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This page contains a single entry from the blog posted on January 12, 2010 3:57 AM. The previous post in this blog was Linchpin countdown. The next post in this blog is Nigel, you missed one. Many more can be found on the main index page or by looking through the archives.

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Tuesday, January 12, 2010

Even Willie Brown gets it

The government workers' unions are bleeding all of us dry. Public administration is collapsing under the weight of their pensions -- and it's going to get worse, much worse. When people ask how you can vote no on a tax increase measure that is going to "save the children," just tell them Willie sent you:

The deal used to be that civil servants were paid less than private sector workers in exchange for an understanding that they had job security for life.

But we politicians, pushed by our friends in labor, gradually expanded pay and benefits to private-sector levels while keeping the job protections and layering on incredibly generous retirement packages that pay ex-workers almost as much as current workers.

Talking about this is politically unpopular and potentially even career suicide for most officeholders. But at some point, someone is going to have to get honest about the fact that 80 percent of the state, county and city budget deficits are due to employee costs.

Either we do something about it at the ballot box, or a judge will do something about in Bankruptcy Court. And if you think I'm kidding, just look at Vallejo.

Comments (20)

Yep, I am living this right now along with Willie Brown. Liberals blame California Proposition 13 (1978), which capped annual increases in property taxes to no more than 1%. (http://en.wikipedia.org/wiki/California_Proposition_13_%281978%29). Conservatives blame a liberal dominated legislature who has given concession after concession to the public employees and teacher's unions who fund their campaigns.

Ironically, I consider both right in their blame.

Prop 13 put in place a two-thirds majority in both California houses of legislature for any tax to pass with the intent to limit the size of government and promote balanced budgets, while Democrats kept on upping state agency budgets to the point where the state budget became unbalanced and unfeasible during a serious economic downturn. California Democrats believe in boom cycles, but their fiscal stewardship never prepared for a prolonged bust cycle like we are in now.

What I will say is, the current CALPERS scheme is unsustainable and I truly feel sorry for my parent's generation who expects to retire like their parents with the RV and second home.

Someone will get shorted when it comes to CALPERS. I believe those who retire later in their late 60s and 70s will get shorted, while those who retire in the next couple of years will get far more than they put in.

I know far too many family members who retire before age 65 and they are getting too much out of CALPERS than they ever put in my opinion.

Willie just licked the new third rail of American Politics. Will it destroy him, or elevate him to the rank of National Leader?

Well, we only need about a few thousand more Willie's to run for public office. Public employeee unions are a "feed the beast" phenomenen.

You can try to slay it now or make it go away with a few bits of tribute and have it come back later stronger.

Honestly, I think the cost of govt is going to be the one thing that kills us as a country. Sorry kids.

Govt. Employee Union $$ wag the D's and Corporate $$ wag the R's. Same 'ol, Same 'ol.

whaddya gonna do...

The accounting profession bears a big chunk of responsibility for the fiasco. With all its mumbo jumbo about whether expenses and liabilties should be recognized based on single-employer vs multi-employer pension plan status, and the application of modified accrual basis accounting to government plans, the green-eye-shade crowd has created cooperative dodges and been an effective enabler for the let's ignore the reality of mounting pension and entitlement-program liabilities crowd.

The actuaries don't get a free pass either. When assessing liabilities for Federal Government plans (I don't know specifically about state or local), the actuaries typically go back to the beginning of the working life of active employees and/or annuitants to grab a set of investment returns (right in principle). This includes periods from the mid 70's to the mid 80's when baby boomers had entered the workforce in large number. There were significant net contributions to plans that could have generated returns. Government bonds were earning high returns (up to 14 percent) courtesy first of stagflation and then of Paul Volcker's breaking-the-back-of-inflation monetary policy. Except the plans didn't actually buy and hold the high-yield bonds (the wrong in practice part). Good luck in relying on assumed double digit returns for funding actual social security, medicare and federal pension payments going forward.

Their are multiple actuarial tsunamis coming down the pike including for most pension plans, social security, medicare and liabilities that will accrue under the pending health care bill.

Govt. Employee Union $$ wag the D's and Corporate $$ wag the R's. Same 'ol, Same 'ol.

There are a lot of "corporate $$" that wag D's too...just look at the current health care debate for starters.

Im not sure exactly when it happened, but somehow government employees became part of the elite class while private employees became the peasants.

Remember California also has that so called three legged stool of taxation; property tax, income tax and sales tax, as Oregon progressives want this state to have for imaginary stable funding. If California can’t balance their budget having some of the highest taxes in the nation because they can’t control spending what makes people think that Oregon’s legislature will do any better if they get more money in their coffers.

