The Shameful Attack on Public Employees
by ilene - January 8th, 2011 4:45 pm
Robert Reich defends public workers and redirects charges of unfairness to the top 1% holders of wealth. Charles Hugh Smith discusses the heart of the problem in U.S.O.F.C.: If the Fraud Stops, the Financial System Collapses. The financial system is where the most dramatic inequities lie. – Ilene
Courtesy of Robert Reich
In 1968, 1,300 sanitation workers in Memphis went on strike. The Rev. Martin Luther King, Jr. came to support them. That was where he lost his life. Eventually Memphis heard the grievances of its sanitation workers. And in subsequent years millions of public employees across the nation have benefited from the job protections they’ve earned.
But now the right is going after public employees.
Public servants are convenient scapegoats. Republicans would rather deflect attention from corporate executive pay that continues to rise as corporate profits soar, even as corporations refuse to hire more workers. They don’t want stories about Wall Street bonuses, now higher than before taxpayers bailed out the Street. And they’d like to avoid a spotlight on the billions raked in by hedge-fund and private-equity managers whose income is treated as capital gains and subject to only a 15 percent tax, due to a loophole in the tax laws designed specifically for them.
It’s far more convenient to go after people who are doing the public’s work – sanitation workers, police officers, fire fighters, teachers, social workers, federal employees – to call them “faceless bureaucrats” and portray them as hooligans who are making off with your money and crippling federal and state budgets. The story fits better with the Republican’s Big Lie that our problems are due to a government that’s too big.
Above all, Republicans don’t want to have to justify continued tax cuts for the rich. As quietly as possible, they want to make them permanent.
But the right’s argument is shot-through with bad data, twisted evidence, and unsupported assertions.
They say public employees earn far more than private-sector workers. That’s untrue when you take account of level of education. Matched by education, public sector workers actually earn less than their private-sector counterparts.
The Republican trick is to compare apples with oranges — the average wage of public employees with the average wage of all private-sector employees. But only 23 percent of private-sector employees have college…
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Beware of Greeks Bearing Bonds
by ilene - September 11th, 2010 6:52 pm
This is a fascinating study of Greece and how the largest of part of its bankruptcy may be in its collective conscience. - Ilene
Beware of Greeks Bearing Bonds
Vanity Fair’s Introduction: As Wall Street hangs on the question “Will Greece default?,” the author heads for riot-stricken Athens, and for the mysterious Vatopaidi monastery, which brought down the last government, laying bare the country’s economic insanity. But beyond a $1.2 trillion debt (roughly a quarter-million dollars for each working adult), there is a more frightening deficit. After systematically looting their own treasury, in a breathtaking binge of tax evasion, bribery, and creative accounting spurred on by Goldman Sachs, Greeks are sure of one thing: they can’t trust their fellow Greeks.
After an hour on a plane, two in a taxi, three on a decrepit ferry, and then four more on buses driven madly along the tops of sheer cliffs by Greeks on cell phones, I rolled up to the front door of the vast and remote monastery. The spit of land poking into the Aegean Sea felt like the end of the earth, and just as silent. It was late afternoon, and the monks were either praying or napping, but one remained on duty at the guard booth, to greet visitors. He guided me along with seven Greek pilgrims to an ancient dormitory, beautifully restored, where two more solicitous monks offered ouzo, pastries, and keys to cells. I sensed something missing, and then realized: no one had asked for a credit card. The monastery was not merely efficient but free. One of the monks then said the next event would be the church service: Vespers. The next event, it will emerge, will almost always be a church service. There were 37 different chapels inside the monastery’s walls; finding the service is going to be like finding Waldo, I thought.
“Which church?” I asked the monk.
“Just follow the monks after they rise,” he said. Then he looked me up and down more closely. He wore an impossibly long and wild black beard, long black robes, a monk’s cap, and prayer beads. I wore white running shoes, light khakis, a mauve Brooks Brothers shirt, and carried a plastic laundry bag that said eagles palace hotel in giant letters on the side. “Why have you come?” he asked.
