My father was a real estate appraiser.

He started out as an engineer, but that lasted less than a year, he wasn’t an ass-kisser, he couldn’t play the game, he was bounced out.

So he opened a liquor store and tried his hand at commercial real estate. Unsuccessfully, because he didn’t have enough money to purchase property.

Trying to improve his lot in life, he relocated the package store next to an exit by the newly-finished I-95, otherwise known as the Connecticut Turnpike. And when redevelopment hit Bridgeport, his friend Maury Magilnick said no one knew as much about local real estate as my dad, and if he became an appraiser, he’d hire him.

My father spent a week at UConn. Another at the University of Chicago. He got licensed. And with his engineering background and his natural acumen he became a legend in the state, Attorneys General feared him, and my dad garnered the income of a doctor or a lawyer, he sent three children to private universities and graduate schools.

That dream is dead today.

I’m in Vail, Colorado. My family started skiing when I was ten. Used to be an egalitarian sport, you saw Beetles in the parking lot, sandwiches were de rigueur in the base lodge, brought from home. Skiers were not the upper crust, they were us.

No more.

So I’m riding up the lift with a fourth year medical student. I ask him what he’s gonna be.

“An anesthesiologist.”

Why? Because he loves it? No, because he can make good bread and vacation and live the high life.

I’d like to tell you I met some musicians on the lift, some regular people, but I kid you not when I tell you the only people I met were in finance. Oh, and there was one dentist.

They traded for the family account. They were “consultants”. They worked for hedge funds. They had their own private ski instructors, at $700 a day. They were the 1%.

And everybody in America is scrambling to get into the club.

That’s what’s wrong with the music business. The executives want to be as rich as the bankers, they too want to fly in private jets and tip with hundred dollar bills. What is the right tip these days? For a ride through town? I’m thinking $20, because the bankers have driven up the rate and the employees expect it and they’re struggling to make ends meet.

I grew up in the sixties. We were all in it together. Sure, my dad told me to be a lawyer, so he didn’t have to worry about me, but instead of taking the LSAT, I went to Montreal. There were no corporate recruiters on campus. Life was about personal fulfillment.

But now life is about money.

Either you’ve got it or you’re struggling to get it.

That wannabe anesthesiologist? He’s a Republican. He doesn’t want socialized medicine and he doesn’t want taxes.

Nobody wants taxes. Everybody thinks life is a personal struggle, that there’s no common infrastructure, no freeways, no police department, no power utility.

What’s mine is mine.

And if you don’t watch out, I’m gonna take yours.

No wonder musicians sell out to the Fortune 500. They too want to be rich. But the joke is upon them, they can never be that rich, the corporations laugh at them, they’re pawns in their game.

We live in a completely duplicitous country where no one’s honest, no one does what he believes in, everybody’s just motivated by the money.

And the problem?

PUBLIC EMPLOYEES!

Those teachers ruined the economy. Hell, you can barely make it on a teacher’s salary, you can’t vacation in Vail, Colorado, you’re closed out.

And somehow we accept all this. We shrug our shoulders and say it’s the way it is and will always be.

Why?

I feel like I’ve been asleep for thirty-odd years. While I was pursuing my dream, everybody else was pursuing the dollar. Reagan made greed legitimate and the baby boomers filled that hole and now their kids want more of the same. They just want to play on their hand-helds and feed at the trough. No one wants to innovate, they just want to get rich.

Ever speak to someone in finance? It’s a rare bird who likes it.

They do it for the money.

And with this money they buy up those concert tickets so you can’t get a good seat. They’ve got a shortage of time. When they get to the amusement park, they want to close you out. Get concierge treatment, cut the line…and you think this is okay because you think you’re gonna be rich too.

Ain’t that a laugh.

At least at Middlebury I saw what rich was.

Most people can’t afford a private college education any longer. 50k a year? Hell, public education keeps going up and up. Most people never even get into the game they think they’re gonna win.

There’s a ruling class, pulling the strings, and you’re not a member.

This is not a Democratic or Republican issue. This is a money issue. Money’s corrupted the system. You’ve got to be on the take to get elected. So you’re beholden to the corporations, not the people.

But you’ve read Steve Jobs’s biography and you think you’re gonna make it.

Don’t you get it? The odds of music success are infinitesimal, all the things you want most musicians haven’t got, a house, a spouse, kids, health insurance…

Don’t be angry with me.

And don’t be angry with the music business titans, keeping you out. They’re just worrying about themselves, they don’t care about you, they just want to live in a gated community and vacation where you aren’t.

They’re revolting in Russia. And they overthrew the government in a bunch of Middle Eastern countries. And if you don’t think it can’t happen here, you’re nuts.

Everybody thinks just because people have flat screens, they’re happy. But have you been following the shenanigans in cable? You’re paying for all this stuff you don’t watch just to keep rich people rich.

Music is a game for the poor. A place where the uneducated with no status can get a bit of notoriety and money. And as long as someone makes it, no one pays attention to the real problem.

The game is rigged.

You’re gonna be left behind unless you start making yourself number one and doing what’s expedient to get ahead.

What kind of country is that?

Not one I want to live in.

P.S. That great middle class of yore? It created the classic rock you’re still listening today. Music was a reasonable pursuit, rock stars were as rich as anybody in America. That framework expired decades ago, rock stars are no longer rich. There are bankers who make $20 million a year every year! So the Grace Slicks of today, people born with a silver spoon in their mouths, don’t go into the arts, it just doesn’t pay. Tom Rush was a Harvard graduate. He revolutionized the folk circuit, he pioneered the singer-songwriter game. Now we’ve just got poor people rapping about Benzes and boats. How fulfilling is that? I get it, they want in. But you used to follow your dreams, not the dollar. But now if you ain’t got the moolah, you’re gonna have a heart attack and no health insurance and you’re gonna be bankrupted. Hell, the dirty little secret is one health episode puts many people in bankruptcy even when they have insurance! But we’ve got to have less corporate regulation and as far as
health insurance goes…you’re on your own. Don’t you see, health insurance is a metaphor for our entire country! Can you imagine someone writing “Get Together” today? Come on people now, smile on your brother, everybody get together and love one another right now… Who sings about that? Chumps.


