Citizens of the developed world are watching Venezuela’s descent into financial and political chaos mostly, it seems, with amused detachment, safe in the assumption that we’ll never end up hunting our cats and dogs for food.
But – since Europe, Japan and the US are making essentially the same mistakes as Venezuela’s past and present governments – we might want to question that certainty. Consider what’s happening in the third biggest US city:
Chicago’s detective force dwindles as murder rate soars
(Reuters) – Every two weeks, Cynthia Lewis contacts the detectives investigating the homicide of her brother on Chicago’s south side almost a year ago.They have had no success finding who shot Tyjuan Lewis, a 43-year-old father of 15, near his home in the quiet Roseland neighborhood of single-family houses.
The death of Lewis, who delivered the U.S. mail for 20 years, is one of hundreds of slayings in 2015 that have gone unsolved as the number of homicides soared in Chicago, piling pressure on a shrinking detective force.
In a city with as many as 90 shootings a week, homicides this year are on track to hit their highest level since 1997.
Chicago’s murder clearance rate, a measurement of solved and closed cases, is one of the country’s lowest, another sign of problems besetting police in the third biggest city in the United States.
Detectives and policing experts interviewed this week said Chicago struggles to solve murders because of declining numbers of detectives, the high number of cases per detective and because witnesses mistrust the police and fear retaliation from gangs.
The number of detectives on the Chicago police force has dropped to 922 from 1,252 in 2008. One detective who retired two months ago said investigators are overwhelmed. “You get so many cases you could not do an honest investigation on three-quarters of them,” he said in an interview. “The guys … are trying to investigate one homicide and they are sent out the next day on a brand new homicide or a double.”
Why should a city as apparently affluent as Chicago have such a nightmarish crime situation? Because it’s not really that affluent. Like most of the rest of the formerly-rich world, Chicago ran out of money years ago and has been more-or-less secretly borrowing to cover the shortfall. Its public sector pensions, for instance, pay retired workers far more than the city can afford – but are legally uncuttable according to a recent court ruling. Here’s that story:
Pension ruling another blow to Chicago taxpayers — and Emanuel
(Chicago Tribune)- The Illinois Supreme Court ruled unconstitutional another pension reform law on Thursday, this one affecting Chicago and splashing more red ink on fragile, debt-ridden city finances.The court’s decision to toss Chicago’s pension reform law, which the Illinois legislature approved in 2014 as an attempt to rescue pension funds for municipal workers and laborers, was not a surprise. Nor is its ripple effect: As the opinion states and unarguable math attests, those two funds remain on track to go insolvent “in about 10 and 13 years, respectively.”
The court previously had twice ruled that an Illinois Constitution pension clause protects retirement benefits promised from a worker’s start of public employment. The law the justices rejected had required certain city of Chicago workers to pay more toward their pensions, scaled back cost-of-living increases upon retirement, and raised the retirement age. The court ruled that those changes violate the constitution’s provision that membership in any pension or retirement system “shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”
The decision repudiates Mayor Rahm Emanuel’s strategy for salvaging a vastly underfunded Chicago pension system that also covers public safety workers — police and fire — and Chicago teachers. Emanuel persistently has argued that because 28 of 31 unions affected by the 2014 reform law had agreed to it. Emanuel said that because the law would shore up the funds in the long run and thereby protect benefits for retirees, it would meet constitutional muster.
But the Supreme Court disagreed. In a 2015 ruling rejecting a pension reform law affecting state lawmakers, the justices faulted state lawmakers for not making adequate payments into their pension system. Thursday’s ruling similarly blamed city leaders for failing to make adequate payments into City Hall’s pension funds: “The pension code continued to set city contribution levels at a fixed multiple of employee contributions. This contribution level had no relationship to the obligations that the funds were accruing.” To rule in favor of the law would mean that the court would have to “ignore the plain language of the constitution.”
Translation: City and state politicians have known well that they were awarding pension benefits that Illinois governments cannot afford. Rather than properly fund pension systems, the politicians have spent on other priorities the tax revenues they should have set aside to fulfill all the generous retirement promises they made to their friends in public employees unions.
Now that this mess has become impossible to hide, new borrowing is getting harder and tax revenues aren’t sufficient to maintain previous levels of health, safety and livability. The result: a steady march down the affluence ladder towards a living standard that would be familiar to people in Brazil or India.
And it’s not just Chicago. Lots of other developed-world cities, states and countries are in similar predicaments, mostly because previous leaders over-promised on pensions that can’t be paid without skimping on everything else. See State pension fund gap approaching $1 trillion.
What does this mean? Over time – and not all that much time – life will get a lot harder for millions of people who are unprepared for it. Crime will metastasize, at-risk kids will go straight from school to prison, roads won’t be maintained, garbage won’t be picked up. It will, in short, become extremely unpleasant for the developed world’s former middle class. Then will come the civil unrest, and just like that your neighborhood looks like those Argentina videos.
The sad thing is that none of this is a surprise. As with so much else that’s going wrong, it traces directly back to the 1971 decision to hand the world’s governments an effectively unlimited monetary printing press. What has followed tracks perfectly with the view of human nature espoused by the Austrian school of economics, which is that we’re potentially brilliant but also corruptible. Since the ability to create money out of thin air is the ultimate temptation, of course nations, states and cities have all borrowed too much and made too many unsupportable promises.
