Spoiled Rotten Nation: Infrastructure Must Be Paid for Somehow

Every once in awhile, a news story comes along that perfectly illustrates the concept of what I call, Spoiled Rotten Nation: people want government services, but they don't want to pay for them. Here is a Las Vegas television station with the story of citizen outrage at having been asked to pay for the services they actually use:

Clark County Commissioners got an earful today from people who got huge water bills in May thanks to fees meant to pay huge bills for the Southern Nevada Water Authority.

At the emotional meeting, non-profit groups, small business owners and residents said they can't afford new fees for services they once got for free.

Homeowner Mary Jo Aldeman said, "I feel as though we're being raped."

Commissioners, sitting as the water district board, claim the public was informed about the new fees approved in February. But, it was clear from the impassioned outpouring that while most were aware of the five dollar hike for residential customers, many were not aware of new fees for fire lines and fire meters until they got new, huge bills.

Brian Aldeman, with the Las Vegas Chamber of Commerce said, "You're seeing a bill go from zero to 660 dollars if you have a 10 inch fire meter. That's a tremendous impact"

Small business owner Leslie Dunn said, "This new business that we're opening up? We've already had to cut one new position simply because of charge. This added four hundred and something dollars to the bill."

Matt Frady of Girl Scouts of Southern Nevada told the commission, "We have projected that our costs for these first three years will be 300 percent of our current water bills."

Water authority head Pat Mulroy said she understands the sticker shock, but the agency is stuck too.

According to Mulroy, "This isn't an extraordinary charge.Cities across the country charge for fire lines. They have to. It's too much of an infrastructure burden"

Fire lines and fire meters used to be covered by connection fees. Those fees disappeared when the economy tanked. But small business owners and non-profits say, their businesses will tank, and some residents fear they'll lose their homes, if they're forced to pay the water authority's $3-point-3 billion dollar bill for infrastructure costs, including a third intake pipe at Lake Mead.

To all those who are upset about receiving these bills, you really have a simple choice: pay them or stop receiving municipal water. Good luck with drilling a deep enough well out in the middle of the desert.

Providing you with the water costs a lot of money, and who else would you recommend pay on your behalf? You should actually feel grateful that it is your local government providing you the water at cost rather than some private corporation at a profit, because then I guarantee your bills would be a LOT higher than they already are.


Bonus: "There ain't no water here to be found"

Mass Layoffs Hammering the Solar Power Industry

Green energy is the wave of the future that is going to save our economy by being a huge driver for employment. Or so says the bullshit propaganda. But despite oil prices hovering in the low triple digits, the solar industry is having huge problems, as reported by Forbes:

Japanese solar company Sanyo plans to lay off about 140 employees in California, or about 40 percent of its manufacturing workforce in the United States, as it shifts its strategy in order to compete with large rivals, particularly those from China.

Sanyo is closing the 30-megawatt factory in Carson that makes silicon ingot and wafers – the materials for making solar cells – after setting up shop there in 2003. Production will stop at the end of March to coincide with the end of the company’s fiscal year, said Aaron Fowles, a Sanyo spokesman, on Friday. The company plans to liquidate the assets and close the factory for good in October.

But wait...there's more:

The planned factory shutdown by Sanyo follows a series of layoffs and solar factory closures in the United States and elsewhere over the past year. Manufacturers have struggled to survive when there is a glut of solar panels and the wholesale prices for them have fallen by 40-50 percent. The glut is partly caused by the lowering of government subsidies in big solar markets such as Germany and Italy in 2011.

Earlier this month, California-based Amonix said it was letting go 200 of the roughly 300 workers at its North Las Vegas factory, which it opened last year with a promise to bring lots of local jobs. Amonix said it needed to cut staff so that it could modify the production equipment and start making a new line of solar energy systems later this year. Some workers there told the Las Vegas Sun that they didn’t know their employment would be so temporary.

Also earlier this month, Boston-based Satcon Technology, which makes power conversion equipment for solar electric systems, said it was laying off 35 percent of its workforce and shutting down a factory in Canada. Two German manufacturers who set up factories in the United States, SolarWorld and Solon, have shuttered some of the production here.

Several manufacturers who didn’t have enough money or unable to reduce their costs quick enough to stay in business have filed for bankruptcies, including Solyndra, SpectraWatt and Evergreen Solar.

