I created a discussion topic at the new forum now available at www.spfld.net focusing specifically on the question of how much actual dollars are lost forever from the city's economic cycle, by employees who work for the city, but live and spend their money in other communities?
The question of residency requirement in Springfield, Illinois is especially important because the city has it's own utility company, City Water Light and Power, which generates money from it's private sector customers as a revenue source that helps pay the salaries of city employees.
If municipal employees live outside the city of Springfield, in the realm of other utility companies, merchants and services that have private sector employees that live in other communities, The potential tax revenue that might have been generated for the city of Springfield is lost forever, which means that real money is slowly and permanently being siphoned out of Springfield, Illinois' economic circulation.
Money is already being siphoned permanently away from Springfield when people choose to buy anything that was not manufactured locally. When you look at money in terms of an environmental cycle, like the hydrogen cycle, for example, it becomes clear that survival based on the money cycle is limited and is dependent upon new money flowing in faster than it leaves.
New money flowing in faster than it leaves is entirely up to businesses. If businesses pay wages high enough, the tax revenues generated should produce services and infrastructure that is attractive enough to draw in more businesses. Unfortunately, businesses will only pay employees what the government forces them to pay employees. The government employees have organized and demanded to be paid more than the city is willing to tax the private sector because the private sector can leave.
The consequences is a crumbling infrastructure which becomes so unattractive that the only way to compensate is to pay exorbitant salaries to the professionals needed for the survival of the community, who would otherwise leave, in the fields of academics, health, finance, engineering, etc.
But the habit in Springfield is this: If you can afford it, live outside of the city.
The city of Springfield, much like most municipalities, is becoming an economic crater. The only difference is that inevitability of collapse is slowed by money generated from the city's own utility company, CWLP. The evidence of a crumbling infrastructure can be clearly seen in the architecture of the buildings surrounding the state capitol, and the odor rising up from the open sewers on 13th street and other older areas of the city.
Showing posts with label economy. Show all posts
Showing posts with label economy. Show all posts
Saturday, March 05, 2011
Saturday, February 27, 2010
Consequences of laying off employees.
People are getting laid off so they can be replaced by entry-level low wage workers who will have absolutely no spending power, and from whom the city and state won't be able to extract tax revenue.
Businesses are collectively sinking their own ships to try and economically reduce government.
The timing is different for each business, between the time a business cuts it's costs by laying off employees and when the negative consequences occur, but in every case the delay is long enough for the cause of those negative consequences to be vaguely blamed on "the economy," rather than the businesses own practice.
The state and city cut a tiny bit deeper into it's own throat by laying off highly paid government workers. The tax loss won't be felt for a while, but it's inevitable.
The shock to the local private sector economy is three-fold for every government worker laid off, by virtue that most government employees are paid at least twice the private sector average wage, even more if you include benefits.
No customers, intermittent fire and police protection, utilities rendered unreliable, If you own your own business and you own the building too, you've doomed yourselves.
My advice is to continue to hype the local economy long enough to sell your business. Oh, sorry about giving away that secret.
Businesses are collectively sinking their own ships to try and economically reduce government.
The timing is different for each business, between the time a business cuts it's costs by laying off employees and when the negative consequences occur, but in every case the delay is long enough for the cause of those negative consequences to be vaguely blamed on "the economy," rather than the businesses own practice.
The state and city cut a tiny bit deeper into it's own throat by laying off highly paid government workers. The tax loss won't be felt for a while, but it's inevitable.
The shock to the local private sector economy is three-fold for every government worker laid off, by virtue that most government employees are paid at least twice the private sector average wage, even more if you include benefits.
No customers, intermittent fire and police protection, utilities rendered unreliable, If you own your own business and you own the building too, you've doomed yourselves.
My advice is to continue to hype the local economy long enough to sell your business. Oh, sorry about giving away that secret.
Sunday, February 21, 2010
DEPRESSION CONTINUES ADVANCING, lets look at the end.
Dave Bakke's column in the State Journal-Register is a testament to my previous blog post.
