Rahm Emanuel versus the machine

Important things are happening in Chicago. With the fastest-growing urban core in the nation, Chicago is at the crux a major cultural transformation. Wealth and influence that shifted to the suburbs in the years after World War II has pivoted back downtown. Out of that transition, nascent political alliances are emerging. If those new alignments can survive a conservative backlash inside both parties, they might eventually offer relief from our national partisan gridlock and signal an urban renaissance.

A nominally Republican Illinois Governor and a nominally Democratic Chicago Mayor are joined in an awkward alliance to replace what remains of the old political machine. Resistance to this change is so strong that Mayor Emanuel faces the first runoff election in the city’s history after failing to win 50% of the vote in the first round.

Frustrated by the muddle of Chicago politics, pundits are mischaracterizing this election as an effort by the Democratic left to reassert itself. It is easy to get confused. A mayor with major financial backing is fighting against unions. Unions always represent the interests of struggling poor people. Hence, the distorted narrative.

Nothing remotely like this is happening on the ground. Let’s be clear, Mayor Rahm Emanuel is facing a challenge from the Democratic right. More to the point, Emanuel is facing a reactionary challenge from the Democratic Party of the 1950’s.

Emanuel is in trouble because he has openly challenged the last well-organized bastion of the machine that has run the city for nearly a century. His decision to close public schools that the city no longer needed and could not afford violated the code. His decision to push back against corrupt pension deals that are bankrupting the city and the state was a cardinal sin.

Political influence in Chicago has always been based on the ability of the mayor and the Democratic Party to dole out public jobs to loyal operatives. Since the Shakman decrees in the late ‘70’s it has been harder to operate this machine in the open.

It is now illegal to expressly tie public employment to party loyalty. Public employee unions have grown more powerful in Chicago as a sort of proxy between the machine and its politically tied employees.

Emanuel, in typical Emanuel style, identified Chicago’s thorniest problem from the outset and immediately determined to untangle it. Chicago’s future growth and prosperity is stunted by a school system that does not meet its students’ needs and a collection of pension obligations it will never meet.

Chicago’s public schools do not suffer from a funding problem. CPS spends just as much per student as some of the most elite suburban districts. Chicago suffers under a school system which has, over the course of half a century, developed into an extension of the machine. Its mission of educating young people is subject to its primary mission – to reward loyalists with good paying jobs.

Enrollment has, not surprisingly, been in steady decline for decades. Enrollment in Chicago schools has dropped by a third since 1970. Meanwhile the number of schools continued to grow, rising almost 20% over the same period. This increase emerges from the disconnect between the schools’ public service mission and their political mission. If the machine cannot produce new public jobs then it cannot feed itself.

Meanwhile the long-term costs inflicted by decades of machine politics are showing up in the city’s pension obligations. Next year’s nearly $7bn budget includes just under $700m in pension costs. Under present obligations that rises to at least $2.4bn in 2017. In other words, more than a third of the city’s revenues will be siphoned away with no compensating services or revenues.

Emanuel, with help from the incoming Republican Governor is trying to engineer pension reforms that would share the burden while keeping Chicago solvent. A combination of tax hikes and benefits cuts could create a workable balance, but public employee unions are fighting for a fantasy alternative based entirely on new taxes. The revenue simply does not exist. If they get their way they will kill the city’s growth and drive Chicago into bankruptcy.

Contrary to the popular narrative, Chicago’s public employee unions are not “unions” in the traditional sense. These are not coal miners fighting for safe conditions and reasonable wages. Public employee unions, for the most part, aggregate the political power of educated white collar workers. They are fed by largely minority and poor communities who are trapped depending on them for services. In other words, these are bizarro-unions in which a white, largely well-educated and already politically connected workforce can suppress the power of the communities that they serve.

In suburban Naperville or New Trier, the power of public employee unions is countered by relatively small political units with relatively affluent, well-connected constituents. Their harm is limited.

Meanwhile in Chicago, the massive weight of an enormous school system is set against minority and immigrant communities with relatively little organization, influence or money. The outcome is schools that consistently fail to meet students’ needs while siphoning resources away from those communities and toward the unions. Cloaking this political dynamic in traditional “union” rhetoric helps further confuse the matter, complicating efforts by those communities to gain access to the services they need and deserve.

Emanuel’s efforts to make the schools function for the benefit of students have directly challenged the power of the unions. By closing down schools that had largely emptied, he disrupted a jobs and patronage engine that had turned CPS into a piggybank for local political interests.

Efforts to introduce accountability both in financial and educational terms have earned him powerful opposition. This election is likely to determine whether city public services can be made to serve citizens or whether Chicago’s public schools will continue their long decline in enrollment. Along the way it may tell us whether a new politics of pragmatism, forged on alliances across party lines, can bring new dynamism to our cities.

Chris Ladd is a Texan living in the Chicago area. He has been involved in grassroots Republican politics for most of his life. He was a Republican precinct committeeman in suburban Chicago until he resigned from the party and his position after the 2016 Republican Convention. He can be reached at gopliferchicago at gmail dot com.

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Posted in Chicago, Cities, Civil Rights, Education, Illinois
170 comments on “Rahm Emanuel versus the machine
  1. objv says:

    Interesting. An Illinois union lobbyist is suing for a teacher retirement pension after working only one day as a substitute teacher. He is trying to take advantage of a loophole while already receiving two pensions – one for his union work and one for working as a legislative aide. If he is successful, his total pension should be $97,000.


    • flypusher says:

      He’s in flagrant violation of Wheaton’s Law.

    • 1mime says:

      teacher trying to claim two pensions….

      People like this give a bad name to the profession and are part of the fraud and abuse of otherwise good programs. There will always be cheaters, won’t there?

  2. 1mime says:

    Imagine: automatic voter registration. A most interesting voter reform…can’t wait for the challenges from the right.


    • Turtles Run says:

      Now contrast this wit the actions of Virginia Republicans that seek to change the allocation of elector votes within the state. The Electoral College votes would be allocated by district. This means that gerrymandered districts would no decide Presidential elections not voters. This approach would have given Romney 9 or the states 13 votes despite the fact that Obama won a majority of votes within the state.


      • 1mime says:

        I’ve been waiting for this. This is the beginning of a coordinated GOP effort to change electoral voter allocation in order to attain the “Triple Crown” – the U.S. Senate, House and the elusive Executive Branch. They essentially already have SCOTUS.

      • 1mime says:

        Another thing, TR, Bibi has watched the far right grab control of America’s government with impunity – suppressing the vote, co-opting the judiciary and now the assault on the Electoral College. Why wouldn’t he copycat? It’s working for the GOP? Why not Israel?

        Meanwhile, America is still on the hook to protect and support Israel regardless what political philosophy governs there.

        I am really worried about the American democratic process. The FF system of checks and Balance is being destroyed.

    • vikinghou says:

      This is really excellent. Thanks for your post. The most unsettling part is at the end where the author says we should expect more of the same behavior from the GOP. It makes me wonder about how this will eventually end—or as the French say “le dénouement.” Another civil war? Hopefully not. More likely is a schism within the GOP and a political realignment, perhaps resulting in the creation of a viable third party. Owl would love it.

    • 1mime says:

      Great article, Rob. Salon’s writers do incredible research and journalism. I was struck by this:

      “Full of scorn for their own government, the ideologues who control today’s GOP feel free to disregard any limitation on their pursuit of conservative purity.”

      I would like the conservatives posting to this blog to relate, what exactly should the role of the federal government be?

    • RobA says:

      There’s a doc on netflix about this, it’s fascinating.

      Perry was presented with a statement from something like a dozen expert fire behavioral scientists who all said that the only evidence the state had (the fire investirgators report that it was likely arson) was demonstrably wrong. And he still killed him.

      And he did it because pardoning a convicted murderer – no matter how innocent they later get proven – is too politically costly.

      As far as I’m concerned, he’s guilty of a criminal offense.

