North Korea Congratulates The Shitty Council of Chicago!

Pictured Above: Supreme Leader of North Korea: Kim Jong Un

The People's Republic of North Korea congratulates the Shitty Council of Chicago for unanimously passing Rahm  Emanuel's budget! The Supreme Leader Kim Jong Un stated "tank yoo Rahm for showing that one party state is way of the future!" 

In Mayor Rahmulan Emanuel's Chicago...

Pictured Above: Rahmulan Emanuel's Top Advisors

It appears that in Mayor Rahmulan Emanuel's Chicago, support for questionable policies has to be manufactured and paid for. Wonder went on behind closed doors when he was President Obama's Chief of Staff? 

Two say they got paid to protest, back closing Chicago schools

BY ROSALIND ROSSI Education Reporter rrossi@suntimes.com January 24, 2012 12:06AM

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Thaddeus Scott poses for a photograph outside the HOPE organization, 6921 S. Halsted, Friday, Jan. 20, 2012, in Chicago. | John J. Kim~Sun-Times

Updated: January 24, 2012 8:42PM

Always contentious hearings on whether to close failing Chicago schools have taken a bizarre twist this year with charges that cash-strapped residents were hired as “rent-a-protesters” and given pre-made signs and pre-crafted scripts to support school shakeups.

Two men told the Chicago Sun-Times they showed up to apply for financial help with their energy bills at the Englewood office of the HOPE Organization headed by Rev. Roosevelt Watkins III, only to be offered money to attend school-related “rallies” held Jan. 6. Watkins denies they were paid to protest, saying money paid was for training.

Both protesters said they didn’t realize until the last minute that they were supposed to support school closings. One said he was promised $50 to speak at a rally “for schools,” but was stiffed $25 after Watkins complained he had publicly revealed at the hearing he was “compensated” for speaking.

“I don’t want the $25 he owes me,” Thaddeus Scott, 35, told the Sun-Times. “He can keep his dirty money. You can quote that.

“Why am I speaking out? Because I am in support of Crane [the high school whose closure he says he was supposed to support]. . . .

“They thought for a few dollars they could get us to say whatever they want. . . . We were preyed upon.”

Stipends for ‘training’

Watkins, pastor of Bethlehem Star M.B. Church and founder of Pastors United for Change, acknowledged he organized busloads of people to attend the Jan. 6 school closing hearings.

Yellow buses delivered people from 69th and Halsted, where HOPE’s Englewood office is, to at least three closing hearings on that date. The hearings concerned Crane High, Guggenheim Elementary and Reed Elementary, hearing participants told the Sun-Times.

Scott said he was offered $50 to speak at a hearing from what turned out to be scripted remarks.

But Watkins said protesters were supposed to be paid to attend “training” first on “community organizing” and how “to be aware of what’s taking place in the community.”

“What we do — so you can hear it from the horse’s mouth — we provide training because we engage community activists to participate in things such as health care, affordable housing, education, safety. Those things. So we do training on community organizing,” Watkins said.

A “small stipend” helps “offset their car fare” or “babysitting,” Watkins said.

Of the Jan. 6 protesters, Watkins said, “Those that did not receive the training should not have received a stipend.”

A day after the Sun-Times asked Watkins about the payments, at least one protester said he received a call from organizers asking him to attend a meeting first if he wanted to attend the next rally.

Chicago Teachers Union Vice President Jesse Sharkey called the busloads of hearing participants “rent-a-protesters.” He likened them to “paid stooges” who “make a mockery of what public participation is about.”

Said Sharkey: “It’s a new low.”

Cash-filled envelopes

Scott and a second man, a Guggenheim Elementary alum, said they were paid after the Jan. 6 hearings at the HOPE Englewood office by a woman who pulled envelopes holding $25 in cash from a container full of envelopes. Scott said Watkins was in the room when the woman told him he had done them a “disservice” and handed him half the promised amount, but Watkins insisted he was not there. Watkins also denied he ever chided anyone for using the word “compensated” at the hearings.

“Absolutely not,” he said. “There are people saying we pay them. We provide training. We’ve always done this. And they receive a stipend for their time.”

