisher of the edited book The Social Psychology of Good and Evil that includes the co-authored chapter, did not respond to a request for comment.

Acland says she decided to “poke around” into Gino’s work in September 2023, after the researcher filed a $25 million lawsuit against HBS and the data sleuths who uncovered the misconduct. Acland focused on plagiarism, rather than data issues, because of her experience detecting it in student work. She searched phrases from Gino’s work on Google Scholar to see whether they matched content from other works.

She says she found apparent plagiarism in the very first sentence of the first work she assessed, the 2016 chapter “Dishonesty explained: What leads moral people to act immorally.” The sentence—“The accounting scandals and the collapse of billion-dollar companies at the beginning of the 21st century have forever changed the business landscape”—is word for word the same as a passage in a 2010 paper by the University of Washington management researcher Elizabeth Umphress and colleagues.

I didn’t talk about the person who found the plagiarism in this case.

This is what gets me so often — the tenured profs just assume nobody will ever check.

For various reasons, perhaps all the top profs shouldn’t assume that anymore. And maybe they should start crediting all their research assistants with the real work…. but that’s for another time.

Prior Gino posts/episodes:

Material Science/Chemistry Non-Replicable Experiment

Chemistry World, 11 April 2024: Holes in the ‘holey graphyne’ story

Recently, the journal Matter published a paper describing a novel form of carbon.2 This purported allotrope, ‘holey graphyne’, is comprised mainly of cyclooctadiyne rings. Moreover, the synthesis was supposedly accomplished using a simple copper catalyst. Typically, the C–C bond-forming reactions of the kind claimed in the Matter paper require expensive palladium.

The unusual structure and the unprecedented chemistry should have raised eyebrows during peer review, and ideally before this review commenced. Eight-membered rings with even a single triple bond are highly reactive (harnessing that reactivity has brought a Nobel prize to Carolyn Bertozzi). A material containing that many two-triple-bond rings would be more energetic than TNT, and likely quite prone to rapid unscheduled disassembly. Contrary to these expectations, the paper asserted perfect stability of the ‘holey’ material up to 700°C. While the reported spectroscopy was demonstrably mismatched with the claimed structure, the authors simply declared that everything fits.

….

Our replication is now published.4 We are grateful to the editor of Matter, as I know from experience that not every editor would even acknowledge the problem.

Regrettably, this story doesn’t qualify as a decisive win for post-publication review. Following their policy, Matter allowed the authors to publish a response, which doubled down on the original dubious conclusions. For now, the ‘holey’ paper remains unretracted, though I remain hopeful.

You may have come across equally troubling papers in your field. Don’t remain silent. Share your concerns on platforms like PubPeer or social media, reach out to journal editors and inform research compliance offices. This may end up being some of your most important work.

Matter, 6 March 2024: The purported synthesis of “holey graphyne” fails replication

A recent article by Ryu, Lee, and co-workers claims synthesis of “holey graphyne,” a strained sp2/sp1 carbon lattice featuring a repeating dibenzo-1,5-cyclooctadiene-3,7-diyne motif. Here, we describe the replication of the key experiments from this article. We did not observe the formation of holey graphyne under the reported conditions. Furthermore, we show that the claimed copper-mediated sp2/sp1 cross-coupling chemistry fails even for undemanding model substrates.

The Saga of the Iffy Excel Autofill & “Just Copy the Next Country” Imputation

Retraction Watch, 5 Feb 2024: No data? No problem! Undisclosed tinkering in Excel behind economics paper

Last year, a new study on green innovations and patents in 27 countries left one reader slack-jawed. The findings were no surprise. What was baffling was how the authors, two professors of economics in Europe, had pulled off the research in the first place. 

The reader, a PhD student in economics, was working with the same data described in the paper. He knew they were riddled with holes – sometimes big ones: For several countries, observations for some of the variables the study tracked were completely absent. The authors made no mention of how they dealt with this problem. On the contrary, they wrote they had “balanced panel data,” which in economic parlance means a dataset with no gaps.

“I was dumbstruck for a week,” said the student, who requested anonymity for fear of harming his career. (His identity is known to Retraction Watch.)

22 Feb 2024: Exclusive: Elsevier to retract paper by economist who failed to disclose data tinkering

A paper on green innovation that drew sharp rebuke for using questionable and undisclosed methods to replace missing data will be retracted, its publisher told Retraction Watch.

Previous work by one of the authors, a professor of economics in Sweden, is also facing scrutiny, according to another publisher. 

As we reported earlier this month, Almas Heshmati of Jönköping University mended a dataset full of gaps by liberally applying Excel’s autofill function and copying data between countries – operations other experts described as “horrendous” and “beyond concern.”

21 Feb 2024, by Gary Smith: How (not) to deal with missing data: An economist’s take on a controversial study

For example, a student in my introductory statistics class once surveyed 54 classmates and was disappointed that the P-value was 0.114. This student’s creative solution was to multiply the original data by three by assuming each survey response had been given by three people instead of one: “I assumed I originally picked a perfect random sample, and that if I were to poll 3 times as many people, my data would be greater in magnitude, but still distributed in the same way.” This ingenious solution reduced the P-value to 0.011, well below Fisher’s magic threshold.

Ingenious, yes. Sensible, no. If this procedure were legitimate, every researcher could multiply their data by whatever number is necessary to get a P-value below 0.05. The only valid way to get more data is, well, to get more data. This student should have surveyed more people instead of fabricating data.

….

Joelving also found that Excel’s autofill function sometimes generated negative values, which were, in theory, impossible for some data. For example, Korea is missing R&Dinv (green R&D investments) data for 1990-1998. Heshmati and Tsionas used Excel’s autofill with three years of data (1999, 2000, and 2001) to create data for the nine missing years. The imputed values for 1990-1996 were negative, so the authors set these equal to the positive 1997 value.

Cancer Research Fraud

The Free Press, February 2024: We’re Not Curing Cancer Here, Guys

These concerns have been brewing for a while and they are reaching a tipping point. The fact that there’s been so much plagiarism at Harvard and there’s been all this image manipulation shows that the most venerable institutions are no safeguard against malfeasance. 

What punishment have any of these researchers actually faced? Claudine Gay resigned, although was shuffled into a role that paid her very well. All of the authors of these disputed papers have, to my knowledge, faced no sanction. Their paper gets withdrawn, but they still get promoted. There’s no punishment. 

A few years ago, there was a proposal by the International Committee of Medical Journal Editors arguing that every paper published in the top journals should make the raw data available. That proposal was shot down because people were worried about their careers, and that other researchers would take their data and use it to make breakthroughs before them. Sharing is the solution. You should have to make all the data available whenever you publish medical research.

Research Fraud, etc. thread at GoActuary

Contains links to these and other stories

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While Chicago is actually in the worst situation, the proposals for Chicago sound the most realistic in terms of fixing its problems.

Edward Siedle’s links

Mar 2024: Minnesota Teachers Fundraise Forensic Audit of State Pension System

Apr 2024: Minnesota Teacher Pension Forensic Investigation Invites Whistleblower, Expert And Public Participation

Minnesota Teachers in Public Plans Database

Minnesota Teachers Retirement Association - contains two plans in the database: Duluth Teachers and Minnesota Teachers. Duluth is small in terms of participants, so I will just link Minnesota Teachers plan.

Minnesota Teachers pension plan.

Some selected graphs:

Connecticut pension links

Hartford Courant op-ed

10 Ways to reform public pension funds

Improvements in the state's historical investment underperformance can alleviate the crushing income tax burden of transferring $7.7 billion in surplus contributions from state tax revenues to pay down the pension burden, and relieve state public employees and teachers from being docked an additional 2% of their wages each year to cover the investments hole. With even average performance in the past, Connecticut's income tax might have been sliced in half or more.

Given the scale of this challenge, it is remarkable that decades of underperformance of Connecticut's pension funds escaped public notice and scrutiny for as long as it did, until last year, when we revealed in a 113-page research report how Connecticut's pension funds have had one of the worst investment track records of all 50 peer states, across all timeframes, which garnered significant attention and calls to action from across the state. Given the asset management and endowment investing expertise in Connecticut, this was a tragic paradox.

Yale Business Report

113-slide version: The Investment Challenges Facing Connecticut’s Pension Funds - Jan 2023.pdf

Shorter version: Why Connecticut’s Investments Are Underperforming

Pie charts w/ the Excel defaults:

They actually cleaned it up a little bit from the originals.

Washington Pensions

Connecticut Pensions

As you can see, there is a very salient different between the two states.

And here we go:

Chicago pension links

Press Release, 5 Apr 2024: Harris School of Public Policy Announces Policy Innovation Challenge's Winning Student-Led Pension Proposal

Op-eds from the finalists

Read each team's op-ed via the links below: 

The winning team: Opinion: Here's a roadmap to financial stability with Chicago's pensions

By Syed Ahmad , Anthony Beaupre , Liam Gluck , James Karsten , Greg Rudd

Opinion: To fix Chicago's pensions, consider a change in public opinion

By Eddie Andujar , Andy Fan , Andre Oviedo , Alberto Saldarriaga

Opinion: Two paths to funding Chicago's pension future

By Anna Weiss , Purva Sarkango , Devyanshi Dubey

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Episode Links

Prior STUMP posts related:

On Life Expectancy

That was the claim.

Here are the facts.

2023 OASDI Trustees Report — Table V.A4.—Period Life Expectancy: Historical Data

First, while period life expectancy from birth increased about 15-16 years from 1940 to 2019 (ignore the pandemic for now), the key life expectancy - from age 65 - didn’t extend quite so much — only 5-6 years. That’s because you have to survive to age 65 in the first place.

A chart from the American Academy of Actuaries based on the historical, plus projected, from the report:

Social Security History

Frequently Asked Questions

Q1:  When did Social Security start?

A: The Social Security Act was signed by FDR on 8/14/35. Taxes were collected for the first time in January 1937 and the first one-time, lump-sum payments were made that same month. Regular ongoing monthly benefits started in January 1940.

American Academy of Actuaries

An Actuarial Perspective on the 2023 Social Security Trustees Report

Social Security Committee issue brief on 2023 Social Security Trustees Report examining the latest detailed annual assessment by the federal government of the program’s solvency.

(February 02, 2024)

Issue Brief: Reforming Social Security Sooner Rather Than Later

Social Security’s combined trust fund reserves are projected to become depleted around 2034,1 at which time its income would be able to pay only 80% of the benefits scheduled for its 80 million beneficiaries. It is important that Congress immediately focus on this issue because delay makes the solution more difficult, as it gradually limits the viable options to those relying on increasing taxes. 

(October 31, 2023)

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

[Gyoji photo: By Eckhard Pecher (Arcimboldo) - Own work, CC BY 3.0, https://commons.wikimedia.org/w/index.php?curid=3381695]

Episode Links

Hokuseiho/Miyagino Bullying Scandal

BBC News: Hakuho: Top sumo champion demoted due to protege's violence

Tachiai Blog: Hokuseiho is out; Miyagino Hangs On By a Thread

Japan Times, by John Gunning: How a rethink of supervision at stables could curtail bullying in sumo

Who Will Watch the Watchmen?

Wikipedia article

... nouiconsilia et ueteres quaecumque monetis amici,"pone seram, cohibes." sed quis custodiet ipsoscustodes? qui nunc lasciuae furta puellaehac mercede silent crimen commune tacetur.

... I knowthe plan that my friends always advise me to adopt:"Bolt her in, constrain her!" But who can watchthe watchmen? They keep quiet about the girl'ssecrets and get her as their payment; everyone hushes it up.

Equitable Life Assurance Society

Wikipedia article

European Parliament document on the fiasco: REPORT on the crisis of the Equitable Life Assurance Society

Equitable Life: A Decade of Regulatory Failure

Public Pension Segment

American Academy of Actuaries Public Discipline

Notice on Jonathan Schwartz’s public discipline from the Academy

Actuarial Board for Counseling and Discipline

STUMP Nov 2018: Actuarial History... Which is Not Really History  

While the “voodoo” remark pissed off a lot of actuaries (and thus many complained to the ABCD), he also got dinged for this shoddy work. FWIW, he already did what the Academy required of him as part of his discipline, and while he’s listed as officially retired in the Actuarial Directory, he’s still a member of the SOA and Academy, as far as I can tell.

….

Schwartz was there to say that defined benefit pensions aren’t obsolete, and they are affordable.

And he “persuaded” that these were affordable… by fudging the numbers. Actuarial “voodoo” if you will.

He actually undermined the DB plans by lowballing the cost. Only in the short run do those in the unions get their payouts, but if it turns out the costs (which are ongoing – people who retired at age 50 back in 2008 have a high probability of still being alive, for instance) are too high….

dun dun DUN….

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

The original articles:

Part 1: Leadership Books - the Classics

Part 2: The Classics, Part 2

Project Gutenberg Links

Plutarch: Lives of the noble Grecians and Romans by Plutarch

The Lives of the Twelve Caesars, Complete by Suetonius

The History of the Peloponnesian War by Thucydides

The Iliad by Homer

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

Truth in Accounting’s FSOC 2024

PDF: https://www.truthinaccounting.org/library/doclib/Financial-State-of-the-Cities-2024.pdf

A few graphs

A couple “random” towns I didn’t talk about:

In accounting terms, black is good, red is bad

Webinar:

Financial Data Transparency Act

Liz Farmer: 3 issues to watch in a landmark year for government financial data

DebtBook: Get the FDTA Playbook

Related Links

2020: Taxing Tuesday Special: State of the Cities from Truth in Accounting  

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

Liz Farmer’s substack

I was not realizing this story is free to all:

Here is a quote from this free story:

A commonality with all the fiscal distress laws I’ve reviewed is that decisions are to be made for the sake of the health, safety and well-being of residents. When a locality is chronically unable to manage its finances, it endangers vital public services and puts residents at risk. 

But state takeovers can go horribly wrong. In Michigan, studies have shown that the wide-ranging authority of the emergency manager law and the resulting lack of accountability of the manager in place in 2014 contributed directly to Flint’s devastating water crisis.

This is a worst-case scenario, but it shouldn’t be dismissed as an extreme. The fear that an outsider will strong-arm duly elected local officials and subvert the will of the people is a legitimate one. The key here is accountability. Virginia’s law requires an emergency manager to submit regular reports to state and local entities, which is one mechanism for accountability.

Sadly, the more common scenario is that residents suffer harm due to local officials’ inability (or unwillingness) to make the tough decisions that a fiscal crisis requires. Emergency response times tick upward, garbage litters the streets because trash pickup is unreliable, libraries and community centers operate on shortened hours—you get the point. I haven’t done a deep dive into Hopewell’s long-term financial trends, but I did stumble upon one datapoint that suggests residents here have increasingly been paying for the city’s fiscal woes. 

I highly recommend Liz Farmer’s work.

The Norwegian Sovereign Wealth Fund Story

Financial Times: The Norwegian Sovereign Wealth fund’s $92 million error [paywall]

ResearchGate: Anthropological gaze, stories, and reflections on NBIM culture

Last year (spring 2022) we had an off-site. One of our workshops was on “Mistakes and how to deal with them”. We wrote post-it notes, classifying them into different categories from harmless to no-goes. One of my post-it notes, I remember it vividly, read: Miscalculation of the Ministry of Finance benchmark. I placed it in the category unforgivable. When I wrote that note, I honestly couldn’t even dare to think about the consequences . . . And less than a year later, I did exactly that. My worst nightmare. It was a manual mistake. My mistake. I used the wrong date, December 1st instead of November 1st which is clearly stated in our mandate. The mistake was not revealed until months later, by the Ministry of Finance. They reported back that the numbers did not add up. I did all the numbers once more, and the cause of the mistake was identified. I immediately reported to Patrick [Global Head] and Dag [Chief]. I openly express that this was my mistake, and mine alone. I felt miserable and was ready to take the consequences — whatever they might be.

Federal Debt and Entitlement Issue

Babylon Bee: Senators Say They're Not Super Worried About Running Up National Debt As Most Of Them Will Die Of Natural Causes In The Next Year Or So

Charles Blahous in Discourse Magazine: Americans Should Be Less Complacent About Social Security

STUMP Related Posts

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode links

Secret of Supercentenarians?

2009, NewScientist: Secrets of the centenarians: Life begins at 100

Dying of old age"There is one, and only one, cause of death at older ages. And that is old age." So said Leonard Hayflick, one of the most influential gerontologists of all time. But dying of old age isn't just a case of peacefully losing the will to live - it is an accumulation of diseases and injuries different to those that tend to kill people at younger ages.For a start, the oldest old have very low rates of chronic diseases such as cancer, heart disease and stroke. The trend is particularly apparent for cancer. The odds of developing it increase sharply as people age, but they fall from the age of 84, and plummet from 90 onwards. Only 4 per cent of centenarians die of cancer, compared with 40 per cent of people that die in their fifties and sixties.Many centenarians even manage to ward off chronic diseases after indulging in a lifetime of serious health risks. Many people in the New England Centenarian Study experienced a century free of cancer or heart disease despite smoking as many as 60 cigarettes a day for 50 years. The same story applies to people from Japan's longevity hotspot, Okinawa, where around half of the local supercentenarians had a history of smoking and one-third were regular alcohol drinkers. These people may well have genes that protect them from the dangers of carcinogens or the random mutations that crop up naturally when cells divide.So what does kill off the oldest old? Pneumonia is the biggest culprit, with other respiratory infections, accidents and intestinal problems trailing behind. "Dying of old age involves total systems failure," says Craig Willcox of the Okinawa Centenarian Study in Japan. "Centenarians avoid age-associated diseases, but you see a lot of systemic wear and tear. Almost all of them have had some problems with cataracts, they can't hear very well and have osteoarthritis. Our most recently deceased centenarian in Okinawa caught a cold and died in her sleep."

2019, Vox: Study: many of the “oldest” people in the world may not be as old as we think

We’ve long been obsessed with the super-elderly. How do some people make it to 100 or even 110 years old? Why do some regions — say, Sardinia, Italy, or Okinawa, Japan —produce dozens of these “supercentenarians” while other regions produce none? Is it genetics? Diet? Environmental factors? Long walks at dawn?

A new working paper released on bioRxiv, the open access site for prepublication biology papers, appears to have cleared up the mystery once and for all: It’s none of the above.

Instead, it looks like the majority of the supercentenarians (people who’ve reached the age of 110) in the United States are engaged in — intentional or unintentional — exaggeration.

….

The paper also looks at the phenomenon in Italy and Japan, where something different seems to be happening.

Italy keeps better vital statistics than the United States does, and has had reliable vital statistics across the country for hundreds of years — yet in Italy, too, there are clusters of the country where lots of supercentenarians pop up. Maybe the Italian supercentenarians are for real?

Newman’s analysis suggests not. He starts out by noticing something fishy: The parts of Italy that claim the most supercentenarians overall have high crime rates and low life expectancy. Isn’t that weird? Why would an area generally have low life expectancy but also produce an extremely disproportionate share of the world’s oldest people?

The same pattern repeats itself in Japan: Okinawa has the greatest density of super-old people, despite having one of the lowest life expectancies in the country and generally poor health outcomes.

The paper puts forward a controversial proposal. It seems unlikely that living in high-crime, low-life-expectancy areas is the thing that makes it likeliest to reach age 110. It seems likelier, the paper concludes, that many — perhaps even most — of the people claiming to reach age 110 are engaged in fraud or at least exaggeration. The paper gives a couple of examples of how this might come about; some of it might be reporting error, and some of the supercentenarians might be produced by pension fraud (someone might be claiming a dead person is still alive for pension benefits, or claiming the identity of a parent or older sibling).

bioRXiV: Supercentenarians and the oldest-old are concentrated into regions with no birth certificates and short lifespans

Abstract: The observation of individuals attaining remarkable ages, and their concentration into geographic sub-regions or ‘blue zones’, has generated considerable scientific interest. Proposed drivers of remarkable longevity include high vegetable intake, strong social connections, and genetic markers. Here, we reveal new predictors of remarkable longevity and ‘supercentenarian’ status. In the United States, supercentenarian status is predicted by the absence of vital registration. The state-specific introduction of birth certificates is associated with a 69-82% fall in the number of supercentenarian records. In Italy, which has more uniform vital registration, remarkable longevity is instead predicted by low per capita incomes and a short life expectancy. Finally, the designated ‘blue zones’ of Sardinia, Okinawa, and Ikaria corresponded to regions with low incomes, low literacy, high crime rate and short life expectancy relative to their national average. As such, relative poverty and short lifespan constitute unexpected predictors of centenarian and supercentenarian status, and support a primary role of fraud and error in generating remarkable human age records.

PDF: https://www.biorxiv.org/content/10.1101/704080v1.full.pdf

Japan Pension Fraud

July 2010, BBC News: Tokyo's 'oldest man' had been dead for 30 years

He was thought to be the oldest man in Tokyo - but when officials went to congratulate Sogen Kato on his 111th birthday, they uncovered mummified skeletal remains lying in his bed.

Mr Kato may have been dead for 30 years according to Japanese authorities.

They grew suspicious when they went to honour Mr Kato at his address in Adachi ward, but his granddaughter told them he "doesn't want to see anybody".

Police are now investigating the family on possible fraud charges.

Wikipedia: Sogen Kato, Aftermath

After the discovery of Kato's mummified corpse, other checks into elderly centenarians across Japan produced reports of missing centenarians and faulty recordkeeping. Tokyo officials attempted to find the oldest woman in the city, 113-year-old Fusa Furuya, who was registered as living with her daughter. Furuya's daughter said she had not seen her mother for over 25 years.[12] The revelations about the disappearance of Furuya and the death of Kato prompted a nationwide investigation, which concluded that police did not know if 234,354 people older than 100 were still alive.[13] More than 77,000 of these people, officials said, would have been older than 120 years old if they were still alive. Poor record keeping was blamed for many of the cases,[13] and officials said that many may have died during World War II. One register claimed a man was still alive at age 186.[14]

Following the revelations about Kato and Furuya, analysts investigated why recordkeeping by Japanese authorities was poor. Many seniors have, it has been reported, moved away from their family homes. Statistics show that divorce is becoming increasingly common among the elderly. Dementia, which afflicts more than two million Japanese, is also a contributing factor. "Many of those gone missing are men who left their hometowns to look for work in Japan's big cities during the country's pre-1990s boom years. Many of them worked obsessively long hours and never built a social network in their new homes. Others found less economic success than they'd hoped. Ashamed of that failure, they didn't feel they could return home,"[13] a Canadian newspaper reported several months after the discovery of Kato's body.[13]

New York State Pension Fraud

July 2023:

DiNapoli: Texas Woman Charged with Stealing Over $65,000 in NYS Pension Payments

State Comptroller Thomas P. DiNapoli announced the indictment of a 53-year-old Texas woman for allegedly stealing more than $65,000 in New York state pension payments meant for a deceased acquaintance. Christy Gibson, of Smith County, Texas, was indicted by Texas prosecutors and charged with one count of theft after an investigation by DiNapoli’s office.

“Christy Gibson went to great lengths to cover up the death of an acquaintance to line her own pockets,” DiNapoli said. “Thanks to the work of my investigators and law enforcement in Texas, she will be held accountable. We will continue to partner with law enforcement from across the country to protect the New York State Retirement System.”

William H. Walsh Jr. retired from the New York State Department of Corrections and Community Supervision in November 1986. He elected to receive a reduced monthly retirement benefit so his wife, Mary L. Walsh, would continue to receive payments if he died before her. William Walsh died in October 2005. Mary Walsh died in December 2012 and at the time of death the pension payments should have stopped. Instead, her death was never reported to the New York state retirement system.

In May 2013, the retirement system received information indicating that Walsh may have died, and pension payments were halted. In June of that year, the retirement system sought verification that Mary Walsh was still alive and subsequently received notarized verification, purportedly from Mary Walsh. As a result, the pension payments were reinstated.

A later investigation by the State Comptroller’s Office found that Mary Walsh was in fact deceased, and the verification was fraudulent.

In total, 70 pension payments were paid after date of death, amounting to $65,102.28.

The pension payments went into a joint account in the name of Mary Walsh and Gibson that was opened in 2011. Gibson never informed the bank of Walsh’s death or removed Walsh’s name from the account. It appears that Gibson was an acquaintance of Mary Walsh through her sister-in-law and also worked at the nursing home where Walsh eventually lived.

DiNapoli’s investigators determined that Gibson used the joint account to pay for entertainment and food. Gibson also made electronic transfers and cash withdrawals.

The Value of the Sentinel Effect

Product Development News, October 1998, Richard L. Bergstrom, The Underwriter’s Corner, “The Value of the Sentinel Effect (Revisited)” https://www.soa.org/globalassets/assets/library/newsletters/product-development-news/1998/october/pdn-1998-iss47-bergstrom.pdf

Episode Links

Harvard

About Harvard Extension School

Since our founding in 1910, we have extended Harvard University to the world — to adult learners who have the curiosity and drive to be challenged. Part of the Harvard Division of Continuing Education, we serve students seeking part-time online courses and programs to advance their careers or pursue an academic passion.

We are a fully accredited Harvard school. Our degrees and certificates are adorned with the Harvard University insignia. They carry the weight of that lineage. Our graduates walk at University Commencement and become members of the Harvard Alumni Association.

Prof Hochschild statements

https://twitter.com/sfmcguire79/status/1745999107569631290

https://twitter.com/sfmcguire79/status/1745983162381987930

https://twitter.com/Jenniferhochsc2/status/1745912823689973880

Chris Rufo statements

https://twitter.com/realchrisrufo/status/1746301145004613819

https://twitter.com/BarneyFlames/status/1745928845167821101

https://twitter.com/realchrisrufo/status/1745922978553155749

https://twitter.com/realchrisrufo/status/1745924111652806981

Personal MBA

Personal MBA website

Personal MBA Manifesto

The Personal MBA is a project designed to help you educate yourself about advanced business concepts. This manifesto will show you how to substantially increase your knowledge of business on your own time and with little cost, all without setting foot inside a classroom.

The Personal MBA is more flexible than a traditional MBA program, doesn’t involve going into massive debt, and won’t interrupt your income stream for two years. Just pick up one of these business books, learn as much as you can, discuss what you learn with others, then go out into the real world and make great things happen.