      • flypusher says:

        I’ve discussed this with the Perry apologists. They want to give Perry a pass because Willngham was a shady character, so even if he didn’t really set the fire he still deserved it. I’ve heard claims that he chose to rescue his car from the flames rather than his children. If true, that makes him a scumbag, but that’s not a capital offense.

        Philosophically, I am not opposed to the death penalty, because there are just some people who need killin’. However, since the state if TX can’t be bothered to even try to do due diligence, I would be fine with a moratorium or even getting rid of it. You can at least partially compensate someone wrongly convicted who gets life.

      • 1mime says:

        Rob, ” (Perry)…..he’s guilty of a criminal offense..” Yes he is, and he is under criminal indictment presently. The TX Legislative response? As I’ve posted earlier, they are removing authority from the independent Travis County Attorney’s office to investigate political and bureaucratic charges and prosecution to other counties.

        In Texas, that’s what happens when you are too good at your job of bringing justice to account.

  3. flypusher says:

    Speaking of teachers, I absolutely shudder to think of this RWNJ in a classroom:


    How did I miss a nuke going off?

    • Turtles Run says:

      Santorum’s face looked like he was wondering why in the hell did he sell his soul to appease these people. This woman is obviously deranged.

    • RobA says:

      Someone in the Jezejbel comments found her FB page, and it’s open. I.e. anyone can read her posts and make comment.

      Kind of funny, she doesn’t post too often, and usually might get one or two comments under them (from her friends I assume). Then all of a sudden, around 12 hours ago, comments from people who clearly don’t know her start pouring in and destroying her.

      I confess, I couldn’t help myself……


      • flypusher says:

        Well now she’ll have a good reason to be paranoid after the fact. I don’t even have to go see it; I know what internet backlash looks like.

        I really do worry about some of my relatives becoming just like her.

      • Turtles Run says:

        One of the gems she has posted:

        D’Souza did a great job in telling the truth about Obama in 2016 Obama’s America. The only thing he missed is Obama’s father. I believe Obama’s father is Frank Marshall Davis, a life long communist whom the FBI had on their dangerous persons watch list for over 20 years. Google” Dreams From My Real Father” to learn more. Also Google”The Down Low Club” to really know the communist Obama in our White House.

        The thought that she was educating children is bone chilling.

      • flypusher says:

        TR, she’s like the 5.0 version of my 6th grade history teacher.

    • texan5142 says:

      That is the base voter, be afraid.

  4. Bobo Amerigo says:

    In a previous thread, 1mime recommended the Weekly Sift. Being of amenable mindset, I started following the blog.

    In this link, the author reviews Edward Baptist’s The Half Has Never Been Told.


    Retelling a chapter of American history from a point of view different than the whitewashed version infuriates some on the right and activates their denial mechanism. This post should do that.

    [Of interest to rhetoric-obsessed me is the author’s use of the word ‘situates,’ which is frequently used in discusses of rhetorical technique.]

    • Turtles Run says:

      The section detailing the Texas Revolution is very interesting.

      Texas. In the Alamo Myth, the Texas Revolution is a battle for freedom against the imperial domination of Mexico. But actually, the 1824 constitution established after the Mexican revolution from Spain did away with slavery. The Southern slavers who had emigrated to Texas came up with a variety of dodges to keep their slaves, and figured Mexico City was far away. But when Mexico eventually began moving to enforce the ban, slave-holding Texans organized resistance, eventually declaring independence in 1836. So the Alamo really was a battle for freedom, but Jim Bowie and Davy Crockett were on the anti-freedom side.

      I always wondered about the issue of slavery and early Texas history. Unfortunately, our school system does not cover such controversial topics.

      • flypusher says:

        TR, I would recommend “Duel of Eagles” to you, a very unwhitewashed telling of the TX revolution that pulls no punches with either side. You get the dirt on Houston’s drinking problem and Bowie’s slave smuggling scams and Santa Anna’s philandering and egotism and Travis as a deadbeat father and Crocket wrestling with the hyped up out of control public persona he created.

        I think the Jackson-Houston conspiracy theory presented is interesting and plausible, but’s IMO there’s more speculation than hard evidence.

      • Turtles Run says:

        Thanks Fly. I will put that on the reading list.

    • flypusher says:

      Great link Bobo and thanks! I never knew that Haiti helped grease the wheels of the LA Purchase!

      I would pay good $ to see a live debate with the reviewer and the author, vs some of those obnoxious Confederate apologists.

    • objv says:

      Bobo, The past is truly more nuanced than we think. In New Mexico, slavery was practiced both by Hispanics and Native Americans. I went on an archeology field trip a couple years ago to see ruins of small fortresses built on top of rock formations. The archeologist, who was our guide, told us that the fortresses were built by the Navajo to prevent their people from being captured and sold by other tribes into slavery.

      While slavery in the US is almost always portrayed as black slavery, We need to remember that Native Americans and Hispanics also owned and sold slaves. Slavery in New Mexico persisted past the time Spain, Mexico and the US had made slavery illegal.


      • flypusher says:

        Yes they did, but no where near on the scale that white people did. Making slaves of war captives was nothing unique, but the enslavement of Africans as practiced in the New World by Europeans was its own special brand of evil. Just like Hitler and Stalin weren’t the first to try their hands at genocide, but they took the horrors the furthest.

        Tell me, when your children were small, would you have accepted the “but other people were doing it too!” excuse if they got caught doing something wrong?

      • 1mime says:

        Slavery as institutionalized in America cannot be sanitized from history – no matter how inconvenient.

        BTW, not only was land seized by American settlers from the Indians, but also from Mexico – from TX west and up the CA coast.

        America owes Black people so much yet treats them so poorly.

      • objv says:

        Fly, nothing I said negates the horror of slavery in the South, but just because slavery in New Mexico was on a different scale doesn’t make it any less terrible. In Chaco Canyon near where I live, human sacrifice and cannibalism were practiced. Indian tribes often used ritual torture before killing their enemies. I believe you know of what the Aztecs practiced in what is now Mexico.

        None of my ancestors owned African slaves, however, some of my ancestors were slaves or owned slaves as early as the 1300s in Europe. Slavery is always wrong. I would never tell my kids that one wrong makes a right, but to make it seem that only white, southern Americans are capable of enslaving people and committing atrocities is not correct.

      • objv says:

        Another correction: Two wrongs don’t make a right.

      • Bobo Amerigo says:

        You know, my sympathies lie more with history expressed in the link below than it does with your faux concern about the definition of slavery.


        “And no American race or ethnic group faced anything remotely resembling the black experience.”

      • texan5142 says:

        Lurking and so much to ponder.

      • Bobo Amerigo says:

        This, too:

        And no American race or ethnic group faced anything remotely resembling the black experience. Whatever hardships the Chinese or the Irish or any other immigrant group faced, once things turned around, they turned around. Only blacks experienced multiple false dawns, where rights were granted only to be later taken back or ignored. When today’s blacks look skeptically at authority or seem paranoid about the hidden intentions of whites, they are not reacting to the slavery experiences of great-great-grandparents they never met, but possibly of the parents who raised them.

        In short: Slavery is a much fresher wound than most of us have been led to believe.

      • 1mime says:

        Exactly. It’s a shame to even have to explain that, Bobo.

      • flypusher says:

        “… but to make it seem that only white, southern Americans are capable of enslaving people and committing atrocities is not correct.”

        If that is the message you are getting, then you really need to step back. That’s a classic defensive reflex, an avoidance reaction upon being confronted with something unpleasant. It’s sweeping the issue under the metaphorical rug, where it continues to fester.

        I haven’t found the exact quote yet, but IIRC, it was Bertrand Russell who said that we erroneously attack a moral superiority to oppressed people based on them being oppressed. More often than not, if the tables were turned, the formerly oppressed people would quite readily pay back their oppressors in the same coin. The real test of moral character is if/when the power gets placed in your hands- what do you do with it? Through the quirks of history (and geography, if you buy into Jared Diamond’s guns-germs-steel hypothesis) the Europeans got the power first. We all know how they used it, and it wasn’t pretty. We have inherited those actions, the good and the bad. It is morally weak to keep evading this heritage of ours. Would black people have done the same if the opportunity for dominance had been theirs? Very likely, as humans excel at treating other humans badly. Make it humans in large groups and the bad can get exponentially larger.

