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Scranton, PA – Pays All City Employees Minimum Wage

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Another story from the US emerges of a city struggling to pay its bills. Scranton, PA, managed to meet its employees paychecks but just paying them minimum wage. How many more cities will have watched and follow with a similar disturbing move?

The city of Scranton, Pa., sent out paychecks to its employees Friday, like it does every two weeks. But this time the checks were much smaller than usual. Mayor Chris Doherty has reduced everyone’s pay — including his own — to the state’s minimum wage: $7.25 an hour.

Doherty says his city has run out of money.

Scranton has had financial troubles for a couple of decades — the town has been losing population since the end of World War II. But the budget problems became more serious in recent months as the mayor and the city council fought over how to balance the budget.

Doherty wants to raise taxes to fill a $16.8-million gap. The city council wants to take a different approach and borrow money. City council members did not respond to NPR’s requests to discuss the dispute.

………

After paying workers Friday, the city had only about $5,000 left in the bank. More money flowed into city accounts that day, but it was still not enough to pay the $1 million the city still owes to its nearly 400 employees.

Scranton’s public workers received a few days’ warning this was coming. John Judge, a firefighter and president of the International Association of Firefighters, Local 60, typically receives about $1,500 every two weeks, after deductions. On Friday his check was less than $600 — before deductions.

The city have clearly broken the law, but that wasn’t enough to stop Doherty. When you are broke, you are broke!

The firefighters’ union, along with the police and public works unions, have taken the city to court. Lackawanna County Judge Michael Barrasse issued an injunction, essentially agreeing with the unions that the city was breaking the law, but Doherty says he doesn’t have another choice. Despite the injunction, he had the city send out paychecks based on minimum wage.

The unions plan to be back in court first thing Monday morning to ask the judge to hold Doherty in contempt.

There’s been no love lost between Doherty and the public employee unions because of this battle; they’ve already spent the past decade in a legal dispute over pay that went all the way to the state supreme court. Both sides come to this latest battle with plenty of baggage and hard feelings. But with nearly 400 city workers receiving a fraction of the pay they typically get, pressure is building to resolve the issue soon.

Source: nrp.org

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1933 Gold Confiscation Never To Happen Again

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Many gold bugs will be aware of Roosevelt’s confiscation of gold in 1933 and there has been speculation by some writers of a similar future move. In an interview with Daily News & Analysis, the anonymous blogger FOFOA says this will not happen and addresses the question as follows:

Franklin Roosevelt had confiscated all the gold that Americans had in 1933. Do you see something similar happening in days to come?

 Not at all!The purpose of the confiscation was to stop the bank run epidemic at that time. There’s no need to do it again. The dollar is no longer defined as a fixed weight of gold, so the reason for the last confiscation—and subsequent devaluation—no longer exists. Gold that’s still in the ground is a different story, however. Gold mines will likely be considered strategically important national assets after the revaluation, and will therefore fall under tight government control.

One of the lines in the interview was a classic..

The dollar is as safe as a bomb shelter that’s rigged to blow up once everyone is “safely” inside.

The full interview is worth the read, click here to read.

German Economists’ Open Letter Against Last Weeks EU Summit

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Last weeks EU summit decisions were heralded as the saviour for the ailing euro, but as usual they were announced in great fanfare but very little detail on how they were to be achieved. In fact all we heard of since then, was how the Finns and Dutch aren’t happy, the Germans and Irish are awaiting decisions from the courts on how constitutional the ESM is and many more hurdles.

All along the Germans have been largely accepting of Merkels decisions but a large number of German economists have criticised the EU summit through an open letter.

Tens of German economists have signed an open letter that warns about the decisions made by the eurozone leaders at last week’s summit aimed at saving the euro currency.

The letter published by the Frankfurter Allgemeine Zeitung, signed by more than 170 mostly German economists, expressed “great concern” about the decisions taken at the summit.

