So why did blue state Wisconsin re-elect far right Governor Scott Walker? And why did two California cities overwhelmingly approve pension cuts for current employees, with one effort led by a liberal Democrat?
Because a growing share of the rest of the 99 percent are realizing what was done to them. How the public employee unions, relentlessly pursing their own interest with retroactive pension deals and not concerning themselves with the consequences for others, have wrecked the future of public services all over the country. Realizing it after tax increase upon tax increase, service cut upon service cut, year after year, even as those at the losing end become worse off themselves.
I described here how a fiscal disaster in Milwaukee County as a result of a retroactive pension deal made Scott Walker’s career. And in California, people have been experiencing higher taxes and lost services due to exploding pension costs ever since a similar deal in 1999. To keep the disaster from being worse today, states and localities keep allowing the pension systems to go deeper and deeper in the hole.
It's kind of like people reading about the big salaries on Wall Street, and in the executive suite elsewhere, while their savings get a return of zero if they are lucky. For 12 years and counting. That could go on for another decade.
And so could the degradation of public services and benefits, as a result of those pension deals. Not just in New York City, as in the 1970s, but across the country. By the end, when pension costs finally start to come down, people are going ask themselves why continue to pay for services they aren't getting?
The huge increase in executive pay, and the retroactive increases in public employee pensions, were justified by the stock market bubble from 1995 to 2000. That bubble was more than a decade ago, but te increased pay for the one percent, and the increased pensions, remain. And the rest of the 99 percent are being made worse off to pay for them.
And the pension systems of Wisconsin and California are far better funded than those of NYC. Their state and local taxes are lower.
And there will be no cuts in pension benefits here. Just another decade of degrading public services, to the point of collapse. Just like in the 1970s. They did it again, exactly the same way. With an extra deal for the United Federation of Teachers making that pension far more crippled than the others. Or at least it would be, if Mayor Bloomberg and the Council weren’t determined to gut services provided by DC37 members to push back the collapse of the schools.
In California, according to the Sacramento Bee, "opponents, led by public employee unions, say the measures deprive workers of benefits they were counting on when they got hired. Some workers decided against potentially more lucrative jobs with private companies, figuring their retirement was relatively safe."
In California, if everyone who is now retired was ONLY getting the benefits they were promised when they were hired, there would be no pension crisis. Same in New York. But they grabbed more and hid the costs, year after year.
In other places, taxpayers got lower taxes and didn't worry about where the money was coming from. But in those places, the taxpayers aren't blaming themselves either. New Jersey Governor Chirstie called all the years when New Jersey taxpayers contributed nothing to the pension funds "ancient history."
So forget about saying “we’re fighting for all workers” and “this means the rich are taking over.” More and more people are realizing which side the public unions are on. Their own, just like the one percent.
Back in New York City, the word for our future is “irrevocable.” That’s what all those retroactive pension deals are here, constitutionally and politically. The politicians and unions will say they cut pension benefits. They have and will continue to cut the pay of future public employees, who can then be expected to do an even worse job in exchange. The retaliation against the people of New York City for their falling numbers and frozen pay has already started.
But the pensions of even those future workers are yet to be determined. The state has passed a law to fund the pensions as if they are less generous, and thus hide their future costs, based on whatever the rule is now. But what the pensions will actually be can be enriched at any moment. We won’t know until Tier V and Tier VI workers retire. In fact, those pensions can be retroactively enriched after they are retired, as they were for Tier 1 workers in 2000.
And who is to say the state legislature will not retroactively enrich pensions for existing workers and retirees again? At any moment? Why not? Most memebers of the legislature will be dead or moved away in a decade anyway, along with their supporters.
The unions will continue to cut deals for enriched pensions day after day, month after month, year after year. It can be no one million times. If it is yes once at 3 am, then the addition benefits will also be irrevocable, no matter what the consequences.
The political upshot? Most Americans will continue to become worse off. And politics will be about blame. Blame the Democrats for the unions. Blame the Republicans for Wall Street. Actually, the Republicans also sold out the rest of the 99 percent in deals with the unions, and the Democrats have also sold out workers and investors to benefit Wall Street and the executives in exchange for campaign contributions. Who is to say they are done taking? But based on what they have already done, irrevocably in New York City, the public employee unions are about as unpopular as Goldman Sachs. And it is going to get worse and worse and worse.