        An example of someone who passed that test of character: Nelson Mandela.

      • Bobo Amerigo says:

        Yes, Nelson Mandela had almost superhuman character.

  5. flypusher says:

    Here’s a fascinating little OT trip in the way-back machine, looking at crime stats from the 19th Century (and the further reading link is also illuminating).


    It has some eerie parallels to today’s issues with crime and certain ethnic/ socioeconomic groups. As Twain said, history rhymes. I can just image what the 19th Century trolls said on the topic.

    • Crogged says:

      We’ve discussed before the possibility of a more parliamentary style here as opposed to the flaws of a ‘two party’ system. One thing, you get campaigns such as this one–with blatantly racist and appeals to lowest common denominators to build a ‘coalition’.

      • flypusher says:

        More racist than the Willlie Horton ad or the infamous Jesse Helms ad?

      • Crogged says:

        I suppose you are right and this is what we will hear a Republican candidate saying in 2016. Will he win a ‘national’ election?

        “Conservative values are in danger. Liberal voters are streaming in huge quantities to the polling stations.”

        “Right-wing rule is in danger. Arab voters are streaming in huge quantities to the polling stations.”

      • 1mime says:

        “Right wing rule”……or, should it state: “white wing rule”. One and the same, correct? Protect the superior Euro-Caucasian at all costs, because, as WF Buckley said in the link posted to this blog,….whites are inherently superior….

      • johngalt says:

        And you get someone who’s party won fewer than 25% of the seats in parliament declaring a “great victory.”

      • flypusher says:

        Bibi’s going to have to cut deals with some moderates-I wonder what he’s going to offer?

      • Crogged says:

        Fly, probably true (and I know nothing about the parties in Israel), but I believe there were other parties who thought Bibi didn’t go far enough………a coalition of the Silly and the Very Silly Parties is probably in the works too.

      • 1mime says:

        Crogged, “flaws of two party system”

        Maybe the system is flawed, but voters are more at fault than the party system, IMO. Despite the “blue wall” Lifer describes, Democrats have to accept responsibility for messaging and voter participation. Republicans count on that and it helps them win elections they shouldn’t.

        As deeply held as my political views are, I cannot ignore the GOP Congressional grand slams in ’12/’14. It’s disheartening but there are far too many voting against their own best interests and until this voter is better enlightened or motivated to change their voting preferences, we can expect the governance we have.

    • vikinghou says:

      Tom Friedman’s column in today’s NYT is an interesting analysis of how Bibi may change the nature of the Israeli state. Not very optimistic I’m afraid.


      • 1mime says:

        Yes, Tom Friedman is a smart man. His book on the Middle East is definitive. It’s an important tool for trying to understand the complexity of issues of the region, entitled: “From Beirut to Jerusalem”.


  6. 1mime says:

    This just in: Aaron Schock resigns. Those who earlier questioned his competency must feel vindicated.


    • bubbabobcat says:

      Not just his competency, but his feel for his constituency and their economic concerns. He must be channeling Nancy Reagan for interior decorations. Screw the cost to taxpayers.

      And then there were the taxpayer sponsored exotic surfing vacations, er “fact finding junkets”.

      This clown is the biggest welfare cheat of tax dollars. Don’t even want to hear any wingnuts bitch about poor Black women having babies for increased benefits or driving Cadillacs and buying lobster with their welfare checks.

      What an arrogant tool.


    • johngalt says:

      While his competency and decency are questionable, his ethical failings are not. He clearly saw his office as a way to enrich himself and he was so blatant about it he must not have known or cared that he was in violation of dozens of laws and/or Congressional rules.

      And, seriously, decorating your office in Downton Abbey style? WTH?

      • flypusher says:

        I just saw a clip of the guy’s father on TV, saying something like “He dresses stylishly, yet he’s not gay”. Huh????????? I’m willing to consider that there’s some seriously missed context here, but still, Huh????

  7. Turtles Run says:

    It seems Israeli Prime Minister Benjamin Netanyahu is worried about his chances. He posted a video on his face book account warning voters to get out to vote for his party because the Arabs are coming out in droves to vote.

    • 1mime says:

      You know, Turtles, if Net loses, it should send a big message to Congress. I hope he loses decisively. It’s time for new leadership so the Palestinian/Israeli problem can have a hope of being improved.

      • vikinghou says:

        Yes, and Obama should arrange a high profile State Visit with all the trimmings just to drive the point home.

      • Turtles Run says:

        Viking – Maybe Obama could walk the next PM (if Bibi loses) by Congress and laugh at them while doing a victory dance.

      • 1mime says:

        Turtles: “Maybe O could walk new PM ”

        But, shhhh, can’t tell Congress first…..

      • Doug says:

        Requests are pouring in to the white house from world leaders in tight races… asking Obama to endorse their opponents. 🙂

      • 1mime says:

        Good one, Doug. I don’t think it’s going to be that simple for Net, however. But, he did win decisively and that’s that. His win doesn’t change my mind one bit about the inappropriateness of his action and that of Boehner. And, that applies whichever party is in power.

    • rightonrush says:

      It’s that damn Acorn!

      • Turtles Run says:

        Likud or not…..Bibi has the persecution complex down to a tee. It is always someone else’s fault not your d-dag ways. He would be a wonderful tea bagger.

      • bubbabobcat says:

        Bibi has sucked dry the goodwill and free pass from the citizens of Israel from his association with his brother Yonny who commanded and was killed in the inspiring raid on Entebbe airport in Uganda and rescue of the hijacked Jewish hostages in 1976.

        Never had any of his own laurels to rest his right wing expansionist delusions on.

        He is an impediment to even the possibility of a greater Mideast peace beyond Israel and Egypt negotiated 36 years ago by Anwar Sadat, Menachem Begin, and yes, Jimmy Carter.

  8. 1mime says:

    Objv: Ob, 22 federal agencies were involved, but it was Medicare Advantage, NOT regular Medicare as you cited. (M.A. is the private medicare program passed by the GOP under W) I find that so ironic as this is supposed to demonstrate how much better privatization can perform vs government…yet it follows close on the heels of Medicaid). I will continue to research as I can’t believe Med. Advantage is the only area of Medicare to experience improper payments, but it is not listed as such in this article. It also points out the Obama administration’s commitment to reduce these VERY old problems decades in the making under both parties.

    Top 6 Programs with improper payments:

    –Earned Income Tax Credit provides payments to low-income families through the tax code: $18 billion in improper payments

    —Medicaid, the health insurance program for the poor: $17.5 billion.

    —Medicare Advantage, which allows older Americans to get their Medicare benefits through private health plans: $12.2 billion.

    —Unemployment insurance: $5.6 billion.

    —Supplemental Security Income, a disability program for the poor: $5 billion.

    —Social Security: $3 billion.


    • objv says:

      Mime, I’m not near Medicare age yet, so I’m not familiar with the differences. However, it seems that fraud is common with both types of Medicare. It is often due to doctors billing for medical products or care that is not legitimate.


      Let me know what you know. I confess I’m not knowledgeable with the subject.

    • bubbabobcat says:

      Very nice mime! Good info.

      OV, just a hint, you will continue to not engender much respect if you persist in tossing out inaccurate and misleading firebombs and when corrected on it, your only response is ‘I’m ignorant/stupid/not knowledgeable and totally clueless about the subject I just dropped a slanted poop bomb about.”

      Just like you weren’t too informed about the reasons for the fake war in Iraq started by George W. Bush as you blindly support it because you were “busy” then and never bothered or had the intellectual or moral/ethical curiosity to inform yourself in the intervening 12 years since.

      But it’s a standard right wing playbook so not surprising. Like the Congressional climate change deniers incessantly slamming all the hard data on global warming and then following up with “well, I’m not a scientist…” as they ignore 97% of the scientists.

