Will We Have US State Bankruptcies?
Attention Teachers, Police, and Firefighters: You are royally fucked:
“Policy makers are working behind the scenes to come up with a way to let states declare bankruptcy and get out from under crushing debts, including the pensions they have promised to retired public workers.
Unlike cities, the states are barred from seeking protection in federal bankruptcy court. Any effort to change that status would have to clear high constitutional hurdles because the states are considered sovereign.
But proponents say some states are so burdened that the only feasible way out may be bankruptcy, giving Illinois, for example, the opportunity to do what General Motors did with the federal government’s aid.
Beyond their short-term budget gaps, some states have deep structural problems, like insolvent pension funds, that are diverting money from essential public services like education and health care. Some members of Congress fear that it is just a matter of time before a state seeks a bailout, say bankruptcy lawyers who have been consulted by Congressional aides.
This raises so many more questions than it answers:
Why should anyone lend money to States again?
Should state employees be induced to take less salary in exchange for greater benefits , especially pension and retirement plans?
How will Unions negotiate with States and CIties going forward? Is it now all about cash upfront, with future promises/incentives looked at as meaningless ?
I expect the repercussions of this are far exceeded by the States’ fiscal condition.
>
Source:
Path Is Sought for States to Escape Debt Burdens
MARY WILLIAMS WALSH
NYT, January 20, 2011 http://www.nytimes.com/2011/01/21/business/economy/21bankruptcy.html
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January 21st, 2011 at 6:47 am
Until such a time it is the tax payers who are fucked. The squeeze is definitely on however. My school district is imposing a ‘fee’ for anyone who wants to play sports in order to cover the costs.
January 21st, 2011 at 7:10 am
The slow motion train wreck continues apace. Once most of the former middle class and below are “let go” to save the big banks, it’ll pick up speed and the collapse will be much more noticeable. Where they expect to generate the necessary tax dollars to keep the lights on and the water running when nobody is working is beyond me.
January 21st, 2011 at 7:26 am
This MUST happen. People pay ungodly amounts in taxes so cops can retire after 25 years with near six-figure pensions. A $50K pension over 25 years of retirement is a $1.3 million winning lottery ticket for EVERY cop, firefighter, train conductor, teacher etc. And we all know thousands make much more than that.
It is absurd and must end.
January 21st, 2011 at 7:43 am
Federal, State, and local governments are bankrupt (regardless of the semantics that might be used to claim otherwise), but only the Federal government can print money (so whom, exactly, is sovereign?). It seems that Ireland has started printing its own euros, despite the constraints of its EU membership. Maybe we’ll see the same from the states (the California IOU was a good start). The demise of our Republic is sure interesting.
January 21st, 2011 at 7:46 am
Could this be a possible selling point to kill all unions once and for all?
I’m amazed at the eagerness some express in their desire to bring “everyone” (usually meaning union workers) down to their “level.” Instead of attacking those with jobs who have pensions and higher wages, thereby dragging them down, why not look at ways to bring the American worker back up? Is it because we still believe that crony capitalism practiced by several corporate welfare fed companies is still better than anything vaguely resembling our misconceptions of socialism?
January 21st, 2011 at 7:49 am
Moss:
While exercise and physical fitness are important — sport, being different than exercise and physical fitness — should have no place in academia. I could be easily argued that sports have been elevated above all else in our educational system (at least by high school).
January 21st, 2011 at 7:56 am
Now everyone wakes up?
H-E-L-L-O…….
There is no free lunch…..vote down (NJ) or cut (NYC) education budget and watch class sizes increases exponentially, services cut and see students languish
Christie (NJ) and lame duck Bloomie (NYC) will join together to garner every sound bite possible to finally break the weakened unions’ back.
This will undoubtedly pave the road for them to gain higher office, consulting (ala NYC school Chancellor Klein) and cut other powerful deals once their run is over.
They will do whatever possible to use this “window of opportunity” to demonize ALL teachers and will get rid of tenure too.
Bill and Melinda Gates, Mark Zuckerberg are leading the American school system in the race to the bottom! Look out below……
January 21st, 2011 at 8:04 am
“Should state employees be induced to take less salary in exchange for greater benefits , especially pension and retirement plans?”
Hasn’t that been the game for the past few decades, especially the last, in negotiations? Union leaders go back to their people with somewhat meager raises , if any (although, relative to private industry, over time, they’ve been pretty good, if you throw in job security), but, say, hey, we got you retirement at 60 this time!, Then, a few years later, “sorry about the 2%, but, you’re outta here at 55! Just be sure to clock a lotta hours when you’re 54!”
Well, now the check just came to the table, and the game is on as to who is going to be stuck with it. Not me, I’m moving to a town in a state somewhere that didn’t kick this can around when I retire.
January 21st, 2011 at 8:09 am
The largest share of retirement funds I recommended for my mother and mother in law when the dads passed away was to place that savings into municipals. Their risk tolerance was negligible.
Should the bankruptcy of a state take place those bond holders will be wiped out. Seems the cost of reducing overly generous pensions may wipe out other retirement lifestyles.
January 21st, 2011 at 8:11 am
The question is: will Republicans bankrupt their states.
The answer is, if it’s bad policy, then yes they will.
January 21st, 2011 at 8:21 am
@JimRino
You need to look no further than Texas:
http://www.nytimes.com/roomfordebate/2011/01/19/whats-the-matter-with-texas
January 21st, 2011 at 8:28 am
This is news? My wife is a public middle school teacher in California. Her class sizes swelled to over 40 students last year. Sports funding is the last to go, as things like music and art and other things were cut long ago (these programs have been funded by parent groups for years). Her teacher health care benefits have been slashed and her district is furloughed one day per month over the school year.
And after twenty years of teaching, she earns less than 70K per year. She plans to teach into her 70s. She certainly hasn’t gotten this “lottery ticket” of which ignoramuses like Quimby speak.
Indeed, MayorQuimby, what sacrifices are YOU making? Are you in California? Own a home? Willing to give up your Prop 13 tax break lotto ticket? That’s be a good place to start.
January 21st, 2011 at 8:38 am
@number2son, There’s an army of unemployed and employed individuals with equal or greater education than your wife who would love to make 60-70k. Be happy that she has a stable job. With her benefits, including health care costs she costs more than 100k. Remove pensions that are underfunded and introduce 401k plans.
January 21st, 2011 at 8:40 am
Interesting that the anger is all directed at the unions and not at the financial engineering and fairytale expected returns that led to the huge funding deficits. Even Newt is now advocating state bankruptcies. Fine with me as long as they can cram down the bankers and the rich too.
January 21st, 2011 at 8:47 am
BennyProfance: With a huge deficit staring them in the face, Republican Texas lawmakers are getting serious. First item on the agenda? You guessed it: a voter ID bill.
http://www.chron.com/disp/story.mpl/politics/7390453.html
Texas has been relatively insulated only because of the commodity bubbles pumped by the Chinese and the Fed since 2007. Just hope that the commodity crash comes while the current crop are still in power to expose the fraud on the electorate.
January 21st, 2011 at 8:48 am
@number2son
Is that 70k for a full year? I left simmer vacation and Xmas week behind when I left school.
January 21st, 2011 at 8:50 am
I have to agree with Mike in Nola. Barry’s earlier post, with the chart from the Atlantic, tells the real story. With one state facing a budget shortfall in 2007, and 48 states with budget shortfalls in 2010, how can the blame be placed on unions? Blaming unions is a red herring. Lloyd Blankfeid and Jamie Dimon get invited to the state dinner, when they should be indicted for helping to create the fraud the has been perpetrated against the people of the United States. Wall Street gets bailed out, goes unpunished, keeps its Bush tax cuts, and the unions are at fault. It makes no sense.
January 21st, 2011 at 8:51 am
@number2son, it is a lottery ticket win. If your wife works to age 63, she will get 70% of her pre-retirement income for the rest of her life (plus yearly adjustments). For having had to put in only a few percent of her salary each year while working, she will get a total amount likely exceeding 1 million dollars over the course of her retirement. In addition to this, unless she chose to work during the summers, she also got very nice summer vacations – making that 70k all the more attractive. As for your argument that she works so hard, I say so what. Far more people work just as hard as her in other jobs where they get less pay, no pension, maybe a 401k, no overtime, etc. Quit your whining.
January 21st, 2011 at 8:51 am
@Mike in Nola
Yup, when the going gets tough, distract them by beating on the little brown people.
That’s what happens when all the kids who were taught Jesus rode around on a dinosaur grow up and get elected.
January 21st, 2011 at 8:51 am
You can depend on the hostage theme continuing like the Sanitation supes’ snowstorm standdown. Meet the new boss; same as the old boss. The easy way out has hit the wall and the greatest transparency will produce the best outcome.
January 21st, 2011 at 8:52 am
“Should state employees be induced to take less salary in exchange for greater benefits , especially pension and retirement plans?”
No. Pensions must be cut. Promises must be broken. The promises were unreasonable to begin – so let’s make them reasonable now. Politicians made promises to appease the unions. I believe must fair-minded people would understand that everyone has to sacrifice. Cash now for promises later is how we got here.
No pensions for new workers. Under 5 years on the job, must cash in pension. Under 15 years on the job, make offer to buy out pensions. SS and 401k should be mandatory. No cost of living increases for pensioners beyond 1% per year – and limit when that can happen.
This is an impossible problem with no popular solution.
January 21st, 2011 at 8:52 am
The states simply need to raise taxes so they can pay their obligations. Then the voters can learn to elect officials that do not just push everything forward.
January 21st, 2011 at 8:54 am
I have lived in California since 1976.
The State government and business leaders applauded and encouraged the illegal invasion for decades.
“Good for business” was the mantra.
Now the hospitals are closing and the welfare rolls, prisons, and schools are full of illegals, and we are bankrupt.
The gas tax should pay for the roads, our ten percent sales tax should fund everything else, the other taxes are robbery.
I am not prepared to make any “sacrifices”, the State provides me nothing, not even well maintained roads or safe streets.
If government employees lose their pensions, welcome to America.
It started with the steel workers back in the seventies and has been going on non stop since then.
Remember, it’s “Good for business”, and “Makes us more competitive.”
January 21st, 2011 at 8:56 am
Would not bankruptcy be a disincentive for States to solve the problem? It might encourage them to continue running big deficits knowing that they can declare bankruptcy.
January 21st, 2011 at 8:56 am
It seems to me that all these salaries and retirement programs were promised in exchange for work done. Now the work is done, so what is promised is due.
These were also under the purview of elected officials all along, and so were publically approved. Nobody wanted to cut education or public services and those jobs were open to anybody who wanted to get the education and training and do the work. There’s a contractual debt owed here; we hardly batted an eyelash throwing trillions at people who didn’t need money so what’s the problem here? The only reason the states are short is because they haven’t got the guts to tax the corporations and upper income groups that finance political campaigns.
January 21st, 2011 at 9:00 am
“@number2son, it is a lottery ticket win.”
If you believe that you should go work as a teacher.
January 21st, 2011 at 9:08 am
Of course it must happen. Half these states wouldn’t even be able to pay out unemployment currently if it wasn’t for Federal aid. These government unions need to get their heads out of their @sses. The free ride is over. The pensions and bennies were the result of promises made in a world that unfortunately no longer exists and thanks to globalization ain’t coming back until our standard of living continues the swirl down the toilet. Thank corporate America and your lackeys in Congress:)
WAGE ARBITRAGE – IT’S NOT JUST FOR PRIVATE EMPLOYEES ANYMORE
January 21st, 2011 at 9:11 am
“here is no free lunch…..vote down (NJ) or cut (NYC) education budget and watch class sizes increases exponentially, services cut and see students languish”
I went to a Catholic grade school. We had 40 students in a class. Nobody languished. While I believe many teachers work hard that entire too many students per people thing is a crock of sh*t.
January 21st, 2011 at 9:17 am
The sickest part of this is that the state employees (I am not one) fulfilled their part of the bargain. They worked their years, put their $$ into the state pension system (thus not eligible for SS). The state legislature and governors then wasted those employees retirement benefits on projects they did not want to seek revenue for.
The pension problem is a big one, but all I read is that greedy lazy state workers and unions caused it, when it is wholly the fault of state leadership. If any of us put 10% a year into our 401K’s and were then told that Fidelity and/or our employer had used our money to finance other operations there would be a huge scandal and the company leaders responsible would go to jail. When GM, United, US Steel, etc. do the same thing with their employees retirement plan, it is celebrated as good cash flow management and the taxpayer foots the bill through the PBGC.
January 21st, 2011 at 9:22 am
@Mayorquimby, if it is such a lottery ticket, I’m sure that you are CLAMORING to be a cop. Or a firefighter. Or teach a class of 40 ESOL students all year, and get furloughed the pay you were due during the summer.
Indeed, I’m sure that there are tons of people lining up to take those super easy jobs with fantastic retirement. Wait, no?
Someone who is 58 and PLANNED on that retirement that they were PROMISED can’t hedge. I’m sure you are also dying to take in your parents if their pension checks and social security checks stop coming, right? You would love to have your mom in your spare bedroom, and pay for her meds, because after a life of hard work she got the shaft so that some rich jackoffs could squeeze just a little more out of the rest of us.
NOT? Then shut up.
January 21st, 2011 at 9:22 am
“She certainly hasn’t gotten this “lottery ticket” of which ignoramuses like Quimby speak.”
http://www.pressofatlanticcity.com/news/top_three/article_9dd4da3c-e218-11de-ad5e-001cc4c03286.html
“The median pension payment for teachers in 2008 was $43,200 (for doing nothing). Police and fire fund retirees were paid a median $61,800 (for doing nothing), with State Police getting $81,700 (for doing nothing). Those retirees were paid far more than many workers in New Jersey, where the median annual ***WAGE*** (for working) in 2008 was $37,900, according to state and U.S. Bureau of Labor Statistics data.”
43.2K x 25 years is $1.1 MILLION BUCKS.
61.8K x 25 years is $1.6 MILLION BUCKS.
81.7K x 25 years is $2.1 MILLION BUCKS.
PLUS….summers off for teachers, overtime, every holiday off, and the best benefits in the land.
Disgusting and corrupt. GIMME GIMME GIMME and to h*ll with my neighbor.
