Different Day, Same Shit.

- Detroit is officially bankrupt. Or at least it would be hadn't a judge ruled the city's Chapter 9 bankruptcy filing unconstitutional:

Ingham County Circuit Court Judge Rosemarie E. Aquilina issued the orders Thursday and Friday, including a temporary restraining order, in an attempt to halt the Chapter 9 filing by Emergency Manager Kevyn Orr. The judge says the bankruptcy filing “…will cause irreparable injury” to the pensioners.

“In order to rectify his unauthorized and unconstitutional actions described above,” wrote Judge Aquilina, the Governor must (1) direct the Emergency Manager to immediately withdraw the Chapter 9 petition filed on July 18, and (2) not authorize any further Chapter 9 filing which threatens to diminish or impair accrued pension benefits.”

- Fiery White House journalist and former correspondent Helen Thomas has died at the age of 92. Being a mainstay of the White House press pool through 10 presidencies is no small feat.

- A man walks into a bank and gets swindled:

(Philip L. Ramatlhware, an immigrant from Botswana) was 48 years old at the time and disabled, after being hurt in an accident as a passenger on a Greyhound bus. His English wasn’t good, he had no college education and his last job had been at a fast-food kiosk at the Philadelphia airport. In April 2008, he received $225,000 in a settlement for his injuries, part of which went to pay legal fees. He was holding the settlement check when he walked into the branch.

Immediately he was referred to a broker for a “financial consultation,” according to an arbitration claim he filed against Citigroup. The broker assured him the money would be invested in “guaranteed” funds and that he could have access to them whenever the need arose, the complaint said. Ramatlhware gave him $150,000 to invest. The broker put $5,000 into a bank certificate of deposit, bought a $133,000 variable annuity and invested the rest in a series of mutual funds.

Less than six months later, Ramatlhware had lost $40,000, according to the complaint. Citigroup settled the case in 2010 for $22,500, without admitting liability, according to a report on the case by the Financial Industry Regulatory Authority.

- Scottie Nell Hughes, Director of the Tea Party News Network and unabashed ultra-conservative*, thinks that rape victims who abort their pregnancies should be locked up and serve the same amount of prison time as their rapists:

FUGELSANG: “Let’s say Roe v. Wade is overturned and abortion becomes illegal. If a woman is raped and she goes to a doctor, and the doctor terminates the pregnancy – Please tell me who deserves the longest jail sentence? The rapist,the doctor or the woman? In order.”

HUGHES: “Across the board.”

FUGELSANG: “All three of them?”

HUGHES: “Go for it!”

Let's just say if Scottie Nell Hughes found herself in that position, she'd find any and every excuse that makes her exempt from the above. That's just what conservatives do.

- George Zimmerman won't be getting his gun back thanks to the DOJ. However, a Florida gun store has kindly stepped in to give him another one, free of charge. Now if someone would be so kind as to give Trayvon Martin his life back...

- Rush Limbaugh doesn't think the N-word is racist anymore. Neither does David Sirota. Hans von Spakovsky, John Nolte, Ben Shapiro, Dan Riehl, Joe Walsh and Todd Starnes all think that racism is "dead" and the president is a "race baiter" of the highest order. All deserve the DDSS Award for Excellence in Rank Stupidity, lovingly crafted out of pigeon droppings, old Klansman robe cloth and discarded anti-abortion bill clippings.

By the way, if you can turn your sink faucet into a flamethrower, thank your local gas-drilling operation for giving you a neat party trick to impress friends. It's not like you actually drink tap water...

*Considering you have to be ultra-conservative for that gig, a bit of an oxymoron there.

Ever since Jefferson County, AL's half-cent occupational tax, authorized in 1967 but not collected until 1988, was struck down as "unconstitutional" back in 2011, the county's been out of an estimated $66 million in desperately-needed revenue. It was the proverbial straw that broke the county's back and drove it into one of the largest bankruptcies in recent history.

Now the county wants to resurrect that tax in an effort to get its fiscal house back in order. Except there's plenty of vocal opposition that would rather have the county eat its cold bowl of court-imposed and "taxpayer"-supported austerity. Instead, Jefferson County is being forced to trim back on indigent care, most notably the services provided by Jefferson County's Cooper Green Mercy hospital. Most of the AL.com crowd wouldn't mind seeing the hospital close its doors, despite it serving a significant portion of JeffCo's poorest and uninsured.

