Instead of making the same old points about how states with assets can’t be broke, I’ll just state the obvious: contracts are important. Even the sacred Constitution defers to them. Instead of faulting the unions (of which I am no fan), fault the compromisers and accommodationists who failed to stand up to them.
I appreciate Dr. Mead’s concern for teachers, firefighters and other union workers whose pensions may not materialize as promised. I have more for non-union Rhode Islanders who never got promises of healthy pensions, and who instead have been and will be taxed to pay union pensions.
I also think Dr. Mead’s argument is not with Scott Walker and John Kasich, but with voters who elected them to curb union power. They want unions’ unjustified drains on the public purse to end or be stemmed sooner rather than later. This isn’t “demonizing” unions; it’s rational. The go-slow Cuomo and Emmanuel approach benefits unions at the expense — literally — of everyone else.
But I found Ostrich Party assumptions of the past to be startlingly contemporary. “The union leadership and the statehouse pols … believed that the American economy would continue to grow richer every year and that there was a never-failing cornucopia of “more” somewhere that would somehow make sure that there was always enough money in the kitty to redeem the promises made. You could always squeeze another quart out of the milk cow.”
How is this different from Barack Obama, Nancy Pelosi and other free-spending latterday pols? Magical thinking is magical thinking, no matter what the level of government.
“Democratic mayors are telling their unions that there isn’t any money — not because they are vicious corporate stooges who hate working people and want to see them suffer, but because There. Isn’t. Any. Money.”
If anyone asks how Tea Partiers can be so “cruel and callous”, how can they sleep at night and look themselves in the mirror, that’s the answer right there.
There. Isn’t. Any. Money.
And our current strategy — printing it — will only lead to the situation that Kipling described: “and though there was plenty of money, there was nothing our money could buy; and the Gods of the Copybook Headings said ‘If ye don’t work, ye die'”.
And that means work at a globally competitive rate.
Our Best and Brightest got totally blindsided with the consequences of globalization. Granted, the efficiency and alacrity of the alliance between Wal-Mart and the Chinese government in draining US jobs away would perhaps have surprised anybody.
Even so, if the porridge of Pat Buchanan was too hot, the idea that NAFTA and other free traders was “just right” finds little support in reality.
Honestly, this can still work itself out (even to both the advantage of the average American worker and the average 3rd world worker), so long as we start fighting on two fronts.
One, get the global economy to start cycling again. Instead of a $450 billion stimulus to bring money into our economy, we need to find ways to bring the $450 billion trade deficit into balance. Bringing those $450 billions back into our economy by sending goods and services to China, instead of signing contracts to hand them even more money in 5, 7, or 30 years, would get our economy moving far more sustainably than any Keynesianism.
Two, make sure that the supply of inexpensive raw materials and inexpensive energy expands to meet China’s new consumption. There is no reason that a productive Chinese citizen should not have the same standard of living as an equally productive American. (It is unsustainable insanity for any Blue Social Model country to promise an *un*productive American or European a higher standard of living than a productive Chinese citizen.) But if we’re going to have the Chinese consume at the level that Americans and European expect, **we need to increase our production of raw materials and energy**. If we don’t, the result will be straitened means for absolutely everyone.
Avoiding straitened means for everyone is precisely the goal the Blue Social Modelers are fighting for; they just seem to be utterly incompetent at doing so. They don’t even know where to start. God save us from idiots such as they.
You need to use history carefully. Comparing Athens, of all places, to Rhode Island is a little silly.
The fifty year old teacher, fireman or police officer may have been naive to believe his or her union leaders, the politicians and the journalists who all said there was nothing to worry about — but most of those workers cannot be called “greedy” or “selfish”. They are victims of a complex, multi-player Ponzi scheme and have been lied to by a lot of people for a long time.
Sorry, but they fought and voted for those liars. They voted for them to head their unions, and they voted for them to head their governments. Now the bill is coming due.
Those teachers have been backing a teachers union that’s been screwing up US education for the last 40 years. Those union workers have been paying dues to unions that have been screwing up our political system for longer than that.
The “Blue Model” is evil. It is the undeserving taking the unearned, and at the same time making it harder and harder for the earners and producers to actually make enough to keep things going. I have zero sympathy for them, and think that, if anything, Walker and Kasich are far too soft.
Public employee unions are an abomination that must end. You want to belong to a union? Great, get a job in the private sector, where if you push too hard your company goes out of business and you lose your job. You will get paid what your work is worth, and not one cent more. Want to get paid more? Great, be more productive, more valuable to your employer.
“Mary Williams Walsh can expect angry push back from a whole sector of American political life that thinks this whole problem will go away if we tax the rich, clap our hands and all say together, ‘I believe in government’.”
Gee I am reminded of President Obama policies somehow.
Right, contracts are important. Unless you are a GM bond holder.
Courtesy of WKPD: On leaving his position as Chief Secretary to the Treasury following the change of British government in May 2010, Byrne left a note to his successor David Laws saying “Dear Chief Secretary, I’m afraid to tell you there’s no money left.”
liberalism is a lie from start to finish
Oh, I don’t know. If you want to work that Athens/Rhode Island analogy, you might extend your sympathy for the Rhode Island public employees to those of Greece. So far, the rhetoric has been that all Greeks are lazy and thievish and they thoroughly deserve everything that’s happening to them. Then again, your protrait of the “hard-working American,” the delusional narcissist who doesn’t know that he’s being duped and who believes he’s worth much more than he is – that portrait isn’t much prettier.
The reason why public union wages are so high is so they can pay high union dues that support democratic politicians.
I want to be a librarian and can’t get a full time job. The reason is that too many public sector workers are paid too much money.
This rational piece with more rational commentaries started with a very rational article from the NYT. How on earth has NYT produced a decent article that’s worth reading? Has hell freezed over and the pigs are flying?
I’m a Californio (native-born Californian). I realized with the last election – when California voters chose across-the-board to elect the very Party that has brought this state to it’s knees (if not lower) – that the problem wasn’t with the politicians, and the unions, and you-name-it.
No. The people spoke. The majority of the voters in this state are idiots. They had the opportunity of choosing the woman that made eBay …and they chose to go back in time to the very governor – Gov. Moonbeam – who fathered the policies that have destroyed the state.
The problem is …the voters.
We’re packing. Now. We pick up the rental truck Saturday. We leave California Monday.
Think about that.
Greg Q has it right. The public-sector unions and THEIR members are the problem.
In many way — not all, but many — public sector jobs have been like welfare for the white middle class. And it is common for one on the dole to strive to get jobs for their brother-in-laws, nephews, etc.
The union members are not innocent victims here. They were totally, knowingly complicit in the shakedown scheme. If their union bosses and bought politicians have failed them, too bad, so sad, but I don’t feel sorry for them at all.
Gov. Walker in Wisconsin is most definitely NOT demonizing the workers. His reforms have helped save a lot of teachers’ jobs. The reforms are directed at reducing the power of the same union leadership that you hold responsible for so much of the blue state demise. You need to get a better grip on the facts in Wisconsin and stop relying on lefty talking points.