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Category: Think Tank

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46 Responses to “What Happened To My Country?”

  1. MayorQuimby says:

    The teachers (and cops, and firemen and sanitation workers) most certainly ARE a part of the problem – as much as all the rich corrupted elites combined. TELL ME why is a median wage household of $60,000 in NJ FORCED to pay $7,200 on average in property taxes? WHERE IS THIS THEFT IN YOUR AMERICAN DREAM SCENARIO?

    That’s an EASY $5,000 in THEFT taken from the kids’ college fund EACH YEAR. Order the course of 20 years that is an EASY $120,000 stolen to fund pensions so teachers can retire at 50 or 55 with a paid salary for life after having worked 9 months a year.

    Give
    Me
    A
    Break

    As for the corrupted wealthy well, stop incurring any debts of any kind and they will eventually lose their stranglehold on society.

    ~~~

    BR: How is that theft? You bought the property in NJ, you knew what the property taxes were.

    Learn the difference between theft and bad decision making

  2. flocktard says:

    I think Lefsetz is a sawed off blowhard, and I like the fact that Kid Rock once punched him square in the face just to get him to shut up, but this column is right on.

    My wife and I used to summer in the Hamptons, and we usually stayed at the Palm’s Huntting Inn in East Hampton. It wasn’t cheap, but neither was it dear. Then, it was a real beach town, and its Main Street had a sandwich shop which made the best Italian heros, which we would take to the beach, a record and CD store, a couple of delis, a pet supply store, a handful of indy clothing stores, small art galleries, and a dougnut shop that was slightly legendary. At night, the streets were quiet, the stores all closed for the day. Main Beach was great in those days. Small romantic restaurants (besides the mighty Palm, of course) were spread across Route 27. The thought of our youth and those summer nights brings back wonderful memories, but also a sense of regret – because it represents a lifestyle that can no longer be achieved.

    Today, East Hampton’s Main Street features a Tiffany’s store- as if one simply could not wait to be back in the City to purchase a silver bauble, and needed to buy it on the weekend- every single major, preposterously overpriced clothing designer has an outpost there, and I doubt if most of them make money, given how retail rents have soared, pushing out any shop that has even the most remote utility, besides BookHampton. Citarella has replaced the old Windmill Deli. Gucci has a store there, as if more evidence of the gauche nightmare the town has become was needed. And unfortunately, staying at the Huntting Inn costs quite a sum these days. And as much as I love the place, and still know some of the staff, I gotta tell ya, it ain’t worth it. At night, the streets teem with people and traffic as if it were Times Square. As further evidence of our nation’s gross inequities, real estate is positively booming out there, while huge swathes of the nation are mired in negative equity.

    Like Lefsetz’ ski resort, to experience simple pleasures now requires running a hedge fund or owning a few office buildings in Manhattan. There is no middle anymore, and what was known as the “mass affluent” has been crushed under the weight of a prosperity that turned out to have a false bottom. I don’t where America went either. And I have no idea how to find it so I can bring it back for my children to enjoy, both of whom are painfully aware that the promise this nation once offered them has completely evaporated, at least for the foreseeable future.

  3. Futuredome says:

    What happened? The economic boom ended in the 3rd quarter of 2000. Americans don’t do well with sluggish growth.

  4. BennyProfane says:

    Well, duh. Your first mistake was going to Vail to ski. Gets me going too. I guess it’s better than Aspen, but, still………..

  5. joe in flyover says:

    Mayor Quimby has a point. True, it may not be “theft” as you or I know the term, but the pensions of teachers, police, and firefighters are every bit as symptomatic of our gimme gimme gimme culture as the banksters, athletes, and entertainers who are never satiated.

  6. mark says:

    Robert Kuttner says that we are ruled by a “rentier class” (http://www.creditslips.org/files/kuttner-on-past-future-bkcy.pdf). But Lefsetz is referring to a “rentier culture”. Kevin Phillips (yes that Kevin Phillips, the author of Nixon’s Southern Strategy) wrote a book exploring the rise of the “rentier culture” and its implication for the future of the good ol’ US of A (spoiler alert – it’s not good). Don’t be put off by the title:

    “American Theocracy: The Peril and Politics of Radical Religion, Oil, and Borrowed Money in the 21st Century”

    http://www.amazon.com/American-Theocracy-Politics-Religion-Borrowed/dp/0143038281/ref=sr_1_4?ie=UTF8&qid=1325194575&sr=8-4

    Haven’t gotten around to the 2009 follow up: “Bad Money” but I’m guessing it rehashes some of the same themes with the financial meltdown as denouement.

  7. tball says:

    I really cannot understand a mentality that blames teachers, firefighters and policeman for our problems. Unbelievable. Income for the top 1% has tripled over the last 3 decades, stagnated for everyone else, but the middle class public servants are the problem? Stop swallowing the propaganda of the finance sector. Remember, all of the news channels you watch/read are controlled by a handful of very large corporations with a vested interest in maintaining the status quo.

  8. BennyProfane says:

    It is a problem, tball, like it or not. I agree that the bankers were the greater evil, but there are many many localities right now that are spending more than half of their budgets for pensions and retiree health care, at the same time that revenues are and are projected to drop 10% a year for the next at least four or five years. I know you like your local teachers and “first responders” (that’s a new one), but they are very, very expensive, and the bill will only get higher over the next decade or two. Another great reason to sell your house in a high tax and heavily unionized area.

  9. MayorQuimby says:

    @BR-

    I don’t live in NJ but would like to.

    Yes, it is theft. A group of people (unions) conspire to exchange votes for $$$. The people of NJ do not understand why the expense is as it is. They don’t see the theft but it is there. They put up within out of ignorance…for now. Eventually, they will flee the area the same way people fled Detroit.

    And this is as much a reason why the middle class in this country is finished as any commodities speculation or malfeasance by the powers that be.

  10. MayorQuimby says:

    @tball

    Absolutely public servants are the problem. And a bigger one than the corrupt bankers at that. Add up how much money gets stolen from NJ taxpayers and hand to pay for cop pensions, excessive salaries, ROLLOVER VACATION and sick time (!!!!!) etc. look at port authority cop pensions and salaries.