So what's the problem?

Some manufacturers blame their Chinese rivals for the pileup of unused solar panels and the big drop in prices. SolarWorld, which runs a solar panel factory in Oregon, joined six other manufacturers in filing a trade complaint with the U.S. International Trade Commission and the U.S. Department of Commerce last October. The companies contend that Chinese manufactures are selling their products at prices far below the cost of producing them, and they are able to do that because they receive heavy and unfair subsidies from the Chinese government.

The fact that Chinese workers are willing to do the job for a fraction of what Americans are paid is no doubt a factor, as is the fact that China essentially has no environmental regulations. Look, we can argue all day about whether large scale solar power really has the potential to replace fossil fuels (as I've said before, I'm not a subscriber to that theory). Nevertheless, even if it could be part of the answer, I think it is clear from this story that as long as we have unrestricted globalization, what solar power will certainly not be able to do is create a substantial number of new good paying jobs in this country as politicos like President Hopey-Changey would like us to believe.

Addendum: After composing this post, I found another story about an impending solar company bankruptcy, this time in Delaware. Here is Canadian Business with the details:

A Delaware-based solar power company has filed for Chapter 11 bankruptcy protection.

New Castle-based Suntricity Power listed estimated assets of between half a million and a million dollars, and estimated liabilities of between $100,000 and $500,000 in its filing Tuesday in U.S. Bankruptcy Court in Wilmington.

Suntricity, founded in 2007, designs, sells and installs solar energy systems for residential and commercial customers.

Bonus: "Who loves the sun? Not everyone"

States Doubling Down on Bad Gambling Bets

I've posted several stories here on TDS about recent decline of the gaming gambling industry in the United States as the throngs who used to fill the casinos find themselves unable to come up cash to throw away on the slots or at the Blackjack table. And yet despite all of the evidence that the industry is in deep trouble and no longer the cash cow it used top be, there are still plenty of localities lining up, hoping to boost tax revenues by overcoming their previous resistance to legalizing gambling and opening casinos of their own. MSNBC has the details:

A Malaysian company's plan to build a $4 billion convention center and big-time casino on the outskirts of New York City could be the biggest shot fired yet in a tourism arms race that has seen a growing number of Eastern states embrace gambling as a way to lure visitors and drum up revenue.

New York Gov. Andrew Cuomo announced last week that he would work with the Genting Group, one of the world's largest and most successful gambling companies, to transform the storied, but sleepy, Aqueduct horse track into a megaplex that would eventually include the nation's largest convention center, 3,000 hotel rooms, and a major expansion of a casino that began operating at the site in October.

The proposal came less than two months after once-puritanical Massachusetts passed a law allowing up to three resort casinos, plus a slot machine parlor, at locations around the state.

Ohio is poised to see its first commercial casinos open this year, after voters approved up to four gambling halls in 2009. Maryland's first casino opened last year, with more on the way. Pennsylvania's first casinos opened in 2006, and already the state is threatening to surpass Atlantic City as the nation's second-largest gambling market.

And in Florida, lawmakers are hotly debating a whopper of a bill that would allow up to three multibillion-dollar casinos, plus additional slot machines at dog and horse tracks. Genting appears confident the law will pass. It has already spent around $450 million to acquire waterfront property in Miami, where it wants to build a $3.8 billion complex that would include a casino, dozens of restaurants and a shopping mall.

States have embraced casinos, after years of trepidation about their societal costs, for two simple reasons: a promise of a rich new revenue source, plus the possibility of stimulating tourism.

The article itself actually does a very good job of raising questions as to whether this latest desperate revenue grab by the state governments is at all advisable:

Some experts, however, have questioned whether revenue bonanzas that large are realistic, and say states should be cautious about giving up too much to lure these projects. Competition for a limited pool of gambling and tourism dollars is already fierce, and recent years haven't been kind to casinos.

Nevada's larger casinos lost $4 billion in 2011, according to a report released this month by the state's Gaming Control Board, as the state continued to feel the effects of the global economic slump.

As gambling options have increased in the East, revenue has slid substantially at the pair of Indian tribe-owned casinos in Connecticut and declined by a dramatic 30 percent in Atlantic City, which has lost customers in droves to the new casinos in nearby Philadelphia, according to David Schwartz, director of the Center for Gaming Research at the University of Nevada Las Vegas.