Cooper Green is currently some $8.9 million bucks in the hole. The hospital's seen its obstetrics and oncology services put to an end in an effort to cut back on spending. People who can't afford decent care from the other surrounding hospitals may have no other choice but to hit the emergency rooms of UAB and others. Meanwhile, the county is doing its best to shed enough of its budget to meet a $40 million dollar shortfall. It doesn't matter how much that ground glass hurts going down, you have to finish all of your austerity before eating dessert.

The whole point of the occupational tax? There are thousands of suburbanites outside of Jefferson County who commute into the county for work but leave promptly afterwards, with their paychecks not far behind. Most of these people choose not to spend any money inside the county beyond the occasional lunch and a tank fill-up. They don't pay property taxes because they don't live in Jefferson County, but they still utilize the road networks and rely on law enforcement, fire and rescue and other resources.

These folks live in Shelby, St. Clair, Bibb, Tuscaloosa and Blount Counties*, places with much lower taxes and far more conservative social and political mores. As you can imagine, they'll extract wealth from JeffCo, but that's about it. A half-cent occupational tax would go a ways to recoup some of those expenses spent on those commuting into JeffCo.

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The most recent bill drafted by lawmakers, the "Alabama Financially Distressed Counties Act," will give other counties the power to levy their own occupational taxes when they fall between a rock and a fiscally hard place. Unfortunately, those suburban folks are the kind of folks who reflexively twist their faces in disgust over paying yet another (half) penny in taxes, despite effectively having their cake and eating it. But it's not just the virulently anti-tax people who are up in arms over the prospect of an occupation tax.

Part of the problem lies in Alabama's fucked up legislative methods when it comes to county-wide affairs. You see, while most other states give their counties home rule, Alabama...doesn't. In most cases, if you want to get get things done in your county, it has to go through the state legislature as either a local bill, seen and approved by the county's legislators or a general bill, seen and approved by all of the state's lawmakers. It only takes four county representatives in the House or one senator to take a local bill, beat the living shit out of it and toss it into a corner, broken and battered until the next legislative session. This is what the illustrious State Senator Scott Beason did to a prior attempt at resurrecting the occupational tax.

The other part of the problem is the bill authors being their own worst enemies. Sen. Jabo Waggoner and Rep. Jack Williams each pushed their own versions of the "Alabama Financially Distressed Counties Act" as a general bill. Williams managed to get his bill through committee. And then a Birmingham News reporter asked a simple question: whether the bill included exemptions for lawyers, doctors and other professionals.

Keep in mind this was an understandable question to ask. The previous occupation tax had this exemption in place to prevent professionals who were already paying professional license fees from essentially being double-taxed. Rep. Williams answered in the affirmative. And that's where the sugar turned to shit.

You see, Rep. Williams didn't actually read the whole bill, despite being credited as the author. As it turns out, no one actually writes their own bills. Or reads them. Worse, lobbyists and other people with vested interests in legislation are the ones penning the bills:

For Williams, the incident exposed an embarrassing fact about how legislation becomes law. Most lawmakers don’t write the bills they sponsor. This is probably for the best, since many are not lawyers and could do more harm than good if they did pen the bills themselves. What’s more, many lawmakers don’t read the bills, either. Instead, they trust the lobbyists and interested parties who shop legislation to them. This becomes a frustrating and embarrassing problem when pesky reporters ask them about the legislation or when the bills become law and have all sorts of unintended and irritating effects, as Alabama’s immigration law, HB56, had last year.

It might seems silly from the outside looking in, but in a system run by lobbyists and politicians, trust is essential.

That sums up Alabama's entire legislative problem in a nutshell. The legislators are merely figureheads and decoration for the real powers: lobbyists and corporate interests.

JeffCo Commissioner David Carrington neglected to make clear to Williams how the exemptions weren't gonna be in the bill. Whoops. Fortunately, Waggoner's bill had these exemptions, in the form of a deduction from professional license fees as long as the fees were less than the tax. Waggoner's bill made it past the Senate, but it didn't make it past the House County and Municipal Government Committee intact.