    And then add up ALL THAT MONEY and give me a grand total.

    I can easily come up with a deep six figure sum over thirty years for your average middle class taxpayer in the northeast east.

    That is HUNDREDS OF THOUSANDS OF DOLLARS given to public leeches who then retire at fifty and get paid for doing nothing.

    They have honorable necessary jobs that deserve recognition and a living wage but they are now living like kings off the backs of a middle class under assault BY BOTH SIDES.

    If you think our problems are entirely left or right focused your credibility is shot as far as I’m concerned.

  11. econimonium says:

    MayorQuimby you are completely and utterly wrong. Period. I can’t even believe anyone with 3 functioning brain cells swallows these arguments.

    My dad worked for the city. He was a school administrator. When he left private industry, to pursue something he wanted to do and loved, his salary went to less than half. Read that again. He could make more than twice as much money but chose to run the school system and make it better for everyone. He has a city pension. He not only bought back a year of time when he left, but his pension is also based on his highest 3 years, which were his last ones. Do you think he “deserves” it? The medical care, the pension?

    You bet your ass he deserves it, every penny. He could have take the approach described above and said “screw you” but he made the system better over the course of 30 years and his various posts. I don’t begrudge him anything. The same goes for the janitors, the teachers, the aides, and the lunch ladies. They got paid shit to do what they did and all could have easily made more. But you know, that was the trade off. You took less up front knowing that you’d get more when you retired. That was the incentive.

    Now asses like you want to renege on this because most of you have crap in the bank and are envious of these people and their pensions. Screw you. You work for 30 years thanklessly at half of private industry rate. People like you make me sick. You’re part of the problem. And you’re completely and utterly un-American.

  12. econimonium says:

    Furthermore Quimby, I’m part of the problem so I’ll make the confession. I have taught part-time at a couple of state institutions for over 20 years now. I’m adjunct. You know why I’m not full time? Even though it would come with a lovely pension and all sorts of goodies? Because of the pay. They can’t pay me even close to enough. I’d make around 60k a year at one, and about 85k a year at the other. They keep asking me every time a slot comes up, but I politely decline and tell them maybe the next time. I’m one of the highest rated faculty members consistently, even better than the tenured full professors. They would kill to have me on staff. But I won’t do it. My dad, on the other hand, did.

    And I won’t do it because of people like you who spout this complete and utter jealous nonsense and complain about people who work their asses off trying to educate kids. I’ve worked around them my whole life, and I know what it’s like. People like you obviously don’t. And the sad problem with this is, as the middle class can’t afford to send their kids to private schools, it becomes even more important to have high quality teachers and professors in the public sector. But if people like you keep it up, you’ll chase even more of us away. I don’t want to give up my salary to go and teach when ignorant blowhards like you are conspiring to even take away what little reward there is in the form of pensions and health care in retirement.

    Sorry for the two posts but this just lit all my burners.

  13. MayorQuimby says:

    Bullshit and it is YOUR entitle mentality that has effed up this country.

    HOW DO WE QUANTIFY what someone “deserves”?

    For DECADES teachers and janitors and cops did JUST FINE with BELOW AVERAGE WAGES which came with pensions because the wages were crap.

    FAST FORWARD TO TODAY.

    The median wage in NJ is about FIFTY GRAND and yet the average cop gets NINETY. But it isn’t just money, this cop also gets to retire at 50 and collect a juicy high six figure salary for LIFE. He gets to accrue rollover sick time and other abusive scams.

    For what?

    Because he’s a cop?

    Bullshit.

    He serves the public who decides what he “deserves”. If I ran things he’d get a 401k plan and median wage and not a penny more.

    And THANKS TO YOUR CRONY PUBLIC UNIONS THERE IS NO SUCH THING AS OWNING PROPERTY ANY LONGER.

    One of the most cherished and fundamental human rights is GONE so public “servants” can help them selves to the producers’ money.

    Average property tax bills in NJ are over $7,000 to pay for all this waste, abuse and ENTITLED BULLSHIT.

    I IMPLORE all of you hard working taxpaying private sector workers to DEMAND MEDIAN WAGES AND BENEFITS for all public workers.

    “I want mine” sums up this whole shitty epoch.

    Well guess what…I’m KEEPING MINE and you can’t have any of it.

  14. flocktard says:

    The answer to your public employee issue is simply this: where it is a problem, it is. Where it is not, its not. Barry and I live in a County where policemen routinely make over $100,000 per year, and school superintendents- of which we have 56 thanks to overdistricting, which keeps a lot of duplication and patronage jobs going- get paid well in excess of $350,000.

    Teachers, under our state contract, currently get a mandated 2% salary increase a year, at a time when anyone who even has a job doesn’t see any increase. But since their health care benefits are paid for, their annual increases are more like 15% since health insurance costs skyrocket every year. Thanks to a rule the unions wrote for the NY State legislature called the Triborough Rule, the terms of a contract cannot be changed until the current one expires. So even in the midst of this contraction, no one can stop the mandated property tax increases every year that go unchecked.

    Needless to say, these teachers aren’t being underpaid, and I know this since their salaries are made public and are easily found on the web. They get summers off, too.

    Once upon a time, people chose the civil service for the benefits, for the security and the tenure, in exchange for lower wages. But in a lot of places they don’t get lower wages at all- and if they get parity in wage scale, then I demand as a taxpayer that they getparity in benefits. I really don’t want to hear any crap from civil servants, each one convinced they “could have made” so much more money in the private sector if only they weren’t so selfless. Its self serving drivel in a lot of cases.

    I won’t go into the manipulation of overtime to increase pension scales, and the myriad of other freebies the civil service in New York gets, including paid blood donation days. Now I know it not a the civil servants fault that health insurance soaks up a huge percentage of one’s income today- but there it is, and they should have to chip in too. Many contracts are being rewritten so that they have to pay 25% of the insurance costs- that is still generous, compared to the private sector.

    http://www.bloomberg.com/news/2011-12-16/million-dollar-nurses-show-california-s-struggle-to-reduce-payroll-costs.html

  15. econimonium says:

    Thank you so much Quimby for that last line. You’re exactly what’s wrong with this country. You’re anti-American, selfish, and a nutbag. Your last post proved it so I shan’t waste any more time with you. Go vote for Ron Paul or something. At least that will keep you out of mainstream politics.