Grow up, the money isn’t there.
January 21st, 2011 at 9:26 am
“Julia Chestnut Says:”
While I agree, taxpayers should never have promised you all such excessive payouts…TOO BAD. They were too busy working their butts off to pay back student loans and mortgages to really have the time to have paid attention. Blame the politicians and ultimately bankers.
And I take EXTREME OFFENSE to anyone’s ENTITLEMENT attitude. We all work hard (I have a hernia and groin pull right now and work to the point of collapse every day). Why any group thinks they have the RIGHT to STEAL money from another, less fortunate group is disgusting. Not only isn’t the money there but it *shouldn’t* ever be there.
Pay public workers MEDIAN wages with MEDIAN benefits and salary increases pegged to median figures annually. No one is asking you all to eat Ramen noodles after 30 years.
January 21st, 2011 at 9:27 am
My wife and I started our married/family life in poorly paid blue collar jobs because neither of us finished college.
We got sick of being (working) poor and really sacrificed to send her to back to school to finish her dream of becoming a teacher. The mission was accomplished (now Masters + 30) 15 years ago after going into debt for which we are still paying. We live comfortably (meaning driving 10 year old cars and living in a 50 year old house) and life is much better. Good investment, until now. We will go back to where we started only by kicking and fighting to get what was contractually agreed upon by her employers. I guess that fight starts now.
January 21st, 2011 at 9:28 am
I’m glad public unions are about to get fu#%%$ but for different reasons. Unions worth their salt would have taken to the streets long ago to fight the fascist state being created by the Democrats-Republicans-Bankers axis. Instead they sat comfortably at home and did nothing when the bankers were bailed out with out, when the supreme court decided corporations could buy elections, when no one went to jail, when Obama caved on just everything he promise. The only power unions have is “feet on the ground” in other words Unions worth saving should’ve marched as a single block nationwide while all these things were happening. Now comes the time for them to go away. They have demonstrated to be useless to labor anyway.
January 21st, 2011 at 9:29 am
The state workers bought the crazy incentives with votes, not fair negotiation, its the tax payer who is shafted. Union like to say they too less “pay” but the numbers just don’t hold true. The outlandish pensions should be defaulted, remaining dollars shifted to SS and let them live like an average person in the real “private” sector.
The best thing that could happen is 100% of wages and benefits being paid in the year earned, this would make negotiations more honest. Also, NOT a single police, fire, city work or teacher need to loose their job. If they voted to lower wages to the amount of taxes actually collected they would all have jobs, but Sr. union members toss the younger ones under the bus. Then if they don’t like the wages go work in the private sector… they will be in for a shock! Private teacher, security guards and job similar to city admin all pay less in the real world. I bet only 10-15% of union work are truly motivated / qualified enough to find work that would pay more than public work.
January 21st, 2011 at 9:29 am
“We will go back to where we started only by kicking and fighting to get what was contractually agreed upon by her employers. I guess that fight starts now.”
Contracts get broken all the time. Save your money and deal with it.
January 21st, 2011 at 9:30 am
HEHEHE,
I went to Catholic schools as well, and in the 7th grade we had 55 kids in the class.
You could hear a pin drop when that nun started to talk.
It’s called discipline and respect.
Vouchers and private schools are the answer.
Public employees develop a sense of entitlement and arrogance since they can’t be fired.
Local TV here in Southern California has shown city employees smoking crack and drinking alcohol on the job, and…………. nothing happens to them.
They are investigating.
If public employees are concerned about their jobs and pensions they should have protested when all the taxpaying private sector jobs were offshored, and the tax base vaporized.
The goose that layed the golden eggs is dead!
January 21st, 2011 at 9:30 am
wally, “If you believe that you should go work as a teacher.”
I would, but I am retired on money I saved and invested – no pension. And it is lottery ticket win if you put in practically nothing and get back enormous sums in return – especially when you did not have make a sacrifice of lower pay for said benefit.
wally, “they haven’t got the guts to tax the corporations and upper income groups that finance political campaigns.”
Unions finance political campaigns as well – maybe even more at the state level. Perhaps we should tax all union members according to there union’s level of campaign finance?
January 21st, 2011 at 9:31 am
Robes- Why would unions fight the powers that ENABLED them to reel in absurd lottery ticket pensions for EVERY SINGLE PUBLIC SERVANT for a decade?!!
THE ENTIRE CREDIT BUBBLE went to unions, bankers and corporations. The middle class got nothing but DEBT from it all.
IT IS A COLOSSAL DISASTER for the ages.
Just wait.
January 21st, 2011 at 9:36 am
With the Federal, State and local debt loads being what they are, everything, pensions, social security, medicare, must be on the table. When companies go bankrupt most prior promises are broken. Public employees expecting anything different are hopelessly naive.
While it is true that the pensions in question were publicly voted on it is ludicrous in the extreme to suggest the voters knew the actual numbers involved twenty/thirty years down the road. That would be like saying that Congress understands Obamacare and its cost down the road.
January 21st, 2011 at 9:38 am
@MayorQuimby Says:
“Robes- Why would unions fight the powers that ENABLED them to reel in absurd lottery ticket pensions for EVERY SINGLE PUBLIC SERVANT for a decade?!!”
For the same reason Bankers fought successfully their ENABLERS to avoid the fall out of their own actions.
January 21st, 2011 at 9:39 am
It’s such fun deciding who to blame.
All of the [publicly funded institutions] I work with are crying the blues about their underfunded pension plans, and it’s all the fault of the unions / bad returns / Russian radars (oops, sorry, they just cause bad weather) and so on.
But then someone asked them: Who agreed to these pensions? Negotiations seemed so simple at the time – just promise future benefits that cost you nothing and will be funded by ever-rising markets.
So, it’s everybody’s fault. Now what do we do about it?
January 21st, 2011 at 9:40 am
“Attention [State and Municipal Employees] : You are royally fucked”
Something tells me Wikileaks is going to be very, very busy…..
January 21st, 2011 at 9:42 am
‘Why should anyone lend money to States again?’
Lenders always return, even to serial defaulters. But the question is, under what rules and conditions?
The U.S. has a huge corporate bond market, all of whose issuers can petition for (or be forced into) bankruptcy if they can’t or won’t service their debts.
Would U.S. corporate borrowing costs be lower if the bankruptcy courts were closed? I don’t think anyone would seriously argue this flaky proposition — the legal uncertainty obviously would raise risk.
So the theme in the NYT article that having a state bankruptcy procedure is dangerous, could actually hike yields, etc. strikes me as naive. It’s along the lines of the superstitious logic that having life insurance makes you more likely to die.
January 21st, 2011 at 9:43 am
A tangential but important truth is that all wealth creation takes place the private sector — even government pensions live and die by returns on investments in the private sector. If only wealth creation, instead of looting, was taking place in the private sector. Therein lies the cause of our bankruptcy.
The US corporatist-controlled economy is a sham/Ponzi scheme, and the jig is up. Bush’s push to have social security replaced by direct investment in the stock market was a red herring. Social Security is already dependent on investment in the markets, directly and indirectly. Every other form of pension is also market dependent. The markets are nothing but hot air.
Over-compensation of the corporatist elite has bled money away from reinvestment and public financial stability, as well as reducing the real value of, and any potential return on, ‘financial products’ held as investments on behalf of pensioners and future pensioners. For example (and not to pick on a single criminal in what is, most certainly, the largest criminal enterprise the world has ever known), Hank Paulson’s compensation package is the pension of thousands of retirees. It’s unrepaired bridges, joblessness, and deficit spending. His hoard is not simply equivalent in value to X number of pensions or $X worth of capital/public infrastructure and improvements, it has actually moved money away from circulation and sequestered it from the broader economy, ultimately leaving the middle class — retirees included — holding the bag (that pensions are taxable income while major corporations and other uber -wealthy “persons” pay no effective taxes, adds injury to injury).
As for the retirees, most took what they were offered during their careers. While I do think they went overboard — especially in the case of pensions for government workers (and with our current government largess, we are all government workers) — what they were to receive was agreed to by a counter-party. It is possible to bargain honestly with a fool, and in this case, Federal, State and local governments and their respective electorates were plenty foolish. Still, that foolishness pales in comparison to the middle-class demographic allowing so much untaxed wealth to be distributed to and concentrated among private interests at the top of the monetary system that our social institutions and lifestyles are being destroyed as we watch.
oh the fuckery and idiocy of it all.
January 21st, 2011 at 9:45 am
Part of the problem is that ” essential public services” are “education and health care.” This is totally insane- none of these are “essential public services.” As an attorney in a state with a $6+ billion budget shortfall, I have seen the state’s judicial branch slashed to the bare bones. Keep in mind this is one of three BRANCHES of government- not some program to give every kid in school an ipad, regardless of academic performance. The point is that we have distorted and unrealistic expectations of the services the government can provide, and lost sight of what truly “essential public services” are.
Yes, unions are part of the problem. So are the politicians, the unrealistic pension promises, and the structural problems of government. But it is time to admit that WE are part of the problem. We simply have to be willing to make difficult sacrifices and choices like our fathers before us. Otherwise, everybody looses.
@number2son. Show me a job where I can work 9 months and make around 80-90K (salary + benefits) per year. I’d take the pay cut and sign up in a second.
January 21st, 2011 at 9:46 am
JET55118:
A well-educated and healthy population are essential to the stability and continuance of any society.
January 21st, 2011 at 9:48 am
. . . IS essential . . .
January 21st, 2011 at 9:49 am
@number2son, There’s an army of unemployed and employed individuals with equal or greater education than your wife who would love to make 60-70k.
Fuck off, asshole.
January 21st, 2011 at 9:51 am
So tell us, Quimby, how do you make ends meet?
January 21st, 2011 at 9:51 am
Bravo Petey Wheatstraw!
January 21st, 2011 at 9:56 am
jjay,
I took my shares of smacks to the head and ear tugs from nuns.
There are so many problems with the public education system to go into you could write for years. It has little if anything to do with the number of students in a class; that’s some bs. that some union financed “study” found that was then trumpeted all over the country by teachers’ unions.
January 21st, 2011 at 9:56 am
number2son- what a whiny douche bag-
wow- the hardship- sounds almost unbearable- why don’t you cry to someone who gives a shit about your wife and her “terrible” pay and benefits
January 21st, 2011 at 9:58 am
“So tell us, Quimby, how do you make ends meet?”
By working my ass off; not by stealing my neighbors’ hard work so I can buy a Hummer and pretend I’m the big shit on the block.
I have the biggest hot tub! Look at me!
Grow up people.
We’re all on Titanic and she’s sinking.
January 21st, 2011 at 10:01 am
There is a shortage of teachers almost everywhere, ergo, they aren’t overpaid: their high salaries and relatively generous pensions are what is needed to attract moderately qualified people into a profession that is very, very unattractive from most points of view. The US needs more teachers, and better ones, but it seems unable to get them. Reducing pay and benefits seems to be an original way to attract new blood, but hey, why not give that a shot…
On the main issue of US state bankruptcy, I must say I simply don’t get what the problem is. Sovereignty – which is what states supposedly have – allows you to default on your bonds. That’s what sovereign default is all about. States have defaulted before (yes, it’s been a long time ago), and nothing has changed in the legal framework to stop them from doing it again. In particular, I don’t think there’s anything the federal government could do to stop it, aside from offering the state the money it needs to fund itself.
January 21st, 2011 at 10:02 am
@JET55118 Says:
“We simply have to be willing to make difficult sacrifices and choices like our fathers before us. Otherwise, everybody looses. ”
This is the mantra that the %1 of the ruling class has been able to brainwashed the rest %99 of the population. Please do tell me how much “sacrifice” and “difficult” choices the financial elites made? Plz…. serve that Kool-Aid to others… There is already a class-warfare being fought against the other %99 of the population. They just haven’t notice. They will notice once “we all in this together sacrifices” need to be made on social security and other middle class “benefits”
January 21st, 2011 at 10:03 am
As soon as the banksters are forced to declare bankruptcy and forgo their government/Fed provided lottery tickets, I’ll start being concerned about public sector unions. At least the public sector union members are providing a service (educating, policing, street plowing) as opposed to just being parasitic. If we have to throw money we don’t have at someone, please let it be public sector unions instead of the organized crime syndicates masquerading as banks. Disclosure: I work in the private sector.
January 21st, 2011 at 10:04 am
Petey,
But, but, but Hank Paulson needs to be rewarded for his keen leadership and risk taking. When you tie CEO’s compensation to the company’s performance they make all kinds of fantastic decisions that benefit shareholders;) Sure they are short-sighted decisions and cause the company to blow up like in 2008 unless the government steps in but look how much they beat earnings by in 2005-2007. Nobody could see those decisions coming back to haunt them …wink, wink, nudge, nudge, smirk, wrap yourself in the flag, praise Capitalism with a capital C – the C being for Cronyism
January 21st, 2011 at 10:04 am
Someone please tell me: where did we get the idea that we (Americans) are vastly over taxed?
I live in the very f*&%ed up state of Texas (Motto: We didn’t invent stupid; we perfected it.) where we have a two-year, $28 billion shortfall. We didn’t spend our way into this mess. We live by the tenet that people in poverty have a duty to remain in poverty and hence don’t need education, healthcare, police and fire protection or paved streets.
We are about to have a layoff fest of epic proportion and the two “emergency” items before the red- neck beauty contest we call a legislative session are to keep blacks from voting and Mexicans from existing.
January 21st, 2011 at 10:04 am
Mayorquimby, someone breaks a contract with me and I take their ass to court. If it is just a contract, I’m sure you won’t mind if the public employees take the states to court, and get their contract enforced? Right now what the states are doing is called anticipatory repudiation. Look it up.
If they decide to do that, likely there will be court costs, lawyer fees, and a whole bunch of other things added in to the benefits promises (now, not NPV’d down over time). And even if the states go into bankruptcy, assuming that bankruptcy law applies to that (who the hell knows what law applies to that) there will likely be quite a haggling over which contractual agreements will be honored and which will not. Want to pay those costs on top of the ones for the pensions?
