Some Chicago Boyz know each other from student days at the University of Chicago. Others are Chicago boys in spirit. The blog name is also intended as a good-humored gesture of admiration for distinguished Chicago School economists and fellow travelers.
Dr Rosamund Langston, a lecturer in neuroscience, says that by using satnavs, we wither away our ‘caveman’ ability to familiarise ourselves with new surroundings by memorizing snapshots of them. Some of the research suggests that lack of exercising these spatial-reasoning abilities may have implications beyond a reduction in one’s ability to find one’s way unaided.
See also my related posts:
In this post I described how Illinois could “fix itself” financially… however my more realistic post here discusses how Illinois is tilted precariously on the edge of a crisis and I believe that one major issue impacting a large entity could kick off the entire process of “going Detroit” and “paging Kevin Orr”.
Recently the City of Chicago, facing ratings downgrades, almost triggered off some swaps payments that would come due if the credit rating was to fall down to a certain low level. Per the article:
Chicago drew closer to a fiscal free fall on Friday with a rating downgrade from Moody’s Investors Service that could trigger the immediate termination of four interest-rate swap agreements, costing the city about $58 million and raising the prospect of more broken swaps contracts.
The city was able to re-negotiate one of the swap agreements and was in talks with Wells Fargo about the other swaps agreement per this article. Apparently the date of reckoning has been pushed out a little further.
The Chicago Public Schools (CPS) debt is now just one grade above “junk” status per this article.
In making the downgrade, Moody’s cited the school district’s reliance on reserve funds for “operating expenditures, particularly pension contributions, which will steadily increase in the coming years.”Moody’s also maintained its “negative outlook” on the district’s debt, again citing the rising pension costs. From 2013 to 2016, annual retirement costs will increase to $688 million from $197 million, Moody’s stated in its rating explanation.
Note that the budget that Rauner proposed for the state of Illinois had additional cuts for state and local government, at a time when each of them are crying to the state for relief. These cuts are also due to Rauner’s choice to let the state income tax surcharge expire rather than renewing it (as Quinn certainly would have done). Per this article:
Governor Rauner’s office released a statement Wednesday afternoon, saying: “Governor Rauner had to make some hard decisions to balance a $6 billion budget shortfall caused by years of fiscal neglect and bad practices. The amount of money transferred to local governments has ballooned by more than 40 percent in the last decade and the reduction to local governments proposed in the budget puts Illinois in line with neighboring states. In Governor Rauner’s budget proposal, Chicago’s overall revenues are reduced by less than 2.5 percent. Through the local government task force, Governor Rauner is committed to working with local communities to reduce costs and give them increased flexibility. Additionally, as part of his Turnaround Agenda, the governor proposed empowering local residents with tools to control costs at the local level and get more value for their tax dollars.”
It will be very interesting to see how this all plays out. Today the various governmental units and branches of our legislature and the governor are circling and eyeing each other to see who blinks first.
Some day hopefully we can move beyond the “funding” discussion into a real discussion of how we can get our state in fiscal order; by encouraging our government to be more productive, by scaling back our obligations to unions, and by unshackling entrepreneurs in the state to create jobs and companies. No one is talking about that yet… except Rauner.
Cross posted at LITGM
I was recently on a plane doodling and thought of some funny / interesting stories from 25+ years of working and traveling. So I decided to write them up as short, random chapters of a non-book with the title of this post. Hope you enjoy them and / or find them interesting. Certainly the value will be at least equal to the marginal cost of the book (zero)…
The Midwest, early 1990s
When I started out as an auditor I actually had to attend a 2 week class to learn how to create audit work papers. This was my first “real” job out of college and I was very motivated to do well.
Looking back, the “teachers” were mainly auditors with a few years of experience. This worked out fine because they were still immersed in the details while the top executives had long since forgotten about the details of day to day existence.
I shared a room on their “campus” with another first year auditor. I was astonished when he brought two pairs of work shoes (wingtips) – he said if you switched every day, your shoes lasted longer. I never had considered something like that.
The training was very stressful and I had “dreams” about how to create work papers. Many of the other students had been interns previously so this was old hat to them but for me it was difficult because it was meticulous and seemingly pointless work.
At various points we went into formal classes on specific industries; I was in the regulated practice so I attended a one week course on how utilities set their rates and recover their costs. The class was good and I will never forget when I walked up to the guy teaching it afterwards and introduced myself and said my name and he said
“Who gives a f&ck about who you are?”
It was a good lesson because from his perspective (and the client’s perspective) we were just low level auditors there to do a job and we should put our heads down, fill out the paperwork, go through the same tests as last year, and get the heck out (and on to the next job).
Work continues – at a rather slow pace, admittedly – on the two books I have currently under construction, while I do research reading for them (in a small way) and work on projects to do with the Tiny Publishing Bidness. Which has just had two old corporate clients appear out of the woodwork; I don’t know how much we can do for the second, as the electronic files for their project are nonexistent, as their corporate history was produced and printed in about 1990. Thus technology marches on. I am wracking my memory, to see if I can come up with my own estimation as to when electronically-composed documents became the norm. I would guess around that time. I used to go back and generate training documents and various reports on a computer which also ran the automated music channel at EBS-Zaragoza in the late 1980s. This usually involved two large floppy disks (one for the operating system, one for my document archive) and a tiny screen of brilliant green letters on a black background. This writing process usually had me seeing white objects in shades of pink for at least an hour afterwards.
I had all these plans
A brief nap and suddenly
It’s three hours later
—-
Good flying advice:
Break ground, take off into wind
And not the converse
—-
At the gas station
We cringe at the dreaded words:
See clerk for receipt
—
Fix-A-Flat didn’t
Our Costco tire warranty
Came to the rescue
—-
Feel free to add your contributions in the comments.