  16. MayorQuimby says:

    eco-

    If there’s one thing I learned in debating people online it’s that those WITH cogent arguments present them.

    Those without, insult and skulk away.

    Bye now.

  17. MayorQuimby says:

    And Ron Paul won’t solve a THING.

    THIS will:

    http://market-ticker.org/akcs-www?singlepost=2138677

  18. jd351 says:

    Geez, I wasn’t going to comment. But here we go again blaming everything on Teachers, Fireman , Public Employee. Ignoring all the real problems bringing this country to it knees. ( ie. Out right corruption at the highest levels of gov’t, out right fraud in the finance industry etc…. ) And here the Mayor is blaming it all on the teachers, firemen etc…. Just amazing !!!!! When you pay peanuts you get monkeys, and that what we got with the Mayor. WOW I get tired of this Bullshit.

  19. MayorQuimby says:

    WOW whip out a calculator and do the math.

    Tell me how much public unions cost taxpayer and how much JPM Morgan Chase does.

    I’d say if they aren’t equal, the former screws more people out of more money than the latter.

    $7,200 in property taxes.

    An END to home OWNership – PERMANENTLY.

    And all these pensions and scams put more pressure on Bernanke to monetize, cheat, swap, print, steal, lie and pretend to keep the whole shitty house of cards in place.

    A nation of children all of whom want MORE THAN THEY PUT IN to the system.

    Instead – you are ALL going to get LESS as it breaks down over time.

    And break down it will.

    Mark my words.

    And if you don’t all grow up, you won’t be able to put it back together again.

  20. BennyProfane says:

    $90,000? pffftt. Pocket change. This is real money: http://www.nytimes.com/2009/05/03/nyregion/03clarkstown.html?scp=3&sq=rockland%20county%20police%20chief&st=cse

    And, up here in Westchester and Fairfield counties, (Real hotbeds of crime, btw. Very dangerous places) the experienced police officer is well into six figures. But, he’s not experienced for long, because he’s retired to Florida at 50 or 55, essentially making double the average American’s income until death (which very well be a longer period than he actually worked). With COLA! And free health care! For the spouse, too!

    econimonium, please with the talk as though public employees have a choice of private or public employment, and are doing it out of the kindness of their heart. Most haven’t experienced the job insecurity that the rest of us have in the real world since our middle class existence has been off shored since the eighties until now. Maybe your father, and, therefore your family, would look at the world a little differently if he lost his job a few times during your upbringing due to no fault of his own. It’s a tough world out here, and, we also have to take care of our meager retirements on our own. Doesn’t help when that tax bill comes in 10% higher than last year.

  21. MayorQuimby says:

    Thank you Benny. An adult in the room, finally.

    Barry and Invictus are enamored with the concept that the right is fanatical but in my opinion it is the left which has done at least as much in undermining middle class prosperity if not more.

  22. ReadAmos says:

    Like it or not, the article is 100% correct. Everyone needs to jump on the Occupy Wall Street bandwagon so we can take back possession of our country. Re-Elect NoOne. Curtail lobbies. End bonuses for execs in companies receiving TARP money. Break up the big bad banks. Stop the dominance of the ruling super-wealthy class. Jail banksters, not protestors. Stop endless war.

  23. theexpertisin says:

    If one thinks the current so-called progressive left has undermined middle class prosperity, “you ain’t seen nothin’,yet” .

    They want the money, true. But what they really seek is power, a more sinister goal.

    Not that the extreme of any political wing is preferable. A pox on all extremists.

  24. Unsettled Cash says:

    So Bob Lefsetz instead of blogging about the injustice of the world why don’t you drive down to Leadville pickup a couple of people and treat them to a weekend in Vail at your expense?
    Put your money where your mouth is and blog about that.

  25. brandyjc says:

    Are you kidding me? Your father made it because he kept trying to make it, even when it didn’t work at first. He kept trying, and from your description he was very open-minded about doing things differently when they didn’t work out the way he first thought…until he finally hit on what did work.

    That’s the issue – doing things over and over again but expecting different results.

    Reagan didn’t make greed okay – the world has been about money for thousands of years – it’s a natural, if not pleasant, human failing. Sometimes, like now, it goes over the top – as in Goldman Sachs vs. Occupy Wall Street. It was only during the sixties (when I grew up too) that supposedly being about personal growth ***in opposition*** to being about getting things done even if it didn’t mean a magically perfect life was considered the norm.

    Now, surprise, I’m a financial advisor, but I’m also about as liberal as it is possible to be and still be in that field. I guess I’m one of the “rare birds” who likes his job and likes to help people and sleep at night.

    The problem, as is revealed in this column, is that helping people doesn’t mean giving them a handout, it means helping them learn how to help themselves and also others, so that we all stand a chance.

  26. jswap says:

    “rock stars are no longer rich”

    wow, I feel pretty bad about this.

  27. Frilton Miedman says:

    It’s ironic, for 30 years we were sold on the idea that lower taxes on the wealthy would “trickle down”.

    Now that it’s glaringly obvious that has failed, the only “trickle down” has been increased consumer debt, we’re now told that the wealthy worked harder than others and earned their money, or that they’re still somehow “job creators”, or that we need to “reward success”.

    I specifically loved hearing that “reward success” line when the outcries came out over Goldman Sachs record breaking bonuses immediately following the screwing they and the other TBTF’s gave the rest of us via mortgage/investment fraud (triple A assets?….really?).

    I get that many executives work 60-80 hour workweeks, but since when are executives the only group that works long hours?

    Talk to me about the HVAC tech that stays at a home until 1:am in the dead of winter to get the heat back on after being up since 6:am.

    Then there’s the cherrypicking,

    “Benny” above cherrypickss two select towns where the police make an anomolous salary, as if this represents all police across the country…therefore all police, teachers and firefigthers are overpaid.

