PROVING Progressives REFUSE TO LEARN. Progressive Rahm Emanuel gets sworn in for 2nd term. Chicago Bond Status Drops to JUNK

PROVING Progressives REFUSE TO LEARN.  Progressive Rahm Emanuel gets sworn in for 2nd term.  Chicago Bond Status Drops to Junk Rating  


Emanuel starts 2nd term, as Chicago financial crisis deepens with 'junk' rating

Mike Tobin
By  Mike Tobin
·Published May 19, 2015
·FoxNews.com

A few months ago, winning re-election was Chicago Mayor Rahm Emanuel’s biggest problem. Now, his problem seems to be that he won. His prize is a mountain of financial problems, so severe that the ongoing gunfire in the rough parts of town is taking a back seat.

On May 12, Moody’s Investor Service gave Chicago a double-notch downgrade to its credit rating, leaving municipal bonds at “junk” status. According to Ted Dabrowski at the Illinois Policy Institute, public employee pensions are so underfunded, the shortfall will nearly equal six times the annual budget for the city. The pension debt – quadruple what it was a decade ago – works out to $60,000 per Chicago household.

“Chicago, I think by any measure, is already broke,” said Dabrowski. “Eventually, you’ll find a situation where Chicago can’t fund itself.”

The problem did not start on Emanuel’s watch. According to a Sun-Times/Better Government Association investigation, Chicago pension funds have been mismanaged for years. Payments to pension funds have been shorted or skipped for years. In one example, an entire decade of payments was skipped.

However, this is Emanuel’s second term. It’s his debt crisis now and his detractors say he should own it -- and charge he's missed past chances to stop the bleeding. Particularly, they point to his standoff with the Chicago  Teachers Union in 2012, when the mayor caved and gave teachers a raise in the face of a billion-dollar budget shortfall.

Read more about another Progressive failure.
http://www.foxnews.com/politics/2015/05/19/emanuel-starts-2nd-term-as-chicago-financial-crisis-deepens-with-junk-rating/?intcmp=latestnews

http://www.zerohedge.com/news/2015-05-13/chicago-junking-triggers-22-billion-payment-deepening-financial-crisis

HOW WALL STREET’S RENT-SEEKING VAMPIRE SQUID SUCKS ALL LIFE OUT OF THE ECONOMY

Author: L. Randall Wray · July 22nd, 2013

- See more at: http://www.economonitor.com/lrwray/2013/07/22/how-wall-streets-rent-seeking-vampire-squid-sucks-all-life-out-of-the-economy/#sthash.hqrZLZ6R.dpuf



"In economics there is the notion of economic rent—payment in excess of what is required to mobilize factors of production. For example, such rents accrue to those who have “cornered the market”—by artificially restricting supply of some resource, they are able to dictate usurious terms to buyers. We call them “rentiers”.

Here’s the point that is critical to understand: the rentier performs no useful function, and the economic rent can be eliminated without reducing the supply of the resources needed for production. This is why J.M. Keynes advocating “euthanizing” the rentier. As you know, “euthanasia” means “mercy killing”—you kill to reduce pain and suffering. Keynes was serious about this—his recommendation came in the final chapter of his great General Theory, as one of his two fundamental policy proposals. (For completeness, the other was a “somewhat comprehensive socialisation of investment”.
Advocacy of “mercy killing” does raise the question: in whose interest do we kill the rentiers? Obviously, it is not in the interest of the rentier class—they are perfectly happy to suck unnecessary economic rents that strangle the economy. Think of the idle class of feudal lords, whose sole purpose of existence was to consume what they did not earn. Nay, we euthanize them to release the entrepreneurial spirit of capitalism. As Adam Smith explained, the interests of the feudal lords were opposed to the interests of all other classes in society.

Today’s equivalent is Wall Street. It serves no interest other than its own. It adds economic rent to all economic activity in our society, sucking the lifeblood out of the economy. Wall Street is our rentier class. If you want to visualize today’s rentier, there is no better example than a Bob Rubin, a Hank Paulson, or a Jamie Dimon, each “wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money” (as Matt Taibbi put it).