And of course they can’t easily shed these obligations, because one of the laws of public life is that once created, a program gains beneficiaries who will defend it to their dying breath. So debt and unfunded liabilities keep expanding until the bill comes due. Then look out, cats and dogs.
“Dammit Janet, get the damn helicopter up in the air!”
Make the Entire City of Chicago a White Only City…….and watch the Trillions of dollars that come in. Zone the entire city for Whites (all others can live in a new city perhaps 100 miles south) and there will be no money problems.
If society is too stupid to do that, at least bring back restrictive covenants, freedom of association, deed restrictions, etc, and that part of Chicago will also produce TRILLIONS of dollars that can be taxed to support, feed, clothe, house and “edukate” the people of color.
Sure, hate my comment, but you know I am correct.
Reported your racist comments.
Chicago became 40% black not long after the civil war, and it enjoyed high employment and prosperity after WWII, your comments are ignorant of history, not to mention racist.
Most of the problems happened after the “progressives” took power. People thought they were moving forward, but they were in fact going backwards.
Do you mean like these people? http://politicalblindspot.com/the-food-stamp-capital-of-the-u-s-is-white-and-republican/
After the 2007-2009 global financial crisis, there was a move by patriotic americans to pay off their debts. The banking ‘industry’ would hear none of it! They stomped on politicians to force them to create programs like cash for clunkers, legal amnesty for bankers, and cut mortgage rates to the bone, and forced the government to transfer all their loan losses onto the federal government’s books (monetizing the debt and bailing out GM, for example), so that citizens could continue ‘shooting up with debt’. Within about 2 years the increased savings rate plummeted once again, consumers began to binge on debt, loan originations soared, and so did bank profits and banking executive bonuses, and american citizens got *uc*ed.
Yep! I think after Volcker jacked up rates back in the ’80’s the banks swore they’d never let that happen again and started “lobbying” big time.
Realist…Is this the best that someone of your privileged white noble self could come up with. you are laughable and do not deserve to breathe the same air as other human beings.
“father of 15”
I hope there’s a type in there somewhere
or check his mail route, maybe he made a few too many special deliveries
There’s one thing missing in this analysis: Pretend there were no pension schemes or central bank inflating the supply of credit [it’s credit they’re supplying, not actual money]. Everybody has to save for retirement, so what would happen if the shape of the population contained a significant bulge? People either save money [but we all know that money saved in 1968 is going to be inflated away by the time you retire; besides, if everybody did that the money supply would disappear under mattrasses within 2 months] or they would need to buy assets [since they cannot save up bread, tomatoes, and services for 60 years]. What would happen to the price of assets when people in the bulge start to all bid them up at the same time? The price would sky-rocket, and the yield [rent, dividend, coupon, whatever] would, all things being equal, drop (since yield and price are inversely related). When they retired, their income would have to come from the yield, but there is none, so they need to sell the assets to live. What would happen to the price of assets if a lot of people in the bulge start selling their assets to survive from the proceeds? Why the prices would crash.
I hope you see the problem. Note that wealth inequality, money-printing, the state of the economy, and (public) pension funds aren’t even part of the story.
I just saw on Fox News website that a cousin of Dwayne Wade (Chicago Bulls) was shot to death in Chicago.
Do not let the left blame taxpayers for underfunding pensions. Pension agencies (typically an unaccountable 4th branch of government in many cities and states) along with vociferous lobbying from government workers (always unite to vote for the party of government) have provided the muscle and intellect for highly subsidized early retirement. Now state courts want to pretend that economic laws do not apply. The government worker class (including pension agency employees and courts) is entitled to highly subsidized early retirement (average retirement age of 57 in Colorado) with large numbers retiring as young as 50 with inflation protection, early retiree medical care (did you know that the Medicare tax paid by government workers in many states funds early retiree medical care, not Medicare?), and starting pensions based on spiked working years typically near retirement. The concentrated interests have overwhelmed the much large diffuse interests to provide a bankrupting entitlement.
Here are the types of questions that diffuse interests must confront the concentrated interests with?
– Why are government workers entitled to retire at much younger (10+ years) ages than other workers?
– Why are government workers entitled to guaranteed returns of 7.5+% on retirement contributions? What investment can guarantee this return?
– Why do government workers need to retire in their 50s when many take other jobs after retirement?
– Why do pension agencies mix funds for growth (preretirement) and income production (retirement) when the private sector cannot mix funds and provide lifetime income guarantees? What happens when this risky strategy backfires during the next market downturn?
– Why do K-12 teachers (largely on defined benefit pension plans) entitled to highly subsidized early retirement (typically in 50s for teachers starting in 20s) but university professors (largely on 401K type plans) typically work until normal retirement age?
– Why are government works (state and local) largely outside of the horrible Social Security racket but private sector workers are forced into this horrible mess?
– In short, why are government workers entitled to lavish guaranteed benefits not available in the private sector except for government protected labor cartels (such as the UAW)?
Buckle up your sphincters.
I’m betting on the dogs, if not the cats. Once the dogs team up, they’ll have plenty of humans to eat.