Watkins said he used neither church nor HOPE funds for the stipends. The money came from a “coalition of clergy” who have “money set aside for outreach in the community,’’ he said.

“This is money from clergy. Clergy have money,” Watkins said. “We used private money.”

Initially, Scott said, he thought he would be joining “an act of activism. … They wouldn’t say what the rally was about until we got there.”

Only at the last minute, Scott said, was he asked to choose from a list of prepared remarks and told not to support Crane.

“If he calls that training and that’s what I was paid for, fine, but that’s not training,” Scott said.

The Guggenheim alum also said he received no training before he boarded a bus outside HOPE’s Englewood office at 6921 S. Halsted on Jan. 6. He said he, too, was seeking assistance with energy bills when he was offered $25 to attend a rally.

He said he was told the rally would be about “longer school hours” — an issue pushed by Mayor Rahm Emanuel, who announced last year that a long list of ministers supported his stand.

A woman at HOPE’s Community and Economic Development Association outlet for energy assistance “asked me did I want to go to a rally,” the Guggenheim alum recalled. “I said no. She said they will pay $25. She said they were rallying for longer hours in the school day. I said ‘I have no problem with that.’ ”

To his surprise, he said, a bus filled with people delivered him instead to a hearing about closing Guggenheim Elementary, where he had graduated. There, he was given a sign saying “something about ‘I cannot support failing schools.’ ”

“That’s how I knew I was on the wrong side,” he said. “I was on the ‘close’ side. I wanted to be on the ‘open’ side. . . . If I knew it was about closing Guggenheim, I never would have gone because I went to Guggenheim. . . . I never would have been in favor of closing Guggenheim.”

Watkins said people were not paid to take a specific side at the hearings, and if they were reading from scripts, “I’ll check into it.”

“My position is, we want [schools] fixed,” said Watkins, whose HOPE Organization offers after-school programming and won nearly $1.47 million in Chicago Public School contracts since 2010.

“We’re not siding with CPS or the Chicago Teachers Union. . . . We’re siding with the children. We don’t want the message to get faded in this.”

The Unintended Consequences of the Chicago Residential Landlord And Tenant Ordinance

Pictured Above: The Author Of The RLTO

Like many unduly heavy handed government regulation, the Residential Landlord And Tenant Ordinance of Chicago produces unintended consequences that harm the very group they were purportedly designed to help. This ever expanding set of codes is heavily biased against landlords and enables tenants and lawyers looking to gain a quick buck from frivolous lawsuits. As I will demonstrate, the end results are diminished housing opportunities, especially for families of modest means.

 The most egregious aspect of the ordinance are the heavy fines mandated for clerical errors such as not maintaining security deposits in separate, interest bearing, escrow account. I personally know an honest landlord who returned the full deposit plus interest in a timely fashion, but was fined twice the amount of the deposit plus the tenant's legal fees! In this case, a $1,000 deposit generated a $3,000 fine, much of which went to the tenant's parasitic attorney! It gets worse; there are lawyers who contact tenants engaged in eviction proceedings and offer them "free" legal assistance, but only if they provided the landlord a security deposit. The unscrupulous attorney then attempts to turn the tables by counter-suing the landlord for any failure to comply with the regulatory minutia governing the deposit. Thus the said landlord can potentially face thousands of dollars in lost rent, fines and legal fees from his own attorney as well as the derelict tenant's attorney! Even if he is not subject to a counter-suit, if a tenant is well versed in the law, it can potentially take 3 or 4 months to evict him. Given that very few landlords immediately begin the eviction process, most spend a month or more hanging onto the broken promises of deceitful tenants, they can potentially face 5 or 6 months of lost revenue. And if the judge rules in the landlord's favor, the chances of collecting the lost revenue is slim at best. Does this sound like equal protection under the law?