So the latest players in the legalized gambling game plan to spend billions of dollars to spread the wealth that much thinner even as the slowly collapsing economy continues to squeeze the mass of players suckers they need to be able to make a profit.

How much more proof do you need that the so-called "leaders" of our society are completely out of ideas and have resorted to merely shuffling the deck chairs on the titanic?


Bonus: Wait a minute, is that music I hear on the promenade deck?

The Las Vegas Housing Market Craps Out

The news regarding the housing market in Las Vegas just gets worse and worse:

Las Vegas-area home prices fell again in September to a new low during the current recession, Standard & Poor’s reported Tuesday.

Stung by elevated unemployment and high levels of foreclosures and underwater mortgages, Las Vegas saw housing prices fall 1.4 percent from August and 7.3 percent from September 2010, Standard & Poor’s said.

Data from Standard & Poor’s S&P/Case-Shiller Home Price Indices show Las Vegas-area prices are now at levels last seen in February 1998 after September’s decline.

Here are a few more statistics to ponder:

Tuesday's data follows release of statistics by the Greater Las Vegas Association of Realtors Nov. 8 finding that in October, the median price of single-family homes sold locally was $121,000. That was down 1.9 percent from $123,400 in September and down 9 percent from $133,000 in October 2010.

Also Tuesday, mortgage data provider CoreLogic reported that at the end of the third quarter, Nevada had the highest negative equity percentage in the nation with 58 percent of its mortgaged properties underwater, down from 60 percent in the second quarter.

In the Las Vegas-Paradise Metropolitan Statistical Area, 61 percent, or 257,345 of residential properties with a mortgage, were underwater, CoreLogic reported.

What has happened to Las Vegas is really quite simple: during the bubble years a whole host of gamblers in the casino and construction industries made a sucker bet that the party would go on forever. Then the music stopped, the lights came on and the $1000-a-night hooker turned out to be a middle-aged transvestite.

The recently reported national numbers for housing were not a whole lot better than the Las Vegas figures. Without a recovery in housing, there will be no recovery in the real economy. So rest assured, what has happened in Vegas isn't going to stay in Vegas. It will be visiting your city, town or state sometime in the near future.

Hooters Casino Declares Bankruptcy

In the wake of the passing of the debt limit compromise, the financial news this morning is returning to the doom and gloom of an impending double-dip recession. One item that particularly caught my eye was from VegasInc.com:

The owner of the Las Vegas Hooters resort on Tropicana Avenue filed for Chapter 11 bankruptcy reorganization on Monday to block a threatened foreclosure — the latest in a series of financial debacles to hit the local casino industry since the onset of the recession.

The company, 155 East Tropicana LLC, in its initial filing in U.S. Bankruptcy Court listed assets of $10 million to $50 million against more than $162 million in liabilities.

Wow—more than $100 million in the red. They need to get some high roller suckers in there, pronto!

I discussed the woes of the gambling industry in my July 18th post, “America’s Domestic Oil Production Peak Presaged the Rise of Legalized Gambling.” No city’s fortunes have more dramatically illustrated that of the whole country during the bubble years than Las Vegas. Sin City benefited immensely from Americans’ pathological desire to get something for nothing in recent years even as their real wages stagnated. Easy credit allowed for the construction of ever bigger and gaudier casinos until the financial crisis of 2008 finally brought the big party to a screeching halt. Now the hangover is a real killer.

And really, what institution is more quintessentially American than Hooters, which built an empire on crappy food served up by comely young women in tight outfits? Sex appeal selling mediocrity—a technique that Madison Avenue has perfected over the past 30 years.

Dude, you know that hot chick in the orange shorts serving our drinks who has been flirting with you? I think she really likes you. Give her a big tip, willya?

This time, however, what happens in Vegas won’t be staying in Vegas. Bankruptcy and financial ruin will shortly be visited upon all sorts of commercial enterprises that exist for no other reason than to separate the suckers from their hard earned dough. Casinos, chain restaurants, fast food joints, big box stores, multiplex cinemas, outlet malls, Starbucks—all of these blights upon the landscape have business models based upon oil and gasoline being cheap forever and ever. As markers of our civilization, I doubt they will have the same archeological staying power as Stonehenge, the Pyramids, the Coliseum or the Parthenon.