As Wall Street’s grip tightened over the past four decades, economic growth stuttered. We first got the Great Stagflation, and then the serially bubblicious economy that inflated debt at the expense of jobs and incomes. The Vampire Squid financialized everything and buried all economic activity under mountains of debt: Developing nation debt; Junk Bond King Michael Milken and LBOs; Charles Keating and his Quintet of Crooked Senators (Hello, John McCain! Read the details of Keating’s attempt to put a contract on my colleague, Bill Black). And then it all really got fun with the Greenspan/Bernanke Duo’s stoking of Wall Street’s biggest bubble of all time—the US era of The Great Moderation that layered Americans under mortgage debt, home equity loans, credit card debt, student loan debt, health care debt, and car loans.

I’ve already written a lot about Wall Street’s financialization of everything—way beyond housing, to auto ownership, college education, “peasant insurance” (your employer takes out a bet that you’ll die earlier than your life insurance company thinks), and “death settlements” (anyone can place that same bet). Back in 2008 I wrote about how Wall Street had financialized commodities, creating the biggest commodities price boom in human history .

Beginning with the “reforms” of 1999 that unleashed financial markets—and especially US Pension Funds—Wall Street began funneling “Managed Money” to commodities markets. At first they were buying the real, physical, commodities and hiding them away in storage—much like the Hunt Brothers had done back in the 1980s trying to increase economic rents through the Big Squeeze on silver. The problem was that this drove up storage prices—all the storage facilities were full.

So Wall Street moved into futures markets—buying paper claims to commodities physicals that they had no plan to ever exercise. Essentially these were one-way bets that commodities prices would only go up. And indeed they did. Not surprising when you figure that total money under Wall Street’s management was orders of magnitude greater than the sum total of the global supply of most commodities (to be clear, some commodities markets are huge—soy, petrol, wheat, corn—but the dollar values of the rest are relatively small; remember that two relatively dim-witted offspring were able to corner the entire silver market at least for a while)..."

- See more at: http://www.economonitor.com/lrwray/2013/07/22/how-wall-streets-rent-seeking-vampire-squid-sucks-all-life-out-of-the-economy/#sthash.hqrZLZ6R.dpuf

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Read Matt Taibbi's GRIFTOPIA.

It's not about progressives. It's about Chicago-style politics.

Face it, Markle, aren't the Republicans the same way - as you see it - with a Bush on the presidential ticket - AGAIN?

These posts can be a bit like Drudge Report. All the same hype with no substance and no relativity.

http://www.thewire.com/business/2010/10/why-does-abu-dhabi-own-all-of-chicago-s-parking-meters/18627/

OCT 19, 2010 11:01AM ET
Why Does Abu Dhabi Own All of Chicago's Parking Meters?

MAX FISHER

The city of Chicago has 36,000 parking meters. In 2008, it sold them on a 75 year lease for over one billion dollars. The buyers were led by Morgan Stanley. But as Matt Taibbi reports in his forthcoming book Griftopia, previewed in Rolling Stone, the state-owned investment arm of Abu Dhabi ended up owning a large share -- possibility a controlling majority -- in Chicago's parking meter system.

It was December 1, 2008. That morning would be the first time that the Chicago City Council would be formally notified that Mayor Richard Daley had struck a deal with Morgan Stanley to lease all of Chicago's parking meters for seventy-five years. The final amount of the bid was $1,156,500,000, a lump sum to be paid to the city of Chicago for seventy-five years' worth of parking meter revenue.

