Alabama’s Historic Economic Prize!

Along with this state’s recent headline grabbing immigration policies rearing its ugly head the most populous county in Alabama is destined for the record books as well, in a story of greed and corruption.

Jefferson County, Alabama has filed for Bankruptcy and if the case is allowed to go ahead it will be the Largest Municipal bankruptcy filing in United States History.

When combined the water and sewage rates in this county of 658,466 residents the rates for these must have services has increased 329% over the last 15 years.

As with most of the gut wrenching economic hardships of our recent recession the poor are the unwarranted recipients of most if not all of the consequences. They are now being forced to bathe in bottled water and use portable toilets as they have been cut-off from these basic necessities through no fault of their own.

While disturbing it’s not surprising that local government officials and Wall Street financiers have been implicated again in another case of financial wrongdoing.

All of this stems from the debt the county took on to finance a new sewer system for Jefferson County residents. Initially the cost was to be $300 million dollars however that initial projection soared to $3.1 Billion dollars and the county is drowning in debt.

JP Morgan Securities along with two of its prior directors have already been fined as they were accused of offering bribes to local politicians to guarantee they would win business financing the project. Six former members of Jefferson County’s commissioners have also been found guilty of corruption as well as fifteen other government officials for accepting bribes.

The new local county commission has seen no other alternative other than to file for chapter nine bankruptcy protections in November as the only way to try to bring the county out of this current financial hole.

However the banks and bondholders who stand to lose $4.5 million dollars per month in repayment charges are fighting the commission’s decision and a bankruptcy judge will give the last word on whether the Jefferson County commission can proceed.

The local residents have absorbed rate hikes of 8.2% a year to attempt to deal with repaying the escalating debt. According to John S. Young the court appointed receiver the rates are projected to be 10% per year up to a whopping 25% for the cash poor citizens of the county in the future.

Along with the prospect of bankruptcy filing for the sewage project the country is also projected to have an extra $40 million dollar budget shortfall.

As five hundred county workers were recently laid off and are living off of unemployment insurance the county’s ability to finance local services is further called into question as tax revenues will most certainly fall.

Tony Petelos the new county manager believes it will be years before the county might be able to turn the tide. He stated, “The public has lost confidence in Jefferson County over the last decade and a half, because of the mismanagement, because of the corruption. We have got to rebuild that confidence” and that there is, “light at the end of the tunnel”.

However in regards to any relief the citizens might realize in their water and sewer rates he was quoted as saying, “When you look at the amount of debt, and you  look at the revenue that is produced from the rate payers, there is no way it is going to come down,”.

Mr. Petelos who was the former mayor of Hoover city, Alabama recalls a Wall Street presentation about the same type of bonds that were used to finance the Jefferson County sewage project. After the presentation he recalls talking with his finance director in dismay and how they were both in agreement that they did not want to have anything to do with the type of financing that was presented.

One resident has found it is cheaper for him to pay a portable sanitation company $14 dollars a month to deal with his household sewage. His previous sewer and water bills sometimes reached $300 dollars per month this in a county whose citizens average income was $19,724 dollars per year according to the most recent census figures.

As most of the citizens of Jefferson County live off of meager Social Security income in this predominately poor community it is abundantly clear they cannot afford to pay these rate increases brought upon them by greed and corruption.

As the current Republican mindset in Washington is to gut most if not all of our governments regulation or oversight of the financial sector or corporations. This current situation in Alabama is the poster child for why we Do Need Regulation of banks and corporations that cannot be trusted to conduct themselves in a responsible honest fashion.

The meteoric rise of the debt from $300 million to $3.1 billion has been tied to construction issues and a series of bad bond and derivative deals that went sour during the 2008 financial debacle which has landed us in our current economic recession.

While for now as Jefferson county may be filing the largest Municipal bankruptcy in the history of our country. How many other cities and counties across the country are also reaching the breaking point remains to be seen.

Again Wall Street is being implicated in more financial crimes with few if any of the perpetrators being brought to justice. However as is usually the case the poorest citizens of the U.S. are being asked to suffer the brunt of the damage.

When will the poor citizens of the United States catch a break or at least be treated in a fair and equitable fashion and when if ever will the financial sector be held accountable?

Republican Leadership Finally

During the run-up to the Presidential election in 2012 as Newt Gingrich is emerging as the Republican nominee for President we are also seeing coming trends for our legislators as well.

