Mayor abruptly slashes wages to minimum for Scranton City Workers

[TBF]

And for any of you holding on to your middle class pretensions and thinking it can't happen to you - think again. Here's the story -

Scranton mayor slashes pay for all city workers—including police and firefighters—to minimum wage
By Dylan Stableford, Yahoo! News | The Lookout – 4 hrs ago

Doherty (AP)

Cash-strapped Scranton, Pa., has slashed pay for all city employees—including police and firefighters—to minimum wage, sparking furor among unions that now say they plan to sue in federal court.

A lawyer representing three unions told Scranton's Times-Tribune he will file several motions, including one to hold Mayor Chris Doherty in contempt of court for violating a judge's order to pay full wages.

The lawyer, Thomas Jennings, said he also expects to file a pair federal lawsuits on behalf of the unions—International Association of Firefighters Local 60, the Fraternal Order of Police E.B. Jermyn Lodge 2 and the International Association of Machinists and Aerospace Workers Local Lodge 2305—alleging the city failed to pay proper wages and overtime, and cut benefits for disabled police and firefighters without a proper hearing.

"Pick a law," Jennings told the Times-Tribune. "They violated it."

Last week, Doherty abruptly cut pay for all 398 city employees to $7.25 per hour, saying it was the only way to keep Scranton solvent ...

More here: http://news.yahoo.com/blogs/lookout/scranton-minimum-wage-city-police-firemen-140229063.html

Here is a copy of the story on MSNBC as well: http://bottomline.msnbc.msn.com/_news/2012/07/10/12659748-scranton-pa-slashes-workers-pay-to-minimum-wage

[badtoworse]

1. They're flat broke. What do you suggest they do?

[TBF]

2. I suggest they raise taxes -

duh.

[badtoworse]

6. The mayor proposed that, but the people in Scranton don't want higher taxes,...

...so the City Council refused to raise them. Any other ideas?

[TBF]

7. I don't care if rich people don't want to be taxed -

and yes I have plenty of other ideas. Have you ever heard of socialism?

[Freddie Stubbs]

10. Most property owners in Scranton are not rich

[TBF]

13. I'm not going to get in any fights about defining the word "rich" -

because I see plenty of that divisive, distracting behavior going on in other threads on this board and it only benefits the very rich when everyone else is fighting.

If folks are well enough off to own property and want police/firemen around to protect it they are going to have to understand they might not be buying a second home this year ...

[Freddie Stubbs]

26. Many of these 'well off' property owners are retirees on fixed incomes

[TBF]

28. Again, will not bite on that. Property owners who expect fire and police

protection had better figure out whether they can pony up some cash.

This is what it comes down to - I really don't care if Aunt Ethyl has $2 million in the bank and wants to leave it all to her favorite cat charity - I'm sure she is a very nice person.

People have families and are now being told they are going to "live" on $7.25/hour.

[CreekDog]

21. $7.25/hour is not a living wage --do you suggest employees stop living?

[Freddie Stubbs]

32. Oh course not

But you have to be aware of the tax structure for municipalities in PA, as well as the fact that Scranton is a largely working class town.

[limpyhobbler]

38. OK so then the state or federal gov't will have to move some money from

A wealthier population to this poorer one. Easy peasy. Problem solved.

[TBF]

45. Sounds easy to me. nt

[badtoworse]

12. Have you ever been in Scranton? How many rich people do you think live there?

[TBF]

14. See my post #13 - not biting. nt

[badtoworse]

27. I read Post No. 20. $128,000 median home price doesn't sound like a rich neighborhood to me.

You didn't answer my question though. I've been to Scranton; have you? With all do respect to its residents, it's not a city that rich people would live in.

[TBF]

29. Again, I'm not playing these republican split the people games

with you. But thanks for bumping my thread.

[badtoworse]

46. BTW, the mayor and the city council are Democrats

http://bottomline.msnbc.msn.com/_news/2012/07/10/12659748-scranton-pa-slashes-workers-pay-to-minimum-wage?chromedomain=usnews

[TBF]

49. I realize that and I'm not surprised that you would point it out.

That is probably why the mayor is actually taking the pay cut too. I doubt a republican would do the same ...

But they are still fucked unless step up and raise taxes, and frankly I would say the same to President Obama (and I think he knows that - his rhetoric on taxes right now is much stronger than it has been in the past. I think he realizes that the public have had enough of being robbed blind by the ruling class).

[nadinbrzezinski]

9. Yes, raise them anyway

oh wait, now they are going to get their final results.

You think workers will stay employed by the city?

911 what is your emergency will be replaced by a non answer.

And your ambulance when you need one, will be replaced by YOU driving your relative two towns over.

Maybe then they will get it... this is the silly stupid shit taxes pay for.

[FrodosPet]

36. Sometimes, democracy sucks when people don't vote right!

Suppose the city council does the right thing. Taxes go up, people already barely getting by start losing their houses to unpaid tax foreclosure, rich people who consider their property marginal at best abandon it when it becomes financially advantageous to do so, and the voters vote in teabaggers who cut the taxes back to the levels where the troubles began.

"Ah! But the city gets all this property it can sell for revenue!", one may say. But before it is sold, it takes a few years. A few years where the property has to be maintained - an expense, or ignored - a safety hazard which makes the property even harder to move.

So how exactly does socialism fix this? What would socialism do for revenues if everything of value is nationalized? I suppose the profits of the enterprise would help, but would it be enough?

[TBF]

37. lolol - don't even start with me

What it will do is put the means of production in the hands of the workers. No more billionaires while others are homeless ...

[FrodosPet]

47. And then what?

So the enterprises will be owned by employees, not the federal government? And then taxed and regulated the same as non-employee-owned businesses?

Do the employees receive profit sharing on top of salaries? Would it be structured like a publicly traded corporation, only with ownership limited to people who perform labor for that enterprise?

Will start up funds and capital expenditures be provided strictly through loans, since there cannot be equity outside of the employees? What happens if the enterprise is incapable of repaying the loans?

When someone takes a new job, what happens to their share of the business? Do they lose their ownership? Will they be compensated?

Do you, or anyone else reading, have a good, DETAILED description of how socialism affects people's day to day lives?

[TBF]

48. Here ya go -

plenty of material for you to look over: http://www.haymarketbooks.org/category/marxism-socialism

I have no time for your red-baiting.

[FrodosPet]

50. I don't have that kind of money for books now

Any free online sources?

And why is asking honest questions about a system that I am having so much trouble figuring out, "red baiting?"

[TBF]

58. Here ya go - online and free

http://www.marxists.org/archive/index.htm

Forgive me for my impatience on the red-baiting, in my experience folks who ask details about how every single day is going to be under the new socialism are really only trying to kill the conversation.

[socialist_n_TN]

71. That's it exactly. They expect to have a working socialist system.........

explained in a internet post.

[CTyankee]

88. how much of this can be chalked up to demonization of government workers that has

been bought into by people voting against their own best interests?

