Detroit bankruptcy

Posted: August 13, 2013
By: Clay Cerny

I couldn’t sleep last night, so I started going up and down the radio dial, looking for something that might put me to sleep.  A conservative talker raged about the need for inner city youth to obey the police.  His point was simple:  No matter what the circumstance, we must respect the police.

Conservative leaders in Michigan must listen to other right wing radio talkers.  According to Laura Clawson in Daily Kos, police and firefighters in Detroit are not getting respect from the conservative governor Rick Snyder and his “Emergency Manager” Kevyn Orr.  Neither group is eligible for Social Security, and the city’s bankruptcy will make their pensions next to worthless.  Unlike pensions in the private sector there is no Federal system to backstop failed public pension funds.  Brave cops and firefighters who put their lives on the line to keep the people safe now face a very insecure retirement.

Even if public safety officers in Detroit received full pensions, they would only average $30,000, much less than peers in cities of a similar size.  How can people who say they respect the police (and I assume firefighters) treat them so poorly?  Clawson puts it best in the last words of her article:  “They kept their promises to the city of Detroit. It must keep its promises to them.”  Amen.

Posted: August 11, 2013
By: Clay Cerny

[“Sabbath” is this blog’s Sunday feature that looks beyond jobs and careers.]

Three Local News Heroes

Everyone I know picks on the Chicago Sun-Times.  “It’s so thin.”  “It’s all ads.”  “All they cover is sports.”  The paper is not as thick as it used to be. Some features have gone away or – as the paper will eventually – gone online.  That said, The Chicago Sun-Times provides reporting and commentary that the people of Chicago desperately need.

Today’s paper is a case in point.  Editorials by Carol Marin, Andy Shaw, and Rich Miller explore three stories that citizens and taxpayers should care about more than the results of the Bears’ first exhibition game.  Marin delves into the case of a young prosecutor who was hounded out of her job for not pursuing a high profile, “heater,” case.  The evidence would not support a conviction.  Marin notes that 75% of juvenile cases were not prosecuted because a similar lack of evidence.  When we hear scary stories about street crime and “thugs,” we need to think about how such crimes happen and what could be done to prevent them.  If three-quarters of investigations lead to nothing, a lot of time, money, and law enforcement resources are being wasted.

Andy Shaw’s editorial focuses on shady dealings practiced by high-paid doctors employed by Cook County.  Shaw, a long-time reporter, now heads The Better Government Association, which conducted an investigation that found county doctors at their private practices when they were supposed to be working for the county.  Where other employees are required to swipe in/out of their work place as a way to track time, doctors do not follow that protocol.  Shaw notes that the county is investigating this matter and has taken some action, including the termination of one doctor.  He concludes by challenging Toni Preckwinkle, President of the Cook County Board, to institute better oversight of doctors.

My favorite piece of today’s editorial troika is Rich Miller’s.  Author of the Capital Fax blog, Miller know Illinois politics.  He unveils a hidden aspect of the recent lowering of the state’s bond rating.  Ty Fahner, a prominent member of the Commercial Club of Chicago, gave a speech at the Union League Club in which he challenged ratings agencies to lower the state’s rating rather than being an “enabler” of its financial problems.  Miller documents ties between Fahner’s law firm and management of the state’s bonds, which would give Fahner an incentive to call for big cuts to state pension programs.  This story is important because there have been similar rating cuts for Chicago and Chicago Public Schools.  As in Detroit, it would seem that the banking and investment community will not be happy until it sees every public sector worker getting pennies on the dollar for their retirement income.

In addition to these three editorials, the paper had several articles on issues that impact the city, county, and state.  Nothing online covers these issues as well (nor does the Sun-Times’ competitor, despite offering more “content”).  Good newspapers provide an important public service.  Our democracy will be poorer if they cannot survive.

Posted: July 24, 2013
By: Clay Cerny

I’m working from home today, so I’m able to listen to the radio more than on a typical.  What am I hearing?  More and more about the royal baby and Anthony’s wiener.  What’s the news on Detroit?  It's bankrupt and there’s no other choice but to cut worker’s pensions.  What’s the news in Chicago, a city that had its bond rating slashed?  The city’s broke, and we must cut workers’ pensions.  Meanwhile, here’s the latest on the royal baby and Anthony’s wiener.

The corporate media, better defined as the info-tainment industry, doesn’t focus on important matters and go below the surface.  The budget problems in Detroit and Chicago have resolutions that are not discussed by shallow reporter who look like models.  There is also no examination of the real winners and losers.  When pensioners are asked to take reduced benefits, who wins?  Investors and the bankers who care for their money as if it were a royal baby.

Retired workers and current employees that paid into pension plans expected to have security in retirement.  They worked thinking that retirement was part of their compensation, not a resource owned by the city that could used to pay its debts.  The problem here is not simply a matter of “resources,” as the Emergency Manager of Detroit put it.  People’s lives are on the line, and we need to understand these stories with that in mind.

Government officials, bankers, and the investor class do not care about these people.  They only know Return on Investment.  They also know that most people will not pay attention to this story.  They want the sensational story that’s easy to understand.  Working people and the middle class need to wake up, or their wages – present and future – will be the next target.

P.S., Economist Dean Baker compares Detroit to an organization that the government bailed out, Goldman Sachs.  Needless to say, the rich get richer.