California has the most underfunded public pension system in the country. CalSTRS, the fund that pays the retirements of the state’s teachers, carries an unfunded liability of more than $100 billion—larger than California’s entire annual K–12 education budget. CalPERS, the parallel system for non-teaching public employees, brings the combined liability to roughly $136 billion. Between 2013 and 2021, the share of a California teacher’s salary that school districts had to send to CalSTRS more than doubled, from 8.3 percent to 19.1 percent, and roughly forty percent of recent increases in school budgets have been absorbed by pension costs rather than reaching classrooms. Three California cities—Vallejo, Stockton, and San Bernardino—have declared bankruptcy in the last two decades, with police and firefighter pension obligations as one of the largest drivers in each case. Cities that have not gone bankrupt have responded by cutting parks, libraries, road maintenance, arts programs, and, in some cases, the very police staffing levels their pension obligations were originally meant to support.
The superior force here is the market (reality) against a union (desires). The union is powerful in its ability to set ambitious goals that have the force of law to be met, but it is powerless against a reality that will not allow those desires to be met in actuality.
On Polymarket, the Journal found, 67% of profits go to just 0.1% of accounts. That means less than 2,000 accounts netted a total of nearly half a billion dollars. The Journal analyzed 1.6 million Polymarket accounts that have traded since November 2022. There are at least 2.3 million total accounts on the site.
The superior force here is better informed people on the other side of trades. It is not all insider information, but that is an important component. Emotion-driven bets are easy prey for the sharps.
The piece is a cautionary tale for bettors specifically and investors generally.
III. Marc Porter Magee on X.com posts (HT: Tyler Cowen),
University of Vermont projects 15% drop in freshman class.
The superior force here is demographics. This is mixed news. For UVM and universities at large, it is bad news. We are deeply into the Great Shrinking of college. For society, it is not so bad. More international students would alleviate the decline and be good for all. Yet, we've been through a period of too much college and for too many people. The reduction was inevitable, and it has good downstream effects. However, the fact that our population is declining due to falling birth rates is bad, bad, bad—a canary in the coalmine.
The piece is a cautionary tale for higher education specifically and both Social Security and the economy generally (population decline).
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