Again, why do you hate public employees so much when you apparently don’t have a problem with bailing out the banks? I guarantee you, those banks holding bonds or other forms of debt to the state in question won’t even take a haircut. Why do the people who own capital deserve to be endlessly made whole, and those who provided work with a promise of some of their pay now and some of it deferred in old age — why are they screwed over?
Perhaps you don’t remember, but the pensions that we’re talking about were standard for workers before the great unraveling. Again, why so bitter? Didn’t anybody help you negotiate a decent deal? Feel like you didn’t get a fair shake? Whose fault is that? And does it make it better or you for a whole bunch more people to live on cat food, just because your life sucks?
And so it’s clear, I’m not a public servant and I don’t have a defined-benefit pension coming to me. From my point of view, a deal is a deal. Screwing over little old ladies and retired cops and judges is not what civil societies do.
January 21st, 2011 at 10:09 am
BTW my dad was a public school teacher. He wasn’t the brightest bulb but I am sure nobody screwed around in his classroom.
January 21st, 2011 at 10:12 am
I’m surprised that no one noted that the main problem, other than the fact that we can’t pay the current obligations is that… wait for it… we haven’t fixed the underlying problem! What is the underlying problem? Defined benefit plans with return assumptions that are too optimistic. Switch them to defined contribution plans – otherwise we are virtually guaranteed to repeat this entire debacle again in 50 years. (then again, that’s pretty much the goal of politics, I think – push the day of reckoning off to a future date when you don’t be the one doing the reckoning)
January 21st, 2011 at 10:15 am
a deal is a deal
until the $$$ is no longer there to pay of course-
I guess when a business breaks its lease (or renegotiates) with the landlord (because it is trying to remain a going concern)- that’s breaking their deal with the landlord?
grow up . . .
January 21st, 2011 at 10:17 am
If government pensions are an issue, how ’bout we start with Congressional pensions?
January 21st, 2011 at 10:18 am
possession is 9/10ths of the law & the other tenth is for lawyers
in this threads case .. possession is 9/10ths of __ #s in accounts __
Stephen Falken: Uh, uh, General, what you see on these screens up here is a fantasy; a computer-enhanced hallucination. Those blips are not real missiles. They’re phantoms.
McKittrick: [McKittrick approaches Beringer] Jack, there’s nothing to indicate a simulation at all. Everything is working perfectly!
but smile :-) it’ll all work out .. with more work (that really doesn’t exist .. thanks WOPRs everywhere)
January 21st, 2011 at 10:23 am
BennyProfane;
You got it nailed. People in mid and top level state positions accepted lower than private sector pay for better than private sector benefits. Furthermore, the states were allowed to make these future promises without setting aside sufficient reserves to cover the cost. For the political game the main issue was to not increase pay and taxes because that was the thing the idiots in our idiocracy responded against – the future disaster you primed was beyond what they could understand so it was not relevant.
Education wise teachers are equivalent to people with an MBA. When you compare the salary of those two groups it is clear that teachers are underpaid, even after adding the differences in benefits. When you look at the value to society of what those two groups do, the difference become completely absurd. Yet the idiots here want to see the teacher profession become even more unattractive as a career, so we can get make sure all the smartest people do something else, so we can fall even further behind the rest of the world. How much of that is just stupidity and how much is just short sighted selfishness (I want lower taxes)?
January 21st, 2011 at 10:25 am
Callmeahab, there will have been a personal guarantee in the lease if it is a small business, liquidated damages, and other remedies, and the person behind the business will be personally liable. He or she will have to personally declare bankruptcy. Happens every day. Indeed, that is one of the problems with small business generating growth – the risks have gotten very high in starting up new enterprises.
It is only large corporations that successfully use the corporate shield to screw over others on contractual obligations.
So yeah, I stand by exactly what I said. Except perhaps I shouldn’t be so mean to Mayorquimby. Personal attacks probably weren’t necessary, and I apologize.
January 21st, 2011 at 10:26 am
Julia says:
“If it is just a contract, I’m sure you won’t mind if the public employees take the states to court, and get their contract enforced? ”
If I can’t pay my rent, my lease is no good. The contract gets torn up. The landlord can take me to court but if I have no money, he gets no money.
“If they decide to do that, likely there will be court costs, lawyer fees, and a whole bunch of other things added in to the benefits promises (now, not NPV’d down over time). And even if the states go into bankruptcy, assuming that bankruptcy law applies to that (who the hell knows what law applies to that) there will likely be quite a haggling over which contractual agreements will be honored and which will not. Want to pay those costs on top of the ones for the pensions?”
Threatening your neighbor…”Give me my overbloated excessive pension, you poor underpaid private sector worker or I will ream you in court!
NIIIIICE attitude there. Dontcha just love this nation of children?
“Again, why do you hate public employees so much when you apparently don’t have a problem with bailing out the banks?”
1. I hate the banks and wish them eternal damnation (literally).
2. I said public workers should get a normal, MEDIAN WAGE. That’s not hate.
3. STOP PUTTING WORDS AND THOUGHTS IN OTHER PEOPLES’ HEADS!!!
“Perhaps you don’t remember, but the pensions that we’re talking about were standard for workers before the great unraveling. Again, why so bitter? Didn’t anybody help you negotiate a decent deal? Feel like you didn’t get a fair shake? Whose fault is that? And does it make it better or you for a whole bunch more people to live on cat food, just because your life sucks?”
1. My life does not suck.
2. I’m not bitter. I’m fair and this is beyond absurd.
3. I said median wage not cat food. If you persist in making shit up – then just go away.
4. I’m not complaining about my lot in life. I simply don’t want gvmt wasting my tax dollars (aka LABOR) by overpaying people to do regular jobs like train conductor and teacher. They are important to society but no more than anyone else. In fact – private workers are the ones that create the trains and technology that drive the economy but I digress…
“a deal is a deal. Screwing over little old ladies and retired cops and judges is not what civil societies do.”
1. People work so hard they don’t have time to read every bill legislated out there in cities and towns. Now that we’ve all woken up and realized that politicians have sold us down the river to garner chunks of union voting blocks, we want them TO RENEGOTIATE. The politicians did NOT do their job – they enriched themselves!
January 21st, 2011 at 10:28 am
“This is an impossible problem with no popular solution.”
This is an impossible problem with creative destruction as a sollution .. & the Impossible Dream being the unpopular solution.
January 21st, 2011 at 10:30 am
This is the very kind of thing that tears at the social fabric of nations. We, of course, “have the money” to bail out all sorts of bad actors (and criminals, if you ask me), but “don’t have the money” for “little people” that help our communities function. Watch out peeps. This is how it starts to unravel.
January 21st, 2011 at 10:31 am
there is an old Chinese saying (well- actually I got it from the movie Shanghai Noon!)-
anyway- the saying is- “never renegotiate”
but . . .that’s just not practical in the “real” world
January 21st, 2011 at 10:32 am
@number2son. Show me a job where I can work 9 months and make around 80-90K (salary + benefits) per year. I’d take the pay cut and sign up in a second.
Then do it. And when you do land that dream job, let us all know where you got that starting salary of 80-90K teaching public school.
A good teacher works 12 hour days, and more on week ends just to keep up with grading papers and lesson plans. Let us know how that goes, and what it’s like working on your feet 8 hours a day in a classroom with 40+ kids. Where it’s a constant struggle to keep order while trying to give the kids a chance at learning something.
I know I couldn’t do it. And, I am certain, neither could you, lawyer boy.
I work in software development and it is a searing indictment of the our educational system and the priorities reflected so commonly by douchebags like you and Quimby and so many others that I find myself interviewing candidates from overseas almost exclusively. Our public education system is failing miserably to children to survive in this economy. But instead of admitting the problem, we get glib assholes claiming how eager they would be to work as teachers given what a great deal they get. Our education system is broken precisely because such a large majority of our citizens hold education in general, and the teaching profession, in particular, in such low regard.
January 21st, 2011 at 10:33 am
my 10:31 post was for Julia . . .
January 21st, 2011 at 10:34 am
There are no guarantees in this world. Ask anyone with a 401K, or a muni bondholder, or a private sector employee who has lost their job. Taxpayers are getting squeezed through higher taxes and reduced services. There’s no reason why the public employees, including retirees on pensions, shouldn’t share in the pain.
My proposal is that all but the lowest paid public employees (and teachers) should receive permanent pay cuts of 5% to 10%, which would reduce current payroll costs as well as future pension benefits. Further, former public employees currently drawing retirement should have their pensions reduced by a similar amount. If they don’t like it, let them find a better opportunity in the job market.
I would exempt teachers from this proposal as it is hard enough to find good ones already.
I haven’t heard anyone propose reductions in pension benefits for the already retired. It seems to me that if one judge in a state upheld the idea, then it would have to work its way up through the court system.
Shared sacrifice should apply to everyone.
January 21st, 2011 at 10:37 am
So much for the “sanctity of contracts” meme. Bunch of elitist whiners.
January 21st, 2011 at 10:38 am
@Al: “Everyone”?! You mean, everyone but those in the financial services industry and executive suite in big corporate America. There, fixed it for you.
January 21st, 2011 at 10:39 am
“reflected so commonly by douchebags like you and Quimby and so many others that I find myself interviewing candidates from overseas almost exclusively”
Fuck off asshole. You are all waaaaaaay overpaid, spoiled and will get bupkis once the other sheeple wake up. And they are waking up. Get some powder for the diaper rash.
Here’s MY job offer for ya:
Median wage with median benefits and no guaranteed anything. Take it or leave it.
January 21st, 2011 at 10:39 am
(Herb) Stein’s Law states “if something can’t continue, then it will end”. This certainly applies to the public pension system. If allowed to continue, it will suck-up too much of our resources as a society. Logic would suggest that, sooner or later, it will have to be addressed.
The question is how critical the situation becomes before we do something.
January 21st, 2011 at 10:40 am
” There’s no reason why the public employees, including retirees on pensions, shouldn’t share in the pain.”
Children with diaper rash don’t reason. They scream and yell and throw tantrums. Don’t expect any better of them.
Save your money – because the children want it so badly.
January 21st, 2011 at 10:42 am
@Mannwich:
The issue of the financial services industry and executive compensation is not germane to the discussion of public finances. If you are saying that this issue also needs to be addressed, I have no argument with that.
January 21st, 2011 at 10:45 am
But on to the investment conundrum.
Part of me says this creates a real opporunity (or WILL create one) to buy the dips in the muni market. Muni fund holders seem to be dumping in droves while more wealthy investors (those with big laddered portfolios) seem to be holding pat. This tells me to do the work and opportunistically pick off “mistakes” as they arise. I’m relatively young but conservative my nature. I don’t hold much of a stock portfolio but like to buy fixed income. I am a “saver” who has taken his lumps in this low interest rate environment.
The other part of me reads where every money-manager in the world is encouraging his/her customers to hold their portfolios and buy when appropriate. This pins my BS meter in the red and subsequently makes me think the risk is too substantial for my “safe” money.
As far as the actual problem itself…I can’t help but feel that we all knew this was coming. Some drastic change has to happen and the longer we’ve waited the worse it’s become. I pay 12k in property tax now and I’m not complaining. I have 2 kids in the schools and try and tell myself it’s tuition. I have no other services. (garbage collection, etc). But I can afford my taxes now. Many cannot and a jump in taxes to keep this current system afloat will cause MANY to go under. I don’t know what the solution is, but at least people have stopped ignoring the problem. I take that as a net positive.
January 21st, 2011 at 10:45 am
Barry, I don’t know if it was an unintended consequence of this post or not, but after reading 90% of the comments attached to it, I think we are just as “fucked” by our attitudes toward one another as we are by our governments supposed debt problem.
January 21st, 2011 at 10:46 am
Well said, Petey. You nailed it. The rest of this is all theater and is evolving (or devolving) quite predictably. THUS far.
January 21st, 2011 at 10:47 am
@Al: EVERYTHING is connected. Do you not see that?
January 21st, 2011 at 10:49 am
If worked in the public sector (I don’t), I dig my heels until the elites make the “necessary sacrifice” they’re talking about the rest us making. Until then, they can STFU.
January 21st, 2011 at 10:50 am
@elvis: Could’t agree more. Hence, my post @10:30 a.m. THIS is our next crisis. It’s how it all falls apart.
January 21st, 2011 at 10:50 am
@Mannwich–Thank you.
January 21st, 2011 at 10:51 am
[...] The implications of a state bankruptcy law are wide-ranging. (NYTimes also Big Picture, FT [...]
January 21st, 2011 at 10:53 am
Believe me, when disillusioned, pissed off police and fireman (AND teachers) and others decide to get the “blue flu” en masse, we could be looking a lot more like the ’70′s than Barry realizes, especially in our cities.
January 21st, 2011 at 10:54 am
“Barry, I don’t know if it was an unintended consequence of this post or not, but after reading 90% of the comments attached to it, I think we are just as “fucked” by our attitudes toward one another as we are by our governments supposed debt problem.”
“The state is the great fiction by which everybody seeks to live at the expense of everybody else.” – Bastiat
January 21st, 2011 at 10:54 am
@Mannwich:
Yes, I do see that. If you are taking me to task for not delving into the issue of financial industry compensation, one could say the same thing about any number of potentially interconnected issues not addressed within Barry’s original post and the comments on this page.
My comments today are directed at the problems with public finance. There’s plenty of material here that it isn’t necessary to delve into all of the other interconnected elements in the universe.
Next time Barry posts something regarding the financial industry, I will comment if I have something to add to the conversation. There probably isn’t much daylight between your opinions and mine on that issue. Let’s not argue about something on which we probably agree.
January 21st, 2011 at 10:55 am
“Believe me, when disillusioned, pissed off police and fireman (AND teachers) and others decide to get the “blue flu” en masse, we could be looking a lot more like the ’70′s than Barry realizes, especially in our cities.”
Just remember everyone – when you see these protests (and you will see them) – they are DEMANDING YOUR MONEY to the extent that each and every one of them DEMANDS a MUCH better and more secure lifestyle than you, the employER enjoys.
Ridiculous.
January 21st, 2011 at 10:56 am
@elvis: I’m glad somebody said it.
To paraphrase most of the above posts: “I think somebody else has a better deal than I do, and I’m pissed about it.”
I’ve rarely seen a discussion on this blog sink so low so fast.
