Liberal Nostalgiacs Don’t Understand Jobs of the Future – Michael Barone – Townhall Conservative Columnists

United Auto Workers

United Auto Workers (Photo credit: Wikipedia)

Liberal Nostalgiacs Don’t Understand Jobs of the Future – Michael Barone – Townhall Conservative Columnists.

I don’t know how many times I’ve seen liberal commentators look back with nostalgia to the days when a young man fresh out of high school or military service could get a well-paying job on an assembly line at a unionized auto factory that could carry him through to a comfortable retirement.

As it happens, I grew up in Detroit and for a time lived next door to factory workers. And I know something that has eluded the liberal nostalgiacs. Which is that people hated those jobs.

The assembly-line work was boring and repetitive. That’s because management imbibed Frederick W. Taylor‘s theories that workers were stupid and could not be trusted with any initiative.

It was also because the thousands of pages of work rules in United Auto Workers contract, which forbade assembly-line speedups, also barred any initiative or flexible response.

That’s why the UAW in 1970 staged a long strike against General Motors to give workers the option of early retirement, 30-and-out. All those guys who had gotten assembly line jobs at 18 or 21 could quit at 48 or 51.

The only problem was that when they retired they lost their health insurance. So the UAW got the Detroit Three auto companies to pay for generous retiree health benefits that covered elective medical and dental procedures with little or no co-payments.

It was those retiree health benefits more than anything else that eventually drove General Motors and Chrysler into bankruptcy and into ownership by the government and the UAW.

The liberal nostalgiacs would like to see an economy that gives low-skill high school graduates similar opportunities. That’s what Barack Obama seems to be envisioning when he talks about hundreds of thousands of “green jobs.”

But those “green jobs” have not come into existence despite massive government subsidies and crony capitalism. It’s become apparent that the old Detroit model was unsustainable and cannot be revived even by the most gifted community organizer and adjunct law professor.

For one thing, in a rapidly changing and technologically advanced economy, the lifetime job seems to be a thing of the past. Particularly “lifetime” jobs where you work only 30 years and then get supported for the next 30 or so years of your life.

Today’s young people can’t expect to join large organizations and in effect ride escalators for the rest of their careers. The new companies emerging as winners in high tech — think Apple or Google — just don’t employ that many people, at least in the United States.

Similarly, today’s manufacturing firms produce about as large a share of the gross national product as they used to with a much smaller percentage of the labor force.

Moreover, there’s evidence that recent growth in some of the professions — the law, higher education — has been a bubble, and is about to burst.

The bad news for the Millennial generation that is entering its work years is that the economy of the future won’t look like the economy we’ve grown accustomed to. The “hope and change” that Barack Obama promised hasn’t produced much more than college loans that will be hard to pay off and a health care law that lets them stay on Mommy and Daddy’s health insurance till they’re 26.

The good news is that information technology provides the iPod/Facebook generation with the means to find work and create careers that build on their own personal talents and interests.

As Walter Russell Mead writes in his brilliant blog, “The career paths that (young people) have been trained for are narrowing, and they are going to have to launch out in directions they and their teachers didn’t expect. They were bred and groomed to live as house pets; they are going to have to learn to thrive in the wild.”

But, as Mead continues, “The future is filled with enterprises not yet born, jobs that don’t yet exist, wealth that hasn’t been created, wonderful products and life-altering service not yet given form.”

As Jim Manzi argues in his new book “Uncontrolled,” we can’t predict what this new work world will look like. It will be invented through trial and error.

What we can be sure of is that creating your own career will produce a stronger sense of satisfaction and fulfillment. Young people who do so won’t hate their work the way those autoworkers hated those assembly line jobs.

“Bankrupting” Public Unions – Mike Shedlock – Townhall Finance Conservative Columnists and Financial Commentary

“Bankrupting” Public Unions – Mike Shedlock – Townhall Finance Conservative Columnists and Financial Commentary.

Distressed cities are finally doing what they should have been doing long ago, declaring bankruptcy to force concessions from public unions. Numbers are still a trickle, but at soon as a major city such as Oakland or LA selects that option, we will likely see a torrent of municipal bankruptcies.

At a packed, two-day conference on municipal woes sponsored by Michael Stanton, the publisher of The Bond Buyer Distressed Cities Discuss Bold Tactics in a New Fiscal Era.

The conference was devoted to a discussion of the strengths and weaknesses of the more powerful tools being used in many cities these days, including receiverships, emergency declarations and even bankruptcy.

Attempts to plug budget holes with one-time transactions are giving way to other approaches, “This is truly a new era for dealing with troubled municipalities,” said Stanton.

