Why Mayor Nagin Fired 3,000 Employees

On October 4, New Orleans mayor Ray Nagin announced that the city of NOLA was going to lay off up to 3,000 employees. This announcement has been reverberating across the malignancy known as Rightwing America ever since. Usually it goes something like this:

"Ray Nagin left the city during the flood, and went to Texas! Then when he came back, he callously fired 3,000 employees!" This is typically said with the quivering lips and bugged eyes of your normal, everyday raving Bush cultist-dittohead.

This nugget comes as part of a much larger package apparently titled, "Rightwing Talking Points Against Nagin and [Louisiana governor] Kathleen Blanco".

I assume this garbage was cooked up in the usual sewers associated Karl Rove, dittohead talk radio and the criminal gang called the Republican Party. The package seems devastating towards Nagin and Blanco, but apparently a lot of is just crap or sophistry of one type or another, as we expect from the Liars Brigades.

Now, when I first heard this, I was mystified. I still can't answer a lot of the charges, you can go here to see a lot of the tidal wave of BS Rush Limbaugh has been defecating lately.

Meanwhile, how about the troubling issue of why Nagin fired 3,000 employees. In a previous post, I suggested that this was because the city was flat broke. My theory has been confirmed in an excellent letter I just received, which I will republish below. The author shall remain anonymous.

Mr. Lindsay, in your post on October 19, you state:

Apparently, these unfortunate layoffs are being done because Hurricane Katrina caused a financial hurricane in the the NOLA city government - the city's finances are simply devastated. In such dire financial straights, perhaps mass layoffs are understandable.

"Apparently"? "Perhaps"? Look, the city of New Orleans, like almost all cities, gets its income from taxes. It taxes the port authority. It taxes the hotel rooms. It taxes liquor. It taxes property. It taxes sales of nearly everything. It taxes for violations of various laws (we call them tickets and fines).

It is the sole provider of garbage and sewer and water, and it gets paid for that. New Orleans also gets money from gambling, unlike some other cities and states. Surprisingly, this is also how Louisiana gets its income. Taxes and gambling. It gets the vast majority of its sales tax from (surprise) the largest city in the state--New Orleans. It gets most of its gambling revenue from (shock) New Orleans.

It also taxes the port of New Orleans, and gets a cut of the import taxes, I imagine. The only thing it doesn't get that New Orleans gets is utility income (and it probably got a cut of NOLA's).

Suddenly, in the blink of an eye, that tax base was completely wiped out. Not just one section of it. All the sections simultaneously. No more ticket revenue (which is substantial for any city). No more sales tax. No more gambling, or liquor taxes, or topless bars to "regulate" with taxes.

No more guests staying in hotel rooms (although apparently FEMA is taking care of that at $90 a night in a city with zero other guests, can you imagine?). No more utilities. No more anything . For the next five years.

Now you may say that all of that income is still occurring, and most of it is. On a tiny scale. But the infrastructure of the city is set up for a huge scale. It's like a family of four, that has a two earner income of $300,000/yr, and both of them get laid off.

They still have a mortgage and two car payments, and tuition, and a living standard consistent with a $300,000/yr income, but their income is bupkis. Or $200/wk unemployment.

Only, it's actually worse than that.

Not only have they lost their jobs, not only do they have to continue making payments on a $300,000/yr lifestyle, but that lifestyle has disappeared (the house has blown over, the cars are wrecked, the pool is underwater) and they have to pay for a new lifestyle elsewhere in addition to making payments on the old lifestyle, all with no income.

So not only is New Orleans still trying to pay for a $300,000/yr lifestyle on a $200/wk budget (so to speak), but they've actually picked up additional expenses, on a massive scale.

Even downsizing all non-essential personnel, they still can't make it. What do you need a municipal court staff for if no one drives a car there, and the cops are far too busy to write a ticket for running a non-existent stop sign? Even downsizing, their expenses far, far outstrip their income.And Bush isn't going to pick up the slack either.

Not only that, but they can't look to their own state government for help, because it is in trouble. Because its cash cow, the jewel in its crown, its primary revenue source, New Orleans, has been slaughtered.

The state, and all the southern cities, not just New Orleans, and not just Louisiana, really, are hemorrhaging money. These entities are actually bleeding out faster than money can possibly be pumped through.

They have run through all their resources, all their reserves, and are now stealing or "borrowing" from the resources of their employees, many of whom are working for free (or on a very reduced schedule while their own bills pile up), on Bush's empty promise that someday in the future, he'll make them whole. While big fat government contractors (including the Red Cross) soak up all the available cash.

So yeah. I'd say that there's nothing "apparent" about it, and there is no "perhaps." The city of New Orleans, the surrounding parishes and cities, and almost certainly Louisiana, are bankrupt.

They have no asset base, no income source of any moment, huge past debts that they cannot service, and more current expenses than you or I can even imagine. I can't even begin to understand that people couldn't see this would be true from the instant the levees broke.

I would like to point that the media has not shed any light at all on this apparently obvious truth about why the city and state are broke. This exemplifies the extreme rightwing corporate nature of what is really the US controlled propaganda (read: totalitarian-like) media.