That was
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Mort Zuckerman Is Back, Blasting American Socialism; Or How America’s Public Servants Are Now Its Masters
by ilene - September 10th, 2010 1:08 pm
Good article from Zero Hedge making a point I agree with — the conflict between public sector and private sector employees is an artifact of a greater issue – the conflict between the American people and it’s "criminal ruling elite." While government workers came out of the last round a lot better off than the average private sector workers, they are not the source of the core problems in our economic-political system, and focusing on government workers, and Unions, is a distraction from deeper, more pervasive corruptions. – Ilene
Mort Zuckerman Is Back, Blasting American Socialism; Or How America’s Public Servants Are Now Its Masters
Courtesy of Tyler Durden
The man who has rapidly emerged as the most vocal Obama critic, Mort Zuckerman, has just penned his most recent scathing anti-administration missive, this time focusing on the schism in US society between "preferred-status" public and shunned private-sector employees, concluding that "Americans cannot maintain their essential faith in government if there are two Americas, in which the private sector subsidises the disproportionate benefits of this new public sector elite." Is this most recent split in US society being cultivated to take the place of the Wall Street – Main Street dialectic, which even Obama is now forced to realize is a fight he is set to lose (just imagine how anti-Obama Cramer would get if stocks drop by 0.001% during the teleprompter’s next media appearance)? Certainly, in a society that exists simply on the basis of a simple ongoing "us versus them" distraction, while the true crimes continue unabated behind the scenes, this is not an impossible assumption. Here’s a suggestion to Mort and whoever else wishes to peddle more such diversions: how about framing the next conflict where it rightfully belongs: as that between America’s people and its criminal ruling elite?
Full Op-Ed below:
America’s public servants are now its masters, first published in the Financial Times
by Mort Zuckerman
There really are two Americas, but they are not captured by the standard class warfare speeches that dramatise the gulf between the rich and the poor. Of the new divisions, one is the gap between employed and unemployed that President Barack Obama seeks to close with yet another $50bn stimulus programme.…
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Hmmm, This Kind of Thing Could Really Catch On
by ilene - July 20th, 2010 7:55 pm
TLP: Hmmm, This Kind of Thing Could Really Catch On
Courtesy of Jr. Deputy Accountant
Seems that there’s something to be said for starting completely from scratch.
The NYT scopes out a lesson in privatization:
Not once, not twice, but three times in the last two weeks, Andrew Quezada says, he was stopped and questioned by the authorities here.
Mr. Quezada, a high school student who does volunteer work for the city, pronounced himself delighted.
“I’m walking along at night carrying an overstuffed bag,” he said, describing two of the incidents. “I look suspicious. This shows the sheriff’s department is doing its job.”
Chalk up another Maywood resident who approves of this city’s unusual experience in municipal governing. City officials last month fired all of Maywood’s employees and outsourced their jobs.
While many communities are fearfully contemplating extensive cuts, Maywood says it is the first city in the nation in the current downturn to take an ax to everyone.
The school crossing guards were let go. Parking enforcement was contracted out, City Hall workers dismissed, street maintenance workers made redundant. The public safety duties of the Police Department were handed over to the Los Angeles County Sheriff’s Department.
At first, people in this poor, long-troubled and heavily Hispanic city southeast of Los Angeles braced for anarchy.
Senior citizens were afraid they would be assaulted as they walked down the street. Parents worried the parks would be shut and their children would have nowhere to safely play. Landlords said their tenants had begun suggesting that without city-run services they would no longer feel obliged to pay rent.
The apocalypse never arrived. In fact, it seems this city was so bad at being a city that outsourcing — so far, at least — is being viewed as an act of municipal genius.
“We don’t want to be the model for other cities to lay off their employees,” said Magdalena Prado, a spokeswoman for the city who works on contract. “But our residents have been somewhat pleased.”
Makes you wonder why the city couldn’t have hired these people to begin with, as actual government employees. Or why the city wasn’t able to hold its workers accountable to begin with.
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Labor Fights Back
by ilene - July 20th, 2010 7:40 pm
Labor Fights Back
Courtesy of SHAMUS COOKE writing at CounterPunch
If the U.S. economy eventually recovers and current trends continue, U.S. workers won’t be celebrating in the streets. The corporate establishment has made it clear that a “strong recovery” depends on U.S. workers making “great sacrifices” in the areas of wages, health care, pensions, and more ominously, reductions in so-called “entitlement programs” — Social Security, Medicare, and other social services.
These plans have been discussed at length in corporate think tanks for years, and only recently has the mainstream media begun a coordinated attack to convince American workers of the “necessity” of adopting these policies. The New York Times speaks for the corporate establishment as a whole when it writes:
“American workers are overpaid, relative to equally productive employees elsewhere doing the same work [China for example]. If the global economy is to get into balance, that gap must close.”
and:
“The recession shows that many workers are paid more than they’re worth…The global wage gap has been narrowing [because U.S. workers’ wages are shrinking], but recent labor market statistics in the United States suggest the adjustment has not gone far enough.”
The New York Times solution? “Both moderate inflation to cut real wages [!] and a further drop in the dollar’s real trade-weighted value [monetary inflation to shrink wages] might be acceptable.” (November 11, 2009).