January 21st, 2011 at 10:58 am
“pensions live and die by returns on investments in the private sector. If only wealth creation” .. didn’t come at someone elses expense .. that age old law – what goes up must come down .. to many people making to many problems
January 21st, 2011 at 11:00 am
There are some really bizarre notions expressed here… particularly by “MayorQuimby”, but by some others as well.
Basically, if there isn’t enough money to do what you promised, then you have to change something. All moral outrage aside, either you renege on your promises to retirees or you collect more taxes.
To go after somebody has a decent pension but to recoil at taxes on people who make far more than those pensions seems to me to be a very odd priority.
The worst of it is the people who talk about the solutions in terms of 401k or defined contribution programs… in other words, put money into the very same private enterprise system whose monumental failure has caused this whole debacle. It isn’t the failure of firefighters or teachers who put us here. It is the failure of our major banks and investment houses.
January 21st, 2011 at 11:00 am
number2-
it’s all about you- isn’t it? And you have all the answers, don’t you? You’re quite important. . . .at least in your own little mind . . .
please drop some more personal “vignettes” . . .I really care (not really)- and I’m sure everyone else does too (probably not). . .
January 21st, 2011 at 11:02 am
Fair enough, Al. I just hate seeing so much vitriol directed at a group of people that aren’t really the main culprits in our current predicament. It’s the classic response by the Sheeple. Can’t go after the true culprits (or truly powerful), so we just go down the ladder and go after each for the remaining table scraps instead. It’s quite a sad, sorry spectacle if you ask me.
January 21st, 2011 at 11:02 am
MayorQuimby Says:
“Median wage with median benefits and no guaranteed anything. Take it or leave it.”
_______________
No constraints on the upper end? No pressure to bring incomes in line with performance and the creation of wealth FOR society? The median is already sparsely populated. Average compensation is skewed by the income gap. The true trend is only apparent when international wage arbitrage is factored in. What’s the median/average look like then? The middle class is getting crushed.
January 21st, 2011 at 11:03 am
This is all misdirection. The real issue is not economical. It is a political one. Our Rovernment is trying very hard to make people look at it from their “economy eyes”. The truth is that the balance of political power has shifted all the way to the financial elites and away from the people. Until this is address the majority will suffer the consequences while the minority will get all the benefits.
January 21st, 2011 at 11:04 am
I again can’t help shake my head at the public sector bashing.
Today Obama will name Jeff Immelt, who sees “no conflict of interest,” to chair Council on Jobs and Competitiveness. GE sells the bomb detection equipment to the Department of Homeland Security, which uses the machines to keep us safe from the terrorists whose villages we bomb in two wars with fighter planes using GE engines.
But damn those teachers, firefighters, and police officers!
January 21st, 2011 at 11:04 am
Well said, wally.
January 21st, 2011 at 11:04 am
It has always been my understanding that if you choose to work as a public servant, you get a ho hum job with no chance to ever get rich.. The up side of that choice is you get a job that is reliable and insulated from the common boom bust cycles of industry, and a decent pension in your retirement.
Instead the pensions funds have been lost in the last market bust and now we’re pointing the blame at the public servants who had no say in how their pensions were managed. Pointing blame with malice I might add.
I think it’s time all public servants go on strike, legal or not, and see how we fare.
January 21st, 2011 at 11:06 am
“@elvis: I’m glad somebody said it.
To paraphrase most of the above posts: “I think somebody else has a better deal than I do, and I’m pissed about it.”
I’ve rarely seen a discussion on this blog sink so low so fast.”
Nope. I work and generate ‘stuff’ off of which fiat currency is created. So the worker generates the wealth.
He needs police and firefighters so he elects a “politician” to take a small % of that money of his to pay for said services.
This is a basic scenario. Now – those service economy employees want WAAAAAY MORE than the employers themselves earn!!!
This is INSANITY.
A $50K pension over 25 year is well over A MILLION DOLLARS when the average 401K at retirement is around $60 – $90K or some shit.
GIVE
ME
A
BREAK with this crapola.
January 21st, 2011 at 11:06 am
@Petey: Quimby and others are stupidly falling for the elites’ plan to make us battle each other for the remaining table scraps after the problems THEY largely caused instead of pointing our ire TOGETHER at the real malefactors here. Where is THEIR sacrifice? What a sad, sorry spectacle.
January 21st, 2011 at 11:08 am
“No constraints on the upper end? No pressure to bring incomes in line with performance and the creation of wealth FOR society? The median is already sparsely populated. Average compensation is skewed by the income gap. The true trend is only apparent when international wage arbitrage is factored in. What’s the median/average look like then? The middle class is getting crushed.”
Median wage in NJ is about $60K. Peg the payscale for teachers, cops etc. in a such a way that the median cop makes $60K. Simply put – divide the total aportionment towards cops by the # of cops and come up with $60K. How they move the $$$ around after that is not my concern although I’d say most cops should make between $45K and $80K. Cut all loopholes and guaranteed anything.
January 21st, 2011 at 11:08 am
“Where is THEIR sacrifice? ”
THEY SHOULD BE IN JAIL!!!!
January 21st, 2011 at 11:10 am
Y’all are really pleasing to your private sector masters. After they robbed and plundered the private sector workers by union busting “free trade” and labor arbitrage, they are pleased to see that you support similar plundering of public sector workers. Those who think that in an economy that produce $125K of GDP/year per full time worker the median salary for full time work should be $125K/year are bad soc!alists. How would that work if each of your masters are supposed to harvest at least $100 million/year. Now just continue to be good little obedient subjects and fight about how much each of you get of the pie while your masters rob and rape the worlds biggest economy. When it is all done your masters will move on to whatever at that time is the worlds greatest economy and leave you to fight over the remaining crumbs.
January 21st, 2011 at 11:12 am
” you support similar plundering of public sector workers. ”
No, we support median wages and median benefits with OUR money.
January 21st, 2011 at 11:14 am
Quimby and others are stupidly falling for the elites’ plan to make us battle each other for the remaining table scraps
yeah- I’m certain that is the big master plan Mannwich . . .have you considered that the States don’t have the cash to pay the pensions?
has that crossed your mind?
January 21st, 2011 at 11:14 am
You and I agree on THAT, Quimby, but there’s the thing, they’re not only NOT in jail, they’re still running the show more powerful than ever. You don’t think many of us notice that, including public sector worksers who are now going to get the shaft AGAIN after ostensibly before forced to bail out these criminals.
January 21st, 2011 at 11:15 am
@ Wally (and others):
In a world where 5-year treasurys are yielding in the low 2s, the discounted present value of a guaranteed income for life is a burden on the taxpayer. The vast majority of taxpayers have no means to create for themselves a lifetime annuity as generous as we are providing for our public servants.
I believe in the sanctity of contracts as much as anyone reading this blog. That said, municipal bonds are also a contract*. The promise to educate our children is a moral contract. The promise to keep our streets safe is a contract. If one contract (to retired public employees) is held above all other contracts, then I’m not in favor of that.
As another commenter pointed out, “everything is interconnected”. This economy sucks and most of us are paying, to some extent. I don’t support ANY specific group being exempted from sharing in the austerity.
*For the record, I don’t own any municipal bonds
January 21st, 2011 at 11:15 am
For those of you who prefer fact-based analyses of topics, I urge you to follow this link where this is discussed in a non-ideological and non-hysterical manner. Barry, you should definitely take the time to read it.
http://www.cbpp.org/cms/index.cfm?fa=view&id=3372
January 21st, 2011 at 11:16 am
Sure has, ahab. It’s called a windfall tax on bankers and other assorted uber-wealthy. Raise taxes on the top, top percentile, ask them for some “sacrifice” (and make a public show of it to shame them into it) and then ask public sector workers to take the requisite cut. There you go. Real compromise, meaning nobody’s happy but the peace is kept. For now, anyway.
January 21st, 2011 at 11:19 am
seems like this subject touched a nerve . . .
January 21st, 2011 at 11:21 am
@Barry Ritholtz Says:
“seems like this subject touched a nerve …” As planed…
January 21st, 2011 at 11:22 am
I love how some of the very same people who were saying that 250K wasn’t “all that much” money when it came to the tax increases last year, are now trying to tell us that 70K is too much for a teacher to be paid. Hypocrisy much?
I see Ahab has finally moved to full Grandpa Simpson Mode
January 21st, 2011 at 11:22 am
mannwich-
How do States like Michigan tax Wall Street Bankers?
January 21st, 2011 at 11:23 am
I see a middle class working harder than ever, making less than ever and with fewer benefits, security and stability than ever before. The prospects are BLEAK for the very people that form the entire foundation of the country – you know – the ones that invent stuff, innovate, create things like televisions and internet and phones….
And while they are suffering more than ever before – EVERY CRETIN from every corner of the planet is robbing them blind.
No more home ownership. It doesn’t exist. You are now FORCED to pay THOUSANDS in property taxes for many services you don’t even NEED or WANT.
No more retirement. Social security will be gonzo or greatly diminshed and 401K’s – even with bubble markets – only amount to $75k or so which gets eaten up by bubble inflation.
No more security or stability. Jobs fleeing the nation like crazy.
And all the while – cops and teachers DEMAND that EACH ONE OF THEM gets a winning lottery ticket from the very people who are being destroyed by this ‘system’.
Ever hear of the straw that broke the camel’s back?
When this camel dies – you not only won’t get a pension – you won’t get ANYTHING.
Keep it up kidz.
Keep it up.
January 21st, 2011 at 11:25 am
HEHEHE,
Speaking of California public school teachers.
Hot off the presses.
“Oakland second graders engage in sex acts in class, teacher suspended”
With pay most likely.
Shut the public schools down and go to vouchers.
Give the kids a real education, save about 30% on the cost at least.
http://sanfrancisco.cbslocal.com/
January 21st, 2011 at 11:25 am
Barry, you looked slim and trim on the tube!
Munis and state budgets. From Center on Budget and Policy Priorities.
http://www.cbpp.org/cms/index.cfm?fa=view&id=3372
January 21st, 2011 at 11:26 am
Just to put some numbers to the discussion on public school budget issues. We have a budget shortfall of $938k for next year (small district of less than 1,200 kids k-12). $906k of that shortfall is due to increased pension costs (our contribution rate has jumped from 11% of salaries to 16% of salaries b/c poor investment performance), healthcare costs (up another 10%) and unfunded mandates.
We’re now considering cutting staff and/or closing an elementary school to make up for the shortfall, thus class sizes will increase and some kids could have a 32 mile one way trip to elementary school.
No easy choices but the legacy costs (pension/healthcare) of operating a public school system are crushing our ability to deliver quality educational experience to our children, imo.
January 21st, 2011 at 11:26 am
I’m in the private sector and we are not doing good these days but I don’t think shifting the blame of this disastrous “trickle down” experiment onto government workers is constructive.
Wikileaks will soon release details of hundreds of tax evading individuals and corporations, I’m looking forward to it because this is where the rot is.
If our society was functioning correctly, we could all have decent pensions and actually retire with some money.
January 21st, 2011 at 11:27 am
@MayorQuimby Says:
“No more retirement. Social security will be gonzo or greatly diminshed and 401K’s – even with bubble markets – only amount to $75k or so which gets eaten up by bubble inflation.
No more security or stability. Jobs fleeing the nation like crazy.”
And your solution is fuc$&^*( the other litlle people instead of the political/financial class that took us here… You are such a good tool….
January 21st, 2011 at 11:29 am
@ahab: Fair point. There’s no one-size fits all for all the states. Some will have to resort to more dire methods than others, but my point is, the “sacrifice” shouldn’t continually come from those who are getting squeezed the most. Part of real “leadership” means actually setting the tone by done yourself what you’re requesting others to do. Our so-called “best and brightest” should set the appropriate tone at the top with their ACTIONS (not words) and the Sheeple will follow. Right now, the Sheeple ARE following our “best & brightest” by seeing the way to make it is to look out for yourself and your family and that’s it, and never give in.
January 21st, 2011 at 11:29 am
@Mayor–I worked in manufacturing for 35 years “making stuff” and am now classified as dislocated. So don’t act like you’re the Lone Ranger around here.
January 21st, 2011 at 11:30 am
“Median wage with median benefits and no guaranteed anything. Take it or leave it”
Why median wage rather than “average income”?
“The issue of the financial services industry and executive compensation is not germane to the discussion of public finances. If you are saying that this issue also needs to be addressed, I have no argument with that.”
It most certainly is. If we did not allocate such absurd amounts of the total wealth created in our society to compensation for these people, we could easily have median salaries of $100K in both private and public sectors.
“To paraphrase most of the above posts: “I think somebody else has a better deal than I do, and I’m pissed about it.””
Yep and our corporate masters are delighted that the corporate media already have brainwashed us to react that way. When we focus on each other we don’t focus on them.
January 21st, 2011 at 11:31 am
No easy choices but the legacy costs (pension/healthcare) of operating a public school system are crushing our ability to deliver quality educational experience to our children, imo.</i.
irrelevant- just find, get it, steal it . . . .whatever it takes to honor the pensions for perpetuity . . .
January 21st, 2011 at 11:31 am
The costs of Empire always exceed the return on looting the barbarians.
Anyway, Demographics giveth and Demographics taketh away.
An interesting read for some historical perspective (you know, for sh1ts and giggles) is The Cost of Empire… by Antonio Calabria.
http://www.amazon.com/Cost-Empire-Finances-Kingdom-Cambridge/dp/0521522285
January 21st, 2011 at 11:32 am
Quimby – The average school teacher in this country makes about 60K a year. Give the right wing diatribe against those horrible greedy union employees a rest already. Thank you also for being judge and jury on how much we should pay the people who educate our children. What are you, judge and jury?
January 21st, 2011 at 11:33 am
repost- left off a tag-
“No easy choices but the legacy costs (pension/healthcare) of operating a public school system are crushing our ability to deliver quality educational experience to our children, imo.”
irrelevant- just find, get it, steal it . . . .whatever it takes to honor the pensions for perpetuity . . .
January 21st, 2011 at 11:37 am
FIRE as a percentage of economy- wealth creation followed by wealth extraction:
http://en.wikipedia.org/wiki/File:NYUGDPFinancialShare.jpg
January 21st, 2011 at 11:37 am
“And your solution is fuc$&^*( the other litlle people instead of the political/financial class that took us here… You are such a good tool….”