Remember California also has that so called three legged stool of taxation; property tax, income tax and sales tax, as Oregon progressives want this state to have for imaginary stable funding.

"Progressives" want a sales tax? The chief petitioners for sales taxes in the past several attempts haven't exactly been the most progressive people about. Yes, there are some Democrats out there who've swallowed the sales tax water (including a number of the folks at Blue Oregon), but on the political level, the people pushing for it have been folks like now-Treasurer Ben Westlund, who floated a 5% sales tax plan back while he was still a Republican and Rep. Scott Bruun (R-West Linn) who wrote an editorial in the Oregonian supporting a sales tax a couple years back.

The public employee unions and the Democrats they elect for power do not care what imminent mayhem they create.
California.

They all just think it will happen after they get theirs.

Willie just licked the new third rail of American Politics. Will it destroy him, or elevate him to the rank of National Leader?

Willie Brown probably wouldn't have spoken out on this issue if he was still in the San Francisco Mayor's Office (term limited after 8 years).

He would have avoided it like the plague if he was still in the Calif State Assembly (term limited after 15 years as Speaker).

Getting some distance from "service" is generally rehabilitative for politicians, but I think he's just beginning to see the writing on the wall. CalPers is on a path to drive the state into bankruptcy.

His pension may be "vested" but he realizes that even government creditors (e.g., public pension beneficiaries) may not be immune to the cliche about blood and turnips.

I pray that the Feds don't bail out California. Better for them to face the music now than find a way to "extend and pretend" a couple more years.

Govt costs are the problem across the board, and employee costs are by far the biggest chunk of that.

Govt always wants to do more. Often it is well intentioned, but the net effect is that govt always grows and never shrinks, and ALWAYS genuinely believes that it doesn't have enough money.

Y'know...as a public employee for over twenty years now, I'd certainly like to know who these cushy over-paid folks are...

Are you talking about those at my public agency who were pulling down six-figure annual bonuses? Rather like the private sector CEO shenanigans that we all pay for? Prior to the private sector collapse, private sector wages were increasing far faster than public sector wages...in my field, at least.

I haven't seen any raise other than a substandard "cost-of-living" increase in the contracted wages I earn. I've been at the top of my classification for ten years and I've been losing money.

Most of my co-workers are doing the same. That's the bulk of public employees, so far as I can tell.

We are all hoping that the retirement system we bought into will still be there when we get to retirement, rather than having been pillaged by the state legislature.

Having been on both sides, it seems to me that both sides engage in the same crap. The public types gouge the taxpayers, the private side types gouge their customers, employees, and stockholders. Immorality is rewarded all 'round, and those who might fix it are have already sold out.

"The public types gouge the taxpayers, the private side types gouge their customers, employees, and stockholders."

That's the rationale used by all of the public employees gouging the system...thanks godfry.

The great inequity is that taxpayers are held hostage and must endure this gouging by the "public types" and their unions, while customers, employees, and stockholders all have a choice as to whether they want to get gouged by the "private side types".

Essentially, godfry is saying..."lots of gouging going on in the private sector, so it's okay for taxpayers to get fleeced by the public sector"...

This is the logic that is killing this great country...

No...I'm saying that YOU are just as culpable as I.

YOU need to alter your behavior as much as, if not more than, I do.

I know this because you spread lies about public employees which I know are not true about all, or even most public employees. You extend the falsehood that if some, at the top are culpable, ALL public employees are to be damned and punished.

I know!

Let's lay off all the prison guards, the police and fire, and the prosecuting attorneys. They all make WAAAAAY too much money anyway...and accomplish anything? No.

Actually, I don't think all public employees are culpable. I think the public employee unions are the villains in this by breeding a false sense of entitlement among public employees and strong-arming the legislative process at the expense of the taxpayer to get what they want.

Sure this happens with corporate lobbyists, but in the private realm the stakeholdes largely get to vote with their dollar, but it the public sesspool we're all held hostage to the wants of the union mob.

Sorry godfry, it's a fact.

BS - Private parties are defrauding the taxpayers faster than any union, public or not. Think government contracts. All I need do is think of Dickhead Cheney and Halliburton, but it goes much further than that...each and every "Defense" contractor is culpable of defrauding the taxpayer...as is Big Finance and Big Pharm. The list goes on with totally unnecessary subsidies to greater undeserving than public employee unions...with tobacco, cotton, automobiles, asphalt, concrete...you name it. The crimes far surpass any perfidy of any union, public or otherwise.

As for you claim of voting with their feet...it would be nice, but it is largely a delusion, because so much in corporate Amerika is determined by price-leadership oligopoly.


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