luni, 15 iunie 2015

This week's top Pins

Take a look at what's popular on Pinterest this week!
	Get the app! Android · iOS

Hi Hari,

Take a look at what's popular on Pinterest this week!

See more top Pins

Flat-Belly Workout: Cardio and Crunchless Abs

Lavinia Tyiran

Health & Fitness

Arm (+Core) Hand Weight Workout -- you'll just need a ...

Annika Tiedemann

Fitness & Sports

Love this idea!

Trochi

Deko

Alecia Chapman

Words of Wisdom

If you are in a big hurry to prepare a ...

Ade supian

food & drink

"Muffin Top Blaster" Love Handles at Home Workout – Visit http ...

A A

Fitness

Baked Parmesan Zucchini Rounds

Janette Mišovičo...

Jedlá

Refreshing melon ball #punch! This stuff is what #summertime is ...

Michelle Pachuta

drink recipes

Happy Pinning!

Get the Pinterest App
Check recipes at the store, browse Pinterest
on the bus and more.

Available on the
App Store

Available on
Google Play

How to Choose a PPC Agency - Moz Blog

How to Choose a PPC Agency

Posted by anthonycoraggio

Paid search management is a great component of your marketing to outsource or delegate to a specialist. The field moves fast, so even without other responsibilities, keeping up with campaigns on a daily basis and all the developments in the technology and market environment is very demanding. When your time is already at a premium, finding a qualified agency can make a world of difference. Here are some questions to help you choose how to resource your online advertising needs.

Where is your business going?
Is this the right way to get there?

The reason you're looking to run PPC campaigns in the first place is because you need to achieve certain business results—but is it actually the best way to get where you need to go right now? Particularly if you're driving a new initiative or running ads for the first time, it's important to take a step back and make sure you're not trying to buy a horse to win an air race, because someone will likely try to sell it to you anyway!

Some red flags to watch out for:

Your target search niche is very small, or so new that no one's searching for your product.
You haven't evaluated the competitive landscape
Your website isn't prepared to make effective use of the traffic you'll be sending

It's important to set expectations realistically. For example, if you're trying to make a big break into the auto insurance market with a couple grand per month, you're going to need some combination of very deep pockets and an outstanding value differentiator. On the other side of the coin, you can't usually lean a major growth initiative on a target segment drawing only a handful of searches every month.

This can actually be a great task for an agency or experienced freelance consultant to address, but if you're still at this stage make sure you're being honest with yourself and them. Be ready to pivot to another channel, and make sure there's a well reasoned backing for any promises of results you receive.

What kind of working relationship do you want?

In my experience, finding the right cultural fit is one of the most important things to consider when hiring out. Even if a deal looks good on paper, if you're not on the same page and excited to work together, a cheaper fee or glossy list of credentials is going to lose its shine very quickly.

How do you actually plan to work?

Both sides of the table tend to start rolling out the idealism and HBR buzzwords during a request for proposals, but it ultimately works out a lot better for everyone if you keep it strictly realistic. Is your company large and methodical, or a scrappy team testing new ideas and patching holes every other hour? These situations demand very different skills and approaches from an agency to be successful, and if expectations are skewed to start, someone will wind up unhappy.

What do they need to be ready for?

Likewise, make sure to get a proper answer to this question from the agencies you're considering. Just like in any hiring process, behavioral interviewing is going to be your friend. Need rapid responses and creative energy? Have a blunt or demanding teammate they'll need to work with? Ask for examples of how they've succeeded in these kinds of situations in the past.

Are you looking for a bold experimenter or an obedient Igor?

Look for the full scope of success

Success in paid search is about much more than tweaking spreadsheets—you'll need to create a cohesive and functional user experience from end to end, and that means some serious work on landing pages, ads, conversion rate optimization, data analysis, and selling the ideas to make it all happen. Before starting a new project, ask these questions:

What will it take to turn around new ad copy?
What kind of input will you be getting from your agency on new or improved landing pages? Whose job will it be to get them created?
What relationships might need to be cultivated between in-house stakeholders and external partners for the most effective communication and results when marketing messages or site changes are involved?