New woes were unfolding elsewhere even as a capacity crowd of government officials, investors, lawyers and credit analysts were gathering here to discuss the trend.

In Jefferson County, Ala. — which filed the biggest Chapter 9 municipal bankruptcy in American history this fall after its sewer-construction financing fell apart and a court threw out one of its taxes — county commissioners were voting to default on a general obligation bond payment.

In Detroit, city and state officials were sparring over how much emergency aid the city might be able to get, and how much state oversight and control would accompany it.

Stockton, Calif., was in negotiations in a last-ditch effort to avoid becoming the biggest American city yet to declare bankruptcy. And just two hours west of Philadelphia, Harrisburg, the state capital, recently announced that it would default on a payment coming due to general obligation bondholders.

Robert G. Flanders Jr., the state-appointed receiver for Central Falls, R.I., said his city’s declaration of bankruptcy had proved invaluable in helping it cut costs. Before the city declared bankruptcy, he said, he had found it impossible to wring meaningful concessions out of the city’s unions and retirees — who were being asked to give up roughly half of the pensions they had earned as the city ran out of cash.

“The municipality is on bended knee asking the retirees and unions to come to the table and give up their contract rights,” he recalled. “All of that leverage shifts once you have the gumption to pull the Chapter 9 trigger. And guess what? That produces agreements quicker and more effectively than otherwise.”

Naomi Richman, a managing director at Moody’s Investors Service, wondered aloud whether it might become more acceptable for cities to declare bankruptcy.

“Back in the ’80s, the stigma against corporate bankruptcy fell away, and it became viewed as a strategy a corporation might pursue for various reasons,” Ms. Richman said. “Recently, with the residential housing collapse, individual bankruptcy has less of stigma in society — it’s a strategy that a person might be advised to follow if they have a debt that they can’t afford. Could the same thing happen for municipal bankruptcy?”

Rhode Island City Offers Gloomy Lesson

The Huffington Post reports As Detroit Bankruptcy Looms, Rhode Island City Offers Gloomy Lesson

PHILADELPHIA — Bankers, consultants and elected officials gathered at a conference here on Wednesday to discuss a hot political question for the formerly sleepy municipal bond industry: how to sell the need to protect the rights of bondholders — the often large, distant financial institutions who extend the credit that keeps towns humming — when cities enter financial crisis. The issue has most recently been thrown into relief as a Monday deadline for the city of Detroit to accept a consent order to fix the city’s budget looms.

“While the economists have declared the recession to have been over for almost three years now, the problems of state and local governments continue to mount,” said Bob Kurtter, the managing director for U.S. state and regional ratings at Moody’s Investors Service. “Default continues to be rare,” he said, but “our ratio of downgrades to upgrades has been negative for the past 12 quarters.”

As more cities and states struggle to fill the $1.26 trillion gap between what they have actually set aside for pensions and retirement benefits and what they have promised, municipal accountants will grapple with questions that will increasingly resemble those faced by Detroit or former Rhode Island Supreme Court Justice Robert Flanders when he was appointed last year as receiver for Central Falls, a struggling former factory town in the Ocean State.

From the comments of Flanders and others at the municipal bonds conference, it seems like the industry is in agreement about one thing going forward: someone is going to have to suffer, and it shouldn’t be bondholders.

Bondholders and Unions Should Both Share the Pain

This idea that bondholders should not take losses is ludicrous. Anyone stupid enough to buy Detroit bonds should pay a hefty price. Moreover, since untenable promises made to public unions are generally a leading cause of bankruptcy, public unions should suffer as well.

Gov. Rick Snyder Move on Detroit

The Christian Science Monitor reports Detroit nears deal to avert bankruptcy, but is it a state takeover?

March 27, 2012

With Detroit now formally in a state of “severe financial emergency,” city and state officials are grappling with the terms of an agreement to resolve the crisis, which both sides say they expect to be signed by week’s end.

So far, Michigan state officials are avoiding talk of a takeover – a toxic term in a majority black city whose elected officials are opposing the appointment of an emergency manager. Detroit officials are calling for more financial support from the state.

While Michigan Gov. Rick Snyder (R) says he wants to avoid assigning an emergency manager to control the city’s finances, the agreement being worked out between the city council and the state treasurer’s office is expected to force the most extensive financial restructuring ever experienced by Detroit, or any other US city its size.

Governor Snyder now has 10 days to deliver a “consent agreement,” according to a new law that allows the state to take financial control of any municipality facing bankruptcy. Since the law passed in March 2011, Michigan has placed four cities and two school districts under emergency management.