Many other commenters here have made the same point, but I will make it again….to suggest that the union members are innocent victims in all of this is mistaken at best, and willfully ignorant at worst. All one need do is look at the voting behavior of these public sector households to see their overt and open complicity in the politics and policies that have led to this mess. Until these political structures are broken, destroyed, and utterly banished, there is little hope that circumstances will improve.
So what is to be done? In WWII, the Western Allies engaged in a sustained campaign of aerial bombing, destroying the factories, infrastructure, and yes…the populations of Nazi Germany. While there is no need to strike at the populations supporting the Blue model (nor would such an initiative be desirable under any circumstances…as Lincoln reminded us, these are our fellow countrymen…misled, perhaps, but still…), we must destroy, utterly, the infrastructure that supports the Blue model. This means the public sector unions first and foremost, and the rest of the welfare/nanny state, as a matter of high priority. Will some, even many, union members suffer as a result of this? Absolutely so, let us be clear about this, and it is regrettable, but ultimately it is also the only way. Let us give them the opportunity to turn away from the Blue model, offer help to them as they do so, but if they choose not to….well, they have chosen their own fate and we cannot stop them.
An earlier commenter pointed out that the voters in CA have chosen their fate, and he has prepared to leave them to it. So it should be elsewhere. The airmen in WWII had no personal fight with the civilians that they bombed, but there was no doubt that without these regrettable casualties, the war could not be one. Professor Mead, I urge you to embrace this necessary (if unfortunate) understadning.
Parhae: The NYTimes had another article that is stunningly this-world-oriented: http://www.nytimes.com/2011/10/22/opinion/nocera-the-ugliness-all-started-with-bork.html?_r=2&src=tp
Satan must be price-shopping overcoats…
Sorry, a lot of them earn way too much. Way too much.
Liberalism is unsustainable
Liberalism is the institutionalization of wishful thinking
Great read. Makes me want to stand up and say ‘yeah!’ Particularly coming from a blue state union family, I have seen the writing on the wall gradually emerging over decades (the convention centers, anti-business policies, choking taxes, total resistance to positive change and problem solving, mindless one-party voting, refusal to hear any ideas except handfed from the dem pols and union bosses -hello wolves in sheeps clothing- check check checkcheckcheck).
This formerly blue girl went tea party in desperation against the ostriches – and what do they do? Shoot the messengers of course.
Just the other week a co-worker said to me in hushed tones ‘I am so terrified what might happen if the tea party is in charge. I wish I could flee up a mountain and live in a cabin.’
‘Ohhhh honey. What you do not know,’ thought I.
Nobody can run from reality forever (though, davisbr, the majority of Californians are determined to try).
It is true that if we, as a nation, actually faced up to our situation voluntarily, we could probably come through this with less pain. But key stakeholders are absolutely committed to making sure that can’t happen.
Unless we figure out a way to work around those key groups, we are going over the falls backward with no paddle. And we must watch out for this same group, including the betrayed public employees, because the unions and dem pols have already tried to have the federal government bail out the union pensions (PA Sen. Casey proposed it but asfaik it died without vote), and Congress held hearings on the idea of nationalizing private savings from 401ks and IRAs.
I will not be weeping for the betrayed pensioners if they steal the retirement funds I have been diligently and voluntarily saving for decades.
It would be just like the attitude of ostriches if, once awake, they seize on everything from everyone else and blame everyone else, too, for the problems they themselves have fostered year after year.
At first blush you may think this cruel, but we must make sure they connect with the consequences of their own actions. Yes let us, as a nation, be determined to be merciful and compassionate, but not to the point of injustice to everyone else. This process has to halt. We must not perpetuate it. In order to halt, and turn on to a different path, the lesson has to be learned.
These folks have to be ready to change or we will be back to this point again.
“The problem is …the voters.”
Precisely. I’m non-native Californian and I never believed that Californians would be so stupid as to elect Moonbeam back to office.
But given the failure of his Republican predecessor to actually accomplish anything, I really shouldn’t have been.
Sooner or later, California will go the route of Rhode Island.
Under no circumstances should the rest of country feel any obligation to bail us out. The only thing that can cure this state is the 2×4 of reality hitting it upside the head.
Good luck, davisbr, someday I may be joining you.
I’d like to hear what Dr. Mead thinks of Chris Christie and his approach.
A: the reference to Athens is in the NYT article and is to current events, not ancient ones.
There is also NO MONEY for the Federal Government. We can NOT go on spending, borrowing and printing money.
California and other states can not be bailed out. They had better do a quick REALITY CHECK. The day of reckoning is here.
If pension monies hadn’t been ussd to support women who procreate at the tax payers expense (and all those endless freebies), none of this would be happening to the pension holders. Hello?
If the GASB were accorded the same respect as FASB, the true costs associated with pensions would be well understood.
This is Democrat corruption, pure and simple.
Somehow, I blame Global Warming, George Bush and the Tea Party. Or, at least: if I don’t, surely the unions, the RI Dems and the Administration will hasten to do so.
As Napoleon once famously said: “It was worse than a crime: it was a mistake.” For which the workers in RI will pay, while the union bosses and state pols go on their merry way.
As a native of the trend setting of most things non-liberals have been telling us for the past 50 years, the Michigan model Does. Not. Work.
My birth town of Saginaw had multiple auto assembly plants, parts production and produced 80% of all steering gear for the world when I was a child. Today not one of those wealth/product producers exists. Bay City, Flint (thank you for giving us Michael Moore, a serial liar of repute) and Detroit have all done the exact same thing, outsource production. While all of this was occuring the locals quite actually cheered it on. When union workers were told that the new contract would force the closure and relocation of a factory they ignored the truth, voted themselves a raise (while fully acknowledging that their children would have to move away) and condemned their future. I got mine!!!
Those terrible Repuglicans were just greedy. Heard that, got the T-shirt. The factories just pollute the land that we want to preserve for our children! Heard that. Refineries, we don’t want those here because int the future we will live on solar (Michigan is the cloudiest state in the Union)! Heard that.
Then came the inevitable. Money started to get tight. The solution? Tax more! Regulate more! Higher, always higher, demands from the unions on the private sector. GM will never leave! Ford will never leave! AMC will never leave! Well folks they did. In the 60s the most industrialized are in the world was Detroit and Michigan. Most of the iron, steel, cars, trucks, train cars, rail, you name it it probably either came from here or a majority of the parts came from Michigan.
Between government pit in the sky regulation and taxation and union work rules, pay rates and strangulation of the private sector the state managed to drive out 95% of its industry. Promises of more government spending, greater pension extortion of industry (and now government), and feel good policies have taken the largest generator of wealth post WWII from glory to the mearest of whimper. California followed suit, Rhode Island tomorrow.
We believed that we were so rich that the cornucopia would never, ever not give us just one more piece of candy. Then we outlawed candy in schools, taxed sugar and demonized those who produce candy. …and we have lied to the past two generations of students who can either pick up the pieces or just keep on believin’ the lies.