If you’re interested in educating yourself about business, The Personal MBA is the best place to start.

“Get Your Personal MBA!” by Mary Pat Campbell, July 2009

The Personal MBA concept revolves around a booklist, organized into categories such as communication, project management, entrepreneurship, leadership and personal development. Titles include familiar business classics:

Dale Carnegie’s How to Win Friends and

Influence People Robert Cialdini’s Influence: The Psychology of Persuasion

There are also newer books on the list, such as Seth Godin’s Tribes, published in October 2008, which looks at the impact of new communication channels (e.g. Twitter or Facebook) on the concept of effective leadership.

….

My own recommendation regarding use of the PMBA reading list is to prioritize reading the older books on the list over the newer ones. Many of the newer titles (such as the previously mentioned Tribes) are faddish and will probably not have lasting relevance.

….

A personal recommendation from the PMBA reading list is Darrell Huff’s How to Lie with Statistics. Originally published in 1954, this book is a short and gentle introduction to popular distortions and misuses of statistics (and some of the numbers he quotes are good for a laugh). I read this book when I first learned statistics, and I’ve used it in my teaching of the subject since then. A good followup to this book (not on the PMBA list) are Edward Tufte’s books1 on graphical presentation of numerical data, which may help you think of effective graphical presentations in your own work.

“Quit Paying For Business Education!” by Mary Pat Campbell, October 2008

I come not to praise the business book, but to bury it.

There is much crystallized wisdom and information in the many books in the business section of stores like Barnes & Noble (especially if “Drucker” is on the spine). However, too often I find I’ve put down good money for something that is outdated (given long publication cycles), full of lightweight prescriptions that aren’t actionable, or is based on a metaphor extended far beyond any reasonable application. I get tired of the books churned out by CEOs boosting their egos, or consultants using the books as vehicles to drum up business or speaking engagements.

The book sits lifeless in my hand, its story unfolding in a linear manner, with no interaction between me and the material except a reflective one. I’ve written comments in the margins of books: “What did he mean by that?”, “Where can I learn more about this?”, “What a crock!”.

But no one answers.

My “No Child’s Ass Left Unkicked” Idea

Jan 2007: Charles Murray response: teaching wisdom

Again, all these lessons are important for everybody, but one likely has to make special provisions for those who are extremely intelligent as they're the least likely to run into these lessons in a standard classroom. It's hard to learn humility when you're constantly lauded as the best. It's hard to learn that hard work is needed when everything is easy for you. It's hard to give others their proper respect when others are always praising your results more than others.So, in short, all kids need to have their asses kicked, but the intellectually gifted are least likely to have that done. So we've got to make sure they get what's coming to them, too.I call this plan the No Child's Ass Left Unkicked plan.

Archive of my education-related posts on livejournal - oldest post on that list is 2001

First Things Podcast

In this episode, Andrew Youngblood joins Mark Bauerlein to discuss his new book “Know Thyself: Catholic Classical Education and the Discovery of Self​​.”

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

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Prior episode in referring to ChatGPT use in academic papers

Guillaume Cabanac

Twitter feed: Guillaume Cabanac ⟨here and elsewhere⟩

He retweeted:

https://twitter.com/clementFFF/status/1745193183988871357

https://twitter.com/gcabanac/status/1689334454798491648

Cabanac also has a suite of tools to discover academic papers in STEM with tortured language as an indicator that something may be suspect with the method or results.

Meep’s rant on calculator use in math class

25 Aug 2000: Here is my tirade on calculators.

In 1988, when I took trigonometry in high school, graphing calculators were an expensive new tool and calculators hadn't really been integrated into the mathematics curriculum. We mainly used calculators to add, subtract, multiply, divide, and sometimes even take a square root. However, even these most rudimentary calculators were forbidden my first quarter in trig. .... Fast forward to 1996, in which very sophisticated calculators and computer programs have been incorporated into the math curriculum, from pre-algebra to trigonometry to calculus and beyond. I spent four years as a computer consultant for the math department at North Carolina State University, which had fully incorporated the symbolic math program Maple into its Calculus curriculum. I saw many of the students doing the same thing as my fellow students from so many years before: taking the functions they had and applying all sorts of things from example Maple worksheets to it, hoping they would recognize the answer when they saw it. If they were lucky, the homework problem exactly paralleled the examples. Usually, they were not lucky, and they, like Cinderella's step-sisters trying on the dainty slipper, would hack at the problem given trying to make it fit one of the examples that had previously been done. This, obviously, is a stupid way to apply technology to math problems. Much has been made of the use of calculators and computers in math, and they are indeed very useful, powerful, and even necessary tools in modern math research. However, I feel that the focus of the use of these tools has been misplaced. Too often they are seen as something that can remove the tedium from math, as opposed to tools that remove tedious calculations that one understands very well and can do by hand one's self. People claim that many students are turned off by math early on due to excessive rote memorization of addition tables, multiplication tables, and the like. Math is about recognizing patterns, not simply arithmetic, they enthusiastically proclaim, and let us use calculators to cut through the tedium of practicing long division and graphing lines. I would agree with them -- mathematics has very little to do with arithmetic and has everything to do with finding patterns and relations and using these things to solve problems. Indeed, I rarely do long division by hand, or even integrate by hand anymore. However, I do not agree with the reasons as to why students are getting turned off from math. They get turned off because they do not understand it.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

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Tom Lehrer: Lobachevsky

Tom Lehrer songs page for Lobachevsky

Lyrics

I am never forget the day I first meet the great Lobachevsky.

In one word he told me secret of success in mathematics:

Plagiarize!

Plagiarize!

Let no one else's work evade your eyes.

Remember why the good Lord made your eyes,

So don't shade your eyes,

But plagiarize, plagiarize, plagiarize --

Only be sure always to call it please "research".

Harvard, Claudine Gay, and Bill Ackman

NY Post: Revealed: Harvard cleared Claudine Gay of plagiarism BEFORE investigating her — and its lawyers falsely claimed her work was ‘properly cited’

Harvard cleared its president Claudine Gay of plagiarism before it even investigated whether her academic work was copied, The Post reveals today.

In a threatening legal letter to The Post in late October, the college called allegations that she lifted other academics’ work “demonstrably false,” and said all her works were “cited and properly credited.”

Days later Gay herself asked for an investigation and Harvard tore up its own rules to ask outside experts to review her work, saying it had to avoid a conflict of interest.

CNN: Business Insider stands by reporting on Bill Ackman’s wife, Neri Oxman, says stories ‘are accurate’ with ‘no unfair bias’

Business Insider and its parent company, Axel Springer, said Sunday that they stood by the outlet’s reporting that Neri Oxman, a prominent former professor at the Massachusetts Institute of Technology and the wife of billionaire hedge fund manager Bill Ackman, had plagiarized in her doctoral dissertation.

In a note Sunday morning, Barbara Peng, chief executive of Business Insider, said the outlet had spent several days reviewing its reporting after public complaints made by Ackman. The review, Peng said, found that “there was no unfair bias” and that the “process we went through to report, edit, and review the stories was sound.”

Peng said a pair of stories the outlet published earlier this month reporting that Oxman had plagiarized other scholars’ work and lifted more than a dozen sections from Wikipedia “are accurate.” She described Oxman as a “fair subject” and “has a public profile as a prominent intellectual and has been a subject of and participant in media coverage,” rebutting Ackman’s complaints that she should have been immune to coverage tied to Ackman’s recent activism.

Fortune: Bill Ackman vows plagiarism checks on MIT president and faculty after wife pulled into fray: ‘We will share our findings in the public domain’

Bill Ackman ramped up his campaign against Massachusetts Institute of Technology president Sally Kornbluth, saying he will begin checks on the work of all of the school’s current faculty members for plagiarism.

The move, announced Friday in a post on X, comes after Business Insider expanded its allegations of plagiarism against Ackman’s wife, Neri Oxman, a former MIT professor. The billionaire investor said that faculty members, including Kornbluth and MIT board members, will be subject to checks using MIT’s own plagiarism standards.

“We will share our findings in the public domain as they are completed in the spirit of transparency,” Ackman said, adding that “it is unfortunate that my actions to address problems in higher education have led to these attacks on my family.”

Data Colada and faked data

17 Aug 2021: [98] Evidence of Fraud in an Influential Field Experiment About Dishonesty

17 June 2023: [109] Data Falsificada (Part 1): "Clusterfake"

20 June 2023: [110] Data Falsificada (Part 2): "My Class Year Is Harvard"

23 June 2023: [111] Data Falsificada (Part 3): "The Cheaters Are Out of Order"

30 June 2023: [112] Data Falsificada (Part 4): "Forgetting The Words"

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

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STUMP growth

(hmmm, kind of oxymoronic)

That vertical leap in midyear is thanks to the substack network. I did not do any promotional drive myself.

Top 4 Posts

1. Top Causes of Death by Age Group, 2021: Finalized U.S. Stats

2. Geeking Out: Replicating Nate Silver's COVID & Partisanship "Work"

Anyway, of all the things people hold against Nate Silver, the thing I hold against him is this sloppy kind of approach to modeling, but seriously, I don’t even know why anybody is going to political affiliation if you can JUST GO TO VAX STATUS TO BEGIN WITH!

Isn’t that supposed to be what this argument is about? That those stupid Republicans aren’t vaccinated and thus dying of COVID? If you had the vax info, just start with that!

And why are all these people allergic to drawing graphs? There are plenty of free options if you are so cheap you can’t afford the Excel license (jeez, I mean.. what?)

3. Who will bail out Chicago?

Chicago is deep in debt.

As the Little Red Hen might ask: Who Will Help Chicago Get Out Of That Hole?

I am not going to make the mistake of Meredith Whitney — Chicago, for now, has cash flow, which to politicians means it’s not bankrupt!

Anybody who looks at Truth in Accounting’s 2023 Financial State of the Cities, seeing Chicago sitting at number 74 out of 75 [and yeah, I know NYC is sitting at 75 - I will treat with NYC in time], could say: “Oh, but that’s just a balance sheet! All those debts aren’t due all at once!”

But the problem is this: unlike with NYC, Chicago’s largest debt is unfunded pensions. And that debt just keeps getting larger.

4. Deaths from Heat and Cold: Deception and Update for U.S. 1999-2022

Sumo Spin-Off

Insurance Collaboration to Save Lives

Catholic Recommendations

Catechism in a Year Podcast

Bible in a Year Podcast

The Pillar — Catholic Journalism

Examples from The Pillar:

Meet Mr. Mincione - very long interview with one of the people recently convicted in the Vatican financial scandal (before convicted & sentenced).

Where in the world are permanent deacons? - an example of one of their data-driven pieces:

Is it still Christmas? The octave, the 12 days, and what you need to know - an example of one of their explainers. In this case - the Christmas octave vs. the 12 Days of Christmas

(I joke that the Christmas decorations don’t come down until Candelmas …. but that’s because I like the lights… and I’m lazy)

For a little extra, here’s me & my son Diarmuid singing the 12 Days of Christmas in 2018:

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

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Larry Pollack: New Disclosure Rules Expose Bad Actuarial Finance; Obscures Trillions of Public Pension Debt

Actuarial finance assumes away the cost of the guarantee, but real finance doesn’t work that way.

….

The Actuarial Standards Board, which defines professional standards for actuaries, finally acknowledged the criticisms and adopted a requirement for actuaries to calculate and disclose – starting with funding reports to be published (mostly) in 2024 – a liability measure more consistent with finance principles. The new measure provides valuable information not previously available, although it is not perfect, and, importantly, it will not affect actuarially-determined contributions or financial accounting.

Further, many prominent and influential public pension actuaries are rejecting this opportunity to educate their clients and the public about how much worse the funding of public pensions is versus what’s commonly reported. Instead, these actuaries have aligned with major public pension advocacy groups in developing a toolkit as part of a campaign to help actuaries and public officials divert attention from the significance and implications of the new figure. Among other things, the toolkit provides model explanatory language for actuarial reports, including the misleading assertion that the difference between the new measure and the current one represents “expected taxpayer savings” from investing in risky assets, rather than heretofore hidden public debt.

John Bury: New Disclosure Rules Expose Bad Actuarial Finance; Obscures Trillions of Public Pension Debt

So what is it the ASB wants actuaries to disclose? Slides from a recent Conference of Consulting Actuaries webinar provide a good overview. Excerpts below:

New required calculation and disclosure when performing a funding valuation: Low-Default-Risk Obligation Measure (LDROM) (page 9)

If the actuary concludes, based on the assessment required that the Contribution Allocation Procedure (CAP) or plan’s funding policy is significantly inconsistent with the plan accumulating adequate assets to make benefit payments when due, disclose that conclusion as well as an estimate of the approximate time until assets are depleted. (page 24) – wondering where they could have gotten this idea.

John Bury November 2010: RNSP (2) – Drop-Dead Dates for State Pensions

Earlier this year Joshua D. Rauh of the Kellogg School of Management at Northwestern University released a paper that set drop-dead dates for selected state pension plans to which the government-plans community objected.  I too had my doubts about Professor Rauh’s methodology and assumptions and, having recently done my own study of 110 public pension plans, decided to embark on a similar study.

Here are the numbers.

Conference of Consulting Actuaries: ASOP 4 Updated Guidance

ASOP 4: MEASURING PENSION OBLIGATIONS AND DETERMINING PENSION PLAN COSTS OR CONTRIBUTIONS

3.11 LOW-DEFAULT-RISK OBLIGATION MEASURE

When performing a funding valuation, the actuary should calculate and disclose a low-default-risk obligation measure of the benefits earned (or costs accrued if appropriate under the actuarial cost method used for this purpose) as of the measurement date. The actuary need not calculate and disclose this obligation measure more than once per year.

When calculating this measure, the actuary should use an immediate gain actuarial cost method.

When calculating this measure, the actuary should select a discount rate or discount rates derived from low-default-risk fixed income securities whose cash flows are reasonably consistent with the pattern of benefits expected to be paid in the future. Examples of discount rates that may meet these requirements include, but are not limited to, the following:

* US Treasury yields;

* rates implicit in settlement of pension obligations including payment of lump sums and purchases of annuities from insurance companies;

* yields on corporate or tax-exempt general obligation municipal bonds that receive one of the two highest ratings given by a recognized ratings agency;

* non-stabilized ERISA funding rates for single employer plans; and

* multiemployer current liability rates.

When plan provisions create pension obligations that are difficult to appropriately measure using traditional valuation procedures, such as benefits affected by actual investment returns, movements in a market index, or other similar factors, the actuary should consider using alternative valuation procedures such as those described under section 3.5.3 to calculate the low-default-risk obligation measure of those benefits earned or costs accrued as of the measurement date.

For purposes of this obligation measure, the actuary should consider reflecting the impact, if any, of investing plan assets in low-default-risk fixed income securities on the pattern of benefits expected to be paid in the future, such as in a variable annuity plan.

When calculating this measure, the actuary should not reflect benefit payment default risk or the financial health of the plan sponsor.

Other than the discount rate or discount rates, the actuary may use the same assumptions used in the funding valuation for this measure. Alternatively, the actuary may select other assumptions that are consistent with the discount rate or discount rates and reasonable for the purpose of the measurement, in accordance with ASOP Nos. 27 and 35.

The actuary should provide commentary to help the intended user understand the significance of the low-default-risk obligation measure with respect to the funded status of the plan, plan contributions, and the security of participant benefits. The actuary should use professional judgment to determine the appropriate commentary for the intended user.

Related posts

Jan 2020: Revisiting Actuarial Standards: ASOP 4 Has Second Exposure Draft  

April 2018: Around the Pension-o-Sphere: Actuaries Testifying, New Standards, Actuary Bloggers, Pew Report, and Connecticut  

Jan 2018: Actuarial Standards of Practice on Pensions: ASOP 4 - a Call for Comments  

Feb 2017: Public Pensions: Actuarial Assumptions and Professional Ethics  

July 2014: Public Pensions Watch: Tell the Actuaries What You Want To Know  

In which I thank all the 2023 Movember donors, and I encourage spreading the love.

Episode links

Movember 2023

Here are the places you can donate to the Movember Foundation, which supports men’s health, specifically focusing on prostate cancer, testicular cancer, and men’s mental health:

* Mary Pat Campbell’s MoSpace – a place to donate at Movember itself

* My Movember Facebook fundraiser – my officially linked fundraiser, if this works better for you

And here’s a QR code if that works better for you:

Literary References

Dante: Building a Modern Hell - something I wrote in 1995, re: Niven & Pournelle’s Inferno vs. Dante’s

Mrs. Jellyby - Mrs. Jellyby and the Domination of Causes, essay by Jim Forest

While few in the peace movement so radically neglect those in their care, unfortunately I cannot think of Mrs. Jellyby merely as a gross caricature. When my wife and I talked about her recently, we could think of several people, of both sexes, resembling her in many details: people with a certain legitimate concerns and noble goals who engage themselves so fully that their fixation wrecks havoc in the lives of those around them, driving many people they intended to influence, even their own sons and daughters, in the opposite direction.

Milton, On His Blindness

When I consider how my light is spent,

   Ere half my days, in this dark world and wide,

   And that one Talent which is death to hide

   Lodged with me useless, though my Soul more bent

To serve therewith my Maker, and present

   My true account, lest he returning chide;

   “Doth God exact day-labour, light denied?”

   I fondly ask. But patience, to prevent

That murmur, soon replies, “God doth not need

   Either man’s work or his own gifts; who best

   Bear his mild yoke, they serve him best. His state

Is Kingly. Thousands at his bidding speed

   And post o’er Land and Ocean without rest:

   They also serve who only stand and wait.”

Works of Mercy

Corporal Works of Mercy - examples from the U.S. Conference of Catholic Bishops

* Feed the hungry

* Give drink to the thirsty

* Shelter the homeless

* Visit the sick

* Visit prisoners and ransom the hostage

* Bury the dead

* Give alms to the poor

Spiritual Works of Mercy

* Instructing the ignorant

* Counseling the doubtful

* Admonishing the sinner

* Comforting the sorrowful

* Forgiving injuries

* Bearing wrongs patiently

* Praying for the living and the dead

Educational charities I support

BEAM — Bridge to Enter Advanced Math

My post on BEAM:

Donors Choose: I often find small projects in local communities to support here

Once I bought ALL of the Dr. Seuss books for kids to populate a classroom.

I often pick special needs classrooms in New York.

Learning Ally: I used to record math and computer science textbooks for them when I worked in NYC.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

Movember Fundraiser

Here are the places you can donate to the Movember Foundation, which supports men’s health, specifically focusing on prostate cancer, testicular cancer, and men’s mental health:

* Mary Pat Campbell’s MoSpace – a place to donate at Movember itself

* My Movember Facebook fundraiser – my officially linked fundraiser, if this works better for you

And here’s a QR code if that works better for you:

Movember 2023 Posts

Top Death Rate — Cancer by Sex

Spreadsheet

Support men’s health!

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

Mortality Trends in the United States, 1900–2018

Childhood death rates

Children's Death Rates Prior Posts

* 2023: Toddler and Teen Terror 2022 U.S. Mortality: Large Increases Over 2019

* 2022: Childhood Mortality Trends, 1999-2021 (provisional), Ages 1-17 Revisited: Teen Mortality Increased 30% 2019 to 2021

The Nasty Old Days

The Good Old Days -- They Were Terrible!

by Otto L. Bettman

The disgusting old days is more like it

Jan 2001

This book is absolutely harrowing and makes one wonder how America lasted until the 20th century -- learn the 19th century origins of the U.S. drug problem (children got hooked on the morphine and the opium in the patent medicines given to them to calm them down, for example) and why the Prohibition might not actually have been an over-reaction to alcohol; learn how our public school system originated as a rote memorization factory in which children ill-fed, ill-taught, and ill-washed crammed onto benches while an ignorant man or woman, not paid enough for even room and board, tried to keep some semblance of order (for which endeavor one schoolteacher got stoned to death for her pains); learn how common were the transportation accidents of the day, in which railroad tracks went through towns without regard to the usual traffic and a propensity for cutting the maintenance costs meant dangerous conditions for those on and off the train.

This book does not go into exhaustive detail (even if it exhausts the reader), and is illustrated with clippings from magazines and newspapers of the time. One other reviewer complained that photographs weren't used, but truthfully I don't =want= to see the photographs of the conditions. The drawings and the text provide enough horror, and I think Dr. Bettman did not want to put readers off =too= much. Also, the drawings from the press give one information that photographs would not have -- the perspective of the people at the time. Many of the drawings come with captions or some doggerel poetry, indicating how well people knew what disgusting things they were getting into.

BEETHOVEN! (4th movement of 5th Symphony)

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

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Society of Actuaries Podcast

https://soapodcasts.libsyn.com/2023/04

Dave Dillon discussed with Paul Conlin, FSA, MAAA, the recently-published book “Power Failure” by William Cohan, on the 2001-2018 unraveling of General Electric.  One of the business events which led to the near-failure of GE was an under-reserving of Long Term Care reserves by 16 billion dollars, discovered in 2018 just as various other problems were emerging for the company.  There are lessons for actuaries in the series of events which led to the LTC reserve “accident”.

Actuarial Standards of Practice

ASOP 56: Modeling

History of the Standard

The ASB first began work on a standard for modeling in the late 1990s. Motivated primarily to address the role catastrophe modeling of earthquakes and hurricanes played in casualty ratemaking, this work was focused on the use of specialized models where actuaries would have to rely on a model that was developed by professionals other than actuaries. As a result of this work, ASOP No. 38, Using Models Outside the Actuary’s Area of Expertise, was approved by the ASB in June of 2000 with the scope of the standard limited to the Property/Casualty area of practice. Historically, ASOP No. 38 had been the only ASOP that specifically addressed modeling.

Recently, the number and importance of modeling applications in actuarial science have increased, with the results of actuarial models sometimes being reflected in financial statements.

Recognizing this trend, the ASB asked the Life Committee in 2010 to begin work on an ASOP focused on modeling. The Life Committee formed a task force to address this issue and, in February of 2012, a discussion draft titled Modeling in Life Insurance and Annuities was released and nineteen comment letters were received. The transmittal letter also mentioned that the scope might be expanded to all practice areas and asked for comments on this idea.

Based upon the feedback received, and numerous other discussions on the topic of modeling, in December of 2012 the ASB created two multi-disciplinary task forces under the direction of the General Committee: i) a general Modeling Task Force, charged with developing an ASOP to address modeling applications in all practice areas, and ii) a Catastrophe Modeling Task Force to consider expanding ASOP No. 38 to all practice areas while focusing exclusively on using catastrophe models. The membership of these task forces has experience in all actuarial practice areas, including enterprise risk management.

First Exposure Draft

The first exposure draft was released in June 2013 with a comment deadline of September 30, 2013. Forty-eight comment letters were received and considered in making changes that were reflected in the second exposure draft.

Second Exposure Draft

A second exposure draft was released in November 2014 with a comment deadline of March 1, 2015. Thirty-seven comment letters were received and considered in making changes that were reflected in the third exposure draft.

Third Exposure Draft

A third exposure draft was released in June 2016 with a comment deadline of October 31, 2016. Twenty-eight comment letters were received and considered in making changes that were reflected in the fourth exposure draft.

Fourth Exposure Draft

A fourth exposure draft was released in December 2018 with a comment deadline of May 15, 2019. Twenty-six comment letters were received and considered in making changes that were reflected in this final ASOP. For a summary of the issues contained in these comment letters, please see appendix 2.

Related STUMP posts

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

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Retraction Watch guest post: Genomics has a spreadsheet problem by Mandhri Abeysooriya and Mark Ziemann

Excerpt:

Gene-name errors were discovered by Barry R. Zeeberg and his team at the National Institutes of Health in 2004. Their study first showed that when genomic data is handled in Excel, the program automatically corrects gene names to dates. What’s more, Riken clone identifiers – unique name tags given to pieces of DNA – can be misinterpreted as numbers with decimal points.

In 2016, we conducted a more extensive search, showing that in more than 3,500 articles published between 2005 and 2015, 20% of Excel gene lists contained errors in their supplementary files. 

….

The widespread adoption of these new names is a lengthy process: Our latest study, of more than 11,000 articles published between 2014 and 2020, found that 31% of supplementary files that included gene lists in Excel contained errors. This percentage is higher than in our previous 2016 study. 

My comment:

The “helpful” way Excel automatically changes text it imports into numerals or dates can screw up my mortality tables I import, where the “1-4” (intended to mean ages 1 years to 4 years) gets transformed to January 4 of the current year.

Ed Cruz (from EuSpRIG) comment:

I believe the primary issue lies in Data Validation. Here’s a proven data management approach that has yielded success for clients in the banking and securities industry:Rather than directly managing raw data within an Excel spreadsheet, create custom database application to handle data effectively:1. Data Validation and Exception Reporting: The application initiates by uploading raw Genomics data into a database. Here, data validation rules are applied before the upload, ensuring data integrity, and promptly generating Exception reports in the event of any issues.2. Excel Template Integration: Afterward, application can query data and publish into a Genomics Excel template, enabling researchers to work with clean data and significantly enhancing accuracy and efficiency.This method not only addresses the data validation concern but also optimizes the entire Genomics data management process.

Cruz links to this 2-minute video:

Please pay particular attention to:1. 0:40, Validation rules are applied and generates an Excel Exceptions report.2. 1:10, Excel Template is populated with clean and processed data.

Video in which I mention Excel importation issue:

European Spreadsheet Risks Interest Group

Main website:

https://eusprig.org/

Horror stories page: https://eusprig.org/research-info/horror-stories/

Example stories:

Identifier:POB2001

Title:Data not controlled, 16000 UK Covid-19 test results lost for a week

Source:https://www.bbc.co.uk/news/technology-54423988

Release Date:08 October 2020

Risk:Lives put at risk because the contact-tracing process had been delayed

Discrepancy:16,000 test cases in a week

Excel: Why using Microsoft’s tool caused Covid-19 results to be lost“The badly thought-out use of Microsoft’s Excel software was the reason nearly 16,000 coronavirus cases went unreported in England. [The labs] filed their [result logs] results in the form of text-based lists – known as CSV files – without issue. PHE had set up an automatic process to pull this data together into Excel templates so that it could then be uploaded to a central system. The problem is that [Public Health England] PHE’s own developers picked an old file format to do this – known as XLS. As a consequence, each template could handle only about 65,000 rows of data rather than the one million-plus rows that Excel is actually capable of. And since each test result created several rows of data, in practice it meant that each template was limited to about 1,400 cases. When that total was reached, further cases were simply left off. To handle the problem, PHE is now breaking down the test result data into smaller batches to create a larger number of Excel templates.”