The Atlantic magazine, agrees:
“So how do we keep wages high in the U.S.? We don’t…U.S. workers cannot ultimately continue to have higher wages relative to those in other nations [China, India, etc.] who compete in the same industries.”
President Obama speaks less bluntly about the wage subject for political purposes, but he wholeheartedly agrees with the above opinions, especially when he repeatedly said:
“We must lay a new foundation for growth and prosperity, where we consume less [as a result of lower wages] at home and send more exports abroad.”
So how will Obama implement his economic vision that inspired Wall Street to give him millions during his Presidential campaign? Much of the work is happening automatically, due to the Great Recession. Bloomberg news reports:
“More than half of U.S. workers were either unemployed or experienced reductions in hours or wages since the recession began in December 2007… The worst economic slump since the 1930s has affected 55 percent of
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Social Unrest Spreads to Slovenia and Spain; Images Around the Globe; US Not Immune to Protests
by ilene - May 20th, 2010 4:08 pm
Social Unrest Spreads to Slovenia and Spain; Images Around the Globe; US Not Immune to Protests
Courtesy of Mish
The wave of social unrest is spreading. A new round of protests has hit Spain with a public sector strike set for June 8. In Slovenia, students are protesting new rules that limit their work hours and pay.
"Luka Gubo" an economist from Slovenia writes:
Hi Mish!
First I must say that I love your blog. Great job!
I just wanted you to know that Slovenian students are protesting too.
The main reason for organizing protests is changes in law regarding student jobs. Current tax law makes average workers uncompetitive because businesses pay about 15% income tax for students and more then 35% income tax for average worker (average net income is 930€).
Bear in mind that the average time for a student to complete his higher education here is 6 years and that more then 20% of "students" do not to school at all. Instead, they just enjoy student benefits like lower income taxes, food stamps, etc.
I think that everyone would agree a new law is needed in Slovenia. However, the new will limit the maximum hours worked by students to one third of full work time, and put a limit on maximum hourly wage at 8€ per hour.
That one *ing great free-market solution, wouldn’t you agree?
Here is the Slovenian parliament building after 2 hours:
The protests went smooth for a while, but it did not last long. You can find a series of 39 images at http://www.finance.si/galerije/2139/3/
Luka Gubo
More Images
Greece, Spain hit by strikes over cuts
CNN Reports Greece, Spain hit by strikes over cuts
Public sector union ADEDY and private sector union GSEE called the strikes against the government’s austerity measures, in particular the pension reforms announced last week. The reforms include raising the retirement age, which varies in different professions.
It is the first major strike since May 5, when violent protests against the austerity measures resulted in the deaths of three people in the capital, Athens.
Spanish government workers were set to protest at 6 p.m. (noon ET) outside the Ministry of the Treasury in Madrid and outside the central government offices in their respective towns. Spanish government workers were set to protest at 6
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Schwarzenegger: “Terrible Cuts” Needed to Close Deficit
by ilene - May 13th, 2010 12:54 am
Schwarzenegger: "Terrible Cuts" Needed to Close Deficit; Prison System Insanity; Mish Proposals for California
Courtesy of Mish
Now that growth in California’s tax revenue is widely understood to be a mirage, with April wiping out all the gains in the previous 4 months, Schwarzenegger Preps ‘Terrible Cuts’ to Close Deficit.
California Governor Arnold Schwarzenegger will seek “terrible cuts” to eliminate an $18.6 billion budget deficit facing the most-populous U.S. state through June 2011, his spokesman said.
“We can’t get through this deficit without very terrible cuts,” Schwarzenegger spokesman Aaron McLear told reporters in Sacramento. “We don’t believe that raising taxes right now is the right thing to do.”
Schwarzenegger’s newest plan will revise the proposals introduced in January to account for the tax-collection shortages. In January, the governor said California may have to eliminate entire welfare programs, including the main one that provides cash and job assistance to families below the poverty line, without an influx of cash from the federal government.
Since then, the Democrat-controlled Legislature has made few strides toward closing the budget hole. Legislation adopted during the emergency session ordered by Schwarzenegger knocked about $1.4 billion from the deficit.
Democrats this week introduced a package of bills that would raise as much as $2.9 billion annually by imposing a 10 percent severance tax on oil production in the state, repealing corporate-tax breaks approved last year to spur job growth and assessing commercial property taxes differently.
By the beginning of 2010, Schwarzenegger and the lawmakers had closed a $60 billion deficit partly by slashing spending on schools, temporarily raising taxes and borrowing from local governments.
Prison System Insanity
I do not care for the Greece comparison, but some of the slides in 16 Reasons Why California Is The Next Greece are quite telling.