  28. Futuredome says:

    6 figures is 60000 in the heartland. That ain’t nothing. Pensions, bleh. Teachers aren’t that impressive. They pay a pretty penny nor does the city or township add anything. There is nothing to see there. “Benny” is lying.

  29. victor says:

    And yet, from a slightly different prospective

    I like to be in America
    Okay by me in America
    Everything free in America!

  30. BennyProfane says:

    ““Benny” above cherrypickss two select towns where the police make an anomolous salary, as if this represents all police across the country…therefore all police, teachers and firefigthers are overpaid.”

    Nope. Linked to an article about one township in Rockland County, and pretty much accused most towns in Upper Westchester and Fairfield counties, so that probably covers, oh, fifty or sixty budgets. And, I only point to police salaries, because that’s the only data I have. But, really, do you actually think that those places operate in a vacuum? Please. Take your head out of the sand. This is a serious problem that isn’t going away for thousands of municipalities. large and small, across America, and you can also include many many counties and a lot of states. Just today I read an article about the mayor of Oakland, Ca. in the NYT, and they mentioned that half of her budget is the ever rising cost of municipal workers, most of which was police and firemen, active and retired. It’s a staggering problem for many other California budgets. There simply is not enough money to pay for all of this, and, only rapid growth will possible cover the costs down the line, and, you know that ain’t happening. We are in a period of deflation that may be here for a decade or two, right? (But, somehow, the public pension actuaries base their whole future model on 8% returns on their money. Yeah, right. Give me 8% totally assured, and I can retire today)

    Getting all high and mighty and avoiding the real math will only postpone the inevitable. Hey, I was once a union member, and I sympathize with the plight of many who aren’t born with the silver spoon up their butt, but this isn’t going to work out well if the real problem isn’t confronted sooner or later. You just can’t continue bleeding the taxpayer dry to pay for this – they will vote for politicians who will prevent that, or, just get up and move to a lower tax town across the country. Why do you think most of upstate NY is an economic wasteland? Who in their right mind would start a business or even retire there, with property and other taxes as they are?
    If you don’t think this will end badly for many, go talk to the poor SOBs in Rhode Island http://www.nytimes.com/2011/12/20/business/pension-deal-in-rhode-island-could-set-a-trend.html?scp=2&sq=rhode%20island&st=cse who just had their pensions cut in half. You think they’re going to be the only ones? They’re just first.

  31. mark says:

    “benny” asked “You think they’re going to be the only ones?”

    Obviously not but the problem is far more widespread and there will be other losers besides the employees and taxpayers:

    From the article you linked to:

    1. Both public and private providers of defined benefit pensions have and will continue to screw over the workers they made promises to:

    As cities, towns and counties struggle with fiscal pain, there has been speculation that they could shed their pension obligations in bankruptcy. Some have said it might, in fact, be easier for local governments to drop those obligations than it is for companies, which use a different chapter of the bankruptcy code. Large steel companies, airlines and auto suppliers like Delphi have terminated pension plans in bankruptcy.

    2. Let’s not forget about the fools who lent money to these municipalities:

    Local officials who want to cut pensions do not, as a rule, want to shortchange their bondholders for fear of not being able to borrow in the future — yet bankruptcy law requires that both types of creditors be treated equitably…The last American city to work its way through Chapter 9 bankruptcy was Vallejo, Calif…It had to navigate similar stumbling blocks. Initially, it planned to cut its workers’ and retirees’ pensions, but it changed course when California’s giant state pension system, which administered Vallejo’s plan, threatened a costly and debilitating court battle. Vallejo instead cut pay, health care and other benefits, as well as city services and payments to its bondholders, and left the pensions intact.

    Granted the article indicates ways in which RI and CA attempted to change the law either to protect the bondholders or to help the cities avoid the stigma of bond defaults but as these cases multiply the states will no longer be able to help (they will be hurting too much themselves and will squeeze the local municipalities to fix their own problems – that’s Meredith Whitney’s thesis by the way, the municipal bond defaults will be at the local not the state level.)

    Sell your munis while you can (with the possible exception of state general obligation bonds except for CA – sell those too)

  32. Frilton Miedman says:

    “benny”,

    the “real math” on police median salaries is $51K.

    The article cites three police captains making an excess of $300K.

    It omits median police salary, again – cherrypicking….seeking convenient examples to justify wealthy tax priviledges.

    It does not address median patrolman’s salary, which is $51K, and most are required to have a degree to get the job in the first place….imagine that, having to get a degree to qualify for a $51K salary.

    You’d have to love what you do, that’s my guess.

    A salary of $51K is excessive?… while I should expect a man to step in front of a bullet or face a deranged lunatic to protect my family, or run into a burning building to save my child?

    If so, then I expect CEO’s to start leaping small buildings in a single bound or stop speeding trains to do their proportional part.

  33. MrBean says:

    Gentlemen,

    Let me direct your attention back to the article. Ido not know who Leftsetz is. I suppose he is suppose to be “someone”, but I do not keep tarck of “clebs”. Regardless, let us look at his screed or complaint. I am a bit older than most of you, so with that in mind, let me proceed. I grew up in a time or era when America offered an oppertunity, not a sure thing. The idea was that America offered one an opportunity to compete, to reach for the brass ring. It never offered the surity of winning or becoming, of achieving simply because one “played the game”. So, it you didn’t have that high school diploma and had to accept a job as a ‘ditch digger”, you would compete with others in the same condition. Whether you got that job was up to you as it was never assured.

    I read the above article and I am struck by the fact that the author thinks one “plays by the rules” and is entittled to some job, some life style. In the fifties, one was only promised the opportunity to compete with others for that job, it was never a given. It did not matter what your justification was, be it money or love of the job, one competed. Now it would seem that so many have expected a change in conditions. If I go to college and graduate with some degree I must be given a suitable middle class job with a suitable salery. When did that happen? When were people guartenteed a middle class job and salery for simply attending some college and graduating with a degree? Did I miss something? Who got these “contracts”?