I will repeat this all day long until you people comprehend it:
NO ONE IS FUCKING ANYONE.
MEDIAN WAGE
MEDIAN BENEFITS
in the richest nation on earth.
That’s a killer deal for anyone in any other country ‘cept you spoiled union boyz and galz. I pray and hope we Patco you all.
January 21st, 2011 at 11:37 am
Wow! This post did bring out the claws in some people. But, some damn good points were made in here too. It’s good to see people connecting the dots and seeing how $hit rolls downhill. Makes me wonder how this country ever had a so-called Boom era? Was it maybe related to businesses paying more into the public till(ie taxes), investing locally to create a virtuous cycle of educated workers supporting public services?
And now, with companies having found more ways to elude the taxman while also playing states against each other for “incentives” and focusing on hiring overseas, they’re getting a helluva sweet deal. If businesses during our boom years were ran this way, there would be no boom. The middle class was not an organic outgrowth of capitalism; our boom was spurred on by government intervention. Businesses today have government under their thumb and don’t want to share it’s leverage power with the common people. They want it all to themselves.
As someone who grew up hearing cracks about welfare queens driving caddies, then learning about these thug capitalists, I don’t buy the old arguments anymore.
January 21st, 2011 at 11:37 am
I went to a school with 45 kids to a class.
My son goes to a school with 23 kids in class.
My school sucked in comparison.
Notice that most of this comes from the South, the section of the country with the Worst Schools in the Nation, and it shows.
January 21st, 2011 at 11:38 am
“I don’t think shifting the blame of this disastrous “trickle down” experiment onto government workers is constructive.”
See above.
January 21st, 2011 at 11:39 am
ahab:
Contracts must be honored, but this goes beyond pensions. We have gifted the upper class our own security. No more employees — everyone’s an independent contractor. No more company paid benes. No more middle class.
January 21st, 2011 at 11:41 am
“The average school teacher in this country makes about 60K a year. Give the right wing diatribe against those horrible greedy union employees a rest already. Thank you also for being judge and jury on how much we should pay the people who educate our children. What are you, judge and jury?”
1. Median wage and median benefits is not a diatribe.
2. I can damn well be judge and jury since IT IS MY MONEY in the first place!!!!!
How YOU can expect people with $60K 401K funds to give YOU a WINNING LOTTERY TICKET – GUARANTEED (!) plus inflation adjustments (!!!) is farking nuts.
January 21st, 2011 at 11:43 am
In just a little while, we’ll have good ol’ feudalism back in place… the ultimate goal of “Supply Side” economics. Suck it up, serfs!
January 21st, 2011 at 11:44 am
I will simplify this for the diaper rash crowd:
I want YOU to get the SAME as me. And since I’m your employER, that’s a pretty darned sweet deal, ‘aint it?! I mean – how many bosses want to give their employees the same salary?!!!
January 21st, 2011 at 11:44 am
Wow Quimby. “IT IS MY MONEY!!!!” Wah, wah, you sound like a 10-year old for God’s sake. Need I remind you that you do live in a community, unless you took over the Una-Bomber’s place? I heard it was for sale recently. LOL.
January 21st, 2011 at 11:47 am
Mayor – I pay taxes too and I think teachers are fairly compensated. If you want to bitch and whine because the private sector has slowly reduced both YOUR pay and YOUR benefits, and abandoned any obligation to pay for your retirement then by all means, knock yourself out. The private sector has been slipping farther and farther behind every year and will continue to do so – THAT’S the big issue here buddy, not overpaid public employee unions. If, as Dedude just said, we hadn’t transferred so MUCH of our wealth to the wealthy business class we wouldn’t even be having this conversation.
January 21st, 2011 at 11:47 am
@MayorQuimby Says:
“in the richest nation on earth.
That’s a killer deal for anyone in any other country ‘cept you spoiled union boyz and galz. I pray and hope we Patco you all.”
1) I’m not union and I think unions are getting what they deserved because they tried to preserve their gain by the same means as the financial gangsters (buying the government) instead of become militant when the time came.
2) This is not the riches nation on earth. This is a rich nation where power and wealth is disproportionally given to some of the riches people on earth.
3) The real problem is political no economical. Making labor stronger helps the middle classes. This can only happen when the current labor union leadership is replaced by people who know and can fight and not sooner.
January 21st, 2011 at 11:53 am
“Making labor stronger helps the middle classes.”
Making PRIVATE sector labor does. Making PUBLIC sector unions stronger does the precise OPPOSITE since they are paid BY the middle class. Consequently every penny that goes to them COMES OUT OF the private sector workers’ pocket!
January 21st, 2011 at 11:54 am
We have gifted the upper class our own security
Petey- how does this equate to a state like Michigan? Their pension system is for their workers- if they don’t have the money- how can they honor the pensions?
It’s that simple . . .
regarding the bigger picture- after the Soviet Union collapsed- people weren’t getting pensions . . .nothing is forever . . .
January 21st, 2011 at 11:55 am
“Need I remind you that you do live in a community”
I do. And I have tremendous respect for my own labor which is why I don’t freely give it away like so many sheeple out there. At any rate – there’s nothing puerile about it. I employ public workers and so therefore I decide what they make. If I cannot find anyone to do the job for my price, I will be forced to raise my price. So let’s start the bidding at $35K per annum with no pension. If we fill the roster at that level, we should do that – then we can lower property taxes and let all that money flow back into the private sector once again – restoring balance to the equation.
OR…..we can have, “Predator State”.
Who wants to be Darth Vader? You Rahm Emmanuelle? You Karl Rove?
January 21st, 2011 at 11:56 am
@MayorQuimby Says:
“Making PRIVATE sector labor does.”
PRIVATE sector labor relinquished any power they ever had to the financial elites. The financial crisis made the bankers richer and more powerful. The only union that actually came out swinging (GM) came out poorer and less powerful so do tell me where is the PRIVATE sector labor power?
January 21st, 2011 at 11:58 am
“Wow Quimby. “IT IS MY MONEY!!!!” Wah, wah, you sound like a 10-year old for God’s sake.”
Nope – I’m just the small % with a fucking clue.
Look – if someone ROBBED YOU AT GUNPOINT of $100 every week, you’d be pissed right?!
Guess what – that’s PRECISELY what ‘gvmt’ does to NJ home-owners and home-owners everywhere. Don’t pay and the guys with the guns come and take you away.
It’s that simple.
And that alarming.
The middle class has been subjugated to the point of impotence.
There’s no more blood to be had from them and they are getting angry and hungry. I’m personally doing well but many of my friends are not only fucked – they are borderline homeless. And I’m talking well-educated guys and gals in NYC – even a couple of Ivy Leaguers.
January 21st, 2011 at 12:00 pm
“so do tell me where is the PRIVATE sector labor power?”
Gone of course. I’m not disagreeing with that sentiment. I’m arguing against public unions (another raping of the middle class). I would love labor unions to form in corporations but that’s not happening when people are fortunate just to be employed.
January 21st, 2011 at 12:00 pm
This is a classic. Every other developed country on the planet solves the problem after facing the reality that old-age security and affordable health care is a society-wide question. Americans sit around pissing on each other.
January 21st, 2011 at 12:00 pm
IN RELATED NEWS:
After a second straight year of double digit gains, Canadian pension funds have surpassed their highs from before the GFC.
Despite wild swings in the market, these funds have posted an annualized 5.4% gain over the last decade.
http://www.financialpost.com/news/Canadian+pension+funds+surpass+crisis+levels/4144108/story.html
January 21st, 2011 at 12:08 pm
MayorQuimby – Now we’re going down the “I’m one of the few people that know what’s really going on” road.
No MQ, you’re not. You just think you are. What you actually have here is an opinion. You have no more access to “the truth” than anyone else so don’t fool yourself into thinking you do.
Why is it always “you just don’t get it” with those on the right these days? If you don’t believe in their warped view of reality you’re just not paying close enough attention? Jesus.
Then we have the “I pay taxes so I get to decide”. No, that’s not how it works in our society. We elect public servants to do this job for us. If you want to be mad at someone, be mad at the elected officials who agreed to these benefits in the first place. As if YOU would turn down all those benefits if they were offered to you. I can just see it now “oh no, no no no, 100K is FAR too much money for me to be paid for what I do” “no no no, couldn’t possibly take four weeks of vacation a year, that’s just not fair”. Right. Tell us another story.
January 21st, 2011 at 12:09 pm
“So let’s start the bidding at $35K per annum with no pension
OR…..we can have, “Predator State”.
Change the “OR” to “AND”. That about sums you up, I see.
January 21st, 2011 at 12:16 pm
“Every other developed country on the planet solves the problem after facing the reality that old-age security and affordable health care is a society-wide question. ”
The VAST majority of middle class workers has no security at all and THEY are expected to provide said security to the public sector.
“Change the “OR” to “AND”. That about sums you up, I see.”
Robbing the poor to pay the rich. Keep it up. One day soon there will be nothing to be had from your neighbor and you will whine all you want to but dem’s da facts ma boy.
Oh – and when the money runs out for us and people look back at the abuse and waste – they won’t forget where it all went to the bankers, politicians and corrupt public sector unions.
END ALL multi-million dollar payouts for every public sector worker!!!
Median wage.
Median benefits.
January 21st, 2011 at 12:19 pm
@Mayor–If, in your opinion, a teacher’s wage should reflect the median wage, then they’re corresponding educational requirements should also reflect a median point. But, because of NCLB and other government mandates, teachers have to be by contract, educated well beyond that median point. If you’re going to pay them a lesser wage, are you willing to lessen the mandates that set their educational requirements?
January 21st, 2011 at 12:20 pm
Wow! This is one hell of a riot. I just stopped by for a little light lunchhour reading. Looks like a lot of folks have all morning to flame each other.
Although, I will make one point.
We are a rich motherkcufing country and will sit around and b!tch just like we live in Mexico. At least the Mexicans could justifiably blame a legacy of Spanish oppression for their screwed up situation. Every problem we are now facing is completely self-imposed. Fascinating.
As someone more pithy than I once said, “Life is a comedy for those who think and a tragedy for those who feel.”
I’m only 40, but I long ago gave over to the idea that I will just have to look out for me and my own ’cause the country ain’t gonna get its act together anytime soon.
January 21st, 2011 at 12:21 pm
“The VAST majority of middle class workers has no security at all and THEY are expected to provide said security to the public sector.”
Misplaced anger again. Instead of being mad at the greedy unions, why don’t you redirect that anger where it really needs to go. That the private sector has lost it’s salary and benefits over the last 20 years.
Good for teachers and other union workers for being the last people in the country aside from the ruling class who actually have anything left at all. But no, you basically want to take it all away so that they are as equally screwed as the rest of us.
January 21st, 2011 at 12:29 pm
Wally,
“Let’s start the bidding at 35k with no pension”
That’s what has happened in the private sector for decades.
Now there is no one left to pay taxes to support the government employees.
The “Predator State” is very real to most of us.
There is no longer enough money to support endless annual raises with no salary caps, and nice pensions and free healthcare for life in retirement.
The pensions the Federal government covered are capped at 40k I believe and they don’t cover medical insurance at all.
As the steelworkers found out.
January 21st, 2011 at 12:33 pm
You guys are moving the discussion/argument/fight towards jobs outsourcing and the general collapse of the nation. That is fine by me. The bankers and political class is MUCH more to blame than anyone else imo.
But every dollar states pay in pensions is taken from taxpayers. Every cent. So when your average worker (the employer) makes $45K nationwide, has not had a raise in 15 years despite inflation at 3% annually, has $5K in savings and $60K in his/her 401K, why on earth would we even CONSIDER paying teachers and train conductors and sanitation workers (all of them mind you) a GUARANTEED ONE TO TWO MILLION DOLLARS FOR LIFE PLUS INFLATION?!?!?!?
This defies any reason, ration, logic, justice or fairness. It ONLY occurs because most people are so busy struggling to make a living that they really don’t have the time to sit down and call their local politicians and be involved. They ELECT politicians so they don’t NEED to be involved.
January 21st, 2011 at 12:35 pm
Oh, yeah, I was going to answer BR’s questions since I do provide market research and analysis for companies that do business with state and local governments.
Q. Why should anyone lend money to States again?
A. Because they have the power to levy ever-more regressive taxes on a steadily growing population.
Q. Should state employees be induced to take less salary in exchange for greater benefits , especially pension and retirement plans?
A. I have no dog in this fight, but that formulation would seem to make the most sense for Boomer workers who will gladly sell their younger coworkers out in order to repair their retirement prospects in the next 5 to 10 years.
Q. How will Unions negotiate with States and CIties going forward? Is it now all about cash upfront, with future promises/incentives looked at as meaningless ?
A. Post-Boomer workers would be well advised to take this approach. However, most workers manage their union engagement the same way private-sector workers manage their 401k. Just pay a little in every paycheck and trust that the big shots are taking care of it. Even if you choose to be hyper vigilant, the drift of the disinterested masses will dictate your fate. Unions have never shown themselves to be good stores of institutional knowledge.
Keep up the good work, BR.
January 21st, 2011 at 12:43 pm
A friend of mine quit working as a software engineer to teach math and business in high school. In his view, most teachers are seriously overpaid.
All of his class assignments are online, all tests and grades are online, and all reports and projects are done online using Google Docs. His leading edge methods combined with his passion for teaching produce dramatically better results and are constantly being fought by the entrenched administrators and teachers.
This is in one of the top school districts in the nation.
January 21st, 2011 at 12:51 pm
RPL@ 11:15,
Outstanding link, thank you. Really beats the kind of “information” that some people in this debate just seems to be pulling out of their dumb a$$es.
January 21st, 2011 at 12:56 pm
MayorQuimby:
What, exactly would median wage be? The median household income in the US was $49,777 in 2009. In China it’s somewhere between $4K – $6K. India is more difficult to gauge at somewhere around $3K, from what I could find. According to The Globalist, a research group based in Washington, DC, the income of all 6.7 billion people in the world averaged to $7,000 a year in 2005. Even if we earn (sink to) double those levels of income, we wouldn’t be able to make it in the good ol’ USA. Seems you want the middle class crushed.
