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SK in CV
Participant[quote=SD Realtor]Sounds like there should be no private entities then because any service industry that has multiple providers is less efficient then a single entity.
Hmmm curious logic.[/quote]
I was specifically talking about residential trash pick-up. And yes, it’s perfect logic. Everyone gets almost identical service, differing only in the number of trash cans. You tell me, which would be more efficient, one provider stopping at every house once a week or 10 different providers driving the exact same route every week, but stopping, on average at every 10th house?
Participant[quote=SD Realtor]Except that annuity companies are not backstopped by taxpayers.[/quote]
Whole different issue. That’s immaterial to your claim that it’s “impossible to correctly forecast the cost of future liabilities more then a year or two in advance and then accurately predict that a given return will cover those liabilities.”
It IS possible.
Participant[quote=SD Realtor]I think there is ample evidence to show they have not been done correctly. Similarly I believe it is impossible to correctly forecast the cost of future liabilities more then a year or two in advance and then accurately predict that a given return will cover those liabilities. [/quote]
Bolderdash. Annuity companies have been doing it for generations. You want to argue that pensions are too high? Fine. You may have a point. You want to argue that pension funds and current funding have been mismanaged? Fine. You’re probably right. You want to argue that return assumptions have been too high? Fine. It’s arguable. (The city pension fund has earned 8% per year the last decade.) None of those refute the fact that annuity companies have accurately and successfully predicted future costs, some for over 100 years.
Participant[quote=SD Realtor]SK I think your assumption is incorrect because you are neglecting to factor in the recurring fees that stick with the taxpayers long after that city employee retires. It may be a wash for the actual cost of running the business but the long term cost to the consumer is substantially less.
So I would rather pay the private company to do the job, even if it a little bit more costly now, rather then fund the garbage man’s pension and health care for life.[/quote]
If done correctly, the pension costs are annual expenses, not perpetual. I acknowledge that it hasn’t efficiently been done that way in the past. Though come to think of it, I have no idea how well funded the city of SD pensions are. If they’re fully funded, there are no perpetual costs.
If it’s a little bit more costly now, it will be much more costly in the future. Guaranteed. As soon as Waste Management has 50% of the market, they’ll jack up prices.
Participant[quote=livinincali][quote=CA renter]
Believe it or not, my mind is open about this issue. If you (or anyone else) can prove to me that there is a net benefit to society when we privatize government assets, cash flows, and services, I will gladly change my mind. Until then, all anyone has ever offered is the same old rhetoric and propaganda from the privatization movement (who stand to benefit greatly…at the expense of taxpayers, consumers of government services, and workers), without any actual evidence to back up their arguments.
[/quote]I can envision a scenario where privatization of a government service would be more efficient, but most privatizations are not done in that manner. For the most part a privatization is a transfer of a government run monopoly to a private run monopoly. It’s the easiest to implement and the less disruptive to the people receiving the service.
Suppose the following scenario. City of San Diego gets rids of free trash pickup and opens up trash pickup to whoever would like to do it. Citizens would be responsible for picking and paying for a trash pickup service based on their need. You might see some people elect to drop off trash at the city dump themselves or they might elect to have somebody do it for them. You create quite a few low skilled jobs in the process and quite a few entrepreneurs that want to run trash hauling services.
After the initial disruption and turmoil this system would likely function at a lower cost and more efficiently than the current city system of picking up trash once a week on a scheduled day. Of course that disruption would be a painful process. Trash would likely pile up at some homes, illegal dumping would rise and other negative consequences would come out of it initially, but after a few years we’s likely find a nice balance.
Of course we’d never privatize in that manner because of those initial disruptions. Instead we’d likely hand a contract to one of the big existing commercial trash haulers and they would likely cost about the same. In their case the owners would likely get rich and the employees would suffer. But on the other hand if you opened it up to all comers and let the market figure it out you’d likely find cost savings and efficiency.[/quote]
The only way this change would result in a net creation of jobs is if the private sector was LESS efficient than the city. All the current city waste employees would lose their jobs. The private sector will only do it if the work is profitable. I would assume that many current city waste workers would pick up work in private industry, probably at lower wages. But I doubt the cost to consumers would be less than the current cost to the city. A single provider will always be more efficient in providing service than multiple providers. (A single truck in each neighborhood v. multiple trucks from competing services in that same neighborhood.) Personally, I’d rather have the higher wages going to the city workers and cut out the profit.
Participant[quote=no_such_reality]
Not major but those little expenses add up and more importantly drive you to realize income which then adds an additional tax expense.[/quote]Unless I’m missing something in what you’re describing here, borrowing money doesn’t normally create any income or additional income tax expense.
Participant[quote=spdrun]Really, the inflexible system in CA is CA’s own fault, though I’m reaping the benefits so I shouldn’t whinge about it.[/quote]
Aren’t you a rather recent buyer? So rather than reaping the benefits, you’d be bearing the more of the burden than long time owners, not less.
ParticipantWhen were sellers in hiding?
Participant[quote=CDMA ENG][quote=CA renter][quote=The-Shoveler]It’s very simple really,
When the City files BK, it does so in Federal court.
If the Federal court over rules the State Law saying that “public employee pensions cannot be diminished or impaired”
Well I guess that’s where the real battle begins.
Interesting times.[/quote]
Employee compensation (including pensions), are priority claims. The only question is how they will determine the limits of the priority claims for a municipal BK, as opposed to limits for a business BK. Bondholders do not have priority claims.[/quote]
Priority claim is what is at stake in Detroit. I know in CA that Pensioner are a priority claim. That being said I hope your right.
