Wednesday, January 26, 2011
Cut off your nose to spite your face
They played by all the rules and got nothing.
I'm seeing a very ugly pattern rearing it's head in this country. Maybe I wasn't looking closely enough or just distracted by the latest natural disaster. I like to tune into the latest news but not from our Lame Stream Media. Who'd watch that unless your interests are the latest dancer to trip on Dancing With The Stars. No I speak of our friends to the North the Canadians. Unlike our obsessions with the cost of a Bieber haircut the Canucks (at least from what I see) can look past their own navels and across their own borders and seas. This is much like the news of 30 or 40 years ago before corporate America became the overlords of the nightly. I am seeing a slant creeping into the mix but that's another story.
Canadian news has never been one to hang out in their own backyards reporting on nothing but hockey even thought it is a national obsession. No they like to jaunt around the globe and sniff out stories that might only get a ten second blurb near the end of one of our network nightlys. A trip to Pritchard, Alabama (What business does a Canadian have in Alabama? We don't even pay attention to Alabama) gave a very revealing glimpse into the future for many a small city in this land. A small city facing financial shortfalls was forced to stop paying its' retired city workers. Now I don't know the exact particulars of where the money went. It may have been invested in some complex hedge fund or maybe their plan was never fully funded a fact that was never revealed. But to add insult to injury the Mayor and all his staff just voted themselves a 50% raise. Being in the heart of blood red republican country here the retirees sit with no income. A woman stood up before the city counsel meeting and dared speak of a tax increase. Out of the question was the general response! The retired workers have hired an attorney to try and get their money but with not much hope.
All of this got me to thinking about the perfect exit plan. Sell everything you have then borrow to the max, on all home loans, credit cards and such then leave the country. Let some other slob worry about the balance sheet and the write offs. This is exactly what Wall Street did to us and we were dumb enough to lend them more money. What are they doing with the money other than giving themselves nice bonuses? The exact same things that got us into the mess in the first place, re-leveraging, is going on again. What better way to make a fortune than selling promises to suckers then wagering on the outcome especially when you know where the chips will fall?
What cities and small towns fail to realize is that there is no free lunch. They can't continue to underfund or not fund their obligations and expect something in return. And rather than take precious funds set aside for grandma and grandpa's retirement and gamble it away in investments that are beyond comprehension it would be more prudent to invest it locally where they could keep an eye on it.
They are now experiencing the results of their own conservatism. When they keep cutting the funding for government programs it bore the fruit of their own cheapness. Now they face the lack of retirement, the lack of money to repair the roads and a crumbling business base that's failing or leaving town. With that comes lower tax revenues and lower home values that leads to even less money for city coffers. At this point I don't think they could borrow the money because with their current financial position no bank would touch them without a guarantee of payback and that would mean raising taxes.
The Mayors' solution is to rob Peter to pay Paul. He plans to take the money from the sewer department in exchange for that department not having to pay a required annual fee. Exactly where he thinks the money to pay for the scheme in the end will come from is anyones' guess.
This is not just an issue for Prichard, Alabama though it's happening in other parts of the country as well. Camden, New Jersey just laid off 1/2 of its' police force and a third of the firemen for lack of funds. The small town of Sultan, Wa. eliminated its' entire police force shoving the job to the county police which itself is hurting and looking at cuts. Most funding is local and state sponsored but some monies come from the federal government. Imagine what federal cuts would do to already strained budgets.