Category: Economy

Richie Daley Wants You to Guarantee the Olympics

Posted on by TL

Got money?  Are you ready to help bail out the Olympics if they fail in Chicago?

Richie Daley thinks you are, and he’s gone rogue making promises on behalf of the people of Chicago and the state of Illinois.

Perhaps the mocking tone isn’t quite appropriate.  This is Mayor Daley, after all.  For all his apparent whining at times, the man is a savvy pol, a one man governmental body, never to be dismissed or underestimated.

But I’m confused, and apparently he is also.  Just what is he promising on behalf of Chicago?  Good luck trying to interpret the Daley doublespeak.

From the Chicago Tribune, June 18:

Faced with losing the 2016 Summer Games to competing cities offering full government guarantees, Mayor Richard Daley made an about-face Wednesday and said the City of Chicago would sign a contract agreeing to take full financial responsibility for the Games.

In a worst-case situation, such as severe cost-overruns or a catastrophic event, the agreement could leave taxpayers on the hook for hundreds of millions of dollars or even more, a scenario Chicago’s bid team acknowledges but insists is far-fetched.

Bid officials said they can offer the guarantee because they plan to add another insurance policy worth a minimum of $500 million to existing guarantees, which they think creates an ample buffer for taxpayers.

The move surprised Chicago aldermen, who wondered why Daley had made a sweeping financial promise without bringing it to the City Council.

Chicago had tried to avoid the full commitment by offering to sign a modified version of the host-city contract with the International Olympic Committee. But Chicago’s package of limited guarantees has been an Achilles’ heel for the bid, since the other finalists — Madrid, Rio de Janeiro and Tokyo — are offering full government guarantees.

On Wednesday, Daley disclosed his change of heart, a move that jeopardizes his long-standing pledge to limit potential taxpayer exposure.

So Mayor Daley is apparently ready to throw in everything and the kitchen sink to see the Olympics come to Chicago.  However, Daley muddied the waters earlier today with a news conference that promised, well, we’re not sure what he promised.

From the Trib’s Clout Street:

Mayor Richard Daley today attempted to dampen the political firestorm he sparked while overseas last week when he told Olympics officials that Chicago would financially guarantee the 2016 Summer Games.

His remarks this afternoon, however, only further confused the issue.

The mayor, back in Chicago and addressing the issue locally for the first time today, seemed to contradict his own statements in Switzerland, as well as the public remarks of Chicago 2016 chief Pat Ryan and International Olympics Committee President Jacques Rogge.

“We agreed to sign a host city agreement with the provisions of the city, state and the insurance policy as added on to the host city agreement. That’s what it’s going to be and that is our protection for the taxpayers of the city of Chicago,” Daley said today with Lori Healey, Chicago 2016 president and the mayor’s former chief of staff, at his side.

But that version is markedly different from Daley’s remarks immediately after emerging from his June 17 meeting with the IOC, when he told the Tribune he had just agreed to sign the host city contract “as is.”

In a subsequent interview last week, the IOC’s Rogge confirmed that Daley had agreed to sign the standard contract without modifications.

How much are Chicago and the rest of the state at risk if all of this goes south?

From Clout Street again:

For months, the mayor and Olympic bid leaders had pledged not to sign the blanket financial guarantee that could put taxpayers on the hook if there are cost overruns beyond the $750 million level the city and state already have agreed to cover.

So, which is it?  $750 million is aweful close to $1 billion.  How much can we afford?

Make no mistake: I would love to see the Olympics come to Chicago.  Every town, village and city in Cook County would benefit, financially and otherwise.  As an added plus, the experience would be completely awesome.

Frankly, I’m suspicious of Madrid, Rio de Janeiro and Tokyo.  None of these cities can afford to make outlandish financial guarantees, and the IOC must know this.  Neither can Chicago.

Here’s the problem: Illinois does nothing efficiently, and Chicago is even worse.  We know that Patronage City will dish out completely unnecessary contracts all over the state.  If all goes well and the Olympics in 2016 are a huge success, somehow, someway, Chicago and the state of Illinois will manage to lose an incredible amount of money.