My husband is a retired municipal employee and he has no fat retirement and got no fat severance pay. His health care benefits ceased when he reached age 70. And yes, he was a member of AFSCME.

My husband and I watch with sadness when our working class compatriots mimic republican talking points, one group dissing the other, with the pecking order usually getting down to the "illegals" after they're run through everyone else. Blame ANYBODY but the rich.

I have pretty much given up on this political argument. My last one, with my auto mechanic who keeps my 13 year old Altima running well, was so depressing I decided to give up talking politics with him or anyone else who spouts RW sh*t while struggling to keep themselves in the lower fringe of the middle class.

I wish I could understand the psychology here. But I just don't. Can you explain it to me?

[TBF]

92. Simple concepts but a lot of money is spent to confuse folks -

The biggest myth the GOP pushes is the idea that government shouldn't "tell you what to do". They eat that up like pie ... meanwhile their last dollars are being stolen from them as their jobs are outsourced to the south pacific and their homes foreclosed from under them.

You know I was explaining our economic system to my 9-yr old recently. Sort of the basics of how capitalism runs vs. what socialism could look like. When I explained capitalism in simple terms - with the "winners" living in their mansions and the ones without money living homeless she immediately wanted to know how we could change the economic system. "Can Barack Obama change that?" she asked. Good question. So I explained that we try to change things by voting for people who believe in sharing, and if things get too bad we end up with wars being fought in order to change the system (French Revolution, Russian Revolution - and even at 9 she understands why people would do that as a last resort).

It's crystal clear when you explain it simply to a child and they get it. George Carlin did a good job explaining it in a humorous way. One thing we probably need is a television station akin to Fox news that tells OUR side of the story. Maybe that would be a way to reach people.

[CTyankee]

95. I hope we can do that. Perhaps we get a dozen or so George Clooneys together to get our

message out. I mean, get their money to back it.

I was really hoping the Occupy movement would accomplish this. I was so hopeful when they were trying to explain to the police that they, too, were part of the 99%. Ah, well, at the very least we now have in the political bloodstream the CONCEPT of the 1% vs the 99%, and that is a game changer right there...

[coalition_unwilling]

51. Are you interested in a serious discussion about socialist remedies for the

municipal fiscal crisis in America or in red-baiting? If the former, I'll be happy to take up the discussion with you. But first, to prove your bona fides, please prove that you know what socialism is by giving a succinct definition of it. If you cannot do that, then I will have to think you're really only interested in red-baiting, not in a serious, informed discussion.

[FrodosPet]

53. Collective ownership seems to be the core

The dictionary definition is:

"any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods"

In digging deeper, it seems like there are a lot of different philosophies regarding the exact structure and blend of governmental vs. worker owned entities, etc.

And that is where I start to get confused and wonder "Which kind of socialism are people advocating?" and "How specifically is the system legally, economically, and culturally formed and maintained?"

It seems that my questions and uncertainty comes off as "red baiting", since I hold no ideas, ideology, dogma, individuals, or organizations as sacred. I think EVERYTHING needs to be examined and forced to prove itself.

[coalition_unwilling]

62. All good socialists agree that everything needs to be examined and forced

to prove itself (using the scientific method), so in that we are in full accord.

You are also correct that socialism has been rent by many factional disputes over the years and there are many here on DU far better versed than I in the minutiae of said disputes.

I think at its core though, every definition of socialism deriving from Marx and Engels has as a core concept the idea that the means of production (specifically, factories and farms) are owned collectively by workers (the so-called 'proletariat') and not owned privately by the bourgeoisie..

Another core concept, I would say, is the notion of a planned economy based around satisfying people's needs vs. the so-called 'invisible hand' of the so-called 'free market'. Imagine that, instead of the latter, an economy were actually built around satisfying people's needs. What might such an economy look like?

Well, before anyone got an I-Phone, a BMW or a car elevator, everyone would need to have a secure place to live, adequate nutrition and healthcare (and ideally education).

As for Scranton's particular difficulties, situated as it is within a larger capitalist-imperialist economy and political landscape, I could see workers' cooperatives forming volunteer fire, police and health care brigades, but also other cooperatives as well, such as nutritional, educational and even arts. This would need to be coupled with expropriation of any assets belonging to the 1% that were required under eminent domain for the common welfare and maintenance of the commons. To get around any legal barriers poised by the state or federal governments, the city of Scranton could call its expropriations a 'tax.' That seems to suffice for the ACA with the SCOTUS and there's no reason to think such confiscatory taxes on the obscenely wealthy could not also pass muster.

My proposed remedies for Scranton are tentative -- and, per your words, need to be examined and forced to prove themselves. But my words are the mere sketch of a socialist program situated within a larger capitalist-imperialist context and I would hope they would be so examined and put through the crucible.

[jtuck004]

67. Just a quick comparison, but it looks like they do pay something already.

Not disagreeing, but I noticed theirs was a little higher than ours according to city data, and I think they had an increase last year. What would be a more fair amount?

A Little info...

http://www.city-data.com/city/Scranton-Pennsylvania.html
Estimated median household income in 2009: $38,774 (it was $28,805 in 2000)
Scranton: $38,774
Pennsylvania: $49,520
Estimated per capita income in 2009: $20,095
Scranton city income, earnings, and wages data
Estimated median house or condo value in 2009: $110,700 (it was $78,400 in 2000)
Scranton: $110,700
Pennsylvania: $164,700
Median real estate property taxes paid for housing units with mortgages in 2009: $1,683 (1.5%)
Median real estate property taxes paid for housing units with no mortgage in 2009: $1,718 (1.6%)


Compared to Spokane, WA

http://www.city-data.com/city/Spokane-Washington.html
Estimated median household income in 2009: $38,939 (it was $32,273 in 2000)
Spokane: $38,939
Washington: $56,548
Estimated per capita income in 2009: $22,707
Spokane city income, earnings, and wages data
Estimated median house or condo value in 2009: $169,700 (it was $96,100 in 2000)
Spokane: $169,700
Washington: $287,200
Median real estate property taxes paid for housing units with mortgages in 2009: $1,659 (1.0%)
Median real estate property taxes paid for housing units with no mortgage in 2009: $1,432 (0.9%)

[TBF]

68. Personally I would look at this from a global perspective

(which is darned well how capitalists look at it) and my goal as a supporter of workers is that things like city services and schools would not be supported by local property taxes. I would nationalize all of it.

[jtuck004]

73. Pay for it out of the federal income tax? n/t

[TBF]

78. Yes - I would nationalize schools, services, etc...

Anytime we push things down to the state/local level we have problems with differing tax bases and local biases. Just like the health care situation - if you nationalize something you can spread the risk so to speak (spread the cost).

To be clear as well, I am not the authoritarian sort. I would like to see workers owning and running the means of production (by committee - that sort of thing) and a lot of input from citizens via town meetings and voting as to how they think things should be run. Organized and funded on a national level, in other words, with local participation/input from those involved.