Don't forget to factor in your plans for SEO, either—paid search is playing on the same field, and you'll want to make sure the two are working together smoothly. If you're also looking for an SEO partner, consolidating the two to a single agency often leads to more and better collaboration.

Think long term

Last, but certainly not least, don't forget to ask where you see yourself in a year or two, and make that a part of the conversation. Are you aiming to bring the work in-house eventually, or will this stay outsourced for the foreseeable future? A good agency will be ready with a plan to help on-board or even help train a future replacement, and definitely won't hold your account or data hostage.

Scale is an important part of the long term picture too. If you're growing quickly into a rich market and could reasonably expect to double, triple, or 10x the scale of your campaigns in the near future, make sure you share your intent and find a partner who will be prepared when the time comes.

Sign up for The Moz Top 10, a semimonthly mailer updating you on the top ten hottest pieces of SEO news, tips, and rad links uncovered by the Moz team. Think of it as your exclusive digest of stuff you don't have time to hunt down but want to read!

You are subscribed to the Moz Blog newsletter sent from 1100 Second Avenue, Seattle, WA 98101 United States
To stop receiving those e-mails, you can unsubscribe now.

Newsletter powered by FeedPress

Seth's Blog : Overpriced

Overpriced

Things that are going up in value almost always appear to be overpriced.

Real estate, fine art and start up investments have something in common: the good ones always seem too expensive when we have a chance to buy them. (And so do the lame ones, actually).

That New York condo that's going for $8 million? You didn't buy it when it was only a tenth that, when it was on a block where no one wanted to live. Of course, if everyone saw what was about to happen, it wouldn't have been for sale at the price being offered.

And you could have bought stock in (name company here) for just a dollar or two, but back then, no one thought they had a chance... which is precisely why the stock was so cheap.

And the lousy investments also seem overpriced, because they are.

Investments don't always take cash. They often require our effort, our focus, or our commitment. And the good ones always seem like they take too much, until later, when we realize what a bargain that effort would have been.

The challenge isn't in finding an overlooked obvious bargain that people didn't notice. The challenge is in learning to tell the difference between the ones that feel overpriced and the ones that actually are.

The insight is that when dealing with the future, there's no right answer, no obvious choice—everything is overpriced. Until it's not.

• Email to a friend •

duminică, 14 iunie 2015

Mish's Global Economic Trend Analysis

Greece Walks Out After 45 Minutes, Talks Collapse; Default Math: Who Foots the Bill? How Much?

Posted: 14 Jun 2015 09:22 PM PDT

Congratulations to Greece for walking out of 11th hour Troika talks. Greece is going to default sooner or later and the sooner the better for everyone involved.

The Financial Times reports Greek Default Fears Rise as 'Eleventh-Hour' Talks Collapse.

Talks aimed at reaching an eleventh-hour deal between Greek ministers and their bailout creditors collapsed on Sunday evening after a new economic reform proposal submitted by Athens was deemed inadequate to continue negotiations.

Greek negotiators, including Nikos Pappas, aide-de-camp to Prime Minister Alexis Tsipras, left the European Commission only 45 minutes after entering.

In a sign of how far attitudes had shifted, Sigmar Gabriel, Germany's vice-chancellor and head of the country's Social Democratic party — long seen as a more conciliatory political group — penned an article for Monday's daily Bild newspaper in which he warned patience towards Greece in Germany was running thin .

"The game theorists of the Greek government are in the process of gambling away the future of their country," Mr Gabriel wrote, in a thinly veiled dig at Yanis Varoufakis, the Greek finance minister who is an expert on game theory. "Europe and Germany will not let themselves be blackmailed. And we will not let the exaggerated electoral pledges of a partly communist government be paid for by German workers and their families."

Gambling Away the Future

I have no love of radical left governments, communists, etc. But I do commend anyone willing to tell the IMF to go to hell. I also commend anyone bright enough to avoid suicide, and that's what accepting the offer would mean.

If Greece defaults, as it should, it will have the opportunity to cram the entire bailout straight down the throats of the nannycrats and the IMF. All it has to do is initiate genuine reforms, make an alliance with Russia, cut taxes instead of raising them, and thrive.