...the County and Municipal Government Committee of the House of Representatives today voted 7-4 to rewrite the plan to exempt people who live outside the county from paying the occupational tax.

Jefferson County Commission President David Carrington said that change would reduce revenue from the allowed occupational tax to about $45 million a year.

Opponents of the amendment excluding Jefferson County workers who live outside the county said it would be unconstitutional, since it would create two separate classes of workers.

That defeats the purpose of the bill, which is perhaps the intended effect. The last bill got killed because an "unconstitutional" amendment. Leaving this poison pill in the pie could get the whole thing thrown out at some point.

Wednesday is the last day of the current state legislative session. Unless the governor feels like opening a special session, this may be the last chance for the county to see a solution to the fiscal problems ailing it.


*There's an urban myth out there that Walker County residents actually commute into JeffCo. I doubt the veracity of this myth, as most Walker Co. residents have traded their wheels for cinder blocks.

In late September, the SEC ended its case for disgorgement against former Birmingham mayor, former Jefferson County commission president and former Fairfield mayor Larry Langford, after the SEC discovered the only asset they could get as part of restitution was a 1/2-interest in his home. It's the only thing he has left, aside from a mess of debts stemming from criminal and civil penalties.

Langford is currently serving a 15-year sentence in federal prison, after being convicted of over 60 counts of bribery and corruption. Given his age (65) and how he won't be eligible to walk out of prison until at least 2023, it's a possibility that this man will die in prison. On the other hand, the two men convicted alongside him, investment banker Bill Blount and former lobbyist Al LaPierre, earned much lighter sentences. True, they plead guilty and Langford didn't, but the disparity in sentencing only raises the usual conclusions about racially-motivated "justice" in this country.

Most AL.com commentators have been chomping at the bit for Langford's demise and rolling around in his family's misery like happy pigs in slop. Blount and LaPierre never got this much bile thrown at them.

Larry Langford's story meshes neatly with the story of Jefferson County's staggering debt and how it was finally forced to declare Chapter 9 bankruptcy. Rolling Stone magazine has a staggeringly comprehensive backstory on the entire saga, including what led Jefferson County to build a high-tech sewer system in the first place and how $250 million ballooned into over $4 billion in debt thanks to J.P. Morgan Chase & Co. and its three-card credit swap monte.

Langford, Blount, LaPierre and J.P. Morgan Chase banker Charles LeCroy were instrumental in driving Jefferson County further into debt. To summarize, LeCroy would pay Blount millions of dollars to help grease the lending skids with whoever was in charge of signing off those deals. Blount then feted then-county commissioner Langford (with LaPierre as a go-between) with what would eventually total over $240,000 in clothing and other gifts. Langford would then effectively steer business back towards Blount's investment firm when he signed off on the deals that would eventually land the county in the financial shithouse. This happened quite a lot.

And it kept happening until those bills came due.

For Jefferson County, the deal blew up in early 2008, when a dizzying array of penalties and other fine-print poison worked into the swap contracts started to kick in. The trouble began with the housing crash, which took down the insurance companies that had underwritten the county's bonds. That rendered the county's insurance worthless, triggering clauses in its swap contracts that required it to pay off more than $800 million of its debt in only four years, rather than 40. That, in turn, scared off private lenders, who were no longer ­interested in bidding on the county's bonds. The banks were forced to make up the difference — a service for which they charged enormous penalties. It was as if the county had missed a payment on its credit card and woke up the next morning to find its annual percentage rate jacked up to a million percent. Between 2008 and 2009, the annual payment on Jefferson County's debt jumped from $53 million to a whopping $636 million.

It gets worse. Remember the swap deal that Jefferson County did with JP Morgan, how the variable rates it got from the bank were supposed to match those it owed its bondholders? Well, they didn't. Most of the payments the county was receiving from JP Morgan were based on one set of interest rates (the London Interbank Exchange Rate), while the payments it owed to its bondholders followed a different set of rates (a municipal-bond index). Jefferson County was suddenly getting far less from JP Morgan, and owing tons more to bondholders. In other words, the bank and Bill Blount made tens of millions of dollars selling deals to local politicians that were not only completely defective, but blew the entire county to smithereens.