There is nothing for it but to take the Walker approach; that is, direct confrontation with the public sector unions. There’s truly no other way. You won’t be able to gently coax concessions from them.
Although Republican, I remain a (lukewarm) supporter of private sector unions. At their best, private sector unions serve a legitimate role, acting as a bullwark against managerial abuses and wage exploitation. A greater good is achieved.
Public sector unions, on the other hand–specifically teacher’s unions–only serve themselves. National test scores continue to decline yet teacher’s unions uniformly resist every attempt at applying proven methods of reform, such as voucher programs.
Choosing to be a teacher or a firefighter or police officer has traditionally meant responding to a call to serve, not as a means to hop on the gravy train of extravagant government pensions and benefits and perpetual job security, yet that is where it stands now. Seemingly, wherever the public good and the union’s interests collide, the public good suffers.
No more collective bargaining rights for public sector unions. No more automatic standard of living increases. No more full and free insurance benefits–you pay into it like everyone else. You want to be a teacher, firefighter, cop? Fine. With that choice, you gain respect, admiration, and authority. What you don’t get is a free ride.
Those to blame for the current crisis won’t blame themselves. Indeed, anyone can be blamed for it, even the blameless. Hence the proverb that the first guy to point a finger at someone else is probably the guilty one, or its more pungent rendition, He who smelt it dealt it.
If Obama and the Dems pull a FDR and blame the malefactors of great wealth for the crisis (cause, duration or both), then I don’t think they’re long for public office. Voters want solutions more than executions. Politically and pragmatically, the unions and their lapdog politicians seem the best whipping boys at hand because an effective recovery of any conceivable design can’t be pursued until they’re laid low.
>>> but most of those workers cannot be called “greedy” or “selfish”…
Oh, you are so wrong about that. I worked alongside NYC Transit Authority workers as I managed IBEW local 3 electricians for 10 years. I can assure you, every single one of them got out of bed every morning wondering how they could lay their hands on more, more, more and do absolutely nothing in exchange for it.
I could tell stories all day long that would curl your hair. I’m going to enjoy watching them suffer.
Isn’t this why there are national union groups? – to help out locals that get in trouble? The national groups give away tons of money to politicians – isn’t it time they stuck up for their members and bailed them out? The national unions should take responsibility for unworkable contracts.
>The problem is not that teachers and firefighters earn “too much” money
Actually, that is exactly the problem. Union demands – whether in cash or kind – have rarely tracked linearly over the past 40 years, and the members supported their unions when those demands were made.
The problem is that govt is on the hook for pensions.
If public employees wanted pensions, said pensions should have been their responsibility, or that of their unions. Yes, the yearly payments to cover the expected future liabilities for that year would still come from govt, but once they’re paid, that’s it – the employees take all market risk (and reward).
It’s reasonably likely that unions would have insisted on adequate funding if they were on the hook, so we’d have had this discussion a long time ago, when reasonable solutions were possible.
And, if the unions steal from their employees, that’s part of the package that the employees sign up for.
Pensions should be reasonable
They should cap at $75k per year.
They should require 30 years of work and attainment of age 65 to be worth the maximum. For non-managerial police, fire and sanitation, that can be 25 years and age 55.
They should be taxable (and states should impose a 5% withholding tax on any pension paid out of state- if you’re in state that is a deduction against your state income taxes). If you’re out of state, too bad.
There should be no free retiree healthcare. At at 65 they can go on Medicare like everyone else. Prior to age 65, offer them the ability purchase the health insurance available to state workers. Someone with 30 yrs of service should get a 60% subsidy (taxable). Someone with 20 yrs gets 40% and someone with 10 years gets 20% subsidy.
Rather than paying public employees in tax-subsidised and easy to hide benefits, pay them more in salary upfront to compensate. That way they at least pay taxes on it like everyone else. And by capping pensions at $75k it will force the high earners to save their own money out of salary, like most of the taxpayers have to.
Governor Christie has not been mentioned so far but I would argue that, for all his tough talk, he has been far more successful than Governor Walker at communicating his interest in protecting public sector jobs and protections. Like it or not, the MSM has been able to portray Walker as a mustache-twirling villain, while Christie remains Teflon-immune to such caricatures. Whatever Christie has been doing in his fight with the public sector needs to be bottled and mass-produced by the Repiblicans.
Utopia is always a lie.
People dumb enough to vote for it get Greece. Nice job to the majority of Rhode Island! (and America?)
Those public union workers organized and donated and voted for this mess. They put their own interests and greed before the public good and they have earned every cent of the pain that is coming their way.
The ONLY ones to blame are the people. They tolerated one party rule for years with no oversight. This is the result. Even though the truth of this debacle is unimpeachable people still look for excuses. If you think that government can solve your problems then you deserve the consequences. I hope you enjoy it.
I would recommend to everyone here to down load a PDF copy of the American Legislative Exchange Council’s 2011 “Rich States, Poor States 4TH Edition. It can be found http://www.alec.org The report will give you the economic condition of your state with relevant data and analysis (facts). Rhode Island is just one of the states rated as economically bankrupt. Therefore if you are looking to leave your state for better opportunities for your family or yourself, I would highly recommend that you study the states that have been rated “competitive” unlike my state of California which has been rated No. 47 of 50 states, in addition to being labeled “economic cyanide.” It is not just public employee pensions, and budgeting gimmicks, it is self-imposed EPA restrictions, environmental extremism, special interests and the list goes on. I can only hope congress will not allow another stimulus to bail out California. The states needs a wake up call. I know California’s congressional team “left” Nancy Pelosi, Dianne Feinstein, and Barbara Boxer are pushing for more stimulus aka Obama’s Jobs(less) Bill. Tax payers from other states should not be required to bail out a profligate state like California nor any other state.
Kenny @ 14: “In many way — not all, but many — public sector jobs have been like welfare for the white middle class”…not really. The so-called “black middle class” is almost entirely govt workers. The numbers vary – blacks are 31% of State Dept employees, 42% at EEOC, 55% of Govt Printing Office – but the collapse of the blue social model will disproportionately affect minorities.
Elisa @ 21: You touched upon a very important point. It is absolutely critical that these states and municipalities not be bailed out.
Regarding the lunacy of CA (I lived there for 13 years so know it firsthand): Michael Lewis wrote a revealing piece in Vanity Fair about it. The part about municipalities having to submit to binding arbitration while negotiating with their unions, and the arbitrators are labor lawyers is horrifying.
The greatest crimes against humanity almost always begin in the name of humanity. People never learn.
Walter – Who’s doing the demonizing here? You say of Scott Walker, “…demonizing state and local government workers is not a good idea.” You’re under the ether of too much MSM. Scott Walker certainly has taken on the unions, but his approach HAS NOT BEEN to demonize the workers.