ETA = I detailed in a post below how I would do it. Bail-out time - just like a weather emergency. Scranton is considered a fiscal disaster and fed money gets pumped in. We pay for it by raising taxes - plenty of billionaires in this country. They can afford it. And we do it today.

[jpbollma]

3. Can the state not step in and assist?

Maybe help in the short term and help the city with long term financial planning, or perhaps allow these people to claim unemployment? I can't imagine these people will continue working in these conditions.

[jtuck004]

74. There is no short term.

The life we knew by 1990 to about 2009 was all speculation and debt, used to cover up the loss of our creation of real wealth as we sold off our manufacturing and other industries. Part of that was selling off city and other government revenue streams, and borrowing to create more jobs. All during that time the really wealthy were socking away fees, upon fees, upon fees, and taking capital gains where they could, stealing the lives of people who had labored for decades. People are all outraged, but this has been going on for years. That guy who lost his job on the Obama commercial, he lost it in 1994.

These people, cops, firemen, townsfolk - ALL should have been outraged then. They weren't, and here we are.

So unless some miracle job fairy increases the money for the 99%, and thus increases demand (energy research, medical research - something that would let ordinary people create wealth like they used to) all this will continue to deflate - which means people losing or spending down their very lives as they lose homes, jobs, 401(k) and retirements (all of that is available through public record, btw), a process that is happening to nearly everyone, (but we are subsidizing the wealthy so they don't get hurt so bad - because capital is more important that people), and it is likely to continue for at least another decade or two, perhaps more.

Btw, the state capital of PA filed for bankruptcy - it was denied because they didn't have permission from the state.

The majority of states are in trouble as well.

Coming up, several hundred billion dollars of those companies bought out with Mi$$ Rmoney (and his ilk) junk bonds must be refinanced with the next two years, or those jobs go into the toilet as well, a significant percentage of the work force controlled by vulture capitalists. (I will have to look it up, but it is in the tens of millions). Along with some new pressures on SS and Medicare.

They are free to go elsewhere - got any suggestions that aren't between the Pacific and Atlantic? 'Cause it's that way in a lot of places, and there are more to come. I wouldn't suggest Marion, Indiana. Or Detroit, or Michigan for that matter. Vegas is probably out, certainly not California. Maybe...no, not there...

Oh damn, that's right, there are about 30 million people looking for a job already...

[Sterling]

117. Good post!

Very informative! Thanks.

[librechik]

4. why are counties states and townships broke? Becasue federal aid has been slashed repeatedly

since 1980. Get rid of Grover Norquist and his pals and get back to a united and federalized nation that doesn't tell its towns to pull themselves up by their bootstraps.

[TBF]

5. I agree - in fact I'd go further and nationalize every

main industry - health care, banks, energy

I've had enough of a handful of billionaires living a life of extreme luxury while the rest of us are holding on by our toenails at best.

[truebrit71]

30. I agree 100000%

...we are in the final phase of capitalism as the money continues to gravitate upwards to the rich. In the end there will only be two classes of people in the USA, the Owners and their Employees...All of the money will be at the top, the poor and middle class will be screwed and the country will be completely broke..

[Woody Woodpecker]

33. Grover Norquist needs to be sentenced to life without parole in prison

for treason and sedition.

He advocates raping the government for money without the means of revenue to pay it back.

I say we seize all of Grover Norquist's assets and his business assets and his associated assets.

Then while he's still in prison, put a lien on his commissary account so he gets NOTHING but bread and water and gruel.

That should be a start to recover from a very bad idea.

If I was Terminator, I'd go back in time and make sure that Norquist's mother gets an abortion and this idea never existed.

[yoyossarian]

44. Grover Nordquist's mother DID have an abortion!

She named it Grover.

[Freddie Stubbs]

34. States and municipalities used to be able to proved services without federal assistance

[TBF]

35. You mean back when there were union jobs and folks could

pay their taxes? Is that the time you're talking about? Before everything was outsourced? That is a very, very good point.

[librechik]

40. +100! n/t

[HiPointDem]

94. ...because of the crash & recession, higher unemployment, and other fallout from the bubble (like

'investments' that went south)

[Gman]

11. What do you suggest?

Do you think this is the only solution?

[badtoworse]

19. I don't see any solution to this

If they continue paying their employees at the same rate, the checks will bounce. I understand the state won't let them declare bankruptcy (somone posted that in another thread, but I didn't confirm it). The City Council won't raise property taxes.

What would you do?

[TBF]

31. If I'm the firemen and police I hold a union meeting and immediately strike -

no police or fire protection for the town. Let's see if the leaders (who likely are living in pretty decent abodes and don't want them vandalized) come up with a solution at that point. But that's just me.

[librechik]

41. better yet, a general strike, like they do in Europe. Followed by an emergency

"collective" : stakeholders in Scranton determined to save the city using humanistic solutions.

Just a first step to reorganization -- I'm no expert, but municipal debts need to be written off or delayed.

[TBF]

42. Agree - folks have to be thinking in this direction

because frankly the very richest are ultimately going to hire their own private security and that sort of thing, leaving the rest of us pretty much destitute. The writing is on the walls.

[librechik]

52. take our government back--for real

total citizen participation and cooperation (a girl can dream, right?)

[FrodosPet]

54. What about people who refuse to participate?

What about people who don't want to learn every detail of every issue?

I have some dear friends, one of whom is mildly developmentally disabled, who refuse to watch or read the news. Should they be forced to?

And what happens when people don't vote the way you hope? For example, taxes? If the majority votes to reduce taxes, or freeze them a la Headlee?

It's not my desire to be a contrarian. It just seems like it is my destiny that I cannot help but piss people off by pulling things apart to see how they work.

[TBF]

55. My response to that is help or get out of the way. nt

[Chan790]

128. I suggest the city employees declare his actions a violation of their labor agreements...

and stop showing up to work. Government flu.

Taxpayers never appreciate what they have until it's gone. The mayor will have an angry mob insisting that the city council raise taxes before the first structure burns or the cops stop showing up.

[krispos42]

8. Then I suggest the city workers start putting in minimum effort

To keep production in line with pay.

[Fawke Em]

15. Does this include the mayor and the city council's paychecks?

Anyone know?

[Enrique]

18. the headline says "workers"

which means people who do work. So in other words, probably not.

[badtoworse]

22. As I understand it, it's everyone, up to and including the mayor.

[TBF]

25. Do you have a cite for that?

I have read that he cut salaries "on his own" - meaning without consultation with anyone - not that he cut his own salary. Would love to see proof of that if it's true.

[badtoworse]

39. Try these

http://www.huffingtonpost.com/2012/07/05/scranton-minimum-wage-city-workers-mayor-chris-doherty_n_1652271.html
http://www.cnbc.com/id/48132752

[TBF]

43. Interesting - wonder about his family background

and how he is going to feed his 6 kids on $7.25/hr ... if he's got inherited wealth I guess it will be easier for him than others. If anyone sees more about the mayor's personal finances I'd love to read it.