Alas, the odds of genuine reform is slim, but at least it's possible. Raising taxes to run the required current account surplus to pay back creditors while Greece goes into a 10-year depression is not going to happen.

At this point, any alleged gamble is better than a zero percent chance of success.

Farce of the Day

The Bild statement "Europe and Germany will not let themselves be blackmailed. And we will not let the exaggerated electoral pledges of a partly communist government be paid for by German workers and their families" is the farce of the day.

I commented at four years ago that German taxpayers would foot the bill one way or another. Their choice, like it or not, is the same now as it was then: Write down Greek debt voluntarily, or Greece would default on it.

This position is not taking sides, it is simply a mathematical certainty based on a simple truism, what cannot be paid back, won't be paid back.

Nothing to Lose

On June 11, in "Air of Unreality"; "Do You Feel Lucky, Punk?"; Who Has the Gun? I said Greece has nothing to lose by defaulting.

I quoted Bob Dylan "When you ain't got nothing, you got nothing to lose."

I emailed that post to Financial Times writer Wolfgang Münchau but he did not respond. I do not know if he read my email or not, but I do know he agrees.

Today Münchau writes Greece has Nothing to Lose by Saying No to Creditors.

So here we are. Alexis Tsipras has been told to take it or leave it. What should he do?

First, contrast the two extreme scenarios: accept the creditors' final offer or leave the eurozone. By accepting the offer, he would have to agree to a fiscal adjustment of 1.7 per cent of gross domestic product within six months.

My colleague Martin Sandbu calculated how an adjustment of such scale would affect the Greek growth rate. I have now extended that calculation to incorporate the entire four-year fiscal adjustment programme, as demanded by the creditors. Based on the same assumptions he makes about how fiscal policy and GDP interact, a two-way process, I come to a figure of a cumulative hit on the level of GDP of 12.6 per cent over four years. The Greek debt-to-GDP ratio would start approaching 200 per cent.

My conclusion is that the acceptance of the troika's programme would constitute a dual suicide — for the Greek economy, and for the political career of the Greek prime minister.

Would the opposite extreme, Grexit, achieve a better outcome? You bet it would, for three reasons. The most important effect is for Greece to be able to get rid of lunatic fiscal adjustments. Greece would still need to run a small primary surplus, which may require a one-off adjustment, but this is it.

Greece would default on all official creditors — the International Monetary Fund, the European Central Bank and the European Stability Mechanism, and on the bilateral loans from its European creditors. But it would service all private loans with the strategic objective to regain market access a few years later.

The second reason is a reduction of risk. After Grexit, nobody would need to fear a currency redenomination risk. And the chance of an outright default would be much reduced, as Greece would already have defaulted on its official creditors and would be very keen to regain trust among private investors.

The third reason is the impact on the economy's external position. Unlike the small economies of northern Europe, Greece is a relatively closed economy. About three quarters of its GDP is domestic. Of the quarter that is not, most comes from tourism, which would benefit from devaluation.

If Mr Tsipras were to reject the offer and miss the latest deadline — the June 18 meeting of eurozone finance ministers — he would end up defaulting on debt repayments due in July and August. At that point Greece would still be in the eurozone and would only be forced to leave if the ECB were to reduce the flow of liquidity to Greek banks below a tolerable limit. That may happen, but it is not a foregone conclusion.

The eurozone creditors may well decide that it is in their own interest to talk about debt relief for Greece at that point. Just consider their position. If Greece were to default on all of its official-sector debt, France and Germany alone would stand to lose some €160bn. Angela Merkel and François Hollande would go down as the biggest financial losers in history. The creditors are rejecting any talks about debt relief now, but that may be different once Greece starts to default.

The bottom line is that Greece cannot really lose by rejecting this week's offer.

Default Math

If Greece defaults on its official-sector debt, Münchau calculates France and Germany stand to forfeit €160 billion.

And what about Spain? Portugal?

Münchau has numbers higher than my January 22, post Revised Greek Default Scenario: Liabilities Shifted to German and French Taxpayers; Bluff of the Day Revisited.

At that time, I had French exposure at €55 billion and German exposure at €73 billion (a total of €128 billion).