It’s inevitable.  This is Illinois.

There must be a way of landing the Olympics without promising a credit card the size of Mayor Daley’s ego.

Weekly Address – President Obama Highlights Tough New Consumer Protections, June 20, 2009

Posted on by TL

Washington, D.C.–(ENEWSPF)–June 20, 2009. As we continue to recover from an historic economic crisis, it is clear to everyone that one of its major causes was a breakdown in oversight that led to widespread abuses in the financial system. An epidemic of irresponsibility took hold from Wall Street to Washington to Main Street. And the consequences have been disastrous. Millions of Americans have seen their life savings erode; families have been devastated by job losses; businesses large and small have closed their doors.

In response, this week, my administration proposed a set of major reforms to the rules that govern our financial system; to attack the causes of this crisis and to prevent future crises from taking place; to ensure that our markets can work fairly and freely for businesses and consumers alike.

We are going to promote markets that work for those who play by the rules. We´re going to stand up for a system in which fair dealing and honest competition are the only way to win. We´re going to level the playing field for consumers. And we´re going to have the kinds of rules that encourage innovations that make our economy stronger – not those that allow insiders to exploit its weaknesses for their own gain.

And one of the most important proposals is a new oversight agency called the Consumer Financial Protection Agency. It´s charged with just one job: looking out for the interests of ordinary Americans in the financial system. This is essential, for this crisis may have started on Wall Street. But its impacts have been felt by ordinary Americans who rely on credit cards, home loans, and other financial instruments.

It is true that this crisis was caused in part by Americans who took on too much debt and took out loans they simply could not afford. But there are also millions of Americans who signed contracts they did not always understand offered by lenders who did not always tell the truth. Today, folks signing up for a mortgage, student loan, or credit card face a bewildering array of incomprehensible options. Companies compete not by offering better products, but more complicated ones – with more fine print and hidden terms. It´s no coincidence that the lack of strong consumer protections led to abuses against consumers; the lack of rules to stop deceptive lending practices led to abuses against borrowers.

This new agency will have the responsibility to change that. It will have the power to set tough new rules so that companies compete by offering innovative products that consumers actually want – and actually understand. Those ridiculous contracts – pages of fine print that no one can figure out – will be a thing of the past. You´ll be able to compare products – with descriptions in plain language – to see what is best for you. The most unfair practices will be banned. The rules will be enforced.

Some argue that these changes – and the many others we´ve called for – go too far. And I welcome a debate about how we can make sure our regulations work for businesses and consumers. But what I will not accept – what I will vigorously oppose – are those who do not argue in good faith. Those who would defend the status quo at any cost. Those who put their narrow interests ahead of the interests of ordinary Americans. We´ve already begun to see special interests mobilizing against change.

That´s not surprising. That´s Washington.

For these are interests that have benefited from a system which allowed ordinary Americans to be exploited. These interests argue against reform even as millions of people are facing the consequences of this crisis in their own lives. These interests defend business-as-usual even though we know that it was business-as-usual that allowed this crisis to take place.

Well, the American people did not send me to Washington to give in to the special interests; the American people sent me to Washington to stand up for their interests. And while I´m not spoiling for a fight, I´m ready for one. The most important thing we can do to put this era of irresponsibility in the past is to take responsibility now. That is why my administration will accept no less than real and lasting change to the way business is done – on Wall Street and in Washington. We will do what is necessary to end this crisis – and we will do what it takes to prevent this kind of crisis from ever happening again.

Thank you.

Source: whitehouse.gov

Weekly Address: President Obama Outlines $300+ Billion in new Medicare. Medicaid Savings

Posted on by TL

Washington, D.C.- June 13, 2009. Last week, I spoke to you about my commitment to work with Congress to pass health care reform this year. Today, I’d like to speak about how that effort is essential to restoring fiscal responsibility.

When it comes to the cost of health care, this much is clear: the status quo is unsustainable for families, businesses, and government. America spends nearly 50 percent more per person on health care than any other country. Health care premiums have doubled over the last decade, deductibles and out-of-pocket costs have skyrocketed, and many with preexisting conditions are denied coverage. More and more, Americans are being priced out of the care they need.

