Daily Links for October 8

October 8, 2014

QUOTE OF THE DAY

Reuters: Chicago pedicabs run into rough headwinds from City Hall

T.C. O’Rourke has encountered plenty of nasty weather in his years as a Chicago pedicab operator – rain, snow and steamy summer heat.

But he has never pedaled into a headwind as rough as this year’s blast from City Hall, which has imposed some of the toughest rules in the nation against the foot-powered tricycle taxis.

A city ordinance that passed in June, just at the start of pedicabs’ busiest season, bans them from downtown Chicago during rush hour, and from Michigan and State streets, which are home to dozens of stores and restaurants, at all times.

A major political battle line these days is between public-union pension funds and taxpayers who pay the bills. Taxpayers won a major victory late last week when federal judge Christopher Klein ruled that the California Public Employees’ Retirement System (Calpers) isn’t protected from cuts in the city of Stockton’s bankruptcy trial.

This is big and hopeful news because pension costs are partly responsible for driving Stockton broke. Pensions equal nearly 40% of the city payroll and are growing. The San Joaquin Valley city will spend $28 million next year on pensions—twice as much as in 2012 when it declared bankruptcy—and $36 million by 2020. That’s one in every five tax dollars.

Yet everyone is taking a hit in bankruptcy except Calpers. The city last year raised its sales tax by 0.75% to cover rising labor costs and hire more police. Creditors are taking big haircuts. Assured Guaranty, which insures about $121 million in pension obligation bonds, will recover about 50%. Franklin Templeton Investments has been offered a penny on the dollar for $35 million in bonds for public works.

Wal-Mart Stores Inc said it would no longer provide health benefits to some part-time workers in the United States due to ballooning healthcare costs.

The company said on Tuesday it would stop health benefits for part-time associates who work less than 30 hours. The move is expected to impact about 2 percent of the company’s workforce, the company said in a blog post. (http://bit.ly/1rfdfXl)

Wal-Mart cut its full-year profit forecast in August, citing higher employee benefit costs, among other things.

Pennsylvania lawmakers have a message for the state’s fiscally unstable municipalities: shape up or ship out.

Under a bill poised for passage as soon as tomorrow, communities must exit the state’s program for distressed municipalities within eight years or risk receivership or even dissolution. Pittsburgh and Scranton, which may sell its sewer system to bolster its pensions, are in the program along with 19 other communities. Fourteen have languished with the distressed label for more than a decade.

The legislation, while offering distressed cities the option to raise taxes, doesn’t address the cause of their predicament, such as collapsing employment in economies formerly dominated by steel and coal, said Howard Cure, head of municipal research at Evercore Wealth Management LLC. More Pennsylvania communities may file for bankruptcy as a result, he said.

Eight Illinois employers warned that they will lay off about 600 workers by early 2015, according to notices filed with state regulators.

Microsoft and Nokia will cut 91 jobs at an office at 425 W. Randolph St. in Chicago. Layoffs will occur there Nov. 17. Microsoft recently bought Nokia’s mobile phone unit and in July, Microsoft said it planned to cut up to 18,000 jobs over the next year. That amounted to a 14 percent reduction overall but a nearly 50 percent cut of Nokia’s mobile phone unit. As of September 2013, Nokia had about 1,200 employees in its downtown Chicago office.

Hibu Inc., a U.K.-based publisher of directories and mailing lists, is closing its Effingham location, where 32 jobs will be lost in November.

As Hanover Park inches closer to upgrading an outdated sports complex, a youth baseball team wants more input on how the village invests in the facility.

One source of division: whether to install a new sign board. The village has budgeted $50,000 for the project, although village officials say it likely won’t cost that much.

“How is a $50,000 sign benefiting the kids?” said Mike Byrne, Hanover Park Little League’s treasurer.

Twitter wants you to know that it is serious about data request transparency, and that is a darn fine good thing.

The social company is suing the government for the right to share, in more granular detail, the requests for user data that state makes. The United States government would like such data to be opaque. Twitter, the opposite.

Both sides’ views are unsurprising. The government wants to keep terrorists in the dark. And Twitter wants to keep its users informed, so that they know that their information, at least through these specific channels, isn’t being absorbed wholesale. This argument is component to the larger debate the nation is currently having about how government surveillance impacts the privacy of the individual, and the nation as a whole.

It’s finally happening: the backlash against the most impressive features of digital-age economics. I’ve been waiting for this for years, knowing that we can’t smoothly travel from the old world of command and control to the new world of personal sovereignty without engaging in the intellectual argument.

What’s been missing until recently has been the framework these arguments would take. That’s now becoming clearer. The opponents of markets just can’t reconcile themselves to embracing the very thing they have supposedly advocated for generations: popular empowerment.

The technological upheaval of the last decade has given rise to a wonderful restructuring of some major aspects of economic life. The most impressive fall under the label of the “sharing economy” or the “peer-to-peer (P2P) economy.” They represent an implausible form of egalitarianism, rightly understood: everyone has access to and controls the means of production. It seems like a socialist dream, except that it is being realized through private property, entrepreneurship, and the universalization of the commercial spirit.

The city of Chicago has “run out of patience” waiting for the owner of a South Shore shopping center to find a tenant for the empty Dominick’s there, and is starting the process that would allow the city to take ownership of the site, officials said Tuesday.

The store has sat vacant since late December, after owner Safeway Inc. shut down the 72-store chain. Since then, many of the store leases – including every other Dominick’s within the city limits – have been taken over by a variety of grocery chains.

Mayor Rahm Emanuel put together a grocery store task force to help find operators for the vacant Dominick’s stores. Suitors, including Jewel-Osco, Mariano’s and Whole Foods, have stepped in for most locations. However, the store at 2101 E. 71st Street in the South Shore neighborhood remained unclaimed.

At a production to honor Chicago’s rebirth after the infamous 1871 conflagration, the fire didn’t start.

Beginning this past summer, the city of Chicago partnered with theater group Redmoon and more than 30 community organizations to commemorate the great Chicago Fire and tell stories of “grit and resilience” using “unique machinery and theatrical skill in an unprecedented city-wide conversation on overcoming and celebrating.”

But the floating model houses the production companies created to resemble old-timey Chicago never fully ignited. Chicago’s 14^th Ward Alderman Ed Burke called the event a “fiasco.”

Millions of Americans may qualify for waivers from the most unpopular part of President Barack Obama’s health care overhaul. But getting that exemption could be an ordeal.

Community groups are concerned about a convoluted process for waivers from the law’s tax penalty on people who remain uninsured. Not everyone is complaining, however: Tax preparation companies are flagging it as a business opportunity.

The law’s requirement that Americans carry health insurance remains contentious. Waivers were designed to ease the impact.

CARTOON OF THE DAY

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