Read more: What is the average annual income? | Answerbag http://www.answerbag.com/q_view/2035326#ixzz1Bgz3KwMNSeems you want the middle to be crushed.
January 21st, 2011 at 12:57 pm
To heap insult onto injury, union members routinely practice ‘pension spiking’ in the last year or two of their employment, just prior to retirement. Since retirement benefits are typically based on an employee’s highest annual earnings (typically just 1 year, rather than the highest-five years in private sector), a pre-retiring employee can boost their final year earnings by 50 to 100% by working overtime, and often by contributing unused vacation and sick leave accruals into the final paycheck.
In California, the San Jose Mercury-News won a lawsuit requiring the local governments to make public the total compensation amounts for highly-paid public employees. (The database can be found on http://www.mercurynews.com) It is incredible the amounts of salary & overtime some of our public servants are making each year: six-figures not just for cops & firefighters, but also public works employee and bureaucrats working in city and county offices.
January 21st, 2011 at 12:57 pm
MayorQuimby: “A $50K pension over 25 years of retirement is a $1.3 million winning lottery ticket for EVERY cop, firefighter, train conductor, teacher etc. ”
You and others sure are fond of wording things so as to give the impression that pensioners receive a MILLION+ windfall upon retirement. If you stand by the financials of your statement, I hope you’ll take me up on a offer to give me a $1.3 million dollar lump sum in exchange for a $52k annuity. I’ll even sweeten the deal with a decorative gift basket full of tea biscuits & marmalade each christmas.
January 21st, 2011 at 12:57 pm
This is so funny. It’s lunchtime, I’m checking all my open tabs, notice I left this open and decide to read the vitriol. Best thing? Some guy who names himself after a minor cartoon buffoon says he is an Island, he is superman, he can take care of himself and society be screwed because he works so hard. But what did Mayor Quimby spend Friday morning doing? Wasting the entire day writing his John Galt fantasy into the comment stream of a blog. Oy Vey. To be self-aware…
January 21st, 2011 at 1:03 pm
The comments on this forum are depressing. Why don’t the most vituperative of you go back and read Barry’s comment “rules,” look in the mirror, and go outside for a walk…
January 21st, 2011 at 1:03 pm
What age group dominates the decision-making regarding pension payouts and has for number of years? Is it perchance those who are closest to retirement (or already there)?
I would encourage people to pursue negotiations that target sustainable payout numbers. Eating the seed corn and then smashing the silo is a bad plan.
From a footnote in ‘The Cost of Empire…’:
“Napoles, pues sta cierto que no haviendo en otra parte tanto aparejo de vivir, travajar, y ganar la vida se havrian de salir a la campaña y hazerse foragidos”
“it’s true that there not being anywhere else so much ‘means’ by which to live, work and earn a living they would have to go to the countryside and become outlaws.”
January 21st, 2011 at 1:06 pm
One last observation:
MayorQuimby Says:
“. . . every dollar states pay in pensions is taken from taxpayers. Every cent.”
______________
So is every cent of every other deficit-growing expense — even bail-outs for the bankers, the bloated defense budget/wars of choice, the cheap beef you eat, and a tax break for a new heat pump. Deficits are taxes, deferred. Pensioners are not gaming the system, corporatists are.
January 21st, 2011 at 1:10 pm
TomL – To heap insult onto injury, union members routinely practice ‘pension spiking’
Strawman. No one here is suggesting that waste and corruption shouldn’t be addresses where public employees are concerned.
January 21st, 2011 at 1:16 pm
MayorQuimby;
What a great parody of a republicanned tool you are – spewing out all the Fox talking points with the characteristic certainty and lack of thought (let alone facts).
Yelling out demands that as you (and yours) were robbed so shall they (and theirs) be robbed equally. Totally focused on MY MY MY MY MY, never realizing that the small stream of money that you can see leaving your pockets is nothing compared to the huge stream of money that is blocked from getting into your pockets. Never realizing that the small (4% public budgets) stream of your money going to public employees pensions is nothing compared to the huge sums robbed from both private and public pension plans by Wall Street banksters.
Your masters are very pleased that your rage is pointed at another group of sheeple rather than at them. This is why they started Fox news.
January 21st, 2011 at 1:24 pm
The reason taxpayers are being asked to pony up more money to cover their obligations to public employees pensions OBVIOUSLY must be because those pensions are way out of line (although trust funds were filled according to reasonable investment return expectations) – its couldn’t possibly be because Wall Street banksters have been robbing the pension funds blind. Some people are just so stupid it almost hurt to read them.
January 21st, 2011 at 1:59 pm
If I got this straight, quimby is a currency trader who produces nothing, adds value to nothing, and creates wealth only for himself and his firm by taking a cut off the top of trades done with OTHER people’s money based on the pain or gains of society’s chosen form of commerce. Yeah, we should give a shit about him.
I’m a teacher and NOT a public employee. Like Haliburton, I am a CONTRACT worker contracted to work approximately 184 days a year (I’ll be working this Sunday most likely though). I make about $28-35 an hour (much less if you actually clock my hours) with a Masters’ degree. The equivalent “private” sector pay is 135% of that figure. I do not get the summers off because I need 135 hours of continuing ed I have to pay for and I actually don’t get paid during the summer.
I believe unions have no reason to exist if people treated each other with respect and without greed, but that isn’t going to happen….ever. So we collectively bargain for our pay, changing some direct payment for health care and TRA, and to guarantee that politics and family friends don’t decide who keeps a job and who doesn’t.
Those who rail against unions do so because of political bullshit on fox and their own inability to organize for fair compensation….or they feel the guy in the next cubicle is inferior to him, so there shouldn’t be any equality in pay (this is quimby and ahab). They also tend to ignore the facts that creating and having wealth actually takes more resources from society than they give (poor people don’t have shit that require cops to protect, resources to move on roads and rails, or contracts that need a system of enforcement).
January 21st, 2011 at 2:01 pm
Well, if nothing else, we can all agree that we’re angry.
Some of these comments directed at government employees, namely the ones that profess a kind of ownership over them and the right to dictate their wages, seem to harken back to an earlier time of ….kings and queens?
And, it’s not like there’s no money; it’s just not being reinvested back into the US.
January 21st, 2011 at 2:04 pm
For the last 30 years, the economy has grown almost continuously as measured by inflation adjusted GDP per person. Yet now we have endless angst about being broke. So the question is not “Why is there no money”, it is more properly “Where did all that money go?”
For the last 30 years the bottom 80% of earners has seen their incomes and share of national wealth decline. They feel poorer. Conversely, the top 1% of earners has seen their share of the national income double. Many reasons for this, but a large contribution has been due to decreased marginal tax rates, decreased inheritance taxes, and decreased capital gains taxes, all of which impact high earners the most and coincided with the “Reagan Revolution”. The outcome has been that the growth in the economy for the last 30 years has gone to the top, while middle incomes have stagnated or frankly declined. At the same time, state expenditures to combat the resulting growing frank poverty at the bottom have exploded (medicaid, food stamp, etc.).
The money exists to fix the state’s fiscal crisis. Dysfunctional politics, greed, and an ignorant and immature populace prevents the states from taking the resources that are required.
Really, it is a shame. There does not seem to be an easy solution outside of education, which is not exactly an easy fix at the national level. Ranting about how some teacher’s pension is the cause of all our troubles is self-deception: how is it that public servants have been cast as evil, as if they were Jews in 1930′s Germany?
January 21st, 2011 at 2:23 pm
I believe it was in the last two weeks that I saw Meredith Whitney on cnbc presenting her argument for the failure of several big states that have no other way to get their future laibilities under control and will have to eventually default if not bailed out by the federal government. I hope that the federal government does move forward and allows states to declare bankruptcy in order to get their fiscal houses in order. History has shown russian default in 98, tequilla crisis, argentine crisis that when sovereign nations default that they eventually emerge from the dead and exports soar as they can usually devalue. The states cannot devalue their currencies and in many way resemble the euro-zone as was pointed out in Barrons this week. However I dont see what the alternative is given that the fed cannot keep on printing money
January 21st, 2011 at 2:44 pm
“You and others sure are fond of wording things so as to give the impression that pensioners receive a MILLION+ windfall upon retirement.”
Simple multiplication. You don’t get the lump sum – but you DO get the MILLIONS.
“But what did Mayor Quimby spend Friday morning doing? Wasting the entire day writing his John Galt fantasy into the comment stream of a blog. Oy Vey. To be self-aware…”
I notice you’re here too. I took the day off work to argue with the kidzzz, read up on the news and generally slack off if you must know.
“What a great parody of a republicanned tool you are – spewing out all the Fox talking points with the characteristic certainty and lack of thought (let alone facts).”
huh?
Once again – you’re DEMANDING that the guy with $60K in his 401Km the guy that employs you (!) pay you $1.1 million or more for life- guaranteed. Fuck Fox (hate all bs cable news and I detest political partisanship of all kinds) and well, fuck you too.
“Never realizing that the small (4% public budgets) stream of your money going to public employees pensions is nothing compared to the huge sums robbed from both private and public pension plans by Wall Street banksters.”"
And ONCE AGAIN – THEY are the bigger fish to fry and need to be imprisoned. Nevertheless – THAT DOES NOT GIVE YOU THE RIGHT TO STEAL MY MONEY TO THE TUNE OF A GUARANTEED MILLION BUCKS WHEN I MYSELF HAVE $60K ON AVERAGE!!!!!!
“Some of these comments directed at government employees, namely the ones that profess a kind of ownership over them and the right to dictate their wages, seem to harken back to an earlier time of ….kings and queens?”
Not ownership, employment! Jesu Christo….do you people even believe what you write or are you just lashing out emotionally?!!!!
Simple.
I need my garbage picked up so me and all the other workers, agree to HIRE someone to do that for us, hence the term, “public SERVANT”.
They serve at the public’s behest. The public is NOT in the businesses of BANKRUPTING itself so we can have our garbage picked up!!! Jesus. This is Kindergarten crap here!
Median wage pegged to a particular district.
Median benefits.
Guaranteed nothing.
This should not even be debatable.
January 21st, 2011 at 2:45 pm
Remember MQ and others .. a pensioner spending IT (the pension) puts money back into the economy .. except when IT is exported from the community, state, country .. now this argument must focus more on that LOSS .. or the concentration of where IT collects .. or if IT actually did Evaporate
January 21st, 2011 at 2:52 pm
“Remember MQ and others .. a pensioner spending IT (the pension) puts money back into the economy .. except when IT is exported from the community, state, country .. now this argument must focus more on that LOSS .. or the concentration of where IT collects .. or if IT actually did Evaporate”
Yup. Keeps the multiplier up at the expense of a massive reduction in credit initiation capacity. IOW – the economic imbalance created pushes home prices, food prices, tuition prices up against the victim – John Q Taxpayer. HIS kids have no savings and must borrow money for school. The firefighter’s kids can afford to pay. John’s kids are now at a loss of say, $400 a month for 20 years while the fireman’s kids can afford a home much sooner. In essence, the ‘getting ahead’ economy grows smaller and consists of fewer and fewer people.
Short version: There’s a limited amount of money in the money supply. Give a greater % to fewer people, throws more and more people off the bus. Those people will create less money and the system will implode under its own weight over time.
January 21st, 2011 at 2:57 pm
“poor people don’t have shit that require cops to protect” .. LOL .. I read that line in the Book too :-)
January 21st, 2011 at 3:00 pm
BTW Greg- My stepdad probably gets a $60K pension and he saves like a mofo. Penny pinching. That money most certainly does not enter the economy. He takes the loot and runs with it.
January 21st, 2011 at 3:14 pm
The state pension ruse is very similar to the elite’s yapping about SS. Just in this state (Massachusetts) workers pay 82 % of their expected pension. The Gov just proposed upping it to 92 %, and both those figures cause me to think again about how big a problem this is, at least here. Here’s a very good synopsis from BC on the whole state pension meme:
http://crr.bc.edu/images/stories/Briefs/slp_13.pdf
January 21st, 2011 at 3:26 pm
just back in from the alley – collecting my empty can & recycle bin .. had a chilly snap & ponder ..
I missed 1 more item that you’all have been hitting on … a promised interest rate return on principle that can no longer be met ..
I bet my mom has collected my dads pension* and way way beyond (he died before collecting 1 red cent from IT or SSI – massive heart attack) .. the greatest generation set themselves up with us Boomers .. a great invention IT was – huh
*coda – I can hear the meeting 60 years ago (10 years before I was born) you start this IT and they finish IT – get IT
January 21st, 2011 at 3:32 pm
@Thor,
I think a more apt description would be Clint Eastwood in “Gran Torino” “Get off my Lawn”!
Get Off My Lawn
January 21st, 2011 at 3:34 pm
MayorQuimby;
The million bucks you are fixated on are simply not connected to facts or reality.
The payments are made in small monthly contributions (about 10% of the persons salary) and invested with returns of about 8%. Then after many years of accumulated compounding interest they are paid out in monthly payments for life. Some individuals may die before they get anything out (they don’t get “MILLION BUCKS”), other may live for 30 years and yes get a million bucks when all is counted and nobody cares about calculating this in inflation adjusted amount. However, if you are a private sector employee with a 401K that you contribute 10% to (or you give 5% and employer match with another 5%), then you have the exact same “MILLION BUCKS” pension as your hated stepfather.
When you convert the public employee pensions system to a corresponding salary (calculate the amount of added salary would you need to purchase a similar benefit to a private sector employee) it comes to about 8-12% depending on the specific system (a few generous legacy systems are higher than that). So the public pension systems basically comes down to a hidden “salary” of about 10% more.
January 21st, 2011 at 3:44 pm
DeDude-
Not true at all.
1. Pensions anticipate an 8% return on their ‘investments’ which is way beyond anything reasonable. In fact, should equities correct, we’d be flat for 14 years. Then there’s the removal of crappy companies from indexes (ie GM) etc.
2. Those investments reap a % of the money consumers spend so let’s not forget that ALL money comes from the workers to begin with. Yup. That iPod you bought helps pay a pension somewhere.