[/quote]
It’s much more complicated than just a matter of priority claims. Debts to employees may not even be priority claims in municipal bankruptcies, as they are, with limits, in business bankruptcies. (The language in the law is not the same, and there just isn’t that much precedence.)
TS quoted a piece of the Michigan constitution, but I think he skipped the more important part. What the law says is:
The accrued financial benefits of each pension plan and retirement system of the state and its political subdivisions shall be a contractual obligation thereof which shall not be diminished or impaired thereby.
If the pension plan benefits “of the subdivisions” are a contractual obligation of the state, then even if Detroit succeeds in wiping out those obligations, they remain obligations of the state. (The state is not a party to the bankruptcy.) So the question that the bankruptcy court has to answer is whether state law makes the state a co-obligor on those debts, and if they pass on answering that question, whether the wording of the state law (both the quoted part, and subsequent sections) creates a security interest in municipal funds.
Participant[quote=The-Shoveler]In the end I guess that’s what it’s all about (the big one)
Does Federal BK law trump State law.
We will see I guess, there will be a lot of eyes on this one.[/quote]
Where do you see the conflict between MI law and bankruptcy law?
Participant[quote=spdrun]^^^
(Good. If they were too fucking stupid to do their research, they’ll be getting what they asked for. They may as well be buying the Brooklyn Bridge sight-unseen. Shame on their countrymen who are selling them on this crap, though.)
This being said, the problem stems as much from decline of manufacturing/realignment as it does from extreme and prolific corruption in Detroit. Cities have had one problem or the other and survived, but typically not both.
Chicago: extremely corrupt, but with a fairly diverse economy still.
Pittsburgh: no extreme corruption (some as always), but had to go through massive realignment after “Big Steel” died out in the US.[/quote]Detroit’s problems go back at least 5 decades. Manufacturing job losses, the race riots, population decline, the racism towards its first black mayor back in the mid-70’s, when both businesses and other politicians rejected his leadership and policies irrespective of their benefits for the people of Detroit, corruption, unions, even the way the city was designed, constructed, and developed. And more. It isn’t any two things. And it isn’t like any other city. Nor can it be repaired like any other city.
ParticipantInteresting development here:
The bad news for Detroiters is that the city’s bankruptcy will likely only deepen the decay of its downtown housing market.
That might deter most prospective home buyers. But some look at Detroit’s hard times and see profit.
Specifically, bargain-hunting Chinese investors. Since the bankruptcy was announced on July 18, talk of snapping up Detroit housing for a pittance has picked up on Sina Weibo (link in Chinese), reports Sina Finance. And it appears to be translating into real interest; Caroline Chen, a real estate broker in Troy, Michigan, says she’s received “tons of calls” from people in mainland China.
“I have people calling and saying, ‘I’m serious—I wanna buy 100, 200 properties,’” she tells Quartz, noting that one of her colleagues recently sold 30 properties to a Chinese buyer. “They say ‘We don’t need to see them. Just pick the good ones.’”
http://qz.com/107937/the-latest-chinese-investment-craze-downtown-detroit-housing/
It isn’t impossible for Detroit to come back. Though I doubt there is either the political fortitude nor the private risk capital to make it happen any time soon. Gentrification takes a lot of time, a lot of money, and a lot of risk. I don’t suspect these particular investors are going to take it that direction. I hope I’m wrong.
Participant[quote=FlyerInHi]The governor of Michigan has it right.
It’s about accountability to the citizens of Detroit who are not getting the services they deserve.
Sorry about retirees and bondholders taking a haircut. They are the past, not the future.[/quote]
Unless the entire state goes bankrupt, the retirees contracted benefits will be paid. The state is on the hook for them.
Participant[quote=zk]
SK, let’s say you live in a country where 99.9% of the people are race A and 0.1% are race B. And 99.9% of the criminals are race B and 0.1% are race A. And you live in a part of town where there are a hundred thousand residents, but there aren’t more than 2 or 3 residents who are of race B. You’re watching your children play in the culdesac where you live from the upstairs window of your house. A man of race B walks into the culdesac. Are you more anxious about that than if a man of race A walks into the culdesac?
[/quote]
Except that’s not the country we live in. Roughly 15% of the population has black skin. The vast majority of them are not criminals.
When I lived in Carmel Valley, I lived on that cul de sac. There weren’t any black families living on the street while I lived there, but there were some in the neighborhood. One of them played in my son’s band. They practiced in my music room for about 6 years. By the time they all got their driver’s licenses, my driveway was filled with cars every weekend. Despite the horrible sound coming from my house, the neighbors were very nice, none of them ever complained. But twice the police showed up. Both times following a suspicious black kid driving through the neighborhood. Both times they questioned him for 10 or 15 minutes about what he was doing in the neighborhood in which he lived. Never happened with any of the white kids, despite the fact that a few of them didn’t live anywhere near our neighborhood.
Now you might claim that the police were just doing their job, investigating suspicious behavior. But the important thing here is not whether you think it was the appropriate thing to do. The important thing, and this is what Obama was talking about, is the effect of these kinds of events on black teenagers and black men. This kid wasn’t doing anything wrong, he was simply living his life exactly the same as his 5 or 6 bandmates were doing. The only difference is that for a black kid, living his life, exactly the same as his white friends is suspicious behavior. Driving down the street is suspicious behavior. And it is in this context that the reaction to the Martin shooting arose.
Neither this kid, nor his parents, who lived right around the corner from me, have any control over what happens in other neighborhoods. They can’t stop the gang activities in other parts of town. And neither should they be targets of law enforcement or community watchdogs because of what happens elsewhere. But they are. So when I hear these BS arguments that black leaders are “making it a racial thing”, my skin crawls. They aren’t “making it a racial thing”. It IS a racial thing. They live with it every single day.
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