      Only in wingnut land where ignorance is a virtue and “I’m an idiot” is a de rigueur legitimate fallback position to be proud of.

  9. 1mime says:

    Off topic, one of the GOP budget plans has been released.

    Here are highlights: Think – states’ rights and major entitlement reform. Governors will have a much more significant role in managing federal block grants. With 2016 in mind, social security will (again) be studied, not touched (surprise, surprise…don’t want to mess with this group prior to the election), SNAP, CHIPS, medicaid will be block-granted to states eliminating any relationship with the Affordable Care Act, which appears to be a stealth issue which will be struck through either the good graces of SCOTUS, or via legislative reconciliation. Either way, it’s still on the hate list.

    Broad tax reform isn’t addressed but the alternative minimum tax would be repealed and offshore corporate income from U.S. taxation would be shielded. Defense budget will increase through an outside the budget vehicle….(isn’t that how W funded the Iraq War?)

    My initial observation is that the plan is comprehensive and offers radical changes which address issues that are key to business interests while hitting entitlements – hard. A second GOP budget proposal will be presented this week. It’s gonna be a wild ride, and, remember, we still haven’t seen authorization to raise a clean debt ceiling. Any bettors on that happening?

    And, this Politico analysis, which lays bare the stakes for the GOP to accomplish their highest priority – repeal the ACA, which would be jeopardized if there is intra-party feuding (this GOP?) : http://www.politico.com/story/2015/03/house-gop-budget-116141.html#ixzz3Uehdl38I

    “Without a budget, they would not be able to use “reconciliation” — a tool that allows for a simple majority vote — to repeal Obamacare or enact tax reform. That means any such legislation would need 60 votes in the GOP-controlled Senate. Passing a spending plan is also a basic test of whether GOP leaders can even run their conference.”

    Hang tight and listen up.

  10. goplifer says:

    This thing may be winding up early. Garcia is having a little trouble explaining how he’s going to keep the lights on if he gets elected.

    “Fifteen minutes into the hour, the debate was as good as over. The longer the men talked, the more obvious it was that this was a debate about one, and only one, candidate’s ideas.”


    • 1mime says:

      Rahm Emanuel is reputedly a tough guy to like, but this may be exactly what is required for Chicago. I’m happy to see a Democratic mayor get credit for taking some tough stands on issues conservatives often attack. His example of making tough decisions and working across the aisle will hopefully not only help IL, but will demonstrate the importance of bi-partisan governing. America needs more pragmatism and less theater.

  11. 1mime says:

    Doug “That’s one way to solve the Social Security issue. All the fed has to do is quietly change CPI calculation and then when that printing press creates runaway inflation, Grandma’s $1000 SS check is worth a buck fifty. Brilliant!”

    I am very familiar with the CPI proposal and the studies which I have seen show that, yes, it extend the life of SS by reducing granny’s check – at the expense of those who were promised a certain level of income when they made the decision to retire. And, a change at a time when they are no longer physically able to work. So, is that your preferred solution? Is raising the SS income cap not an alternative or bridge to secure this vital safety net for Granny? After all, if the SS Trust Fund had remained independent and not legislatively changed to flow into the General Fund, (speaking of printing presses and IOUs), we might not be having the problem – at least with SS. And, that wonderful decision was made by a Democratic President, so I’m not being partisan here.

    America has been kicking the can down the road for so long it has forgotten how things were to begin with. Irresponsible government management has been a “borrowing from Peter to pay Paul” fiasco for a long time.

    • Doug says:

      The CPI change is a dishonest, chicken-shit way of (partially) dealing with the problem.

      Social Security wasn’t a bad deal for those who spent most of their working years at the lower tax rates. It’s a terrible deal now. When it started in 1937, the tax rate was 2% on income of about $48K (today’s dollars). Today, the tax rate is over six times higher on 2 1/2 times the income. How much is enough? No matter what you do to “fix” it, somebody’s going to get screwed. Personally, I’d privatize or abolish it.

      “America has been kicking the can down the road for so long it has forgotten how things were to begin with.”

      Very true. And also implementing programs with no thought to the future or how math works.

      • 1mime says:

        Doug, you haven’t been posting that long so may have missed one of my comments relating to interest rates we HAD to pay as business owners that were 18/19%. That meant lots less in the take home column but it was what it was. No matter what the solution is, people near or in retirement need to be grandfathered. It would be grossly unfair to change the COLA this late in the game for them. Plus, we’re looking at a very small COLA increase and enjoyed two years of no increase.

      • Doug says:

        “No matter what the solution is, people near or in retirement need to be grandfathered.”


        I’ve been reading Lifer for several years, just felt I had to post a bit more lately since objv seems to be the lone dissenter now. 🙂

        And I remember the high interest rates. Once got around 14% on a mortgage and was happy to get it. Hard to imagine now.

      • objv says:

        Doug, Your comments are greatly appreciated! 🙂

      • objv says:

        The federal government made 125 billion dollars in improper payments. Medicare was one of the biggest areas of fraud. If this mess can be cleared up, there would be more money available to fund Medicare.


      • objv says:

        Another problem:

        “Americans are getting older, but not this old: Social Security records show that 6.5 million people in the U.S. have reached the ripe old age of 112”


      • 1mime says:

        Ob, Ob, read the article in full before posting. “Social Security does not have death records for millions of these people, with the oldest born in 1869, according to a report by the agency’s inspector general.”

        Think that might be contributing to a few missing million dead folks?

      • objv says:

        Mime, Yes SS doesn’t have millions of death records. That is a problem. It is more of a problem when relatives continue to collect benefits and others take the social security number of someone who is dead or a minor. While checking for fraud would be time intensive and expensive, there is little excuse for not checking when a social security number is used multiple times or when a two-year-old reports wages! 🙂

        Read further

        “For example, nearly 67,000 of the Social Security numbers were used to report more than $3 billion in wages, tips and self-employment income from 2006 to 2011, according to the report. One Social Security number was used 613 different times. An additional 194 numbers were used at least 50 times each.

        “People in the country illegally often use fake or stolen Social Security numbers to get jobs and report wages, as do other people who do not want to be found by the government. Thieves use stolen Social Security numbers to claim fraudulent tax refunds.”

      • 1mime says:

        I read the full article, Ob. There will always be cheaters. Do you think Target and Home Depot don’t have a better grip on that now? Do you think Repubs are the only party who understands these problems exist? And, that Dems are the only party not taking responsible action?

        But the problem is not that the problems are not known, but that they are not easy to correct, AND, it takes adequate training and staffing to be able to eradicate problems of this kind. So, the new budget coming out of Repub now is fixated on decentralization from federal management to state management. This is not always a bad thing, but in a civilized society, is that necessarily better?

        If that is the thinking, why not just dissolve the union – do away with the 3 branches of government and let each state operate autonomously?

      • Crogged says:

        60 Minutes had a story on this Sunday-records are bad–in part because the agency has to rely on the states, which sometimes lag in modernizing their own systems. But, yeah, there aren’t a whole lot of 110 year olds in the world, much less the US……..

      • Moslerfan says:

        Objv, I’ve been thinking about the overpayments article which has been making the rounds. I believe it’s correct, but there’s a context, too. What’s a reasonable error rate for a country of 330 million? Would a private entity do better? And what is being proposed as a solution; would it really be an improvement? Don’t let the perfect be the enemy of the good.

      • objv says:

        Mime, I never intended this to be a partisan issue. The articles are current and originally from the Associated Press. They don’t mention political parties.

        Fraud is an ongoing problem. It doesn’t matter who is in the White House. My aim was to say that cutting down on fraud would free up money to use for the people who are actually entitled to it. No political spin was intended.

      • 1mime says:

        Objv, “I never intended this to be a partisan issue”

        If you were a senior on Medicare, Medicaid, or SS, you might approach the subject with greater sensitivity. Head Start, SNAP, Pell Grants – all are on the cutting table with the GOP budget proposal. We all want efficiency in tax dollar management, but what does it say about America that more than half our budget goes to defense with more increases planned, yet we keep cutting services for the poor and elderly? What kind of nation are we becoming?