•Illinois State Journal-Register 2/21/2010 [ http://www.sj-r.com/bakke/x723437528/Dave-Bakke-I-like-living-here-but-why ]
•SPFLDnet.blogspot.com 2/10/2010[ http://spfldnet.blogspot.com/2010/02/depression-advancing-at-imperceptible.html ]
The downward spiral of the economy is self-sustaining.
Laid-off private-sector workers = less consumerism = less tax revenue = laid-off public-sector workers = less consumerism = laid-off private-sector workers.
The cycle repeats. This cycle will continue to repeat until there is nothing left but land owners with natural resources that are still in demand. That is unless those who control the government begin to arbitrarily seize land so they can pay their own ridiculously high government salaries and pensions.
Government salaries in the upper levels will increase drastically because they can see this coming. Once they retire they can sit back and just let the money flow into their coffers.
•Illinois State Journal-Register 2/21/2010 [ http://www.sj-r.com/bakke/x723437528/Dave-Bakke-I-like-living-here-but-why ]
•SPFLDnet.blogspot.com 2/10/2010[ http://spfldnet.blogspot.com/2010/02/depression-advancing-at-imperceptible.html ]
The downward spiral of the economy is self-sustaining.
Laid-off private-sector workers = less consumerism = less tax revenue = laid-off public-sector workers = less consumerism = laid-off private-sector workers.
The cycle repeats. This cycle will continue to repeat until there is nothing left but land owners with natural resources that are still in demand. That is unless those who control the government begin to arbitrarily seize land so they can pay their own ridiculously high government salaries and pensions.
Government salaries in the upper levels will increase drastically because they can see this coming. Once they retire they can sit back and just let the money flow into their coffers.
Wednesday, February 10, 2010
DEPRESSION ADVANCING AT AN IMPERCEPTIBLE PACE
The business news media keep reporting claims that the economy is slowly climbing out of a recession. It is for a few companies that managed to cut their costs temporarily enough to report an upward trend in their profit-expense ratios; just enough to get more investors the same way Enron did shortly before its fraud was discovered. Unfortunately, this is more than just Enron, it’s the few businesses that are used in calculating the gross domestic product (GDP) for the entire country.
Several stories published in the Illinois State Journal-Register (SJ-R) combine to foretell the doom of our economy, more so than any temporarily distorted PE ratios; a tale of greed so strong that long-term consequences are ignored for instant gratification and knee-jerk reactions.
Public universities are depleting financial reserves in order to make payroll, according to a story by Deanna Bellandi of the Associated Press. “the state isn’t giving them the money they’ve been promised,” Twelve public universities are in trouble, even after raising tuition, the state owes the universities nearly three quarters of a billion dollars.
The souring economy and consequent layoffs, increased temporarily the number of enrollees at colleges for re-training, but for some reason, the increased enrollment and tuition combined still has the universities operating at a loss. The universities apparently are not self-sustaining. The income from tuition is going somewhere, but where?
It was reported February 3, 2010 that enrollment was up at the University of Illinois at Springfield, however, one commenter online referenced the economy and stated “More kids are staying home and commuting rather than going away. SIU-C is taking a pounding for the same reason.”
The state of Illinois is running a deficit, climbing toward thirteen billion dollars.
Sean Driscoll of Gatehouse News Service reported today that without help from the U.S. Congress, sixty five thousand Illinois residents are slated to lose their unemployment benefits in March and two hundred and thirty five thousand by June. Tim Landis reported a twenty eight percent increase in the number of unemployment claims between 2008 and 2009, in Springfield, to about sixteen thousand claims. The unemployment rate is the second lowest in the state behind Bloomington-Normal, according to Landis.
Springfield is not a microcosm of every medium sized town across the state because it’s the state capital, has colleges, a major medical district, and international historical notoriety.
On February 4, 2010, Dean Olsen reported that the Illinois Supreme Court overturned the cap on medical malpractice claims for constitutional reasons, making Illinois very unattractive to medical practitioners because malpractice insurance premiums will skyrocket, consequently so will health care and general health insurance costs in the state.