[POB] I can correct the headline to:Why a lack of basic data controls caused Covid-19 results to be lostOf course they should not have chosen a file format with a size limit to process results. Nonetheless, whatever technology they used, anywhere data is exchanged between systems there must be checks and controls that reconcile the output of a transformation stage to its input, such as record counts and hash totals. Even if the upload process would only accept XLS files, batch total controls could have been imposed there too.

Identifier:POB2003

Title:Scientists rename human genes to stop Microsoft Excel from misreading them as dates

Source:https://www.theverge.com/2020/8/6/21355674/human-genes-rename-microsoft-excel-misreading-dates

Release Date:06/08/2020

Risk:Inconvenience

Discrepancy:none

The bioinformatics community decided it was easier to change gene symbols than changing peoples’ habits.’Módos, whose job involves analyzing freshly sequenced genetic data, says Excel errors happen all the time, simply because the software is often the first thing to hand when scientists process numerical data. “It’s a widespread tool and if you are a bit computationally illiterate you will use it,” he says.’

My Slides for EuSpRIG 2010 meeting: I’ve Got 99 Problems but a Spreadsheet ain’t One

A lot of the links in that presentation are now dead. Alas.

Bonus MPC presentation: Think Outside the Parallelopiped - 2008

Podcasts?! Wha?

[and I brought my iPod with me, I think, to demonstrate the business podcasts I listened to then]

Actuarial Standards of Practice

Actuarial Standards of Practice: https://www.actuarialstandardsboard.org/standards-of-practice/

ASOP 23: Data Quality

1.1 PURPOSE

The purpose of this actuarial standard of practice (ASOP) is to provide guidance to the actuary when performing actuarial services involving data.

….

SECTION 3. ANALYSIS OF ISSUES AND RECOMMENDED PRACTICES

3.1 OVERVIEW

Appropriate data that are accurate and complete may not be available. The actuary should use available data that, in the actuary’s professional judgment, allow the actuary to perform the desired analysis. However, if significant data limitations are known to the actuary, the actuary should disclose those limitations and their implications in accordance with section 4.1(b). The following sections discuss such considerations in more detail.

etc.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

The Seen and the Unseen with Amit Varma

Episode 347: India’s Massive Pensions Crisis

It might seem to be a subject that would interest only wonks and retirees, but “pensions can reshape an entire society.” Ajay Shah and Renuka Sane join Amit Varma in episode 347 of The Seen and the Unseen to explain why — and to take a deep dive into the crisis India is facing right now.

Ajay Shah

Ajay Shah’s home page

Ajay Shah c.v.

Ajay Shah, 2006: Pension guarantees are subtle

Ajay Shah, 2018: Stay the course on the NPS

Choices Have Consequences

* Retirement Policy

* Retirement Age

* Retirement Benefit Design – COLAs, Replacement Rate, Indexing, and More

* Funding (or, rather NOT funding) Public Pensions

* Pension Obligation Bonds

* Public Pension Investments in Alternative Assets

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

Insurance Collaboration to Save Lives

https://www.insurancecollaborationtosavelives.org/

Upcoming events

Society of Insurance Research 2023 Annual Conference

Date(s): September 10th-12th, 2023

Where: The Westin Cincinnati, Cincinnati, OH

Open Industry ICSL Presentation

Date(s): September 21st, 2023 from 11 AM-12 PM CST

Where: Zoom Webinar

Did you see us at one of these previous events? Join the team, ask questions, dig deeper.

Go to events page for more details.

A Few Graphs

Death poetry

(which is life poetry)

https://poets.org/poem/do-not-go-gentle-good-night

Do not go gentle into that good night

Dylan Thomas

1914 –1953

Do not go gentle into that good night,Old age should burn and rave at close of day;Rage, rage against the dying of the light.

https://www.poetryfoundation.org/poems/44107/holy-sonnets-death-be-not-proud

Holy Sonnets: Death, be not proud

BY JOHN DONNE

Death, be not proud, though some have called thee

Mighty and dreadful, for thou art not so;

For those whom thou think'st thou dost overthrow

Die not, poor Death, nor yet canst thou kill me.

From rest and sleep, which but thy pictures be,

Much pleasure; then from thee much more must flow,

And soonest our best men with thee do go,

Rest of their bones, and soul's delivery.

Thou art slave to fate, chance, kings, and desperate men,

And dost with poison, war, and sickness dwell,

And poppy or charms can make us sleep as well

And better than thy stroke; why swell'st thou then?

One short sleep past, we wake eternally

And death shall be no more; Death, thou shalt die.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

Cross-written letters

Wikipedia: https://en.wikipedia.org/wiki/Crossed_letter

A crossed letter is a manuscript letter which contains two separate sets of writing, one written over the other at right-angles.[1][2] This was done during the early days of the postal system in the 19th century to save on expensive postage charges, as well as to save paper. This technique is also called cross-hatching[3] or cross-writing.[4][5]

Google Translate and Sumo

The Nikkan Sports Weigh-In Pic - via SumoMemes subreddit, thanks, u/ExtensionEar1901!

What it looks like after Google Translate processes it….

Um, yeah.

Lex

Lex.page

Otter

Otter.ai

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The stupid argument on Reddit (ripped out of context to protect the stupid):

Matthew 7:7-8, KJV

7 Ask, and it shall be given you; seek, and ye shall find; knock, and it shall be opened unto you:

8 For every one that asketh receiveth; and he that seeketh findeth; and to him that knocketh it shall be opened.

ChatGPT in Academic Papers

https://twitter.com/gcabanac/status/1689334454798491648

Data Tampering Followup - Lawsuit

PDF here: https://storage.courtlistener.com/recap/gov.uscourts.mad.259933/gov.uscourts.mad.259933.1.0.pdf

THE NATURE OF THIS ACTION

* Plaintiff Francesca Gino (“Plaintiff” or “Professor Gino”) is employed by Harvard University as a tenured Professor at the Harvard Business School.

* Plaintiff is an internationally renowned behavioral scientist, author, and teacher. She has written over 140 academic articles, both as an author and as a co-author, exploring the psychology of people’s decision-making.

* Plaintiff has never falsified or fabricated data.

* In July 2021, a trio of professors and behavioral scientists (all male), Defendant Uri Simonsohn, Defendant Leif Nelson, and Defendant Joseph Simmons, who have a blog named “Data Colada,” (and who are collectively referred to herein as “Data Colada”), approached Harvard Business School with alleged concerns about perceived anomalies and “fraud” in the data of four studies in academic articles authored by Plaintiff.

* Data Colada threatened to post the “fraud” allegations on their blog, thereby subjecting Plaintiff, and by extension, Harvard Business School, to public scrutiny.

* Without Plaintiff’s knowledge, Harvard University and the Dean of Harvard Business School, Defendant Srikant Datar (“Dean Datar”), negotiated an agreement with Data Colada pursuant to which Harvard Business School investigated the allegations, in accordance with a new employment policy created solely for Plaintiff, in exchange for Data Colada’s silence during the investigation period. Unbeknownst to Plaintiff, Harvard Business School further agreed to disclose the outcome of the investigation to Data Colada, who could then subject Plaintiff’s work and professional reputation to public disparagement on its blog.

* Pursuant to its negotiations with Data Colada, in August 2021, Harvard Business School created the “Interim Policy and Procedures for Responding to Allegations of Research Misconduct” (“Interim Policy”) just for Plaintiff, which included a range of potential sanctions, including termination of employment.

* Under said Interim Policy, a finding of research misconduct required an investigation committee to prove, by a preponderance of the evidence, that Plaintiff “intentionally, knowingly, or recklessly” falsified or fabricated data, and to specify for each allegation the requisite intent.

* Under said Interim Policy, as with any other policy at Harvard, allegations were required to be made in good faith, and an investigation was required to be fair. Neither of those things happened in this case.

NPR: Fabricated data in research about honesty. You can't make this stuff up. Or, can you?

The Hartford, an insurance company that collaborated with Ariely on one implicated study, told NPR this week in a statement that it could confirm that the data it had provided for that study had been altered after they gave it to Ariely, but prior to the research's publication: "It is clear the data was manipulated inappropriately and supplemented by synthesized or fabricated data."

Ariely denies that he was responsible for the falsified data. "Getting the data file was the extent of my involvement with the data," he told NPR.

Read The Hartford statement to NPR:

Prior two episodes on the Data Colada investigation into the faked data:

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Episode Links

BEAM: Bridge to Enter Advanced Mathematics: beammath.org

Positions available

LinkedIn post from founder Daniel Zaharapol

Director of Institutional Giving: Lead our strategy and outreach with a highly engaged group of donors who are passionate about changing the face of STEM education.https://lnkd.in/e--5B94EManager of Math Instruction, Los Angeles: A unique opportunity to work on providing quality math instruction at all of our programs in one of our two core cities.https://lnkd.in/ehJ4nF_M

Two-pager on strategic plan

More detailed presentation on strategic plan

Canada/USA Mathcamp

December 2001: I’d Rather Go to Mathcamp by Brenda Fine in FOCUS Magazine

Yale Professor Serge Lang declared Mathcamp to be “the largest concentration of intelligence and math freaks” he had ever seen — and that’s in some five decades of work in the field.

False Proofs compiled by Meep (Mary Pat Campbell)

Meep’s Mathcamp page

The Contrapositones sing the Mathcamp anthem at Mathcamp 2012: Nonabelian (written by Meep & Chris Tuffley, with melody by Simon & Garfunkel)

Mathcamp book recommendations from 2001

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

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Brookings on Major Restrictions

Restricted access to lucrative college majors harms underrepresented students most

Major restriction policies take one of three common forms at American universities:

In-major mechanical restrictions require students to achieve a GPA in the major’s introductory courses above a minimum threshold;

Overall mechanical restrictions require students to achieve an overall GPA in their first year or two of college above a certain threshold; and

Discretionary restrictions require students to submit a competitive application to the department; what criteria departments use to review the applications varies and is often not transparent.

A tiny number of majors are only available to students directly admitted into the programs from high school, which is a popular policy internationally but rare in the U.S. All other departments are considered unrestricted.

Society of Actuaries on Upcoming Exam System Changes

Evolving the FSA Pathway

Volokh Conspiracy on NextGen Bar Exam

NextGen Bar Exam MC Questions Only Require Takers To Spot Issues, And Not Apply the Rules

I worry that these questions are far too simple. If the states end up adopting the NextGen exam, they should increase the cut score (the relevant percentage needed to pass the exam). Finally, I worry how this exam will trickle down to law school pedagogy. Will professors shift their coverage to no longer require memorizing and applying the rules–only spotting issues? It's true that all lawyers have sophisticated tools at their disposal to research different topics. This new format seems to be a surrender to this technology–don't require students to do what they don't have to. I, for one, do not plan to change how I teach for this exam. And state supreme court justices should take a very long pause before adopting this new exam.

A Former Law Examiner Comments On the NextGen Bar Exam

In my view, the UBE, and the *** Supreme Court through its adoption, dropped the standard of "minimal competence" to an alarming level.  I could not, in good conscience, continue to serve and resigned.  The NextGen Bar Exam represents the complete abandonment of competence as a standard.  I sincerely hope that the *** Supreme Court does not adopt it.  Unfortunately, they will probably blindly defer to the "experts" at the NCBE.

Even since *** adopted the UBE, I have been hoping that it would not prove to be the disaster for professional competence that I feared it would.  And while the jury is still out on that point, the NCBE now wants to do away with any testing of the applicants' abilities to apply the facts to the law.  Any state that adopts the NextGen bar exam will have abandoned its professional obligation to ensure that new lawyers are minimally competent.

Sumo!

Newest ozeki Hoshoryu (currently 24 years old, 313 pounds (142kg), 6’2 inches (188 cm) tall).

He started looking like this at age 15, and didn’t show up in the banzuke until age 18.

According to sumoDB, his initial stats weighing-in at age 18: 185 cm (almost 6’1”) and 107 kg (236 pounds - which is a lot more than the picture below)

Most of the sumo wrestlers do enter fairly small. Some never get very large, actually, because in each sumo stable, the top-ranked wrestlers eat first. The lowest get their chanko-nabe last.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

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Reason article

A Decade After Bankruptcy, Is Detroit Better?

If there is a lesson from Detroit's 2013 bankruptcy, it's that going broke can only take a city so far. Municipal bankruptcy is a process that gets a city out of debts that it can't pay. But city residents don't get better services when those debts are canceled.

There are some things that ought to surprise people about city finances. When Detroit filed for bankruptcy in July 2013, residents found out that the group the city owed the most money to was not banks or bondholders or city contractors—it was the city's pensioners. Former city employees accidentally became Detroit's largest creditors because the city didn't have enough money to pay them what they were owed.

This should not be. When governments promise to pay their employees pensions, they should set aside enough money to pay for them. This keeps the cost of pensions on current taxpayers and doesn't push the costs into the future.

Detroit News article

Detroit police, fire pensioners push back on bankruptcy ruling to extend payments

The Police and Fire Retirement System of Detroit filed on Monday a motion for reconsideration, pushing back on a federal bankruptcy judge's ruling in favor of the Duggan administration's plan to extend the city's pension payment obligations over 30 years rather than 20 years.

The city's police and fire retirees are continuing litigation that has been ongoing since August when the city administration initially filed suit against the pension system to enforce a 30-year pay-out schedule. On June 26, Judge Thomas Tucker ruled in the city's favor, stating that a 30-year amortization period is "indeed part of the (bankruptcy) Plan of Adjustment and that the Police Fire Retirement System cannot change it."

The new motion seeks clarification of the court's possible imposition of a 6.75% rate of return that was specifically set to expire after 10 years under the Plan of Adjustment, the bankruptcy exit plan. After June 30, the pension fund's rate of return and its amortization funding policy are within the purview of the Police and Fire Retirement System's Board of Trustees and Investment Committee, according to the pensioners' filing.

At the 30-year determined rate, the city will complete its debt obligations in 2054. Police and fire retirees want their pension fund to be made whole sooner.

STUMP posts

2014: Detroit Bankruptcy: It's Over, But It's Not  

Various valuation/funding practices were nixed for private DB plans (as per ERISA) because they made the plans less safe for participants in the event of a pension sponsor bankruptcy.

Why do some public DB plans still use these approaches? The obvious answer is that it makes pensions look cheaper than they actually are, or that they keep pushing off til years later what they should be paying today, but one still needs cover of a sort to get away with it.

The justification often used for these approaches is: “governments don’t go out of business.” Also, some of these governmental entities cannot file for bankruptcy.

But just because there’s no established legal bankruptcy process does not mean governments cannot go bankrupt in fact. Because they obviously do.

Just because there’s no formal bankruptcy process for states does not mean that Illinois can’t ever go bankrupt. Or California. Or New Jersey. Or Rhode Island. They can, and I won’t be surprised if several will over the next twenty years. (And no, there won’t be federal bailouts. Not all states have these problems, and certainly not to the extent of the worst players above.)

That’s why I bolded the particular statement from the SOA letter. It is an acknowledgement that there is no magical pot of money that will fill all unfunded liabilities some time in the nebulous future.

This is a problem for Detroit. Even if they didn’t have various parties suing and appealing over the bankruptcy workout, or huge fees paid to consultants and lawyers as part of the plan, they could be seeing a return to bankruptcy court when they really can’t pay the pensions.

2016: The Connections Between Detroit and Chicago Public Schools  

We know about the CPS financial squeeze, and they’re looking for a bailout from the Illinois statehouse — Detroit Public Schools is in a similar plight:

2016: Detroit Resurrected by Nathan Bomey: a Review  

Nathan Bomey created a compelling narrative out of the bankruptcy workout of Detroit, lasting from July 2013 to December 2014. One expects an epic fight from the largest municipal bankruptcy ever (so far), but what I came across was unexpected – a fast-paced narrative detailing the major players, and most importantly, letting those players explain themselves.

(An aside: for the prim, I will warn there’s a lot of “NYC language” coming from particular players. It’s not Games-of-Thrones bad; after all, nobody gets killed (SPOILER ALERT!), no sexy romps, and definitely a dearth of direwolves. But yes, plenty of strong opinions uttered using vulgarities.)

It was so refreshing to see the narrative played out where there are no real villains except some hazy groups (like a hapless City Council) and the definitely-named Kwame Kilpatrick. But he’s off-stage by the beginning of the book, being bundled off to federal prison, along with some of his cronies. But even the biggest losers in the deal, bond insurers FGIC and Syncora, get their say. They’re not made out to be eeeeevil Wall Street players, but players representing their own interests and making their own claims for fairness. The only Detroit institution leaving unscathed in the deal was the art museum, DIA. One gets to hear of the sense of betrayal by all the players, within and without Detroit, without their particular pain being mocked.

The book has plenty of conflict, surprising alliances, and a few interesting twists at the end (which cleared up some mysteries to me at the time.) I thought the pacing was really well-done, and Bomey did a good job of explaining salient technical points, like present value, relatively quickly and enough detail for the lay reader to understand. Excellent book for the general public. It will also be a great study for law and business schools for people learning about negotiation in high stakes situations that seem like zero sum.

If Bomey takes this level of detail and even-handedness to all his journalistic work, as well as the storytelling ability, he will go far in journalism.

Bomey actually has been doing pretty well.

After his stint in Detroit, he went to USA Today and to Axios. I like his work.

Nathan Bomey’s Twitter feed

2018: Happy Public Finance Story: The Bankruptcy of Detroit Brings Good Results  

Just the headlines version:

HAPPY NEWS: DETROIT IS RESPONSIBLE FOR ITSELF AGAIN

SEPARATE HAPPY NEWS: BUSINESSES INVESTING IN DETROIT

CLOUDS ON THE HORIZON

Demographic History of Detroit

Wikipedia: Demographic History of Detroit

TMBG: Say Nice Things About Detroit

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Episode Links

Data Colada Links

Part 3: [111] Data Falsificada (Part 3): "The Cheaters Are Out of Order"

The Anomaly: Out-Of-Order Observations

As in Part 1 of this series (Colada 109 .htm), the tell-tale sign of fraud in this dataset comes from how the data are sorted.

The dataset is almost perfectly sorted by two columns, first by a column called “cheated”, indicating whether participants cheated on the coin toss task (0 = did not cheat; 1 = cheated), and then by a column called “Numberofresponses”, indicating how many uses for a newspaper the participant generated. 

As in Post 1, the fact that the sort is almost perfect is more problematic than it appears.

Part 4: [112] Data Falsificada (Part 4): "Forgetting The Words"

Let's first orient ourselves to the dataset, which was posted on the OSF in 2020 (.htm) [2].

The top row shows a participant who provided a ‘1’ to all the impurity items. This participant didn’t feel at all dirty, tainted, inauthentic, etc., by being at the networking event. The words they wrote were positive as well: Comfortable, Accepted, Belonging, etc.

Positive ratings, positive words. Makes sense.

The Researchers Didn’t Care About The Words. But We Do.

Critically, the authors were not really interested in the words that participants generated; the words task was there merely to help participants remember the networking event before doing something else. And so, to our knowledge, those words were never analyzed. They are not mentioned in the study’s Results section.

This is important because someone who wants to fabricate a result may change the ratings while forgetting to change the words.

And it seems that that's what happened. In our analyses we will contrast ratings of the networking event, which were tampered with, with words describing the networking event, which, it seems, were not [3].

In order to perform analyses on the words, we needed to quantify what they express. To do this, we had three online workers, blind to condition and hypothesis, independently rate the overall positivity/negativity of each participant’s word combination, on a scale ranging from 1 = extremely negative to 7 = extremely positive. We averaged those ratings to create, for each participant, a measure of how positive or negative their words were [4].

They actually used humans to score the positivity of the words used, but one can use NLP (natural language processing) and sentiment analysis, which are common algorithms used all over the place now, to have done a similar task. I’m considering doing this myself to test out some code I’m trying out.

Research Box Link - to download the Data Colada data to do own analysis

Retraction Watch

Retraction Watch Database User Guide

Welcome to our database. We’ve prepared this document to help you get started, and to answer some questions that are likely to come up. This document will evolve as users have more questions, so please feel free to contact us at team@retractionwatch.com.

Doing a search in their database, only the 2021 post for Ariely et al shows up:

Highly criticized paper on dishonesty retracted

https://retractionwatch.com/2021/09/14/highly-criticized-paper-on-dishonesty-retracted/

This does tie to the 4-parter from Data Colada, by the way, as one of the four papers is covered and more included.

That said, Gino’s name appears in this July 1 round-up of posts:

Weekend reads: A professor who plagiarized his students; how many postgrads in China think it’s OK to fake data; fighting fraud

https://retractionwatch.com/2023/07/01/weekend-reads-a-professor-who-plagiarized-his-students-how-many-postgrads-in-china-think-its-ok-to-fake-data-fighting-fraud/

The one link mentioning Gino goes here: [Twitter]

https://twitter.com/stephaniemlee/status/1673402412126851072

I assume she hasn’t further appeared in Retraction Watch yet as Psychological Science hasn’t formally retracted those papers yet.

That said, there are other items linked in the post that ought to give one pause:

Knowledge and attitudes of Chinese medical postgraduates toward research ethics and research ethics committees: a cross-sectional study

Background

Research ethics provides the ethical standards for conducting sound and safe research. The field of medical research in China is rapidly growing and facing various ethical challenges. However, in China, little empirical research has been conducted on the knowledge and attitudes of medical postgraduates toward research ethics and RECs. It is critical for medical postgraduates to develop a proper knowledge of research ethics at the beginning of their careers. The purpose of this study was to assess the knowledge and attitudes of medical postgraduates toward research ethics and RECs.

Methods

This cross-sectional study was conducted from May to July 2021 at a medical school and two affiliated hospitals in south-central China. The instrument of the study was an online survey that was distributed via WeChat.

Results

We found that only 46.7% were familiar with the ethical guidelines for research with human subjects. In addition, 63.2% of participants were familiar with the RECs that reviewed their research, and 90.7% perceived RECs as helpful. However, only 36.8% were fully aware of the functions of RECs. In the meantime, 30.7% believed that review by an REC would delay research and make it more difficult for researchers. Furthermore, most participants (94.9%) believed that a course on research ethics should be mandatory for medical postgraduates. Finally, 27.4% of the respondents considered the fabrication of some data or results to be acceptable.

Chronicle of Higher Education

How Academic Fraudsters Get Away With It by Andrew Gelman

My impression, ultimately, is that these people just don’t understand science very well. They think their theories are true and they think the point of doing an experiment (or, in some cases, writing up an experiment that never happened) is to add support for something they already believe. Falsifying data doesn’t feel like cheating to them, because to them the whole data thing is just a technicality. On the one hand, they know that the rules say not to falsify data. On the other hand, they think that everybody does it. It’s a tangled mess, and the apparent confessions in these book titles do seem to be part of the story.

It’s certainly not a great sign that so many cheaters have attained such high positions and reaped such prestigious awards. It does make you wonder if some of the subfields that celebrate this bad work suffer from systematic problems. A lot of these papers make extreme claims that, even if not the product of fraud, ought to cause more leaders in these fields to be a bit skeptical.

….

Here’s a pungent way of thinking about it. Cheating in science is like if someone poops on the carpet when nobody’s looking. When some other people smell the poop and point out the problem, the owners of the carpet insist that nothing has happened at all and refuse to allow anyone to come and clean up the mess. Sometimes they start shouting at the people who smelled the poop and call them “terrorists” or “thugs.” Meanwhile, other scientists walk gingerly around that portion of the carpet; they smell something, but they don’t want to look at it too closely.

A lot of business and politics is like this too. But we expect this sort of thing to happen in business and politics. Science is supposed to be different.

As a statistician and political scientist, I would not claim that my fields show any moral superiority to psychology and experimental economics. It just happens to be easier to make up data in experimental behavioral science. Statistics is more about methods and theory, both of which are inherently replicable — if nobody else can do it, it’s not a method! — and political science mostly uses data that are more public, so typically harder to fake.

This piece looks like it’s developed mainly from this blog post Gelman wrote, plus this additional post.

Andrew Gelman has many interesting things at his blog, so check it out!

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Actuarial Standard of Practice 4

3.11 LOW-DEFAULT-RISK OBLIGATION MEASURE

When performing a funding valuation, the actuary should calculate and disclose a low-default-risk obligation measure of the benefits earned (or costs accrued if appropriate under the actuarial cost method used for this purpose) as of the measurement date. The actuary need not calculate and disclose this obligation measure more than once per year.

When calculating this measure, the actuary should use an immediate gain actuarial cost method.

When calculating this measure, the actuary should select a discount rate or discount rates derived from low-default-risk fixed income securities whose cash flows are reasonably consistent with the pattern of benefits expected to be paid in the future. Examples of discount rates that may meet these requirements include, but are not limited to, the following:

* US Treasury yields;

* rates implicit in settlement of pension obligations including payment of lump sums and purchases of annuities from insurance companies;

* yields on corporate or tax-exempt general obligation municipal bonds that receive one of the two highest ratings given by a recognized ratings agency;

* non-stabilized ERISA funding rates for single employer plans; and

* multiemployer current liability rates.

When plan provisions create pension obligations that are difficult to appropriately measure using traditional valuation procedures, such as benefits affected by actual investment returns, movements in a market index, or other similar factors, the actuary should consider using alternative valuation procedures such as those described under section 3.5.3 to calculate the low-default-risk obligation measure of those benefits earned or costs accrued as of the measurement date.

For purposes of this obligation measure, the actuary should consider reflecting the impact, if any, of investing plan assets in low-default-risk fixed income securities on the pattern of benefits expected to be paid in the future, such as in a variable annuity plan.

