Today governments across the United States are facing budget shortfalls caused primarily by making promises in terms of pensions and benefits to workers that no longer are supportable. Recently I was in California and I saw this sign in a bathroom at a popular tourist attraction.
The key concept to understanding how we got into this predicament is the word “craven”. Here is the official definition per Webster:
lacking the least bit of courage : contemptibly fainthearted
Politicians lacked the courage to stand up to public sector workers, predominantly the unionized ones like teachers, firefighters, and policemen, because negotiating with them seemed to be all downside:
1) If they are angry, they can go on strike, disrupting schools, hospitals and essential public services
2) They are voters (predominantly Democratic) and represent a (mostly) unified voting block that is prepared to petition to achieve their goals in the media (which is usually sympathetic to their cause, since they are mostly Democratic, too)
3) Many of them (Police, Firefighters, and to some extent teachers) present sympathetic postures to the public; fighting with them is a no-win situation (even if you win, you lose)
4) Their army of retirees often are still local and also vocal and organized and prepared to demonstrate as well, although they are not in a position to block essential services
Thus the “craven” route was simply to capitulate – write up promises to TODAY’s government workers and RETIREES and then just “kick the can” into the future to the date when those promises came due. Today’s politicians won’t be there when the bills come due (Daley most famously sold off Chicago’s assets, signed long term unaffordable deals for labor peace, and walked off into the sunset) so this fits their short term strategy to a tee.
However, in the near term, I think that politicians’ inherent “craven” behavior will work in REVERSE, giving us an opportunity to tackle the root cause of the problem. How do I come to that (preliminary) conclusion?
It is simple – there are really only two solutions available for politicians today (in places like Illinois, California, and Detroit, where it is literally collapsing) and in the near term in more well run or well funded places:
1) Raise taxes AND cut services drastically to pay for union benefits and pensions
2) grab a hold of the problem, cut payments to today’s workers and retirees and cut their benefits and costs, thus leaving more dollars for services TODAY and the opportunity to AVOID tax increases
So let’s say that you are a politician running for office in a few years – what do you promise constituents? You have to promise #2 – that you won’t cut services today and won’t raise taxes – or you won’t get elected. I’d love to see people run for office on a platform of #1 and get elected – it won’t happen. Now what will actually happen a lot is that politicians will promise #2 but do a variant of #1 to get elected (because it is VERY hard to take on the entrenched unions when you come into office) – but then the financials will collapse further and they will be FORCED into making a harder choice, or they will come up for re-election and be drummed out of office.
Soon the EASIER or “more” craven approach will just be to get elected on a basis of reducing government costs on the backs of existing workers and retirees and chopping compensation to avoid raising taxes or reducing services. Thus the entire process that led to our current debacle will operate in reverse, with bad consequences and subsequent demonizing for government employees as the root case of the issue.
Government workers, especially unionized ones, will see many victories but a long term defeat on all these issues. In the end sympathies won’t be enough to offset the crippling taxes and immense service cuts that are necessary to pay for past politician promises. The politicians will side with the majority, who will have to reform the system, even though this reform will be rocky and filled with failures and vitriol.
Politically craven behavior, which dug this grave, will work in reverse. This is a hope, at least.
Cross posted at LITGM
The paper towel thing in the state parks is just a “pumishment” for the massive amount of people who enjoy them. That tiny bit of money is so small relative to the pension payouts it isn’t even funny. Closing/taking money away from state parks is the government unions way of telling the masses to “shove it”. It does literally nothing to help balance California’s massive budget shortfalls.
Dan – that is part of it – whenever they (the politicians) face a budget shortfall the first thing they want to do is reduce police, fire dept or – toilet paper. Let tghe public suffer.
At the dog park I frequent they stopped supplying dog poop bags – people now leave plastic bags from supermarkets.
So many of the politicians have gotten office due to the public employee labor unions – so they really don’t want to face them.
That is why the WI could be a watershed event – but it will take a long time for the revolution to come out here.
It will be interesting to see if the Gov can survive the recall.
As far as voting demographics it is probably Madison vs the rest of the state.
It’s called the “pothole syndrome” and is well known. When Prop 13 is emasculated in California, you will know it is time to leave. The guy who ought to be governor here is named john Moorlach. He was a CPA who predicted the bankruptcy in 1994. He was running against the crook Bob Citron for county treasurer. Citron had been making more and more risky interest rate bets with county money. Moorlach predicted that he would get on the wrong side of a trade and bankrupt the county.
The LA Times attacked him ferociously and Citron won the election. Six months later, when I was in Hanover NH, the bankruptcy arrived. Citron was disgraced but I don’t recall the Times ever apologizing for incompetent analysis. Moorlach was then appointed Treasurer by the board to replace Citron, than was elected in his own right. Subsequently, he was elected Supervisor and immediately began to warn about public employee pensions. Needless to say, this did not make him popular but his credibility is impeccable. So far, he has not been successful, but he has a history as a sage.