I also had Spain at €33 billion and Italy at €48 billion. Both of those numbers are likely way higher today. Even if my numbers are still accurate, where the hell is Spain going to come up with €33 billion? Where will Italy come up with €48 billion?

The answer to both questions is simple: they won't.

Loaded Gun

So who has the loaded gun and who doesn't?

If Greece is smart, it will not implement capital controls until the ECB shuts down the ELA, forcing the issue. Greece will then have the ECB and Germany to blame for the resultant controls.

By the way, Münchau is a staunch supporter of the eurozone and I certainly am not. Yet, we both arrived at the same conclusion: Greece has nothing to lose by defaulting.

The only people who have not figured this out are the nannycrats who believe they have a loaded gun pointed at Greece, when it's Greece that really has the gun.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

"Last Try" in Greece Before Capital Controls: Then What? Best Case Scenario for Greece

Posted: 14 Jun 2015 10:45 AM PDT

"Last Try" in Greece

For years we have heard phrases like down to the last hour, one minute before midnight, now or never, etc. But on every previous occasion, the Troika negotiators pulled an agreement rabbit out of the hat.

So, when we read Greece Locked in 'Last Try' Talks with Bailout Negotiators it's easy to be more than a bit skeptical of the serious "final" mature of it all.

Talks between Athens and its international bailout creditors were expected to resume late on Sunday after Greek government officials were told to submit a final list of economic reforms in order to secure €7.2bn in desperately needed rescue aid.

A spokesman for Mr Juncker would only say that talks would continue on Sunday. But others briefed on the talks said the meeting had been "difficult" and that senior eurozone officials were concerned whether a deal could be reached in time for Greece to access the aid before its bailout expires at the end of the month.

"Positions are still far apart," said one EU diplomat. "It's not certain there will be an outcome." Another senior eurozone official said the Greek team returned to Brussels on Saturday without new proposals and that Sunday's evening session would be a "last try."

"Greek movement [is] not discernible," said the official. "I think they do not want a solution."

Mr Pappas, the Greek minister of state and a longtime political ally of Mr Tsipras', took to Twitter to push for politicians to become engaged in the negotiations rather than technocrats who normally hammer out such agreements. "A political solution is needed to permanently exit from the crisis," Mr Pappas wrote.

"A credible proposal needs to be tabled by the Greeks in the next 24 or so hours," said Mujtaba Rahman, head of European analysis at the Eurasia Group risk consultancy. "Otherwise it's looking like game over for Athens."

Under the creditors' plan, Athens would need to find measures to hit a primary budget surplus — revenues less expenses when interest on sovereign debt is not counted — of 1 per cent of gross domestic product this year, rising to 2 per cent next year and 3 per cent in 2017. By 2018, the primary surplus would need to hit 3.5 per cent.

"1.2 per cent was utterly feasible in late March," Yanis Varoufakis, the Greek finance minister, wrote on Twitter over the weekend of this year's target. "1 per cent infeasible after three more months of induced asphyxiation."

Primary Surplus Infeasible?

The creditors targets for a primary surplus are not infeasible, but they would amount to "induced asphyxiation".

And for what?

Every bit of that surplus would go to pay creditors. If Greece could get a primary surplus, it's best strategy is simply to default, and use that surplus for internal use rather than to pay back absurd "bailout" loans that should never have been granted in the first place.

Grexit might have cost perhaps €30 to €60 billion euros up front had the nannycrats just let Greece go when the problems first arose years ago. Two bailouts and growing Target2 imbalances ever since have turned this into a €330 billion problem, minimum.

Capital Controls Coming?

The Financial Times reports Greece Running Out of Options to Avoid Capital Controls.

Just a few months ago, the possibility that capital controls would be imposed in Greece still seemed distant.

But with the government fast running out of money — and nervous depositors pulling cash from the country's banks — talk of such extraordinary measures is widespread and analysts are warning Athens may soon be forced to employ them

"We are four to six weeks away from the possible imposition of capital controls," said Daniel Gros, director of the Centre for European Policy Studies think-tank in Brussels. "There is always some temporary solution [eurozone politicians] can pull out of thin air, but now we are getting really close."

Four to Six Weeks Away?

Four weeks is a long time. Is it a minute before midnight or not?