As our current President Barack Obama has faced nothing more than obstructionism from Congress mostly from the Republican controlled house. Our country is continually being faced with a long lingering recession. A recession brought on by the uncontrolled financial sector who attempted to destroy the economy of the United States as well as worldwide financial markets all in the name of generating obscene financial gains which could not be sustained.

Rather than truly addressing financial reform our present Congress has done nothing but attack regulation, medicare, social security and promoted tax breaks for the über wealthy or extensions of costly tax breaks from the previous Bush administration along with trying to aid the oil industry and not representing the people they swore and oath to serve.

The Republican controlled House of Representatives has taken on the persona of a college fraternity playing games with the American people as they try their best to destroy the President at every opportunity. Rather than trying to dig the United States out of the worst recession in decades where tens of millions of citizens are needlessly suffering the game must go on. They have only submitted bills that they knew well in advance would never pass muster or become law. To them it’s just another game as they try to unseat our President no matter what he might honestly try to do for the good of our country and the people who live, work and die here.

Instead of generating more revenue with a modest increase on those with significant wealth along with the top 1% of wealthy Americans they would rather attack the poor. Even though the billionaire Warren Buffett has publicly stated that he and other wealthy Americans want to be taxed more, the Republican controlled Congress does not want to hear a word of it.

Even though a recent study came in with the results that over $2 Trillion dollars are sitting on the sidelines that could safely bring unemployment down to 5% across this country banks and corporations are playing the game as well in concert with their Republican allies all in the name of unseating President Barack Obama for whatever reason or stake they might have as they to toy with the American public.

So even though Newt Gingrich who has never been the personification of a decent human being will win the Republican Presidential nomination and then be soundly defeated by our current President who will see a second term in office, the game must go on while ordinary American’s suffer.

However our Republican Congressional legislators might consider acting responsibly by doing what is right and honestly representing the people they swore an oath to instead of answering to their lobbyists who control their every move as this is the current environment in Washington.

A recent national survey should give them a reason to reconsider their current obstructionist stance. As recent results have shown an overwhelming amount of registered Republican voters are getting fed up with their current Republican Congressional (so-called) representatives in both houses. The Anti-Incumbent Sentiment results of the survey are in and it does not bode well for the likes of John Boehner, Paul Ryan and Mitch McConnell to name a few whose political careers are on the chopping block.

As of December 2011 a full 67% of registered voters Do Not want to see most members of Congress reelected. Also as for their current districts representatives not being reelected the figure has climbed to 33% from 28% in 2006 and as Republican Congressional obstructionism continues unabated the figure can only be expected to climb higher in the coming months.

These recent figures represent an all time high for the survey as these are the highest figures the Pew Center has reported since it began its work over 18 years ago.

This along with a recent Gallup poll that found that a full 76% of voters feel that most members of Congress do not deserve reelection, this is more than just a passing fancy that will just go away. Coupling these recent surveys along with polls by the New York Times, CBS News, ABC News, Fox News, AP and the Washington Post which all show all-time low approval ratings for Congressional members does not show a bright future for the Republican party. In all Republicans are bearing the brunt of American outrage as their Democratic counterparts are being seen as more honest and ethical along with their ability to better manage our American government.

Furthermore 55% of voters feel that the Republican party is more extreme in it’s positions versus 33% for Democrats. While Democrats were viewed by 51% as being more willing to work with the their Republican colleagues who only rated 25% in this category.

Most of the criticism of Congress which is pointed at Republican members is coming from the Republican parties own registered voters.

While it might not be too late for the likes of John Boehner and Mitch McConnell to start to act responsibly and honestly address this country’s economic issues in a mature fashion their current obstructive stances do not bode well for the future of the Republican party.

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Congressional investigation of Blackwater USA and attempts to block it

The committee on Oversight and Government Reform made clear that hearings will commence on October 2, 2007 in regards to Blackwater USA, the private contractor used by our government in Afghanistan and Iraq.

Information gleaned from the Congressional letter which used various sources below:

Three key questions are to be addressed:

  1. Is Blackwater’s presence advancing or undermining US Efforts in Iraq?
  2. Has the State Department responded appropriately to shooting incidents involving Blackwater forces?
  3. What are the costs for US taxpayers of the reliance on Blackwater and other military contractors?

Of interest is some new information the committee states it has acquired: Read more of this post

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