[nadinbrzezinski]

24. Yes

[KansDem]

16. Looks like gross fiscal management from the mayor on down...

From the Times-Tribune--

Accountability

Not that the supermajority didn't have a point.

The SPA <Scranton Parking Authority> is a ticking time bomb of mismanagement and bad debt. Its incompetent board and administrators were hand-picked by Mr. Doherty <the Mayor>. I actually gasped when I learned that SPA executive director Bob Scopelliti was being paid $83,200 a year and had an expense account.

His salary was cut Wednesday by 18 percent to $68,250, which seems awfully generous for the head of an authority that has amassed $100 million in debt and can't pay its bills. Again, the mayor's salary is $50,000. The median household income in Scranton is about $39,000.

http://thetimes-tribune.com/opinion/editorials-columns/christopher-j-kelly/chris-kelly-scranton-s-only-real-hope-could-be-the-apocalypse-1.1327685

Looks like it's time for austerity!

[HiPointDem]

98. that parking bond deal looks pretty corrupt to me. esp. since the parking authority people

aren't sharing in the austerity.

[NNN0LHI]

17. Who doesn't think it can happen to them?

We took our first concession contract in 1982. And we lost more every contract after that one.

I know all about this stuff. First hand.

Don

[TBF]

23. Yes, I've seen your posts -

I think you definitely understand what is going on.

[TBF]

20. Interestingly CNNMoney ranked it as one of the

10 fastest growing real estate markets:

12-month forecast: 2.2%
Median home price: $128,000
One year price change: 7.2%
Five year price change: 41.1%
Change in foreclosure rate: 8%

http://money.cnn.com/galleries/2008/moneymag/0805/gallery.resg_gainers.moneymag/7.html


So, what is going on here?

[Starry Messenger]

60. Out here fly-by-night LLCs are buying up foreclosures at auction and turning them into rentals.

Don't know if that's the reason in Scranton, but it could be an avenue of investigation.

[HiPointDem]

99. that *is* interesting.

[jody]

56. Common sense says taxes simply shift private spending to government spending.

Competition in the private spending sector shifts demand to the least-cost product/service.

Good or bad that’s why so many DUers buy products made in other countries and not the United States.

In general government whether federal or local has a monopoly to provide services. That has resulted too often in inefficient services and in the end bankruptcy for the government agency.

Sad about Scranton but what would you suggest the city do to prevent forcing citizens in the future from paying via taxes for inefficient services?

[TBF]

59. I disagree with your framing -

privatizing services is not the answer. We've seen where that road is taking us.

[jody]

63. I said nothing about "privatizing services". Do you have a solution to the problem? nt

[TBF]

69. As I said, I disagree with your interpretation of the "problem".

The problem is that we have localities going broke. Detroit, Scranton, there will be many more ... how do we deal with this? Do we just close these cities, wipe them off the maps, and make the citizens move elsewhere? Or do we look at this, realize that privatizing everything has come at a huge cost, and in our zest to cut taxes we have gone too far?

I think your answer depends upon whether you value capital or people. Just by your interpretation of what is happening here I can guess your response to that question.

[jody]

109. LOL please start your own thread stating your proposed solution and I'll be delighted to read and

reply.

One possible issue you can consider is how much We the People should allow individual freedoms to be diminished at the expense of increasing the power of central government.

[TBF]

110. lol I already started a thread -

and I'm not going to waste my time spouting off republican/libertarian talking points. That, evidently, is your area of expertise Mr. "individual freedoms". Freedom to bailout corporations, freedom to outsource, freedom to fire folks, freedom to break unions, freedom for corporations to declare themselves persons, the list goes on and on ...

[jody]

112. My statement "taxes simply shift private spending to government spending" is based on economic

theory independent of any political agenda.

Since you disagree, please explain how government taking a dollar of your money as taxes does not reduce your personal spending by one dollar and increase government spending by one dollar.

IMO the issue is a simple zero-sum game as Eisenhower recognized and warned about in his Chance for Peace speech, April 1953, "Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed."

[TBF]

113. No

your statement "we the People should allow individual freedoms to be diminished at the expense of increasing the power of central government" is clearly a right-wing talking point. And I responded very clearly to that - the only freedom for anyone in this country happens when they reach the top 5% or so. Given the gap between the wealth of the top 1% and everyone else, even going down to 5% and assuming some freedom at that level is generous on my part.

[jody]

114. "right-wing talking point"! Have you ever read the Kentucky & Virginia Resolutions by Jefferson and

Madison defending the 10th Amendment. Those two legends started the Democratic Party.

Have a great day and goodbye

[socialist_n_TN]

111. How can you call it "freedom" when an owner..........

is a penny-ante tinpot dictator with control over your very livelihood? Yeah, that's freedom all right. For a few. What about the rest of us?

There's a reason socialism is called "economic DEMOCRACY". How can you support democracy everywhere except where you earn your living/existance?

[jody]

115. Understand your anger and hostility but you do have the freedom to start your own company and

compete with your current employer.

Run it out of business and show society how companies should be run.

[TBF]

122. You can't start companies without capital -

and right now that is getting much more difficult with the top 1% hoarding it.

[jody]

139. If you prepare a business plan, see link to SBA for help, that has promise,

please send me a message and I'll help you raise capital.

See http://www.sba.gov/category/navigation-structure/starting-managing-business/starting-business/

[HiPointDem]

135. why are you here? i think you want the neoliberal forum.

[jody]

138. Why am I here? I'm a Yellow Dog Democrat in the Jefferson/Madison pattern, the founders of my

Democratic Party, authors of the Kentucky and Virginia Resolutions!

Why are you here?

[TBF]

140. He's here because he's socially liberal and fiscally conservative like Obama -

there are many others who are the same.

After 30 years of conservative rule you'd think the pendulum would swing back ...

[HiPointDem]

134. bullshit.

[Blue_In_AK]

57. Police and firefighters will move to another city

where they can earn a living wage and Scranton will be enveloped in chaos. I wonder if the mayor will have a "plan" then.

[TBF]

61. See "Detroit". Thank you for your comment because it is the reason I took the

time to actually bring the story here and spend some time replying to folks. This is not just Scranton. This happened in Detroit. This will happen elsewhere ... symptoms of a much larger problem.

Everything is being privatized and there is a very small subset of individuals in this country who are profiting handsomely (and storing their profits offshore). Meanwhile so many folks - millions of us - are quickly dropping from respectable middle class to just scraping by at best. This is not going to change if we sit back complacently and wait for change. I have no problem with voting (I volunteered on Obama's last campaign and will do it again) - but make no mistake that our involvement cannot end there. If we don't figure out how to take Occupy to the next level we are all going to be living in Scranton, metaphorically speaking.

[mike_c]

64. since this undoubtedly violates their collective bargaining agreements...

...every one of those workers should strike as soon as they can organize it.