      • objv says:

        Mime, on this thread, I was merely trying to say that cutting fraud would open up funds for the people who are entitled to it. I was wondering why I was being met with so much hostility.

        My parents are collecting SS and are on medicate. Of course, I’d like to preserve SS …. I plan on living at least until 110. 🙂

      • 1mime says:

        Hostility, no, frustration, yes. Don’t become a victim of the “emperor has no clothes”.

        As for living to 110, you should be fine – the GOP plan is for only Republicans to live long, healthy lives.

      • objv says:

        Ha! My parents are on Medicare. Autocorrect rules.

      • objv says:

        Mime, my intention was to live to 110 by getting lots of exercise, eating right, and maintaining my weight. I did not realize those were only Republican values! People in the “Blue Zones” regularly live to a ripe old age because of their lifestyle.

        Seriously, I wish that all senior citizens could have state of the art medical care and enough funds to live a comfortable life. This should be our goal and it may be achievable. We do need to realize that unlimited funds are not available. Being realistic does not equate to being mean. That is why cutting out fraud in SS and Medicare would go a long way to get money to the elderly who deserve it.

      • 1mime says:

        Ob, “Being realistic does not equate to being mean. ” If you read my posts, you know I understand that. Quality healthcare for all Americans is simply not a priority or a goal of the Republican Party. Isn’t it odd that Congress is able to find unlimited dollars for defense, yet not meet even the basic needs of the poor and elderly?

      • Moslerfan says:

        Objv, may you live a long and healthy life. Be sure to keep up with the healthy lifestyle stuff, it’s no fun outliving your health.

        Medicare and Social Security fraud should be relentlessly pursued because they are fraud, and they eat away at the bonds of trust that hold our society (and our money*) together. The Federal government can always create more money. It’s true that Medicare is limited in how many dollars it can spend, but that’s not a true financial constraint, it’s a legal constraint imposed by appropriation law. Appropriations can be changed anytime it’s in somebody’s interest to do so. The only real constraint is whether there are medical providers willing to accept dollars in payment.

        *No longer based on gold, our money is in fact a social construct, based on trust and backed by social and legal institutions.

    • Moslerfan says:

      “Doug, your comments are greatly appreciated.” Yes, but not necessarily agreed with. 🙂

      • objv says:


      • Doug says:

        @Moslerfan Aww, jeez…I should have picked up on your handle earlier. If you’re a fan of that kook, I certainly wouldn’t expect you to agree with me.

      • Moslerfan says:

        Seriously, Doug, the thing that surprises me is how quickly that kook’s ideas are popping up in the mainstream. Today’s Seeking Alpha, for example, has an article busting Lawrence Kotlikoff for claiming that the U.S. and SS are “broke,” and giving the exact reasons Mosler has promoted all along. Quote:

        “It is even more remarkable because many of the people who argue this sort of stuff (The U.S. Is Broke) often have great faith in the wisdom of the markets. The markets give this nonsense a thorough thumbs down, and rightly so.” seekingalpha.com, Mar. 18.

    • objv says:

      Moslerfan, Billions of dollars in fraud affects everyone in the U.S. Identity theft affects a good many people and can cause a great amount of stress as well as countless hours of work trying to straighten out credit problems.

      The Social Security Administration could do more to screen for fraud particularly when it comes to children and the elderly. I don’t know if a private company would do a better job. SS should put more resources in screening and then flagging certain numbers for investigation. The process of inactivating numbers for those almost certainly dead might be the easiest step.
      Since there are few people in the US over the age of 110, it might be best to identify those people and inactivate the rest of the SS numbers of people over that age.

  12. rightonrush says:

    The article from the washingtonpost.com below is a spoof, thank God. I should have known when they quoted Kevin McCarthy making that insane comment.

  13. rightonrush says:

    Proof the Republicans have lost their collective minds:

    “If Republicans in the House of Representatives have it their way, First Daughters Sasha and Malia Obama might soon become the first presidential children to ever be forced into following a dress code, which would apply to how they present themselves in public for the duration of President Barack Obama’s stay at the White House.

    The bill, titled “The Respectable First Family Act,” would force a strict dress code on all Presidential and Vice Presidential children under the age of eighteen, for the full time their father or mother holds the office. Republicans claim they want to begin enforcing the new dress codes this year, and were hastened after a recent controversy where some criticized the First Daughters for how they dressed during the Selma rally this past weekend.”

    “I shouldn’t need to justify why this bill is necessary to anyone, not after seeing what they were dressed like,” says the bill’s author, Congressman Richard Head (R-UT). “Did you see the photos from the march? The First Daughters looked like pole dancers. You could clearly see their knees and even an inch or two of their thighs. And one of them was wearing go-go dancer boots. Is this the sort of message we want to send to the rest of the world? Is this how we want the First Family to represent America and our values? I think not.”
    “No dress or skirt shall expose any portion of the leg or waist more than one (1) inch above the ankle,” the bill states,” nor shall a girl’s feet be exposed fully outside of socks and/ or toed shoes.” The bill also claims that “shirt or blouse sleeves must be present, and may not be shorter than one (1) inch from the wrist, while no other part of the torso below the neck be exposed.” Head’s dress code would also prohibit makeup and jewelry not pre-authorized by
    “The bill has instantly picked up serious traction with House Republicans, who believe the legislation “sends the right message to America’s youth” and carries with it “the best, most traditional, and most honorable Christian values we could hope for from legislation,” according to House Majority Leader Kevin McCarthy.”


  14. vikinghou says:

    OT, but had to share this.



    “Mr. Lane’s ambitions are national — he focused on battleground states in 2014 and has built an email list of 100,000 pastors around the country.

    His goal now is to get 1,000 pastors to run for public office, and their potential support has drawn a virtual pilgrimage of conservative candidates eager to join the tours Mr. Lane organizes to Israel and to his “Pastors and Pews” events.”


    This may be the last hurrah for the fundies. All of these pastors should lose their tax exemptions pronto.

    • 1mime says:

      Viking – “All of these pastors should lose their tax exemptions pronto.”

      Want to place a bet on that happening?

    • flypusher says:

      “Some other states have no income tax, he points out, and they’ve done well.

      He’s talking about places like Florida and Texas and Alaska. The difference, of course, is that those states have tourism and oil, and even at that they’re struggling.”

      Also Texas has property taxes instead of income taxes. We’ve got our Lt Guv talking about cutting them, but oil prices have nose-dived, so the budget here may get balanced in the same way- at the expense of the middle class and poor.

      You made your bed Kansas, go lie in it.

      • 1mime says:

        Fly – “the budget here may get balanced in the same way- at the expense of the middle class and poor.”

        I can assure you the poor and middle class already are feeling it. Fracking production and normal M&O needs have torn up TX roads with the dedicated funds for that cost center going into the general fund; public education cuts made 3 years ago still haven’t been replaced forcing local counties(i.e. taxpayers) to make up the difference; and the dramatic fall of oil and gas revenue have seen thousands laid off; health care costs at ER are pummeling hospitals whose dedicated tax source is being diverted to the general fund meaning more hits to the hospital taxes within property taxes; yet TX leadership is still planning on giving business cuts as well as property owners. We con’t have a sales tax in TX but we pay PLENTY in property taxes.

        THIS is how TX has proudly achieved their balanced budgets, and, yes, in great years, revenue has offset expenses, but no longer, yet continue with campaign pledges of tax cuts. It is pure BS.

        And, this, is how Republicans govern. Sleight of hand, anyone?

      • 1mime says:

        Correction to my post: (Texas) ….doesn’t have sales tax….meant state income tax. Sorry (-:

      • 1mime says:

        Catching up on my print news and saw this article that exactly presents the problems caused by irresponsible budget cuts. The GOP fixation with balanced budgets (by whatever sleight of hand) is not working. We are watching it unfold. Here’s a Houston Chronicle article relating the dilemma faced by a GOP state legislator who jumped on the spending cut wagon only to be elected to a post that is hamstrung by the cuts he championed! If real people weren’t imperiled, it would be fun to watch.