Slide #7: In 23 years, California erected 23 prisons and ONLY ONE university
"In a recent 23-year period, California erected 23 prisons — one a year, each costing roughly $100 million dollars annually to operate, with both Democratic and Republican governors occupying the statehouse — at the same time that it added just one campus to its vaunted university system, UC Merced."Slide #9: CA spends $859 million per year on imprisoned illegal immigrants
"There are roughly 19,000 illegal immigrants in state prisons, representing 11% of all inmates. That’s costing $970 million during
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Union Cannibalization: Laid-off CTA workers upset with unions, management
by ilene - February 25th, 2010 2:28 pm
Union Cannibalization: Laid-off CTA workers upset with unions, management
Courtesy of Mish
In every downturn, unions cannibalize their junior membership, throwing them to the dogs. This downturn is no different, except that cuts will be much deeper and far more lasting.
Please consider Laid-off CTA workers upset with unions, management.
Ralph Cleveland says getting a job driving a bus for the Chicago Transit Authority was the best thing that happened to him since moving up North 10 years ago.
"When I came to Chicago in 2000 from Bibb County, Alabama, I was so proud about having a uniform on," said Cleveland, 56, who started with the CTA almost 6 1/2 years ago. "I stood in the mirror, and I couldn’t believe the Lord had blessed me with that."
He looked forward to getting up in the morning and going to work at the transit agency’s 77th Street bus garage, then coming home to take care of his wife, who has severe arthritis and other ailments.
But the couple was dealt a serious setback this month when Cleveland became one of 1,059 CTA workers laid off because of CTA service cuts that slashed bus service by 18 percent.
Like many of his former co-workers, Cleveland says his labor union, the Amalgamated Transit Union, has let him and others down, almost abandoned them, to preserve the pay raises and full benefits for almost 7,000 union brothers and sisters with more seniority, who the CTA did not let go.
He has seen larger and larger deductions from his paycheck in recent years for union dues and other union expenses, Cleveland said.
In contrast to his union’s strident opposition to negotiating concessions, Cleveland is willing to take a pay cut if that’s what is needed for him to get behind the wheel again.
"If I could get my job back, that’s what would make me happy, making money for me and my wife, who I love so much, and my grandchildren,” he said. His CTA employee health care benefits were cut off at 11:59 p.m. on Feb. 6, a minute before the service cuts took effect.
CTA officials have called on the agency’s bus and rail unions to make those concessions to help eliminate a $95.6 million budget deficit in 2010. Leaders of the Amalgamated Transit Union have refused to reopen the current contract, which expires
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CalPERS Admits California “Pension Costs Unsustainable” – So What To Do About It?
by ilene - August 18th, 2009 2:16 pm
CalPERS Admits California "Pension Costs Unsustainable" – So What To Do About It?
Courtesy of Mish
In an unusual display of honesty CalPERS Actuary Says "Pension Costs Unsustainable"
The CalPERS chief actuary says pension costs are "unsustainable," and the giant public employee pension system plans to meet with stakeholders to discuss the issue.
"I don’t want to sugarcoat anything," Ron Seeling, the CalPERS chief actuary said as he neared the end of his comments. "We are facing decades without significant turnarounds in assets, decades of — what I, my personal words, nobody else’s — unsustainable pension costs of between 25 percent of pay for a miscellaneous plan and 40 to 50 percent of pay for a safety plan (police and firefighters) … unsustainable pension costs. We’ve got to find some other solutions."
Dwight Stenbakken of the League of California Cities told the seminar that pension benefits are "just unsustainable" in their current form and difficult to defend politically.
"I think it’s incumbent upon labor and management to get together and solve this problem before it gets on the ballot," he said.
"I actually think it is sustainable," said Terry Brennand of the Service Employees International Union. He said the basic problem is investment losses, not high benefit levels.
"What is sustainable?" said Lou Paulson of the California Professional Firefighters. He said proposals to extend the retirement age for firefighters from 50 to 55 would result in more injuries with advancing age, driving up workers’ compensation costs.
Sustainability In Eyes Of Beholder
The California Firefighters Association and the Service Employees International Union think the plan is sustainable. I think it is too, if they are willing to put 25% of their pretax pay in every year at retire at 60 after 25 years of service.
Otherwise, they are speaking as extremely biased beneficiaries of massive public handouts, not as impartial unbiased observers.
8% annual returns are not sustainable, at least not with long-term yields at 3.5%. Indeed chasing performance is one of the reasons CalPERS suffered the losses it did. CalPERS is attempting to get 8% returns in a 4% return world.
Perhaps the crisis is just too noticeable to deny any longer, but it’s refreshing to see a bit of reality from CalPERS even as the unions are in a massive state of denial.
Politically Unfeasible Solutions
The article notes that four years ago…
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the site