The law allows the state to break collective bargaining agreements, privatize city assets, fire local officials, and force a restructuring to keep basic city services flowing.

“It’s a big experiment,” says Vincent Hutchings, a political scientist at the University of Michigan in Ann Arbor. “Detroit is a high-profile city with a lot of issues.”

City officials oppose referring to the final deal as a “consent agreement,” which can lead to an emergency manager. The city wants to retain power to approve budgets but will hire a chief financial officer who will report to the mayor, said Deputy Mayor Lewis on Tuesday. The city also wants the state to lend Detroit money – a move that Snyder has refused in the past.

Meanwhile, many Detroit residents are protesting the possibility of the state playing a larger role in management of their city. An open meeting of the state commission was nearly shut down Monday by protesters who shouted, sang, and angrily denounced the state officials for what they see as trying to intervene with the democratic process. One activist filed a request with the Michigan Supreme Court for an emergency injunction to stop Snyder’s team from moving forward.

Adding to the drama is the weekend hospitalization of Detroit Mayor Dave Bing, who remains bedridden.

$1.26 Trillion Pension Gap

The only way to fill a pension gap of that size is to reduce benefits. Tax hikes are out of the question. And the fastest, easiest, and best way to get pension concessions from public unions is to reduce benefits and tell the unions what they get.

There is no need to negotiate. Central Falls did not negotiate, they said take 50% or you may end up getting even less.

Ultimately, the only way to deal with public unions is to strip them of all power including collective bargaining rights, then claw back ridiculous benefits in bankruptcy court.

Let it fail – Tea Party Nation

Let it fail – Tea Party Nation.

Posted by Judson Phillips

If you want to see the poster child for the failure of American liberalism, look no further than Detroit. 

 Motor city was once a hub of the American economy.  It was a poster child for American economic dominance.  Today, it is a ghost town.  In the last decade, a quarter of the population has left.  Parts of the city are simply uninhabited.  Wild life is moving back into quarters of the city where people have fled.   One of the hottest tickets in Detroit, perhaps the only hot ticket, is something called Urban Exploring.   This is where intrepid souls venture into the wreckage that used to be Detroit in its heyday.  These buildings they go into include the old train station, old schools and hospitals. 

 The Democrat Mayor of what is left of Detroit and the Republican Governor of Michigan are currently in a fight.  Detroit has an economy that makes the Greek economy look like it was run by Dave Ramsey. 

 Mayor Dave Bing does not want the State to take over Detroit.  The Republican Governor of Michigan Rich Snyder wants to do that because Detroit has been so badly managed.  

 Since the 1960’s Detroit has had its hand out for every Federal Government handout that has come down the pike.  The result has been the total destruction of what was once one of the most prosperous cities in America.

 By fighting the Governor on the take over, Mayor Bing wants to perpetuate the failure that has been Detroit for the last fifty years.   Detroit has not had a Republican Mayor in 51 years.  One Democrat after another has raided the city coffers and bankrupted the city.

 Unfortunately, Governor Snyder wants to perpetuate failure too. 

 It is time to admit the truth.

 Detroit is dead.  Let’s pull the plug on Detroit and let it die. 

 Michigan needs to revoke the charter for the City of Detroit and let it pass into history, with other dead cities, like Pompeii.  Similar to Pompeii, Detroit has been buried by an avalanche of progressive volcanic ash.

 As Detroit dies, we need to be warned that it is but the canary in the mineshaft. 

Every city has the same problems Detroit has.  Perhaps not to the same degree but every city does. 

 Every major city relies of federal grants and other tax dollar bailouts to keep the city afloat.  Liberal Democrats, who keep promising greater benefits to the core constituencies that keep them in power, run every one of these major American cities

 Many cities have already driven away a significant portion of their tax base by constantly increasing the taxes the city imposes.   

 One of the ways we can cut Federal Spending is by cutting these block grants and other transfers to the cities.  Cities need to be able to run on their own tax revenues and not have bailouts from the government.

 The problem with bailouts is that they never work.  All they do is mask the problem and allow the politicians who caused the problems to escape the responsibility of fixing them.

 It is time we the people started saying no to the incompetent city hall politicians who believe the city treasury exists only to serve their reelection needs.  It is time we stop feeding failure.  

 Let Detroit die. 

 Something will replace it.  Something better.  Something that will work and will not cost the taxpayers millions or even billions of dollars.

 Let Detroit stand as a warning for everything that is wrong with liberalism.

 Let Detroit’s epitaph be, “Created by the free market.  Destroyed by liberals.”