Understandably, a growing number of landlords have decided to waive the requirement for a security deposit. Even landlords who have not decided to take this course of action have gotten much stricter on their credit requirements for prospective tenants. Most landlords would be willing to "lend a hand" and "give working families a chance," but given the increasingly costly and time consuming nature of evictions, most would rather maintain their apartments empty than run the said risks. What this means is that a lot of good, hard working families are having even more trouble finding quality, affordable housing in decent neighborhoods. To make matters worse, the growing risks and regulatory burdens that landlords face in Chicago are causing fewer individuals to purchase  property, especially in the blighted neighborhoods that are most in need of investment. And the landlords who remain will direct more of their resources towards regulatory compliance and keeping up with surging property taxes, than the upkeep and improvement of their property.

The Rule Of Law in Chicago & Mexico

In itself I do not find it so troubling that Chicago and Cook County are not systematically enforcing immigration laws, because limited resources should be directed towards apprehending dangerous criminals. And contrary to far right wing narratives, few immigrants, undocumented or otherwise, commit serious crimes. But, I  find it unsettling that given the extent to which immigration laws are violated, we now don't even have the option to choose to systematically enforce them. Given demographic and economic realities, doing so would cause greater damage and dislocation than continued non-enforcement.


While I sympathize with the mostly good and hard working families that have been driven by desperation to cross the border, it is a troubling precedent that a law has in effect been overturned not through the democratic process, but  because the extent of its violation has made it virtually non-enforceable. This is exacerbated by the nature of the Chicago Machine, a patronage system in which individuals and groups believe that their electoral and financial support for a political machine entitles them to economic and political benefits, including immunity from the law. A repeated theme in discussions led by Univision Anchorman Jorge Ramos is that the federal government should enact amnesty, not so much because it serves broad national interests, but because electoral support for Obama has entitled Latinos to it. 


So, in effect the decision to enforce a law has now been determined by its violators and not by the will of the public. Is this not the very phenomena that has rendered Mexico, a country rich in human and natural resources largely ungovernable? The problem is not that Mexico lacks laws and regulations, but the extent to which they are disregarded by the public and the collusion of key segments of the police and politicians, has created widespread impunity for minor and major offenses alike. Is this not the foundation of Mexico's endemic corruption? This holds true for "harmless offenses" like the bootlegging of movies and music, unregulated food vending and littering, as well as more serious violations, like drug trafficking. It has been speculated that the reason why illicit industries are allowed to operate with a considerable degree of impunity is that they now constitute such a significant portion of the economy that their elimination would cause a sharp economic decline in the "lawful sectors" of the economy, like banking and transportation.


I am not for one second comparing undocumented immigration to the drug trade, because whereas the former has offers some economic benefits, the latter is almost entirely destructive. And in no way is an undocumented drywaller or dishwasher comparable to a vicious drug trafficker. But, the underlying principles holds true: the unwillingness or inability of political elites to enforce existing laws and regulations, even ones that we do not entirely agree with, erodes the rule of law. Overtime the social, political and economic repercussions of allowing the rule of law to deteriorate renders cities, states and nations ungovernable, if not unlivable. 


One thing is for certain, we the people cannot expect change to come from our rotten politicians; if we wish to clean up our city and our country, we  must first affirm the rule of law in our daily lives, in our public and private conduct, in the board room and classroom, in the toll booth and voting booth. Whether we are in Chicago or Mexico, we cannot seek to gain rewards and immunity from the law, through the pursuit of political clientelism and expect our politicians to behave any more responsibly. 

When Labor Unions Become A Public Burden...

In principle, I am supportive of labor unions. They were instrumental in improving the wages and working conditions for millions of Americans. In the private sector, a dynamic give-and-take occurs between unions and businesses, as seen in recent negotiations between automobile worker unions and the major auto markers. Faced with the clear reality that the domestic auto industry would go under if they did not become more globally competitive, the unions made major wage, pension and work rule concessions. Conversely, during industry wide booms, when labor markets tighten, unions can and should push for an increased share of the profits. But, this salubrious dynamic is entirely absent from unions that have embedded themselves into corrupt political systems. A recent Chicago Tribune Investigation documented how working with the Chicago Democratic Machine, politically connected unions heads were able to loot Illinois's already broken pension system. For example, Dennis Gannon, the former president of the Chicago Federation of Labor earned $55,474 a year, but now sucks $158,258 a year off the public pension system. So, before you indiscriminately go to bat for unions, I urge you to make a distinction between private and the public unions that partake in Chicago's tradition of graft and outright corruption.