When calculating this measure, the actuary should not reflect benefit payment default risk or the financial health of the plan sponsor.

Other than the discount rate or discount rates, the actuary may use the same assumptions used in the funding valuation for this measure. Alternatively, the actuary may select other assumptions that are consistent with the discount rate or discount rates and reasonable for the purpose of the measurement, in accordance with ASOP Nos. 27 and 35.

The actuary should provide commentary to help the intended user understand the significance of the low-default-risk obligation measure with respect to the funded status of the plan, plan contributions, and the security of participant benefits. The actuary should use professional judgment to determine the appropriate commentary for the intended user.

Actuarial News

Daily Treasury Par Yield Curve Rates – 29 Jun 2023

Prior STUMP Death & Taxes Episode

Other STUMP posts

July 2014: Public Pensions Watch: Tell the Actuaries What You Want To Know  

That’s when the revision began….

February 2017: Public Pensions: Actuarial Assumptions and Professional Ethics  

April 2018: Around the Pension-o-Sphere: Actuaries Testifying, New Standards, Actuary Bloggers, Pew Report, and Connecticut  

July 2018: Actuarial Standards of Practice on Pensions: ASOP 4 - a Call for Comments  

March 2019: An Ugly Interest Rate Environment and Public Pensions Chasing Returns  

January 2020: Revisiting Actuarial Standards: ASOP 4 Has Second Exposure Draft  

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

Data Colada links

17 Aug 2021: [98] Evidence of Fraud in an Influential Field Experiment About Dishonesty

Interlude: Calibri and Cambria

Perhaps the most peculiar feature of the dataset is the fact that the baseline data for Car #1 in the posted Excel file appears in two different fonts. Specifically, half of the data in that column are printed in Calibri, and half are printed in Cambria. Here’s a screenshot of the file again, now with a variable we added indicating which font appeared in that column. The different fonts are easier to spot if you focus on the font size, because Cambria appears larger than Calibri. For example, notice that Customers 4 and 5 both have a 5-digit number in “baseline_car1”, but that the numbers are of different sizes:

17 June 2023: [109] Data Falsificada (Part 1): "Clusterfake"

Two summers ago, we published a post (Colada 98: .htm) about a study reported within a famous article on dishonesty (.htm). That study was a field experiment conducted at an auto insurance company (The Hartford). It was supervised by Dan Ariely, and it contains data that were fabricated. We don’t know for sure who fabricated those data, but we know for sure that none of Ariely’s co-authors – Shu, Gino, Mazar, or Bazerman – did it [1]. The paper has since been retracted (.htm).

That auto insurance field experiment was Study 3 in the paper.

It turns out that Study 1’s data were also tampered with…but by a different person.

That’s right:Two different people independently faked data for two different studies in a paper about dishonesty.

20 June 2023: [110] Data Falsificada (Part 2): "My Class Year Is Harvard"

As mentioned above, students in this study were asked to report their demographics. Here is a screenshot of the posted original materials, indicating exactly what they were asked and how:

….

A less reasonable response is “Harvard”, an incorrect answer to the question. It is difficult to imagine many students independently making this highly idiosyncratic mistake. Nevertheless, the data file indicates that 20 students did so. Moreover, and adding to the peculiarity, those students’ responses are all within 35 rows (450 through 484) of each other in the posted dataset:

Books by two of the (possibly fraudulent) researchers

Rebel Talent: Why It Pays to Break the Rules at Work and in Life by Francesca Gino

The Honest Truth About Dishonesty: How We Lie to Everyone--Especially Ourselves by Dan Ariely

My actuarial articles

Feb 2013, The Stepping Stone: Everybody Cheats, at Least Just a Little Bit - A Review of The (Honest) Truth About Dishonesty, by Dan Ariely

Like many forms (especially tax), one generally fills out an insurance application, and then, at the end, signs a statement attesting that all the information above is truthful. Ariely wanted to check the effect of having people sign such a statement before filling out an auto insurance application. Specifically, he looked at the part of the self-reporting miles driven per year (as more miles driven results in higher premiums, usually). The result? Those with the form with the attestation at the top reported, on average, 2400 fewer miles driven than those who had the attestation in the standard place: the bottom. This was about a 9 percent reduction, which reflects the marginal aspect of “normal” cheating.

Or maybe that was the level of data falsification they thought they could get away with.

November 2021, The Stepping Stone, Distrust and Verify

However, I have learned to be a little more suspect of such “one simple trick” methods for making insurance easier.

In the age of InsurTech and increased risks in a pandemic, a bit of skepticism in the face of gee-whiz claims is useful. It does feel a little like righteous thinking “what myopic management!” and I should have distrusted the result just due to my own biases. Here I thought I was being a sophisticate, and I was just as gullible as people who believe clickbait articles.

One thing this did cement for me is the importance of our own professional standards as actuaries. If an actuary were involved in falsifying this data,[11] there would be consequences in terms of the danger of having one’s credentials suspended or being expelled entirely from actuarial organizations. Actuaries’ credibility has been hard-won through a long history of not only developing better practices, and better standards, over time, but also policing those standards.

In light of those standards, I must respectfully retract part of my old article.

And I must remember to be more skeptical in the future.

Related STUMP posts

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

Substack post link (this post)

Lightning Strike Deaths

Graph of Lightning strike death counts

Graph of Lightning strike death locations

By S.fever - Own work, CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=74366934

Story from Texas

6-year-old boy dies after battling lightning-related injuries in Texas

Grayson Boggs, 6, has passed away after being in a coma following the fatal lightning strike in May. His father was pronounced dead at the scene.

By Allison Finch, AccuWeather staff writer

Published Jun 16, 2023 3:09 PM EDT | Updated Jun 16, 2023 3:30 PM EDT

Lightning Safety Sites

CDC: Lightning Safety Tips

CDC: When Thunder Roars, Go Indoors!

NOAA: Lightning Safety

National Weather Service: Lightning Safety Tips and Resources

National Lightning Safety Council

Spreadsheet

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Episode Links

Candace Wheeler

The Stepping Stone, August 2016: “Leadership Inspiration: Candace Wheeler— Bringing Beauty and Work to Women”

Wheeler was a creator, a business-builder, a network-weaver— someone who spread beauty and knowledge that gave others the ability to create for themselves. I see her inspiration as a person whose influence was felt on multiple levels in different roles; one can lead by creating art and then showing others how to create for themselves. I always think of her when I am writing about beautiful spreadsheets.

The Textile Eye: Happy Birthday to Candace Wheeler, the “Mother” of Interior Design!

March 24 and March 27, 1827, are both cited as Candace Wheeler’s birthday, so we get to celebrate twice! She grew up on a farm in Delhi, New York with her seven siblings. Wheeler’s life went through dramatic transformation: her early years were “a hundred years behind the time” in a strict Presbyterian household, but her latter years were spent in jazz-age New York City after decades of being “working woman”, paving the way for women in design.

The product of Civil War and financial uncertainty, Wheeler viewed economic power as women’s most immediate need, becoming an early feminist leader. Her success as a leader drew strength from her friendships with well-known painters and designers, a supportive husband, well-to-do brothers, and her drive. She created a substantial career for herself as a designer of textiles and interiors and as a teacher, lecturer, and author.

Wheeler had a distinctly American style of pattern design, with colors and motifs modeled on American flowers and responding to the qualities of American light. She believed in creating beautiful things, but also that they had to be affordable and practical for the middle class.

Met Museum of Art

Candace Wheeler: The Art and Enterprise of American Design, 1875–1900

You can read the exhibit book for free online, as the book is out of print. (I bought a physical copy at a library sale.)

Irises panel by Wheeler - one of the pieces she made with her new firm, Associated Artists after she left her partnership with Tiffany

Tulips panel

Thistle textile - by Tiffany & Wheeler company. Not sure who the actual designer is, but you can see the type of design

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

The Museum of Failure

Museum of Failure blog

Facit Calculators

Facit (Facit AB) was an industrial corporation and manufacturer of office products including furniture. It was based in Åtvidaberg, Sweden, and founded in 1922 as AB Åtvidabergs Industrier. Facit AB, a manufacturer of mechanical calculators, was incorporated into the corporation the same year. In 1932, the first ten-digit calculator was manufactured by Åtvidaberg Industries, it was named FACIT and became a great success.

….

In 1965, 4,000 digital calculators were sold globally. The next year, the same figure had reached 25,000 and in 1967 they accounted for 15 percent of the market.

Facit sought to handle this disruptive threat by collaborating with the Japanese firm Hayakawa (Sharp).

….

In 1970, the company had reached its peak with more than 14,000 employees worldwide. In 1971, modern Japanese-made calculators started to seriously disrupt the industry, instantly making Facit's mechanical calculators obsolete. As a result, Facit went out of business virtually overnight. The general view on this failure is that Facit met its demise as a result of refusing to acknowledge the superiority of modern calculators, as well as an unwillingness to adapt and change accordingly, to meet the new demands from the market. Other reasons for this have been mentioned as well: for instance the inability to consolidate the R&D functions of acquired companies as well as limited R&D resources due to the relatively small size of Facit compared to its American counterparts. In Swedish business theory, this is called "the Facit trap" (Swedish: Facitfällan), inability to follow a technology shift, even if skill and money is available. Also in the mid 1970s Facit's designs were cloned in products such as the VK-2 in Soviet Union.

Rejuvenique

The box:

The back of the mask:

Trabant

Trabant is a series of small cars produced from 1957 until 1991 by former East German car manufacturer VEB Sachsenring Automobilwerke Zwickau. Four models were made: the Trabant 500, Trabant 600, Trabant 601, and the Trabant 1.1. The first model, the 500, was a modern car when it was introduced. It featured a duroplast body on a one-piece steel chassis (a so-called unibody), front-wheel drive, a transverse two-stroke engine, and independent suspension. Because this 1950s design remained largely unchanged until the introduction of the last model, the Trabant 1.1 in 1990, the Trabant became symbolic of the former East Germany's stagnant economy and the collapse of the Eastern Bloc in general.[3] Called "a spark plug with a roof", 3,096,999 Trabants were produced.[4] Older models have been sought by collectors in the United States due to their low cost and fewer restrictions on the importation of antique cars. The Trabant also gained a following among car tuning and rally racing enthusiasts.

NuSpoon Tasters

STUMP: DEATH TO GEESE (okay, one particular goose)

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

Ancient Burying Ground

Death’s Head Gravestones

Images began to appear on Connecticut gravestones late in the 1600s. Stones from this period into the early 1700s evolved from crudely simple heads into a fully realized, forbidding, grimacing skull, with hollow eyes, arched batlike wings, and sometimes surrounding decoration. Known among modern gravestone scholars as “death’s heads,” these are believed to reflect early Puritans’ grim attitude toward human mortality, emphasizing impending, unavoidable death, and the subsequent decay of the physical body. 

Gravestones were the primary form of sculpture produced in early New England. The carvers were folk artists each of whom started with the same symbolic image, then rendered it in his own personal, distinctive style. 

The style of the lettering, the decorative work on the tympanum and along the edges and bottoms of stones – pin-wheels, clovers, hearts, diamonds, scallops, vines, and more – also could reflect the work of a particular carver. The size and quality of the carving on a stone also reflected the financial prosperity and social status of the deceased.

The style of an individual carver could develop and change over the course of his career. The work of more than 40 different carvers is represented in the Ancient Burying Ground. 

Angel’s Head Gravestones

Beginning around 1730, death’s heads became more “human” in appearance, more sophisticated in design and execution. The fearsome expression gradually softened into a sober, serene, even smiling one. The bat wings morphed into celestial, often upswept ones. These “angel’s heads” are believed to symbolize the soul’s flight to heaven, emphasizing the blissful life everlasting that awaited the righteous. This change has been attributed to the religious revival of the 1730s and 1740s known as the Great Awakening, which focused on salvation of the soul, the possibility of a joyful afterlife, and on emotional expression of personal spiritual development.

Kevin Wolf, Contingencies, 2018: A Long Stroll Through Avoca Cemetery—An actuarial study … and a few meditations and meanderings

The Avoca Cemetery is about 8 miles from Fond du Lac, Wisc. My wife, Mary Gau, and I took a break from a family reunion in September 2017 and spent two days photographing the gravestones—we may have missed some, but our goal was to capture them all. I gathered information from readable gravestones in the cemetery. I found that the average lifespan (or life expectancy) from birth to death was 64.3 years. The earliest birth year was Hanna Bull in about 1772 (the gravestone read “Died Mar. 18, 1861 [AG]E. 88 ys. 7 ms.”). The oldest person buried was Martha Hodge Blaeser (1882-1988) who died at about age 106. The longest marriage, with known wedding date, was over 74 years between Bennett and Ethel Bird from Sept. 19, 1923. through Ethel’s death in 1998. My results came from about 2,100 gravestones and 2,850 people buried there. I used the information on the gravestones to develop mortality tables and life expectancies.

Downloadable database of Hartford’s Ancient Burying Ground Pictures

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

Earlier STUMP post:

8 May 2023, WBBM: Brandon Johnson inheriting some of the nation’s worst-funded pensions, finance expert says

1 May 2023, The 74: New Chicago Mayor Brandon Johnson Inherits America’s Worst Teacher Pension Mess

Comparing the city-only plans:

On Proposed Taxes

Mark Glennon, Wirepoints: Echoing Scarface, ‘First We Get the Money,’ say Mayor Johnson’s allies with $12 billion financial plan, and here comes Angela Davis – Wirepoints

Two Chicago interest groups that are major allies of Mayor Brandon Johnson published Wednesday what they want Johnson to pursue for new taxes: a city income tax, a wealth tax, a “head tax” assessed per worker on employers, a digital ad tax, a jump in the tax on jet fuel used at Chicago’s airports, a progressive increase on real estate transaction fees on sales over $1 million. The new taxes would total $6.8 billion according to the plan, and would be coupled with supposed savings of $5.1 billion that would be redirected to other spending, totaling nearly $12 billion.

For a little perspective, the tax increase would be even bigger than Chicago’s near-$5 billion Corporate Fund, the main operating account in the city’s budget.

You gotta hand it to today’s left when it comes to the path to power. The title on their proposal is “First We Get the Money: $12 billion to fund a just Chicago,” echoing the wisdom in a famous line in the movie Scarface, “First you get the money, then you get the power….”

Andrew Stuttaford, National Review: Chicago: Pork Bellies to Flee the Sinking Ship?

Sometimes the golden goose escapes the knife and moves to Florida. Among the tax proposals (increases, not cuts, in case you were wondering) being put forward by Brandon Johnson, Chicago’s new mayor, is one for a financial-transactions tax, at a rate of $1 or $2 for every “securities trading contract”.

….

Such taxes are not a good idea at the best of times, but to propose them for the embattled city that still hosts the Chicago Mercantile Exchange, well . . .

How does that advice about stopping digging go again?

On Population Migration

Bryce Hill, Illinois Policy: 85% OF ILLINOIS COMMUNITIES LOSE PEOPLE IN 2022; CHICAGO LOSES 33K

1,108 Illinois communities of all sizes shared in the record loss of more than 104,000 residents in 2022, according to new Census Bureau data. Chicago lost 32% of the state’s total.

Illinois’ population loss hit more than 85% of its cities, towns and villages in 2022, but 32% of the state’s 104,437-person loss came out of the city of Chicago, new Census data shows.

Population decline in Illinois is spreading, now affecting more than 85% of communities throughout the state and hitting communities of all sizes. There were 1,108 of Illinois 1,296 incorporated places that lost population in 2022, according to data released May 18 by the U.S. Census Bureau.

I didn’t mention the following graph:

But note that this is a one-year change. One percent does not sound like a very large loss, but if it continues over a decade… that will have a large impact.

On Illinois Shorting Pensions

Illinois Policy: LAWMAKERS PLAN TO SHORT PENSIONS BY $4.4 BILLION IN 2024 BUDGET

No matter what rhetoric about passing a balanced budget comes out of Springfield, the state budget will automatically be unbalanced because of inadequate pension contributions.

As lawmakers work to finalize a budget leading up to their final scheduled session day on May 19, they plan to short pension funding by $4.4 billion.

That means the budget they pass automatically will be unbalanced despite what Gov. J.B. Pritzker will assuredly claim. He’s claimed that every year, and did so in his 2024 budget proposal.

2017: Geeking Out (and Illinois Pensions): Fixing a Graph and Assigning Blame for Underfundedness  

That was in fiscal year 2016. Every single year, for every Illinois state pension fund, they never gave full contributions. Thus, the largest single contributor to underfundedness has been deliberate underfunding.

I should update that graph. Upcoming….

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

Battling Cognitive Bias

April 2010: “Battling Cognitive Bias”, The Stepping Stone, Society of Actuaries

Time and again, one hears stories where a commonly seen effect is ignored by scientists for years as “noise”, “coincidence” or “irrelevant”. Only later, other people without these built-in preconceptions can make real breakthroughs.

For example, in the article, “Accept Defeat: The Neuroscience of Screwing Up” author Jonah Lehrer recounts the story of Arno Penzias and Robert Wilson, who had been trying to make a detailed map of the Milky Way. They had built a very sensitive radio telescope, and in tuning it up, discovered some “noise” wherever they pointed their telescope. Their original assumption was that there was something wrong with their setup or their equipment, and thus spent a long time troubleshooting something that wasn’t actually trouble.

But that background radiation never went away.

For a year they simply ignored that “noise” to make the measurements they had set out to make. Luckily, they did decide to really look into it, and considered the “noise” to be a very real signal—this “noise” was evidence of the Big Bang, and Penzias and Wilson later shared the Nobel Prize in Physics because of this discovery. How often has this happened to you—you entirely miss a solution to a problem, because you have already decided on an answer and ignore all signals outside of your expectation? Being aware of the biases built into our brains can help us combat them. One can’t fix what one doesn’t know is broken. Given there are so many biases, I will concentrate on two, and possible remedies for them.

Wikipedia: Availability Heuristic

The availability heuristic, also known as availability bias, is a mental shortcut that relies on immediate examples that come to a given person's mind when evaluating a specific topic, concept, method, or decision. This heuristic, operating on the notion that, if something can be recalled, it must be important, or at least more important than alternative solutions not as readily recalled,[1] is inherently biased toward recently acquired information.[2][3]

The mental availability of an action's consequences is positively related to those consequences' perceived magnitude. In other words, the easier it is to recall the consequences of something, the greater those consequences are often perceived to be. Most notably, people often rely on the content of their recall if its implications are not called into question by the difficulty they have in recalling it.[4]

“Suspicious” Dominican Republic Deaths

From June-July 2019:

Mortality with Meep: How Many Deaths Before it's No Longer a Coincidence?  

Obviously, a certain number of people are going to die while on vacation each year, and some may have trouble after drinking a bit much.

So, what would be the number of people dying before it’s justified to think it’s more than just coincidence?

This story says 9 deaths: Timeline of deaths – goes back approximately one year.

How many Americans visit the Dominican Republic each year?

According to Wikipedia, about 2 million Americans per year, but those people probably stay about a week each. I need to turn this number into people-years, aka, I divide that 2 million by 52 weeks (assuming 1 person stays about one week) in order to get the right number for “exposures”, that’s about equivalent to 38,500 people each staying one year to get exposure units.

So 9 people out of 38,500 people-years is an annualized q_x of 0.023%.

….

Okay, statistically, how many “excess deaths” would it take before we can say it’s not a coincidence?

….

So, if 225 Americans died in the DR in one year, I might start to get suspicious.

That’s about 225-193 = 32 “excess” deaths to be an anomaly.

Of course, this is all dependent on my exposures and base estimate for mortality. It can be due to age mix I should expect more (or fewer) deaths.

Mortality with Meep: Dominican Republic and Raw Death Rates  

The problem for the Dominican Republic is purely public relations right now. Comparing numbers like death rates is not going to convince anybody who is deciding on a location to vacation at.

There’s this bit:

But nobody really has a bias for thinking that somebody is going around murdering Americans in the Dominican Republic.

Let’s think of something that’s far more endemic: antivaxxers. They will not be convinced by numbers. It’s purely emotional reaction at this point.

Truth is one of my highest values, and I have a bias of digging into my assumptions. I am particularly aware of cognitive biases.

But that’s not how most people are (and I wouldn’t even argue that’s how most people should be. I don’t dig into every damn thing myself because it gets exhausting. Somebody needs to make the donuts and not spend time questioning everything.)

So they need to find some good emergency communications people, because this ain’t cutting it.

I agree that the numbers themselves don’t show a problem, but the problem is no longer about the numbers.

I have no recommendation on this score, because this really isn’t something I have expertise about. I can only tell the “you probably won’t die” is not a good message to convey. “Most people survive!” is not any better.

DO BETTER.

Mortality with Meep: Even More Dominican Republic Deaths  

I think getting the FBI to help may be useful, but, unfortunately, you will get people who say “they’re covering it up!” even if those autopsies/toxicology reports come up with nothing untoward.

Every so often one gets a spate of these media panics (such as the shark attack summer of 2001), because the beast must be fed. Sometimes these stories are placed… such as when somebody has a big lawsuit, and they’re trying to get judgment by press.

But dear lord, people, stop arguing the statistics. Get the autopsies/toxicology reports done and disclose the info…. though the relatives may not want the info disclosed. Such as if drug use was involved in some of these cases.

In any case, I’ll keep up with this, because death rates are my jam. And so far, I agree with the DR officials that the specific numbers are not suspicious. But we shall see.

Deaths in the Dominican Republic: How Many are We Up To Now?  

Here is my problem with these — it’s the count. A lot more than 11 or 12 American tourists had to have died in the Dominican Republic over the past year (my prior figuring that likely a few hundred die every year).

I already flagged a few of the ones that were not mysterious at all. This one claims 12 “mysterious” deaths, and others had claimed 11. Who the heck is keeping this list? Can we have a central clearinghouse indicating which deaths are mysterious and which are not?

I believe the State Dept., etc., when they say that there’s not an uptick in deaths of tourists in the DR. It’s just that it’s easy to find a “pattern” when this stuff happens all the time. It’s like any media-fueled “trend” (shark attack!). You just decide to publicize something that happens often enough that you’ll get a report at least once a week. So you can keep feeding the media coverage!

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

To be sure, with increasing interest rates right now, POB deals will be few and far between, but I want to take a snapshot of why POBs are not ONE CLEVER TRICK for solving public pension plan problems. They’re more a way to make a bad situation worse.

Episode Links

10-year Treasury rate

As you can see, the 10-year rate is currently at a level around where we last saw it pre-Grand Recession.

Marc Joffe from Reason Foundation

June 2022: The risks of issuing pension obligation bonds are rising with inflation, interest rates

The Federal Reserve’s effort to rein in inflation might be closing the window on state and local governments’ opportunity to reduce pension burdens by issuing pension obligation bonds. These pension obligation bonds are frequently used by public employers with large pension liabilities. But do they benefit the governments that issue them? 

If assets acquired with public obligation bond (POB) proceeds yield more than the bonds’ interest and issuance costs, the government will have additional resources to meet its pension obligations over the life of the bond. For POB deals to work out, asset returns must exceed debt servicing costs. While servicing costs are predictable, asset returns vary from year to year. For example, most public pension systems achieved very large positive investment returns in the 2021 fiscal year, but this year most pension systems will post negative investment returns.  

Given the unpredictability of investment returns, it is advisable to issue public obligation bonds only when there is a large margin between expected returns and servicing costs to provide a cushion for prediction errors. In late 2021, a big difference between POB interest rates and assumed returns on assets arguably existed for many issuers, offering a healthy margin. Now, however, with borrowing costs rising, this cushion has eroded. 

STUMP on Pension Obligation Bonds

7 Feb 2015: Pension Obligations Bonds ARE OF THE DEVIL (Don't do it, Brownback!)  

But pensions aren’t a capital asset/expense. They’re an operational expense. They are for paying for current service by giving some money in the future, but the expense is incurred right now.

Just like when I go out to a fancy restaurant and put that tab on my credit card. I usually pay off my balance in full each month for credit cards, because I use them to pay for my current, operational expenses like groceries, the energy bill, my Amazon habit. If all I did was keep charging operational expenses to my credit cards and not paying off the balance, I’d be accruing debt like the unfunded liability in public pensions. The credit cards don’t expect me to pay off all the balance all at once, but I don’t need to be still paying for today’s meal at Per Se for the next thirty years.

That’s the unfunded liability, in analogy: a large credit card balance. Living beyond your means. Saying that you’ll pay for current expenses by future income… somehow.

So what would a Pension Obligation Bond analogy be?

Credit card balance transfer. The pension debt is being transferred from a debt to the pension fund to a debt to the POB holders.

I happen to do credit card balances all the time, because I do sometimes have short-term large expenses, and I want to spread it out over a year. So I will transfer the balance with one of those 0% promo APRs (with an up front 3% transfer fee). That’s fine by me, because I know I will have paid off that balance by the time the 0% is finished.

Now, what would be crazy to do (and what I have seen people do) is to use one of those balance transfers or cash advances so I can go gamble in Vegas. And if I lose…. good luck paying off that credit card.

I had this argument with a friend during the dot com boom, btw. He was racking up credit card debt, and held a large amount of stock and options in his own company (that had been going great guns in growth). I argued that he needed to pay off the sure debt (which wouldn’t wipe out all his stock holdings, btw) instead of assuming that the stock would grow 20% per year for sure. Because it wouldn’t.

And it didn’t.

Likewise, using a POB just so a pension fund can chase the yield it can’t get without taking on a lot of risk… yeah, that’s asking for trouble.

The reason POBs are of the devil is that they use accounting maneuvers that no private entity would be allowed to use — you would not be allowed to issue a bond and declare that you made a profit on the deal at issuance. That’s what is being argued when they say the 5% interest bond is going into cash that will for sure return 8%. That’s the argument.

And what if the market crashes?

What then?

16 Feb 2015: Why are Pension Obligation Bonds OF THE DEVIL? A Lesson from the Dollar Auction  

You can barely see it, but there was a POB between 2003 and 2005. It barely made a dent in the unfunded pension liability.