And here's the kicker. Last year, when Jefferson County, staggered by the weight of its penalties, was unable to make its swap payments to JP Morgan, the bank canceled the deal. That triggered one-time "termination fees" of — yes, you read this right — $647 million. That was money the county would owe no matter what happened with the rest of its debt, even if bondholders decided to forgive and forget every dime the county had borrowed. It was like the herpes simplex of loans — debt that does not go away, ever, for as long as you live. On a sewer project that was originally supposed to cost $250 million, the county now owed a total of $1.28 billion just in interest and fees on the debt. Imagine paying $250,000 a year on a car you purchased for $50,000, and that's roughly where Jefferson County stood at the end of last year.

Last November, the SEC charged JP Morgan with fraud and canceled the $647 million in termination fees. The bank agreed to pay a $25 million fine and fork over $50 million to assist displaced workers in Jefferson County. So far, the county has managed to avoid bankruptcy, but the sewer fiasco had downgraded its credit rating, triggering payments on other outstanding loans and pushing Birmingham toward the status of an African debtor state. For the next generation, the county will be in a constant fight to collect enough taxes just to pay off its debt, which now totals $4,800 per resident.

And to think this all started with a consent decree.

In 1996, the EPA ordered Jefferson County to revamp its aging sewer system after a lawsuit involving the Cahaba River Society. Something about keeping waste out of the rather fragile Cahaba River, which also served as a source of the city's drinking water. Instead of ordering the city to repair that particular problem, the EPA issued a mandate to eliminate all sewer outflows. That would require a damn-near brand-new sewer system designed to be as environmentally friendly as possible. So the city of Birmingham set out to build the new sewer system, to the tune of $250 million.

A $250 million estimate, turned into a $4 billion clusterfuck of epic proportions.

Meanwhile, whatever chance JeffCo had of paying that debt off ended when its occupation tax did, started in 2005, the 1-cent tax was the county's attempt to recoup some income from the hordes of suburban commuters from outside of the county who still worked in the Birmingham/Jefferson County area. After a fair bit of whining from the usual anti-tax forces, the occupation tax was rendered unconstitutional and struck down, leaving Jefferson County with little to no options for paying down its debt.

At some point, the sewer system fell under receivership and under control of John Young, state court-appointed and given the power to raise sewer rates as necessary. Second Front talks about how he endeared himself to the citizens of Jefferson County:

Since appointed, Young has become one of the least popular public figures in the sewer debacle, mostly because he has been paid $500 per hour for his services, even when giving interviews to the media or speaking to civic groups. Last week, the receiver’s total compensation exceeded $1 million. Also, Young has told the state court that a sewer rate increase of 25 percent would be appropriate for the creditors and affordable for most ratepayers.

In these economic times, seeing a guy get paid $500/hr to putz around with people's future sewer rates is a bit much to bear.

Two county commissions spent three years coming to an amicable agreement on how to repay the debt, but it fell through at the last minute:

Three of the commissioners interviewed by Reuters said the turning point came last Monday when creditors who include JPMorgan sent a document to commissioners outlining new settlement terms.

They said the new terms weren't what they thought they had negotiated and they spent two days combing through the document with lawyers before deciding that bankruptcy was a better alternative to accepting a revised deal.

Among the concerns, the creditors were insisting on being paid back $2.19 billion of the $3.14 billion debt, rather than the $2.05 billion the commissioners had expected. And the commissioners claim that the revisions meant an assistance program to help those on a low income pay higher sewerage rates would have to be shouldered by the county for 10 years.

"When I read the document that came back Monday my blood pressure shot up. I felt like everything was in favor of the creditors and nothing was in favor of the county," said Republican Commissioner Joe Knight.

The Commission President David Carrington, also a Republican, said he had been optimistic up until last Monday night. "When I left here (the commission offices) Monday night I thought we had an agreement. I felt good. But I got a call from one of our attorneys. It was about nine o'clock, saying there was these new revisions," he said.

"They had these conditions and those conditions are unacceptable. I knew it wasn't going to happen," he said.

In a last ditch effort, creditors urged governor Robert Bentley to call the state legislature to a special session:

In the wake of the tentative deal, Alabama Governor Robert Bentley promised to call a special session of the state legislature to consider a bill to allow the county to raise fresh funds to address a shortfall in its general fund that could, in itself, have led to bankruptcy.