Yes, this is corrupt.

Pension rigging this egregious demands three investigations — and an Illinois Truth Commission.

September 25, 2011

As Chicago's 1991 municipal elections approached, Mayor Richard M. Daley was consolidating power for his first re-election campaign. In Springfield, two state senators — Daley's brother John and his political ally Jeremiah Joyce — introduced a "shell bill," an empty vessel into which lawmakers later would stuff an astonishing public pension giveaway to Chicago union officials.

That pension giveaway was among more than 100 provisions eventually added to the shell bill, but never debated by either chamber of the General Assembly. Instead, 10 members of a bicameral "conference committee" that evidently never held a meeting shaped the legislation to achieve their political goals. By the time the heavily larded bill was ready for passage by the two chambers, another Chicago Democrat, state Sen. Emil Jones, assured his colleagues that the bill wasn't controversial. "These provisions incorporated within this bill have been agreed to by the (city) administration and the pension system and the laborers," Jones told his Senate colleagues the day the bill passed in January 1991. "The people in the city of Chicago came together and agreed."

That wasn't true. As with most Illinois sweetheart deals, only the insiders who would benefit from this looting of city pension funds "came together and agreed." Nobody consulted "the people in the city" who, as taxpayers, would foot the exorbitant cost of this legislation for decades to come. Nor did anyone ask rank-and-file union members who someday would rely on city pension funds.

Twenty years later, as the Tribune and WGN-TV reported last week, 23 retired union officials from Chicago stand to collect about $56 million from two ailing city pension funds, thanks to the 1991 law. More union officials evidently are in the pipeline to receive the lavish benefits included in that legislation.

Sure enough, two days after the pension changes passed the Legislature — departing Gov. James Thompson signed it into law — the city's unions lined up to endorse Mayor Daley's re-election campaign. He would serve another 20 years with organized labor's support and acquiescence.

Always, though, the mayor would owe a debt for the 1991 legislation to his brother John, his pal Joyce and the 10 members of that conference committee: Senate Democrats John D'Arco, Emil Jones and Phil Rock; Senate Republicans John Friedland and Calvin Schuneman; House Democrats Ralph Capparelli, John Cullerton and Sam Wolf; and House Republicans Gene Hoffman and Terry Parke.

Only Cullerton, now president of the Illinois Senate, is in the Legislature today.

Pensions and political gain

That is the essence, but by no means the extent, of the cronyism that binds Illinois public officials and public employee union leaders. The officials — in Chicago, its suburban collar, downstate and in state government — have exploited public pension funds as huge pools of money that enable them to wieldpower. Many of those public officials have arranged enormous pension benefits for themselves and their peers in electoral politics from the executive, legislative and judicial branches. But buying labor peace, and labor union political support, also has been high on their priority list.

This is yet another classic saga of how Illinois power brokers take from the many to line the pockets of a chosen few. Legislators awarding free tuition at state universities to the children of their contributors, school boards inflating superintendents' late-career salaries to raise their pension calculations, politicians awarding one another pensions for part-time jobs — like those three traditional scams, this pension-rigging for union officials fits the definition of "corrupt": contaminated, morally unsound, debased, venal.

Calculating labor leaders' city pensions on their union salaries means Liberato "Al" Naimoli, president of Cement Workers Union Local 76, draws an annual city pension of $157,752 for a city job that paid him $15,264 a year. Then there's Dennis Gannon, former president of the Chicago Federation of Labor. He resigned from his city job, which topped out at $55,474, in 1993. But, because an accommodating Chicago City Hall rehired him for one day in 1994, he's drawing a city pension of $158,258.

Was this legal?

If you haven't read the Wednesday and Thursday news stories in which the Tribune's Jason Grottoexplained how city and state lawmakers enabled these outrages, you'll find them at chicagotribune.com/pensions. Fascinating reads, don't miss them.

rotto's stories may expose the tip of a deep and wide iceberg. There are indications that this pathology — taxpayer-funded pensions based on huge union salaries — extends well beyond 23 labor leaders from Chicago. We hope members of the affected unions note that, on average, these privileged few have accrued pension benefits nearly three times what typical retired city workers receive. Those workers ought to be furious that their leaders are raiding their funds. Just as taxpayers should be furious about union bosses depleting city pension coffers that are underfunded by $20 billion or more.