And what then? In the ten years since 2005, Illinois underfunded the TRS pension fund by at least a billion dollars a year.

With regards to contributions, there was a choice on the part of the “government”.

With regards to all the other reasons for shortfalls — investment experience, experience in salary changes and longevity — the government had less direct control. But they definitely had a choice with regards to how much of the budget to apply to the pensions.

And every damn year, the Illinois government made a conscious decision to shortchange the pension. That was not an accident.

…..

Only accounting magic makes the debt look smaller than it actually is. And the debt to the pension fund is actually larger than originally stated. Now the state has two creditors: the holders of the POBs and the pension fund. That sounds more like the dollar auction now.

The POB debt is “sure” — the state is supposed to pay off the interest and the principal. The pension debt is less sure, but somehow it seems to grow even faster after this particular POB trick.

And the only states that feel the need to avail themselves of this particular trick tend to have gotten in their position by bad behavior, and they’re not about to change their behavior after the POB is issued.

This is why I say POBs are of the devil — whether or not you believe in a literal devil, the literary devil is the kind that helps you rationalize the bad behavior you already did and are determined on continuing.

Ask Faust about how that worked out for him.

2018: Two Awful Tastes That Go Great Together: Pension Obligation Bonds and 80% Funding Myth  

FINANCIAL LEVERAGE

I am put to mind of the people I knew in the 90s who were trading on margin.

Leverage in the financial world works similar to levers in the physical world: it amplifies things.

If you overshoot your target return, leverage amplifies it, and you make even more money! YAY!

But if you undershoot it, that undershooting is also amplified. You now have even more promises you have to fulfill.

I am not a market-timer, but it seems to me that timing is of the essence for these POBs.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

Crossing Thin Ice podcast - look for Episode 8, 24 Apr 2023, Fear v. Danger

Research Insights SOA podcast - look for 26 Apr 2023, 16th Annual Survey of Emerging Risks Key Findings

Jane Austen’s England

An authoritative account of everyday life in Regency England, the backdrop of Austen’s beloved novels, from the authors of the forthcoming Gibraltar: The Greatest Siege in British History (March 2018)Nearly two centuries after her death, Jane Austen remains the most cherished of all novelists in the English language, incomparable in the wit, warmth, and insight with which she depicts her characters and life. Yet the milieu Austen presents is only one aspect of the England in which she lived, a time of war, unrest, and dramatic changes in the country’s physical and social landscape. Jane Austen’s England offers a fascinating new view of the great novelist’s time, in a wide-ranging and richly detailed social history of English culture. As in their bestselling book Nelson’s Trafalgar, Roy and Lesley Adkins have drawn upon a wide array of contemporary sources to chart the daily lives of both the gentry and the commoners, providing a vivid cultural snapshot of not only how people worked and played, but how they struggled to survive.

Fire Companies

Union Fire Company

Union Fire Company, sometimes called Franklin's Bucket Brigade, was a volunteer fire department formed in Philadelphia in 1736 with the assistance of Benjamin Franklin.[1] It was the very first firefighting organization in Philadelphia,[2] although it was followed within the year by establishment of the Fellowship Fire Company.[3] The fire company was formed on 7 December 1736 after a series of publications in the Pennsylvania Gazette by Franklin and others pointing out the need for more effective handling of fires in Philadelphia and remained active until approximately 1820.[3] Although modeled after the Mutual Fire Societies of Franklin's native Boston, the Union Fire Company protected all members of the community rather than only the members of the company.[4]

Croton Falls Fire Department

(I live in Croton Falls)

Atlas Obscura: A Short History of Fire Marks, The World’s Hottest Insurance-Related Antiques

Drowning

Episode Links

STUMP, April 14: The French Continue to Protest Over Retirement Age Changes

I have a Google news alert on “retirement age” that emails me weekly, and every week this year it’s been full of headlines about French protests over raising the retirement age to the ancient limit of 64 years old. Zutalors!

AP, April 14: France’s Constitutional Council approves higher pension age

France’s Constitutional Council on Friday approved an unpopular plan to raise the retirement age from 62 to 64, in a victory for President Emmanuel Macron after three months of mass protests over the legislation that have damaged his leadership.

….

The council rejected some other measures in the pension bill, but the higher age was central to Macron’s plan and the target of protesters’ anger.

Macron can enact the bill within 15 days.

In a separate but related decision, the council rejected a request by left-wing lawmakers to allow for a possible referendum on enshrining 62 as the maximum official retirement age. The council will rule on a similar request next month.

Fertility Rate

Our World in Data: Total Fertility Rate

More on fertility rate

Robot cats

JOY FOR ALL - Silver Cat with White Mitts - Interactive Companion Pets - Realistic & Lifelike

Yeah, I still consider them creepy.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

Associated Press, March 23, 2023: South Carolina’s top accountant to resign after $3.5B error

COLUMBIA, S.C. (AP) — South Carolina’s embattled top accountant will step down next month after a $3.5 billion error in the year-end financial report he oversaw, according to a resignation letter written Thursday that was obtained by The Associated Press.

Republican Comptroller General Richard Eckstrom’s decision to leave the post he has held for 20 years came after intense scrutiny of his performance following the blunder and amid rising calls for him to either quit or be removed.

The Senate panel investigating the financial misstatement issued a damning report last week accusing Eckstrom of “willful neglect of duty.” As recently as last week, however, Eckstrom had said he would not resign.

….

Eckstrom has said the Annual Comprehensive Financial Report exaggerated the state’s cash balances for a decade by double counting the money sent to colleges and universities. The mistake went unsolved until a junior staffer fixed the error this fall.

….

The next comptroller general may also lead a much weaker office. The investigating panel suggested its responsibilities be transferred to one or more agencies. State Treasurer Curtis Loftis, an elected Republican, has testified that his office could absorb the main tasks.

….

A certified public accountant, Eckstrom, 74, spent four years as state treasurer before assuming his current office. He has run unopposed in the past two elections and last faced a Republican primary challenger in 2010.

AP, March 16: Bid opens to fire SC comptroller for $3.5B accounting error

COLUMBIA, S.C. (AP) — South Carolina lawmakers angry over a $3.5 billion accounting blunder by the state’s comptroller general began efforts Thursday to sack the official, a day after demanding he quit or be fired.

Comptroller General Richard Eckstrom told senators last month he had unintentionally exaggerated the state’s cash position by $3.5 billion by overstating the amount the state had sent to colleges and universities for a decade. He has signaled he won’t resign.

The error wasn’t in actual cash, but in the way the state reports its balance sheets. It could affect South Carolina’s credit rating and has eroded confidence that a large number of lawmakers in the Republican-dominated state had in Eckstrom.

AP, March 15: SC lawmakers want to fire comptroller for $3.5B error

A $12 million coding error in 2007 got compounded by a shift beginning in 2011 from one accounting system to another, Eckstrom has said. The reporting confusion then led to a double counting of state cash transferred to colleges and universities. By 2017, the sum of overstated funds had grown to $1.3 billion. That number has nearly tripled in the following years as South Carolina sent more and more money to higher education.

In its Wednesday report, the Senate Finance Constitutional Subcommittee concluded Eckstrom failed to do his job properly and should be removed from office. In South Carolina the comptroller — the state’s chief accountant — is elected.

….

For 10 years, Eckstrom did not respond to warnings that a “material weakness” existed in the comptroller general’s office, according to state Auditor George Kennedy. He said the internal controls over the annual report’s preparation were insufficient to detect and correct errors in a timely manner. Around 2017, Kennedy said his office told Eckstrom’s team that a full reconciliation would help. That did not happen until last spring.

South Carolina Office of the Treasurer: Annual State Debt Report FY2022

Statement of Revenues

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

Spy Wednesday

Catholic News Agency: Why is today called Spy Wednesday?

Met Museum of Art

Salvador Dali

The Last Supper

Juan de Pareja

Exhibit link

This exhibition offers an unprecedented look at the life and artistic achievements of seventeenth-century Afro-Hispanic painter Juan de Pareja (ca. 1608–1670). Largely known today as the subject of The Met’s iconic portrait by Diego Velázquez, Pareja—who was born in Antequera, Spain—was enslaved in Velázquez’s studio for over two decades before becoming an artist in his own right. This presentation is the first to tell his story and examine the ways in which enslaved artisanal labor and a multiracial society are inextricably linked with the art and material culture of Spain’s “Golden Age.”

Representations of Spain’s Black and Morisco populations in works by Francisco de Zurbarán, Bartolomé Esteban Murillo, and Velázquez join works that chart the ubiquity of enslaved labor across media, from sculpture to silver. The Met’s portrait, executed by Velázquez in Rome in 1650, is contextualized by his other portraits from this period and the original document whereby Pareja was freed upon return to Madrid. The exhibition culminates in the first gathering of Pareja’s rarely seen paintings, some of enormous scale, which engage with the canons of Western art while reverberating throughout the African diaspora.

The Calling of St. Matthew link

St. Benedict of Palermo

Wiki article: https://en.wikipedia.org/wiki/Benedict_the_Moor

Benedict the Moor O.F.M. (Italian: Benedetto da San Fratello; 1526 – 4 April 1589) was a Sicilian Franciscan friar who is venerated as a saint in the Catholic[1] church. Born of enslaved Africans in San Fratello, he was freed at birth and became known for his charity. As a young man he joined a Franciscan-affiliated hermit group, of which he became the leader. In 1564 he was sent to the Franciscan friary in Palermo, where he continued good works.

….

Benedict died at the age of 65 and, it is claimed, on the very day and hour which he had predicted.

St. Joseph, Patron of a Happy Death

Statue at my church

Prayer for a happy death

O Blessed Joseph, who yielded up thy last breath in the arms of Jesus and Mary, obtain for me this grace, O holy Joseph, that I may breathe forth my soul in praise, saying in spirit, if I am unable to do so in words: “Jesus, Mary and Joseph, I give Thee my heart and my soul.”Amen.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Notes

Public Money Pod

Show webpage: https://munifinance.uchicago.edu/cmf-podcast/

Each year state and local governments spend $4 trillion dollars. Where does that money come from? Where does it go? Who manages it? And what do citizens and taxpayers have to show for it? In The Public Money Pod we explore the budgets, bonds, and bureaucrats at the heart of state and local public finance.

Hosted By:

Liz Farmer is an award-winning fiscal policy expert and journalist, writing about the many ways state and local governments spend our taxpayer money. You can find her @LizFarmerTweets and “Long Story Short.”

Justin Marlowe is a Research Professor at the University of Chicago’s Harris School of Public Policy, where he also serves as Associate Director of the Center for Municipal Finance.

Episode: Fix-It Financial Leadership, with Mark Scott

We discuss the challenges of engaging elected officials in their community's financial story. Legendary City Manager Mark Scott explains how the Los Angeles Riots transformed Beverly Hills, how municipal bankruptcy transformed San Bernardino, how to engage elected officials in financial decisions, and the public finance of Coachella, among many other topics. In Ripped from the Headlines we enumerate the challenges and opportunities of the Financial Data Transparency Act.

Liz Farmer on Mark Scott

April 2017, Governing: The City Managers on a Constant Quest for New Places to Fix

In the early 2000s, Mark Scott had been working for the city of Beverly Hills for 20 years -- 14 of them as city manager. Thanks to the opulence of the town, it was the kind of place where a budding manager could learn the business minus the typical “city” problems. But eventually the absence of serious issues started to get to Scott. During his tenure, he had watched neighboring Los Angeles endure dramatic civil and social unrest. Meanwhile, in Beverly Hills, luxury merchants and developers were bending over backward to do business. In 2003, the town’s Rodeo Drive Committee announced that the glassware company Baccarat was displaying $1 million worth of crystal chandeliers along the famous road’s median. It all triggered something in Scott, and he decided he needed a change. Or, really, a challenge.He couldn’t have picked a more opposite place for his next chapter. Scott landed in Spartanburg, S.C., a former mill town divided almost evenly between white and black residents. About one-quarter of the town lived in poverty. Scott started working on ways to bring life to depressed places, overseeing a revitalized town square, new public housing, and new parks and grocery stores in historically segregated neighborhoods. He learned how to finance new projects “out of nothing,” he says, a skill he hadn’t needed in Beverly Hills. But as it turns out, the move to Spartanburg was only the beginning of what became Scott’s quest for new problems to solve. He returned to California, and in a relatively short time has been manager of four cities: Culver City, Fresno, Burbank and now San Bernardino, which is in the process of exiting municipal bankruptcy.

Financial Data Transparency Act

Data Coalition fact sheet: https://www.datacoalition.org/resources/Documents/FDTA%20_ACT_final2_2022.pdf

Searchable, Machine-Readable, Open Data Standards: The FDTA defines requirements for common data standards that build upon industry and technology best practices, account for lessons learned from existing federal regulatory standard setting, and incorporate relevant federal policy and international standards definitions. The data standards require that data be rendered fully searchable – which is facilitated by the requirement to be “machine-readable.” “Machinereadable” data are “data in a format that can be easily processed by a computer without human intervention while ensuring no semantic meaning is lost” (per 44 U.S.C. § 3502(18)). The data will be made available under an “open license” format, which will reduce barriers for industry, academia, and others to incorporate or reuse the data standards and information definitions into systems and processes. This requirement will also facilitate competition between multiple vendors for data tools and services, ultimately reducing long-term costs

National League of Cities: What You Need to Know About the Financial Data Transparency Act

As written, the introduced legislation would require local governments to come into compliance with the new financial reporting standard by 2027. The new standards are to be created by the Securities and Exchange Commission (SEC). 

The final legislation mandates that governments put their financial information in machine-readable format. The key difference between the initial draft and the final draft of the legislation is that they will be responsible for enacting the new data standards. It is preferable to have the SEC be the body that administers the standards because Congress has oversight of the agency, and if the rules are not working Congress can exercise oversight of the agency.  

This legislation will pose an unfunded mandate of compliance on local governments. While the bill mandates compliance, it does not provide any additional federal dollars to help municipalities come into line with the new requirements. NLC will be working with the SEC and other allied organizations to reduce the burden of this unfunded mandate as much as possible on communities.  

The mandates will be set in place approximately four years from the passage of the legislation.  

Girard Miller, Governing: More and Better Uses Ahead for Governments’ Financial Data

The central idea behind the FDTA is that public-sector organizations’ financial data should be readily available for online search and standardized downloading, using common file formats. Think of it as “an http protocol for financial data” that enables an investor, analyst, taxpayer watchdog, constituent or journalist to quickly retrieve key financial information and compare it with other numbers using common data fields. Presently, online users of state and local government financial data must rely primarily on text documents, often in PDF format, that don’t lend themselves to convenient data analysis and comparisons. Financial statements are typically published long after the fiscal year’s end, and the widespread online availability of current and timely data is still a faraway concept.

….

The debate over information content requirements should focus first on “decision-useful information.” Having served briefly two decades ago as a voting member of the Governmental Accounting Standards Board (GASB), contributing my professional background as a chartered financial analyst, I can attest that almost every one of their meetings included a board member reminding others that required financial statement information should be decision-useful. A key question, of course, is “useful to whom?”

San Bernardino on STUMP

May 2015: Buyers of Distressed Munis: BEWARE! GET OUT!  

San Bernardino bondholders were being told that pensions come before them:

May 11 (Reuters) – An attempt by holders of bonds issued by bankrupt San Bernardino to win the same treatment accorded the city’s biggest creditor, state pension giant Calpers, was thrown out by a federal judge on Monday.

The ruling comes three days before the southern California city of San Bernardino is to produce a bankruptcy exit plan and would appear to clear the way for the city to slash its bondholder debt. The city has already said that it intends to make full payment to Calpers, which has assets of $300 billion.

May 2014: Public Pension Watch: The Fragility of "Can't Fail" Thinking  

Calpers, the large California public pension plan, has filed an amicus brief in the case of Detroit’s bankruptcy.

Calpers does not like the Detroit pension plans being treated like unsecured creditors in a bankruptcy proceeding, and cites the constitutional (state constitutional, that is) protections for pensions. Thing is, there’s law, and there’s reality.

October 2015: Calpers and the Benefits of Public Pensions: Things Seen and Unseen  

Vallejo has been followed by Stockton and San Bernardino. All of these bankruptcies have been paired with service cuts, much of which would be considered essential services being cut.

This is not unique to California, of course, but it’s just becoming more and more visible.

The problem becomes that Calpers is trying to make something that is unseen (economic boost by retirees) to being seen, while ignoring the equal issue of taxpayers spending their own money. And that the taxpayers don’t give a damn about that anyway.

They care about their services.

BOTTOM LINE IS SEEN BY ALL

So you’d better be ready to explain just what people are getting for their tax dollars now. They can see that the pensions currently paid are for services not currently being provided.

March 2015: Pension Quick Takes: Nice Work if You Can Get It  

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

…and why didn’t my dad, the electrical engineer who worked at IBM, teach Aunt Pat instead of the 11-year-old Meep (that was me in 1985)?

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

Technology, Accessibility, and my Aunt Pat

Mortality Updates for 2022: Bad News Lurks in Non-COVID Causes of Death

National Kidney Foundation

https://www.kidney.org/

Fast Facts

What is Kidney Disease?

Chronic kidney disease (CKD) means your kidneys are damaged and losing their ability to keep you healthy by filtering your blood. In the early stages of the disease, most people do not have symptoms. But as kidney disease gets worse, wastes can build up in your blood and make you feel sick. You may develop other problems, like high blood pressure, anemia, weak bones, poor nutritional health, and nerve damage. Because kidneys are vital to so many of the body's functions, kidney disease also increases your risk of having heart and blood vessel disease. While these problems may happen slowly and without symptoms, they can lead to kidney failure, which can appear without warning. Once kidneys fail, dialysis or a kidney transplant is needed to stay alive. Kidney failure is also called kidney failure with replacement therapy (KFRT).

Dialysis comes in two forms: hemodialysis (HD) or peritoneal dialysis (PD). Both forms remove wastes and extra fluid from your blood. Patients receive hemodialysis usually 3–4 times a week, either at home or at a dialysis center. During hemodialysis, your blood is pumped through a dialysis machine, where it is cleaned and returned to your body. With peritoneal dialysis, your blood is cleaned inside your body every day through the lining of your abdomen using a special fluid that is periodically changed. Peritoneal dialysis can be done at home, at work, at school, or even during travel. Home dialysis is an increasingly popular mode of treatment, and is associated with better outcomes.

* 6,427 children (<18 yrs old) in the U.S. lived with KFRT in 2017.

* According to one study, children with KFRT are 30 times more likely to die prematurely than healthy children. In another study, adolescents (<18 yrs old) with KFRT since childhood had a life expectancy of 38 years if they were treated with dialysis during childhood, and 63 years if they received a kidney transplant during childhood.

* The primary causes of pediatric KFRT in the U.S. between 2015–2018 were: primary glomerular disease, CAKUT (congenital anomalies of the kidney and urinary tract), cystic/hereditary/congenital disorders, and primary/secondary glomerular disease/vasculitis. Urinary tract infections can also lead to kidney infections, which can cause long-term damage to the kidneys.

American Kidney Fund: Catching Up With Camp All Stars

Wikipedia Links

IBM PC Jr

The IBM PCjr (pronounced "PC junior") was a home computer produced and marketed by IBM from March 1984 to May 1985, intended as a lower-cost variant of the IBM PC with hardware capabilities better suited for video games, in order to compete more directly with other home computers such as the Apple II and Commodore 64.

Gary Coleman

Gary Wayne Coleman was born[3] in Zion, Illinois, on February 8, 1968. He was adopted by W. G. Coleman, a fork-lift operator, and Edmonia Sue, a nurse practitioner.[4] Due to focal segmental glomerulosclerosis, a kidney disease, and the corticosteroids and other medications used to treat it, his growth was limited to 4 ft 8 in (142 cm),[5][6] and his face kept a childlike appearance even into adulthood. He underwent two unsuccessful kidney transplants in 1973 and again in 1984, and required dialysis.[7]

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

December 2012: “A Tale of Two Formulas: Solvency II SCR and RBC”

An article I wrote for the Society of Actuaries newsletter, The Financial Reporter, to contrast a specific item of European and United States solvency regulation.

To begin with, there is a top-down vision of the Solvency II SCR: It is defined as being the one-year value at risk (VaR) at the 99.5 percent confidence level. One starts at this high-level concept and then drills down to modules and submodules of risk that conform to this vision.

….

On the other hand, U.S. RBC is more of a bottom-up calculation in its core concept. There is no specific time horizon or risk metric that is specified, much less a specified confidence level. As the RBC formula has been updated, it has been at the component level, with various pieces having their own calibration points, not necessarily in conjunction with any other factors seen in the equation. The method for updating RBC has been one of incrementalism, with new factors being targeted to very specific risks and/or lines of business.

Record of the Atlanta Spring 1999 Meeting of the Society of Actuaries: Insurance Company Failures of the Early 1990s-Have We Learned Anything?

Summary: The early 1990s saw the failure of three major life insurance companies in North America-Executive Life, Mutual Benefit, and Confederation Life.

The panel looks back at the settlements of these insolvencies and how different policyholders fared. Changes in the insurance industry, credit analysis, and marketplace resulting from these failures are discussed. The panel also represents the changes in regulation designed to prevent or lessen the impact of future insolvencies and tries to assess the likelihood of a major failure in the future.

Guaranty Funds

National Organization of Life and Health Insurance Guaranty Associations

The National Organization of Life and Health Insurance Guaranty Associations (NOLHGA) is a voluntary association made up of the life and health insurance guaranty associations of all 50 states and the District of Columbia.

NOLHGA was founded in 1983 when the state guaranty associations determined that there was a need for a mechanism to help them coordinate their efforts to provide protection to policyholders when a life or health insurance company insolvency affects people in many states.

* What Happens When an Insurance Company Fails

* The Safety Net at Work

* Frequently Asked Questions

The National Conference of Insurance Guaranty Funds

At the heart of every property and casualty insurance contract lies a promise that if misfortune occurs, insurance will step in to soften the blow by covering outstanding claims.

But what happens when an insurance company becomes financially troubled, fails and is no longer able to uphold its end of the bargain?

That’s when the state property and casualty guaranty fund system – a system few know much about – steps in. Put simply, guaranty funds provide an essential safety net for policyholders, one that meets the needs of those least able to deal with losses should their insurance company fail.

The National Conference of Insurance Guaranty Funds (NCIGF) – a non-profit, member-funded association – provides national assistance and support to the property and casualty guaranty funds located in each of the 50 states, the District of Columbia, and the Commonwealth of Puerto Rico.

Wikipedia Links:

National Organization of Life and Health Insurance Guaranty Associations

The National Organization of Life and Health Insurance Guaranty Associations[1] (often abbreviated NOLHGA) is a voluntary, U.S. association made up of the life and health insurance guaranty associations of all 50 states and the District of Columbia. NOLHGA was founded in 1983 to coordinate the efforts of state guaranty associations to provide protection to policyholders when their multi-state life or health insurance company becomes insolvent.[2]

….

When an insurance company reports to its state insurance regulator that it is in financial trouble, the state will first attempt to assist the company back toward financial stability. If the state insurance department determines the company cannot be saved, then the insurance commissioner asks the state court to order the liquidation of the company.[3] Once the order to liquidate a company that operates in multiple states is handed down, NOLHGA, on behalf of affected member state guaranty associations, assembles a task force of affected guaranty associations to analyze the company’s commitments to policyholders. Each affected state guaranty association pays out claims to the insurance company's policyholders in the state; in some instances, the associations arrange for policies to be transferred to a financially sound insurer.[2] Each state guaranty association is governed by state law; most associations cover up to at least $300,000 for life insurance death benefits, $100,000 in cash surrender value for life insurance, $250,000 in withdrawal and cash values for annuities, and up to $500,000 in health insurance policy benefits (depending on the type of health insurance in question).[4][5]

Executive Life

Executive Life Insurance Company (ELIC) was once the largest life insurance company in California. Its financial problems and subsequent insolvency in April 1991 shocked its policyholders and the financial world.[1]

At the time, First Executive was the biggest insurer ever to fail, which resulted primarily from money-losing investments in junk bonds.

….

In 2003, Crédit Lyonnais and others agreed to pay $771 million in settlements resulting from false statements to bank regulators in connection with the acquisition of junk bonds and the insurance business of the failed Executive Life Insurance Company of California.[5]

….

A subsidiary, Executive Life Insurance Company of New York (ELNY), was seized by the state of New York, who sold the majority of the business to MetLife, retaining the structured settlement book of business. Due to mismanagement, ELNY was ordered to liquidate.[9] Guaranty Association Benefits Company took over the assets of ELNY in 2013.

Mutual Benefit Life Insurance Company

Mutual Benefit Life was taken into receivership for rehabilitation by the New Jersey Department of Banking and Insurance on July 16, 1991, after losses in an overheated real estate market led to a run by policyholders, who ultimately lost the purported "cash value" that had been said to have accrued in their policies. At the time, the collapse was the largest ever of an American insurer. AMEV acquired the group life, accident and health insurance Mutual Benefit in 1991.[5] SunAmerica acquired the remaining divisions in 1998.[6] Effective June 14, 2001, Mutual Benefit was liquidated and dissolved.[7]

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

Virginia Postrel

Her footnote:

Using ChatGPT, I got a bunch of potentially useful data on the percentage of various national populations over 80 from 1920 to the present. But I can’t be sure the AI isn’t making stuff up and by the time I find the numbers on the cited sources I haven’t saved any time. ChatGPT has an enormous advantage at rummaging through databases but that isn’t any good if I can’t trust it. And it looks like it was wrong.

goActuary threads on chatGPT

ChatGPT to actually get some work done

ChatGPT and Education

Embed in Excel:

chatGPT chatbot

https://openai.com/blog/chatgpt/

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

Social Security/Medicare Projections

A Crash Course in Social Security’s Funding Woes, John Manganaro, Think Advisor, 26 Jan 2023

The Committee for a Responsible Federal Budget has published a new analysis that compares the Social Security solvency projections of the Congressional Budget Office (CBO) and the Social Security trustees, finding there is substantial disagreement in key aspects of the two organizations’ outlooks.