[TBF]

70. They're filing law suits but they need to be in the streets -

and unions that were well-organized would have brothers/sisters across the country striking in solidarity. Police on the picket line across the country would send a good loud message to home-owners. You want protection? You pay us more than minimum wage.

[socialist_n_TN]

72. Don't you know mike, contracts are only for the wealthy.........

not the "common people".

[Bake]

65. Did Hizzoner cut his OWN pay to minimum wage?

I'm betting not.

Bake

[former9thward]

66. You bet wrong.

The mayor's wages as well as members of the City Council were also cut to minimum wage. http://www.cnbc.com/id/48132752

[Bake]

100. Well, I'm shocked.

Bake

[sweetapogee]

75. I have been on DU for 2 or 3 years

Last edited Wed Jul 11, 2012, 07:01 AM - Edit history (1)

and I'm not a big poster on DU. Basically I limit myself to Fire fighter and EMS topics and the economy.

OK, I presently live in Carbon County and have roots in Scranton and Wilkes-Barre and NE PA Fire service and EMS. So while I'm not an expert on city workers rights, I know Scranton, it's politics, it's current economic situation and the present economic situation under discussion. If I piss off someone including the OP poster so be it because I love NE PA, my home and the disinformation here is really sad.

First of all, here is a fact that NO ONE want's to hear and I don't want to say but it is the truth. EMS in Scranton is run by private providers so even if you call 911 and fire is on strike, you will get a ride to the ER. They, the medics in Scranton got their full pay last week even if the FFS didn't.

Next, last week when the firefighters were getting paid $7.50/hr, Vice President Biden was in town hob knobbing with the Mayor. Oh yes, and did you hear one word about this? Scranton is the birth place of the VP, did you know that? Did you know that US Sen. Bob Casey is also a son of Scranton?

Let that sink in for a minute.

Scranton is as Demacratic a city as they come. The homeowners in Scranton pay a lot more in taxes than everyone outside of the city. Scranton is basically a wreck. 30 years ago there were 100s of good union factories in Scranton. All gone today. If there are any rich people living high on the hog in Scranton please give me their names.

If there was any possibilty that Scranton could benifit from throwing rocks at the repukes, then who on this side of sanity thinks that the dems running Scranton would not be doing so?

If the Mayor is thrown in jail it will solve nothing because there is no money to pay the workers. Many on DU is saying that the PA legislators will not allow Scranton to declare ch 9. Someone please tell me how the pukes in Harrisburg can stop the city of Scranton from filing the paperwork in a court to declare chapter 9? How does the state exercise that kind of control over the federal courts?

The reason why the dems running Scranton are not throwing rocks at the pukes is very simple. The City does not have any kind of fiscal plan. There is no BANK on this earth that will lend Scranton the millions it needs without a practical plan, something that those running this cily have avoided doing for years. The kid's running the city know that they are kids and do not want the party to end and thus here we are. Sorry if that offends, gets me thrown out of here, whatever, but that is the truth.

Blaming republicans may feel good, may be factually correct but in the case of Scranton PA is not helpful at all. The Mayor and City Council of Scranton does not, I repeat DO NOT want the eyes of the nation and the bookkeepers of the Banks looking at them.... end of story...

[Hassin Bin Sober]

76. "Someone please tell me how the pukes in Harrisburg can stop the city of Scranton from filing"

The US Constitution (10th Amendment) recognizes the states' the authority to manage their own affairs.

The municipalities are charters of the state so the BK court recognizes the state's authority to manage the municipality and make the decision FOR the municipality.

In this case, the state passed specific legislation barring filling. The BK court has to honor that.

You've heard of state's rights? Yes? Ever hear of town's rights?

Some states require authorization and some don't. Some states, apparently, step in while a town is considering BK.

[sweetapogee]

77. great response!

But Harrisburg filed... see this: http://www.reuters.com/article/2011/10/12/harrisburg-bankruptcy-idUSN1E79B0DS20111012

[jtuck004]

84. Harrisburg got thrown out. They did not have permission from the state. n/t

[sweetapogee]

86. that

did not stop them from filing though.

[jtuck004]

87. Could they not find something useful to do? That's like 'pubs voting to oust O's insurance plan

while 30 million people who we need to have working watch.

If the council at Harrisburg had all worked at McDonalds for the day and donated the proceeds to the city they would have had more impact on the problem.

[sweetapogee]

89. I understand and appreciate your frustration.

There is no easy fix for Scranton. The problems are years in the making and quite frankly I see the very real possibility that the city ends up laying off a large percent of it's public workers. Not much in the way of good news with respect to this city. I get no pleasure out of saying this.

[Hassin Bin Sober]

96. That will likely get tossed. The BK court will defer to the state.

In a statement, Assured questioned the vote's legality, saying that as a distressed city of the third class of Pennsylvania cities, Harrisburg is "specifically prohibited from filing for bankruptcy."
"Assured Guaranty realizes the complexity of the situation facing Harrisburg and continues to be eager to work with Harrisburg, Dauphin County and the Commonwealth in formulating solutions to address Harrisburg's debt."

The company "also strongly supports the efforts of the Governor and the Legislature to reach a prompt and fair resolution of Harrisburg's debt obligations."

[sweetapogee]

104. not to pick nits, really

Last edited Wed Jul 11, 2012, 02:26 PM - Edit history (1)

but I have read in numerous places that most likely Harrisburg will try again. This issue isn't settled and the problems are not fixed.

But really the chapter 9 issue really isn't the main event with respect to Scranton. Neither the Mayor or the Council are asking for or considering ch 9. The reason it comes up is because at least on paper it gives the city a chance to step back and come up with a unified plan of action.

Again, the problems are immense and complicated but the city has a huge liability on bonds issued by city commission and funding for salary, pensions and benifits. Thats on the payable side, on the receivable end the city does not have a fiscal plan going forward that is workable. There are around 70K people living in the city that has a budget and workforce more in line with a 150K population. I hate to say it, really, but I think before this is over, the political SWHTF with the citizens of Scranton and it might not be to our advantage.

I love Scranton, always have but parts of it are quite ragged, almost shocking actually. If the city wants to attract businesses for those who want to work there it is going to have to re-think it's policies. I personally would not buy a home today in the city, or any city for that matter where just one mile outside the limits property taxes are half, the streets are safer and there are actually places to work. I've become spoiled living in Carbon and really don't want to relocate right now so it's a moot point.

Simply driving through the city of Scranton will cause a emotional reaction out of anyone who goes there. There is so much good there but you cannot shake the subtle hint of despair right there on the perimeter. A lot of that negativity goes away when you consider nearby Wilkes-Barre which is slightly smaller than Scranton. My daughter goes to Wilkes Univ. and we just love that city. She wanted to live on campus and we have really no fear for her safety. That city has it's issues but you get a sense that it is looking more toward the future than Scranton which is currently in hunker down mode.

Enough for now, take care friend, enjoy chatting with you about NE PA Coal Country! It is really a unique place. lots of history, beautiful landscape. It is the birthplace of the industrial revolution and the labor movement. We are close to NYC but 180 degrees opposite in many ways. If you ever get a chance to visit you will have a great time!