        In case this doesn’t open, here are the salient points:

        “Sid Miller, …as a state lawmaker voted to slash the TX Dept of Ag’s budget in face of a projected budget shortfall…Now that he’s agriculture commissioner, he’s pleading with the Legislature to restore funding so he can do his job.”

        I almost feel sorry for him. Almost. There are way too many examples of mis-guided, poorly researched, cuts for the sake of cuts. It costs money to run programs that serve real needs. Fund them adequately and stop making political points!


    • 1mime says:

      Brownbackanomics – Terrific post, great writing and sooo on target. I particularly loved former Gov. Sebelius’ wry observations. Sadly, KS isn’t alone with the balanced budget mania. Look at what is happening in LA, Jindal’s hall of fame, to name one. They’re taking their budget orders from Grover. (I guess he’s feeling pretty smug about having Congress cow-tow to him, not he’s moving down the ladder to state legislatures. Humph!)

      • Moslerfan says:

        1mime, I frequently harp on the fact that the Federal government can create dollars at will and can run a perpetual deficit if it finds that to be economically beneficial. But state and local governments (KS and LA, e.g.) are not monetarily sovereign like the Federal gov, and must cover their expenditures with income – taxes or borrowing – or their checks will bounce.

        Brownback’s problem is that he bought into the idea that cutting tax rates would stimulate the economy to such an extent that tax revenues would rise. That didn’t work for Reagan or Bush, and it’s not working for Brownback. Or maybe he didn’t actually believe revenues would rise, he just tried to sell that idea so he could cut taxes because cutting taxes is what he wanted to do.

        Many conservatives believe that “government can’t do anything right.” It’s frighteningly easy to make that proposition come true.

  15. 1mime says:

    Mosler – “stop worrying about dollars and start worrying about the people who will produce the food, energy, and services we will need in the future. ”

    They need to do both. One problem is immediate; the other is long-term. Kicking the can down the road has become SOP. If business doesn’t pay their workers a living wage, these Americans will never be able to afford discretionary purchases. If people don’t have health insurance, they will get sick and lose wages and then lose their jobs. Many are already living paycheck to paycheck. So, you’re correct that the focus needs to be people-directed. Wage increases, equal pay for equal work, equal opportunity for all, and, yes, quality education – is how America can help people break out of the cycle of poverty. Get more kids ready for college or excellent trade schools where each can advance according to ability and demand. Make higher ed affordable so that our graduates aren’t in hock up to their eyeballs, taking years to pay back loans when their lives are just starting. Families are making huge sacrifices to enable their children to do better than they did. For what?

    Meanwhile, Congress isn’t governing. Nothing is happening. And, life goes on ad nauseum.

    I don’t have any confidence that the current crowd of conservatives even understand the problems of the working poor so it’s easy for them to cut workmen’s comp (because they’re unlikely to be manual laborers), and reduce hours rather than provide benefits.. The problems are so deep and broad that there isn’t space here to elaborate and I’m sure the majority of commentators here understand the issues well.

    As for SS – there are substantive changes in the COLA formula being promoted by conservatives that can really hurt retirement income of people who are near retirement and retired. I don’t hear any Repubs considering raising the income cap for SS taxes despite the fact that the existing cap is years old, but lots are in favor of raising the age of eligibility. Why not consider some sort of combination that splits the difference? Increasing eligibility age might work fine if you’re a white collar worker, but if you’re a nurse who does floor work, or a laborer who cleans offices, or a single parent, a construction worker, or an oil field worker who does production work…these people have worked physically hard all their lives, paid taxes, and tried desperately to get ahead. Their life expectancy and health are more vulnerable than those with upper level, office positions. Both groups of workers are important to America’s success and both need to be considered when addressing structural changes to the social safety net.

    Compassion for “people” is what is missing and if conservatives tried to understand and relate more to the needs of people whose lives are vastly different than the ivory tower of DC, they might come up with a plan that works better for all of us.

    People empowerment through good education, equal opportunity, access to quality health care, and fair wages. Do these things right and America will return as the nation of opportunity for all, not just those who were lucky enough to be born white and middle class or wealthy. They will not just “subsist”, they will put money into the economy, they will contribute, and then they will become consumers of goods, the engine of the capitalistic society.

    • RobA says:

      1mime there’ a fantstic doc on netflix called Inequality For All done by Reobert Reich, Clintons (very short) sec. of labor.

      He describes the virtuous circle, which is kind of what you’re talking about. You invest in education, people get better jobs, they make more money, they spend more money, companies make more, companies hire more, tax revenues go up, back to square 1 (investing in education).

      Like the guy says in it, the middle class creates consumption, not the 1%. Yes, they buy bigger and more expensive purchases. But that’s not what drives economies. Even the richest person still sleeps on one mattress. They still only buy 1 or 2 dishwashers for their house etc etc. But make but give more diposable income to millions of middle class, and watch consumption explode.

      I highly recommed it.

      • 1mime says:

        I’m very familiar with Robert Reich but haven’t seen this documentary, so thanks for heads up. I understand his economic theory which is essentially a higher tide lifts all boats vs the trickle down stuff that clearly ain’t happening. It’s frustrating to see such insensitivity and denial of the needs of so many people. The only thing that apparently gets the attention of Congress are those who are need help least.

    • Moslerfan says:

      1mime, here’s a fundamental reality: money won’t take care of you when you when you get old, people will. People will raise the food you eat, build and maintain the house you live in, produce the energy that keeps you warm, and provide the medical care you’ll require. Stockpiling money accomplishes nothing, stockpiling food and medical care is impossible, energy is very limited, housing works sort of. The answer is people; educate them, keep them healthy, give them infrastructure and a stable social structure so they can be productive.

      For you and me as individuals, yes, squirrel that money away. It’ll make a big difference. But for the nation as a whole, that’s just not the answer. If I stand up at a baseball game, I’ll be able to see better. If everyone stands up, we won’t all be able to see better. Same principle.

      You write: “I don’t have confidence that the current crop of conservatives understands the problems of the working poor.” John Kenneth Galbraith wrote this: “The modern Conservative is engaged in one of mankind’s oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness.”

      • Doug says:

        …and Friedman wrote this: “Many reformers – Galbraith is not alone in this – have as their basic objection to a free market that it frustrates them in achieving their reforms, because it enables people to have what they want, not what the reformers want.”

      • 1mime says:

        Yeah, well when your 80 year old granny has her medicare voucher handed to her, you better be around – she’ll need lots of help selecting her health plan for the first time in 15 years, and, if she’s not in excellent health, you and your family are gonna have some hard decisions to make about subsidizing her care. That’s the reality of just one of the more hideous planks in the GOP budget.

      • unarmedandunafraid says:

        Moslerfan and Doug – Ah, the contention between two great men rises again. I often wonder if either changed any minds. I personally found John Kenneth Galbraith when I decided that someone was lying to me and I needed to find out who. Some say that in the future Elvis will be the figurehead in a new religion. Others say Ronald Reagan will be portrayed with a halo over altars. For me, I could write a hymn or two for JKG. Read all of his books. Cool dude. I recommend “The great crash of 1929” as an educational but entertaining read.

        I understand JKG and Milton Friedman were close friends even if they were so far apart politically. But I wonder what Friedman would think of the modern conservative party.

        So, you can boil down the post war political argument to, from the conservative side, “we are going to hell in a handbasket, things were better before the New Deal”. And from the liberal side, “were not”.

        I think that is all we are saying as we talk past each other.

      • Moslerfan says:

        Unarmed, I honestly don’t know that much about JKG (or macroeconomics in general, truth be told). But he was a very quotable guy, for sure. For example, you wonder if he changed any minds. He once said something like “Ideas do not yield to other ideas but to a mass of circumstance with which they cannot contend.”