I am a forensic accountant for a firm contracted with the State of California. The facts are California has a $483 billion unfunded public pension liability that no one is speaking of lest the Governor of this state. Calpers bookkeepers are manipulating our numbers to suit this ostrich phenomenon. If nothing is done in California soon the State will hit that wall Mach 5 with their hair on fire with the last thing going through their minds being their collective rear ends. All we hear are the numbers are wrong with not one molecular whiff as to why. We know which is why we contributed to the Stanford California Unfunded Pension Liability Study, to try and get this word out.
And since Mr Mead knows so much – why didnt he write about this in 1972? or 80? or 90? or 2000? or did he also mistakenly believe that the American economy would sustain everything?
One comment about the 50 yr old fire fighter or police officer…most cops or ff’s I know plan to retire well before 50 with big, fat defined benefit pensions. Could that be part of the problem, perhaps…otherwise loved the article, good analysis.
Reply to steve smith
Steve: If the union members elect the politicians to negotiate on the other side of the table, how is the union in any real way different than the politician. Indeed, that is the whole point about public unions; the unions vote in the people who will be on the other side of the table…
WRM, Dem and blue state politicos want to do as little as possible regarding structural pension, work rule and benefit reforms. Their strategy is too delay and do just enough to survive and catch the next up cycle. Yes, they may propose very modest changes, but will not bite the hand that feeds them.
Part and parcel with pension reform is a drastic remaking of state and local governments departments and how they do and do not effectively deliver services.
Most organizations don’t embrace change, and government organizations are even more resistant. So, we have to change the organizational model, employment policy plus pensions and compensation.
Only a truly articulate and principled leader has the desire to confront the vested interests and that is more likely to be Walker, and Christy. Anything less will result in failure.
California, NY and Illinois are the best examples of Rhode Island on a much larger scale.
The Ostrich party = the Democratic party.
I was a missionary for the LDS Church back in 98-99 and I was stationed in 2 different areas in Rhode Island: Pawtucket and Woonsockett. Pawtucket was a very nice place very nice people, but, about 92% of the people were on welfare. Woonsockett was a different story. Most of the people there were very, very RUDE. and from the data we had to work with when I was there, 99%!! of the people living in Woonsockett (which I always called and continue to let people know is the either the butthole or armpit of America) were on welfare. 99%!!!
As my grandfather, a long-time RI businessman, told me many years ago, “The only people left in Rhode Island are the ones too lazy to leave.”
Otis, I should have been more specific when I wrote that in many ways, government work was like welfare for the middle class.
I was referring to local and state govt. jobs — the schools, police, municiple workers.
In the urban areas, yes, there are a lot of minorities in those positions, especially the schools where there are a lot of fluff positions. But outside the cities, those jobs belong to the whites.
Unions see the 20th century much as do rank and file liberals, as a time of relentless progressive social advancement. Okay, there was a good deal of that, but along with progress–a term that begs for a less rosy real world definition–comes unintended consequences gallore. Politicians love to play up the former, but duck the latter with a vengence. Thus, unintended consequences are allowed to grow large and strong in the dark. Were there a responsible media to pick up the slack, this would at least be a problem that’s out in the open. But, oh well!
Instead, the media plays milk maid to progressivists, hiding and dissembling the damage of their consequences while playing up the advantages of their gains.
And when called on it, progressives and their cohorts in the media and academe pull a very effective dirty trick: the fear-instilling insistence that were we to take a second look at the negative results of some of our “progress”–like unionization, entitlements, the list is endless–we will somehow revert back to a previous time when women, children, old people and cute little pussy cats are forced back into the work force for 16 hour days under the thumbs of suddenly resurrected robber barons.
And thus the dance continues unresolved until a crisis so big–9/11 wasn’t big enough, the 2008 economic collapse wasn’t big enough, what will be big enough?–that it overwhelms the senses and nullifies the paralysis that has taken hold.
Or not. Maybe in this movie, we don’t recover.
Did the upper class Romans know a century before Rome’s fall that a dark age was in descension? When how do you tell that a society has started the fall into terminal entropy? Do we have a constitutional guarantee that America will never end up on the edge of the abyss with what’s left of the cliff crumbling at our feet?
This is your life: stay tuned.
I’m in agreement with most of what Mead writes. I differ when he absolves the union workers of responsibility in the debacle. These people were not naive, they were complicit in what the union demanded and got. These people paid the dues, elected the pols the union endorsed and in general supported the union leadership. They were not naive, they were the constructors. They looked after themselves, not the people they were hired to serve. Now those that pay the taxes are on the hook to fund the pension plans that are better than any the taxpayer has.
Very seductive is the prospect of living however you want without consequence. It’s the mindset of a child.
“Gimme gimme gimme!” Now there is nothing left to give.
god help us all
“… and when all else failed, you could assume that your underperforming pension reserves were invested in magic growth beans that would automatically gain 8.5 percent in value forever.”
Or, you could assume that a friendly, magical-thinking “blue” administration would simply borrow tons of money from China and use it to bail you out!
I’ve been following the Rhode Island decline for the past several months, and have pretty much written the same thing here:
The problem has been that the assumption is that “government doesn’t go out of business”.
If your historical horizon is only a few decades, sure, you might believe that. But if one considers the “public employee problem” of Rome or Byzantium… oh yeah, government can go out of business.
As for why someone like me (or Mr. Mead) didn’t write about it in 1972. Well, for one, we have access to a lot more info now. Also, I wasn’t alive in 1972. I’ve been writing about public pension issues since 2008. Many others (such as Peter Drucker) wrote about it well before I did.
If you’re interested in public pension issues, check out Pension Tsunami:
Prof. Mead – I’m one of your biggest fans, but help me. I remember well Scott Walker being “demonized”, but when exactly did Scott Walker “demonize” state and local workers? I missed that. Is such a statement really intellectually honest, at least as it relates to Gov. Walker, or is it included as the ideological cover necessary to say the rest of what you have to say?
Republican Mayors of RI
Vincent “Buddy” Cianci – convicted felon
Edward DiPrete – convicted felon (also governor)
Blue Model demise you have carefully cataloged for more than year WRM. The economic post Blue Model already exists – we are struggling with its creative social/economic dynamic in many blue model states and cities. “Toxic blue model legacy costs are the problem: rigidly bureaucratic government structures, unrealistic costs, years of underfunded pension plans, regulations that choke growth and initiative, outdated progressive ideas about how change works” in 21st century underscores dynamic that has been exacerbated since 2008 fiscal crisis.
“I think leadership today has to do more: political leaders need to talk to the public about what has changed and why, and talk also about where we can go from here.” WRM, public office implies “public trust” and your proposal assumes a base for general intelligent political action in behalf of our cities, states, and citizens (when experience has shown the average voter/citizen attaches vast importance in political leaders to religion, race, ethnic grouping, sex, conventional outlook and behavior, etc.) How do you activate a populace to excercise knowledge and good judgment to select, elect, and retain political leaders who will act in their interest (rather than a personality who may look, sound, talk, and be perceived as a fellow communicant – while average citizen yet comes up short a la blue model)?
Defending our country domestically requires at minimum WRM an informed and engaged citizenry.
While Rhode Island is suffering through a hard patch, I’d happily contrast its standard of living, property values, crime rates, and overall public health to any state in the Southeast (who have lagged for decades and remain far behind both socially and economically).
