One
day after Moody’s downgraded the status of city government’s bonds to junk
status – implying that they are a bad financial risk for investors looking to
make a buck – they took the same actions with the schools and the parks.
THEY’RE
ALL JUNK. It probably is the first in a series of downgrades that will impact
all governmental units in the area.
Big
business interests will now be eager to treat all government entities in such a
negative manner.
Which
makes me think they’re engaging in their own partisan politicking – trying to
force government into enacting measures of harm to labor interests and ones
that likely would never have been considered otherwise.
The
real question, in my mind, is if the Standard & Poor’s bond rating agency
decides to follow suit. Will they downgrade their own ratings of our local
government entities to show some sort of overall negative perception of how
weak our financial status is.
OR
WILL STANDARD & Poor’s keep its level the same? Indicating it might be a
mere hang-up that Moody’s has with regards to Chicago.
Considering
that the two entities usually react in similar ways, it would be likely that a
Standard & Poor’s downgrade would be forthcoming. Which means it’s more a
kneejerk reaction than anything else.
Of
course, I have always felt that the bond ratings are not some hard-and-fast
ranking that ought to be taken for granted. It’s almost like those baseball
fans who think the batting average, a mere percentage carried out to the
thousandth of a point, is an absolute indicator of how good a ballplayer truly
is.
Nothing
has truly changed between last week when the bond ratings were still of some
sound standard, and this week when we’re supposedly worthless financially.
EVERYTHING
IN CHICAGO remains the same. In fact, it is likely that things won’t get
significantly better when our government officials do figure out some
mathematical formula that enables the pension funding mechanisms to be resolved
and our bond ratings will increase again.
I
noticed that Mayor Rahm Emanuel went about saying on Wednesday that it was “irresponsible”
for Moody’s to lower the bond ratings. Just as Chicago Teachers Union
spokeswoman Stephanie Gadlin issued a statement calling such actions “reckless.”
Could
it be that the bond rating fiasco is the common ground that can bring two
otherwise-openly hostile sides together? I don’t know if this is the first step
toward avoiding a teacher strike later this year.
But
that could become the one positive that arises from all this mess.
OF
COURSE, WITH the teachers’ union also saying it believes Emanuel and the big
banks are in cahoots with each other to misrepresent the financial status of
our governments, it’s probably not realistic to expect anything to bring the
sides together.
Actually,
I’m wondering how long it will be until Illinois government also has its bond
ratings dinged down to junk status. Or is there a sense that business interests
don’t want to do something to embarrass the political stature of Bruce Rauner –
the governor of Republican persuasion who claims he wants to run the state like
the investment banker he once was.
That would be blatantly partisan. I’d like to think such a thing would not happen.
But
this kind of big-business trash-talk about junk bonds does have a certain stink
of partisan politics about it; perhaps concocted by the same kind of partisans
who are desperate to spew the nonsense that Chicago is the next Detroit.
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