Blog Posts by Peter Gorenstein

While a great debate rages in states across the country about benefits and pensions for state workers, existing pensions continue to fall short of their funding needs. State pension deficits increased 26% to $1.26 trillion in 2009, according to the Pew Center.

Here are some other eye-opening stats from the same report:

• State retirement systems had 78% of what they needed to pay for promised pensions
• Pension plans lost an average of 19% in 2009
• The unfunded liability in state-run pension plans rose to $660 billion in 2009 from $452 billion in 2008
• The biggest unfunded pension liabilities in 2009 were in Illinois, which had just 51% gap and West Virginia, with 56%. New Hampshire was 58% funded, while New Jersey and Ohio both had just two-thirds of what they needed.

The stock market's recovery in 2010 and 2011 (so far) likely helped the situation, but that may have been offset by rising health care costs and underfunding of pensions. The poor fiscal situation of states highlights the

Texas Congressman Ron Paul is once again throwing his hat into the Presidential race. The conservative Republican will officially announce he's created an exploratory committee at an event later today in Iowa. Paul who ran in 1988 and in 2008, is a darling of the Tea Party and has a very loyal, albeit small, group of supporters thanks to his libertarian views favoring limited government, low taxes and free market policies.

Luckily for him, his criticism of the Fed and the government's handling of the budget, which were not major issues in the 2008, are now mainstream and could help him gain more support. At the very least, candidates will be forced to address monetary and fiscal policy issues on the campaign trail and in debates, which could speak well for Paul's candidacy.

Here's how the Business Insiders' Joe Wiesenthal puts it:

"It's inconceivable to think that in the GOP primary, candidates won't be asked for their position on Bernanke, quantitative easing, the role of the dollar,

"I believe we no longer have free market capitalism and we no longer have a democracy," says David Stockman, the blunt-talking former Michigan Congressman and Director of the OMB during the Reagan administration.

What now exists at the heart of the U.S. economy, Stockman argues, is "crony capitalism" - a system that benefits and even rigs the system in favor of America's banks and bankers at the cost of average Americans. It's a system built on the back of government-issued bailouts and free money. "The Fed is the great enabler" through its free money policies, which "generate results the market wouldn't otherwise provide for," he says.

In the last decade Korean automakers have come from nowhere to become a dominant force in the U.S. and on a global scale. Hyundai sales in the U.S. grew 32% in March while Kia saw a 45% uptick.

"The Korean's Kia and Hyundai have been able to achieve that level of success in a shorter period of time, in 10 years, but also in a much more competitive marketplace," says Jim Resnick Yahoo! Autos contributor, at the New York International Auto Show. Meanwhile, Toyota is still hurting from a series of high-profile recalls and production disruptions after Japan's devastating earthquake and tsunami. "I think they're out 'Toyota-ing' Toyota. If you think what Toyota did in the 70s and 80s offering great value, very reliable transportation and a great dealer network to service the cars. Yes, absolutely.

When they entered the U.S. market Korean cars were an after-thought, mocked for their quality….

Over 1 million people are expected to attend the New York Auto show, which opens to the public Friday. The show offers a dizzying array of vehicles to be dissected and critiqued by car aficionados, the media and the general public.

Among all the features being dissected, perhaps the least important is whether the car is foreign or domestic.

"It's a delineation without a difference these days," says Jim Resnick, an editor with Yahoo! Autos.

For all the talk about the resurgence of American automakers, "Made in America" is really a matter of marketing. For example, a Honda Accord made and assembled in America has 80% U.S.-sourced parts vs. 65% for a Ford Escape, Resnick notes in the accompanying video, taped at the show earlier this week.

"It's built in America. Designed in America. Marketed in America and sold in America," he says of the Accord. "It's an American car with a Japanese nameplate."

In fact, Resnick notes Honda exports cars made at its plants in Alabama and Ohio from

A federal jury convicted Lee Farkas, the former Chairman of Taylor, Bean & Whitaker Mortgage Corp., Tuesday for his role in a $2.9 billion fraud that led to the fall of his company and that of former Top 50 bank Colonial Bank. Farkas was found guilty on all 14 counts of conspiracy and bank, wire and securities fraud. He now faces life in prison.

Recent moves in the oil market one suggest that price fluctuations are less and less based on supply and demand dynamics. Saudi Arabia announced yesterday it cut oil production in March and a Saudi oil minister said there was too much supply on the market. One would think these events would push prices higher.

Thanks to $100+ crude oil, prices at the pump have eclipsed $4.00 per gallon in six states. This weekend New York became the latest, but probably not the last, state to break the $4.00 barrier joining Alaska, California, Connecticut, Hawaii and Illinois. The national average now stands at $3.83, 29 cents higher than a month ago and nearly $1.00 more expensive than it was this time last year.

Much like the summer of 2008, when oil spiked to $147 a gallon and national gas prices topped out at $4.11, recent surveys suggest drivers are buying less fuel as a result of price increases. Furthermore, higher gas prices are taking $100 billion out of consumers pockets, according to a Fortune article, citing Goldman Sachs economist Andrew Tilton. "A key reason for concern is the sharp rise in gasoline prices so far in 2011 — nearly 70 cents per gallon — which is siphoning off household income at a run rate equivalent to $100 billion per year." That certainly won't help with the economic