    What happened to doing for yourself? Why do so many people seem to think that the government owes them a job, a middle class life style? What is this if you are born in America you are owed some “life style” just because you went to college and ot a degree? Where is this carved in stone? I am a high school drop out, I started at the bottom. It took me two years of unemployment interrupted by shit jobs to finally get that opportunity to compete with other Vietnam veterans for a good job. I put myself through junior college, got my AA degree. I went on to take many classes and finally got my degree, a BA in Psychology. But that never entittled me to some cusdhy middle class job with a middle class salery. I worked for the telephone company climbing poles for a living, splicing telephone cable in all kinds of weather. I made my own opportunities by studying electronics and computer architecture just to get into electronic switching. I taught myself network architecture and IP protocols. I became something, an engineer in voice and data networks, became a software engineer in telecommunications. And come the bust in 2001, I became unemployed.

    Yes, high tech was a great place, a lot of fun, a license to play beyond my wildest dreams. I was lucky, but I worked for that opportunity, it was not given to me because I had a degree. I have had open heart surgury and a stroke. I have had to work as a truck driver in my sixties just to earn a living. Now I live on disability social security. That is an entittlement. I worked the require number of quarters, I had the stroke that was required for disability. But Mr lefsetz seems to believe that he was entittled to something more. That there was some implied promise by “America” to provie him with the easy life just because he attended a college and graduated.

    Yes, we work for some sort of entittlement. Yes, it is earned. But while we may believe that it is some sort of ironclad guarentee, it is really dependent on a number of conditions. I expect that in ten years or less I will lose that social security “entittlement”. What the government promises the government can take away. That is a fact of life. Some ofyou may say that it isn’t fair. Lucky for me, I have saved some money. True, my exwife has taken more than her share and I may be a little short in the long run, but that is my problem, not yours. I don’t whine and complain about the unfairness of life like Mr Lefsetz. I will get along. It will not bother me that I can’t spend money like a drunken sailor, that was never the point of living. But I will survive.

    Do p0olice and finemen make to much? The simple answer is yes. I know the rules, I used to make out like a bandit in the telephone company with the union riles. Overtime and double ti9me after nine hours of overtime, and tripple time for holidays. Man, I worked the system with a passion. Was I over paid. Hell yes. The union was there to make sure that we were over paid. It didn’t matter that they were bargining us out of a job, it was about being over paid. Are cops and firemen over paid? Hell yes. Are their retirements over the limit? Hell yes. Did they ever ask themselves if there would come a time when the community would say,”I’m not paying the extra taxes so they can retire on saleries twice what I would get.” Hell no, they didn’t care. Does a university professor that taught four or six courses a year, who neve put in close to fourty hours a week in work really deserve $50,000 or $75,000 a year? His union says so. As the song goes, “Nice work if yoiu can get it.”

    I have been taking college course since 1968. I have met many professors who were never worth their pay. I have over eight years or undergraduate courses, two years of grad school. I could have easily taught a third of those courses and in fact, I did. Just because you have a PhD after your name does not mean you know anything. The world will bullshit you if you let it. Someomne telling you that they ahve a PhD and are an authority on the subject is simply an appeal to authority type of argument. Present your facts, not your credentials. Attack the argument, not the individual. You can’t bullshit logic.

    So who is this Lefsetz and why did Mr Riztholt pubishsi this screed? What was the point? As far as I can see, it was bullshit. Sorry for the profanity. Was it to produce thought or merely produce reaction? Did this guy Lefsetz have a point or was he simply complaining? Well, lets see, it did produce some reaction. People took excetion and offense. And the point was…? I suppose that is my complaint.

  34. Frilton Miedman says:

    MrBean, did you miss the part where Mr Lefsetz first mentions his fathers repeated inability to “compete” and finally found the vocation which he was formidable?

    Your reiterating his point, back then an American had a shot at competition, that dream is now dead.

    An American college grad now has to factor the cost of living, cost of education and whether his chosen vocation can be outsourced to a country where education and healthcare are socialized.

    Want your kid to be an engineer?…programmer?…scientist?

    Forget it, GE, CAT, and most multinationals ares only hiring college grads in China for 1/20th the wages an American engineer needs….good luck with that tuition kid, have a nice day.

  35. Francois says:

    Mr. Bean,

    You are a liar and a troll.

    People like you poisoned the Internet and stupidify any debate by spewing bullshit and falsehoods galore.

  36. maggiemaggie says:

    It looks like the next big lie for Mr. Ritholz to debunk is this idea that public workers are ripping off America.

    With all that’s going on do people seriously want to aim all their vitriol at public workers? It seems to me another distraction to keep the 99% fighting amongst themselves while the 1% really rob you blind.

  37. MayorQuimby says:

    On the contrary Maggie. The big lie is that they aren’t.

    Chart property taxes as a percentage of salary over the last decade. Even in states like NH, taxes are obscene.

    No….the middle class is being assaulted by ALL special interests including those on your beloved left.

  38. Greg0658 says:

    wow – this thread went _ …. on the point of fat pensions heading to Florida – I know its a free country and I’d hate to knock that freedom BUT (always a but) IF the cash stayed in the community that provided it to the government worker there’d be no loss .. there still would be the perception he/she is living a fat lifestyle on my taxes .. ok

    on the Q: the A: we became an entertainment meca GDP .. we outsourced to cheaper less environment conscious locals for the big ticket items and our trade deficit and jobs deficit shows it .. now we are stuck with our capital in those places that we once thought was the green green grass of home plan .. maybe it will work – I don’t think so (for most)

  39. stuckinblue says:

    Downward mobility, a sense of entitlement and a willful ignorance of economics can produce a heated rant. I hope it was cathartic for the author because it doesn’t bring much light to the discussion.
    We have more of a “If you have it , flaunt it”, celebrity culture. There are some fields , and finance is one where globalization and massive improvements in communication and processing power can make people far more productive. Inflation-adjusted ,

  40. stuckinblue says:

    …no hedge fund could have managed $200mm per professional 30 years ago. Now it is possible , and while it probably is not a good idea , money pours into the larger funds from large pension funds. If you really can generate a 12% return , that creates revenues of $9mm @ a 2 % nmanagement fee and a 20% incentive fee. Ill-advised? Probably ; but no one makes the investors , many loyal liberal Democratic apparatchiks , invest on behalf of their retirees ; but they do. Is it risky for the managers and their employees? In a sense , yes . One bad year can blow their franchise ; but the risk/reward ratio continues to entice people just as it does in pro sports or the upperend of the entertainment business or the riskier end of real estate. Are risks greater and rewards lower? Probably. between 2007 and 2009 the number of tax returns with gross incomes in excess of $10mm declined 60%. Are people-even risc people , more anxious? Yes, and they should be . It is a competitive world out there. Sorry.