This is what happened in Cyprus, and it happened in a take-it-or-leave-it offer in a matter of hours, not weeks.

Under pressure from its EU partners, Nicosia [capital of Cyprus] agreed to a deep restructuring of its banking sector and a "bail-in" of large depositors — forcing them to accept bank shares for some of their cash — in exchange for a €10bn loan.

The measures took a heavy toll on ordinary citizens: under government orders, Cypriot banks were closed for nearly two weeks. When they reopened, there were tough restrictions on domestic and external payments, including a domestic cash withdrawal limit of €300 per day, a €5,000 limit on credit card payments abroad, and a requirement of central bank permission for any transfer of more than €5,000.

But the measures were ultimately credited with preventing a full-fledged meltdown of Cyprus' banks and therefore helping to keep the country in the eurozone.

Bank Meltdown

Nonsense. There was a bank meltdown and capital controls are proof of it.

To bail out the banks and the bondholders, depositors suffered massively, all for a €10 billion loan that still has to be paid back.

Capital Controls, Then What?

Here's a link I picked up from ZeroHedge. Open Europe discusses The how, what, when and why of Greek capital controls.

How would Greek capital controls be implemented and what form might they take?

It's likely that such controls would need to be brought in over the course of a weekend, though I expect they may also need to be combined with some bank holidays anyway.

Cash/ATM withdrawal limits: This would be a vital control in order to halt the huge outflow of deposits which has been taking place and which will pick up if a deal isn't struck soon. In Cyprus the limit was set at €300 per person per day. However, I suspect ones in Greece may go even lower. This is because Greece is suffering from serious domestic withdrawals while the primary concern in Cyprus was foreign outflows.
Foreign transfer controls: The aim here would be to limit the amount that people can transfer abroad from Greece in one go and also over a set period. Obviously some transfers are needed for businesses to function so there would need to be a process by which businesses related (and other verified) transactions could still go through.
Time requirements or taxes: Other options or versions of the above include taxing certain withdrawals or foreign transactions heavily. This has the advantage of potentially creating a revenue stream for the government, though it may come at a very high cost. The government could also decree time limits on certain deposits or investments in an attempt to limit withdrawals indirectly.
Physical controls: Obviously with free movement within the EU it would be quite easy for people to move large amounts of cash or assets across borders. As such there will need to be checks and limits on the amount of cash people can take abroad with them. This may also have to extend to assets. For example, someone could purchase a car and then try and drive across a border and sell it on. This is tricky to police but some attempts may well be made.

What's the Aim Capital Controls?

The more interesting discussion is the "What's the Aim?" question. I generally agree with the Open Europe writer Raoul Ruparel on this one.

Why would Greece go for capital controls?

This seems an obvious answer given all of the above – to halt bank runs and stop money flowing out of the economy. But there is a wider question that needs to be answered. What would be the aim and end goal of capital controls? Ultimately, capital controls are only really of use when it comes to buying to time or pushing through some tough policies. In Cyprus and Iceland the controls were needed to impose tough write downs on foreign depositors/investors but stop huge outflows of money. But the actual write down was over fairly quickly. But in Greece the problem is a long term malaise and huge uncertainty over its future position in the Eurozone – not a singular one off event for which time needs to be bought.

In the end then, I find it hard to see why the Greek government would want to go for capital controls. They would only be of use if we got to the stage where a deal was close but couldn't be struck in time. But if we get to that it will be because the differences between Greece and its creditors could not be solved over the past 6 months. It's not clear that a few extra days, weeks or months under capital controls would drive an agreement. It's also not clear why the government would want to put the economy and people through the pain of such controls to then just agree a deal. Why not just agree one now? Surely, it doesn't seem likely that Greece's negotiating hand would be stronger under such controls?

So, while capital controls are technically possible, I have failed to see any clear answer as to why they would actually desirable, especially from the Greek perspective.

That is why I believe that capital controls would most likely be a prelude to a Grexit. At least here they would serve a clear purpose – allowing time for the transition to a new currency to be organised and negotiated. They would likely need to be even more stringent and probably involve longer term bank holidays. Therefore, when capital controls start to become seriously discussed, it is probably quite a negative sign.

