The missed payments illustrate the trend among cities in bankruptcy to favor payments to pension funds over bondholder obligations, which has increased the hostility between creditors and municipalities.
San Bernardino declared last year that it intends under its bankruptcy exit plan to fully pay Calpers, its biggest creditor and America’s largest public pension fund with assets of $300 billion.
The city continues to pay its monthly dues to Calpers in full, but has paid nothing to its bondholders for nearly three years, according to the interest payment schedule on roughly $50 million of pension obligation bonds issued by San Bernardino in 2005.
If you’re a bank, a retirement fund, or a hedge fund, why on earth would you buy California municipal debt when there are safer alternatives? (Hat tip: Ace of Spades HQ Doom roundup.)
So how’s that San Francisco minimum wage law working out? Exactly like everyone who understands economics expected. “Some restaurants and grocery stores in Oakland’s Chinatown have closed after the city’s minimum wage was raised. Other small businesses there are not sure they are going to survive, since many depend on a thin profit margin and a high volume of sales.” Plus this: “Low-income minorities are often hardest hit by the unemployment that follows in the wake of minimum wage laws. The last year when the black unemployment rate was lower than the white unemployment rate was 1930, the last year before there was a federal minimum wage law.”
California is dead last in spending transparency among the 50 states, with an F rating and a piddling score of 34. Texas ranks 13th with an A- and a score of 91. (Hat tip: Cal Watchdog.)
“North Texas gained an average of 360 net people per day from July 2013 to July 2014, a testament to the job-creating machine in the Lone Star state, according to the U.S. Census Bureau…North Texas and Houston were the only metropolitan areas to add more than 100,000 people during that one-year period.”
Just because California has some of the highest taxes in the nation doesn’t mean that the state’s Democratic legislature doesn’t want to add still more.
While Texas is certainly in much better shape than California on public employee pensions, things here are not entirely cloudless either. “The Texas Employee Retirement System is reporting unfunded liability of $14.5 billion in 2014, compared with liability of just $6.3 billion in 2013. By comparison, all of the state government’s general obligation debt as of 2013 was $15.3 billion. The Texas Law Enforcement and Custodial Officer Supplemental Retirement Plan is reporting unfunded liability of $673.1 million in 2014, compared with $306.7 million in 2013.”
Unlike California, Texas looks to get ahead of the curve on pension concerns with House Bill 2608, which restores control of pension funds to the local level by eliminating legislative approval for pension changes. I”nstead of locking up significant benefits in state statute, HB 2608 would allow city pension systems, like the Houston Firefighters’ Relief & Retirement Fund, to solve pension problems at the local level by changing benefit structures, if they so chose.”
“Support for the “bullet train” is ebbing across California, except, perhaps, in the Governor’s mansion.”
American Spectrum Realty, a real estate investment management company that operates self-storage facilities under the 1st American Storage brand, has somehow managed to file for bankruptcy in both California and Texas. I think it’s safe to say that financial shenanigans are involved…
Lawsuit over misappropriated funds in a Napa Valley winery leads to a murder/suicide. It’s one of those stories that sounds too strange not to link to…
The Air Force is trying (yet again) to kill the A-10 Warthog. The ostensible reason is shrinking budgets. The real reason is that the A-10 is perfectly suited for a role (close air support) that the Air Force is equally unwilling to embrace or give up.
Jerry Pournelle has been expounding on the theme for years. “USAF will always retire hundreds of Warthog to buy another F-35. Always, so long as it exists. And it will never give up a mission.”
Being so well-suited for close air support of ground forces, the A-10 could make a big difference fighting ISIS (or even Russian armor in the Ukraine, assuming the administration was serious about Ukrainian sovereignty). This would be a great place for a strong White House leadership to step in and reset priorities for the Air Force. Unfortunately, strong White House leadership is exactly what we lack right now…
Sure, Jose Manuel Barroso, the former president of the European Commission, is a self-interested Eurocrat, but here he provides a nicely concise statement of the obvious concerning Greece’s problems
Greece’s problems can be laid at its own door and the country needs to provide a clear commitment to reform to reach an agreement with its creditors, Jose Manuel Barroso, the former president of the European Commission, told investors in Hong Kong.