I’d be particularly happy to make this comparison using data over the course of the last two decades. I suspect that you know already that such numbers would decimate your entire argument.
Pull your own head out of … the ground, Mr. Ostrich.
Mr. Mead, I’m as liberal as they come in the United States- far more so than most any Democratic politicians. However, when it comes to the issues of pensions and public unions and state and national debt, I am in complete agreement with you. And I hope you’ll agree with me that the costs of our current crisis should be born by ALL sectors of society, not just those who are not fortunate enough to be the denizens of Wall Street and other government favored corporate entities. I’ll agree with you that we shouldn’t ask the rich to bear ALL the costs, but I would appreciate it if you would agree with me, for example, that raising taxes is sometimes necessary. And unlike Obama, I have no problem saying that we’re all irresponsible, and we should ALL pay increased taxes at all levels of government, if need be to solve these debt issues. And I’ll further more agree that these tax increases should be conservative in nature, and that we ought to focus even more on how we’ll reduce our spending. Our society needs to take a long look at what exactly we want to fund, and how we are going to do so sustainably. My biggest problem, Mr. Mead, is that we now have an entire political party that favors the Scott Walker approach. You don’t seem to give the Democratic Party much credit in that at least there is a conversation going on amongst their side. At any rate, good article, and I hope that both the left and the right can start to come together and address these issues.
If Scott Walker is too hot, and Andrew Cuomo is too cool, the Christie approach is probably best. He laid out the truth and asked the unions and other entrenched interest groups to take the next step and participate in renegotiating how state and local government work. He didn’t set out to uproot these groups, nor does he shy away from stating the truth.
It’s small wonder so many wanted Christie to run.
rI has a looney governor a corrupt legislature and stinking liberals abound!end of story
Unfortunately, Rhode Island is only one small piece of the problem. The fiscal rot is shot through almost every level of government from the Feds through local transit authorities and school boards, after 30 years of vote-buying. Both parties are guilty, though the Democrats usually outbid the GOP in states like RI. I will link to this from my Old Jarhead blog. We are now down to very painful choices or a future of entitlement riots, bloodshed and fiscal collapse, followed by political and social collapse. And all most groups are crying is, “Borrow if you must, but don’t cut me.”
Robert A. Hall
Author: The Coming Collapse of the American Republic
(All royalties go to a charity to help wounded veterans)
For a free PDF of the book, write tartanmarine(at)gmail.com
Did you remember that Rhode Island has been for decades one of the most corrupt states in the Union? This city-state until recently was run by the Mafia, and our past mayor, Buddy Cianci, spent several years in federal prison for corruption(as have a couple of governors). It isn’t the Democrats, friends; it’s the Mafia. BTW, we have also had Republican governors for the past two decades and until 2008 had a Republican senator.
As a former RIander I have always hated that state and will continue to. The corruption is so blatantly obvious and yet the people continue to vote the same crap in. I mean come on, they vote a convicted felon (who everyone and their brothers knew he was on the take and followed the “pay to play” motto) in as mayor of providence. One year the choice of Johnston mayor was between a pig farmer with a rap sheet longer than my arm or a loser who was caught smoking pot in a dump. Seriously Johnston….is that the best you’ve got? Sadly, yes it is. The current gov is a Nam dodging horse blacksmith who, had it not been for his fathers name, would be a nobody, he has about 5 brain cells total. (BTW- his father is rolling over in his grave knowing the wrong child was killed) – harsh yes, but that is what RI deserves! Don’t even get me started on all the judges. My guess is there is not a one who hasn’t accepted bribes and lord knows there have been plenty who were found guilty of it and yet still kept their full pensions. I could go on but I would much rather look around to the beautiful place where I live today and know I will never again deal with the cold, stupid people of RI!
substitute Pittsburgh, PA for Rhode Island and you could submit the same article to another publication.
The problem is much bigger than many here have accepted and has to do with the structure of American governments and the structure of the American economy. You have a status quo-oriented model of government and a progessive economic model. The government model is status-quo oriented in that it is designed to be weak and decentralised – it distributes limited powers to multiple institutions that are designed to hold contradictory interests. Ask George Will – Americans get what they want but only after decades of fighting for it.
You then have capitalism – a progressive economic model that depends upon consistent growth produced by ever-increasing productivity, efficiency and innovation. Capitalism is not conservative – it is transformative.
Problem number one:
Your economic model/economy is transforming your society and your political and social structures cannot keep up. Social structures – and especially the family – are being undermined by changes that have their root not in some evil political party or ideology, but in the economy. Your economic model demands growing rates of consumerism and productivity – the two being tied together. These have encouraged the fragmentation of the family unit throughout the past two hundred years (and not just since the 1960s). People focus on their own gratification more – which makes them better consumers – and they devote less time to family because they are expected to be more involved in the economy – as producers.
Your political system cannot keep up – it is not designed to be proactive, to make “big” decisions, to think “long-term”. If you want big, bold, long-term solutions, then think about the reform of your basic political model – and don’t merely blame one party or the other.
Problem number two:
Neither you nor I know where your transformative economic system is taking you. Firstly, Capitalism promotes transformation but it does so in a decentralised way as the billions of minor choices made by millions of people add up to broad patterns of change and continuity. This makes it hard to predict where economic change is taking us and even more difficult to direct that process of transformation. Secondly, Capitalism is not a benign deity that has your interests at heart – it is an economic model with strengths and weaknesses. Its tranformative potential is powerful but that transformation need not be consistent with of all of your values. Thus, when WRM talks of the need for a new model of growth, one has to be open to the possibility that such a model of growth might undermine aspects of society that you value. And then comes the really hard part – thinking about how to manage competing pressures and values.
You want a return to growth but you know it has to be a new model of growth? What are you willing to change/sacrifice? What educational model will need to support this new economic growth? What social structures will be needed to support this new economic growth? What model of the family will be needed to support this new model of economic growth? What political structures will be needed to support this new model of economic growth? (And that might be a bigger, more authoritarian political structure!)
There’s a lot of talk above of the “wishful thinging” associated with Liberalism – and I don’t disagree with that. However, wishing that the transformative capitalist model will solve your problems, or that existing political structutres just need better inhapitants ain’t going to solve these problems.
I believe,Mr Mead, that you do an injustice to the efficacy of the blue social model. It can work. In your allusion to the Wizard of Oz formula, you left out an essential step. Had they clicked their heels 3 times while chanting “I believe in government”, there would be no problem.
Dr. Mead, you are a ridiculous sophist–look it up if you want to know what it meant in Greece. The self serving optimism of the foolish Rhode Island trade unions and their paid for political flacks is no different than the self serving optimism of the Wall Street peddlers of phony real estate backed securities and the fools who were convinced that there is always “more” in whatever trough they are feeding from. Rhode Island didn’t invent the game, it played it to the bitter end. Defend your country, insult a sophist.
