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New Front in Blue Civil War: Silicon Valley


If blue policies worked in practice the way their defenders say they do in theory, then San Jose, the self-proclaimed capital of Silicon Valley, one of America’s most dynamic and regions, should be the Kingdom of Heaven on Earth. It should be a place where the overwhelming “excess” of riches from a relatively large, elite class of millionaires is channeled by public officials into brilliantly designed welfare, education, and infrastructure programs, making it the envy of the civilized world.

Instead, San Jose is going broke. Because it is spending an astonishing one-fifth of its general fund on still-rising municipal pensions and retiree benefits, libraries, parks, community centers, and roads are being starved of the resources they need to survive, and the ranks of city employees, including police, are shrinking.

Public officials, pressed for cash, are being forced into an epic brawl with labor unions, reports Mary Williams Walsh at the NYT:

Government officials and municipal bankruptcy experts across the country are watching San Jose closely because of a plan to reduce benefits — drafted by Mayor Chuck Reed, a Democrat, and passed by 70 percent of voters in a referendum last year.

The plan is being opposed in court by unions that represent city workers and say it is illegal under state law. It would introduce a second tier for new city employees involving much lower pension and health benefits. It would also alter pension benefits for existing workers, allowing them to choose either a similar, second-tier benefits plan or to pay significantly more out of their own pockets for the benefits they had come to expect.

The outcome of the case is expected to have a major impact on municipal budgets around the state and, perhaps, the country. If a state court rules later this year or early next year that the referendum allows San Jose to alter pension plans for existing workers, and it survives appeals, similar measures are expected to pop up elsewhere.

If the tax revenue from Silicon Valley isn’t enough for progressive officials to maintain the bare minimum of social services that it is their basic duty to provide, then there’s a problem in the approach. It’s not the fault of corporations, greedy millionaires, China, or Wall Street. The crisis is in the blue model itself; if it can’t handle the warm, rich, entrepreneurial currents of Silicon Valley, then it probably can’t swim anywhere.

[Image of Silicon Valley courtesy of Wikimedia Commons]

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  • bpuharic

    Hmmm..seems WRM has been spending too much time in the college library and not enough time actually looking around

    If RED STATE policies worked the way they’re touted, this is what we’d find:

    1. Bust labor unions to increase meritocracy

    Did it work? Nope. we’ve had 30 years of middle class wage stagnation with the 1% tripling their income over the same time period

    2. Deregulate banks since they can regulate themselves

    Did it work? Nope

    Banks invented new financial instruments that no one could evaluate and sold them against the best interests of their own banks. When these trashed the economy, the banks got a bailout from the middle class

    3. Cut capital gains taxes based on supply side economics

    Did it work? Nope. George Bush cut capital gains taxes to the lowest rates in 60 years. Result?

    The biggest recession in 80 years.

    So yes, WRM, if you ignore the failure of the RED STATE model, the blue state model is a failure

    So the red state model blew out our economy, trashed the middle class and resulted in America being a plutocracy.

    Amazing what you can do with statistics! The red state model is turning America into the world’s best 3rd world country.

    • Leah Keever

      Sorry, that’s Obama who is doing that. The rest of your points are also fantasy.

      But thanks for playing.

  • rheddles

    San Jose may proclaim itself the capital of Silicon Valley, but that doesn’t mean the millionaires live there.

    • Kavanna

      They’re increasingly living elsewhere.

      Will this lead to a revolt against the brainless, zombie-like “consensus” politics that is leading us to bankruptcy? The behavior of voters across the major Western countries leaves limited room for hope.

      Isn’t ironic that many of these policies are dramatically increasing inequality too?

      • rheddles

        Millionaires have not lived in San Jose since Sobrato bought the last orchard.

  • Loader2000

    When I lived in San Jose, cops their made more money than in any other city in America. In fact, they were paid so well that I actually took the qualification test and considered switching careers from a statistician to a policeman. The justification was that San Jose was a very safe city (thanks to the cops obviously) and that housing prices were so high, all city employees needed to be paid A LOT. However, strangely enough, when the housing bubble burst and prices plummeted, salaries didn’t go back down to compensate. The bottom line is that if you are going to be a cop, and your spouse isn’t going to work, you shouldn’t expect a middle class lifestyle in one of the most expensive places to live in the country. As a nation, we aren’t rich enough to make everyone’s life comfortable through taxes, and as soon as that becomes our obsession (as opposed to grit, sweat, hard work and sacrifice), then we’ve officially started down the road to decadence and decline.

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