These costs are also hurting business, as some big businesses are at a competitive disadvantage with their foreign counterparts, and some small businesses are forced to cut benefits, drop coverage, or even lay off workers. Meanwhile, Medicare and Medicaid pose one of the greatest threats to our federal deficit, and could leave our children with a mountain of debt that they cannot pay.

We cannot continue down this path. I do not accept a future where Americans forego health care because they can’t pay for it, and more and more families go without coverage at all. And I don’t accept a future where American business is hurt and our government goes broke. We have a responsibility to act, and to act now. That is why I’m working with Congress to pass reform that lowers costs, improves quality and coverage, and protects consumer health care choices.

I know some question whether we can afford to act this year. But the unmistakable truth is that it would be irresponsible to not act. We can’t keep shifting a growing burden to future generations. With each passing year, health care costs consume a larger share of our nation’s spending, and contribute to yawning deficits that we cannot control. So let me be clear: health care reform is not part of the problem when it comes to our fiscal future, it is a fundamental part of the solution.

Real reform will mean reductions in our long term budget. And I have made a firm commitment that health care reform will not add to the federal deficit over the next decade. To keep that commitment, my Administration has already identified how to pay for the historic $635 billion down payment on reform detailed in our budget. This includes over $300 billion that we will save through changes like reducing Medicare overpayments to private insurers, and rooting out waste in Medicare and Medicaid.

However, any honest accounting must prepare for the fact that health care reform will require additional costs in the short term in order to reduce spending in the long-term. So today, I am announcing an additional $313 billion in savings that will rein in unnecessary spending, and increase efficiency and the quality of care – savings that will ensure that we have nearly $950 billion set aside to offset the cost of health care reform over the next ten years.

These savings will come from commonsense changes. For example – if more Americans are insured, we can cut payments that help hospitals treat patients without health insurance. If the drug makers pay their fair share, we can cut government spending on prescription drugs. And if doctors have incentives to provide the best care instead of more care, we can help Americans avoid the unnecessary hospital stays, treatments, and tests that drive up costs. For more details about these and other savings, you can visit our website: www.whitehouse.gov.

These savings underscore the fact that securing quality, affordable health care for the American people is tied directly to insisting upon fiscal responsibility. And these savings are rooted in the same principle that must guide our broader approach to reform: we will fix what’s broken, while building upon what works. If you like your plan and your doctor, you can keep them – the only changes that you’ll see are lower costs and better health care.

For too long, we have stood by while our health care system has frayed at the seams. While there has been excuse after excuse to delay reform, the price of care has gone up for individuals, for business, and for the government. This time must be different. This is the moment when we must reform health care so that we can build a new foundation for our economy to grow; for our people to thrive; and for our country to pursue a responsible and sustainable path. Thank you.

Source: whitehouse.gov

Todd Stroger is Confused About Taxes

Posted on by TL

First, Cook County Board President Todd Stroger wanted to cut taxes.  That big announcement was made around tax day 2009:

Less than a year before he seeks re-election, Cook County Board President Todd Stroger today asked commissioners to roll back part of the major sales tax increase he pushed through last year.

Under the proposal, the county’s sales tax rate would drop from 1.75 percent to 1.5 percent. At a a news conference, Stroger said federal stimulus package dollars would make it possible.

Pressed to explain how exactly stimulus dollars would replace sales tax revenue, Stroger replied that he had “no hard numbers” because the county continues discussions with federal officials.

Given Stroger’s inability to focus or clearly explain his positions, it was not surprising that Stroger had “no hard numbers.”  Much like the U.S. Senate Republican’s 2009 budget proposal — which essentially was a glorified coloring book — Stroger’s budget proposals have been erratic.

Forward one month:

Cook County Board President Todd Stroger has vetoed a 12-3 vote of the County Board to repeal his beloved sales-tax increase. Deep down, he says, he supports killing the full tax increase. But not now, and not even on a set schedule. No, he wants to roll back the tax “as funds become available.”

Right.  So that federal stimulus package that was supposed to save the day doesn’t count.