On February 9, 2010 it was announced in the SJ-R that the local power and water company, City Water Light and Power (CWLP), issued six pink slips to employees, with the promise of fifty four more pink slips if the union rejects concessions for furlough days and pay or benefit reductions.
On February 5, 2010 it was reported in SJ-R that another twenty-one layoff notices went out to other city employees who are members of the American Federation of State, County and Municipal Employees (AFSCME) if they don’t concede to furlough days and smaller pay raises.
On February 6, 2010 it was reported that The Springfield Police Benevolent and Protective Association Unit 5 announced that ninety seven percent of its organization voted against conceding to furlough days and lower salary raises. According to SJ-R the police union rejected the proposal because there was no guarantee that if accepted; no police officers would get laid off.
On February 8, 2010, it was reported that approximately half (two of four) of Springfield, Illinois City Clerk employees were issued notices of “possible layoffs.”
On February 4, 2010, it was reported that Springfield city alderman approved a spending budget that closed all but one of the city’s public libraries.
On February 3, 2010, Chris Dettro wrote in SJ-R that in Central Illinois Foodbank’s twenty one county area, over a hundred and five thousand people, including thirty-nine thousand children already receive food assistance annually, over seventeen thousand in a given week.
While all this is taking place, management at state and municipal levels are being promoted so they get higher pensions when they retire, often as an incentive to retire early, such as the outgoing Springfield, Illinois police chief, as reported on February 10, 2010 in the SJ-R.
What does this mean? Well, remember the promise that a lower prime lending rate would translated into lower credit card interest rates for customers? Remember that it never materialized and that all the profits were pocketed instead of being passed on to customers?
The same goes for your taxes. You aren’t going to see a dime of tax savings because management will be enriched further at the expense of laid-off labor. They are currently gorging themselves on what little is left of federal, state and local money.
Soon there will literally be nothing left, and they will be long gone. The baby boomers are gutting the economy and hoarding cash. I hesitate to suggest electing a new generation because it will be another generation of the same people, and the same type of people.
If you look at all the hoops you need to jump through to get elected, it’s not much of a stretch to conclude that the whole system is completely rigged.
Looking on the bright side, Scheels super sporting-goods store will be coming soon to compete with Gander Mountain and Dick’s Sporting Goods. This could mean that tents and sleeping bags at K-Mart, Target, and Shopko will be even more affordable for the rest of us.
Several stories published in the Illinois State Journal-Register (SJ-R) combine to foretell the doom of our economy, more so than any temporarily distorted PE ratios; a tale of greed so strong that long-term consequences are ignored for instant gratification and knee-jerk reactions.
Public universities are depleting financial reserves in order to make payroll, according to a story by Deanna Bellandi of the Associated Press. “the state isn’t giving them the money they’ve been promised,” Twelve public universities are in trouble, even after raising tuition, the state owes the universities nearly three quarters of a billion dollars.
The souring economy and consequent layoffs, increased temporarily the number of enrollees at colleges for re-training, but for some reason, the increased enrollment and tuition combined still has the universities operating at a loss. The universities apparently are not self-sustaining. The income from tuition is going somewhere, but where?
It was reported February 3, 2010 that enrollment was up at the University of Illinois at Springfield, however, one commenter online referenced the economy and stated “More kids are staying home and commuting rather than going away. SIU-C is taking a pounding for the same reason.”
The state of Illinois is running a deficit, climbing toward thirteen billion dollars.
Sean Driscoll of Gatehouse News Service reported today that without help from the U.S. Congress, sixty five thousand Illinois residents are slated to lose their unemployment benefits in March and two hundred and thirty five thousand by June. Tim Landis reported a twenty eight percent increase in the number of unemployment claims between 2008 and 2009, in Springfield, to about sixteen thousand claims. The unemployment rate is the second lowest in the state behind Bloomington-Normal, according to Landis.
Springfield is not a microcosm of every medium sized town across the state because it’s the state capital, has colleges, a major medical district, and international historical notoriety.
