8 replies to this topic

[Peeves]

Many cities/states have followed the same path in employee largess, irresponsible spending and passing the bill onto the tax payers. Some for votes, some because they could just raise taxes, ans some just to be nice politicians. But the piper must be paid.


As in "Where Walker Succeeds, Unions Fail and Wisconsin Wins!" On Wisconsin(s) everywhere.



http://www.calgaryherald.com/business/Stockton+California+become+largest+jurisdiction+declared/6826436/story.html

STOCKTON, CALIFORNIA -- When 10,000 citizens of Stockton, California, sang along with Neil Diamond at the opening of their city’s shiny new concert hall it seemed like the good times would roll for ever.

It was 2006 and local officials were happy to pay the musician $1 million in taxpayers’ money to perform Sweet Caroline as they rode high on the back of a turbocharged housing market.

However, the concert has come to symbolise the financial irresponsibility that now has the city staring into an abyss.

Barring a last-minute reprieve, Stockton, which has a population of 300,000, will become the largest city in American history to file for bankruptcy on Tuesday. Its demise is perhaps the most extreme example of a nation’s boom-time spending splurge, and a cautionary tale of what happens when the bills finally have to be paid.

“I have nothing personal against Neil Diamond, but that was just a huge waste of money,” said Ann Johnston, the mayor charged with cleaning up Stockton’s financial mess. “It was a time of excess, of grandiose dreams and gross ambition. We’re like a homeowner who took out second and third mortgages and then everything crashed. We will be cash insolvent by the end of this month.”

Stockton, which sits in California’s agricultural Central Valley 80 miles from San Francisco, began life as a transport hub for the gold rush 160 years ago.

At the height of the economic boom, 3,000 homes a year were being built in the city and its population grew by 20 per cent in a decade as it sought to join the San Francisco commuter belt. In addition to its $80 million glass-fronted concert arena, a 5,000-seat ballpark also went up for the local minor league baseball team.

A $42 million superyacht, the Casino Royale, dominates the marina. It shimmers like a mirage in the California sun, while in its shadow a homeless man pushes a trolley.

During its glory days the city also paid $2-million to a Californian chef to open a bistro, which did not last long. It splashed out $35 million on an eight-storey building which was to be a city hall. Officials never moved in and it was repossessed by the bank a few weeks ago, along with three multi-storey car parks. Inside the current crumbling city hall, the tap water is undrinkable and there are rats.

Due to its massively inflated housing market and soaring debts, Stockton was hit like a freight train when the recession came after the 2007 sub-prime crisis. Its home foreclosure rate was the highest in America, property values dropped by up to 75 per cent and businesses went under. Unemployment is now at 19 per cent. The council’s revenues from property and sales taxes were decimated by the downturn. In addition, it had given away sumptuous benefits to city employees, including medical care for life for each public employee and their spouse.

The health care plan left them with an estimated liability of $417 million. Officials are in talks with creditors over $350 million the city owes bond-holders. Those talks end on Monday and, if they fail, bankruptcy will commence.

Mrs Johnston has already slashed public sector staffing and pay. The 425-strong police force has been cut by 25 per cent. The result has been a crime wave with a record 58 homicides last year. Gang members taunt the remaining officers, asking them when they will get laid off.

Kari Webb, a mother of two sons, lost her husband Alex Bell who was murdered amid declining police numbers.

Less than a mile from the marina, the morning queue at Stockton’s food bank starts 90 minutes before opening time. More than 400 people line up each day for a box of donated produce.

Waiting for one box is Denene Howland, 45. She bought a two-bedroom house in 2005 for $215,000 with her husband Ralph, a labourer. The house was foreclosed in 2009.

She said: “We couldn’t make the payments. When we lost it someone then bought it for $60,000. The realtors had just taken advantage of idiots like us.

“For a while it was like the gold rush back then, and then people were cutting each other’s throats..”

As the city awaits the bankruptcy verdict, Mrs Johnston said: “This recession keeps dragging on and we are still at the bottom. Neil Diamond will not be coming back.”

Read more: http://www.calgaryhe...l#ixzz1ye0eS5gG

Excess,

[punked]

The NYT has a story out about Stockton. I was not surprised to find out it has very little to do with Unions and this is just some more Peeves blaming every problem he can on unions. It has a lot more to do with those "no risk" loans that come with deregulation. Eh Peeves?

http://www.nytimes.c...B3E0B04AF285D55

Edited by punked, 25 June 2012 - 03:57 PM.

[Jack Weber]

Those damned dirty unions,eh Peeves??

Nothing like the meritocracy of the non-union workplace and the sanctity of the "free" market,huh?