The economists say the adopted decisions are a “step towards a banking union, which means collective liability for the debts of all banks in the eurozone.”

They argued that this would mean the citizens of countries like Germany, which have strong economies, could end up paying other countries debt.
“Banks’ debts are nearly three times higher than government debts,” the letter added.
The economists said that “the taxpayers, retirees and savers in the so-far solid countries of Europe must not be made liable for backing these debts, particularly since gigantic losses are foreseeable from financing the southern countries’ inflationary economic bubbles.”

Typically the political response to numerous economists telling you that economically you are doing the wrong thing is to ignore them, because after all the EUssr comes first.

However, German Chancellor Angela Merkel has rejected the letter, calling it out of hand.

During the eurozone’s summit on June 29 in Brussels, leaders of the bloc’s leading economic powerhouses agreed to directly support the struggling banks and bring down the borrowing costs for the stricken member-countries such as Italy and Spain.

Backing the idea of a single banking authority at the end of the Brussels Summit, Merkel said that it was needed to prevent government debt from piling up.

Source: PressTV

UK Customers Moving Accounts From The Big Banks

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Its enevitable that pissed off customers are going to move their accounts when you take into consideration the level of scandals and technical glitches that we have experienced in the UK over the last month. In fact the banking system takes for granted its customers loyalty, but thats a two way street and depends on the banks upholding their end of the bargain. Quite clearly they have been failing miserably to provide stability and honestly which is the cornerstone.

Angry bank customers have been voting with their wallets and bombarding co-ops, building societies and credit unions with applications for current accounts over the past week, after the NatWest computer meltdown and the Barclays rate-rigging scandal.

Data compiled by the campaign group Move Your Money UK shows an explosion in requests to switch from large high street banks to smaller alternatives that consumers hope will take a more ethical approach. Charity Bank, which lends its savers’ money to charities, has seen a 200% increase in depositors; the Ecology Bank has had a 266% jump in applications; and Triodos, a Bristol-based “sustainable bank”, a 51% increase.

Credit unions, which are often small institutions investing people’s savings in their local economy, have seen week-on-week increases of at least 20%, some of them up to 300%. Evidence of the growing number of switchovers comes as Ed Balls, the shadow chancellor, on Sunday calls on the government to make it easier for consumers to switch to another bank or building society.

Its not hard to see why customers are moving, but this has being going on from the start of the year and will most likely increase rather than decrease after the revelations over the past month.

Consumers have been looking for alternatives to the mainstream banks to protest about the revelation that Barclays traders conspired to fix a key interest rate over a number of years; and the IT chaos that left millions of RBS customers unable to access their accounts.

Since the start of this year, Move Your Money UK estimates that an average of 80,000 savers a month have been leaving the crisis-prone banking giants – a total of almost half a million since the start of 2012. The Co-operative Bank, which has seen a 25% rise in applications over the past week, hopes to capitalise on the public’s frustration by trebling its number of branches to 1,000, if it can clinch a deal to buy 632 from Lloyds Banking Group.

Lloyds, which was bailed out by the taxpayer during the financial crisis, was ordered by Brussels to sell the branches when it took over the troubled HBOS.

……..

Adam Scorer, director of external affairs at the advocacy group Consumer Focus, said: “Consumers have decided to mete out their punishment by moving away from banks who have been tarnished by recent events and revelations. RBS have failed on the basics of managing their customer accounts. Barclays have failed on the basics of behaving with honesty and integrity. These might be very different issues, but they both degrade the reputation of banks in the eyes of their customers.” Many British banks shifted from being “mutuals” – owned by their customers – to shareholder-owned public companies in the 1980s and 1990s, in a wave of “demutualisations”, seen as making them more successful. But as bankers’ pay has exploded, and profits flowed to shareholders rather than savers, a growing number of people have begun to warm to the idea of old-fashioned mutuals, including building societies.

Source: Guardian

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