3. The average 401K at retirement WITH 10% contributions isn’t even in the six-figure range. Go look it up. People simply do NOT make that much money!!! And they save almost nothing….
4. ALL OF THIS is predicated upon ENDLESS credit growth. But credit can only expand if wages do IN TANDEM. Otherwise, it stretches like a rubber band and then snaps back (cutting your finger). Since wages have not expanded much the past 10 years, take out all credit expansion in that time frame because it is a BUBBLE and must correct.
Bernanke either knows this and chooses to ignore it or is so enamored with trees, he can no longer see the forest.
The problem is an economy that covers TOO FEW people and with income distributed MUCH too unevenly. Then there’s WAAAAY too much debt and a total lack of respect for money creation by the powers that be. It all must collapse or things will get progressively worse over time.
January 21st, 2011 at 3:45 pm
We agree with Mr. Ritholtz’s sentiments, however government budgets reflect civil commitments citizens have made to each other. These commitments — public safety, education, good roads, freedom from government over-regulation, and reasonable taxes — are built into local, state and federal budgets. These commitments accumulated over decades. The formality with which the commitments were made, and the way they accumulated over decades and were reaffirmed year after year in budget legislation, led people to believe the commitments could be relied upon. Citizens organized their lives, families and businesses around these commitments. They are the fabric of our society.
When we say budget deficits, state or national, are unsustainable, we’re really saying the commitments people have made to each other via their government can’t be met.
And it is a true “crisis” because the fabric of society is being ripped apart.
In this crisis, citizen expectations and trust in government, and each other, are being torn apart.
If solutions can’t be found, civil conflict or repression is almost certain.
Solutions to the crisis require citizens to adjust the commitments and agree to new, sustainable commitments.
January 21st, 2011 at 3:45 pm
@Stav,
You nailed it.
January 21st, 2011 at 3:53 pm
@number2son
Actually, my mother was a special ed. public school teacher for 30+ years- so I know how much bank they pull down. Also, I never said that 80-90K was the starting salary- most start at about 55K-60K (salary+ benefits), at least in my State. Let me tell you, they sure as hell are making 70K-90K when they retire. Again, not bad when you only work for 9 months per year and have every major holiday off.
January 21st, 2011 at 4:01 pm
MQ – All I can say at this point is that you’re anger is directed at the wrong place and toward the wrong people. This is EXACTLY what the people pulling the strings want us to do, to fight each other. That way we won’t focus so much on the continued rape of the middle class by the top 1% and their lackey’s in DC.
Less Fox News, and Right Wing talking points, and more fact based arguments please.
January 21st, 2011 at 4:10 pm
I think this vid is appropriate right about now…
January 21st, 2011 at 4:11 pm
damn…can’t embed…linky…
http://www.youtube.com/watch?v=acLW1vFO-2Q
January 21st, 2011 at 4:21 pm
RIP, George Carlin.
One of the last truth tellers, thankfully we can still enjoy him.
January 21st, 2011 at 4:22 pm
MayorQuimby;
1. The 8% is the actual historic return (on the funds paid to the trust fund for current pensioners back when they worked). Only in the past few years has that assumption been questioned and maybe it should be ( and payments to the trust funds should be increased as soon as the economy allows it).
2. Yes investment returns of all kinds are taken from workers. Do you want to revoke capitalism or only revoke it from benefitting people like your hated stepfather?
3. You must have failed to look at the life insurance tables 401K sales brochures etc. When you use 30-40 years of continued contributions accumulating an 8% annual return – and fail to “adjust” for inflation then it is remarkable how small a monthly contribution is needed to accumulate a MILLION BUCKS”. Go look it up, you will be amazed how easy it is to become a millionaire (yes YOU can too if you are willing to forgo instant gratification for a secure retirement).
4. Agree; if our Wall Street masters continue to rob and rape society, and leaches are allowed to make huge fortunes on “rent seeking” whether by currency, commodities or stock speculation – then we are all screeewed. That is why we should concentrate on blocking the rent seekers and banksters, rather than on destroying the middle class life style of highly educated hard working public servants who’s total compensation (including cost of benefits) is considerably lower than compensation given to people on Wall Street (with similar levels of education).
January 21st, 2011 at 4:52 pm
Did not anyone here watch Westerns? When the silver mine runs out, the tumbleweeds take over. Sic transit.
Henry Ford had the genius to realize that paying his workers $5 real gold dollars a day Gold, fixed and spot-deliverable at $20.67 per troy ounce ( a quarter OZ a day!) would allow them to buy his product.
Reagan, patron Saint of Wall Street, drilled holes in the great Flywheel and no wonder where the mo went as it grew They the Corporations rather than We the People.
The bank monopoly rules as throughout recorded history by feeding politicians who do the dirty work.
Connecting with growing your own food and medicine is a wise choice these days.
January 21st, 2011 at 5:30 pm
What we’re talking about here folks is the local version of the global bottleneck we’ve recently entered.
The whole thing is going to collapse (and probably within our lifetimes) because there are too many people on the earth – the population overshot global carrying capacity . i mean “lights out and no running water” kind of desperation is going to happen if we keep going the way we’re going. It’s already too late to change the climate back from the chemically unbalanced state we’ve orchestrated (via the Industrial Revolution) and that will kill our food sources off in relatively short order. A lot of people are not going to survive the next 20 years due to all the interrelated effects of our pollution: heat and fires, drought, storms, flooding, lack of food and water, disease, lack of healthcare leading to epidemics, rising sea levels, collapse of the biosphere (too many species die and there’s no more “food chain”), overfishing, etc.
i don’t think this “grade school to college” thing is going to last much longer either if we hollow out the middle class (in fact i think it’s already too late here too). With no tax dollars to support all the unemployed and homeless, and no funds being directed to keep the lifeblood of the country going through real work – which we could be doing, if only to keep up with the rate of decay- our brief exercise in sovereignty is about to conclude.
Mankind was an interesting experiment – too bad they were caught up in acting individually and not caring for one another, didn’t learn from their mistakes, and as we can see clearly “didn’t get it” – i guess we’ll just have to try again in a few millenia and probably somewhere else in the cosmos.
January 21st, 2011 at 5:43 pm
i am thinking that the 401k/IRA plans are really big scams. because unless you are really lucky and the last decade is really good in the market, you will not hit the target you need to retire on. if pensions are such a problem then so are 401k/IRA. the main cause of pension failures is one thing. employers not funding them properly. one of the big problems with 401ks, people not funding them.
but even if you do fund them, 401ks can fail since the stock market can and will collapse. as we have seen in the last 2 years
http://www.nytimes.com/2011/01/22/your-money/401ks-and-similar-plans/22money.html?ref=business
also consider this pensions are based on investments (stocks,bonds, etc) and 401ks/IRAs are based on on investments. one is managed by professionals full time, the other run part by amateurs. care to guess why both will end up with the same result if the stock market takes a header like it did in the last few years. in fact the market hasn’t been good for a decade. and if you are trying to retire in the next few years, better hope you saved a lot more than you ever thought you would need cause its really likely the money won’t be there.
and consider this.
lots of financial planning expects funding needs to go down after retirement.
not true.
if you are like the vast majority of people, you will end up in an assisted living facility at some point after you retire. today my mother in-law has been there for more than 5 years. she had a $3000+ bill for this. she has just recently had to move to a more advanced care facility. that costs is almost 5000 a month. the only thing that has saved her so far was my wife having her buy a long term care policy. but it isn’t paying the entire bill any more.
January 21st, 2011 at 6:22 pm
I cant believe people are so naive. If the cost of all these promises is around 10 trillion over the next 30-40 years, whats the big deal….it will be paid by more borrowing (supported by more printing) inflation and it is going to go on for a long time(barring a black swan event).
look at this chart: http://en.wikipedia.org/wiki/File:USDebt.png
the debt has grown almost 8 times.. do the math what happens when 12 trillion gets multiplied by 5.
slow inflation (printing money) can be a cure for all past debt and thats the path of least resistance…being practiced by US govt since a long time. why will they stop now??
January 21st, 2011 at 8:04 pm
You can all pee on each other all you want but I have a plan and you should too. I am fortunate to have a good private sector job currently living in CT. When everything went to hell 3 years ago and I watched 30% of my co-workers get laid off I started making a plan. I shut down my 401k completely and have been saving 33% of my money. Cash in my hands. Nobody else is touching or rubbing or molesting my cash! I am 40 years old now. I am retiring when I turn 50, selling my house which will be paid for by then. I am hoping to have a quarter million cash when all is said and done. Doesn’t sound like much? Wrong. I am heading for smallest most remote town in Iowa (where i was born) I can find. Where $30,000 still buys you a nice house. Growing a huge garden and living cheap and isolated. When I hit 59 I do have a decent 401k I am cashing out, that should get me to social security age and even if I get just a few hundred bucks from SS thats all you need to get by in a small town with no house payment. Sounds like heaven to me. You know what my main driving motivation everyday is? I refuse to work until my 70′s to pay for all the pensions of all these public employees retiring in their 40′s and 50′s! I REFUSE! It’s a crime to retire that young and expect ME and EVERYONE else to work until our dying day to support your plush early retirement. A CRIME!
I refuse to do it. And I won’t. I am cashing out early and living simple. I don’t need much. And I refuse to allow you to take from me to meet your needs. Rely on yourself. Because I predict as this issue makes taxes start rising to insane levels, which it will, more and more will flee the bankrupt cities and head for small towns all over the country. This will feed on itself. Less people to support the pensions, higher taxes drive away more people leaving the need to raise taxes again driving more people away. Go ahead public SERVANTS. Keep demanding what you feel you deserve. I will tell you piss off with my feet and mobility. And I, and many others will. I hope the sates have the balls to go bankrupt. It is the only sane thing to do in all this public pension insanity.
January 21st, 2011 at 10:47 pm
Ugh.
Barry…
Great comment-bait post my friend.
Just the mere mention of Unions will get the “foaming out of the mouth” types out in force. (i.e. DeDude, Julia, and the other girlfriends.)
Well played sir.
If you did a good drive by hit job on the Libertarians or Ayn Rand, you could really get something rolling….
I’d be forced into the fray with the braying donkeys.
January 21st, 2011 at 10:57 pm
Inexorable problem.
Promises were made. Promises that will not be kept.
My guess is that 1/2 the people who were promised benefits are already bracing for disappointment. The rest just haven’t been paying attention, or are placing too great a faith on various government agents.
Taxing the few remaining taxpayers more is probably not the solution.
Probably time to start figuring out ways to make this nation (and its States) a bit more competitive….
[Hint: More regulatory schemes will not make us more competitive.]
January 22nd, 2011 at 1:23 am
Hey Stalker!
January 22nd, 2011 at 1:30 am
Not long ago, it was popular in certain circles to lay all our economic problems at the feet of the UAW. Their supposed (make believe) compensation of $75/hr was storied to be our path to national economic ruin.
Most old time UAW employees make around $25-28/hr with retirement after 30 years. The new hires only draw a poverty wage of $12-14 with no retirement other than what they fund themselves. You have to make some really generous assumptions about the cost of benefits to even get up over $40/hr in total compensation for the old guys, let alone the wingnut popular $75.
I worked in a UAW plant where some of the old timers were missing body parts. Missing fingers mostly, one fellow was short an arm. Even with today’s “uncompetitive” regulatory environment I was in the shop one day when a man mashed his hands under the hold-down clamps on a shear and a few years later when another suffered the same in a brake press. Injuries weren’t common but they happened. It can be hot, repetitive , dangerous work and I doubt any of the traders in this “room” could hack it long in a world where they actually had to produce something with their time other than a “trade”. Any trader criticism of the modest compensation anyone who actually works for a living gets shouldn’t count for much in the real world but that doesn’t seem to be throttling the conversation against working people, does it.
Now that you’re done with the UAW, the conversation seems to be shifting to the “over-compensated” cop/fireman/teacher. My father retired as a highway patrol sargeant. I can remember growing up as working poor. Money was always tight and we lived simply in small midwest towns. The weak salary for Pa’s long hours and difficult work was offset by the promise of a decent retirement which my parents cashed into as my father hit 60 and left the Patrol, not the 48 commonly used by the same crowd who crow the UAW boys all make $75/hr. My folks are already beginning to worry over the talk about retirement cuts as my father at 85 is a little too old to strap the Smith & Wesson back on, don the campaign hat and hit the road in his patrol car again. We don’t live in one of the real problem states so I don’t think they need to sweat … much.
Ayn Rand’s “The Fountainhead” was on TCM the other night. Each time I run across it, I try to watch but I never last longer than 5 minutes and if not for Patricia Neal I wouldn’t even last that long. I can’t but chuckle at the people who follow her Libertarian theology who also likely view her as a great film writer. What garbage it all is.
I can’t help but think of my father’s years as an honest cop as a huge waste considering today’s predatory capitalist environment. If he’d had a notion of what we’d all eventually become, perhaps he’d have been better off as a dirty cop. Instead of stopping to help “Andy T” change a flat tire on a lonely rainy night as a public service stop, he could have pulled his six-shooter and selfishly emptied Andy’s wallet instead?
January 22nd, 2011 at 2:17 am
A couple of years ago, the starting wage for a trooper was a whopping $25k/year.
http://www.mshp.dps.missouri.gov/MSHPWeb/PatrolDivisions/HRD/index.html
It’s probably not too late for the fortune seekers here to sign up for their government job and get rich.
January 22nd, 2011 at 2:31 am
I’m sorry, the advertised starting wage was $32k/year during their last recruiting drive.
January 22nd, 2011 at 8:23 am
First they came for the autoworkers, and I cheered (because I was not an autoworker and I wanted cheeper cars)
Then they came for the teachers, and I cheered (because I was not a teacher and I wanted lower taxes)
Finally they came ……..
History has a tendency to repeat itself or at least rhyme.
January 22nd, 2011 at 9:14 am
Wow. This has been a joy reading these cheery upbeat comments.
I love the suggestions to cut all of the public sector employees wages back to 35K and / or save up a few 100K and buy a house and grow a garden in the middle of nowhere.
Great solutions to rebuild a great America. Only if we could eliminate social security, public schools and perhaps public roads and bridges then we would really be getting somewhere.