...He then gave them the details: he had arranged a lease deal with Morgan Stanley, which put together a consortium of investors which in turn put a newly created company called Chicago Parking Meters LLC in charge of the city's meters. There was no mention of who the investors were or who the other bidders might have been. ... The council at this time has no idea who's actually behind the deal. "We were never informed," says Hairston. "Not even later."
But while the City of Chicago was deliberating on whether to sell their parking meter system to Morgan Stanley--which they ultimately decided to do--the Wall Street megabank was making plans to offload the parking meters to a third party.
[The investment] process involved [Morgan Stanley]'s Infrastructure group going on a road tour to ask people with lots of cash to pony up. It was these guys from Morgan's Infrastructure desk who took their presentation to the Middle East and pitched Chicago's parking meters to a room full of bankers and analysts in Abu Dhabi, the Abu Dhabi Investment Authority, who ultimately agreed to purchase a large stake.
Within two months of selling its parking meters to a coalition of U.S. and Western investors led by Morgan Stanley, Chicago's parking meters came under new, foreign ownership.
So basically Morgan Stanley found a bunch of investors, including themselves, to put up over a billion dollars in December 2008; a big chunk of those investors then bailed out to make way in February 2009 for this Deeside Investments, which was 49.9 percent owned by Abu Dhabi and 50.1 percent owned by a company called Redoma SARL, about which nothing was known except that it had an address in Luxembourg.

Taibbi calls this a "bait and switch" pulled by Morgan Stanley on Chicago. He explains why this is about more than just parking meters. Now if city officials want to do anything that might disrupt parking meter revenue -- let's say close down parking for a street festival or parade -- they need to get the approval of those meters' shadowy, foreign owners. They also need approval to change parking hours or fees. The new ownership has already made unwelcome changes, ending the previous policy of allowing free parking on holidays. But not only did Chicago cede the operation of an entire segment of the city to mysterious private investors -- Taibbi says they could have gotten four times as much money for it, up to $5 billion.

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SheWrites wrote:It's not about progressives.  It's about Chicago-style politics.  

Face it, Markle, aren't the Republicans the same way - as you see it - with a Bush on the presidential ticket - AGAIN?

These posts can be a bit like Drudge Report.  All the same hype with no substance and no relativity.  

Chicago-style politics IS Democrat politics. Has been for decades and has been corrupt or decades.

I do love it when Progressives so grudgingly concede that their policies and programs are total failures. Instead of outright admitting that massive failure, they sputter...but, but, but...Republicans are the same way.

To whine that Jeb Bush is presidential candidate is really laughable. We have a great selection of at least a dozen great, diverse choices competing for the nomination.

It is so funny hearing that from a Progressive when ALL THEY HAVE IS...CLINTON...AGAIN and no other options. Nothing, nada, zip. A candidate drowning in scandals and corruption.

What is the Progressives PLAN B?

ZVUGKTUBM wrote:

Markle wrote:We have a great selection of at least a dozen great, diverse choices competing for the nomination.

Who cares about the diversity of the Republican choices? The question is, are any of them electable? Since the Republican platform is going to be mostly based on foreign policy, will they be able to instill enough fear in the hearts of voters to sway them to vote Republican?

You will need to convince the voters that fighting Iran and ISIS is more important than the economic successes we have seen at home since the lows of 2008-2009. That means you will also need to convince voters that they have suffered unimaginably from an economics standpoint under Barrack Obama since 2009. Good luck with all of that!

As you know, this "recovery" has been the most anemic since the Second World War. The average income of a worker has DECREASED each year since semi-retired President Obama took office.

Markle wrote:As you know, this "recovery" has been the most anemic since the Second World War.  The average income of a worker has DECREASED each year since semi-retired President Obama took office.

Maybe it appears anemic since the crash was the worst since 1929 (before World War II). No one can dispute that things are better than they were in 2009. What Republicans need to do is convince voters how bad-off they are and how the GOP intends turn the economy around better than the Democrats can. So far, all we hear from Republicans is how ISIS is taking over in Iraq and how Iran is a threat to our security. We have heard NOTHING about the Republican plan to continue the ongoing economic recovery that we now have here at home. Ignore this at your peril!

Solely focusing on fearmongering about things happening far away is not going to sell your brand very well in 2016.

I am still waiting for the first GOP contender who has the balls to throw George W. Bush under the bus, and declare that the invasion of Iraq in 2003 was a mistake that should not have taken place. Right now, they seem to be very befuddled by questions asked about the subject--it is fun watching them on that tightrope, and the double talk coming from their mouths is mind-blowing!