In addition to comparing the two solvency projections, the CRFB analysis also offers a blueprint for restoring Social Security’s long-term financial health, pointing to a variety of possible tax increases or benefit formula adjustments that could be undertaken, either alone or in concert, to put Social Security on a sounder financial footing.

Ultimately, the CRFB analysis warns that legislative action is sorely needed in the coming years, as the projections of both the CBO and the Social Security trustees firmly agree that benefit cuts are in store given current funding levels. At some point in the early to mid-2030s, benefits could be cut 20% to 30%, or more, for the typical retiree, and time is quickly running out to act.

CBO: Only a Decade Until Social Security Insolvency, CRFB, 23 Jan 2023

The Budget and Economic Outlook: 2023 to 2033 Visual Summary, CBO, Feb 2023

New York Times Op-Eds and Letters, plus rebuttal

Why Medicare and Social Security are Sustainable, Paul Krugman, NYT, 21 Feb 2023

So why does the C.B.O. project continuing budget pressure from aging? Because it assumes that life expectancy, specifically life expectancy at age 65, will keep rising. That has certainly been true in the past, but given America’s mortality problems, I’m not sure that it’s safe to assume this trend will continue at past rates.

….

Anyway, C.B.O. projections now show social insurance spending as a percentage of G.D.P. eventually rising by about 5 points, which is still a lot but not unimaginably large. And here’s the thing: Half of that is still the assumed rise in health care costs. And there are things we can do to control costs that don’t involve cutting off Americans’ benefits. Bear in mind both that U.S. health care is far more expensive than that of any other nation — without delivering better results — and that since 2010 we’ve already done quite a lot to “bend the curve.” It’s not at all hard to imagine that improving the incentives to focus on medically effective care could limit cost growth to well below what the C.B.O. is projecting, even now.

And if we can do that, the rise in entitlement spending over the next three decades might be more like 3 percent of G.D.P. That’s not an inconceivable burden. America has the lowest taxes of any advanced nation; given the political will, of course we could come up with 3 percent more of G.D.P. in revenue.

Biden's Promises on Social Security and Medicare Ignore Financial Reality, Brian Riedl, NYT, 23 Feb 2023

The president's implication that full benefits can be paid without raising taxes for 98 percent of families has no basis in mathematical reality. Imagine that Congress let the Trump tax cuts expire, applied Social Security taxes to all wages, doubled the top two tax brackets to 70 and 74 percent, increased investment taxes, imposed Senator Bernie Sanders's 8 percent wealth tax on assets over $10 billion and 77 percent estate tax on estates valued at more than $1 billion, and raised the corporate tax rate back to 35 percent. Combined federal income, state and payroll marginal tax rates would approach 100 percent for wealthy taxpayers, and America would face among the highest wealth, estate and corporate tax rates in the developed world.

Yet total new tax revenue -- 4 percent of G.D.P. -- would still fall short of Social Security and Medicare shortfalls that will grow to 6 percent of G.D.P. over the next three decades. Not even halving the defense budget would close the remaining gap.

More realistically, if these programs aren't reformed the middle class will have to shoulder the burden, just as it does across Europe. And the burden is huge: Closing with taxes the aforementioned Social Security and Medicare shortfalls would more plausibly mean raising the payroll tax by nine percentage points and imposing a 20 percent value-added tax. Taxes haven't been raised that sharply since World War II, back when tax revenues consumed a much smaller share of our economy, and there were many more untapped revenue sources.

Letters in response to Brian Riedl’s Op-Ed, NYT, 27 Feb 2023

Paul Krugman Says Social Security Is Sustainable. It's Really Not. Eric Boehm, Reason, 23 Feb 2023.

First, he says the CBO's projections about future costs for the two programs might be inaccurate because the agency is assuming that health care costs will continue to grow faster than the economy as a whole. At best, that means postponing insolvency by a few years. The structural imbalance between revenues and outlays means that depletion of the trust funds is a question of "when" and not "if," as this chart from the Committee for a Responsible Federal Budget makes clear.

American Academy of Actuaries Social Security Game

The Social Security Game

No, they didn’t ask me about how to properly host and embed videos.

Look ma, I saved Social Security solely through increasing taxes! A lot!

Social Security Wage Cap History

Complete history - 1937-2023

The Evolution of Social Security's Taxable Maximum

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

Years of Life Lost: An Exploration, U.S., 2018-2022 (Provisional)

Martin Chuzzlewit, Chapter 11

`Ecod, you may say what you like of my father, then, and so I give you leave,' said Jonas. `I think it's liquid aggravation that circulates through his veins, and not regular blood. How old should you think my father was, cousin?'

`Old, no doubt,' replied Miss Charity; `but a fine old gentleman.'

`A fine old gentleman!' repeated Jonas, giving the crown of his hat an angry knock. `Ah! It's time he was thinking of being drawn out a little finer too. Why, he's eighty!'

`Is he, indeed?' said the young lady.

`And ecod,' cried Jonas, `now he's gone so far without giving in, I don't see much to prevent his being ninety; no, nor even a hundred. Why, a man with any feeling ought to be ashamed of being eighty, let alone more. Where's his religion, I should like to know, when he goes flying in the face of the Bible like that? Three-score-and-ten's the mark, and no man with a conscience, and a proper sense of what's expected of him, has any business to live longer.'

Wikipedia: Years of potential life lost

The Carter Center: Guinea Worm Disease Reaches All-Time Low: Only 13* Human Cases Reported in 2022

Memento Mori

May 2021: Mortality Nuggets: Global Excess Deaths, Memento Mori, and Mortality News Round-up

Every Day is a Gift

Amazon link: https://amzn.to/3SleBpz

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

Laurence Msall

Statement on the Passing of Civic Federation President Laurence Msall, 1962-2023

The members and staff of the Civic Federation are heartbroken to share the news of the death of our president, Laurence Msall. He passed away surrounded by family on Saturday, February 4, following complications from surgery. Our members and staff are supporting each other through this unexpected loss and taking comfort in the memories of our extraordinary leader and dear friend, who served as president of the Civic Federation for 21 years.

Laurence’s contributions to the Civic Federation were immeasurable and his sudden passing comes as a devastating blow to members of the Civic Federation family. While Laurence was the Civic Federation to so many in the community, his real legacy was in helping to make the Civic Federation the indispensable voice for fiscal responsibility throughout the state of Illinois and that mission will go on through the outstanding staff that Laurence developed.

Obituary for Laurence Msall

Illinois Policy Institute

HERE’S A TO-DO LIST FOR CHICAGO MAYORAL CANDIDATES

Pensions: Support constitutional pension reform.

In order to stabilize city finances, prevent further crowd-out of other city functions and secure retirements for city workers, Chicago’s mayor must support pension reform. Lightfoot recently pushed this issue as did her predecessor, Mayor Rahm Emanuel, late in his term.

That will require amending the Illinois Constitution to allow for changes to the growth of future benefits. The mayor must lobby state lawmakers to place that amendment before the state’s voters.

LIGHTFOOT 2ND CHICAGO MAYOR TO CALL ON SPRINGFIELD FOR PENSION REFORM

Mayor Lori Lightfoot Jan. 27 urged Springfield lawmakers to help reduce Chicago’s future pension woes, arguing the city can no longer afford to spend the $1.3 billion it did on public pension debt during the past four years.

Lightfoot said her $16.4 billion 2023 budget prepaid $242 million in pension debt to avoid raising costs on taxpayer and avert the liquidation of assets by the municipal employees, laborers, firefighters and police pension funds. But Lightfoot said Gov. J.B. Pritzker and state lawmakers now need to act on pension reform.

Public Plan Database on Chicago Pensions

Chicago Municipal page

Contributions made

Funded ratio

All the Chicago plans

Old STUMP Posts on Chicago plans

April 2017: Watching the Money Run Out: A Simulation with a Chicago Pension  

April 2017: Geeking Out: Testing Chicago MEABF to Destruction  

March 2019: Chicago Mayoral Race: Screwed No Matter Who You Choose, Thanks to Unfunded Pensions  

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

The moral: when you do mortality analyses, you need to separate your babies from the kids, and the young adults from the kids as well. Also, picking the worst mortality period from the past isn’t necessarily going to influence action in the future.

Oh, and pools are dangerous to little kids. (But they’re also fun.)

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode links/notes

JAMA article:

30 Jan 2023: Assessment of COVID-19 as the Underlying Cause of Death Among Children and Young People Aged 0 to 19 Years in the US

doi:10.1001/jamanetworkopen.2022.53590

Key Points

Question  Where does COVID-19 rank as an underlying cause of death for children and young people aged 0 to 19 years in the US?

Findings  Among children and young people aged 0 to 19 years in the US, COVID-19 ranked eighth among all causes of deaths, fifth in disease-related causes of deaths (excluding unintentional injuries, assault, and suicide), and first in deaths caused by infectious or respiratory diseases. COVID-19 deaths constituted 2% of all causes of death in this age group.

Meaning  In this study, COVID-19 posed a significant disease burden for children and young people, so pharmaceutical and nonpharmaceutical interventions continue to be important to limit transmission of the virus and to mitigate severe disease.

My post in response:

Key graph from that post: (with some new annotations)

Related STUMP posts:

January 2023: Most recent ranking of causes of death by age group (updated for 2021)

September 2020: Mortality with Meep: Retrospective on Mortality Trends (and a wee bit about COVID)

The 19th century was a rough time to live (or, in this case, not live). While there was some mortality improvement for children up til the Civil War, that diphtheria outbreak [late 1800s] caused disimprovement.

But check out 1930. From 1920 to 1930, there was an almost 50% improvement of mortality. Not a 25 year period, but a 10 year period. Child mortality dropped from about 17% to 9% over that period.

I didn’t point it out in [the older] post, but look at the 2010 data point — even with child mortality as low as it currently is, with most kids dying from accidental causes, homicide (sorry, y’all), or cancer… there still was an over 10% improvement in [child] mortality from 2000 to 2010. It still flabbergasts me. It’s not just breakthroughs with childhood cancer (which is rare, but because kids die so infrequently of any cause, it’s a top cause of child deaths), but a reduction in accidental deaths. YAY SAFETY!

April 2022: Pools are more dangerous than Covid to small children

Here are the numbers for kids aged 1-4, death by drowning while in pools (ICD-10 code W67), U.S.:

2018: 2372019: 2002020: 2392021 (provisional): 229

The 2021 swimming pool deaths are 4 times that of the Covid deaths for this age group. Let’s ban swimming pools! How dare people!

I did not include the ones where the kids drowned in pools from accidentally falling in the pools (ICD-10 code W68). They were already in the pools, presumably having a good time. So I low-balled the risk of swimming pools.

Look, I do not want to ban swimming pools, even if little kids are around:

When my kids were little, I did worry about my neighbors putting in a swimming pool. I was aware of the dangers … but I also knew the orders of magnitude. I knew about needing to put in particular safeguards for our autistic son, but I didn’t go to my town council to have pools made illegal.

Because swimming in pools is fun. And people (and children especially) should enjoy life. Life is for living.

Enjoy life!

(memento mori)

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

Associated Press: France: Over 1 million march against raising retirement age

At least 1.1 million people protested on the streets of Paris and other French cities Thursday amid nationwide strikes against plans to raise the retirement age — but President Emmanuel Macron insisted he would press ahead with the proposed pension reforms.

Emboldened by the mass show of resistance, French unions announced new strikes and protests Jan. 31, vowing to try to get the government to back down on plans to push up the standard retirement age from 62 to 64.

Social Security Administration: Starting Your Retirement Benefits Early

You can start receiving your Social Security retirement benefits as early as age 62. However, you are entitled to full benefits when you reach your full retirement age. If you delay taking your benefits from your full retirement age up to age 70, your benefit amount will increase.

If you start receiving benefits early, your benefits are reduced a small percent for each month before your full retirement age.

BBC: Japan PM says country on the brink over falling birth rate

Japan's prime minister says his country is on the brink of not being able to function as a society because of its falling birth rate.

Fumio Kishida said it was a case of "now or never."

Japan - population 125 million - is estimated to have had fewer than 800,000 births last year. In the 1970s, that figure was more than two million.

Birth rates are slowing in many countries, including Japan's neighbours.

But the issue is particularly acute in Japan as life expectancy has risen in recent decades, meaning there are a growing number of older people, and a declining numbers of workers to support them.

….

In 2020, researchers projected Japan's population to fall from a peak of 128 million in 2017 to less than 53 million by the end of the century. The population is currently just under 125 million, according to official data.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Let’s consider a core principle of finance, as announced by fictional character Wilkins Micawber of David Copperfield, by Charles Dickens: “Annual income twenty pounds, annual expenditure nineteen pounds nineteen [shillings] and six [pence], result happiness.

Annual income twenty pounds, annual expenditure twenty pounds nought and six [pence], result misery.” In short: if you continually spend more than you bring in, you will surely come to grief. This core concept applies to public finance as it does to personal finance, and we will be seeing this in our journey during 2023. Come along with me!

“Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness.

Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.” — Mr. Micawber, from the novel David Copperfield

Episode links

Prior STUMP posts

Jan 2023: Back to Basics on Public Finance

Feb 2016: Living Beyond Your Means Kills: Debt is Just the Killing Weapon  

OVERSPENDING IS THE CAUSE

The point is the problem doesn’t come from the debt per se, but from the overspending all these years. One can overspend a little bit, take on a little bit of debt… but if that debt is never paid off, if one just keeps accruing more debt, and some of that new debt is just rolling over the old debt… there is trouble.

There is appropriate use of debt: 30-year bonds to cover the construction of a building that will last 30 years. A 1-year note to cover liquidity needs, due to lumpiness of tax receipts.

Not appropriate use of debt: 30-year bonds to pay for that 1-year note.

But if you keep overspending your income, that’s where you end up.

State Long-Term Revenue vs. Expenses

Dec 2022: Nine States Began the Pandemic With Long-Term Deficits

Twenty states recorded annual shortfalls in fiscal year 2020, when the coronavirus pandemic triggered a public health crisis, a two-month recession, and substantial volatility in states’ balance sheets. States can withstand periodic deficits, but long-running imbalances—such as those carried by nine states—can create an unsustainable fiscal situation by pushing off some past costs for operating government and providing services onto future taxpayers.

States are expected to balance their budgets every year. But that’s only part of the picture of how well revenue—composed predominantly of tax dollars and federal funds—matches spending across all state activities. A look beyond states’ budgets at their own financial reports provides a more comprehensive view of how public dollars are managed. In fiscal 2020, a historic plunge in tax revenue collections and a spike in spending demands were met with an initial influx of federal aid to combat the pandemic. The typical state’s total expenses and revenues grew faster than at any time since at least fiscal 2002, largely thanks to the unprecedented federal aid. But spending growth outpaced revenue growth in all but five states (Idaho, Maryland, Missouri, South Dakota, and Virginia). And 20 states recorded annual shortfalls—the most since 2010 and four times more than in fiscal 2019.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

Full Population

The 2022-only graph for the whole population (including kids, but they barely add to the rate):

The full graph going back to 2020:

All the graphs are in that post, but let me provide the 2022-only graphs for each of the age groups:

Seniors

Middle-Aged

Young Adults

2020-2021 by Cause of Death Analysis

Children — Age 1-17: Childhood Mortality Trends, 1999-2021 (provisional), Ages 1-17 Revisited: Teen Mortality Increased 30% 2019 to 2021

Young Adults — Age 18-39: approximately the Millennials in 2020-2021 Part 1 and Part 2, plus the podcast

Middle Agers — Age 40-59: approximately Gen X – Middle-aged Massacre (too!): Increase in Mortality for Ages 40-59 in the U.S. for 2020-2021 Mainly Driven By COVID

Young Seniors — Age 60-79: approximately Boomers – Baby Boomer Mortality Experience: Welcome to Old Age! 2020-2021 U.S. Mortality Increase for Ages 60-79 was Mostly COVID

Old Seniors — Age 80+: mainly Silent Generation (as older generations are mostly dead at this point) – Silent Generation Has Odd 2021: COVID Over 100% of 2021 Mortality Increase Compared to 2019 in the U.S. for those over age 85

Earlier overview of 2020-2021 mortality in video — May 2022: U.S. Mortality Trends Through the Pandemic

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

Mike Shedlock at Mish Talk:

Here's My Number One Investment Idea For 2023

But if all you are doing is seeking out your own opinion, stop seeking, you already have it. 

Entertain the other side. If you have grudges, they won't do you any good, so let them go. 

Invest in life. 

Happy New Year.

Some places in which you can learn (for free!)

Duolingo - good for practicing foreign language skills, but not great for learning grammar, etc.

Khan Academy - one of the best place to brush up on rusty math skills. It helps you fill in the holes you may have, and go at your own pace. There are things other than math there, too, but I have found that stuff to be less reliable.

My livejournal posts:

January 2007: Charles Murray response: teaching wisdom

It's hard to learn humility when you're constantly lauded as the best. It's hard to learn that hard work is needed when everything is easy for you. It's hard to give others their proper respect when others are always praising your results more than others.So, in short, all kids need to have their asses kicked, but the intellectually gifted are least likely to have that done. So we've got to make sure they get what's coming to them, too.I call this plan the No Child's Ass Left Unkicked plan.

February 2016: I found my patron saint....kinda

We will lie down for such a long time after death that it is worth while to keep standing while we are alive. Let us work now; one day we will rest.

Facebook post:

I realized I didn’t mention my now-12-year chronic nerve pain problem that has been getting worse and of course, Stu’s metastatic cancer. And there are things w/ the kids, but that’s not for me to tell, other than my youngest, Diarmuid, is autistic.

So yes, I am referring to lots of things happening within, not just the external world.

Best Advice from my Dad: Be a Good Animal

After one particularly bad spate of being a hobbit in my cozy hobbithole, eating my junk food, and consuming a bunch of books, my dad (who had similar proclivities) gave me this advice:

Be a Good Animal.

This advice was about taking care of the physical side of yourself - eat well, get out in the sun, get enough sleep, if you're exhausted - nap! And realize when you've hit your limit.

….

It helps to step back - from advice on how to succeed in business, catch an opportunity, build a career - and remember that the main point is to have a life.

My #BestAdvice from my dad has helped me with just that.

Go and Be a Good Animal.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Ho Ho Ho, Merry Christmas!

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Parody Lyrics

(with links for the technical terms, especially the sumo)

On the 1st day of Christmas, STUMP podcast gave to me….

A handful of Christmas parodies…..

Working with the WONDER database

[to the tune of “Walking in a Winter Wonderland”]

Twitter dings, I’m downloading

While there’s deaths that I’m coding

My trends all depend

On the ICD-10

Working with the WONDER database

In CSV I get the data

And it’s partial and provisional

Some is censored and some is projected

So I gotta be careful til it’s all final

So I wait while it’s collecting

And the changes I’m detecting

I just have this plea

To the CDC

Keep let us working with the WONDER database

On the 2nd day of Christmas, STUMP podcast gave to me….

A scatterplot of sumo

And a handful of Christmas parodies….

God Rest Ye Merry Rikishi

[to the tune of “God Rest Ye Merry, Gentlemen”]

[written by both Meep & Stu]

God rest ye merry rikishi

Let nothing ye dismay

For ye shall bulk up heartily

Eating chanko–nabe

Avoid henka and mono-ii they

Make bad basho days

Oooo tidings of ganbatte; hakkeyoi!

Hakkeyoi

Ooo tidings of ganbatte; hakkeyoi!

On the 3rd day of Christmas, STUMP podcast gave to me….

3 crashing spreadsheets

2 sumo graphs

And a handful of Christmas parodies

Excel I have crashed again

[To the tune of “Angels we have heard on high”]

Excel I have crashed again

With XLOOKUP()s and linked files

Break out audit tools with pain

IFERROR() is not my style

SORT() as a

function is so awesome

But ‘tis not

When the cells have #DIV/0!s

On the 4th day of Christmas STUMP podcast gave to me….

4 unfunded pensions

3 crashing spreadsheets

2 sumo graphs

And a handful of Christmas parodies

Oh Pension Plan

[To the tune of “Oh Tannenbaum”]

Oh pension plan

Oh pension plan

What bailout will you ask for

Oh pension plan

Oh pension plan

What bailout will you ask for

When COVID hit, and deaths went up

But then assets dropped and now you’re stuck

Oh pension plan oh pension plan

What bailout will you ask for

On the 5th day of Christmas STUMP podcast gave to me….

Free posts for all

4 unfunded pensions

3 crashing spreadsheets

2 sumo graphs

And a handful of Winter song parodies’

Blogging STUMP

[to the tune of “Jingle Bells”]

Posting here at STUMP

As a smart-ass every week

Using GIFs and graphs

Being myself as a geek

Reading all the news

Not just latest fads

When you note long-term

Trends and analyze

Think of value that that adds!

Oh!

Blogging STUMP, blogging STUMP.

Blogging all these years

Been doing it before substack

And will after, never fear

That’s if I’m here—ya never know

Memento mori, y’all

But I’m having fun

And when I’m done

I’ll be happy with it all!

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

HO HO HO!

Merry Christmas!

See y’all in the New Year! (for the next podcast episode)

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

The paper in question:

COVID Vaccine Hesitancy and Risk of a Traffic Crash

Donald A. Redelmeier, MD, FRCPC, MSHSR, FACP

Jonathan Wang, MMASc

Deva Thiruchelvam, MSc

Published: December 02, 2022

DOI: https://doi.org/10.1016/j.amjmed.2022.11.002

My related post:

The others who did their own analysis and critique

Dr. John Campbell

Norman Fenton on the pedestrian casualties in the data sample: A Study in Stupidity: does the covid vaccine really lower your risk of being in a car accident?

Igor Chudov: The Unvaccinated Had More Car Crashes… Because they Were the Ones Driving!

Dr. Clare Craig: Twitter thread on problems with the study — (she touches on one of the big problems I noticed — the small sample size leading to huge error bars — some of this had really low credibility, which is why they had a stupid “unvaccinated” definition.)

Forbes article from Aug 2021: Canada To Make Proof Of Vaccination Mandatory For Air And Train Travel

April 2021 COVID-19 Advisory for Ontario: A Vaccination Strategy for Ontario COVID-19 Hotspots and Essential Workers – shows many essential workers in Ontario not getting vaccinated

Tyler Vigen’s Spurious Correlations

http://www.tylervigen.com/spurious-correlations

I didn’t talk about this at all, but I like the site.

And a lot of the spurious correlations involve death.

Agatha Christie’s Mr. Parker Pyne

As the Amazon editorial description is a bit inaccurate, let me share one of the reader reviews:

After reading two of Agatha Christie's short stories featuring the very unconventional private investigator, Parker Pyne, I knew I had to read more, so when I came across this collection, I grabbed it.Pyne relies upon his thirty-five years in a government office compiling statistics to help him solve any case that's presented to him. Some of the short stories revolve around people who respond to his advertisement in The Times, but Pyne also travels to more exotic climes, such as Jordan, Syria, and Iran and finds himself solving puzzles in those countries as well.

Don’t drive like a maniac! Keep safe this holiday season!

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

Current Events

Dec 10, 2022: Central States Teamsters Pension Fund finally gets its bailout money, as planned -- now what?

John Bury at burypensions: Central States Bailout Approved

Pensions & Investments: Biden announces $36 billion in federal aid for struggling Central States Teamsters plan

Background Reading

Wikipedia article on ERISA

Department of Treasury: Frequently Asked Questions about the Kline-Miller Multiemployer Pension Reform Act

PBGC page on MPRA of 2014

May 2016: Central States: I Guess the Plan is To Run Out of Money

John Bury’s entire Multiemployer Pensions category at burypensions

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

In this episode of STUMP Death & Taxes, I look to The Tale of Melibee from the Canterbury Tales, and how Chaucer's advice on how to choose advisors is still useful 600+ years later.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

August 2015 Stepping Stone: Chaucer on Choosing Advisors

October 2015 LinkedIn: Take Some Advice from Chaucer... On Taking Advice

* Don't ask for advice if you have already decided, and are only looking for confirmation.

* Judge well those who give you advice. There are many reasons people may give you poor advice, and you need to be aware when judging the advice.

* Make sure those giving advice share your goals and have enough knowledge and experience to give you useful advice. 

I'm not sure if Chaucer shares my goals, but he certainly had plenty of experience and knowledge on advice-giving.

The audiobook I listened to was from Blackstone Audio:

https://www.blackstonelibrary.com/the-canterbury-tales?sp=12018

J.U. Nicolson is my favorite modern English translation. Here is a link to the Dover thrift edition at Amazon.

February 2015 STUMP post: Here is God's Plenty: The Canterbury Tales  

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

In this episode, I talk about the bad trends for men and death by suicide in the U.S., the sex gap in suicide, and the importance of looking after mental health. I’m fundraising for men’s mental health, as well as prostate cancer, with my fundraising for Movember in 2022 - check out my links below!

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

For Giving Tuesday - Movember Foundation fundraising links

(yes, I know it’s Monday)

* Mary Pat Campbell’s MoSpace – a place to donate at Movember itself

* My Movember Facebook fundraiser – my officially linked fundraiser, if this works better for you

Both accumulate for the same fundraiser. Anonymous donations are possible via the MoSpace link.

Prior Blog Links on Suicide

Prior posts on suicide:

* Dec 2020: COVID News Round-up: Suicides, Increasing Deaths, Duty to Die, and Dolly Parton

* July 2017: Mortality Monday: Suicide — the Absolute Numbers

* July 2017: Mortality Monday: Suicide — Rates

* April 2021: Mortality with Meep: Top Causes of Death in the United States in 2020

* Jan 2022: Suicide: Trends, 1968-2020, and Provisional Counts Through June 2021

* Sep 2022: World Suicide Prevention Day: U.S. Suicide Trend Update through 2021

Other Movember Posts

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

My 2014 article: Dickens and Business Fraud

June 2018 post: The Wisdom of Dickens

Prior podcast episode: Fraudulent Life Insurers

Dickens Productions

Martin Chuzzlewit

There’s a very good BBC miniseries version of Martin Chuzzlewit, which includes the Anglo-Bengalee in all its glory. That was the BritBox link, and evidently, you can buy the miniseries in streaming video. I own it on DVD.