I lived in RI most of my life and moved out of RI 6 years ago. I’m in my 60’s and we who lived and live in RI knew that you can not keep paying for a job at a high salary and let people retire in there 40’s. The state would hire someone for that position and you could be paying 3 people for the same job for a number of years. What private sector job does that? In the private sector your pension money is put into a cash balance plan and invested in a guarantee rate treasury bill and that money belongs to the employee and he/she chooses how to retire with this money either in cash, annuity or IRA withdrawal. No-one receives 80% of there income for life with medical and price of living increase. Even the big auto industries could not keep up to there pension promises and now the post office are in trouble also. It is a sweet deal for the state union employees if you can get the taxpayer to continue paying a pension that is way better than they will ever receive in their life time. Start over and add up years of service with a percent structure times annual salary from day one and increase % with time of service and pay everyone off and let them fend for themselves. Why would a teacher as an example retire with 60k per year for 30 years of service for the rest of their life with living increase. That would cost an employer in the private sector close to 1.75 million dollars to pay that pension out for a live time. Who has that kind of money except the government taking taxpayers money and we are tired of paying. Amen
I love California but will most likely leave in two years.
The scenery and the weather are second to none but the leftist cabal running this state will kill it deader than fried chicken sooner rather than later.
Gov Brown just signed the job-killing state equivalent of cap and trade. And most state, county, or municipal workers can retire at 90% pay for life at the age of 50 under a 3% at 50 rule.
Yup, start with the county at age 20, work 30 years until you’re 50, and then get 3% of you last year’s pay times the number of years you’ve worked (3%/yr x 30 years = 90%). Oh, and you can jack up your last salary by working tons of OT since the pension is based on your last earnings, not your last base pay.
Pretty good deal, huh? And it was all earned through ‘negotiations’ between public sector workers and Democrat politicians.
The corrupt deal between the Ostrich/Democrat party and the public employee unions is coming to an end, more because the numbers don’t add up then because of Gov Walker or Kasich. And the article is correct that the average teacher is not to blame, except to the point that the numbers were there for them to see, and the warnings were there for them to hear, but they didn’t care as long as they could help elect democrats and keep the raises and benefits coming even when it was crystal clear they couldn’t be maintained. As for Gov Walker and Kasich their approach may have been too hot, but what choice did they have. The democrats, nor the beneficiaries of their corrupt deal, were ever going to sit down and negotiate the kinds of changes that were needed. They would never work or compromise with Republicans to make the needed changes as long as they think they can defeat them at the polls to get their beloved Ostriches back in power. What’s truly frightening is that Obama is doing on a national level what RI and CA have done at the state level, except he has the ability to borrow and print the nation into collapse. And he’s clearly decided to do that rather than even attempt to bring the corrupt wasted spending and debt under control. In 2012 the nation will have to decide whether to go with Obama the Ostrich and continue toward total collapse. Or go with the Republicans and pull back from the edge of the Grand Canyon?
The author should take an economics course. The obstacles to growth are the policies that created the debts and pension obligations. He also creates the impression that level of benefits of these defined benefit plans were believed to be affordable by teachers and firefighters. That is bull. Why do these workers fight so hard to resist change? They know they have a great, unrealistic deal and don’t want to give them up. Contracts are sacred to the legal system, but the legal system also provides relief. Political entities are allowed to go bankrupt. The solution is not to deny pensions, but tailor them so they look a lot more like Social Security.
This problem is not a new one, here’s a little history lesson;
>In 1887 Alexander Tyler, a Scottish history professor at the University of Edinborough, had this to say about the fall of the Athenian Republic some 2,000 years prior:
“A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse over loose fiscal policy; always followed by a dictatorship.”
“The average age of the world’s greatest civilizations from the beginning of history, has been about 200 years. During those 200 years, these nations always progressed through the following sequence:
1) From bondage to spiritual faith;
2) From spiritual faith to great courage;
3) From courage to liberty;
4) From liberty to abundance;
5) From abundance to complacency;
6) From complacency to apathy;
7) From apathy to dependence;
8) From dependence back into bondage.”>
I know we are a Constitutional Republic, which obtained its great wealth through free market capitalism, but unfortunately we haven’t been practicing either of these for some time; so I think Tyler’s warnings have merit here.
Right now we have about 50% of the population dependent on government; there will be a tipping point where we can’t reverse that trend, then— we will fall back into bondage.
Make sure you vote for those individuals in favor of reducing government’s size and scope. That should be the focal point.
We are the only ones that can fix this, and it can be done, as long as we all pitch in.
I am a retired NYC teacher and a conservative. Just a few points from my perspective:
1. I live in a closed-shop state. That means that I had to pay union dues even if I didn’t consider myself a union member (We know why the democrat pols in New York state refuse to make New York a right to work state).
2. I was able to save, tax free, in a tax deferred annuity, available only to civil service employees. And when I retired in 2008 I had accumulated approximately $500,000. After retirement I was able to maintain my annuity in their cash fund and it pays me 7% a year (thanks democrats that run NY city!)
3. In the five years before I retired the teachers union negotiated for me contracts that raised my salary 40%, and when I retired my salary was $100,000 a year and my pension (based on my final salary) is $55,000 a year. I also have the most complete and best medical/hospital/drug coverage that anyone in this world could possibly have, for about $100 dollars a month (thanks democrats that run NY City!).
4. Also, New York state does not tax my pension (thanks democrats that run NY state!)
Well, there you have it.
Scott Walker’s reforms were VERY modest as to the increased contributions state workers have to make to their own pension and health plans. He demonized no one, in fact he saved thousands of public sector jobs. Ever the ingrates though, public sector workers made a spectacle of themselves, did millions of dollars of damage to the capital, freely lied about the reforms, and are still doing everything they possibly can to reverse the reforms which have pulled Wisconsin back from the brink. The public sector unions lie, cheat, steal, vandalize, bully, threaten (death threats even) and commit rampant vote fraud to get their way. They are the worst sort of pigs, angry to be asked to pitch into the upkeep of their trough. I wish my homestate of Illinois had an electorate smarter than a box of rocks, but we are still on the blue state road to disaster. Public sector unions should be outlawed; they present a fundamental conflict of interest with the people who employ and pay them. Parasites all.
You make a deal with the Devil, don’t act all shocked when you end up in Hell.
“…there is one thing that state and municipal workers and taxpayers can and should demand: honest and transparent accounting standards…”
Like politicians will ever allow that to happen.
Sure, they might pretend to let it happen, but the only real results will be that the lies will get more subtle and the truth will be buried deeper layers of misdirection.
Where’s Jack Kemp when we need him?
If the teachers and firemen don’t get their pensions then it is their fault. They elected their union representatives, listened to them, egged them on to ask for more and more, and apparently thought their demands were reasonable. The fact that they were stupid [pack animals –ed] is hardly my fault or the public’s. They corrupted the economic model and the political system because they were greedy, feckless, irresponsible, and lazy. The heck with them. The cupboard is bare. The party is over. Mephistopheles is here to collect.
Nothing will happen until the buildings fall out of the sky.