ZVUGKTUBM wrote:

Markle wrote:As you know, this "recovery" has been the most anemic since the Second World War.  The average income of a worker has DECREASED each year since semi-retired President Obama took office.

Maybe it appears anemic since the crash was the worst since 1929 (before World War II). No one can dispute that things are better than they were in 2009. What Republicans need to do is convince voters how bad-off they are and how the GOP intends turn the economy around better than the Democrats can. So far, all we hear from Republicans is how ISIS is taking over in Iraq and how Iran is a threat to our security. We have heard NOTHING about the Republican plan to continue the ongoing economic recovery that we now have here at home. Ignore this at your peril!

Solely focusing on fearmongering about things happening far away is not going to sell your brand very well in 2016.

I am still waiting for the first GOP contender who has the balls to throw George W. Bush under the bus, and declare that the invasion of Iraq in 2003 was a mistake that should not have taken place. Right now, they seem to be very befuddled by questions asked about the subject--it is fun watching them on that tightrope, and the double talk coming from their mouths is mind-blowing!

Let's try this again.

EVERYONE, Democrats and Republicans agree that KNOWING WHAT WAS KNOWN THEN THEY WOULD HAVE OVERTHROWN SADDAM.

Now try again...
As you know, this "recovery" has been the most anemic since the Second World War. The average income of a worker has DECREASED each year since semi-retired President Obama took office.

These, as you well know, are demonstrable FACTS.

Pretty clear people do not understand the issues.

The Bond agency said the Illinois Supreme Court's May 8 ruling that struck down changes to four state pension systems makes it unlikely the city will be able to defend changes to two of its pension systems in pending lawsuits. Like the state law that was found unconstitutional, the city measure aimed to restore financial soundness to the funds in part by cutting benefits.

Understand that Bipartisan governors and legislators overstated income investment and failed to make the required State contributions. The largest percentage of non payment was during the Thompson, Edgar, and Ryan administrations over a thirty year period. The teacher, firefighter, police, and general public employee pensions in Illinois are obscene, and completely covered and protected by provisions in the Illinois Constitutions. The threat of bankruptcy does not work, and the reality is that massive cuts in programs and increasing the income tax may be court ordered.

Illinois is one of the wealthiest states and this crisis is a tempest in a teapot if the legislator would address the issue with deep cuts and continuing the temprorary increase in the income tax raise........Rahm and Chicago politics has little to do with the problem which is state wide, and shared by both Republicans and Democrats.......nobody will compromise, and the courts will probably do a blended consent decree so the politicians who for thirty years have failed in their responsibilities.

2seaoat wrote:Pretty clear people do not understand the issues.

The Bond agency said the Illinois Supreme Court's May 8 ruling that struck down changes to four state pension systems makes it unlikely the city will be able to defend changes to two of its pension systems in pending lawsuits. Like the state law that was found unconstitutional, the city measure aimed to restore financial soundness to the funds in part by cutting benefits.

Understand that Bipartisan governors and legislators overstated income investment and failed to make the required State contributions.  The largest percentage of non payment was during the Thompson, Edgar, and Ryan administrations over a thirty year period.  The teacher, firefighter, police, and general public employee pensions in Illinois are obscene, and completely covered and protected by provisions in the Illinois Constitutions.  The threat of bankruptcy does not work, and the reality is that massive cuts in programs and increasing the income tax may be court ordered.

Illinois is one of the wealthiest states and this crisis is a tempest in a teapot if the legislator would address the issue with deep cuts and continuing the temprorary increase in the income tax raise........Rahm and Chicago politics has little to do with the problem which is state wide, and shared by both Republicans and Democrats.......nobody will compromise, and the courts will probably do a blended consent decree so the politicians who for thirty years have failed in their responsibilities.

Nice effort at diversion...again. Seems that the only defense Progressives can muster today is smoke and mirrors.

The problem is CHICAGO and it's decades and decades of corrupt Progressive leadership. Illinois is NOT responsible for the bad decisions made by Chicago.