Time for another Texas vs. California update:
Posts Tagged ‘bankruptcy’
Texas vs. California Update for May 21, 2015
Thursday, May 21st, 2015Chicago Is Detroit Is California Is Greece
Sunday, April 5th, 2015National Journal has a piece up by moderate lefty John B. Judis on all the problems plaguing Chicago.
Perhaps more than any other major city in America, Chicago is facing a truly grave set of problems—problems that are essentially more extreme versions of the challenges confronting city governments across the country.
But there’s a vital piece of information omitted from that sentence: “problems that are essentially more extreme versions of the challenges confronting city governments across the country run by the Democratic Party.” Though Republican cities are not immune to such problems, make no mistake that the very worst examples are cities run by the Democratic Party, most for a very long time (Detroit hasn’t had a Republican Mayor since 1962, Chicago since 1931), and most are in states with solid (if not overwhelming) Democratic Party majorities.
The failure of America’s bankrupt cities is a microcosm of the failure of the Blue model of big government liberalism. And the reason I have spent so much time on covering California and Greece is that they are part of the same story: The failure of American liberalism is a microcosm of the bankruptcy of the welfare state, and the bankruptcy of the welfare state is a subset of the failure of socialism.
The quandaries begin with Chicago’s dramatic social divide. To an even greater extent than is the case in, say, New York or Philadelphia, Chicago has become two entirely separate cities. One is a bustling metropolis that includes the Loop, Michigan Avenue’s Magnificent Mile, and the Gold Coast, as well as the city’s well-to-do, working-class, and upwardly mobile immigrant neighborhoods. The other Chicago consists of impoverished neighborhoods on the far South and West Sides, primarily populated by African-Americans. These places have remained beyond the reach of the city’s recovery from the Great Recession.
As we have known since Charles Murray’s Losing Ground in 1984, welfare programs don’t lift the poor out of poverty, but keep them ensnared in it. Indeed, a cynic might observe that welfare programs are designed to create a voting clientele for the welfare state and the liberal party that runs it.
The problem, as Mark Steyn put it, is that “the 20th century Bismarckian welfare state has run out of people to stick it to. In America, the feckless insatiable boobs in Washington, Sacramento, Albany and elsewhere are screwing over our kids and grandkids. In Europe, they’ve reached the next stage in social democratic evolution: There are no kids or grandkids to screw over.”
As Steyn further noted:
A government big enough to give you everything you want isn’t big enough to get you to give any of it back. That’s the point Greece is at. Its socialist government has been forced into supporting a package of austerity measures. The Greek people’s response is: Nuts to that. Public sector workers have succeeded in redefining time itself: Every year, they receive 14 monthly payments. You do the math. And for about seven months’ work – for many of them the workday ends at 2:30 p.m. When they retire, they get 14 monthly pension payments. In other words: Economic reality is not my problem. I want my benefits. And, if it bankrupts the entire state a generation from now, who cares as long as they keep the checks coming until I croak?
The story of Detroit’s current bankruptcy is the story of Chicago’s coming bankruptcy, and the similar problems of California. All are dealing with bloated public sector pensions that are making their cities insolvent. All promised and spent money they didn’t have against their decedents, not realizing (or not caring) that the debt burden will ruin the worlds of those decedents before they could ever pay it off.
The theme with all is that deficit spending destroys, and the only cure is to force governments to pare back the welfare state and stop spending money they don’t have. As the example of Greece shows, there reaches a point in welfare state dependency at which actually curtailing welfare state spending, even at the point of financial ruin, is politically impossible. The looting of the public treasury cannot be stopped because that looting is the only thing that holds left-wing coalitions in power anymore.
One of the many reasons the Tea Party exists is to hold American politician’s collective feet to the fire to make sure the terminal phase of the welfare state Greece is now enjoying never gets that bad in America. (To this end, they’ve had the tiniest little glimmer of success.)
Chicago is Detroit is California is Greece is, eventually, America. It’s all part of the same story, and one any voting public ignores at its peril.
(Hat tip: Instapundit.)
Previously Bankrupt Stockton Suddenly Has Enough Money for an Affordable Housing Development
Tuesday, March 10th, 2015As part of my regular Texas vs. California updates, I’ve been keeping close tabs on the city of Stockton, which just emerged from bankruptcy proceedings last month.
