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Cumberland Advisors chairman David Kotok weighs in on the Chicago teachers’ union strike.
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And our next guest says -- teachers strike in Chicago will be a watershed mama.
For our country and this administration let's bring David coats doctor and he's chairman and.
Chief investment officer Cumberland advisors joins us now what -- -- -- watershed moment.
Illinois of the fifty states.
Is the least creditworthy.
It's got the most unfunded pension percentage it doesn't pay its vendors on time.
And its largest city now faces a strike in a showdown of the teacher's union.
It is.
Are we gonna see -- leadership.
Change in approach is this -- Ronald Reagan moment with the air traffic controllers.
Which turned things.
Or is it going to be more business its usual in a settlement.
We're gonna find this out it it Rahm Emmanuel now has to face this down is -- Obama's buddy.
Is -- the mayor of Chicago the largest city in Illinois we're gonna see.
How do you think it plays out as you mentioned Ronald Reagan in the air traffic controller strike where Reagan said okay strike and your and essentially fired them all.
It was a dramatic moment the power of the White House the power of saying no unions.
But Ron Emanuel doesn't have that power is it more symbolic simply because he's a democratic mayor and you've got a Democrat -- -- off with the union.
I don't I don't know I think Rahm Emmanuel is -- newly elected mayor he's in office the power structure is his power structure.
Now he's got shot down with 250000.
People.
And either he says we can't pay you we have to -- the economics of this deal.
Or he sitcoms if he -- comes.
Then there's no change no watershed it's business as usual and that means.
The economics of the city in the state get a lot worse minority bad but at fact that he's a Democrat matters though that because if he's not their friend.
I know as a centrist Democrat but he's not their friend who lives there aren't any Republicans in the Chicago anymore so they're all Democrats question is -- -- they divide.
Does he have the leadership -- do it.
He has the ability to do it -- he's got to face down a union it's him very dramatic test.
And it's -- test not only for Illinois and Chicago because all countries focused on it.
Because it's a big issue.
Well how would that then play out.
Assuming that Rahm Emanuel get somewhere with the teachers and -- some concessions in negotiating their wages and other benefits and how their rate it.
OK let's play both sides know showdown happens.
Union winds.
You're rating agency you look at this credit and say.
This is getting worse the pension fund funding issue continues.
And you can then assume about the rest of -- state take it the other way right and say wait a minute they finally decided to hunkered down when you're in a hole stop digging they did it.
Now what happens you start to view the credit differently.
You start to see -- turn in the economics.
You start to see confidence combat.
That's the test at stake right now by its big story to to watch out there and thank you David for coming in today difficult time I -- any way to say thank you semi.