Aim of Dragging Out the Talks

My disagreement is the last sentence. I find it hard to believe capital controls are not already seriously discussed - by four groups: Greece, Germany, IMF, ECB.

Greece and the ECB are the important ones. If the ECB shuts off Emergency Liquidity Assistance (ELA), Greeks will not be able to withdraw cash.

I propose it's likely that Greek Prime Minister Tspiras purposely dragged out the talks for the express reason of giving people time and reason to withdraw cash. While the negotiations were underway, all to no avail, Greeks pulled money.

Unless there is a disorderly mad dash for the exit, the ECB may allow this to continue. We will find out soon enough tonight. But at some point (and I expect far sooner than four weeks from now), Greece will be forced to impose them as soon as ELA is shut down.

Bottom line: If you still have money in Greek banks, you are begging for a haircut.

By the way, capital controls are in violation of EU rules. Then again, what nannycrats cares about rules?

Best Case Scenario for Greece?

I outlined the "best case scenario" for Greece in "Air of Unreality"; "Do You Feel Lucky, Punk?"; Who Has the Gun?

Best Case Scenario

Greece defaults.
Greece sheds €330 billion worth of debt.
Greece opens up trade with Russia, killing EU sanctions once and for all (and exposing the stupidity of the unanimous nature of EU rules in the process).
Greece threatens to yank US access to the US military base in Crete.
Russia builds pipeline through Greece. In turn, Greece collects shipment and storage fees.
Russia provides interim funding for Greece until Greece runs a primary account surplus.
The interim agreement from Russia requires Greece to initiate some market reforms that will pay big dividends down the road.
Greece reforms and does very well in a relatively short time frame.
Italy, Spain, Portugal, get some clever thoughts of their own.

Default the Best Option

Whether or not Greece chooses to quickly get to a primary account surplus position so that it can stay in the eurozone, it's best option is to default.

And if it defaults, capital controls will come as soon as the ECB shuts off ELA (if not before). That discussion has to be going on at the ECB right now.

Meanwhile every day that passes by without capital controls is another day Greek citizens have to get their money out of the banks.

Why there has not been a mad dash for the exit instead of a slow bleed of cash remains a mystery.

Finally, the real fear of the nannycrats has to be that the best case scenario for Greece does indeed happen, proving what any sensible person knew all along: Exit is possible, and there is life after the eurozone.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Seth's Blog : A good bucket brigade

A good bucket brigade

We can get more done, if we care enough. And trust enough.

From the brilliant Cory Doctorow's award-winning novella:

I love a good bucket brigade, but they're surprisingly hard to find. A good bucket brigade is where you accept your load, rotate 180 degrees and walk until you reach the next person, load that person, do another volte-face, and walk until someone loads you. A good bucket brigade isn't just passing things from person to person. It's a dynamic system in which autonomous units bunch and debunch as is optimal given the load and the speed and energy levels of each participant. A good bucket brigade is a thing of beauty, something whose smooth coordination arises from a bunch of disjointed parts who don't need to know anything about the system's whole state in order to help optimize it.

In a good bucket brigade, the mere act of walking at the speed you feel comfortable with and carrying no more than you can safely lift and working at your own pace produces a perfectly balanced system in which the people faster than you can work faster, and the people slower than you can work slower. It is the opposite of an assembly line, where one person's slowness is the whole line's problem. A good bucket brigade allows everyone to contribute at their own pace, and the more contributors you get, the better it works.

• Email to a friend •

Seth's Blog : The unknowable path

The unknowable path

...might also be the right one.

The fact that your path is unknowable may be precisely why it's the right path.

The alternative, which is following the well-lit path, offers little in the way of magic.

If you choose to make art, you are no longer following. You are making.

HT to JSB.

• Email to a friend •

sâmbătă, 13 iunie 2015

Mish's Global Economic Trend Analysis

Illinois Politicians Play Chicken With Taxpayers Over Budget

Posted: 13 Jun 2015 12:23 PM PDT

In Illinois, nothing happens in the legislature unless House Speaker Michael Madigan and Senate President John Cullerton give the green light for legislation to pass.