So what’s one of the first thing Stockton does after exiting bankruptcy? Would you believe spending $14 million for 40 units of affordable housing? For a city that owes $1.6 billion in pension debt to CalPERs, that’s like someone who can barely afford food deciding to buy spinning rims for his 19-year-old Civic.
To my mind, this has all the hallmarks of a politic payoffs.
The project would evidently entail “renovation of the 123-year-old Cal Weber Building and the 88-year-old McKeegan Building.”
Who controls the Cal-Weber building? Dan Cort.
Who controls the McKeegan building? Dan Cort.
Who’s Don Cort? A Stockton commercial real estate developer and “urban renewal expert.” He was also Mayor of Pacific Grove (which is a good two and a half hours away from Stockton) until he resigned in advanced of a recall election in 2009. Pacific Grove, like many California cities, got in financial trouble due to outrageous public employee pension costs, and bond debt to cover same.
Is Cort tied-in to Stockton’s City Council? Given that six of the seven members, including the Mayor and Vice Mayor, are among Cort’s Facebook friends, I’m going to answer “Yes.” (The seventh, Dan Wright, has only been in office since January.)
None of this is conclusive proof that underhanded financial shenanigans and/or kickback are going on. But it is an indication that reporters, bloggers and Stockton taxpayers should be taking a good, hard look at this project.
Also, I can’t imagine that Franklin Templeton, the mutual fund company and Stockton bondholder which was forced to take a haircut in bankruptcy hearings can be too happy about it either…
Texas vs. California Update for January 21, 2015
Wednesday, January 21st, 2015Texas vs. California Update for July 16, 2014
Wednesday, July 16th, 2014Some other stuff bubbling up, so here’s a Texas vs. California update to tide you over for a while:
Texas vs. California Update for March 13, 2014
Thursday, March 13th, 2014Time for another roundup of Texas vs. California:
The California city of Vallejo emerged from bankruptcy just over two years ago, but it is still struggling to pay its bills.
The main culprit: Ballooning pension costs, which will hit more than $14 million this year, a nearly 40% increase from two years ago.
Amid threats of legal action from the state’s pension giant, CalPERS, Vallejo did little during its nearly three-year stint in bankruptcy to stem the growth in its pension bills.
Now when I think about California, I think of a liberal oppressive police state and regulations and taxes and fees. I’d rather go someplace and have my own little place out on the edge of town. I’m a country girl at heart. It makes me happy when I see people in Texas open-carrying. It makes me feel safe. I’m not even a gun owner, but I’d like to see a gun rack in every pickup truck, like my boyfriend had when I was fifteen years old in Florida. An armed society is a polite society.
Texas vs. California Roundup for December 11, 2013
Wednesday, December 11th, 2013Time for another roundup of Texas, Red State Champion, versus Blue State California:
Texas vs. California Roundup for November 11, 2013
Monday, November 11th, 2013Time for another roundup of Texas vs. California:
Texas vs. California Update for July 24, 2013
Wednesday, July 24th, 2013Smart denizens of California must be eying Detroit’s bankruptcy warily. After all, 60 years ago Detroit was the wealthiest city in America. And California seems hellbent on following Detroit’s Blue State path to bankruptcy sooner rather than later…
Bruce Malkenhorst took home more than $911,000 a year as city manager of the tiny city of Vernon. His reign ended shortly
before he was convicted of misappropriating public funds, and he walked away with an annual pension that eventually topped $500,000,
the largest in the California Public Employees’ Retirement System.But CalPERS last year decided to cut his pension to $115,000, concluding he’d derived some of his hefty salary improperly.
So now the 78-year-old Malkenhorst is suing Vernon to make up the difference.
And if you’re interested in California corruption, you should be following Dwight’s regular updates on Vernon and Bell.
The Ten California Cities Most Likely To Declare Bankruptcy
Tuesday, May 21st, 2013Who’s next on the California bankrupt city hit list? Well, USA Today has been kind enough to take a stab at it, and offers up the following likely candidates, listed alphabetically:
Wait, Vernon? Vernon hasn’t already declared bankruptcy? The city that would probably win “Most Corrupt City in California” if not for stiff competition from Bell?
If I had to wager, I’d pick Vernon, though Compton and Mammoth Lake are also good candidates…