Rats in a Cage: Talk of Base Closings Angers New England States

Everyone is familiar with the concept of NIMBY-ism, the "Not In My Back Yard" mindset where people adamantly oppose the placing of certain economic development projects, from prisons, to power plants, to wind farms, to sports stadiums, where they will actually have to look at them...and job creation be damned. Now that "austerity" has become the new hot buzz word in the Imperial Capital, and the Pentagon in particular is being forced to reduce its grotesquely bloated budget, we are now starting to see a reverse NIMBY-ism, in which our ever gallant "leaders" are freaking out that military bases in their own states and districts will be on the chopping block.

Here is CBS Money Watch with a recent story covering this newest trend:

Less than seven years after local and state officials, business owners and civic groups beat back recommendations to shut a submarine base in Connecticut and a submarine repair yard in Maine, the Obama administration has again raised the specter of base closings.

President Barack Obama will ask Congress to approve a new round of domestic base closures, Defense Secretary Leon Panetta said Thursday, although the timing was left vague and there is little chance lawmakers would agree to it in a presidential election year.

U.S. Rep. Joe Courtney and U.S. Sens. Joe Lieberman and Richard Blumenthal, of Connecticut, who are members of the House and Senate armed services committees, said in a news release that the proposal has drawn bipartisan opposition and would be "dead on arrival."

Courtney, whose district is home to the submarine base in Groton, called it a weak proposal because the administration did not include the cost of closing bases, which he said is enormous. In an interview Friday, he said residents have been nervous for years, "convinced that it's only a matter of time" before the issue of base closings returns.

To the north, where the Portsmouth Naval Shipyard is viewed by some as vulnerable, U.S. Sen. Olympia Snowe of Maine derided the idea of another round of base closings and suggested that the military should look to close overseas bases before targeting domestic bases.

"All I can say is it's preposterous to suggest another base closing round," Snowe told The Associated Press.

The 212-year-old Navy yard that repairs and overhauls nuclear submarines in Kittery, Maine, has survived three reviews from Base Closure and Realignment Commission, including the most recent in 2005.

"The Kittery-Portsmouth shipyard is probably the one facility that has been through the most rigorous scrutiny of any military installation in the country, having been evaluated in three separate base closing rounds. It suggests to me how vital it is for maintaining our submarines," she said.

Snowe, joined by Maine colleague U.S. Sen. Susan Collins and U.S. Sens. Jeanne Shaheen and Kelly Ayotte of New Hampshire, issued a statement saying another round of base closings doesn't make sense either in advancing national security or saving money.

Right there in that last passage you can see why it is so difficult for this country to get serious about reducing the federal budget deficit, let alone the national debt. We can no longer afford our planet dominating military, but that doesn't mean the politicos and their constituents aren't going to fight like hell to keep their piece of the Military Keynesianism pie from being cut. Like I first wrote in my August 1st post from last year, "Rats in a Cage," as things unravel every interest group is going to fight like hell to protect their interests and the common good be damned.


Bonus: "Despite all my rage, I am still just a rat in a cage"

$100 Million in Increased Profit = 172 Layoffs

Sometimes the CEOs of big corporations will try to sugarcoat the fact that they are actually laying off their employees out of sheer greed. At other times, however, they will simply extend a big middle digit to the workers and communities they destroy in order to line their own pockets. As reported by the Hartford Courant last week, one unfortunate Connecticut town is about to experience the latter:

RR Donnelley & Sons, a $10.6 billion global printing company, is closing its Windsor location in March, putting 117 people out of work.

In a press release that same day, the CEO told investors that 2011's cash flow would be better than previously projected — instead of having $600 million in profits (not counting capital expenditures, taxes and debt service), it will have $650 million to $700 million.

In its third-quarter earnings report, the company said profits tripled from the same time last year, and sales increased 8 percent.

So what did the CEO have to say for himself about the layoffs?

"We continue to have success in the marketplace, winning new work and expanding customer relationships. Given the challenging global economic environment and sluggish financial markets activity, we are pleased with our results," said Thomas J. Quinlan III, RR Donnelley's president and chief executive officer. According to Forbes Magazine, he was paid $2.64 million in 2010, and owns $6 million in stock in the company.

There you go, Occupiers. If you need yet another corporate poster child scumbag to highlight why you are doing what are doing, R.R. Donnelley President and CEO Thomas J. Quinlan III just gave you the perfect gift.


Bonus: "I never understood why the people of France cut off Marie Antoinette's head. Now I fucking GET IT"

"Thank You, Sir. May I Have Another?"

image: "For the Better" - unless you happen to have been employed there.

At first glance, this story from the Hartford Courant looked like just another routine tale of American manufacturing jobs being shipped overseas:

PerkinElmer, a global manufacturer with more than 500 employees in Shelton, is eliminating close to 75 jobs as it moves four product lines to England and Singapore.

The company, headquartered in Waltham, Massachusetts, lauded the Shelton location for its safety and environmental stewardship in its last corporate social responsibility report.

Gov. Dannel P. Malloy and other state officials visited the Shelton plant in July as part of the governor's jobs tour, but no one from PerkinElmer talked to the state before choosing to transfer jobs overseas. The company told its employees Wednesday about the layoffs.