The Trib has a plan:

We figure the 12 board members who voted to kill the tax increase will vote to override. Similarly, the three who previously voted to keep the increase in place — Jerry “Iceman” Butler, William Beavers and Robert Steele — probably will vote against an override.

So Stroger’s veto brings tremendous pressure on the two members who missed that 12-3 vote. Either can be the fourth vote he needs. And both may have Democratic challengers in February’s Illinois primary precisely because of their past support for Stroger’s tax policies.

Surely they would appreciate your guidance on whether to let Stroger keep collecting his tax increase. Earlean Collins represents Chicago’s West Side and some west suburbs. Her telephone numbers are 312-603-4566 and 773-626-2184. Deborah Sims represents parts of the South Side and south suburbs. Her numbers are 312-603-6381 and 708-371-4251.

Readers, start dialing.

That’s a good plan.

Look, I know I’m naive.  I don’t get it.  I should better understand why Commissioner Deborah Sims is so loyal to Stroger in the first place — but I don’t.

The Cook County Board needs to grow some and override the veto.  Make your calls.

Conservative Blogger Matt Drudge Near Top of Out Mag’s Power List

Posted on by TL

Out Magazine has released their Power 50 list, featuring the leading figures in the gay community.  Much to the chagrin of the far right, I’m sure, Matt Drudge makes his debut on the list in 6th place.

Right-wingers know Drudge is gay, right?

From the lead-in to the list:

Power and Money have always been close companions, and the global economic crisis has only made them more so. But the Out Power 50 list has never been only about person wealth: congressman Barney Frank rose to the top this year because of his power over national financial policy. On the other hand, since just about everyone from Warren Buffet (not on our list — he’s not gay) to Dolce & Gabanna (also not on the list — they don’t live and work primarily in North America) has taken a personal financial hit, changes in person wealth generally didn’t affect rankings.

Any surprises?  Rosie O’Donnell dropped from 31st to 42nd.  The editors are sorry to not hear from Rosie any more, “We’ll admit it: The world is quieter, and maybe even a bit more boring, without daily updates from the mouth of Rosie. (She’s even abandoned her blog, at least for the time being.)”

Jodie Foster dropped from 13th to 36, “There’s not much doing in the life of Jodie Foster these days. But as the highest-paid openly lesbian actor in Hollywood — she got $15 million for her role in The Brave One — she’s got a lot of sway.”

Facebook creator Chris Hughes makes his debut on the list at number 32, “Not only is the 25-year old Harvard grad a cocreator of one of the most triumphant starups in recent history — a little marvel called Facebook — he also helped Obama land in the White House. Hughes left Facebook in February 2007 to serve as director of online organizing for Obama and launch My.BarackObama.com (orMyBO), allowing supporters to form groups, raise funds, and plan events online. ”

Neil Patrick Harris debuts at number 28, the editors saying, “Named one of last year’s Entertainers of the Year by Entertainment Weekly, Out cover guy Harris could do no wrong wherever he showed up.”

Suze Orman moved from 24th to 22, “Personal finance guru Orman came out publicly in The New York Times two years ago, but with the economy now on life support we need her more than ever. ”

Making his debut to the list at number 7 is Anglican Bishop Gene Robinson, “Baptized Vicky Gene (his parents had been hoping for a girl), Bishop V. Gene Robinson has been a lightning rod in the debate over the church and homosexuality ever since his consecration in 2003. But while the 77 million — member Anglican church of which Robinson is a member remains deeply conflicted over the issue, his series of meetings with Barack Obama in the run-up to last year’s election was a powerful signal of the new administration’s inclusiveness. ”

In what may be the biggest surprise, or disappointment, to the right wing and conservative America in general, Matt Drudge debuts on the list at number 6:

Matt Drudge — the archly conservative 42-year-old owner of the right wing news–aggregating site Drudge Report—also happens to love Chaka Khan, The Young and the Restless, and sex with men. Though he often plays coy about his homosexuality — “I go to straight bars. I go to gay bars,” he once said — he had a long-term relationship with a male landscaper. The power of Drudge is formidable; he reports that his site averages 20 million page views a day. Unfortunately, his agenda is often antigay, anti-choice, and anti-tolerance. No one said power was always used for good.