On February 4, 2010, Dean Olsen reported that the Illinois Supreme Court overturned the cap on medical malpractice claims for constitutional reasons, making Illinois very unattractive to medical practitioners because malpractice insurance premiums will skyrocket, consequently so will health care and general health insurance costs in the state.
On February 9, 2010 it was announced in the SJ-R that the local power and water company, City Water Light and Power (CWLP), issued six pink slips to employees, with the promise of fifty four more pink slips if the union rejects concessions for furlough days and pay or benefit reductions.
On February 5, 2010 it was reported in SJ-R that another twenty-one layoff notices went out to other city employees who are members of the American Federation of State, County and Municipal Employees (AFSCME) if they don’t concede to furlough days and smaller pay raises.
On February 6, 2010 it was reported that The Springfield Police Benevolent and Protective Association Unit 5 announced that ninety seven percent of its organization voted against conceding to furlough days and lower salary raises. According to SJ-R the police union rejected the proposal because there was no guarantee that if accepted; no police officers would get laid off.
On February 8, 2010, it was reported that approximately half (two of four) of Springfield, Illinois City Clerk employees were issued notices of “possible layoffs.”
On February 4, 2010, it was reported that Springfield city alderman approved a spending budget that closed all but one of the city’s public libraries.
On February 3, 2010, Chris Dettro wrote in SJ-R that in Central Illinois Foodbank’s twenty one county area, over a hundred and five thousand people, including thirty-nine thousand children already receive food assistance annually, over seventeen thousand in a given week.
While all this is taking place, management at state and municipal levels are being promoted so they get higher pensions when they retire, often as an incentive to retire early, such as the outgoing Springfield, Illinois police chief, as reported on February 10, 2010 in the SJ-R.
What does this mean? Well, remember the promise that a lower prime lending rate would translated into lower credit card interest rates for customers? Remember that it never materialized and that all the profits were pocketed instead of being passed on to customers?
The same goes for your taxes. You aren’t going to see a dime of tax savings because management will be enriched further at the expense of laid-off labor. They are currently gorging themselves on what little is left of federal, state and local money.
Soon there will literally be nothing left, and they will be long gone. The baby boomers are gutting the economy and hoarding cash. I hesitate to suggest electing a new generation because it will be another generation of the same people, and the same type of people.
If you look at all the hoops you need to jump through to get elected, it’s not much of a stretch to conclude that the whole system is completely rigged.
Looking on the bright side, Scheels super sporting-goods store will be coming soon to compete with Gander Mountain and Dick’s Sporting Goods. This could mean that tents and sleeping bags at K-Mart, Target, and Shopko will be even more affordable for the rest of us.
Monday, August 24, 2009
Predicted “Staycations” didn’t include IL State Fair.
Soon after the economy pinched a loaf last winter, the news media started repeating the trendy new word "Staycation" until it became a cliche. It was an accurate prediction for Indiana, Wisconsin, Missouri, Ohio and possibly Kentucky, that local state fair attendance would go up.
Not so for Illinois and Michigan.
I went to the Illinois State Fair last week, and spend most of my money on the admission and parking fee. $12.00 Attendance was reported down by 15% on WMAY this morning. They must have gone to the Missouri State fair which was up by the same amount from last year.
While Michigan’s state fair is not expected to start until August 28th and run through Labor Day, The Detroit Free Press reports that Governor Granholm is faced with a $1.8 billion deficit, plans to cut the fair’s budget. Eviction notices have been sent to the tenants, apparently scheduled for immediately following this year’s fair, freep.com reports.
The admission fee is broken down into the categories of “Super Saver Combo Pass,” $25.00 for gate admission and all day rides per person; $25.00 admission of 2 adults and 2 children; $9.00 for one adult; $4.00 for a child 3-12 years of age; $4.00 for a senior 62 or older. Groups of 25 or more get in for $7 per group member.