[Michael Hardner]

For those who like to overstate the role of morality in economics, how about the morality promising pensions to people then not giving them ? At one point does bad planning represent actual dishonesty ?

[bush_cheney2004]

For those who like to overstate the role of morality in economics, how about the morality promising pensions to people then not giving them ? At one point does bad planning represent actual dishonesty ?

"Morality in economics" is an oxymoron. Retirees and pensioners already get the lion's share of government expenditures compared to other (younger) demographics, which has to pay for them.

[CPCFTW]

For those who like to overstate the role of morality in economics, how about the morality promising pensions to people then not giving them ? At one point does bad planning represent actual dishonesty ?

That's an agency problem between management and owners (excessive management risk-taking to focus on short-term profits)... or simply poor management.

I believe you meant the morality of free markets... in which case I would argue that the risk of being part of a fractional percentage of private employees who were promised, but not delivered retirement benefits, is heavily outweighed by the risk of excessive government intervention and oppression. History is filled with wars caused by overzealous or oppressive governments... I can't think of any wars started by rioting pensioners.

[Michael Hardner]

"Morality in economics" is an oxymoron. Retirees and pensioners already get the lion's share of government expenditures compared to other (younger) demographics, which has to pay for them.

You're not who I was thinking about. It's those who cry about unfair union wages, the other side of the morality-in-economics debate.

[Peeves]

You're not who I was thinking about. It's those who cry about unfair union wages, the other side of the morality-in-economics debate.

Of course there's two sides to contract issues. I'v worked on both sides, union and management and self employed.
I have never denied there are companies that have been unfair, even crooked, but, when I post on unions I should expect responses to that with opinions and facts on point.

Here what we get is "You" this "you" that and whining. Funny the more whining the happier I get.

My major complaint is with the public sector (and I have worked there too.)

For years, actually since the 70's or so, civic workers have been awarded sweetheart deals well beyond the private sector BECAUSE the costs could simply be passed on to the tax payer.

Not a threat of losing customers due to price increase, the tax payer will always be there. Politicians milked the taxpayer by promising unions more and more for votes. The politicians 'GAVE' those contracts, and a public service worker would have been nuts to turn them down. Why should they?

Meantime we must remember that back in the 50's 60' 70's the public sector worker had benefits the private sector did not enjoy. The public sector, Posties, Cops, Fire Dept. City workers,teachers etc. were indeed paid lower wages but they had job security, good working conditions, health care and usually less stressful, less physical jobs and the jobs were pretty cushy. Posties often off at 2 pm, three people in city jobs for any two positions, and most managers in the public service were 'empire builders.'

The more they could have working for them, the bigger their dept. the more they could ask for and....GET! Because 'We' The taxpayer got the final bill.

If that happened in the private sector, commodity price had to go up or share holders were unhappy and the business closed.

Eventually, public sector workers/teachers/cops etc. were " Fire Proof."

Layoffs in the public sector NEVER reached the proportions that occurred on a regular basis in industry, in the private sector where profit was expected.

No unions haven't wrecked the country,but often boards and politicians have backed down to union demands to the point of idiocy. And.....there's no denying that unions by poor leadership have shot themselves in the foot closing companies that were the goose with the golden egg. Bin thar seen that.
Of course companies have screwed workers over. Of course both ides are out for their own gain.
But, I maintain the public sector stands as the worst of the worst.

Edited by Peeves, 27 June 2012 - 08:41 AM.

[Peeves]

Those damned dirty unions,eh Peeves??

Nothing like the meritocracy of the non-union workplace and the sanctity of the "free" market,huh?

Most workers are not unionized. Lets consider them as well. Unions leaders don't give a shit about the majority of workers that aren't in a union.
Many that are, object to the Rand Formula effect on employment in unionized 'shops.'
Very few if any other countries have such draconian laws that insist a worker pay dues whether they want the union or not.
Our governments (cities and up) suffer higher costs by up to 40% because tenders on projects must be from unionized companies.

As in the Star expose, we can see how then the city union then gets kick backs and hours of work on a job are claimed when it took but minutes. That's fraud. You may applaud that, but as a taxpayer I don't.

Many union workers are pissed that the union leadership uses their dues for funding things like the Occupy", the G20 demonstrations, Quebec students, and Israel boycott agenda. Things that are the pet programs of their leader(s).


It's about time!
http://fullcomment.nationalpost.com/2012/06/27/andrew-coyne-ontarios-tories-take-on-the-unions-and-its-about-time/

Edited by Peeves, 28 June 2012 - 07:23 AM.