  41. Francois says:

    Don’t ever mention to some that the US has some problems; they just go apeshit.

    Can’t stay a great nation if people aren’t willing to face up to the facts, instead of masturbating their prejudices.

  42. Francois says:

    Quimby (not to be confounded with Quincy)

    “Chart property taxes as a percentage of salary over the last decade. Even in states like NH, taxes are obscene.”

    And your point is what? That the unions are the biggest responsible of this situation?

    One thing always stuck from my residency: “There is always an elegant, simple, clear…but wrong explanation to a complex situation.”

    Something to think about.

  43. MrBean says:

    Mr Mielman
    Yes, I read the entire article. It is a screed, a complaint, that somehow the times resemble yesterday. But today never does. Of course the past always plays tricks on our minds. Somehow we can look back to a “golden age” and ignore all the relevent problems that so many went through. Yes, my father took adantage of the opportunities that came along. But nothing was automatic and it never was. He was an aircract engineer and designer. He started with Glenn L. Martin working on the B-26 during the war. In 1953 he left Martin for Chance Vought, but he made one tiny little mistake. You see, the war regulations were still in effect. If you wanted to move to another company you had to obtain permission from the War Department (now the Defense Department). In 1959 came the layoffs, McDonnel won the Navy fighter competition with the F-4. He went to work for Lockheed in Georgia working first on the B-1 Bomber, and after that contract was cancelled, he worked on the C-5A and C-141. After two years hew was laid off again. He went to Vertol in Philidelphia and wouldn’t you know that Boeing would buy the company and lay him off in the 1980s. In the defense industry, layoffs were a way of life. What happened to Consolidated Aircraft? What became of Convair? What happened to Douglas and Martin? My uncle graduated from Duke with a degree in Electrical Engineering and went straight into the US Navy during WWII. He worked for a number of companies and suffered through layoffs like many others. And it wasn’t just the defense industry. What happened to the old car companies like Hudson and Nash? Many failed and they failed because unions pushed wages highier to the exclusion of profitability of the company. Do you remember the clothing industry and the textile mills? What happened to all of them? Excessive union wage demand pushed the mills from the north to the south and finally out of the country. But that wasn’t much of a loss. Do you know why? All that dust from textiles does a number just as bad as coal dust on your lungs.

    So now we have lost a number of “jobs” because we are no longer competitive. Why do the Chinese make the shoes the Italians and the Spainards use to make? The wages are lower as are the living expenses (well, things do change and the cost of living has been rising in China). Will we see a resurgence of good factory jobs come back into the US? We are seeing a few but not many.

    As for myself, I am no stranger to long term unemployment. When I left my father house I ended up in Cincinnatti broke and homeless. It took a few weks, but I was able to convince a small factory to hire me at minimum wage, $1.35 and hour. I had to leave that go0lden opportunity to spend my time in the service of Uncle Sam. When I got out in 1970, I didn’t have a job until January 1972 with the telephone company. When the telecom bubble burst, it left me without a job and no one was hiring us “old folk”. I ended up taking a job as a over the road truck driver covering all 48 states. It was a rough life and I met a lot of men who had similar stories. But the one thing that sticks in my mind is that all through those years of growing up, there were extended family members who were outof work at one time or another. There were neighbors who went through hard times over the decades. The reality is that that “dream” Mr Lefsotz pines for is just a dream, it never was a reality. Did we have “good times”? Relative to what? We , as a country, traded prosperity for the good life where all would be assured of an above average income and living. It was the dream of the big rock candy mountain sungby hobos. I remember my sixth grade teacher telling me that there was plenty of room at the top, that everyone could have a “A” on all of the tests. I remember blurting out that it was a lie. At the age of eleven I knew it was a lie but I didn’t know why. Now I do.

    Yes, I read Mr Lefsotz’s article and it is a lie, he just doesn’t know it.

    MrFrancios,

    Am I really a liar and a troll? Is that your best? Or is you job to make sure that all who do not share your point of view be castigated. Pleas, tell me what you think, your opinions and such, so I can conform to your personal expectations fo what is permissible to write on this blog. I am sure that Mr Righoltz has personally appointed you to the position of correctthough policeman.

  44. flocktard says:

    @ Mr. Bean- while your response has a great deal of truth in it, there is also a counter experience which Mr. Lefsetz and I saw with our own eyes. I came out of the apparel business, and I knew many people who served in WWII, had their jobs waiting for them when they returned from service, and worked at firms like Sears, Roebuck and JC Penney right up until retirement, with fully vested pensions, mortgages paid off, and a nation that had reasonable health care costs. But the day of the “30 year man” is over, and for good. We enjoyed a considerable amount of upward mobility and opportunity, and although your father’s experience didn’t have it (although I must say he must have been a rather nimble fellow) a great many Americans wistfully remember those days- and they know they’re not coming back ever again. I live where Grumman used to be headquartered- I do remember the disruption caused to a great many familes when the moon projects ended and F-14 production stopped. But there were plenty of other industries that were based on steadily increasing consumer demand that provided a great deal of stability.

    As far as the textile and garment experience, which I can speak to with what I think is considerable authority, no American worker can compete with a factory worker in Shenzen, nor should they be expected to. But I will tell you this: manufacturing will come back to to America. My father was something of a visionary who knew that the future of the industry lay outside the US, partly because of union intransigence, but even without them, an industry that required so much manual labor could never compete with foreign wages scales. So first, he imported garments from Korea, but as the country began to flourish, their labor got too high, so he went to Taiwan- then there was the same economic transformation of what was once a pathetic backwater. I don’t have to tell you what happened to Hong Kong .I don’t think you’ll find to many shirt manufacturers there anymore.