Meanwhile, Missouri’s state fair attendance was up fifteen percent, according to kansascity.com. Governor Jay Nixon’s office reported that nearly 110,000 people attended the Show-Me State’s fair this year, nearly the population of Springfield, Illinois. Missouri’s state fair had an admission charge of $1.00
Indiana’s state fair this year was 17 days long and so far had an attendance record of 905,645. This past Saturday the attendance was announced at 73,645 according to ChicagoTribune.com.
The Kentucky State Fair is currently ongoing and attendance numbers are not yet available.
Not so for Illinois and Michigan.
I went to the Illinois State Fair last week, and spend most of my money on the admission and parking fee. $12.00 Attendance was reported down by 15% on WMAY this morning. They must have gone to the Missouri State fair which was up by the same amount from last year.
While Michigan’s state fair is not expected to start until August 28th and run through Labor Day, The Detroit Free Press reports that Governor Granholm is faced with a $1.8 billion deficit, plans to cut the fair’s budget. Eviction notices have been sent to the tenants, apparently scheduled for immediately following this year’s fair, freep.com reports.
The admission fee is broken down into the categories of “Super Saver Combo Pass,” $25.00 for gate admission and all day rides per person; $25.00 admission of 2 adults and 2 children; $9.00 for one adult; $4.00 for a child 3-12 years of age; $4.00 for a senior 62 or older. Groups of 25 or more get in for $7 per group member.
Meanwhile, Missouri’s state fair attendance was up fifteen percent, according to kansascity.com. Governor Jay Nixon’s office reported that nearly 110,000 people attended the Show-Me State’s fair this year, nearly the population of Springfield, Illinois. Missouri’s state fair had an admission charge of $1.00
Indiana’s state fair this year was 17 days long and so far had an attendance record of 905,645. This past Saturday the attendance was announced at 73,645 according to ChicagoTribune.com.
The Kentucky State Fair is currently ongoing and attendance numbers are not yet available.
Thursday, February 26, 2009
Economic Costs and Government Intervention
I found the president's speech inspiring, and even though the response by the Governor of Louisiana was, to put it lightly, lackluster, it did make me wonder if government oversight of business has been used as a prop to make businesses too big.
Case in point, The Associated Press reported that the absence of Food and Drug Administration inspections at a plant that manufactures medical syringes resulted in the shipment of several that were contaminated. [1]
The Bush administration drastically reduced the F.D.A.'s effectiveness over the last few years, through deregulation, de-budgeting, or replacing people. The absence of inspectors may have uncovered serious flaws in production processes that may have been previously mitigated by the FDA's requirement that the company divert resources toward asset maintenance and cleanliness.
Now, without an effective FDA, do we see the true results of the Production Possibility Curve (PPC)? If the F.D.A. was removed entirely, we would surely once again see Karl Rove on a speaking tour talking about Tort Reform (reforming the legal system because of "out of control litigation.")
Without the FDA, companies that have maximized their production capacity at the expense of health and safety will face far more economic costs.
[1] http://www.google.com/hostednews/ap/article/ALeqM5j20sqsItq7UMZKLJ6MUW0PlTNOGAD96ISUE01
Case in point, The Associated Press reported that the absence of Food and Drug Administration inspections at a plant that manufactures medical syringes resulted in the shipment of several that were contaminated. [1]
The Bush administration drastically reduced the F.D.A.'s effectiveness over the last few years, through deregulation, de-budgeting, or replacing people. The absence of inspectors may have uncovered serious flaws in production processes that may have been previously mitigated by the FDA's requirement that the company divert resources toward asset maintenance and cleanliness.
Now, without an effective FDA, do we see the true results of the Production Possibility Curve (PPC)? If the F.D.A. was removed entirely, we would surely once again see Karl Rove on a speaking tour talking about Tort Reform (reforming the legal system because of "out of control litigation.")
Without the FDA, companies that have maximized their production capacity at the expense of health and safety will face far more economic costs.