In this production, Montague Tigg/Tigg Montague is played by Pete Postlethwaite.

Little Dorritt

Similarly, BBC has an excellent production of Little Dorritt. Fabulous cast - Claire Foy as the title character, Matthew Macfadyen as Arthur Clennam, Andy Serkis as the malevolent Rigaud (in the novel, the character is absurd, but he makes it work). For Dickens, you always need a great ensemble cast. I just picked out the three big names, but you will recognize many of the actors if you watch a lot of BBC drama.

Alas, they don’t really focus on the business fraud so much, and the whole Circumlocution Office business, which of course is the highlight of the novel for somebody like me.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

My Movember fundraiser

* Mary Pat Campbell’s MoSpace – a place to donate at Movember itself

* My Movember Facebook fundraiser – my officially linked fundraiser, if this works better for you

Prostate Cancer Trends Posts

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The first is an odd claim, as it highlights recent inflation. The second may be true but seems unlikely, as most politicians of any party have avoided doing anything about Social Security unless they’re forced to. But as the Trust Fund has now started going cash flow negative, perhaps they’re forced to…

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

Social Security COLAs

COLA history under the bill signed into law by Nixon. Prior to 1975, the COLAs were set ad hoc by Congress via legislation.

Have a graph:

You have to go back 40 years to get COLAs as high.

The kerfuffle over a later tweet:

Twitchy: White House excitement over Social Security check increases may not be the FLEX they think it is

Politico: White House deletes tweet after Twitter adds 'context' note

Snopes: Did 'Biden's Leadership' Play Role in Social Security Increase for 2023?

Social Security Reform

Here’s where the claim for Medicare and Social Security cuts are coming from: Republicans Plan to Use Debt Limit Leverage to Reduce Social Security, Medicare: Report

Shrinking the safety net: One option reportedly being discussed is raising the eligibility age for Social Security and Medicare, the two largest mandatory spending programs. Each faces financial squeezes in the coming years as the baby boomers age and continue to retire. Under current rules, the Social Security system would be forced to cut benefits starting in 2034, while Medicare could run short of funds by 2028.

I know I’ll be coming back to this, but depending how you define the Boomer generation, almost all of them are Social Security eligible already. Any eligibility rule changes are going to be hitting Gen X (yay!) at the oldest, not Boomers.

Anyway, the original piece is at Bloomberg Government, and I am skeptical of this being anything more than a bargaining chip at this point. We will see what actually happens.

But my characterization is more-or-less correct — make Congress have to vote to keep the benefits going with the same levels, instead of making it automatic as before. That’s the true bottom line.

2022 OASDI Trustees Report, plus spreadsheets, etc. https://www.ssa.gov/OACT/TR/2022/

I am graphing the net change in the OASI (that’s the old age benefit part) Trust Fund, year-over-year.

I think you can easily see all those glorious years the Boomer payroll taxes were being stuffed into the Trust Fund… but really flowing right out into current spending for other goodies.

And you can see when that reversed and is now negative, and will continue to be negative until the Trust Fund is exhausted, in the early 2030s.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

Report Link

As I write this, the Society of Actuaries website is down for maintenance, so I will link to my prior post, which has my top bullet point takeaways and one graph:

I will put the actual link to the report here when the SOA website once more becomes available.

A few (other) graphs:

And a table:

Mortality through the Pandemic - 2020 and 2021 (provisional)

U.S. life expectancy fell almost 1 year (again) in 2021 - looking at the meaning of period life expectancy

Top CausesTop Causes of Death in U.S. for 2021 by Age GroupTop Causes of Death for 2021: Heart Disease, Cancer, and COVID

By Age Groups

Children — Age 1-17: Childhood Mortality Trends, 1999-2021 (provisional), Ages 1-17 Revisited: Teen Mortality Increased 30% 2019 to 2021 Under age 1 is infant mortality and requires special handling — I really don’t want to deal with this right now.Young Adults — Age 18-39: approximately the Millennials in 2020-2021 Part 1 and Part 2, plus the podcastMiddle Agers — Age 40-59: approximately Gen X – Middle-aged Massacre (too!): Increase in Mortality for Ages 40-59 in the U.S. for 2020-2021 Mainly Driven By COVIDYoung Seniors — Age 60-79: approximately Boomers – Baby Boomer Mortality Experience: Welcome to Old Age! 2020-2021 U.S. Mortality Increase for Ages 60-79 was Mostly COVIDOld Seniors — Age 80+: mainly Silent Generation (as older generations are mostly dead at this point) – Silent Generation Has Odd 2021: COVID Over 100% of 2021 Mortality Increase Compared to 2019 in the U.S. for those over age 85

Enjoy!

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Related links

Society of Actuaries Experience Studies

U.S. Individual Life COVID-19 Mortality Experience Study – Third Quarter 2021 Update

This is based on individual life insurance mortality experience, splits out by different products, and shows experience going back to 2015 so one can compare

There is a Tableau dashboard one can investigate: [this is just a snapshot]

Group Life COVID-19 Mortality Survey - Updated through March 2022

Group life is not as fancy - they just get a pdf report.

“Grey” collar is not industries that are more like services — retail, lighter manufacturing (pharmaceutical manufacturing, for example), wholesale trade, etc. There’s more person-person interaction, and you have to work more in person, unlike white-collar jobs, which are more likely to be able to be done at a distance.

One thing to note — all these “excess mortality” rates are relative to expected for that group. So these ratios don’t tell you what the absolute mortality was.

I’ll come back to this report in the future, because the group life report is the one many people are misinterpreting.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

I talk about the term “liability-driven investment” (or LDI). It’s been blamed for some trouble in the United Kingdom lately during their interest rate run-up, but no such trouble has occurred in the United States as interest rates have also run up over here. It turns out, LDI is a term that can mean many different things which can differ depending on different jurisdictions and different goals.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

Investopedia link: Liability Driven Investment (LDI)

A liability-driven investment, otherwise known as liability-driven investing, is primarily slated toward gaining enough assets to cover all current and future liabilities. This type of investing is common when dealing with defined-benefit pension plans because the liabilities involved quite frequently climb into billions of dollars with the largest of the pension plans.….

There is not one agreed-upon approach or definition for the specific actions taken in regard to the LDI. Pension fund managers quite often use a variety of approaches under the LDI strategy banner. Broadly, however, they have two objectives. The first one is to manage or minimize risk from liabilities. These risks range from a change in interest rates to currency inflation because they have a direct effect on the funding status of the pension plan.2

To do this, the firm might project current liabilities into the future in order to determine a suitable figure for risk. The second objective to generate returns from available assets. At this stage, the firm might seek out equity or debt instruments that generate returns commensurate with its estimated liabilities.2

Hedging is often involved, either in part or in whole, to block or limit the fund’s exposure to inflation and interest rates, as these risks often take a bite out of the fund’s ability to make good on the promises it has made to members.2

In the past, bonds were often used to partially hedge for interest-rate risks, but the LDI strategy tends to focus on using swaps and various other derivatives.3 Whatever approach is used typically pursues a "glide path" that aims to reduce risks—such as interest rates—over time and achieve returns that either match or exceed the growth of anticipated pension plan liabilities.

Humpty Dumpty:

"I don't know what you mean by 'glory,' " Alice said.Humpty Dumpty smiled contemptuously. "Of course you don't—till I tell you. I meant 'there's a nice knock-down argument for you!'""But 'glory' doesn't mean 'a nice knock-down argument'," Alice objected."When I use a word," Humpty Dumpty said, in rather a scornful tone, "it means just what I choose it to mean—neither more nor less.""The question is," said Alice, "whether you can make words mean so many different things.""The question is," said Humpty Dumpty, "which is to be master—that's all."

In case you’re interested in Cantor’s Diagonal Argument:

And here is my text version of the argument, which I wrote back in 12 April 2001:

When I presented this argument to a bunch of middle school students, the response I got was "but infinity is infinity" -- making me realize that I should never have used the word infinity to begin with. People have connotations tied up with words like infinity and chaos that have nothing to do with the precise mathematical definitions of the words - often people use words as humpty dumpty does - making them mean what they want them to mean, so that they can use them to express their ideas. However, mathematical ideas are much more limited that the ideas the human mind can hold and words are restricted to very particular uses. "Continuous" means something extremely precise (though not what you think it means. Most people equate continuous with smooth), and "infinity", though it can take on different meanings in mathematical context, has only one meaning in any given mathematical context.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

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Links from the podcast

Chief Investment Officer: 10 Oct 2022: Louisiana Divests Nearly $800 Million from BlackRock to Protect Fossil Fuel Industry

Louisiana Treasurer John Schroder is divesting $794 million worth of state funds from BlackRock because the world’s largest asset manager’s “blatantly anti-fossil fuel policies would destroy Louisiana’s economy.”

The divestment is in response to BlackRock’s sustainable investing philosophy, and for the firm calling on other companies to embrace net zero investment strategies that would harm the fossil fuel industry, which Schroder notes is a “vital part” of Louisiana’s economy.

Schroder’s letter: dated 5 Oct 2022

Your blatantly anti-fossil fuel policies would destroy Louisiana’s economy.

Therefore, Louisiana Treasury will liquidate all BlackRock investments by the end of 2022. To date we have divested $560 million. We are strategically divesting over a period of time so state money is not lost to the detriment of our citizens. Once complete, this divestment will reflect $794 million no longer entangled in BlackRock money market funds, mutual funds or exchange-traded funds (ETFs) holdings.

This divestment is necessary to protect Louisiana from actions and policies that would actively seek to hamstring our fossil fuel sector. In my opinion, your support of ESG investing is inconsistent with the best economic interests and values of Louisiana. I cannot support an institution that would deny our state the benefit of one of its most robust assets. Simply put, we cannot be party to the crippling of our own economy.

In addition, according to my legal counsel, Environmental, Social and Governance (ESG) investing is contrary to Louisiana law on fiduciary duties, which requires a sole focus on financial returns for the beneficiaries of state funds. Focusing on ESG’s political and social goals or placing those goals above the duty to enhance investors’ returns is unacceptable under Louisiana law. A letter signed by 19 state attorneys general sent to you recently emphasized this same point.

So, supposedly Schroder is a fiduciary of the funds he is pulling from BlackRock.

That said, I note he is removing money from: money market funds (what? — is ESG in this?), mutual funds (fair enough), and ETFs (again, fair enough). Some of this is sounding somewhat weird to me. Money market funds?

Larry Fink’s, CEO of BlackRock, 2021 Letter to CEOs:

BlackRock is a fiduciary to our clients, helping them invest for long-term goals. Most of the money we manage is for retirement – for individuals and pension beneficiaries like teachers, firefighters, doctors, businesspeople, and many others. It is their money we manage, not our own. The trust our clients place in us, and our role as the link between our clients and the companies they invest in, gives us a great responsibility to advocate on their behalf.

This is why I write to you each year, seeking to highlight issues that are pivotal to creating durable value – issues such as capital management, long-term strategy, purpose, and climate change. We have long believed that our clients, as shareholders in your company, will benefit if you can create enduring, sustainable value for all of your stakeholders.

….

I believe that the pandemic has presented such an existential crisis – such a stark reminder of our fragility – that it has driven us to confront the global threat of climate change more forcefully and to consider how, like the pandemic, it will alter our lives. It has reminded us how the biggest crises, whether medical or environmental, demand a global and ambitious response.

Larry Fink’s 2022 Letter to CEOs:

The financial security we seek to help our clients achieve is not created overnight. It is a long-term endeavor, and we take a long-term approach. That is why, for the past decade, I have written to you, as CEOs and Chairs of the companies our clients are invested in. I write these letters as a fiduciary for our clients who entrust us to manage their assets – to highlight the themes that I believe are vital to driving durable long-term returns and to helping them reach their goals.

….

Most stakeholders – from shareholders, to employees, to customers, to communities, and regulators – now expect companies to play a role in decarbonizing the global economy. Few things will impact capital allocation decisions – and thereby the long-term value of your company – more than how effectively you navigate the global energy transition in the years ahead.

….

Every company and every industry will be transformed by the transition to a net zero world. The question is, will you lead, or will you be led?

In a few short years, we have all watched innovators reimagine the auto industry. And today, every car manufacturer is racing toward an electric future. The auto industry, however, is merely on the leading edge – every sector will be transformed by new, sustainable technology.

Engineers and scientists are working around the clock on how to decarbonize cement, steel, and plastics; shipping, trucking, and aviation; agriculture, energy, and construction. I believe the decarbonizing of the global economy is going to create the greatest investment opportunity of our lifetime. It will also leave behind the companies that don’t adapt, regardless of what industry they are in. And just as some companies risk being left behind, so do cities and countries that don’t plan for the future. They risk losing jobs, even as other places gain them. The decarbonization of the economy will be accompanied by enormous job creation for those that engage in the necessary long-term planning.

….

That is why we are pursuing an initiative to use technology to give more of our clients the option to have a say in how proxy votes are cast at companies their money is invested in. We now offer this option to certain institutional clients, including pension funds that support 60 million people. We are working to expand that universe.

We are committed to a future where every investor – even individual investors – can have the option to participate in the proxy voting process if they choose.

4 Aug 2022 Letter from 19 Republican state attorneys general:

BlackRock’s Chief Client Officer, Mark McCombe, recently wrote a letter to many of our states describing BlackRock’s position on energy investments with respect to our pension funds. Mr. McCombe’s letter contains many statements that appear to conflict with BlackRock’s previous public statements and commitments.

Based on the facts currently available to us, BlackRock appears to use the hard-earned money of our states’ citizens to circumvent the best possible return on investment, as well as their vote. BlackRock’s past public commitments indicate that it has used citizens’ assets to pressure companies to comply with international agreements such as the Paris Agreement that force the phase-out of fossil fuels, increase energy prices, drive inflation, and weaken the national security of the United States. These agreements have never been ratified by the United States Senate. The Senators elected by the citizens of this country determine which international agreements have the force of law, not BlackRock. We have several additional concerns that fall under our jurisdictional authority as attorneys general.

7 Sept 2022 response from BlackRock:

We are writing in response to the letter you sent to BlackRock, Inc. (“BlackRock”) on August 4, 2022. We welcome the opportunity to address the questions you raised and clarify misconceptions about BlackRock.

….

Governments representing over 90% of global GDP have committed to move to net-zero in the coming decades.8 We believe investors and companies that take a forward-looking position with respect to climate risk and its implications for the energy transition will generate better long-term financial outcomes. These opportunities cut across the political spectrum; notably, as Bloomberg recently reported, Republican districts are well ahead of their Democratic counterparts in advancing clean-energy projects and deploying clean-energy technology.9

Climate risk and the economic opportunities from the energy transition have become a top concern for many of our clients. BlackRock clients representing more than $3.3 trillion in assets have committed to support that transition through investments in their portfolios.10 Our role is to offer them data and analytics, investment insights, and thought leadership about the impacts of the energy transition on their portfolios.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

In which I tell some stories of transforming and valuing risk — and the mistake of marking it zero, when the risk is most definitely not zero. Telling the story of Long-Term Capital Management, lifecycle mutual funds versus money market funds, and more.

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Related Links

Long Term Capital Management

Investopedia article

When Russia defaulted on its debt in August 1998, LTCM was holding a significant position in Russian government bonds, known by the acronym GKO. Despite the loss of hundreds of millions of dollars per day, LTCM's computer models recommended that it hold its positions.

LTCM's highly leveraged nature, coupled with a financial crisis in Russia, led the hedge fund to sustain massive losses and be in danger of defaulting on its own loans. This made it difficult for LTCM to cut its losses in its positions. LTCM held huge positions, totaling roughly 5% of the total global fixed-income market, and had borrowed massive amounts of money to finance these leveraged trades.

Well-known book on the disaster

When Genius Failed: The Rise and Fall of Long-Term Capital Management

On September 23, 1998, the boardroom of the New York Fed was a tense place. Around the table sat the heads of every major Wall Street bank, the chairman of the New York Stock Exchange, and representatives from numerous European banks, each of whom had been summoned to discuss a highly unusual prospect: rescuing what had, until then, been the envy of them all, the extraordinarily successful bond-trading firm of Long-Term Capital Management. Roger Lowenstein's When Genius Failed is the gripping story of the Fed's unprecedented move, the incredible heights reached by LTCM, and the firm's eventual dramatic demise.

On 401(k)s and default allocations:

TIAA Institute: The Role of the Employer Default Allocation in Defined-Contribution Retirement Plan Design

Most 401(k) and 403(b) retirement plans now provide a default asset allocation for participants who do not choose their own investments. This paper offers plan providers insights on the use of defaults, including explaining why the optimal default is not a riskless allocation; why the default should reflect the characteristics of individuals most likely to use it; what attributes lead employees to select an asset allocation; and why improvement in the default allocation can reduce people’s ability to manage their retirement funds over time.

Key Insights

Modest inclusion of risky assets is beneficial for all plan participants and a more substantial inclusion is potentially beneficial for many participants.

Relatively less-experienced employees with modest funding in the employer’s account are more likely to use the default asset allocation.

Age-based target-date funds, which are used frequently as the default portfolio, may not align with particular employee preferences, such as desired retirement age.

Counterparty credit risk (from One Minute Economics):

Equitable Life UK

Equitable Life UK Timeline of Events from the BBC

Richard Roberts: Did anyone learn anything from the Equitable Life? Lessons and learning from financial crises

The traditional with-profits life assurance policy was a highly opaque and complex product devised and managed by the industry’s high priests – the actuaries. At Equitable, the non-executive directors were incapable of following their mathematical convolutions and thus of effectively monitoring or controlling the leading executives who, boy and man, were actuaries. Thus they failed to spot the over-allocation of bonus and over-payment on claims, which put Equitable towards the top of the league tables but critically weakened its financial position.

Complex and opaque financial products proliferated in the years before the financial crisis. Devised by bank ‘rocket scientists’, their structured products, such as credit default swaps, surpassed the comprehension of not only many directors but also of banks’ risk models and, so it would appear, regular professional scepticism. ‘Where were the people that said, “hold on, that is not right”?’ wondered a senior banker. ‘Where were all the academic and mathematical departments? The risk analysts? The rating agencies? Where were the regulators? All those – stuffed full of very bright people – why did none of them say: “Hang on a second”? I genuinely cannot say why of all the people in the world who do this sort of stuff – the modelling and the reasoning – why there wasn’t even a 10 per cent proportion who cast theoretical doubt on it?’

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Related Links

Effective Federal Funds Rate, 2000-now:

FOMC Actions, going back to 2003:

Open market operations (OMOs)--the purchase and sale of securities in the open market by a central bank--are a key tool used by the Federal Reserve in the implementation of monetary policy. The short-term objective for open market operations is specified by the Federal Open Market Committee (FOMC). Before the global financial crisis, the Federal Reserve used OMOs to adjust the supply of reserve balances so as to keep the federal funds rate--the interest rate at which depository institutions lend reserve balances to other depository institutions overnight--around the target established by the FOMC.

The Federal Reserve's approach to the implementation of monetary policy has evolved considerably since the financial crisis, and particularly so since late 2008 when the FOMC established a near-zero target range for the federal funds rate. From the end of 2008 through October 2014, the Federal Reserve greatly expanded its holding of longer-term securities through open market purchases with the goal of putting downward pressure on longer-term interest rates and thus supporting economic activity and job creation by making financial conditions more accommodative.

From the IMF and Bank of America Research:

Federal Reserve, Last updated 27 Aug 2020: Why does the Federal Reserve aim for inflation of 2 percent over the longer run?

For many years, inflation in the United States has run below the Federal Reserve’s 2 percent goal. It is understandable that higher prices for essential items, such as food, gasoline, and shelter, add to the burdens faced by many families, especially those struggling with lost jobs and incomes. At the same time, inflation that is too low can weaken the economy. When inflation runs well below its desired level, households and businesses will come to expect this over time, pushing expectations for inflation in the future below the Federal Reserve’s longer-run inflation goal. This can pull actual inflation even lower, resulting in a cycle of ever-lower inflation and inflation expectations.

If inflation expectations fall, interest rates would decline too. In turn, there would be less room to cut interest rates to boost employment during an economic downturn. Evidence from around the world suggests that once this problem sets in, it can be very difficult to overcome. To address this challenge, following periods when inflation has been running persistently below 2 percent, appropriate monetary policy will likely aim to achieve inflation modestly above 2 percent for some time. By seeking inflation that averages 2 percent over time, the FOMC will help to ensure longer-run inflation expectations remain well anchored at 2 percent.

Brookings, June 2018: Alternatives to the Fed’s 2 percent inflation target

Today, the 2 percent inflation target is under scrutiny, in part because of fears that framework will hamper the Fed’s ability to fight future recessions. In the early 2000s, economists at the Fed and elsewhere estimated that the inflation-adjusted (or real) neutral interest rate—the short-term interest rate expected to prevail when the economy is at full employment and prices are stable—was around 3 percent. With 2 percent inflation and a 3 percent real neutral rate, then, nominal rates would hover around 5 percent when all was calm. In a recession, the Fed would have plenty of room to cut interest rates by 4 or 5 percentage points as it often does in a recession.

The latest projections of the long-run neutral real rate are much lower—perhaps 1 percent or even less. Most Fed officials project that the nominal short-term interest rate, the one the Fed influences most directly, will be between 2.8 percent to 3.0 percent in the long run, well below the 1960-2007 average of 6 percent. Because getting interest rates much below zero is impossible, the Fed won’t be able to cut rates by 4 or 5 percentage points when the next recession arrives, and that could prolong the pain of any downturn.

Megan McArdle, 23 Sept 2022: Governments need to realize that the era of economic freebies is over

When inflation was quiescent and real interest rates were hovering near zero, politicians could pursue their policy goals or, heck, just pander for votes, by injecting some borrowed money. And, boy, did they! But when inflation is high, the central bank will set about undoing these actions by tightening monetary policy, and markets will make you pay with higher bond yields. Boost the economy with borrowed money, and you will see the gains clawed back by higher interest rates. The resulting economic contraction and inflation will erase the political gains along with the economic ones.

….

The past 15 years have convinced a lot of people that they didn't have to face unpleasant truths, that hard realities could always be magicked away with more government money. But the real economic constraints were always there underneath, waiting to reassert themselves. Now they have, and if governments don't deal with those realities, reality will deal harshly with them.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

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Episode links

Maverick Actuary:

I highly recommend The Maverick Actuary’s Podcast which can be found on his website: https://www.maverickactuary.com/podcast

It’s also on major podcast services:

Spotify:

Apple Podcasts:

Google Podcasts:https://podcasts.google.com/feed/aHR0cHM6Ly9mZWVkcy5zb3VuZGVyLmZtLzI3ODc3L3Jzcy54bWw

Richard Feynman:

Surely You’re Joking, Mr. Feynman! - a fun memoir, and not necessarily appropriate for a kid to read.

Life Expectancy Posts:

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In which I look at the Pioneer Institute’s campaign against a ballot proposal to amend the Massachusetts state constitution, and to wander down the route other northeastern states have trod: ever-increasing tax rates on high-income residents, driving them to lower-tax climes.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links:

Wall Street Journal Op-Ed -

Don’t Make Massachusetts ‘Taxachusetts’ Again by Jim Stergios

Unlike many blue states, Massachusetts has resisted the temptation to raise taxes on high earners. That antitax fortitude is about to be tested. In November state legislators will ask voters to approve an amendment to the Massachusetts constitution adding a 4% surcharge to annual income over $1 million.

Massachusetts is home to arch-progressives like Sen. Elizabeth Warren and Rep. Ayanna Pressley, but many voters here remember the 1980s, when the state was derisively known around the country as "Taxachusetts." A series of antitax popular initiatives in the 1980s and tax cuts enacted by Gov. William Weld in the 1990s reduced Massachusetts' overall state and local tax burden considerably. Proposition 2 1/2, which limits both the levels and growth of property taxes, was approved by voters in 1980 and remains sacrosanct. Among states with income taxes, Massachusetts' flat 5% rate is on the low side. In neighboring Connecticut and New York, the highest earners pay 6.9% and 10.9% respectively.

What was Taxachusetts has become New England's economic dynamo. Since the 2007-09 recession, wage and job growth in Massachusetts has outpaced the nation. Sustained economic growth produced a budget surplus exceeding $5 billion in the past fiscal year, which makes it doubly odd to ask voters to approve a tax hike now.

Their book:

Pioneer Institute’s pages on Back to Taxachusetts

Connecticut’s Revenue Problem as Billionaires Move Away

My earlier posts on Connecticut’s tax revenue issues:

June 2016: No Billionaire Left Behind

Some states have become dependent on their wealthiest tax-payers.

Somehow I think this isn’t happening to Texas or Florida, where they don’t have income tax.

BRIBE THE BILLIONAIRES

This reminds me of the old saying — if you owe the bank $100K but have trouble paying it back, you have a problem. If you owe the bank $100 billion and have trouble paying…. the bank has a problem.

If the state has a lot of rich people/companies it can soak, and you’re a rich person concerned about taxes, you have a problem; if the state finds this revenue source drying up, it has a problem:

….

Almost 100 billionaires in New York, and CT has to hobble along with only 12.

I can see why they have to bribe any of them from leaving with their yummy revenue sources.

May 2015: Public Finance Follies: When You're Too Dependent on Very Few People

The problem is that CT is overly dependent on their coterie of rich people (whether high income, high wealth, or both) for their revenue. Rich people are the most mobile people there are. They may be happy to pay big bucks to live in a pretty house on the shore near a bunch of other rich people, but there are plenty of other places one can go and be rich.

And for all those rich people, CT has been struggling to find economic growth.

….

In any case, Connecticut is so dependent on a very few people for a large portion of their revenue, they keep extremely close tabs on those people:

Connecticut, home to some of the richest Americans, has a big stake in the billions of dollars in revenue their income taxes generate. State tax officials track quarterly estimated payments of 100 high net-worth taxpayers and can tell when payments are down. Of that number, about a half-dozen taxpayers have an effect on revenue that’s noticed in the legislature and the state Department of Revenue Services.