    • 1mime says:

      Mosler: “It’s frighteningly easy to make that proposition come true.” I agree. Sorry if my post wasn’t clear. The GOP mania with cutting bureaucracy is impeding their ability to do their jobs well. Then there is the U.S. Postal debacle championed by Rep. Issa….that is so sad and so wrong.

  16. Name says:

    “more than a third of the city’s revenues will be siphoned away with no compensating services or revenues”
    the services were delivered decades previously.
    But I would agree that the KP has successfully destroyed retirement and secure savings in the usa.

  17. objv says:

    “Enrollment has, not surprisingly, been in steady decline for decades. Enrollment in Chicago schools has dropped by a third since 1970. Meanwhile the number of schools continued to grow, rising almost 20% over the same period.”

    Interesting. I have a sister in Ohio. The school district she lives in was suffering the same problem with declining enrollment and she wanted to move a few years ago. Test scores were poor and the schools weren’t a pleasant place to learn. Fortunately, the school district hired a new superintendent who brought about huge changes.

    My sister mentioned that he closed several schools and sold some of the properties the district owned. He made one old junior high (the one I attended) into a center for a STEM program. He used the money from all the efficiencies he instituted to update the schools that were left and to buy computers and tablets for the students to use..

    My sister, a teacher, is now quite happy with the school district. She has one child in junior high and one in elementary school and they are thriving.

    • 1mime says:

      Ob, Talented, visionary educational leaders can accomplish great things creatively when they include the community and school employee groups in the process. There is cost efficiency potential and, as noted, other benefits (new STEM program) from reallocated funds that stimulate public education and make the learning process more productive and interesting for all.

      Rahm Emmanuel is trying this in Chicago but is finding tough going. Kids and taxpayers are losing out.

      • objv says:

        Mime, I’ll have to call my sister to find out about the other changes. I’m not even sure if the employees of the district were union or not. Some of the cost savings were not popular. For instance, bus service was cut.for students living less than two miles from school which meant that no kids were bused to school at my niece and nephew’s elementary school.

        My sister said that parents ended up making arrangements with other parents to get their kids to school. I know my sister did her part to make sure neighbor kids had a ride if their parents worked. My sister works part time and has a three-year-old in preschool. She spends a lot of her time driving. 🙂

        All in all, the changes were positive. The students are getting a much better education and money isn’t going to maintain buildings that are not really needed.

  18. Manhattan says:

    This is an interesting article goplifer. I wish I could see something like that here in Buffalo, NY. The Buffalo City School Board has elected some Republicans not too long ago, but there’s been a lot of fighting and mud-slinging, There was an article where there was some name calling between members, pretty much accusing each other of bigotry.

    Buffalo, NY has always been a Democratic city, the last Republican elected as Mayor was Chester Kowal from 1961-1965. Basically, the business community and the political machine did not get along due to ideological differences. There was a book called Power Failure and included another part of words I forgot.

    The city has improved in some parts over the years, but there is still is a ways to go.

  19. Cpl. Cam says:

    Are resources really so thin in this country we have to choose between educating our children and letting our teachers retire in comfort? Where is my goddamn pitchfork?

  20. Pensions!
    Here and in the UK a pension MUST be funded – as soon as your worker does some work and he has an agreed pension you the employer have incurred a future liability
    Here you MUST fund that and by agreed accountancy rules

    In the USA you keep missing that point

    If you haven’t funded it it is not and cannot be the fault of the worker or his union
    The management has all of the power and makes all of the decisions about pay and how to fund that pay

    Your big companies did this as well
    GM could boast that it was making more money and pay its managers more because it was NOT putting the money to one side to fund its liabilities

    The money that should have gone into the pension fund went instead into the pockets of the 1%
    This IMHO means that you should tax the buggers to re-fill the pension funds

    • flypusher says:

      Careful Duncan, you’ll trip the class warfare alarm!

      But funny how it’s only class warfare in some people’s minds when someone brings up a point like yours, but if businesses and their lobbyists get workers’ comp gutted, or abuse eminent domain to snap up other people’s property for private development, that’s just good old fashioned capitalism.

    • vikinghou says:

      As I mentioned earlier, ultimately pensions may be scrapped altogether thereby absolving companies from future liabilities. Workers will be responsible for funding their own retirements through private investments and company contributions to funds such as the 401k. If the market tanks and you lose your money just before retiring (e.g., 2008), that’s just too bad. Freedom! That’s why I’m dead set against the efforts to privatize Social Security. It’s the one (albeit meager) safety net that may protect the elderly from a destitute old age.

      • flypusher says:

        There was a time when I just stopped opening my 403b statements, because I already knew they were bad news. I’m fortunate in that I’m not near retirement, and since then it’s rebounded nicely. But I’ve started the transition from the higher yield (but higher risk) portfolio into an incrementally more stable mix.

        Q: What’s the difference between gambling in Vegas and playing the stock market?

        A: In Vegas, they are required to tell you the odds.

    • Moslerfan says:

      Duncan, best reply to this post. Management, both corporate and civic, are allowed to push funding of pension liabilities into the future, and then the unions become the bad guys when the bill comes due. Forcing management to face reality in real time would prevent these things from becoming such big problems.

      • 1mime says:

        “Management is allowed to push funding liabilities…”

        You’ve heard the old adage, “He who has the gold, rules”, that’s what’s going on. The rules bend for business, who avoid immediate responsibility, and workers take the hit as being excessive in their wage/benefit demands, or in their retirement, when business/government hasn’t responsibly funded pensions and benefits. Government unfunded pension obligations are an extension of the kicking the can down the road philosophy, and, once again, the taxpayer pays the tune to avoid accountability. It’s all about elections.

        Congress won’t hear of increasing military health premiums despite a huge unfunded liability in that program, because veterans were promised these things would be lifetime. I don’t argue with veteran’s entitlement, but I do argue on the basis of taxpayer fairness. There is incredible criticism for cost over runs by social security, medicaid and medicare and other basic safety net programs and the need to reform these programs, yet who in Congress is looking at the whole picture? Retirees from government service vote. That’s the reason. If reform is needed, shouldn’t all programs share in the reform process?

        BTW, “if” SCOTUS rules against the ACA, and/or, Congress successfully repeals it, how many believe that the health care plans of Congress will be adversely impacted?

  21. 1mime says:

    So, a Republican and a Democrat are working together to solve real problems – and their reward will either change the historical political dynamic or utterly fail and be thrown out of office. The alternative is, do nothing to challenge the status quo, and everything falls apart – or bankrupts the state….a situation that is not unique to IL. Texas, where we live, has woefully underfunded pensions yet touts its “rainy day fund”, balanced budgets and promises tax cuts with little regard for shifting dedicated tax revenues from ERs and highways. There has to be a reckoning. What a conundrum, Lifer!

    Yet, in state after state in which one party dominates, there is little room for change unless it’s change that benefits the party in majority. Hardly news, but a reality.

    I hope the deep thinkers in IL vote, because you can be certain the unions will. It certainly appears from your analysis that there is little to be applauded by IL public unions – I wouldn’t know not being from there. I still maintain that unions have a place but they also have to be responsible partners.

  22. vikinghou says:

    This is an interesting post. Regardless of party, efforts to correct inefficiencies and improve quality are laudable.

    I have mixed emotions about the pension scheme. In my opinion it would be unfair to older workers nearing retirement to have their pensions slashed. During their careers they have counted on the pensions in their financial planning and would have little ability to make financial course corrections. It would be fairer to offer reduced benefits to newer employees who have the time to do long-term financial planning and compensate for the lower pension payout. As the older workers leave, the pension obligation gradually falls to a sustainable level.

    My former employer (a large oilfield services company) stopped offering pension plans to new employees about 15 years ago. To compensate, they substantially increased the matching of 401k contributions. Older employees still have their pensions coming when they retire, and retirees like me share a fully funded and solvent pension fund. Personally I’m still for pensions (even less generous ones). Like Social Security, they help insulate people from the volatility of the financial markets. But that’s another story….

