When these hallowed pages last wrote about the potential for municipal bankruptcies erupting during this “golden age” economy back on September 9th, it was looking more and more like the Federal government shut down would not impact the localities, the trade war was won, and a modern America looking like 1895 with computers would emerge.
If any of my readers believe any of this, I have ten thousand square miles of desert to sell you in the Everglades.
The reality is that the so-called “blue” cities have diminished and attacked private property rights, the ability of citizens to reside safely in their homes, and businesses to survive in crime ridden toilets to the point where population is fleeing in such large numbers that these bloated bureaucracies can not survive unless the Federal government suddenly gets charitable and decides to bail out the states and localities all at once.
Too bad the Feds are broke also.
While I try to track the news and report what is happening in this second potentially great financial crisis in our lifetimes, I can not always be Johnny on the spot (sorry not sorry for the pun).
From October 22nd, via the Chicago Tribune editorial pages:
This excerpt from the must read editorial speaks volumes:
So when news came down last week that Harvey’s City Council had voted overwhelmingly to declare the municipality a financially distressed city, opening the door to a state takeover of sorts of Harvey’s finances, maybe it shouldn’t have come as a surprise. And yet it did because Harvey is only the second municipality in Illinois history to take this step under state law. East St. Louis was the only other, and that was 35 years ago.
35 years ago was 1990. The peak of the S&L crisis and during Gulf War Recession. President Bush during that era didn’t want to call it that, but the crisis put such a strain on the economy that a contraction was unavoidable.
Today, in this newspeak modern era, we just do not call contractions, slow downs, or zero growth by the economically proper name of “recession” any longer.
Another excerpt highlights how severe the problems are for the remaining residents:
Harvey said 69 employees, including police and fire, were to be furloughed without pay beginning Tuesday. That’s more than 40% of the city’s workforce.
40%.
Think about that number in your home town.
I’m fortunate that barring a 1929 style depression, our locality despite its horrid spending habits, incompetent leadership, and wasteful ways will not experience this type of economic pain this time; or so I hope.
But in many depopulated deserted, rotting, and decaying communities with corrupt leadership, overvalued real estate, and over taxed residents, the Municide party is just beginning.
I’m warning everyone now, prepare for a different kid of economic consequence due to fifteen years of financial malfeasance at the national and especially local level. Chapter 9 bankruptcy, while not legal in Illinois, will become a phrase many of my readers should, if not already, become very acquainted with.