Kansas City, Misery

Kansas City TV station KMBC announced today that the city is facing an $85 million shortage in their budget. Mayor Mark Funkhouser has put a plan up that includes holding back the $2 million dollar payment to the Truman Sports Complex. Eliminating the payment would essentially break the lease with both the Chiefs and the Royals.

While I completely see the point that the city needs to balance its budget, I wonder what would be more beneficial. Let’s examine the points.

The city doesn’t pay up, and the teams, basically, become free agents. Just like the Sonics did to Seattle last year, they could pack up and go because the city didn’t help them stay. Of course, there were other points in interest in Seattle, but that is for another day. With the bad economy affecting the entire country, do the teams have a realistic chance to find another city that would be able to support them financially and offer a viable fan base? One obvious answer is Las Vegas, but neither the NFL or MLB is willing to let a team camp out in Vegas due to their respective league’s stance on gambling. So Vegas is out. And in a down economy, Vegas just got some bailout money to remain viable anyway. Vegas is very out. For MLB, there are a few other options. Charlotte, NC, already has a basketball and football team. But since Charlotte is the Southern Banking Capital, the city’s economy has been hit hard. Atlanta might object to another team being so close, especially one where they have a large fan base. Charlotte stays on the list for now. Then there is New Orleans. Like Charlotte, there is an established pro sports legacy. One advantage New Orleans has is a ready stadium in the Superdome. Although it may be outdated, at least there is a place to play immediately. New Orleans is on the list. As far as I can see, those are the options for the Royals. Besides, who would want one of the worst teams of the last 20 years?

Unfortunately for the Chiefs, the options are not good. LA. That’s it. And we all know how that is going to turn out, don’t we Al Davis . . . .

Besides loosing the teams, there would be a ton of revenue leaving the area, along with jobs in concessions, parking, stadium maintenance, and team operations.

Now, let’s examine what would happen if KC bucks up and pays the bill. The teams stay. There is a rabid fan base for the Chiefs, which keeps the locals happy. People stay in employed and pump money back into the local economy. Kansas City would lose a lot more than $2 million if they choose not to pay up.

In this time of economic belt-tightening by municipalities everywhere, this is one time where the muni needs to splurge a little to keep their local economy from flat-lining.

Markets tank again; GM and Citigroup lead the way

As of 2:30 PM today, the Dow was down 260 points to 6.612. And The One didn’t even mention the economy today. And Timmy hasn’t been in the news. Hmm. I guess this is just reflective of how the markets see the assistance from the government.

The Dow is down more than 50% from its high of 14,164 on October 2007. February 2009 is the worst February for the Dow since 1933.

“The Dow, which dropped 12 per cent this month, had its worst February since 1933. During the month, 20 of the 30 components reset their 52-week lows, with 13 hitting 52-week lows at some point during final session of the week.”

Citigroup’s stock finally fell below the $1 threshold. Welcome home, dear! I thought the feds were going to prop up Citi after their announcement last week about converting a few billion dollars in preferred shares to common stock. That would give the feds 36% ownership in Citi. Looks like that was a great idea..

Oh yeah, and GM is saying today they may have to go into bankruptcy to help restructure. Why didn’t they say this $50 BILLION ago? Once again, the government offered a band-aid to something that needed to be amputated. If GM is going to have to declare bankruptcy to get straight, they should just suck it up and do it. Bankruptcy would allow them to void their union agreement so that could be restructured as well. Every time they’ve been give BILLIONS, they come back to the trough like pigs a few weeks later wanting to get some more. Unfortunately, President Obama promised in his speech to Congress last week that he would not let them fail.

While the American auto makers are crying, why haven’t we heard any screams from Toyota, Nissan, or Honda?

Citimortgage announces Loan Modification Program

Citimortgage announced yesterday it had its own loan modification program. Under the program, home owners have the option to pay around $500 a month on their mortgage for three months if they meet certain criteria. Citimortgage is targeting those homeowners that are unemployed and perhaps behind in their payments. This is a great idea from Citimortgage and it’s time for more companies to propose something along these lines.