    • flypusher says:

      Also some people did forgo the possibility of more $ in the private sector for the prospect of more security, like a stable pension in the public sector.

      I’ve got TRS and a 403b.

    • 1mime says:

      Mixed feelings about older people on pensions..

      I agree, Viking. Assume these people will be grandfathered. I’m watching to see what happens to social security, medicaid and medicare. A lot of people retired with certain expectations that savings would be adequate based upon what they were promised. It’s obvious changes have to be made, but so far all I’ve seen in raising the retirement/medicare eligibility age with no mention of raising income caps on taxable earnings. It won’t matter if the state’s bankrupt and can’t pay, or the social security/medicare/medicaid funds are out of money – regardless of the reason. When there’s no money, either people pay more, get less, get it later, or some other situation I can’t imagine.

      • Doug says:

        “some other situation I can’t imagine.”

        The standard situation is financial collapse. http://www.amazon.com/This-Time-Different-Centuries-Financial/dp/0691152640

      • RobA says:

        Not sure I get your point Doug

      • Doug says:

        In the simplest terms, once a government starts giving away stuff it is very difficult to stop, even when the money runs out. Nobody wants their benefits cut, right? Several of our government programs are unsustainable, but most likely won’t appreciably change until a crisis forces a change.

        The book I linked to is a study of government financial crises covering eight centuries. It’s a bit dry, but contains some good information.

      • Moslerfan says:

        Doug is right, once the government starts giving away things, the corporate lobbyists make it very difficult to stop.

      • Doug says:

        Yes, that, too.

      • 1mime says:

        Mosler – once the government starts giving away things, the corporate lobbyists make it very difficult to stop.

        Here’s my problem. The bulk of the escalating cost is always focused on the big social safety net programs – medicare, medicaid, social security. This is where the problem is and must be addressed. Just as with pensions, the problem is most people in or nearing retirement have contributed in good faith in anticipation of receiving the government support that was promised. They will be the losers if changes are made too late in their work careers.

        What I never hear anything about is cutting defense, which comprises more than 50% of our entire budget and is so amply funded that it exceeds the aggregate defense budgets of ALL of the major industrialized nations in the world. We never hear anything about the significant budget shortfall in military benefits or government pensions. It’s complex and it deserves a thoughtful, bi-partisan, realistic and reasonable approach. Think that’s gonna happen with this Congress?

        I don’t think any American would stand in the way of a fair, balanced (gee, hate to use that Foxy term when it is so meaningless) bi-partisan effort to responsibly make changes, but there is no trust – on either side – and our current toxic atmosphere in D.C. guarantees failure. Most people don’t trust Congress to be fair about anything, especially when you look at some of the track record of Republicans over the past 6 years.

        So, another quagmire? Debt ceiling disaster for monies Congress has already approved and allocated? Endless fighting and strong-arming by the dominant party? Legislative slights of hand to power the majority party’s wishes? It could happen with this crowd.

        I have even less confidence than trust, and, that is really at the heart of the problem and the solution for most Americans. This Republican Congress has destroyed any faith that I have for fair budget management and I don’t think I am alone in feeling this way. They can’t even have reasonable discussion of tax reform which is needed. How are they going to tackle a financial challenge like a major overhaul of the social safety net. I’m not denying need for action, I just don’t trust the messenger.

      • Moslerfan says:

        Doug and 1mime, you assert that “several government programs are unsustainable” and you may be right. But it won’t be because the Federal government runs out of money. They have a printing press! We might run short of food, energy, or perhaps medical services to buy with our Social Security dollars, but the SS dollars will keep coming unless Congress chooses to change the law. What that means is that we need for Congress stop worrying about dollars and start worrying about the people who will produce the food, energy, and services we will need in the future. Get people, immigrants if necessary, educate them, keep them healthy, and provide them with the infrastructure and – as importantly – the social stability needed to succeed economically. That’s how our sustainability problems will be solved, or not. There is no other solution.

      • moslerfan says:

        Back more on topic, GOPlifer is talking about Chicago, which, unlike the Federal government, does not have a printing press for dollars so the issue is a bit different. The bottom line is that no society can prosper if too many real resources (people, basically) are unproductive. That’s true whether they are employed at make-work jobs or simply unemployed.

      • Doug says:

        “But it won’t be because the Federal government runs out of money. They have a printing press!”

        That’s one way to solve the Social Security issue. All the fed has to do is quietly change CPI calculation and then when that printing press creates runaway inflation, Grandma’s $1000 SS check is worth a buck fifty. Brilliant!

      • Crogged says:

        If ‘printing money all mad crazy!’ causes inflation-please explain. Sometimes it does (Argentina)-sometimes it doesn’t (US).


        One reason is we have not made ridiculous increases in SS. The other, in a depressed economy, it doesn’t matter.


      • Crogged says:

        And I purposefully used a link from a site which would say ‘au contraire!”. By their own writing from 2010, they have some esplaining to do……….

      • Moslerfan says:

        @ Doug – runaway inflation? Least of our worries now, but again don’t worry about money, it doesn’t feed you, keep you warm, or cure disease. Worry about food, energy, medical care; real stuff. If there’s enough real stuff we’ll be fine, if not we’ll be in trouble. Whether or not there is enough money is missing the elephant, and arguing about money just diverts attention from the real issues. Fixing real problems may be harder than fixing money problems, but it’s far more important. This is why we’re paying Congress the big bucks, right?

      • Moslerfan says:

        Crogged, great question. Here’s a most highly recommended start: 7 Deadly Innocent Frauds of Economic Policy, by Warren Mosler (Go Moslers!), free at moslereconomics.com/wp-content/powerpoints/7DIF.pdf . It’s also available on Amazon, where you can read reviews.

      • unarmedandunafraid says:

        Moslerfan- “no society can prosper if too many real resources (people, basically) are unproductive.”

        So I wonder what you see as our future when we are replaced by automation, and fewer and fewer humans are needed to do the “productive’ jobs. Soylent, anyone?

      • Moslerfan says:

        Unarmed, you have hit on a core issue for our time. It seems like a problem unique to our era, but the same questions arose as farming went from employing 90% of our labor to about 1%. Partly, I believe we need to change our definition of productivity from ‘activities that earn money’ to ‘activities that benefit people’ and find a way to incorporate that concept into our economic system. Lifer often talks about a guaranteed income. I am intrigued by the idea of a guaranteed job, with the gov paying for things that are socially useful but not profitable for the private sector, like environmental remediation. Sort of a new WPA/CCC. The idea of a Job Guarantee has been developed elsewhere (and even tried on a limited basis).

        BTW, I’d really like to have a bumper sticker with your handle on it.

      • unarmedandunafraid says:

        Moslerfan – Just to make it clear, our conceptions of “productivity” will change. Sounds like you are proposing what we would call “make work” now. Even with these changes in thought process, it is hard to imagine “non-productive jobs” that could not be done with automation.

        I assume that a lot of what we consider to be economic truths will fall. A lot of what we consider, errr, fair economic order.

        We are finally getting out of the “austerity fixes everything” mind set. In the deep recesses of our brains, we have this idea that if we make people suffer now they will be better for it later. In other words, don’t have a job, you are lazy and shiftless and unemployment pay will make these traits worse. You just haven’t suffered enough.

        As for the tag as a bumper sticker, that would scare me. I would have to carry a gun to protect myself from the gun nuts.

    • vikinghou says:

      An addendum to my previous post….

      One reason many private companies are abandoning pension schemes is that, today, few people work for one company throughout their careers. My 35 years with my former employer would certainly be an anachronism in the current environment. I recently read an article stating that people beginning their careers should expect to work for 5 or more employers before they retire. Therefore, with such job hopping, it would be difficult for employees to become vested in a company’s pension plan and accumulate enough credits to receive a decent payout.

      • Name says:

        even discarding ‘temp work’, approximately ten employers or ‘contractees’ (1099 abuse) is more accurate, i think.

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