The weird right is taking being led over the cliff by a gay man.  I suppose there’s poetic justice there somewhere.

Sign Petition to Break Up the Banks

Posted on by TL

Democrats.com is circulating a petition, and I would encourage you to click through to their site and sign this petition:

Treasury Secretary Geithner proposed a $1 trillion plan to help Wall Street make a killing buying “toxic assets” with our tax dollars and guarantees. And he proposed a complex regulatory scheme to keep huge financial institutions from wrecking our economy once again.

But there’s a better and simpler solution: break up those huge financial institutions. If they’re “too big to fail,” then they’re too big to exist.

Returning to the banks and insurance companies that existed before the Reagan era would not hurt our economy. As Paul Krugman writes, “that boring, primitive financial system serviced an economy that doubled living standards over the course of a generation.”

Our friends at A New Way Forward have a plan:

NATIONALIZE: Insolvent banks that are too big to fail must incur a temporary FDIC intervention – no more blank check taxpayer handouts. (see Paul Krugman on nationalization)

REORGANIZE: Current CEOs and board members must be removed and bonuses wiped out. The financial elite must share in the cost of what they have caused. (see Simon Johnson on reorganizing)

DECENTRALIZE: Banks must be broken up and sold back to the private market with new antitrust rules in place – new banks, managed by new people. Any bank that’s “too big to fail” means that it’s too big for a free market to function. (see Mike Lux on decentralization)

Thank you for your consideration on this matter!

Gov. Bobby Jindal is Trying to Stand Up

Posted on by TL

It’s going to be quite a ride watching the Republicans try to reorganize themselves.  They really want power.  They should focus on issues and developing policy.  Their only policy is their stubborn ideology regardless of circumstances.

Governor Bobby Jindal is trying to position himself for a presidential bid for 2012.  He says it’s time for the GOP to stand up to President Obama.

Of course it is.  Why wait until you have ideas?

From CBS 2 Chicago:

Louisiana Gov. Bobby Jindal again found himself carrying the Republican mantle opposite a primetime appearance from President Barack Obama on Tuesday, saying Republicans must be ready to defy the president when they disagree with his policies. He also joked about his widely panned response to Obama’s address to Congress last month.

“We are now in the position of being the loyal opposition,” Jindal said at a Republican congressional fundraising dinner that only by coincidence fell on the same night as Obama’s news conference. “The right question to ask is not if we want the president to fail or succeed, but whether we want America to succeed.”

Saying “the time for talking about the past is over,” Jindal said Republicans have begun to find their voice after back-to-back elections losses — motivated by what he called historic Democratic spending excess.

“The time for talking about the past is over.”  Of course it is.  The past is how we got into the mess we’re in right now: Republican policies, George W. Bush, historic Republican spending excess.

Yes, and don’t you forget it: Historic Republican spending excess.  In all the wrong places.

Stand up, Bobby.  Repackage for us the same, old, dangerous Republican policies that paved the way for the Great George W. Bush Recession — and thank Americans they tossed your party’s sorry collective asses the hell out of Dodge.

Time to Trust Economists, Time to Listen to Krugman

Posted on by TL

I am not an economist.  I have been a politician.  When serving in office, I trust the financial advice of those who know better than I do. We all have our limitations, and, depending on the office, the job of the politician is to develop sound policy.  Likewise, I’m not likely to trust the scientific advice of other pols who tell me there is no global warming.  On that, I’ll talk to the two astronomers I know.  When they tell me global warming is real, I understand that they understand the science, and can draw that conclusion.

So I don’t really give a care what anyone in Congress has to say about the Bush Recession we’re stuck in as long as they choose ideology over common sense.  And the Obama administration has me worried, largely because they’re worrying the New York Times’ Paul Krugman.  I’ll err on the side of listening to a Nobel laureate instead of the pols, even if that politician is President Barack Obama.