Already, it has forced the county to cut jobs and services so that, to give one example, a long line snaked outside the courthouse early on Thursday morning of residents waiting to pay for their car tag renewal.

No session was called, however, and there appeared to be little appetite in the Republican-controlled legislature for any increase in taxes. The source said the county voted for bankruptcy mainly because that special session looked increasingly unlikely to happen.

When that didn't happen, Commission President David Carrington filed bankruptcy on behalf of the county and subsequently lost over $1 billion in concessions from creditors.

The fallout's been horrific. Langford, LaPierre and Blount were convicted and sentenced. The old county commission was seen as a bunch of corrupt assholes. The Jefferson County government had to furlough employees, shut down courthouse satellites and even stop county sheriffs deputies from responding to traffic accidents. Sewer customers will most likely see their rates rise by 25% and even higher in subsequent years. This municipal bankruptcy is the largest in recent history, after Orange County's $1.5 billion bankruptcy.

Now that the county's officially declared bankruptcy, the federal courts have stepped in to resolve the matter, first to determine if the county is actually eligible for bankruptcy and second to determine the best financial settlement terms possible for the county and its creditors. A bit of side drama is whether the sewer system remains under control of John Young or whether it defaults back under control of the county itself.

Lots of lives and livelihoods were devastated by the willingness of several entities to engage in greed, and it seems the only people who aren't paying for it are those under employ of J.P. Morgan Chase & Co., although it was one of the institutions instrumental in causing the county's fiscal collapse.

- Millions of people around the country are honoring the sacrifices made by those in past and present service to our nation's defense forces.

- Meanwhile, Victor Davis Hanson compares Herman Cain's "authenticity" against President Obama's decidedly not-so-black "Metrosexual cool":

Yet most Americans are far more concerned with authenticity than with color or diction, and Cain is nothing but authentic. His speech and manner are as genuine as Obama’s are forced and often phony. His everyman persona and appeal to the working classes scare the liberal elite, in much the same way that Sarah Palin’s did. If Cain were to say “corpse-man” or “punish our enemies,” he would be written off as an embarrassment — in liberal parlance, a “minstrel” and “buffoon.” But if he said “corpse-man” with an academic non-accent and a Harvard pedigree, well, that’s a momentary, understandable slip for a gaffe-prone Harry Reid or Joe Biden.

This is what happens when you mentally masturbate yourself into blindness. Bravo, VDS. *golf clap*

- Jefferson County, Alabama just filed the biggest municipal bankruptcy in recent history. Thanks to putting all-in on J.P. Morgan and other lenders' financial poker game in exchange for sewer project funding, the county ended up in over $3 billion of debt. After seeing a huge source of income evaporate and little to no help from the state government, the county commission decided to fold and declare Chapter 9 municipal bankruptcy. A more detailed blog post is forthcoming.

- Joe Paterno and Graham Spanier are officially gone from Penn State. Tim Curley and Gary Schultz may be gone along with them. And Mike McQueary's career options are rather limited right about now. The Board of Trustees are cleaning house.

It wasn't bad enough that Jerry Sandusky was allowed to prey on young boys for the 15 years he was with Penn State. No, there are nasty implications floating around on how the Second Mile charity he founded was really a one-stop shop for Sandusky and others' pedo needs. Oh, and the disappearance of a district attorney who decided not to prosecute Sandusky in 1998 may or may not be related.

I feel awful for Penn State students. The coaches you looked up to are now outed as baby bumpers and cover-up artists. And now the football program will most likely catch hell from any other opposing team for the rest of the season.

- Colin Powell calls the Occupy Wall Street movement "as American as apple pie." Careful, Colin. Those Teabaggers might not agree with you on that one.

"People are concerned now that there is not that source of an income, there isn't that work source that I remember," Powell continued. "What you're seeing with Occupy Wall Street and the others are people who are unhappy and they're directing their unhappiness now toward Wall Street and toward those they think are doing too well in our society."

That's putting it lightly, Colin. Corporate and financial powerhouses have gone out of their way to impoverish and defraud countless millions of Americans. They're pissed over more than just someone doing a bit too well.