“The Greek people went through extremely difficult moments, hardship. But these difficulties of Greece were not provoked by Europe,” Barroso said in an address at the Credit Suisse Asian Investment Conference in Hong Kong.
“It was provoked by the irresponsible behavior of the Greek government.”
“The situation of Greece is the result of unsustainable debt that was created by the Greek government, mismanagement of their public finances, huge problems with tax evasion and tax fraud [and] problems of the administration,” he said, noting that the country had also misled the European Union by filing false figures on its economy.
A nice statement of the problem. To which I can only add: And Greece continues to compound the problem, because it refuses to reduce government spending to match receipts. And it refuses to do because it’s welfare state is unsustainable.
All this talk of bailouts, relief, reparations, agreements and grexits is just filigree on the essential problem: Greece’s government spends more money than it takes in and refuses to change its ways.
Cruz had a very strong social media team for his 2012 Senate race, so this move isn’t a big surprise. Now we’ll see if it, and his early jump, can get him any separation in a very crowded field…
Texas State Rep. Jason Villalba, ostensibly a Republican, seems to be going out of his way to alienate actual Republican voters.
First he was among the (sadly many) Republican Representatives to vote to reelect Joe Straus Speaker, then got caught praising Straus’ progressive agenda.
Next came Villalba’s introduction of H.B. 2918, which attacks the rights of photographers, bloggers and CHL holders under the guise of protecting police from being assaulted by cameras.
Naturally, this has lead to a raft of criticism on Twitter and elsewhere. (There’s aeven a Recall Jason Villalba Facebook group. Since Texas does not have any recall election mechanism for state-level officials, I presume they mean to back a primary challenge to him in 2016.)
So what has Villalba’s reaction to this criticism been?
So go ahead and add “thin-skinned” to the list of Rep. Villalba’s flaws…
Another Friday, another LinkSwarm. There’s almost enough news here to break out a separate “UK child rape cover-up update,” but I found the idea too depressing…
What set off this new round of ominous Israel concern-trolling was Netanyahu’s assertion that leftist NGOs, billionaires and consultants were making sure that “Arab voters are going to the polls in droves.”
Which was a fact.
The leadership of the Arab front has openly stated that it wanted to pull together any and all factions of Israeli Arabs, including communists and Islamists, for the single political purpose of removing Israel’s prime minister. Arab political forces are free to rally to unseat Netanyahu, free to aspire to dismantle the Jewish State, but if Netanyahu mentions any of this he’s a racist undermining Israel’s formerly pristine democracy. Or so we’re told.
Charles Krauthammer on the same theme:
The Obama Administration is so desperate for a nuclear deal with Iran that they’ve dropped Iran and Hezbollah from the terrorist organization list.
“If you want to know what Hillary Clinton would be like as president, you’re seeing it right now. There is no other Hillary. This is her.” Also: “What this utterly typical PR fiasco shows is that what they’ll actually get is familiar, tired, pathetic, dishonest, and embarrassing.”
“Hillary, I’m not disappointed that you’re lying. I’m disappointed that you’re phoning in your lies.”
Some people just can’t learn from the mistakes of others. Even when the other is Anthony Weiner. And you’re a Democratic lawmaker. And you’re hitting on the same woman Weiner hit on.
The new, not-improved New Republic to create stories to order for advertisers? Honestly, selling the magazine to Rush Limbaugh wouldn’t have been quite so dishonorable to the magazine’s memory… (Hat tip: Moe Lane.)
Shockingly, A.) It’s pretty evenhanded, and B.) It doesn’t suck.
On the other hand, Too Many Cooks was four months ago. It shouldn’t take more than a week to crank this out. Even if they did take a day to get the perfect font match…