We on the Tribune editorial board don't practice criminal law; perhaps every action described in Grotto's stories was, and is, legal.

That said, the exposés suggest three avenues for investigators: FBI agents can assess whether any pensioner fraudulently claimed benefits in asserting his eligibility to qualify for this deal. The conduct of city pension fund officials — and of other city officials who directed payments into those funds — also is open to scrutiny. Separately, the office of Chicago's inspector general has authority to explore the use, and potential misuse, of city funds. And the U.S. Department of Labor has responsibility to help protect union pension funds. Any improper claim on those funds not only diminishes what remains for other retirees; withdrawn assets also deprive the funds of future growth possibilities.

For Mayor Emanuel …

Chicago's current mayor, Rahm Emanuel, didn't cause this pension debacle, but he can begin to address it. City Hall needs to reform policies that permit labor leaders to take essentially indefinite leaves of absence from city jobs, one factor permitting big city pensions for the long-departed. He also should be asking why nobody in city government, or at the pension funds, blew a loud whistle over these egregious practices.

But Emanuel is correct that Illinois needs thorough, rather than scattershot, pension reforms. To that end:

In Springfield, House Republican Leader Tom Cross plans to push for a repeal of the 1991 law that allowed this particular abuse. Cross also says he will explore strengthening enforcement of provisions against fraudulently claiming eligibility for public pensions.

And Cullerton, who says the pension law he helped pass is a relic from a bygone era, has instructed his staff to draft legislation "that would address the concerns that have been the focus of these media reports." Cullerton says the Legislature should address the problems in the fall veto session or in January.

Let's make that the fall veto session, Senator.

We hope House Speaker Michael Madigan will aggressively contribute. He was in full control of his chamber in, yes, 1991, when this noxious bill was approved.

… and for Illinois:

Citizens awakened to pension scandals at many levels of governance in this state deserve an Illinois Truth Commission to investigate all that's wrong and how lawmakers can correct it. Nobody will fight this idea more than the lawmakers, who have incredibly sweet pension deals themselves, and who have awarded generous deals to others. (Question from Illinois Pensions 101: Why do legislators give fantastic pension perks to judges? Answer: A lot of the actions legislators take wind up being challenged and then … evaluated by judges.)

At every turn, we the people are learning about insider deals and, yes, corruption. We realize that suggesting formation of an investigative panel risks a customary Illinois fate: Public officials here love to bury their problems in committees. But a group headed by, say, a former federal judge or prosecutor could unearth the many special deals that suffuse Illinois pension laws. A model here might be the so-called CLEAR Commission, which has been streamlining and updating the state's criminal code. Its distinguished members have done good work while largely avoiding politics.

A Truth Commission, then, could cast light on these rampant abuses by pols and union leaders of rank-and-file workers and Illinois taxpayers. Then the rest of us taxpayers can apply whatever heat is necessary to enact significant reforms.

Illinois Debt Crisis / Why No Protests?

Wisconsin has been beset by major protests and a campaign to recall their governor, yet Illinois has remained virtually free from protests. This is puzzling, because according to Report on Illinois Debt, we are in far worse fiscal shape than Wisconsin. In fact our per capita debt level is three times greater than Wisconsin's. Illinois has the dubious record of: having the worst credit rating, the most underfunded pension system and the third worst business climate of all the states of the union and $8 billion in unpaid bills! This has resulted in a net exodus of businesses, tax payers and jobs. Chicago alone owes $63 billion and when we calculate the total debt and unfunded liabilities of the cities, counties and state, we are on par with Greece and Portugal! And unless dramatic measures are taken, we will continue down the classic debt spiral path, in which an ever greater portion of our budget will go towards servicing our debt, prompting weary lenders to raise their interest rates. Ultimately I believe that this dire situation has not promoted protests for two reasons: At least in the short run, vocal special interests, such as Illinois's public sector unions benefit from the status quo. And the simple narrative of good (public unions and students) vs bad (Wisconsin's Governor Scott Walker) are much easier to comprehend for the economically illiterate than issues of unfunded liabilities and capital outflows. 

