America will never recover when China builds our infrastructure
End game for America’s jobs
America will never recover if we outsource everything, including our public infrastructure. Bloomberg made the excellent video above about California outsourcing the construction of a portion of the San Francisco Bay Bridge to Shanghai Zhenhua, a Chinese firm. Shanghai Zhenhua is assembling the section and will then ship it to California for installation. The state is supposedly saving $400 million with this move. The workers at the Chinese facility are making $12 dollars a day.
In times of fiscal stress it’s easy to understand why public entities are trying hard to cut costs. But this “cost cutting” is really just off-shoring American jobs. Something has to give — we can’t recover without creating American jobs. It’s our choice, and I choose spending more and creating jobs at home.
Background on the project from Bloomberg.
Hungry market gobbles up new municipal bonds
The week’s new inventory can’t seem to reach the muni market fast enough. One trader in Florida said there is little product anywhere. “There are fewer bonds than usual,” he said. “It’s hard to find anything to sink your teeth into.”
Muni yields have been following Treasuries lower. But they aren’t too low for the market to absorb the new volume, wrote Tom Kozlik, a muni credit analyst for Janney Capital Markets.
Rhode Island city near collapse
It’s an ugly end game for Central Falls, RI. The New York Times reports that the city’s money is gone and they owe a lot to retired firemen and policemen:
The small city of Central Falls, R.I., appears to be headed for a rare municipal bankruptcy filing, and state officials are rushing to keep its woes from overwhelming the struggling state.
The impoverished city, operating under a receiver for a year, has promised $80 million worth of retirement benefits to 214 police officers and firefighters, far more than it can afford. Those workers’ pension fund will probably run out of money in October, giving Central Falls the distinction of becoming the second municipality in the United States to exhaust its pension fund, after Prichard, Ala.
Watchdogs bite in Chicago
There is no story that I like better than one of citizens watching over their government and identifying waste and corruption. The Better Government Association in Chicago went after unauthorized credit-card use at city agencies and created some big waves. BGA reports on their blog:
Last month, the BGA and FOX Chicago exposed Chicago city officials spending your tax dollars on lavish meals, first-class seats and fancy hotels, and even red-light camera tickets.
Today the city is making big changes to rein in city spending and credit card abuse. Mayor Rahm Emanuel announced he’s eliminating most of the 500 city credit cards and banning the use of petty cash altogether.
Bond Buyer: Illinois High Court Upholds Capital Plan
Columbus Dispatch: Merging localities seems unlikely
Institutional Investor: Texas System Invests $1B In HFs
Columbus Dispatch: City union pact has raises, pension change
Capitol Fax.com: Not enough?