All this partisan talk makes my head hurt. The shortfall of public finances has to do. as far as I can tell, with the Meltdown, and the rather sudden inability of states to meet obligations already made. To blame public workers for mistakes made by Wall Street and deregulated investment banks given those powers by NeoCon economists, is dishonest in my view, and is why people who get smug because they played the finance game, and may have defrauded others in doing so, are going to be surprised one day soon at how their opinions doesn’t matter for much.
I would rather round up the osterichs (modern Democrats), tar and feather them all, and drag them down a gravel road behind a pickup truck on a strong chain.
In 1972 it might have been complacency, but here is the question for 2011: If the political leadership of the Democratic Party, including President Obama realizes full well the unsustainability of our fiscal recklessness (as I believe he does), then why do they and he continue on the same path?
If you ask yourself this question, and answer it truthfully, you come to the conclusion that something much more wicked to use Dr. Mead’s word is afoot. These leaders do not have their heads in the sand, like ostriches, but (at best) are using the economic downturn that their policies perpetuate to stoke denial and rage, pitting Americans against each other for their own short term political gain. That is bad enough, but if they are not so petty and mypopic and can see perfectly well what the long term consequences of these policies are, and still pursue this course, what does that say about their long term goals?
I would love to see an industrious economics grad student do a study on the economic effect of the following: (1) All public employees are shifted from their myriad defined benefit plans to social security, with an appropriate contribution to a 401(k) plan if they paid in any more than they would have had they been subject to social security withholding. (2) Public employees get medicare upon retirement once they reach the age of 65; if someone chooses to “retire” prior to the age of 65 it is **their choice** and they are on their own …. just like the rest of us.
To all the former liberals, Blue State refugees and Red State wannabes who posted here:
I hope you’re fans of Casablanca. As Victor Lazlo put it, “Welcome to the fight. This time I *know* our side will win.”
You say teachers, police officers and firefighters are not being paid too much. Please show me one position for hire amongst that group that does not have a waiting list for that position…exactly, alligator arms…no response.
The jobs pay too much, add salary and health today with pension and health tomorrow and your first year firefighter is making over $100k. How about a bid system from the applicants where they say how much they would accept the job for rather than hold out a big golden carrot and have a waiting list of 1,000 applicants.
And, I do not know of any single firefighter, teacher or cop that was conscripted for their service so stop with the pedastal for them.
The brutal irony missed by liberals and the current Wall Street demonstrators is the your line: “Unrealistic assumptions about rates of return” on state investments runs counter to their standard vilification of business.
They voted for bigger pensions, expected permanent employment, increased all services and programs while “banking” on the coffers to grow through compound interest.
At the same time they passed environmental and employment regulations, hiked minimum wages, forced insurers to assume every choice of insureds, raised taxes and strangled the free market.
To assume a strong rate of return is the wishful thinking of a child. A real tooth fairy exists? So now that the truth must be faced, the vocal OWS members scurry to open socialism—a system that has been proven in their presence to be a complete failure.
In addition to lying to union workers, the union workers will not listen when you try to explain the economics doesn’t work. As we see with Scott Walker and the union protestors screaming in the streets, deficating in the rotunda of the state house.
Now, in desperation, as the author notes, union people are bereft, because they were lied to. Yes they went along and supported those corrupt union leaders and politicians who were lying to them. . . .who wouldn’t want to be told that you can have benefits for life on someone else’s dime, and a pension better than any in the private sector?
Who wouldn’t want to believe this? They met their neighbors, who are retired, and watch them have a good life on the taxpayers. . . .who wouldn’t want to believe it?
And now that the lie has been exposed, the union members are angry, and desperate for anyone to make good on the lie they were told.
I’m sorry, but, some of the taxpayers of today probably weren’t even alive when the corrupt lie was put in place for you. . and now you want them to make good on a lie someone else told you?
Not gonna happen. If the union workers are angry, turn to your union representatives. The union leader who worked a 40K a year job and somehow has a 350K pension. . . .
The union workers who believed the fairy tales they were told, never wanting to ask “how can this be?” If it’s too good to be true, it usually is.
But yet, there they are, acting shocked, horrified and angry. . . . . desperate for someone, anyone, to make good on the lie they were told.
I’m sorry, but that isn’t ever going to happen.
Government employees are far over paid for the skill set and value they bring to the table. Automatic pay raises? Benefits paid for? Pensions that are so rich, no one in the private sector has a matching benefits package?
For what? They could be replaced tomorrow. A 9.00/hour job doesn’t magically turn into a 70K a year job just because you sat at the same job for 30 years. The insanity of rewarding nothing but breathing has to stop.
Teachers believing somehow they’re worth 125K a year, and benefits the rest of their lives on the backs of the taxpayers? Why? What does a teacher do? They only work 9 months a year. They aren’t curing cancer, or recontructing limbs, or helping someone walk again. . . .
They’re just teachers. They can be replaced in a heart beat. . . .
The problem is, we need to discuss with certain segments of our society that they’re just not worth what they demand.
Americans work hard for their money. They deserve to keep it, get the best bang for their buck, not give it away to some union person who started at a 8.00/job and somehow now thinks it’s worth life time benefits and 80K/year pension. Same for private sector unions. Just because you sit at an entry level job doesn’t magically turn it into a big pensionable job.
If you didn’t invest in yourself or your skills, why are the taxpayers liable to you? Why are we forced into investing in you the rest of your life?
Entire segments of the population need a hard reality check. . . .you’re just not worth what you’re demanding. I’m sorry, but you’re not.
The private sector is struggling. There is no reason the public unions should live like kings on the backs of the very people that pay the bills. . . .it’s obscene.
RayJ, maybe the Republican predecessor failed to fix anything, but given the voters in CA, if he had tried, he would have failed. I agree, this is 100% on the voters out there. Suicide lemming march…
FOR THE EDIFICATION OF THOSE WHO WOULD ABANDON CONTRACT LAW IN RHODE ISLAND, THE RECENT RULING:
“The case law does not preclude but rather supports this Court’s holding that Plaintiffs, as ten-year veterans of the State, possess a contractual relationship with the State pertaining to retirement allowances and COLA benefits which are not subject to collective bargaining.”
Arnold, a RINO, tried to make changes in 2005 with several smart financial proposals but the voters failed to pass any of the initiatives. Now we have Moonbeam all over again.
I fail to see what’s so radical about refusing to force workers to join and pay dues to 4 of the 11 largest spenders in federal politics and outside of casino interests the largest spenders in local politics. What’s wrong with simply asking people whether they wish to join or support such an organization? End the funding, end the corruption, end the stupidity.
We are fighting over scraps.
The reason it is SCRAPS is because of the FIRE Neoeconomic model.
Debt money is just that…DEBT. With compounding interest, it defies nature (which we are a part of).
Perhaps we need a new financial paradigm, that is credit, 0% interest, or even negative currency.
(and perhaps bonds too if necessary)
Want to fix this sorry state of affairs?
#1 – Get the money out of politics!
Why does it cost so much? Advertising? Reelection Accounts for favors? Yes!