But then, someone had the bright idea to go interview the local Chamber of Commerce flack to get his opinion:

Bill Purcell, president of the Valley Chamber of Commerce, which invited the governor and Economic and Community Development Commissioner Catherine Smith to visit, said: "It's not an accident that we invited the governor there because they do represent — and they still do represent — all the best Connecticut has to offer; innovation, progress, globalization, exporters, and good global citizens."

Yeah, fat lot of good that did, Mr. Purcell. You sound like an abused spouse telling the policeman she doesn't want to press charges. You got any more inane blather for us?

Purcell said the layoffs will begin in the second half of 2012, and continue into the early part of 2013.

"Obviously it's disappointing to hear, we're grateful for what will remain, and know they'll continue to be big players here, not only in our state and in our region but on the global stage."

Thank you, sir. May I have another?

"Their tagline is 'For the Better,' and they are making the world a better place as a result of the important work they do," Purcell said. The instruments the company designs and manufacturers are used in medical and environmental testing.

Bend me, shape me, any way you want me.

Purcell said PerkinElmer "made a very, very substantial investment in that property. They've been just a terrific company, a great employer, great innovator, a great exporter, a wonderful and gracious corporate citizen."

Holy crap, what a pathetic, craven, simpering little worm. If this guy is what passes for a "business leader" in America these days, no wonder we are headed right down the shitter.

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 Mohegan Sun Casino is $1.6 Billion in Debt

In yet another blow for state and local governments who think more legalized gambling is a great way to increase tax revenues comes a story from the Norwich Bulletin about deep financial problems being experienced by the Mohegan Sun casino in Connecticut:

The parent entity of Mohegan Sun recently received a waiver from its bankers, something the casino operator sees as a vote of confidence in its future. Yet it could be the calm before a major storm in Connecticut’s economy in 2012, an analyst said.

Foxwoods Resort Casino, whose parent also is in talks to restructure debt, and Mohegan Sun are on course for severe financial problems in the year ahead, said Clyde Barrow, a University of Massachusetts Dartmouth professor of public policy who follows the New England casino industry.

The Mohegan Tribal Gaming Authority was unable to complete a refinancing agreement during its fiscal first quarter, which ended today. With that, the authority’s auditors attached a “going concern” warning to 2011 financial statements, authority CEO Mitchell Etess said Thursday.

A filing with the Securities and Exchange Commission said lack of a resolution would materially impair Mohegan Sun’s ability to operate.

So just how bad is it?

Mohegan’s total debt as of Sept. 30 was $1.6 billion, the authority reported. Of that, $811.1 million comes due within the next 12 months, including $535 million that needs to be paid by March 9 and $250 million in 8 percent notes that mature on April 1. This debt will need to be refinanced before the due dates, the authority said Thursday.

So what are the overall implications for the Nutmeg State?

Foxwoods and Mohegan Sun are two of Connecticut’s largest employers and major sources of revenue to the state government. Both are members of the Chamber of Commerce of Eastern Connecticut. Chamber President and CEO Tony Sheridan declined to comment on the Sun’s finances Friday, saying he was still studying them.

What is there to study, exactly? The casinos are deep in debt, and unless there is a miraculous economic recovery they are soon going to have to declare bankruptcy. Looks like Chamber of Commerce President and CEO Tony Sheridan is about to find out what Las Vegas already knows: a gambling-based economy is only sustainable so long as the marks still have money in their pockets. As the old saying goes, you can't get blood out of a stone.

SP Newsprint Files for Bankruptcy

Everyone knows that the dead tree newspaper business model is...well...dead. The latest casualty was reported the other day by Reuters:

SP Newsprint Co, owned by newsprint magnate and fine art collector Peter Brant, filed for bankruptcy protection because of rising raw material costs and too much debt, and said it may sell itself to its lenders.

Tuesday's filing by the Greenwich, Connecticut-based company, which has called itself the fourth-largest North American newsprint manufacturer, followed a Sept. 7 bankruptcy filing by NewPage Corp, North America's largest maker of magazine paper. New Page is owed by private equity firm Cerberus Capital Management LP.

Paper makers have struggled in recent years with rising costs, increased competition from Asia and Europe, and falling demand as more advertisers and readers move online.

Ed Sherrick, SP Newsprint's chief financial officer, in a statement said weak economic conditions and record prices for key raw materials shrank profit margins, leaving the company unable to continue paying its debts.

Nothing terribly surprising here, although I did find this part of the story amusing:

Brant was once a billionaire, though he no longer appears on Forbes magazine's annual list of the richest Americans. His second wife is supermodel Stephanie Seymour.

He has also run Brant Publications Inc, whose magazines include Art in America, The Magazine Antiques and Interview, which was created by the artist Andy Warhol.

Brant was also the breeder of the horse Thunder Gulch, which won the 1995 Kentucky Derby.

Poor bastard. I wonder how long it will be before she leaves his bankrupt ass? Clearly, he needs a tax cut.


Bonus: Sorry Joe, but the world just isn't fair.