[TBF]

79. Thanks for your comments and I'm not pissed at all -

we may disagree on overall political orientation (I am a socialist - in favor of nationalizing most industries). My way of solving these local problems is to immediately bailout from the federal level. If I were Barack Obama I declare Scranton a disaster area - just like a weather disaster - and pump some cash in immediately. Today. Your EMTs may be privatized (which is another thing I'm against - I am against capitalism flat out) but your police and firemen are not.

Yes, you heard me, bailouts for people rather than just bankers. We have the power of taxation on the federal level and we need to use it. There are billionaires pillaging this country on a daily basis while others are homeless (or will be soon). That is not right.

Repugs vs. Dems - I'll handle that question straight up as well. I believe that the dems do a better job on social issues and at least used to have the idea of nationalizing services - whether they do anymore is up for debate. I'll still be voting for Obama, but truly we should not be making excuses for anyone. I am not going to bury this story simply because we have an election coming up. This is too important. As I've said in other posts - today it's Detroit and Scranton. By next year this time it's a thousand more little cities who decide they too can help their books by doing away with all the contracts and putting everyone at minimum wage. This is a huge issue.

Thanks for your local perspective on the issues, very much appreciated.

[sweetapogee]

80. thanks!!!

but not to sound like a broken 33 1/3, I don't think that the current management in Scranton want's any federal bailout money because they don't want the oversight that comes with said aid.

take care TBF!

[TBF]

81. Well the current management can be replaced.

You take care as well.

[nc4bo]

83. Bond Guarantees. New York Times article that explains some more. Not just Scranton but

many other cities and towns throughout the U.S. Very sobering.

http://www.nytimes.com/2012/06/26/business/surprised-taxpayers-are-paying-for-bonds-they-did-not-vote-on.html?pagewanted=all

Scranton’s version of a debt crisis began when a local parking authority said it couldn’t make a bond payment coming due in June, calling on the city’s guarantee. The authority had issued bonds to finance parking garages that the city had used in a campaign to woo Hilton Hotels and Resorts to operate a conference center downtown.

Each time the authority issued more bonds, the city backed them with a powerful “full faith and credit” guarantee. But by 2008 the authority had $54 million in bonds outstanding, and was spending about 60 percent of its budget on debt service — so much that it could not cut parking rates to compete with cheaper parking lots nearby.

A majority on the City Council refused to honor the guarantee, saying the authority’s finances were in disarray and they wanted to strike a blow for fiscal rectitude.

The entire article is really worth the read and really explains how cities get into these situations.

[Blue_Tires]

91. Taibbi had a huge piece on this, too

[HiPointDem]

97. the taxpayers weren't given a chance to vote on the bond question -- who made that decision?

if it's the same city council, first order of business is to fire their scamming asses. and the mayor.

[jtuck004]

85. So it's either raise taxes to the point where it directly pays for city services

or figure out some way to get investment that will create enough new opportunities to bring in business tax to pay for those services?

Borrowing would be silly, because there are at least a couple decades of this same crap ahead, and the lenders are right not to loan without a plan.

So it sounds like what will probably happen, given how freakin' helpless anyone seems to be at investing in our people and country for growth, is some kind of tax increase which maintains some shred of the status quo with some layoffs, or privatizes those services?

I used to work for a private ambulance service - if you didn't pay the tax (i.e. membership) the ride to the hospital was $800 and up, now I think it is $1200 and up). Is it the same there?

[sweetapogee]

90. I'm south of Scranton

but I think your figures are about right. An ALS trip here for non-members that are not covered by insurance is $900.00 in my area. BLS is $400.00. Membership for the whole family is $50.00/year. Still, the ambulance association eats a fairly good percentage of receivables. You can't get blood out of a stone and you cannot deny service.

[NNN0LHI]

101. Well, let me ask you something then sweetapogee

Where do you think those 100s of good union factories in Scranton moved to in the past 30 years?

Are most of the garages, driveways and parking lots around you like the ones around here? Full of imported and non-union made cars by any chance?

And who was president 30 years ago when this all began?

Don

[sweetapogee]

105. no argument

Don't confuse me with someone defending outsourcing, please.

Actually, I think folks around here are quite loyal to US car makers. Of course the decline of the area is mostly coupled with the decline of the anthracite coal and the steel industries. In the Lehigh Valley (Allentown) Mack truck has moved a lot of mfg to North Carolina and as you know if you are a fan of Billy Joel, Bethlehem Steel is no more more. Here in the Wyoming Valley a lot of textiles have also moved to the southern states. The weather in NE PA is also not that great so old factories that need upgrades find it easier to simply move down south.

One other note of criticism toward current attitudes in government policy, we are sitting on a huge amount of anthracite. If we were to find a way to mine it respectfully and burn it cleanly this whole area would be total gangbusters.

Agree or disagree, I only offer some explanation not a fix for the current fiscal problem in Scranton. A long term solution needs to be crafted not a dwelling on the past mistakes or miscues.

Have a great day!

[reformist2]

82. Free trade is destroying the tax base of hundreds of cities across America.

We're going to need to figure out a solution. If we can't figure out a way to create jobs in these cities, taxing the wealthy and redistributing wealth is going to be the only realistic option...

[TBF]

93. Yup, that's the way I see it as well -

and that is the only realistic choice if we want to keep this pleasant. And frankly that is what Obama, Pelosi, Reid etc ... should be saying both in the open and behind closed doors.

When people have nothing left to lose they are going to be in the streets. And good luck controlling them if you've laid off all your police. It's not going to be pretty.

[upaloopa]

102. As a government worker and union member, if my pay was cut to minimum wage because

the good citizens of our community didn't want to pay our salaries I would hope we would go out on strike. Then when they dialed 911 they would get "the number you called is no longer in service" and they damned houses would burn to the ground and when in a car wreck no EMTs would show up etc.

[TBF]

103. Solidarity brother -

that's exactly what my dad would say. I'm old enough to remember unions in this country, and painting strike signs in the 70s with my dad. It's time to get in the streets again.

[sweetapogee]

106. maybe I should just stop now BUT...

somehow, someway this problem in Scranton is going to be resolved. When it does get resolved the workers will get back pay. The FFs know this. In a technical sense the taxpayers have not been asked to pay more at least yet, this is really a tug of war between the Mayor and City Council. The problem you see is that the city has a liability problem which is bleeding funds from the general account. It is not a case of greedy tax payers, no sir.

As far as a firemen's strike goes, I don't think that will happen for several reasons. First, the FD is overstaffed and the FFs know it. This would just give the city the excuse it needs to thin out the herd. Second, a no-strike clause would subject the FFs to arrest. Once you have an arrest record, your FF/EMS/LE days are over, it goes with the territory. Finally some entity is going to put the fire out or cut the patient out of the car. Scranton PA isn't NYC and is surrounded on all sides by communities that will send their FFs in. Tobyhanna Army Depot has a fire company that would be quite capable of doing the job. But it's not going to get to that point so why get all worked up over it?