“Supervisor John Moorlach faced defeat last week by the state Court of Appeal in his unrelenting battle to undo what he feels was not only a wrong move by the 2001 Board of Supervisors in voting for 3 percent at 50 retroactive retirement benefits, but an unconstitutional one.”
The politicians who held office when the pensions were raised, were recently interviewed.
“Today he says he’d vote differently, adding that he supports Moorlach’s pension reform efforts. How does he feel being blamed by Moorlach?
“All the actuaries at the time supported our decision,” he says, reminding me. “OC consistently remains one of the safest counties in the country.”
Sound familiar ?
You guys all see the symptoms but you need to see the larger picture.
We should be HAPPY that unions and their benefactors the state politicians (largely democrats) are not putting out toilet paper, trying again and again to raise taxes, and failing to learn from the past.
This is what the future Republicans are reform Dems (if they exist) would RUN AGAINST. When there isn’t enough money to pay pensions for retirees and bloated current salaries and the only alternatives the Dems offer is to 1) cut services 2) raise taxes – that is an AWESOME mix for anyone new to run against.
Then there will be a first wave of “reform” people that are a SHAM, because it is hard to reform and they will only promise it.
Then there will be a second wave that will have no option but to deliver because the $ isn’t there anymore.
ALSO – once the first wave of bankruptcies comes through (watch Detroit) and the bond holders see that they won’t always be bailed out – then the market for weak municipalities will crater and it will start a “death spiral” amongst the rest.
Bond holders – especially muni bond holders – are “craven” too, except for the specialists and hedge funds that buy for cents on the $ after the events occur to try to make a profit.
Carl – you may be right on the ultimate outcome – but it will take a complete revolution. Ironically our current Gov – Jerry Brown – during his first time in the 70s – let the unions into the public employee arena. it was also not ironically during this time CA started slipping from its once world-envious position.
The unions – and the democrats – today have a symbiotic relationship.
Threaten the unions and they will pour 10s of millions – even 100 million into constant negative ads .
Add to all this the people on the taking side – we have per capita 3x the welfare people as any other state – and it will be a long uphill battle.
I am conflicted because my son is a state firefighter and he has wanted o be one since he was six. He was a fire explorer scout. He reflexively takes the union side although he is otherwise conservative. The state firefighters don’t make as much as local districts and I am thankful that he has a very competent wife with her own career. She and I believe she will have to carry the load one day.
“grab a hold of the problem, cut payments to today’s workers and retirees and cut their benefits and costs, thus leaving more dollars for services TODAY and the opportunity to AVOID tax increases”
You are in worse shape than Greece. It was your corporate overlords put you there. It is their campaign to cut union and retirement benefits that you lot are supporting.
Greed is not a useful cultural attribute unless you want what you have. It promotes unbridled warfare against anything that would suppress it’s effects. This is destroying your economy but the rich and powerful benefit from your worship of monetary success. Your workers and retirees are not your problem.
Your ridiculous medical apparatus costs about twice the norm for first world countries and delivers about half the benefit. It is wildly expensive and a big part of why your people and companies suffer such large every day expenses.
Greed is your nemesis. A fitting one for you lot.
One of the methods which will start the reform process is to have multitudes of people who accept the basic proposition that the public sector must be brought under control quickly, and reduced drastically, at all levels, register for lower level offices in all the coming elections.
School boards, city councils, county commissioners, any and all that don’t require a well-known name or big money to be competetive.
Eventually, as has already happened in a few places, the local political caucuses will be reductionist instead of business as usual, and then offices at the state and even federal level are attainable within a few election cycles.
We are facing desperate and dangerous times ahead. The operating structure of the republic must be taken away from the corrupt, incompetent pols and their utterly useless academic experts, who have driven us to the very brink of financial and economic catastrophe.
As someone said awhile ago, I would rather be governed by a few thousand people from any common telephone book than the corrupt elitists who have been running the show for their own benefit for most of this last century.
We had an example of local citizens taking over the city council in out community. What is discouraging is that the new councilpersons quickly become friends with the rent seekers, who flatter them and invite them to Lakers’ games, etc. Temptation is a powerful force. As Howard Jarvis used to say, “You can’t ask pigs to step back from the trough. You have to kick it away.”
That kind of crap is why you also run for city and county attorney and local sherriff.
No solution is perfect or instantanious. Anyone falling off the wagon should be kicked out asap and replaced with someone who will respect the reason he or she was elected.
PenGun, if you are attempting to paint Canadians as a non-greedy pile of humanity, then I suggest that you pull the other leg.
“PenGun, if you are attempting to paint Canadians as a non-greedy pile of humanity, then I suggest that you pull the other leg.”
Oh no, we are as greedy as anyone. It is however not regarded as a good thing in Canada. In your country it is a cultural meme, ‘greed is good’, is widely believed as an economic good. It is not.
Pengun, it is unclear what the point of your comment is.
What does greed have to do with the fact that politicians made promises to unions that cannot be paid? I might agree that the politicians and unions are greedy, since they stacked the deck to ensure that they were paid first and left municipalities and states near bankruptcy.
Knowing PenGun’s history, I no longer respond to him/her.