The piling-on begins: The AP reports:
Three big city mayors asked the federal government Friday to use a portion of the $700 billion financial bailout to assist struggling cities. They sought help with the pension costs, infrastructure investment and cash-flow problems stemming from the global financial crisis. The mayors – Michael Nutter of Philadelphia, Shirley Franklin of Atlanta and Phil Gordon of Phoenix – made their request in a letter to Treasury Secretary Henry Paulson. Nutter said cities are facing an economic crisis not seen since the Depression and need help just like financial institutions. “I want to make sure that cities and metro areas are at the table, that their voices are being heard, that our challenges and problems are well understood, so that we can get relief,” Nutter said.
Who’s next?
November 15th, 2008 at 9:51 am
Of cities, I’d say Las Vegas and then maybe Miami. The RE bubble is crashing hard there, and as house prices fall, so too will property tax receipts. LV also has the problem that gambling is falling, unlike in recessions of the past.
Of businesses looking for money, I’d say the sorts of business that have high capital expenditures, particularly those with long lead times, like electricity. The recession’s destruction of demand and curtailed production probably will give them a little breathing room, however. Rumor has it that Boeing and Airbus are worried they might be stuck with some unsold inventory too. Railroads will take a hit to income from declining intermodal, autos and coal loads as demand for imports, cars and electricity fall, but they may be able to make up for it from folks who’ve looked to substitute rail for trucking in case diesel heads back up.
Of course, statups will have a harder time getting venture money, since risk premiums are up. Since they don’t have as much political clout as their value to society might reflect, I suspect they won’t get much, however.
November 16th, 2008 at 1:22 am
Las Vegas’s problem is that it is basically an incredibly poverty stricken city. The income numbers don’t tell the whole story. Take away gambling and then omit the incomes of well-to-do retirees who do not contribute to the economy and you have a very large city with no industry or creative class and a very low income level.
No bailout is going to help Las Vegas. It’s economy is structured as a house of cards.