This proposal allows people to stay in their homes and also keeps the asset on the books for Citimortgage. Hopefully, this is more than a stopgap measure and homeowners will take advantage of this offer. They are even freezing credit reporting during the process as well. It is a win-win for both parties. Citi would loose a lot more if the house went into foreclosure than by asking someone to pay what amounts to rent on a one-bedroom apartment in most cities. It also protects other homeowners because this should help stabilize some property values.

This does what the government has tried to do through two pieces of legislation. It tackles the original problem of the economic turn we are in. It goes after home foreclosures. Once again, a business based solution trumps government.

This follows on the heels of Freddie Mac and Fannie Mae’s plans to rent foreclosed properties. Many renters were being evicted because the owners were being foreclosed upon, affecting the innocent tenants. While still being owned by Freddie (and in effect, the government) the plan keeps the homes occupied and from falling into a state of disrepair. Just like the Citi plan, it helps to stabilize home values and keeps a stream on income on the asset instead of letting it sit.

Subtraction by Exponential Multiplication

When I was in the 8th, my algebra class had a hard time understanding some of the principles involved. So, we would just say our teacher was using her magic powers. It was a convenient explanation of math we didn’t understand. Well, I would like to say congratulations to her. She is no longer a math teacher. She is now working for the Office of Management and Budget. And they have figured out a way to reduce the deficit in half by 2013, along with proposing the largest budget in history in terms of dollars and percentage of national GDP. Shazaam!

When President Obama was campaigning, he said he would rule from the middle. He failed to mention that he would write his budgets from the far left. But conservatives have been waiting for this since he took office. He had the most liberal voting record in the Senate, when he wasn’t voting “Present.”

In presenting his outline, Obama said there would be "some hard choices that lie ahead." I really find it hard to believe that there would be some extreme cuts in a government budget that is the largest in history.

Highlights include and additional $250 BILLION to stabalize the financial system. I guess there wasn’t enough money in Porkulus to get the job done? And then there is $634 BILLION for a reserve fund for health care for those without coverage. Wealthy seniors will fund some of the increase by paying more in Medicare premiums. And so will those making more than $250 G once the Bush tax cuts expire. I’ve combed over the Constitution, and I still can’t find where health care coverage should be covered by the government.

During his inaugural addres, Obama asked Americans to make sacrifices, to get this great country on the road to recovery. Well, President Obama, we are going along the best we can. It’s nice to know that we shouldn’t worry about the government struggling.

It was nice to see the GOP leadership come out swinging, though. From CNN.com:

"There's been too much spending under the Republicans over the last couple of years, but if you begin to look at what's happen over the last month and what's being proposed in this budget, the president's beginning to make President Bush like a piker when it comes to spending," said Rep. John Boehner, the House minority leader.

Even Mississippi Democrat Gene Taylor was critical of the proposal, saying “I don't like it ... Change is not running up even bigger deficits that George Bush did”

Of course, Nancy Pelosi almost fell over herself praising it as in line with our national values. Well, considering we are in an economic mess right now because people got mortgages they couldn’t afford, maybe she’s not too far from the truth.

I just pray that the GOP makes enough racket about the proposal and can get some Democrats on their side.

Quick blurb on illegal immigrants out of work

CNN posted this story about an illegal immigrant having to return to Guatemala because he couldn't find work here. According to the story, our tougher immigration stance may be a contributor.

Immigration experts say it's not yet clear how large an immigration exodus of Latin Americans is under way. But they say anecdotal evidence suggests day laborers, like Pablo, have begun packing -- a result of the economy and tougher immigration enforcement.

Hmm, I thought we needed a new immigration policy. I guess just better enforcement is working fine, along with a sour economy.

There are unemployment numbers for everything from manufacturing to health care. Now we need to add another one for illegal immigrants.