    But the same transformation is happening in China now- it is getting difficult to find factory help in some places, and wage inflation will be a given. Garment factories are moving to cheaper areas within China, away from places where workers have left for the cities.Manufacturing has always been about the search for cheap labor, but at one point, many of these nations will have wage parity with the USA- which is why Kia van build cars here. But not Reeboks. Yet.

  45. MrBean says:

    Mr Flocktard,

    Thank your for sharing your story. I agree with you that manufacturing is coming back, indeen, it never left. As for Mr Lefsetz’s complaint, the man has limited vision. If my father had been born five years earlier, he would, in all likelihood, have been jobless. The aircraft industry was still in a depression mode. He would only have had the skills of a draftsman to sell. My father lucked out in life, he applied at Martin in 1940, the year that the various war industries really pushed the output of arms and machines. As for those who returned from the war, yes, a fair amount walked into waiting positions. But we forget that not everyone was released at the same time. And not everyone who came back had ready made job skills. I think one of the greatest films ever made, “The Best Years of Our Lives”, gave us an understanding of those days and years. As for the wonder years after the war, we forget that there were several severe recessions, 1947 and 1949 were back to back. The idea of the 30 year man was more the invenstion of post war than the continuing “American Dream”. This country, like all others, has had its share of variotions in employment and economy.

    Mr Lefsetz complain about the music industry is very stupid. He sees it’s ruin in greed. The classic rock he speaks of had its run. Every musical genre has its limits. After which people tire of the genre, mucisians want to expand into something new, and as Ricky Nelson once sang, “If memories were all I sang, then I’d rather drive a truck.” One can make a living singing “Feelings” at weddings but one does not get much respect doing it.

    Your father did show vision about the clothing industry and textiles in general. The whole point of Taylor was to organize simple manual labor into great effeciency. Fr0m that point one can begin to organize manual labor into processes that eventually become mechanicized by machinery. That is what an assembly line is about. I worked in a factory before being drafted in 1966. The company manufactured gasoline tanks for Ford trucks and the Bronco. The lead man took a sheet of carbon steel and using a brake bent the steel into the four corners that formed the tank. I used a machine to spot weld the seam and then guy next to me did the seam weld on another machine. We put the end caps, which had been stamped by a 14 ton press on each end and passed the tanks to the guys who did the machine soldering. From there they went to a test position and were tested for leaks. I understand that the entire process is automated today. The guys who started at Ford on the assembly line made three dollars an hour. I started at a dollar thirty-five.

    When I drove truck with a Class A ticket, I dragged flatbeds. I picked up and delivered to a number of small businesses that did manufacturing. These companys often made parts of the likes of CAT or Deere or some other large assembler. I also picked up the twenty or thirty ton tractors or graders from Cat or Deere. From CHN I often picked up the oversze loads of combines for delivery to dealers. Fun is a fouteen foot wide combine on a goose neck trailer that is also fourteen feet high. There are larges numbers of small businesses out there that employ five to one hundred people who make things for others. A great many of them are non union. And most of these businesses exist because the set up for manufacturing can’t be automized, it has to be done by hand. But with the various laws and regulations, the price for the parts go up and the profit margins are thin.

    PDM Steel was driven out of the East Bay in the Oakland area because it was considered too dirty an industry. At the time we had the promise that high technology would solve all of our employment problems and was clean to boot. Unfortunately for the steel workers union and their members, that steel plant was turned into a super hazzard site and half their pensions went towards the clean up. The Santa Clara alley was home to many factories and canneries. Eventually most of them got pushed out by city councils and county governments because environmentalists demanded clean industry. And a majority of voters agreed with them. I saw orchard and farm bulldozed and replaced with new housing, most of which was poor quality construction. But that became our new dream, clean industries and high paying work. Now we find that the electronics and micro chip industry has left the water tables polluted with benezine. This is a common tale. You can go back and look at the history of business and industry and see the growth, the displacement, and the ruin all across America. It runs in cycles. What you will not see is the big box factories of fifty years ago with high union wages make a come back. Yet that is the ideal being pushed by those who think more money spent will bring back that past.

    Some people now see that “social networks” are the wave of the future and promote all manner of stupidity. How did I manage to live with out Facebook and four thousand friends before? To think that it was the telegraph that started this “revolution” and yet how many of us today even know how that worked? The telephone is another wonderful instrument that started out to connect the very few, the one percent. As the system grew, the idea of shared service, the 8 party line came of age. But even then, it was not until after the war that half the homes in America had telephones. It wasn’t until the sixties that we had subscriber trunk dialing (direct long distance). Then came the fun of staying in contact. Did you ever see Woody Allen’s movie, “Play It Again Sam”? Remember the friend who spent so much of his time calling his answering service leaving telephone numbers where he could be reached and how long he expected to be at any one of them? Then came the beeper, the next status symbol. We had mobile telephones back in the fifties, you connected by radio link to the mobile operator to make a call to a mobil subscriber or a land land. The personal answering device was first in the central office and then became a common store bought adjunct. I could go on, but I think you get the point. The question is, what has changed? Much of our social life is still about popularity. That is what Facebook is about. I changed th way we compete for popularity. The new social paradigm is still about social bullshit. The pity is, most people have not recognized all the modern high tech for what it is, a convienent excuse for continuing the same old shit. We build cars that are commonly capable of reaching speeds of 120-130 MPH. Do you go that fast on your trip to the grocery store? And assuming you did, how much time are you saving? A couple of minutes? Bigger, better, faster, it doesn’t get us much in the long run. Mr Fefsetz never really learned the lessons of history and now he complains that things aren’t right. Right from what?

    So yes, we will have more manufacturing assuming the economy resets a little more quickly and government on all levels stops interfering with job creation. Debt must be repaid or defaulted, wages racheted back down, standards of living reduced. And it will come, it is just a matter of how much pain we intend to inflict upon ourselves. But the economy will grow again, it always does. Our civilization hasn’t collapsed just yet, we have a few years. Thank you for your story, I found it interesting and informative.