How do we bring this country back to greatness? What strategy will create real growth in production, wages and quality of life for all levels of society? Cutting the wages of teachers and defaulting on pension commitments may bring some short term budgetary relief but where does it get us long term?
January 22nd, 2011 at 9:22 am
“Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.”
BR, Frickin hilarious. And yes sometimes I am guilty of the above. Haha. I shall endeavor to improve.
January 22nd, 2011 at 9:26 am
Wow, after reading 24 hrs. worth of posts all I can say is there are an awful lot of angry people out here. I think all this anger is very misdirected. Calling out cops and firemen because they will get sweet pensions and not directing this anger at our congress and state representatives, who have all sold out to the bankers and Wall Street is crazy. When was the last time a banker or hedge fund manager risked his life to save you or your property? Day in and day out for 20 or 30 years? Hey, I just turned 55 this month and I am drawing on my pipdy pension from working as a county employee in NY before I joined my husband in his business. I paid into it and I am going to get my return for as long as I can, while it is still there. How many towns in upstate NY would have no employment if it wasn’t for the local highway depts. and the prisons. Open your eyes and take a good look around, the middle class is now turning on itself. Conquer and Divide. We are witnessing the destruction of the middle class. Enjoy the show.
January 22nd, 2011 at 9:39 am
Economic imbalances people. Million dollar pensions, record income gaps, corruption ALL OVER the financial system, QE, Fed printing, commodities run amok, insane college tuition and professorial tenure….
ALL of these imbalances must be corrected or we’re going nowhere. You can’t have private sector workers guaranteeing multi-million dollar pensions for teachers. You can’t have 3rd world POMO markets. You can’t have bankers that can run up oil and inflation costs and literally rob the entire nation.
ALL of these imbalances must be addressed. And they should be addressed by simply letting the numbers fall the way they should. Let the market fix this! Put Ben in a straight jacket (where he belongs) and let the farking thing fix itself!
IT WILL!!!!
January 22nd, 2011 at 9:56 am
NJ taxpayers still owe $250 million for the football stadium torn down last year after the state subsidized a new luxury stadium for the billionaires owning the Giants and Jets.
In addition to two unprofitable stadiums, taxpayers are also paying for an underused, unprofitable arena, an underused, unprofitable racetrack, an underused, unprofitable trainline and a thrice bankrupted, partially built disaster of a rusting hulk Zanadu mall. All built in the Meadowlands wasteland.
Now NJ is bankrupt and who does the governor blame? Of course, without a doubt, everybody knows it’s all the fault of those greedy, selfish retired teachers, firefighters and police officers collecting $20,000 pensions the state contracted with them to pay decades ago and – Surprise! Surprise! – recklessly failed to fund.
January 22nd, 2011 at 10:37 am
“braying donkeys” LOL
manifoldsrme – thats sounds sensible and therefor a plan – I can see the headlines in downstateIA “East Coast Arrives – Inflation Up & Locals Out” – practice swordmanship* and garden growing now
*coda – not expendable in a post modern world
.. this flippant post is not a jab – its a compliment for what seems to be a plan in post modern world
January 22nd, 2011 at 10:47 am
Duh, divide and conquer. Hadn’t had my cup of tea yet.
January 22nd, 2011 at 11:14 am
Andy T,
You may not find it disturbing to see that beast of predatory capitalism eat your annoying Nabors and maybe even enjoy the table scraps that fall down to you. Just remember that after all the Nabors have been devoured, the beast will still be hungry ;-)
January 22nd, 2011 at 11:36 am
Self sufficiency. The heartland knows what it is and embraces it. You really need very little in life. The fact that self sufficiency is looked at in disbelief or even ridiculed is EXACTLY why this country has failed.
January 22nd, 2011 at 12:01 pm
ridiculed? Are you kidding? Having a vegetable garden to supplement your food is not the same as being self sufficient. Can you make your own sugar? How about feed for your animals? Are you going to generate your own oil and produce your pharmaceuticals when your family gets sick? Is your wife going to home school your children? Are you going to have enough children so that you can supplement the labor you’re going to need to hire to run a farm large enough to feed that family?
People in the heartland embrace no such thing – 95% of them are living in the cities and suburbs getting fat and lazy just like the rest of the country.
January 22nd, 2011 at 12:33 pm
Speaking of braying donkeys and self sufficiency, we have a new Congress-person.
The old Truman Democrat was kicked out and a new Tea Party Republican replaced him. Our new public servant ran campaign ads promoting her and her husband’s farm equipment businesses and farming operation as proof of their self sufficiency and Libertarian Ayn Randish entrepreneurial spirit.
The farm equipment businesses were passed along from her father-in-law lock, stock and barrel as was the family farm. This is their farm subsidy record …
http://farm.ewg.org/persondetail.php?custnumber=A05241472
Her parents farm is nearby and their subsidy record is similar. So, you’re talking roughly $1.5 million in farm subsidies for these self sufficient Tea Party Republicans while they’re picking at the braying donkey welfare queens trying to survive modest state retirements.
Generally, I only lurk here and have for several years but this thread kind of made me … mad.
January 22nd, 2011 at 1:04 pm
anonymouse,
Thank you for your observations. Many politicians whine about government spending while their hand is in the till. Sarah Palin was another one with “the bridge to nowhere”. It was fine to spend hundreds of thousands on her state, until she became Veep candidate.
Many treat inherited wealth as proof of their canny ability to build businesses using conservative, frugal, rugged self made man practices, while being silent on the massive government supports they receive. You know, the born on third base, thought they hit a triple folks.
And you know that many Libertarians are former Republicans who are ashamed of out of control spending by Republicans who haven’t balanced a federal budget since the Eisenhower days.
January 22nd, 2011 at 1:07 pm
back from errands ..
correction – “downstateIA” probably “outbackIA” (dyslexic w/my regionals)
& manifoldsrme – be sure to keep the Glock w/30 packin in case somefolks from the old country showup – don’t wanna be outmatched
January 22nd, 2011 at 1:35 pm
manifoldsme;
Make sure to keep your health insurance, you wouldn’t want to destroy that there self-sufficient image with a massively coronary subsidized by them there urban leaches and their tax-money. Last time I was in the heartland they didn’t let the uninsured die in front of the hospital door, but they did take federal money for their hospitals. Also do bring your off road bike, because you wouldn’t want to be leaching by using the roads build with subsidies from them there urban taxpayers.
January 22nd, 2011 at 2:31 pm
The history of this country has always been (expect for a few yrs of TR and FDR) that wealth owns Washington. Whether it was the railroad barons, the robber barons for the late 1800′s, or Wall St. in the 1920′s. The current crop is no different, that being the nexus of the the banksters and the military/Ag/Ins/Healthcare industrial complex who are currently in charge. The new variable is the now complete corporate control of the mainstream media…the lack of the 4th estate. The question is, do we just lie down as we watch the concerted march continue on the road back to the “good old days”.
The Any Rand crowd are “believers”, not at all interested in the facts. For the most part belief vs data, is the heart of the disagreements in all the of above arguments in this comment section.
Let’s look at Denmark with it’s massive democratic socialism…high tax rates, free healthcare, free medical school, 2 yrs of unemployment ins (though a < 5% unemployment rate) , and lack of crime is considered, by the Heritage Foundation, to have a slightly higher "Index of Financial Freedom" (http://www.heritage.org/index/ranking). Given it is a "communist/socialist" country, how then could it ever be considered more economically free then the US.?
PS: All of the countries that are ranked higher then the US, have some form of national healthcare.
January 22nd, 2011 at 5:47 pm
same reason as in Europe
money isn’t gone, it changed over years the hands only…. and we have to pay.
but not for the people only for a few priveliged.
and I don’t mean federal Workers and so on, who are all tax payers.
Think about the Managers, Bankers and Politicians, it seems that they are all related to those in Europe or backwards. Their only aim is getting might and money
A disapointed member od the EU
January 22nd, 2011 at 6:26 pm
“I can’t help but think of my father’s years as an honest cop as a huge waste considering today’s predatory capitalist environment. If he’d had a notion of what we’d all eventually become, perhaps he’d have been better off as a dirty cop. Instead of stopping to help “Andy T” change a flat tire on a lonely rainy night as a public service stop, he could have pulled his six-shooter and selfishly emptied Andy’s wallet instead?”**
Did I write or say anything to suggest that I advocated violating previous pension/health care commitments? Or, did you just feel like being mean to me?
My feelings are so very hurt now…
**I’ve been helped by plenty of fellow citizens when I’ve been in need of assistance. And, I’ve given plenty of assistance to others. Can’t say I’ve EVER been helped by the Po Po.
Or
January 22nd, 2011 at 6:28 pm
“And you know that many Libertarians are former Republicans who are ashamed of out of control spending by Republicans who haven’t balanced a federal budget since the Eisenhower days.”
Well, at least they’re capable of feeling some “shame”….
Unlike others….
January 22nd, 2011 at 6:39 pm
Who can not believe the absolute venom aimed at teachers, police and fire fighters today? Too many believe we are bankrupting the operation of government. Let’s do a quick reality check:
http://www.salon.com/news/newt_gingrich/index.html?story=/tech/htww/2011/01/21/newt_gingrich_and_state_bankruptcy
Newt Gingrich and the Big Money Republicans know taxes are going up. By destroying public sector unions, right wing nuts can keep more money. It’s not like they didn’t get enough from the Bush tax cuts. They know what’s ahead and no public employee unions mean near minimum wage educators, police and fire protection. For another discussion, ask yourself who in God’s name will do these honorable jobs? Who will stay in these jobs as a career?
A growing progressive revolt will force higher taxes (then add the exploding costs we will pay for healthcare). As the little guy realizes the super wealthy have sold out the American Middle Class, we should be asking where are the jobs?.
http://nationaljournal.com/member/magazine/what-happened-to-15-million-u-s-jobs–20110120?page=1
We have not yet figured out why 15 million jobs went up in smoke during this decade. And the policies we pursuing now are making things worse. As parents and grand parents this article should send chills down your spine.
joepie
A pro-growth jobs program: “They also ought to listen to the hundreds of American executives who have told me that critical ingredients for them to create long-term growth and long-term careers are highly responsive (not nonexistent) government, predictability of regulation (not lack of regulation), great (public) schools and excellent institutions of higher education (including vibrant state universities), reasonable taxes, a good workforce, a great quality of life and affordable (not unlimited) access to capital.” DE Gov. Jack Markell (former Nextel and Comcast executive)
January 22nd, 2011 at 6:51 pm
“Let’s look at Denmark with it’s massive democratic socialism…high tax rates, free healthcare, free medical school, 2 yrs of unemployment ins (though a < 5% unemployment rate) , and lack of crime is considered, by the Heritage Foundation, to have a slightly higher "Index of Financial Freedom" (http://www.heritage.org/index/ranking). Given it is a "communist/socialist" country, how then could it ever be considered more economically free then the US.?
PS: All of the countries that are ranked higher then the US, have some form of national healthcare."
~~~~~~~~~~~~
I don't know if you caught the "theme" of the countries on that list….but, most of the ones above the United States are very small "island" nations. Denmark is a peninsula.
Let's swaps Denmark with El Salvador and we'll see how free and happy they are in a few years from now….
I love it when idealist liberals highlight some of these nations with high levels of socialism and "income equality"…. as if this something that United State should "seek" to attain or could possibly attain. Pfft.
There are 5mm people in Denmark. 90% of of them are Danish. 80% of them belong to the same Church. The per capital income is about 35k/year.
In other words, it's an incredibly small, homogeneous group of educated people.
Denmark looks a lot like Iowa…. If you want to compare the United States with some of these countries, please at least pick one of our States (with a similar demographic profile) to do an "apples to apples" comparison.
Otherwise, you're just smoking your own dope.
And you think Libertarians are "believers?!" Ha ha ha.
"Geez Louise."
January 23rd, 2011 at 7:51 am
What exactly is it about Denmark that is not scalable, and why?
They actually have at least as much racial/ethnic tension as the US (their minorities have slightly worse unexplained excess in unemployment rates than ours), and heterogeneity is a strength not a weakness (or maybe there is some secret to why 80 of one kind and only 20 different would be “good” ?).
The one thing they do have is a majority believing that government is the problem solver not the problem, but that difference is about attitudes, so if enough people could turn their brains on we could adopt their attitudes (and their solutions).
Talk about smoking your own dope.
January 24th, 2011 at 1:31 am
THIS IS A CRISIS OF ETHIC PROPORTIONS!
Unfortunately for most of us who are ethically-hinged, we tend to take the message at face-value, failing to see this parry as yet another trope from the uber-conservative script to divide-and-crush the middle class. It’s another case where fear-mongering uses the exception to stand-in as the rule.
Are there abuses in pension systems? Yes. Should they be addressed? Yes. Are the systems rife with corruption? No. Are most civil retirees making a fortune? No.
The reality is that many civil pension systems do not contribute to Social Security. Therefore, for their members the pension is in lieu to SSA. How many are aware of that factoid? Also, most civil positions pay less than positions of comparable education and responsibility in the private sector.
For all the hue and cry about the Beltway folks leaving government for positions as lobbyists or in private industry, does that not make the case that people of high skill LEAVE civil service because they can make higher wages in the private sector – rather than the other way around?
I understand why people are upset. The heart of the middle class is being dismantled right beneath us and we don’t know who to hold accountable. Those who are accountable are working double-time to ensure we don’t pin the blame on them… thus, these narratives about who to “blame” are circulated from ‘think tank’ press releases to our clueless mainstream media shills. So while we attack one another, the multi-national corporations get a free pass.
Please have a quick look at this post from Zero Hedge about the positioning of General Electric (GE) in maximizing “tax efficiency” through outsourcing their previously-American operations to low-cost labor pools abroad. If this doesn’t jar you from the bunk we’re being fed by the MSM, I don’t know what will:
http://feedproxy.google.com/~r/zerohedge/feed/~3/jy7W_SnIYTs/tax-winnersloser-obama-immelt-no-conflict
January 24th, 2011 at 8:45 am
[...] election. I sincerely doubt any legislative remedy is in the future. The teabaggers have a hard-on for BKs because they know it would break the unions (and its contracts and pensions), a move heartily embraced by the likes of Newt Gingrich and Grover Norquist and not likely to be [...]