Liberal Lunacy At Its Best!

Liberal lunacy at its best: the courts forced the fire department to hire 111 African-Americans because given the fact that only 11% achieved the required score on a standardized test, the majority of those who were hired were white. It's one thing to use diversity and quotas to drive hiring practices for bloated bureaucracies like the DMV, but when we are dealing with life and death services (police, paramedics and firemen) it's essential that we hire the best and brightest candidates.

Chicago Firefighters: City Must Hire 111 African Americans, Pay Millions To Others


By DON BABWIN

05/13/11 04:54 PM ET

CHICAGO -- A federal appeals court ruled on Friday that the Chicago Fire Department must hire 111 African Americans who passed a firefighters entrance exam 16 years ago and pay millions of dollars to thousands more who took and passed the same test.

The Seventh U.S. Circuit Court of Appeals ruling was the latest blow to the city, which has been on the losing end of court decisions regarding the 1995 test for years, including a 2005 ruling by a federal judge who said the test discriminated against black applicants and a U.S. Supreme Court ruling last year that the candidates did not wait too long to sue the city.

An attorney for the black firefighter candidates said that the 111 jobs would be filled from the applicants who passed the 1995 test and their pensions would be adjusted as if they'd been firefighters since 1995. And, said Joshua Karsh, 6,000 others who also passed the test will divide "tens of millions of dollars" that would have been paid 111 firefighters from 1995 until today.

A spokeswoman for the city's law department called the decision a "partial victory" for the city because it reduced the number of African Americans the fire department must hire from 132 to 111. "Reducing the number of plaintiffs who are eligible reduces the damages," said Jenny Hoyle.

Hoyle said that the city was still calculating the damages as result of dividing the back pay of 111 firefighters among the 6,000 applicants, but that officials estimate the payout will be about $30 million.

The ruling stems from a test given in 1995 that was intended to measure an aptitude for firefighting. After the test, anyone who scored 64 or below was deemed not qualified, but officials told those who scored above that number that while they passed, they would randomly hire the top 1,800 who scored 89 or better.

Because only 11 percent of the African Americans scored 89 or better, the overwhelming number of applicants hired from that test were white.

Karsh said the test was discriminatory because there was no evidence that the applicant who scored 89 or better would be any better firefighter than another who scored a 64, and in fact in 2005 a federal judge said the test discriminated against black candidates. In her ruling the judge said the city knew the cutoff point was meaningless and would disproportionately exclude blacks from the pool of candidates most likely to be hired.

"If the city of Chicago had selected firefighters at random from all the people who passed the test it would have gotten a pool of equally capable firefighters and the pool would have been more integrated," said Karsh said. He said he did not know when the hiring might begin, but said that he expected it to start soon.

After the judge's decision, the city, which hadn't given another test since 1995 because of ongoing court challenges, gave another test in 2006. But that test was given on a pass/fail basis and that all passing applicants, and not just the top ones, were processed randomly for additional tests such as physical agility and background checks

Jimmy Carter Prize For the Advancement of Douchebaggery: King Richard Daley II

We are proud to bestow the Jimmy Carter Prize for the Advancement of Douchebaggery to Chicago's own (ex)Mayor Richard Daley II. Although the mayor's administration does have some noteworthy achievements, such as the beautification of downtown, past and presents acts of nepotism are so blatant and over the top that the mayor is clearly a first class douchebag. Here are but a few:

The Hired Truck Scandal, in which connected trucking companies were handsomely paid to do little or nothing. Among those indited was city employee and known mob bookie, Nick LoCoco. Not surprisingly, the mayor's brother, John P Daley greatly profited by providing insurance to 25% of the trucking firms. In addition, his brother in law, John Briatta was convicted of taking several thousand dollars in bribes to steer trucking contracts. City Clerk Walter Kozubowski, was convicted in a ghost payroll scheme for paying a total of $476,000 to six "ghosts" for little or no work over a dozen years.