Krugman says this in today’s New York Times:

Over the weekend The Times and other newspapers reported leaked details about the Obama administration’s bank rescue plan, which is to be officially released this week. If the reports are correct, Tim Geithner, the Treasury secretary, has persuaded President Obama to recycle Bush administration policy — specifically, the “cash for trash” plan proposed, then abandoned, six months ago by then-Treasury Secretary Henry Paulson.

That’s cause for concern.  We certainly cannot afford to recycle the Bush adminstration’s failed policies.

Krugman continues:

This is more than disappointing. In fact, it fills me with a sense of despair.

After all, we’ve just been through the firestorm over the A.I.G. bonuses, during which administration officials claimed that they knew nothing, couldn’t do anything, and anyway it was someone else’s fault. Meanwhile, the administration has failed to quell the public’s doubts about what banks are doing with taxpayer money.

And now Mr. Obama has apparently settled on a financial plan that, in essence, assumes that banks are fundamentally sound and that bankers know what they’re doing.

Barack Obama is a brilliant politician, but I’m afraid he’s reached his own, “Good job Brownie!” moment.  We can’t afford to hold on to Tim Geithner if he’s too entrenched in Wall Street group-think to think us out of this mess.  Obama campaigned on change, and the President must accept the fact that everything has changed already.  Our economy is not the same.  This recession is a different animal, and it doesn’t want to die.

Krugman proposes a better solution:

As economic historians can tell you, this is an old story, not that different from dozens of similar crises over the centuries. And there’s a time-honored procedure for dealing with the aftermath of widespread financial failure. It goes like this: the government secures confidence in the system by guaranteeing many (though not necessarily all) bank debts. At the same time, it takes temporary control of truly insolvent banks, in order to clean up their books.

That’s what Sweden did in the early 1990s. It’s also what we ourselves did after the savings and loan debacle of the Reagan years. And there’s no reason we can’t do the same thing now.

If I’m the guy making policy, I’m listening to the guy with the Nobel Prize, not the guy trying to make the same broken clock tick.

Mr. President, it’s time to trust economists.  Pick up the phone and give Paul Krugman a call.

Bring 30 Pieces of Silver for Chicago Parking Meters

Posted on by TL

Want to park your car for two hours in Chicago?  Bring 28 quarters plus a few more if you need more time.

Carol Marin says the hike in parking fees has caused a mild rebellion among commuters.  Apparently there are quite a few open spots on the streets of Chicago:

At noon in Wicker Park, where Milwaukee Avenue is usually packed with parked cars, there were open meters waiting.

And at 2 p.m. around the Sheraton Hotel on Columbus Drive, a place where normally you can’t crowbar your car into a space, there were at least three or four parking spaces. What’s up with this?

What’s up is that a month ago, when the City of Chicago privatized parking meters, rates were immediately jacked way up, and you now have to feed 28 quarters into the meter to park a car in the Loop for two hours. In exchange for a 75-year lease, the city got $1.2 billion to help plug its budget holes.

$1.2 billion sounds great in the short term.  But what about sustained revenue?  Did Chicago jump for short-term gain and lose long-term revenue in the process?  According to Marin, “parking tickets reap six, seven, even eight times more than what meters bring in.”  If no one parks, then there are no tickets.

The whole purpose of parking meters was as an urban planning tool, used to generate turnover so businesses could see a steady stream of customers who park for a short time, shop and leave, opening spaces for more shoppers.

And there’s the rub: parking meters exist now only to generate revenue.  They’re punishment for shopping.

There must be an army in Chicago writing tickets now.  A friend’s son pulled into a spot last week, but didn’t have any tickets.  He ran into a dry cleaning store for change to feed the meter.  Coming from the store just a few moments later, parking meter enforcement had already found his vehicle.  Now he’s paying dearly for that spot.

Want to go shopping?  Stay in the ‘Burbs.  Better yet, head to the South Suburbs.  The best deals are in the south.  Discover the affordable housing in Park Forest and have dinner at Bixby’s.  Visit Crete for antiques.  Head to Matteson to J.C. Penny’s or any number of other stores.

You can even park for free.

Deny Richie Daley and the LAZ Parking cabal their 30 pieces of silver.