I and other have said it over and over again, Scranton is a Dem friendly city. the IAFF isn't going to call for a strike. The other city depts might but not fire.

[TBF]

107. What is going on with that general account? nt

[sweetapogee]

108. again complicated

but for a start, check out what another poster has in post #83

BTW, the Unions were back in court today.

[jody]

116. Good point and that's your right and a governor has the power to activate the unorganized militia to

do such things as law enforcement and fire fighting etc.

Of course under federal law the unorganized militia in every state includes all males between 17 and 45 and in some states it includes men and women between 17 and 64.

Wouldn't that be a hoot if striking government employees were activated by a governor as unorganized militia to do the very job from which they left?

[upaloopa]

118. As a government worker I have sworn the same oath to protect and defend. If called I would have to

do whatever emergency job I was assigned to do.

You see, the good citizens get a twofer from us. Something you seem to think is funny.

Why would you not stiff your creditors yet are willing to stiff us and laugh when we would have to protect your ass for free if called on?

[jody]

119. Sorry but you misjudge me, I've been a govt. worker. I simply pointed out the power each governor

has to use the unorganized militia. Something that many who post on DU don't know when they proclaim they aren't in the militia.

Sadly more cities will declare bankruptcy and others drastically limit spending.

Cities are already eliminating their police force and letting their county sheriff pick up law enforcement.

Don't know what the future holds for cities, counties, and states but deficit spending is no longer possible.

[upaloopa]

121. Sorry about that. What most people don't understand is that we could be ordered to work for free!

We take classes in diversity and how to be nice to the citizens who are called customers. We are told we serve the public. Yet the public has no shame in kicking our asses when ever it suits them.

[HooptieWagon]

120. It sounds like the problem lies with the parking authority.

Did a previous mayor and council approve this? If the city can proceed with a bankruptcy, then a judge can determine what happens. Sounds like taxes should go towards services, and the parking authority assets given to the creditors. And it appears the parking authority officials should be investigated.

[OrgExp]

123. No thought whatsoever toward reducing spending?

I find it particularly interesting to read through all of these comments and find that nobody even suggests the possibility of looking into the town's operations and finding out what, if anything, might possibly be cut in terms of spending.

Conceptually, you have to think about this first at the smallest possible level.

Let's say you live in a condominium building. Each month, along with every other condo owner in the building, you pay an assessment. This assessment is what funds the operations of the building. Electric, gas and water bills for the public areas. Cleaning. Garbage removal and/or recycling. Security. Elevator maintenance. On and on. All of these things add up to a monthly budget, and the assessments are paid accordingly to cover the expenses. This would be akin to the taxes of the town paying for things like police and fire and ambulance if the town has a hospital.
___________________________________________________

Please note as well, those of you who have never lived in a rural community, that these services are not human rights. They exist as towns are able to afford them. They do not magically appear out of the ether. I grew up on a farm, for instance, and fought a few fires with just our family and help from the neighbors.
___________________________________________________

Back to our condo board example. Let's say, for instance, someone on the board thinks it's a great idea to add two floors to the building, and he hustles up the board votes to do it, but they don't want to raise assessments on the building. They decide to take out a loan to fund the construction, figuring that they can charge the future tenants a higher assessment to make up the costs. Except then the downturn hits, and they can't get anybody to move in to the new floors, meaning they can't pay the loan. Except the building is on the hook for the loan, which means all the people who live in it. So the board tries to raise the assessment, and they're voted down. What are they to do?

There is a reckoning to be dealt with. They need to look at the services they pay for every month and decide what services they can forego. Perhaps they eliminate cable in the workout room, cancel the security guard contract, renegotiate the cleaning contract to be once a month instead of once a day, and cancel the recycling portion of the garbage removal. Services in the building are reduced dramatically, life isn't as comfortable, and people complain. But those people also don't pay any more than they already were, so everybody deals with it.

This is effectively what municipalities are dealing with. The spending was running rampant and unchecked, and now it needs to be reined in, because they don't have a choice. It's not a political issue, it's an economic issue. At the end of the day, you can't argue the numbers, no matter the political system. Outspending resources has ultimately collapsed every government, whether it has been authoritarian, totalitarian, socialist or communist. Capitalism has been the most resilient as it's able to generate the most overall revenue, but we're at a point now where even our economy is shuddering under the weight of government spending at every level. If spending isn't reined in, it won't matter what your political beliefs are, you'll be fending more for yourself than you certainly ever planned on.

[aintitfunny]

124. What spending is rampant & unchecked?

I think it is safe to say when they are down to reducing salaries of employees to keep more people employed in tough times is not indicative of rampant and unchecked spending.

Economic issues have several factors, spending is one of them. Spending has been addressed across this country.

This Congress has put more onus on the states, the states put more burden on counties/cities, the municipalities have nowhere else to go.

Congress is at the heart of the problem with their inaction. They (Republicans) are the big spenders in reality and they are the people now seeking austerity for everyone but themselves and their owners.

[OrgExp]

126. Rampant & Unchecked?

I didn't suggest that Scranton's spending was, in fact, rampant and unchecked. I wondered why nobody thought to question it. Even now you assume that it MUST have been looked at because they're cutting salaries. But has it really been? Who knows, unless someone digs deeper into it?

[TBF]

131. Defense - rampant and unchecked. Close every overseas base.

That's right - every single one. Bring the soldiers home and put them to work rebuilding our infrastructure. And that is just a start.

[socialist_n_TN]

132. Tax breaks for the wealthy nationwide-rampant and unchecked............

That's right. The top tax rate is 60% (approximately) lower than during the Eisenhauer years. The productivity of workers has risen by $130k EACH since the 80s, yet wages for that worker has stayed the same. Most of that rise in productivity has gone to the wealthy for tax breaks.

It's simple. Tax the wealthy back to Ike (a Republican) levels and give grants to cities for essentian services.

[PETRUS]

125. Scranton's problems did not originate in Scranton

That's not the only reason why your suggestion "to think about this first at the smallest possible level" is flawed, but it might be the most important one to point out.

Scranton's problem is that $1.5 trillion dollars worth of annual demand was pulled out of the US economy following the collapse of the housing bubble. This has much more to do with Wall Street, the Federal Reserve and various DC policy makers than it does with Scranton's residents.

You seem to be among the people who have been tricked into believing the problem is that we're poor, and therefore we must tighten our belts. This is not the problem. We are rich. National income is close to $50,000 dollars per person, and I mean every person - man, woman, child, newborn baby. Businesses sit on trillions and unemployment is high because we are able to meet demand and still have idle capacity. This is a situation of abundance. The problem has to do with distribution.

[OrgExp]

129. Poor

I didn't make any argument as to whether anyone is poor or rich.