“There are probably a handful of people, five to seven people, who if they just picked up and went, you would see that in the revenue stream,” said Kevin Sullivan, the state’s revenue services commissioner.

That is pretty bad. For one, there is an obvious opportunity for corruption. Those 5-7 people want a special deal/perk that doesn’t come out of the revenue stream? You’d better cater to their wishes.

January 2018: Connecticut Says Bye Bye Billionaires

Lots of people like living in Florida. I don’t like the gators, skeeters, and those hideously large bugs they get, I don’t like breathing in the mush they call air there. But that’s me. I understand some people like sun and warmth.

And Florida has no state income tax.

As the Yankee Institute notes, Connecticut is particularly sensitive to the moves of a few extremely high income people. In a prior post, I wrote about the special state office that keeps very close tabs on the state’s billionaires. And they’ve bribed them to stay.

Some Local Massachusetts Reporting (not finance)

For a bit of fun, some Massachusetts color (this has nothing to do with taxation — just one guy who does local Mass. reporting):

Also from the same reporter:

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In which I give advice to those currently living as to how to consider the effects of COVID on their life expectancy (short version: yes, COVID may have had an effect; no, the CDC report provides no information on that score) and advice to the CDC to stop using period life expectancy as a metric in following population mortality trends.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Episode Links

Related blog post:

What I was referring to re “fake spike of deaths to leave”

As of this morning (6 September 2022), it’s still in the dashboard.

Supposed housecleaning to come at the CDC

August 2022: from CDC website: CDC Moving Forward

Key Takeaways

* There is a strategic imperative to modernize CDC so that it consistently delivers public health information and guidance to Americans in real time – a mission recognized by the talented people who work here and by public health experts around the globe.

* Throughout her tenure as director, and over the last few months in particular, Dr. Walensky has evaluated CDC operations; she listened – to voices from within CDC, to our partners and other interested parties, and to external reviewers.

* The director announced a series of changes that will prioritize public health action to help equitably protect and promote the health of the American people.

* The optimizations are designed to not only change how CDC operates but also its culture, orienting it toward timely action – ensuring CDC’s science reaches the public in an understandable, accessible, and implementable manner as quickly as possible.

CNN: CDC announces sweeping reorganization, aimed at changing the agency’s culture and restoring public trust

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

2020-2021 Mortality Experience Posts

By Age Groups

Children — Age 1-17: Childhood Mortality Trends, 1999-2021 (provisional), Ages 1-17 Revisited: Teen Mortality Increased 30% 2019 to 2021 Under age 1 is infant mortality and requires special handling — I really don’t want to deal with this right now.Young Adults — Age 18-39: approximately the Millennials in 2020-2021 Part 1 and Part 2, plus the podcastMiddle Agers — Age 40-59: approximately Gen X – Middle-aged Massacre (too!): Increase in Mortality for Ages 40-59 in the U.S. for 2020-2021 Mainly Driven By COVIDYoung Seniors — Age 60-79: approximately Boomers – Baby Boomer Mortality Experience: Welcome to Old Age! 2020-2021 U.S. Mortality Increase for Ages 60-79 was Mostly COVIDOld Seniors — Age 80+: mainly Silent Generation (as older generations are mostly dead at this point) – Silent Generation Has Odd 2021: COVID Over 100% of 2021 Mortality Increase Compared to 2019 in the U.S. for those over age 85

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Related Links:

Tax Foundation: List of States That Might Tax Student Loan Debt Cancellation Dwindles, originally posted August 25, 2022, updated August 30, 2022

Arkansas. One of a handful of states which does not conform to the Internal Revenue Code in any significant way, Arkansas’s tax code is silent on the treatment of student loan debt forgiveness, and the ordinary rule—that a discharge of indebtedness constitutes taxable income—should prevail absent state action.

Massachusetts. For most purposes, Massachusetts uses an individual income tax conformity date of January 1, 2005. As such, the state does not conform to the new federal provision.

Minnesota. Minnesota’s conformity date is December 31, 2018, which is well prior to ARPA, and the state currently lacks any other provision to exclude student loan debt cancellation from income.

Mississippi. Another state which largely goes its own way in defining its tax base, Mississippi retains the ordinary treatment of discharged debt and is in line to tax student loan debt forgiveness.

North Carolina. Although North Carolina conforms to a post-ARPA version of the Internal Revenue Code, its conformity statute contains an add-back which taxes student loan debt forgiveness despite the federal change.

Wisconsin. With a conformity date of December 31, 2020, Wisconsin is currently in line to tax student loan debt forgiveness.

Estimates of student loan forgiveness

Wharton model: THE BIDEN STUDENT LOAN FORGIVENESS PLAN: BUDGETARY COSTS AND DISTRIBUTIONAL IMPACT

President Biden’s new student loan forgiveness plan includes three major components. We estimate that debt cancellation alone will cost up to $519 billion, with about 75% of the benefit accruing to households making $88,000 or less. Loan forbearance will cost another $16 billion. The new income-driven repayment (IDR) program would cost another $70 billion, increasing the total plan cost to $605 billion under strict “static” assumptions. However, depending on future IDR program details to be released and potential behavioral (i.e., “non-static”) changes, total plan costs could exceed $1 trillion.

Committee for a Responsible Federal Budget: New Student Debt Changes Will Cost Half a Trillion Dollars

President Biden today announced a set of changes to student loans – including cancellation of up to $20,000 for some borrowers – that will cost between $440 billion and $600 billion over the next ten years, with a central estimate of roughly $500 billion. Combined with today’s announcement, the federal government’s actions on student loans since the start of the COVID-19 pandemic have cost roughly $800 billion. Of that amount, roughly $750 billion is due to executive action and regulatory changes made by the Biden Administration. 

Reuters: Analysis: Biden's student loan forgiveness may erase savings of climate, drugs law

President Joe Biden's controversial plan to forgive up to $20,000 in student loans for tens of millions of Americans could erase the projected $300 billion deficit reduction that his hard-fought climate, drugs and tax legislation would generate over 10 years - by as much as two times.

The extent of the additional federal debt incurred by the one-time gift to college graduates and ex-students depends on which estimates are used, economists say.

Non-government budget analysts project the program's total 10-year cost at $500 billion to $600 billion, including extending a repayment pause on all federal student loans through Dec. 31 and reducing future payments based on income.

Related Posts

March 2021:

Let me make a comparison of four numbers:

* the MEP bailout size in the current bill ($86 billion)

* total MEP underfundedness ($673 billion)

* a theoretical public pension bailout ($1.9 trillion)

* a Social Security “bailout” amount ($16.8 trillion)

Here ya go:

June 2022:

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Episode Links:

July 27, 2022 Press Release: Governor Ron DeSantis Announces Initiatives to Protect Floridians from ESG Financial Fraud

Governor DeSantis’ proposed legislation for the 2023 Legislative Session will:

Prohibit big banks, credit card companies and money transmitters from discriminating against customers for their religious, political, or social beliefs.

Prohibit State Board of Administration (SBA) fund managers from considering ESG factors when investing the state’s money.

Require SBA fund managers to only consider maximizing the return on investment on behalf of Florida’s retirees.

August 2017: Public Pension Assets: It's Not Your Money to Play With, Pension Trustees  

The Catholic Spirit, July 2022: Vatican investments must follow Catholic social teaching, new policy says

The Pillar, July 2022:

THE WISDOM OF FINANCE

April 2018: Mornings with Meep: The Wisdom of Finance and Failure is Always a Possible Outcome  

The Wisdom of Finance, by Mihir Desai, is a really interesting book – a fast read (only 5 CDs for the audiobook, less than 200 pages on small pages), chock full of references to history, literature, and even hip-hop.

I reviewed the book at Goodreads:

Appealing to a wide variety of audiences — it makes core financial concepts comprehensible for non-finance people, and it connects finance people with a broader view from the humanities. Desai takes a denigrated subject, even by some of its own practitioners, and makes it more human (with all the bad and good that entails.) He uses examples from history, literature, art, poetry, movies, TV, and even song lyrics (She take my money when I’m in need…)

For those concerned: VERY LITTLE MATH. There is a small amount of arithmetic when Desai explains leverage. But other than that, he keeps it at a high conceptual level.

This book is more a jumping off point, though – it’s very short. It gives you a taste, which may leave one hungering for more. I listened to the audiobook (read by the author himself), and therefore don’t have the notes from the back! So I’m going to have to get a hard copy so I can get at those. I really want to read more about how annuities helped foment the French Revolution.

And yeah, that’s why I checked out the book from the library. He gives multiple references for that… also, there’s a paper on the connection between insurance and witchcraft (as in: once you could insure your home, you were less likely to burn a witch just because your house burned down.)

Society of Actuaries, The Stepping Stone: Book Review: The Wisdom of Finance

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Related Links

Key graph of relative change in mortality

Gen X Trend:

Millennial Trend:

Links to posts on key causes of death and their trends

Suicide

Suicide: Trends, 1968-2020, and Provisional Counts Through June 2021 – this one had only one standalone post, but I’m not done with this topic yet.

Mortality Nuggets: Videos on Suicide Rate Trends, Society of Actuaries Report, and Fixing Their Graph — there are a variety of mortality trends covered in video form here, and suicide rate trends are in the first video.

Homicide

Homicide: Trends, 1968-2020, and Provisional Counts Through June 2021

The Geography of Homicide — States, Base Rates, Increases, and Correlations

Motor vehicle accidents

Motor Vehicle Accident Deaths: High-Level Trends, 1968-2020, Part 1

Motor Vehicle Accident Deaths, Part 2: Age-Related Trends with Provisional Results in 2021

Motor Vehicle Accident Deaths, Part 3: Geographical Differences, 2019 vs 2020

Drug overdose deaths

Drug Overdoses, Part 1: High-Level Trends, 1999-2020

Drug Overdose Deaths, Part 2: U.S. Age-Related Trends 1999-2020 with Provisional Results in 2021

Drug Overdose Deaths, Part 3: Geographical Differences for 2019 and 2020

Alcohol-related deaths

Part 1: Dead is dead: Increased Alcohol-Related Deaths, U.S., 2020-2021

Part 2: Alcohol-related deaths, part 2: Geographical Differences for 2019 and 2020

As a reminder, I have a Mortality with Meep category, if you want to only look at mortality-related posts (I do write about other things, like public finance).

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Related Links

2017: Friday Trumpery: The Murder-Suicide of Expertise

[H]ere are the hallmarks of why “experts” are not being trusted:

* The experts are not all that expert (well-credentialed, but deeply ignorant)

* The experts lack intellectual humility – they hold onto wrong claims far past reasonability as a result, and make overconfident pronouncements

* The experts are intellectually dishonest

* The experts aren’t the people who get hurt by what they get wrong

….

It’s usually via media of some sort, and the grand gatekeepers drove the knife in for reasons similar to that of the suicide of expertise.

* Many media people are deeply ignorant, and can’t tell credible experts from know-nothing phonies

* The media needs eyeballs — so intellectually dishonest as well as overconfident experts make for a better show

* It’s not the media people who get hurt by the sensationalism they peddle

The thing is, being able to play around with words and to spin stories does sell very well — the boring expert who says “There is no nifty risk-free trick to making pensions cheaper. There’s always a trade-off” will be outdone by the bombastic person yelling “THEY WANT US TO DIEEEEEE!”

June 2021:

I am annoyed.

If these people just admitted they were wrong in the past, and will try not to make such mistakes in the future, that would go a long way in establishing future credibility.

That many people have decided to take the “nuh uh, I never wrote that” route has made it much easier for me to carve down who I will actually pay attention to.

So, “experts”?

If you wonder why people aren’t paying attention to your profound pronouncements after you have scrubbed your past?

You were the ones who decided your credibility was really most sincerely dead. Not me. Not others.

You did that.

I don’t want to hear any whining about what you did to yourselves.

28 July 2022:

The Professor and the Madman:

Quote from the book:

The lexicographer, Trench pointed out, was “an historian…not a critic”.

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Podcast Links and Notes

Main post:

Twitter thread:

Interesting responses from others:

The picture:

Now Scotland:

Some prior posts on drug overdoses:

Top causes of death:

GoActuary thread on mortality trends:

https://community.goactuary.com/t/mortality-trends-non-pandemic/1388

STUMP - Meep on public finance, pensions, mortality and more is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Related Links:

Press Release from the Pioneer Institute in June:

Study Finds Pension Obligation Bonds Could Worsen T Retirement Fund’s Financial Woes

A new study published by Pioneer Institute finds that issuing pension obligation bonds (POBs) to refinance $360 million of the MBTA Retirement Fund’s (MBTARF’s) $1.3 billion unfunded pension liability would only compound the T’s already serious financial risks.

Download Report

With POBs, government entities deposit revenues from bond sales into their pension funds and use the money to make investments they hope will deliver returns that outpace borrowing costs.

“Virtually every study of POBs finds that timing and duration of the bond issues are critical,” said E.J. McMahon, author of “Rolling the Retirement Dice.”  “Bonds floated at the end of a bull market are the most likely to lose money, and that makes this idea a wrong turn at the worst possible time.”

To reiterate, the report is at this link: Rolling the Retirement Dice

Let me grab a few key graphs and tables from the report:

There is a lot going on in that graph, so focus simply on the red line: the funded ratio. Its scale is to the right, going from about 120% in 2001, down to under 60% in 2020.

This is the alternative valuation I mentioned. The 7.25% valuation in the top row is the official valuation. That made for the 57.9% funded ratio as of the end of 2020. The 6.25% valuation is also in the actuarial report, as they provide valuation at +/- 1 percentage point difference from the official valuation rate.

The 4.37% valuation is based on investment-grade corporate bond rates. The 3% valuation was based on 30-year Treasury rates as of late May 2022.

So, I have decided to do a graph - of the 10-year, 20-year, and 30-year rates for the history I have them. Just so you can see how the 7.25% compares, historically.

I put in the line for the 7.25%, the current valuation rate for the MBTA, so that you can see the time period for which long-term Treasury rates were above that level. Just so you can compare.

Actuarial Standard of Practice 4 — current

Actuarial Standard of Practice 4 — revision that will be going into effect February 2023

3.11 LOW-DEFAULT-RISK OBLIGATION MEASURE

When performing a funding valuation, the actuary should calculate and disclose a low-default-risk obligation measure of the benefits earned (or costs accrued if appropriate under the actuarial cost method used for this purpose) as of the measurement date. The actuary need not calculate and disclose this obligation measure more than once per year.

When calculating this measure, the actuary should use an immediate gain actuarial cost method.

When calculating this measure, the actuary should select a discount rate or discount rates derived from low-default-risk fixed income securities whose cash flows are reasonably consistent with the pattern of benefits expected to be paid in the future. Examples of discount rates that may meet these requirements include, but are not limited to, the following:

* US Treasury yields;

* rates implicit in settlement of pension obligations including payment of lump sums and purchases of annuities from insurance companies;

* yields on corporate or tax-exempt general obligation municipal bonds that receive one of the two highest ratings given by a recognized ratings agency;

* non-stabilized ERISA funding rates for single employer plans; and

* multiemployer current liability rates.

When plan provisions create pension obligations that are difficult to appropriately measure using traditional valuation procedures, such as benefits affected by actual investment returns, movements in a market index, or other similar factors, the actuary should consider using alternative valuation procedures such as those described under section 3.5.3 to calculate the low-default-risk obligation measure of those benefits earned or costs accrued as of the measurement date.

For purposes of this obligation measure, the actuary should consider reflecting the impact, if any, of investing plan assets in low-default-risk fixed income securities on the pattern of benefits expected to be paid in the future, such as in a variable annuity plan.

When calculating this measure, the actuary should not reflect benefit payment default risk or the financial health of the plan sponsor.

Other than the discount rate or discount rates, the actuary may use the same assumptions used in the funding valuation for this measure. Alternatively, the actuary may select other assumptions that are consistent with the discount rate or discount rates and reasonable for the purpose of the measurement, in accordance with ASOP Nos. 27 and 35.

The actuary should provide commentary to help the intended user understand the significance of the low-default-risk obligation measure with respect to the funded status of the plan, plan contributions, and the security of participant benefits. The actuary should use professional judgment to determine the appropriate commentary for the intended user.

I will likely have more to say about the new ASOP 4 as we get closer to its effective date.

Related Links

A screenshot of the old Actuarial Outpost (RIP):

(Sorry, fellow AOians, I only archived things important to me, which were mainly public pensions threads, Social Security, Excel, and the Moody’s Rate history. None of the drama crap.)

New York Times: 2015 July 9 Bad Math and a Coming Public Pension Crisis

When Jim Palermo was serving as a trustee of the village of La Grange, Ill., he noticed something peculiar about the local police officers and firefighters. They were not going to live as long as might be expected, at least according to pension tables.

After Mr. Palermo dug into the numbers, he found that the actuary -- the person who advises pension plan trustees about how much money to set aside -- was using a mortality table from 1971 that showed La Grange's roughly 100 police officers and firefighters were expected to die, on average, before reaching 75, compared with 79 under a more recent table.

….

On Thursday, a panel of senior actuaries will consider whether to update, or elaborate on, the existing actuarial standards for public pensions. The dueling mortality tables will be among the evidence, and Mr. Palermo is among the parties who have submitted written testimony.

It is only the second time in recent memory that the Actuarial Standards Board has held a public hearing, an indication of the gravity of the nation's pension woes. State and local governments have promised several trillion dollars' worth of benefits to retirees -- the exact amount is in dispute. Now, with large numbers of public workers retiring, the money set aside is turning out to be at least a trillion dollars short.

….

"Actuaries make a juicy target," said Mary Pat Campbell, an actuary who responded to the board's call for comments.

She expressed concern that elected officials were using actuaries to lend respectability to "questionable behavior" like funding pensions with borrowed money, picking risky investments and "enacting benefit improvements based on lowballed costs."

Actuarial Standards Board Hearing on Public Pension Issues - notice for July 9, 2015

The funding of public pension plans is a matter of considerable public interest. Stakeholders including individuals, organizations, and media outlets are engaged in a vigorous public dialogue on the topic.

As the standards-setting body for actuaries in the United States, the Actuarial Standards Board (ASB) is charged with establishing and improving guidance for credentialed actuaries practicing in the U.S., and in July 2014 the ASB issued a Request for Comments (RFC) on ASOPs and Public Pension Plan Funding and Accounting.

In order to solicit the broadest possible input on proposed standards, the ASB will hold a public hearing on the proposed actuarial standards of practice (ASOPs) applicable to actuarial work regarding public pension plans on July 9, 2015. The ASB urges interested parties to attend the hearing and/or offer comments per the guidelines below.

Actuarial Standards Board Hearing on Public Pension Issues Comment Letters - 2015

My letter dated 10 June 2015

When public plans get into trouble, it generally does not emerge suddenly, as a run on the bank. Trouble in public pensions develops over years, sometimes decades. Perhaps the slow-moving nature of public pension disasters makes sponsors complacent, but it is probably expected by sponsors that if there were something terribly wrong, the actuaries would have warned them. It does not matter how many disclaimers we actuaries put into our reports. We are the numbers people; we do the projections; we should have been highlighting cases when current assets cannot cover the liability of not only current retirees, much less future retirees.

11 July 2015: Story of a trainrider — not doing that again. At least, not on purpose.

When I was waiting for the late-night train in GCT:

John Bury’s blog: Burypensions

Public pensions category on Actuarial News

Podcast Related Links

Mark Glennon at Wirepoints on Ken Griffin: The Illinois Political Establishment’s Shameful Response To The Departure Of Ken Griffin And Citadel

On a wall in Ken Griffin’s office at Citadel in Chicago, I’m told by people who worked there, hangs a thank you note from a six-year old. Like many kids that age, he was enthralled by prehistoric creatures so he wrote to thank Griffin for funding Evolving Planet, a permanent wing in Chicago’s Field Museum.

The six-year old was my son, who asked if he could write it after my wife had taken him for what must have been the fifth time to the exhibit.

I was proud that he had the simple decency to feel a need to thank somebody.

I wish I could say the same about the Illinois political establishment’s send-off to Griffin and Citadel, who are leaving for Florida. There was no decency in any of it.

This reminds me of a post I did for Taxing Tuesday years ago: idea of thank you certificates to the top taxpayers. Evidently, this is a thing in India and China:

But seriously, wouldn’t it be great to have an annual award ceremony celebrating the biggest taxpayers for a specific polity? [yes, some would decline, so let that lay low. But others may welcome the attention.]

Make it a gala event! Show the love!

It reminds me that the top public people in the Roman Empire would fund public buildings and entertainment, and get their names plastered all over it. Maybe we should do that with the government budget as well. Give the top taxpayers a menu of choices, based on their amount — they could be the sponsor for the state patrol that year, say, or the state subsidy for UConn.

I think Connecticut would be a great state to try that out with first, given all the really rich folks there and how difficult a time the state is having with taxes. Let’s think outside the box!

I think that would be kind of cool, actually.

Another Wirepoints piece, by Ted Dabrowski and John Klingner

Illinois has been bleeding its wealthiest residents for years. Now it’s Ken Griffin’s turn to leave

IRS migration data shows between 2012 and 2020, 80,900 tax filers with $200K-plus incomes left Illinois for other states, but only 40,900 similarly-wealthy people moved in. (The IRS only began breaking out its data by income brackets in 2012.)

That means a net 40,000 wealthy tax filers have exited Illinois in the last nine years. 

In the most recent year of data alone, a record net 8,000 wealthy residents left and took $5.6 billion in income with them.

But that’s just the losses for one year. The problem with losing people and their wealth is that one year’s loss doesn’t just affect the tax base the year the income is lost, it also impacts all subsequent years. The losses pile up on top of each other, year after year.

Finally, I mentioned the Wadsworth Atheneum, which is right across the street from the office where I work (when I’m in Hartford (yes, I live in Westchester, NY and work in Hartford. I’m nutty.)) It takes pride of place in my Art Break album on Facebook, as I’m a member and often go there to chill:

Love hanging out with the art. Thanks, rich folks!

Related Links

Recent post on Providence, Rhode Island POBs:

Older STUMP posts on POBs:

2018: Illinois Idiocy: Digesting the Presentation of the Mega Pension Obligation Bond Idea  

https://stump.marypat.org/article/906/illinois-idiocy-let-s-run-some-scenarios-on-a-gargantuan-pob

That was an idea of issuing a $100+ billion POB to cover the ginormous unfunded pension liabilities of Illinois. They didn’t do it.

2015: Why are Pension Obligation Bonds OF THE DEVIL? A Lesson from the Dollar Auction  

http://stump.marypat.org/article/191/why-are-pension-obligation-bonds-of-the-devil-a-lesson-from-the-dollar-auction

The dollar auction is a truly evil game. I used to forbid people from playing it at Mathcamp. That’s not a joke.

I had a really ugly graph on that post, and yes, I’ve gotten better with the graphs over the years. The ugliness of that graph was a partial inspiration to seek solutions. (Other ugly graphs as well).

You can barely see it, but there was a POB between 2003 and 2005. It barely made a dent in the unfunded pension liability.

And what then? In the ten years since 2005, Illinois underfunded the TRS pension fund by at least a billion dollars a year.

With regards to contributions, there was a choice on the part of the “government”.

With regards to all the other reasons for shortfalls — investment experience, experience in salary changes and longevity — the government had less direct control. But they definitely had a choice with regards to how much of the budget to apply to the pensions.

And every damn year, the Illinois government made a conscious decision to shortchange the pension. That was not an accident.

POBs are most often used by governments that were shortchanging the pensions, or goosing the benefits in insane and seemingly sane ways, to paper over said shortchanging. This farce lasts only so long.

February 2022: Positioning for a Potential Interest Rate Hike: Public Finance and More

Ah, the good ole days of temporary inflation of January 2022. Remember that?

It was 8.6% for May 2022.

I also have a list of some of my POB lowlights over the years.

So yes. I very much hate pension obligation bonds. Mainly because of all the lying surrounding them.

Related Links

CNBC: Social Security fund will be able to pay benefits one year longer than expected, Treasury says

OASI Trust Fund History: 1937-2021 - I will write more about this history another time

A quick graph of the ups and downs:

Every time those dots dip below the heavy bold line, the Trust Fund shrank. You can see the trouble of the late 1970s/early 1980s.

Actuarial News link: As our entitlements crisis gets closer, a solution moved farther away — that’s for Megan McArdle’s WaPo column. That’s because not everybody has access to the Washington Post.

But if you do, here’s the WaPo link: As our entitlements crisis gets closer, a solution moved farther away

I will quote a different part than the Actuarial News post:

Senior citizens are America's most powerful voting bloc. Any party that makes those changes unilaterally will be slaughtered — which means neither Republicans nor Democrats will do it unilaterally, unless they happen to be the unlucky folks who get stuck holding the bag when the money actually runs out.

This is the gloomiest development of the past 15 years. Not only are the parties more polarized than they were, making the bipartisan deal we need unlikely, but they struggle even to pass legislation on their own. President Donald Trump's Obamacare repeal and President Biden's Build Back Better agenda went down in flames not because of opposition obstructionism but because they couldn't rally enough of their own party's senators to make their bills pass. And these were minor compared with touching Social Security, the "third rail of American politics."

….

The politicians of yesteryear treated our entitlement problem like a fine wine, bound to improve if we only let it ferment for a few more years. Instead, the problem got even worse. We can't afford to wait around and watch it get harder still.

Actually, they didn’t, if you look at the late 1970s, and what they did to fix that.

I will write/talk more about Social Security later. There are lots of “fixes” possible, depending on what you consider the goal to be.

The goal I have is extremely sustainable, and the original goal of the program.

But that’s for later.

Episode links

Elon Musk tweets:

The Total Fertility Rate graph:

Musk’s followup:

Musk has had 8 children, one of who died in infancy. Six of the children with his first wife. He had no children with his second wife (also divorced). And two children with ex-girlfriend.

Census population change estimates

This won’t embed on substack, alas. I will simply show you a few screenshots and you have to go over there for the interactivity.

Here is the Census link:

How is Population Shifting in Cities or Towns in Your State?

Related story: The Center Square - Census: Illinois cities combined lose 104,000 people in 2021