Both Madigan and Cullerton want massive tax hikes and both are beholden to unions. Badly needed legislation on pension reform, municipal bankruptcy laws, and workers' comp is currently held up in the legislature awaiting action.

Madigan wants tax hikes before any reforms pass. Of course if there are tax hikes, there will not be reform.

These cartoons by Eric Allie for the Illinois Policy Institute adequately depict the current setup.

Budget Balancing Act

Playing Chicken With Taxpayers

Signup for the Illinois Policy Institute Newsletter including cartoons.

Budget Impasse

Madigan and Cullerton passed an Illinois budget that is $3 billion in the hole. Given Illinois budgets always contain sleight-of-hand tricks and overly optimistic revenue assumptions, one can be sure the real deficit is higher.

Governor Rauner rightfully refused to sign the budget. Technically it would be unconstitutional to do so. The Illinois constitution requires a balanced budget. It never is of course, but this time no one even pretended it was balanced.

Madigan is playing a game of chicken with Rauner as funding for schools will dry up in August unless a budget is passed.

Legislators don't care because they passed a continuing resolution allowing them to be paid without a budget.

Whom to Blame?

The Chicago Tribune writer Dennis Byrne hits the nail smack on the head with Blame Rauner? Come on.

Mostly blame House Speaker Michael Madigan and Senate President John Cullerton (both Democrats) and their deep-pocket contributors, the American Federation of State, County and Municipal Employees and other public employee unions. Their incessant and greedy demands for more, more and more have forced government to borrow more, more and more to a point approaching bankruptcy.

Champions of the middle class, downtrodden and huddled masses? Hardly. These very Democrats are hypocritically robbing the schools, hospitals and social service providers of billions and billions of dollars that must instead go into pensions and debt service.

For example: An astonishing quarter of every dollar that Chicago earns from taxes, grants, fines and fees goes to pay for employee pensions, according to Marc Joffe, a bond market analyst and principal consultant at Public Sector Credit Solutions.

On the state level, pension and interest payments gobble up 10 percent of all revenues, according to Joffe. Those billions could have gone a long way to help the most needy.

The unions will try to sell the idea that they aren't responsible for the more than $100 billion that's owed to the pension funds. They'll argue that if the government had not raided the funds to pay for normal operations, we wouldn't be facing this crisis.

In a way that's true, but here's the rub. First, the pensions are unreasonably generous; if they were more realistic, more reflective of what is normal in the private sector, we wouldn't have had to put so much money in the funds to begin with.

Second, without those diversions, the state would have spent less on schools, health and other essential services. Teachers unions always complain that not enough money is being spent on schools; but without the diversions, the schools would have had received even less. Are the teachers saying that the money should have gone first to their pensions and not the schools?

The public employee unions act as if the fault lies elsewhere. But when the money was being diverted into operations instead of pensions, where were the union leaders? They were tossing union money (i.e., the members' money) to those very same politicians, mostly Democrats, who were raiding the pension funds for other purposes. And passing inflated budgets that forced them to borrow.

Bingo!
Unless reform comes first, the Illinois legislature will squander the money just as it has always done.

Related Stories

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

luni, 15 iunie 2015

This week's top Pins

How to Choose a PPC Agency - Moz Blog

How to Choose a PPC Agency

Where is your business going?
Is this the right way to get there?

What kind of working relationship do you want?

How do you actually plan to work?

What do they need to be ready for?

Look for the full scope of success

Think long term

Seth's Blog : Overpriced

Overpriced

More Recent Articles

duminică, 14 iunie 2015

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

Seth's Blog : A good bucket brigade

A good bucket brigade

More Recent Articles

Seth's Blog : The unknowable path

The unknowable path

More Recent Articles

sâmbătă, 13 iunie 2015

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

Pagini

Persoane interesate

Arhivă blog

luni, 15 iunie 2015

Where is your business going? Is this the right way to get there?

What kind of working relationship do you want?

How do you actually plan to work?

What do they need to be ready for?

Look for the full scope of success

Think long term

duminică, 14 iunie 2015

sâmbătă, 13 iunie 2015

Pagini

Persoane interesate

Arhivă blog

Subscribe to

Where is your business going?
Is this the right way to get there?