You've been reading too much Krugman if you're going to boil down a local economy's woes to being a problem of aggregate demand at the national level. Even if his ideas were right, production by the overall national economy couldn't help Scranton's local government with it's mismanaged budget anyway. Local governments are primarily funded by property tax, and there's nothing that's going to bring housing values skyrocketing back to where they were before. The housing market is correcting itself and even if it were as simple as waving a magic Krugman wand and directing that supposedly idle capacity to some useful means of production, it couldn't possibly be in the area of housing. Now, if they were lucky enough to be sitting on the next industry that would boom from the Krugman-wand-wave bubble, then sure, they'd have all the new revenue they'd need. Other than that, it's just going to be a hard slog out of it for them.

It's not as if hard times have never befallen a municipality before. Asheville, NC went through it and it just took a really long time to pay down their debt. It also resulted in Asheville remaining one of the best Art Deco downtowns anywhere.

Because of the explosive growth of the previous decades, the 'per capita' debt owed by the city (through municipal bonds) was the highest of any city in the nation.[19] By 1929, both the city and Buncombe County had incurred over $56 million in bonded debt to pay for a wide range of municipal and infrastructure improvements, including the courthouse and City Hall, paved streets, Beaucatcher Tunnel, school buildings and municipal parks. Rather than default, the city paid those debts over a period of 50 years. From the start of the Depression through the 1980s, economic growth in Asheville was slow. During this time of financial stagnation, most of the buildings in the downtown district remained unaltered. This resulted in one of the most impressive, comprehensive collections of Art Deco architecture in the United States

[PETRUS]

130. What you said.

You suggested that the problem is public spending that we can't afford. So you are at least positing that we are poor in a relative if not an absolute sense. That was my point

So has Scranton made budgeting errors? In an earlier post, you suggested someone ought to look into it, now suddenly you are describing it as mismanged. Do you know something? I don't. In either case, it is indisputable that the collapse of the housing bubble and a subsequent drop in aggregate demand is hurting them. Production from the overall economy can, in fact, help Scranton. We could choose to allocate funds via the Federal goverment, and we should.

You are right to suggest that there are individual stories to be told city by city (and even business by business, or worker by worker) but it's important to identify the biggest problems and prioritize them. Right now, joblessness is a bigger problem than debt. Eventually we need to make other changes to our crisis-prone, inequality-producing system but bringing public spending down to a level that might please people like you and Paul Ryan is not the solution. There is one item to worry about in the Federal budget and that is Medicare/Medicaid. And here the problem is not that benefits are too generous, the problem is that we are overpaying providers. The story behind this is the political influence of medical equipment manufacturers, pharmaceutical companies, private insurers, and high-end specialists. Other wealthy countries spend half as much per person as we do and get better results. If we plug in the medical costs of a country like France or Germany and change nothing else, we would be projecting budget surpluses.

A few words about public debt: This is mostly money we owe to ourselves, much of it in the Social Security trust fund. A not insignificant portion is held by Chinese and others outside of our borders, but this is a function of the trade deficit. And now would be a good time to point out that our trade policy (and immigration and dollar policy, because those things factor in as well) is a policy designed of by and for the 1%, and they are doing just fine. The rest of the debt is held by Americans. The 1% owns about 60% of all financial securities and the top 10% own 98%. So most debt, public and private, is money the rest of us owe to the very wealthy. Instead of taxing Bill Gates and Pete Peterson to pay for education ($1 trillion in student loans!) and other public services, we've been borrowing it from them which means your grandchildren are going to owe their grandchildren. So debt, too, is a problem of distribution.

(PS. I am way to the left of Krugman.)

[pinto]

133. How about increasing revenue? Yeah, I mean taxes. Many municipalities, and states, cut taxes

in response to some version of "populist" dissent. (See CA's Prop 13 as a prime example of low tax political pandering). Revenues inevitably fell. And fell. Contractual agreements and basic services needed to be maintained, though. Push came to shove and the "populists" called on cutting services as a solution. They ignored the option of returning to fair, reasonable and effective tax rates in conjunction with fair, reasonable and effective budgets.

They made a decidedly political point, not an economic point. We're all paying for their shortsighted, divisive political manipulations.

[shanti]

127. the gropenator tried to do this to california state employees

fortunately, he was stopped.

[HiPointDem]

136. Apparently the parking authority is sitting on a spare million and still asked for a bailout.

Last edited Wed Jul 25, 2012, 07:01 AM - Edit history (1)

It's the $1.1 million question. Scranton City Council wants to know how Scranton Parking Authority's debt reserve increased from $3.2 million to $4.3 million in the past 18 months, particularly at a time when SPA had been seeking - and eventually received on June 14 - a $1 million bailout from the city.

Council questions whether SPA had been parking cash into the debt reserve fund while simultaneously seeking since October for the city to cover a SPA budget shortfall. Council questions why SPA didn't tap any possible excess debt reserves instead of asking the city to cover the debt.

On Thursday, council voted 4-1 to ask SPA to either return the $1 million in bailout money or any excess in the debt reserve than is legally required to be there.

"Obviously, there's an extra $1 million floating around that the parking authority now has that the city does not," Councilman Pat Rogan said. "It's just a giant scam on the part of the parking authority. It's a scam and the taxpayers were had for $1 million."

Mr. Rogan said, "The question has to be answered: why was $1.1 million put into that (debt reserve) fund, or if the investments made $1.1 million, why wasn't that taken out of the fund to pay the debt instead of coming to the city" for a bailout.

http://thetimes-tribune.com/news/scranton-parking-authority-faces-1-1m-question-1.1346557


The parking authority's supposed shortfall is what set off this whole chain of events. Their exec's salary is higher than the mayor's. How much management can parking in a city of 75K need?

Feels like some big fraud going on.

now they've replaced the bond trustee:

Scranton Parking Authority's bond trustee is replaced

Bond insurers for the beleaguered Scranton Parking Authority have replaced the bond trustee that oversees the agency's debt, city council announced Thursday at its meeting.

Asked if the appointment of a new trustee could be a first step in a council-sought dismantling of SPA, council solicitor Boyd Hughes said, "Yes. That's the first move..."

On June 6, the SPA board cut the pay of the authority's three managerial posts. Then, on June 15 former SPA solicitor Paul Kelly, who also is city administration solicitor, resigned from the SPA post, citing a potential conflict of interest if SPA and the city become legal adversaries. The council majority previously had been calling for Mr. Kelly's resignation.

On June 20, SPA appointed Mr. O'Brien to replace Mr. Kelly. It was on that same day that SPA's bond insurers, Radian Asset Assurance and National Public Finance Guarantee Corp., replaced former SPA bond trustee Bank of New York Mellon with Wells Fargo as the new trustee, Mr. O'Brien said...

Councilman Pat Rogan said, "I hope they will be placed into a receivership. Right now there aren't any signs they're folding up."

http://thetimes-tribune.com/news/scranton-parking-authority-s-bond-trustee-is-replaced-1.1339929

[TBF]

137. Interesting - thank you for the update on this! nt