KeNo's Housing and Economic Portal: Saturday July 10 Housing and Economic stories

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TOP STORIES:

Public employee unions on the defensive – (www.sfgate.com) Despite record high membership and dues, and years of unparalleled clout in state capitols, public-sector unions find themselves on the defensive, desperately trying to hold onto past gains in the face of a skeptical press and angry voters. So far has the zeitgeist shifted against them that on one recent weekend, government employees were the butt of a "Saturday Night Live" skit, and the next day, a New York Times Magazine cover article proclaimed "The Teachers' Unions' Last Stand." Public unions' traditional strength - the ability to finance their members' rising pay and benefits through tax increases - has become a liability. Although private-sector unions always have had to worry that consumers will resist rising prices for their goods, public sector unions have benefited from the fact that taxpayers can't choose - they are, in effect, "captive consumers." At some point, however, voters turn resentful as they sense that: -- They are underwriting, through their taxes, a level of salary and benefits for government employment that is better than what they and their families have. -- Government services, from schools to the Department of Motor Vehicles, are not good enough - not for the citizen individually nor the public generally - to justify the high and escalating cost.

Union Thugs Resort to Despicable Ads to Garner Support - (Mish at globaleconomicanalysis.blogspot.com) The USA Today reports Ads are latest weapon to scare off layoffs. Some city and county employees and school districts are taking dramatic steps to try to solve their budget problems. The Sacramento County, Calif., sheriff's deputies union is using mobile billboards, mailers and radio and newspaper ads with vivid images and messages in a bid to avert more layoffs. The campaign includes a photo of a child with an adult's hand over its mouth and the words, "Your child could be at risk!" Another shows a masked man breaking through a door and asks, "Do you feel safe?" "We felt it was necessary to grab people's attention," says Kevin Mickelson, president of the Sacramento County Deputy Sheriffs' Association. He says 122 deputies were laid off last year and more cuts would make it "impossible to do our job." Billboards put up this month in Stockton, Calif., by the Stockton Police Officer's Association read, "Welcome to the 2nd most dangerous city in California," and "Stop laying off cops!" Mayor Ann Johnston calls the billboards "very inappropriate" and says they are "attempting to strike fear in the hearts of the community." Union Fear Mongering Amounts to Extortion: This kind of fear-mongering is nothing more than extortion. Tax dollars go to unions whose members are overpaid and whose benefits are absurdly out of line with the private sector. To top it off, whether the union members personally agree with such tactics, they cannot opt out of the union or these tactics. In essence taxpayer dollars support these fear-mongering ads, just so the gravy train can continue for hugely overpaid public workers.

California on verge of system collapse - (www.theglobeandmail.com) Golden State, like many others, is nearly bankrupt and desperately needs a bailout. rnella Sims has seen a lot in her 34 years as a Los Angeles County court reporter, but nothing like this. Case files piling up by the thousands, phones ringing off the hook, forced midweek courthouse closings and occasional brawls as frustrated citizens queue for hours to pay parking fines. “People think we’re becoming a Third World country,” said Ms. Sims, 55. “They don’t understand.” It’s a story that’s being repeated all across California – and throughout the United States – as cash-strapped state and local governments grapple with collapsed tax revenues and swelling budget gaps. Mass layoffs, slashed health and welfare services, closed parks, crumbling superhighways and ever-larger public school class sizes are all part of the new normal. California’s fiscal hole is now so large that the state would have to liberate 168,000 prison inmates and permanently shutter 240 university and community college campuses to balance its budget in the fiscal year that begins July 1. Think of California as Greece on the Pacific: bankrupt and desperately needing a bailout.

Slide in shipping shows global recovery running out of steam - (www.theglobeandmail.com) Baltic index drops 15 consecutive days as raw material demand falters. Europe’s woes are showing early signs of stalling the recovery of globaltrade. The Baltic Dry Index, a measure of global shipping that is followed closely by economists, is suddenly raising red flags over the pace of the economic rebound. The reading released daily by the Baltic Exchange has been sinking every trading day for the past three weeks, measuring a 34-per-cent drop in ocean freight rates and foreshadowing a slowdown in trade. The index declined 3.8 per cent Thursday to 2,784 points, reflecting the slump in the shipping industry’s prices to transport dry raw materials over 26 global routes. Economists watch the index because the amount of raw materials being shipped – from coal to grain to iron ore – provides a key indicator of consumption and manufacturing trends.

That ‘30s Feeling - (www.nytimes.com) Krugman didn’t get it and didn’t see it coming in 2007 and yet people think he is brilliant. He is all for kicking the can to future generations. Suddenly, creating jobs is out, inflicting pain is in. Condemning deficits and refusing to help a still-struggling economy has become the new fashion everywhere, including the United States, where 52 senators voted against extending aid to the unemployed despite the highest rate of long-term joblessness since the 1930s. Many economists, myself included, regard this turn to austerity as a huge mistake. It raises memories of 1937, when F.D.R.’s premature attempt to balance the budget helped plunge a recovering economy back into severe recession. And here in Germany, a few scholars see parallels to the policies of Heinrich Brüning, the chancellor from 1930 to 1932, whose devotion to financial orthodoxy ended up sealing the doom of the Weimar Republic. But despite these warnings, the deficit hawks are prevailing in most places — and nowhere more than here, where the government has pledged 80 billion euros, almost $100 billion, in tax increases and spending cuts even though the economy continues to operate far below capacity.