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    Monday
    Apr032017

    John Arnold: The Most Hated Man in Pensionland

    The billionaire philanthropist has vowed to secure retirement for public employees. So why do so many public employees despise him?
    BY  APRIL 2017
    (Photos by Brent Humphreys)

    John Arnold wasn’t a pension guy.

    The billionaire financier, who made a fortune in the stock market before retiring at 38, hadn’t ever really been interested in public retirement plans. But in early 2009, just months into the global financial crisis, Arnold began seeing a flurry of news articles about public pension funds collectively losing billions in the stock market crash. Assets had plummeted, causing unfunded liabilities to shoot up. Cash-strapped governments couldn’t afford to fix the shortfall, and the longer they delayed putting more money in their pensions, the worse the problem would get. In short, it was a policy nightmare.

    Arnold became intrigued. “The fact that you could go in one year from having a system that was well-funded to having a major gap -- that affected me,” he says. He started digging and found a book called Plunder: How Public Employee Unions Are Raiding Treasuries, Controlling Our Lives and Bankrupting the Nation, by conservative writer Steven Greenhut. As the title suggests, the book is an anti-union take on public pensions that details the misdeeds of the system’s bad actors -- public employees who game the system and wind up with pensions that are equal to or better than what their working salaries had been. Reading that book, says the now-43-year-old Arnold, “just made me mad.”

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    Wednesday
    Mar012017

    The Myth vs. the Truth About Regulating Payday Lenders

    When state laws drive so-called "debt traps" to shut down, the industry moves its business online. Do their low-income customers follow?
    BY  MARCH 2017

    In 2010, Montana voters overwhelmingly approved a 36 percent rate cap on payday loans. The industry -- the folks who run the storefronts where borrowers are charged high interest rates on small loans -- predicted a doomsday of shuttered stores and lost jobs. A little over a year later, the 100 or so payday stores in towns scattered across the state were indeed gone, as were the jobs. But the story doesn’t end there.

    The immediate fallout from the cap on payday loans had a disheartening twist. While brick-and-mortar payday lenders, most of whom had been charging interest upward of 300 percent on their loans, were rendered obsolete, online payday lenders, some of whom were charging rates in excess of 600 percent, saw a big uptick in business. Eventually, complaints began to flood the Attorney General’s office. Where there was one complaint against payday lenders the year before Montana put its cap in place in 2011, by 2013 there were 101. All of these new complaints were against online lenders and many of them could be attributed to borrowers who had taken out multiple loans.

    That is precisely what the payday loan industry had warned Montana officials about. The interest rates they charge are high, the lenders say, because small-dollar, short-term loans -- loans of $100 or $200 -- aren’t profitable otherwise. When these loans are capped or other limits are imposed, store-based lenders shut down and unscrupulous online lenders swoop in.

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    Tuesday
    Jan032017

    Fighting Sex Trafficking Is Harder Than It Seems

    More than half the states have passed laws to protect victims, but the laws aren’t always enforced and often produce new challenges.
    BY  JANUARY 2017

    When a young teen named Anjelique ran away from her home near San Francisco last summer, her trauma didn’t end when police eventually found her. Instead, while her distraught mother and grandmother posted “missing child” fliers all over the East Bay area, police took Anjelique to an Alameda County social services assessment center in Hayward. Before police take troubled youths home, they often bring them there to receive counseling and services.

    But 12-year-old Anjelique only stayed one night. That’s because sex traffickers were using the assessment center as a recruitment base. Anjelique befriended another teenage girl in the center, who convinced her to leave. Together, they walked just a few minutes up the seedy commercial strip in Hayward to a budget motel. Once there, Anjelique was put to work.

    As a means of controlling her, her mother said, Anjelique’s traffickers got her hooked on heroin. As part of an investigation into her story, a local news crew visited the motel where Anjelique unwittingly entered the sex trafficking trade. Filmed one night this past summer, the news video shows young women arriving early in the evening while others linger in the doorways of rooms or on the balcony outside. Throughout the night, men come in and out of the rooms; other men whisk the girls away in cars, bringing them back a few hours later.

    Anjelique eventually escaped, and at the time of the news story, was spending time in drug rehab for her addiction.

    Anjelique’s story may sound sensational, but in the world of child sex trafficking, it’s painfully normal. Traffickers seek out vulnerable, unhappy teens -- like runaways. Juvenile detention facilities or social services centers such as the one in Hayward are prime recruiting grounds. Sometimes, young women already in the trade become recruiters themselves, approaching other vulnerable girls and offering them what seems like an exciting life. The new recruit comprehends the full reality of her new situation too late. Readily available drugs help numb the pain.

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    Thursday
    Nov032016

    A Sneak Peek at the Seismic Shift in Corporate Tax Breaks

    New rules are forcing states and localities to calculate how much revenue they’re losing to business deals -- and whether they pay off. It’s something Washington state has been doing for a decade.
    BY  NOVEMBER 2016

    Earlier this year, Washington state lawmakers got a wake-up call. A tax incentive package they’d approved in 2013 for aerospace giant Boeing -- largely regarded as the most expensive incentive deal in history -- was actually on pace to surpass its estimated $8.7 billion cost. According to a Department of Revenue report, the deal, which extends to 2040, had already amounted to half a billion dollars in giveaways in just the first two years alone. In other words, the state was losing out on a whole lot more money than it had planned.

    And the kicker? Just months earlier, Boeing had announced plans to cut roughly 4,000 jobs in Washington. The year before, the company had transferred thousands more jobs out of the state.

    Some lawmakers were livid, openly contemplating whether the state should consider revoking the tax breaks if the company didn’t add back some jobs. (Boeing, for its part, says it has continued to invest in the state, including $1 billion last year for a plant to build its new 777x aircraft.) But on the whole, response from officials and local media was measured. Most lawmakers said that in the bigger picture, the company was still good for Washington.

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    Friday
    Oct142016

    Big-Box Stores Battle Local Governments Over Property Taxes

    The retailers are deploying a ‘dark store’ strategy that’s hurting cities and counties around the country

    BY  SEPTEMBER 2016

    On Michigan’s sparsely populated Upper Peninsula, big-box stores are a modern necessity. Where towns are spaced far apart and winters are long, one-stop shopping to load up on supplies adds a crucial convenience to what can be -- at least for many -- a rugged existence.

    Landing one large retailer is a coup. Having more than one can make a city or town a regional shopping destination. Marquette Township, a small community adjacent to the larger city of Marquette, is in the unique position of having a handful of big-box chain stores. Taking advantage of the fact that the city of Marquette was mostly built out, the township began encouraging large-scale commercial development on its western edge early in the 2000s.

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