Patrick Daley earned over $700,000 in a deal to provide wi-fi to O'Hare & Midway Airports. Of course that had nothing to do with the fact that he is Richard Daley's son.

Patrick Daley and his cousin Robert Vanecko secretly invested in Municipal Sewer Services, a firm that received a $4,000,000 no-bid contract.

Vanecko's firm also gained a no-bid contract to manage $68,000,000 in city pensions.

In a blatant act of nepotism, immediately after retiring, the former mayor accepted a position with the law firm that pocketed $822,760 in the questionable privitzation of the Chicago Skyway and Parking Meters. In the short run this deal infused Chicago with needed capital, allowing Daley to postpone necessary budget cuts, but in the long run it will only exacerbate the city's fiscal health.

And Daley is now being employed by the University of Chicago, which of course has nothing to do with back room deals that occurred during his time as the mayor. We can be sure that King Richard II and his family will profit from his political connections for years to come. As we say in Chicago "fersure my friend, heez da biggest douchebag I know!"

Minority Contract Set Aside Scandal

A recent article in Craine's Chicago Business and NPR detailed the shortcomings of Chicago's minority owned firm set aside program, which seeks to maximize the number of minority owner firms that receive city contracts. Often, firms employ a minority front to gain the contract, when in fact the real owners are white males. The focus of this piece was the lucrative construction contract of the west side Walmart by Broadway Consolidation, whose CEO, Margaret Garner is an African-American single mother. Both the city and Walmart widely publicized their choice as proof of their "commitment to diversity" and "investing in the community." The investigators found that 17 out of the 19 subcontractors that she employed were white males, which was a violation of the spirit and possibly the letter of the law. Sadly, the construction costs overshot the $17.8 million bid by nearly $10 million and each of the unapid subcontractors placed liens against her firm, which ultimately led to the bankruptcy of Broadway Consolidation. There are several lessons that we can draw from this incident:

Unlike the city, minority entrepreneurs are economically rational. Whereas city government heavily relies on political criteria (race, sex & nepotism) on their choice of contractors, Ms. Garner presumably chose the firms that offered the best service and lowest costs, regardless of the race or gender of their owners.

When the city places political considerations above economic ones, the cost and quality of work will suffer. I am betting that Mayor Daley would not have let political or ideological considerations guide business decisions  that involved his own money. But hey, who cares? It's only the tax payers money!

While contract set asides may benefit politically connected minority entrepreneurs, they do little to help the residents of Chicago's poorest residents. If anything, widespread city inteference dissuades businesses from investing in the city.

More than anything, this demonstrates one key problem with affirmative actions, most often seen in educational institutions; it is rarely in the interest of competent individuals or firm to be promoted beyond their ability. For example, an African-American student who would have excelled in a good school that corresponded to their ability (like Northwestern), will run a much higher risk of failing out of a top tier school (like Harvard) that recruited them largely on racial criteria. While Ms. Garner's firm was successful, it's yearly revenues amounted to $5 million, which leads me to believe that the $17 million dollar Walmart Contract was out of her league. Perhaps if Ms. Garner had resided over a project that matched her experience and expertise, her company would be growing, rather thank bankrupt. So, while such policies may satisfy the liberal conscience of university or city administrators, they do little to benefit the minorities that they are designed to help. This may be less noxious than the traditional Chicago practice of granting city contracts solely on the basis of family or political connections, but it most definitely is not in the interest of the people of our great city.

America's Most Miserable Cities

Interesting article on America's top 20 miserable cities. I believe that not by chance, but largely by government policies, 8 of these cities are in sunny and (formerly) optimistic California. To a lesser degree Florida, Ohio and Michigan are overrepresented. And the areas are largely, but not exclusively blue cities. Unfortunately, but not surprisingly Chicago made the list, mainly because of its long commutes, high taxes, crime and corruption.

America's Most Miserable Cities

Kurt Badenhausen

Forbes Magazine

02.02.11

California has never looked less golden, with eight of its cities making the top 20 on our annual list. Arnold Schwarzenegger was sworn in as the governor of California at the end of 2003 amid a wave of optimism that his independent thinking and fresh ideas would revive a state stumbling after the recall of Gov. Gray Davis.