The airwaves are a PUBLIC GOOD.
That is, owned by all of us.
Require FCC Licensed broadcasters to fulfill the PUBLIC GOOD, FREE POLITICAL DISCOURSE, EQUAL AIR TIME and the 1.00 checkoff on our income tax form should cover the political sigs and donuts and coffee, (So it’s not too boring, and we can get together and discuss this like adults.
I have my own point of view, but I very much welcome YOURS.
That’s freedom folks.
Do you want a race to the bottom in BOTH the private and public sector?
I don’t. I want our people to be happy.
It’s a false choice to say we HAVE TO go down.
Excellent discussion an accurate summary of the issues.
Only one comment to add (from a non-Civil Servant Taxpayer stung by growing taxes)…..
I’ve always believed in fairness, and fairness suggests that “total compensation” (cash pay + pensions + benefits such as retiree healthcare promises) should be very close for reasonably comparable Public and Private sector jobs. For many years it was, with Public sector workers getting less cash pay but better pensions and benefits…. fair enough.
But starting about 20 years ago and accelerating ever since, cash pay in the Public Sector has grown to be just about equal to Private Sector cash pay, while Public Sector pensions and benefits (which started out better 20 years ago) has grown even better.
Today, the Taxpayer paid-for share of Public Sector pensions is ROUTINELY 2, 4, even 6 times (for safety workers) greater in value at retirement than the pensions afforded comparable Private sector workers by their employers.
The RESULT is MUCH greater Public Sector “total compensation”. This is unnecessary (to attract and retain a qualified workforce), unsustainable, and grossly unfair to taxpayers whose pension contributions (and the investment earnings thereon) TYPICALLY pay for 80-90% of the total cost of Public Sector pensions.
The excessive pensions (the root cause of the financial mess cities and States now find themselves in) can be traced to the quid-pro-quo between the Public Sector Unions and our self-serving, vote-selling, contribution-soliciting elected representatives, more than willing to trade favorable votes on pay, pensions, and benefits for campaign contributions and election support. Nobody at the “bargaining table” represented Taxpayer interests.
The upshot of this is fraudulently approved EXCESSIVE pensions that would never have been approved in the absence of the collusion between the Public Sector Unions and our elected representatives. As such, part of the “solution” must remove that “excess” by (as best as possible) determining what pensions WOULD HAVE BEEN approved (in the absence of that collusion) and in the context of cash pay now equal to that of the Private Sector.
That “excess” is certainly substantial … likely more than 50% of the “promised pensions”. Taxpayers must not be forced to fund such “excess” so fraudulently obtained. Substantial haircuts to Public Sector pensions are both necessary and just.
Keep spewing the same old smack, refuse to work hard on the complicated issues, and prepare for at least four more years. The current crop of Republican candidates shows how barren the party’s talent pool has become.
Why sound so angry at the messenger and the message. RI is in cardiac arrest! In order to save this state drastic cuts need to be taken. How can someone work for 20 years or less and expect to get a pension and medical care for 40 years; the numbers just do not add up. These people have robbed the system! Most people in private pensions have lost much of their savings. Why should state workers be any different? Do any of these people consider their children and grand-children or is it all about only themselves?
As a Greek-American and a Rhode Islander that is rather interested in these things, I’ve been making this connection for some time – near on 14 years since my visit to the homeland when I was only 15.
While much was discussed, I do not wish to discuss the finer points, the other comments did so, but I’d like to point out a few things in the comments:
1) the analogy to Rhode Island is VERY true with respect to the workforce. The stereotype of all Greeks being lazy simply is a farce. In 2008, surveys indicated that privately-employed in Greece worked more hours that ANY OTHER COUNTRY IN EUROPE. They were mostly self-employed, working an average close to 50 hours per week, if memory serves me correctly. I know from what my own government-employed family members tell me that they work just a bit more than half that many hours, and are receiving not only more pay, but handsome benefits by comparison. Taxes are disproportionately higher (though go fairly often unpaid) by the private employees because they cannot afford them, but admittedly, benefits in retirement and healthcare are fairly good for all Greeks as a whole. This IS Rhode Island.
2) There was a reference to “liberalism” being a “lie.” I sincerely hope this is not a reference to Classical Liberalism, but rather those people who call themselves liberals in modern political culture. Sadly, no one seems to know what “liberalism” really is. Look it up…
3) The “head-in-the-sand” thing is not necessarily true. It’s tempting, especially because those of us that can think logically and have some minor working knowledge of government theory assume that the others are both (a) listening to and (b) understanding the terms of the terms of the discussion. Unfortunately, the general public tends to be apathetic, or worse: stuck in pre-determined, pre-formed, simplistic positions that they grew into and did not develop for themselves. This is why we do not live in a direct democracy – the Framers knew the ineptitude of the public and danger of mob rule… but that’s a different conversation.
As to this point, the head in the sand analogy, as sad as it is, gives most people too much credit. Rhode Islanders typically defend to the hilt the system that they have because they’ve grown and talked themselves into a position from which they can ACTUALLY BELIEVE IT’S NORMAL AND APPROPRIATE… Much like Greeks REALLY BELIEVE their system is normal… They really believe that the social system is normal, but then speak cynical ill of their government and avoid paying taxes at all costs with the delusion that they money will never run out or be incorrectly allocated…
Quick anecdote: my cousin is 52 and lives in a city in central Greece. He was educated in an American college, but stayed in Greece after returning for his compulsory military service in 1980 or so. He figured that he’d do well with his college degree from the States, and largely, he did. He’s been a teacher and done other independent work, but is government employee, and barely works by our standards. He’s also an intelligent guy but as I sat at his table 2 months before Lehman Brothers went down, he told me over his homemade wine that “Hugo Chavez is a world leader we need to have more of.”
I nearly fell off my chair. It blew me away precisely because it’s when I realized that his head wasn’t in the sand – HE REALLY BELIEVED THIS IS NORMAL AND CORRECT – and I strongly suspect this is what most Rhode Islanders seem to believe about our own position.
Anyway, ponder that, and enjoy your weekend.
“So what is to be done? In WWII, the Western Allies engaged in a sustained campaign of aerial bombing, destroying the factories, infrastructure, and yes…the populations of Nazi Germany. While there is no need to strike at the populations supporting the Blue model (nor would such an initiative be desirable under any circumstances…as Lincoln reminded us, these are our fellow countrymen…misled, perhaps, but still…), we must destroy, utterly, the infrastructure that supports the Blue model. This means the public sector unions first and foremost, and the rest of the welfare/nanny state, as a matter of high priority. Will some, even many, union members suffer as a result of this? Absolutely so, let us be clear about this, and it is regrettable, but ultimately it is also the only way. Let us give them the opportunity to turn away from the Blue model, offer help to them as they do so, but if they choose not to….well, they have chosen their own fate and we cannot stop them.”
A MODERN DAY IMPERIALIST IN OUR MIDST! THANKS FINBONNICIO! REVERAND JOSIAH STRONG MUST BE YOUR HERO!