[1] http://www.google.com/hostednews/ap/article/ALeqM5j20sqsItq7UMZKLJ6MUW0PlTNOGAD96ISUE01
Wednesday, November 05, 2008
The retired win in Sangamon County
Springfield is basically on a fixed income rolling toward assisted living. Personally, I can't account for a community that is in such a state, voting Republican. There may be one exception, a very short horizon.
People who think that if they support and emulate characters like Gordon Gekko, they will become like Gordon Gekko,
The problem is Sangamon County is not Wall Street. They are all big fans of the so-called "free market" but it takes money to make money, and most of your money is being gradually siphoned away by national franchises that have institutional investors based on Wall Street for real.
The point is that they are supporting a philosophy that belongs to their masters, not themselves. The other people they see reaping the rewards they themselves desire don't live in our neighborhoods, they only see them on television.
So the local political structure remains the same and so follows the economic structure. The Gordon Gekkos of the world would scoff at our community because according to the U.S. Census, there are only a tiny few people who barely come close to being excluded from the tax break promised by President-Elect Obama.
People who think that if they support and emulate characters like Gordon Gekko, they will become like Gordon Gekko,
Gordon Gekko: The richest one percent of this country owns half our country's wealth, five trillion dollars. One third of that comes from hard work, two thirds comes from inheritance, interest on interest accumulating to widows and idiot sons and what I do, stock and real estate speculation. It's bullshit. You got ninety percent of the American public out there with little or no net worth. I create nothing. I own. We make the rules, pal. The news, war, peace, famine, upheaval, the price per paper clip. We pick that rabbit out of the hat while everybody sits out there wondering how the hell we did it. Now you're not naive enough to think we're living in a democracy, are you buddy? It's the free market. And you're a part of it. You've got that killer instinct. Stick around pal, I've still got a lot to teach you. (Wallstreet, 1987)
The problem is Sangamon County is not Wall Street. They are all big fans of the so-called "free market" but it takes money to make money, and most of your money is being gradually siphoned away by national franchises that have institutional investors based on Wall Street for real.
The point is that they are supporting a philosophy that belongs to their masters, not themselves. The other people they see reaping the rewards they themselves desire don't live in our neighborhoods, they only see them on television.
So the local political structure remains the same and so follows the economic structure. The Gordon Gekkos of the world would scoff at our community because according to the U.S. Census, there are only a tiny few people who barely come close to being excluded from the tax break promised by President-Elect Obama.
Wednesday, October 01, 2008
Advice for the future
The future will be brightest for those who know how to hunt, those who know how to sew, those who know how to farm, those who know how to preserve food without refrigeration, those who know how to make fire and those who know how to make the tools necessary to perform the aforementioned tasks.
• My T-Shirts from Fruit-of-the-Loom and Hanes are getting holes under the arms, but instead of simply replacing them, I'm going to stitch them up.
• If I buy bottled water, I refill it with tap water and reuse the bottle for at least a month, if not more.
• I don't buy soda anymore. Nobody needs soda.
• No fast food. The grocery store is the best place to get nutritional meals. There is far more variety at the deli counter than you will find any any restaurant. More variety of prices too.
If the big banks want to hold the rest of us hostage, let's turn the tables. Pay off your credit cards, then close the accounts and cut up your cards. If you bought it with credit, you really didn't need it.
It may be a while before we are finally performing shadow shows on cave walls again, so let's do our best to delay that for as long as possible.
• My T-Shirts from Fruit-of-the-Loom and Hanes are getting holes under the arms, but instead of simply replacing them, I'm going to stitch them up.
• If I buy bottled water, I refill it with tap water and reuse the bottle for at least a month, if not more.
• I don't buy soda anymore. Nobody needs soda.
• No fast food. The grocery store is the best place to get nutritional meals. There is far more variety at the deli counter than you will find any any restaurant. More variety of prices too.
If the big banks want to hold the rest of us hostage, let's turn the tables. Pay off your credit cards, then close the accounts and cut up your cards. If you bought it with credit, you really didn't need it.
It may be a while before we are finally performing shadow shows on cave walls again, so let's do our best to delay that for as long as possible.
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