Debt Rattle April 24 2018

[Raúl Ilargi Meijer]

John French Sloan A Woman’s Work 1912   • Japan Can Begin Reducing Stimulus In Five Years – Kuroda (CNBC) • ECB Mulls Shelving Rules Tackling Eur
[See the full post at: Debt Rattle April 24 2018]

[Patricia]

There was an interesting article on a UBI in https://www.truthdig.com/articles/the-oligarchs-guaranteed-basic-income-scam/

[V. Arnold]

John French Sloan: A Woman’s Work 1912
I like that picture. I’ve come back to it 4 times; and the degree of detail is very impressive. From bricks and iron works (ladders and balconey) to clothing (lots of it) hanging on the lines.

[Dr. D]

Schools and schoolteachers can ask for unlimited money because unlike the general population, they’re government employees and get enormous, stable pay, more than enough to cover what they’re asking. Or at least here in the states. And that’s at teacher level, administrators are now half the staff and get paid 3x as much.

So how does that work exactly, that a poor population is expected to fund and ever-increase a service they pay for? That wages can fall and expenses can rise infinitely, in some sort of Australian housing levitation voodoo? It can’t. If society gets poor, teachers, administrators, policemen, and senators all must see their wages fall too. But they will never, ever cut back. They will savage every poor working mother living in her car first.

“Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery.” -Dickens

[V. Arnold]

Dr. D
I’m more than a little confused by your opening paragraph;
https://nymag.com/daily/intelligencer/2018/04/teachers-go-on-strike-in-two-more-red-states.html
Actually it’s 3 more states.

I’m no fan of the U.S. educational system; one of the worst on the planet. We’ll leave that for another time; back to salaries/pay/benefits?

[Dr. D]

It’s relative pay. There used to be a bargain: you get modest/marginal pay for government jobs because you get the benefits of health care and “government” pension. Fine, we were all good with that. But even decades ago, teacher pay moved above the area average and kept the benefits. Then with compounding raises, it got high relative to the area, while the health care/pension were astronomical. Teachers, like in my own family, don’t appreciate this double squeeze. The pay is modest, it’s only what the rest of us should have gotten over these 40 years. 3%p.a., then 3% with contract-long gaps, then only for the old crew and refused to hire teachers, offloading them into assistants and other educationally-disruptive shenanigans. But the all-in cost for their health care is like $2k/month? Like another whole salary. They don’t think of it that way because they don’t see it, but that money comes from somewhere. Besides, the administrators next to them — who provide no education — are full employees paid 50-300% more. And THEN there’s the pension, which has crushed every other government. Bad enough, but worse since Bernanke wealth-transferred all savers to banks, and gave 0% for pensions/insurance. So they now make up all those pensions in taxpayer cash, not annual gains.

Here’s the problem: while (full) teacher’s incomes have risen a little in pay, and $10,000 in health care cost, the private working population that supports them has DROPPED in pay by 3% a year for years. As with every non-government, non-monopoly job. So the “average” U.S. income has become completely non-descriptive. First, the average is including Bill Gates, second, the income is wildly aggregated to high-rent, high-population areas, but third all the remaining jobs are government/monopoly jobs. Outside of those, the economy looks like the surface of the moon, both in Baltimore and in upper Michigan. Average household income outside the protected groups and areas? $21,000? $18,000? Remember, these few incomes are bringing the average up. Like I said yesterday, just like the Soviet Union: you’re either a party member in a town the party cares about, or you’re in Chernobyl.

So yes, among the protected class, the teachers — because they actually do something useful for a living — are the least protected, but that protection looks wildly, amazingly great to the rest of us, a deep resentment, and more that they actually CAN strike. Must be nice. A job you might actually keep? That has family health care? Never mind the pay, pay nothing, I’m sold. And their s–t job that they protest for, with all the harassment and chiseling away at them using every weasel cheat and redefinition a horde of useless administrators can find, is STILL a dream job to everyone else outside a city. I try not to raise my blood pressure, but it’s that bad.

So: perception. Teachers think they have nothing because the State is cheating them, part-timing them, dragging out contracts to avoid pay, but that’s only because Ben stole the money at 0%, and the protected health care monopoly is so high that their non-gold-plated, but actual non-s–t care costs another whole income. They can sort of see that on paper, but from my experience, it doesn’t really connect, not the way it does out here where we pay medical out-of-paycheck and get nothing. It may be hidden, but it’s still pay, and pay I don’t get.

As Denninger points out, stopping this one monopoly, which laws have existed for 100 years along with steady Supreme Court decisions, would solve all cost problems. But because that money is siphoned into medical lobby, they can use the money of every school district in the United States to buy Congressmen. And they do. How do you solve it? History says you don’t. You collapse. Just like we did, only it hits different locations at differing rates.

[Dr. D]

Trying to figure out how to chart cost, as it’s localized down at the town level, yet cost-shifted all over with state funding, pension patch-overs, etc. Here’s one from LaFayette near Lexington KY:

Unfortunately, it’s difficult to find an non-paper online tax history, but property taxes have been rising 10% compounded since the 90’s.

Here’s one of only 10 years, a 40% increase, with steadily dropping services.
Lindenhurst, Long Island, 50% in 10 years:

No one has that kind of pricing power. And this is only ONE kind of tax: they’re also cost-shifting out of State taxes, business and building fees, paying garbage collection, separately etc. There have been cases where if the county had a tax revolt and refused to raise taxes, the State took them over and MADE the locals pay taxes, even though they voted for fiscal restraint, although generally what happens is they keep all idiot services, and stop all useful services, like police ambulance, library, and parks, to bully the taxpayers into caving. That’s not a system that has democratic feedback.

You can tell this on the ground as the whole town is boarded up and blown away like a Mellencamp song, and the only building that aren’t collapsing are the police, fire, school, and cell phone store. Here’s one in Gary, Indiana,
https://www.chicagotribune.com/suburbs/post-tribune/news/ct-ptb-gary-abandoned-homes-st-0219-2-20150218-story.html

And another link to the hundreds of websites photgraphing urban decay exceeding an Ayn Rand novel:

https://www.placesthatwere.com/2017/01/abandoned-city-methodist-church-gary-indiana.html
Coast to coast.

There IS money, but the question is, who gets it, and what do they do with it?
Baltimore now spends $16,000/student, and is graduating NO ONE. They’re reaching the point where ZERO students pass state competency. At that point, you could just shut down, because the students who want to will just go to the library and read at home. That’s WITH a 50-100% increase in taxes.

“6 Baltimore schools, no students proficient in state tests” https://foxbaltimore.com/news/project-baltimore/6-baltimore-schools-no-students-proficient-in-state-tests

So do schools/teachers have pricing power? Sort of, yes. I can’t think of who else can charge 50% more for zero competency. But it’s a mosaic of elements, most heading in the wrong direction. Sorry about going on, but it’s complicated and there are no more easy answers.

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