The good vibes are a distant memory: The Governator exited office last month with the state facing a crippling checklist of problems including massive budget deficits, high unemployment, plunging home prices, rampant crime and sky-high taxes. Schwarzenegger's approval ratings hit 22% last year, a record low for any sitting California governor. Located in the state's Central Valley, Stockton has been ravaged by the housing bust. Median home prices in the city tripled between 1998 and 2005, when they peaked at $431,000. Now they are back to where they started, as the median price is forecast to be $142,000 this year, according to research firm Economy.com, a decline of 67% from 2005. Foreclosure filings affected 6.9% of homes last year in the Stockton area, the seventh-highest rate in the nation, according to online foreclosure marketplace RealtyTrac.

Stockton's violent crime and unemployment rates also rank among the 10 worst in the country, although violent crime was down 10% in the latest figures from the FBI. Jobless rates are expected to decline or stay flat in most U.S. metro areas in 2011, but in Stockton, unemployment is projected to rise to 18.1% in 2011 after averaging 17.2% in 2010, according to Economy.com.

There are many ways to gauge misery. The most famous is the Misery Index developed by economist Arthur Okun, which adds unemployment and inflation rates together. Okun's index shows the U.S. is still is in the dumps despite the recent gains in the economy: It averaged 11.3 in 2010 (blame a 9.6% unemployment rate and not inflation), the highest annual rate since 1984. Our list of America's Most Miserable Cities goes a step further: We consider a total of 10 factors, things that people gripe about around the water cooler every day. Most are serious issues, including unemployment, crime and taxes. A few we factor in are not as critical, but still elevate people's blood pressure, like the weather, commute times and how the local sports team is doing.

One of the biggest issues causing Americans angst the past four years is the value of their homes. To account for that we tweaked the methodology for this year's list and considered foreclosure rates and the change in home prices over the past three years. Click here for a more detailed rundown of our methodology. Florida and California have ample sunshine in common, but also massive housing problems that have millions of residents stuck with underwater mortgages.

The two states are home to 16 of the top 20 metros in terms of home foreclosure rates in 2010. The metro area with the most foreclosure filings (171,704) and fifth-highest rate (7.1%) last year is Miami, which ranks No. 2 on our list of Most Miserable Cities. The good weather and lack of a state income tax are the only things that kept Miami out of the top spot. In addition to housing problems (prices are down 50% over three years), corruption is off the charts, with 404 government officials convicted of crimes this decade in South Florida. Factor in violent crime rates among the worst in the country and long commutes, and it's easy to understand why Miami has steadily moved up our list, from No. 9 in 2009 to No. 6 last year to the runner-up spot this year. California cities take the next three spots: Merced (No. 3), Modesto (No. 4) and Sacramento (No. 5). Each has struggled with declining home prices, high unemployment and high crime rates, in addition to the problems all Californians face, like high sales and income taxes and service cuts to help close massive budget shortfalls.

Last year's most miserable city, Cleveland, fell back to No. 10 this year despite the stomach punch delivered by LeBron James when he announced his exit from Cleveland on national television last summer. Cleveland's unemployment rate rose slightly in 2010 to an average of 9.3%, but the city's unemployment rank improved relative to other cities, thanks to soaring job losses across the U.S. Cleveland benefited from a housing market that never overheated and therefore hasn't crashed as much as many other metros. Yet Cleveland was the only city to rank in the bottom half of each of the 10 categories we considered. Two of the 10 largest metro areas make the list.

Chicago ranks seventh on the strength of its long commutes (30.7 minutes on average--eighth-worst in the U.S.) and high sales tax (9.75%---tied for the highest). The Windy City also ranks in the bottom quartile on weather, crime, foreclosures and home price trends. President Obama's (relatively) new home also makes the cut at No. 16. Washington, D.C., has one of the healthiest economies, but problems abound. Traffic is a nightmare, with commute times averaging 33.4 minutes--only New York is worse. Income tax rates are among the highest in the country and home prices are down 27% over three years. ....

http://www.forbes.com/2011/02/02/stockton-miami-cleveland-business-washington-miserable-cities.html