David Atkins, writing at Hullabaloo, has an interesting post up examining why stoking pension envy isn’t “class warfare” in the same way it’s “class warfare” to point out the stunning imbalance in wealth distribution in our country. The short answer is that pensioners don’t have nearly as much money invested in PR campaigns as the Koch Brothers and their brethren.
But, a more interesting angle is that we know the types of people who have pensions, and we can see directly that they’re no better, smarter, or industrious than we are. We basically know what their job entails and have a pretty good notion that we could do that job. We can grasp what it means to have health insurance and a pension even if we don’t have those things. Therefore, it understandably rankles that they should be spared the anxiety of having insecure access to healthcare or an uncertain retirement when we work just as hard as them. Hell, there is a whole political movement busily telling us that, because they work for government and we don’t, we’re better than them. In fact, they should probably be kissing our collective butts because we’re taxpayers!
Contrast that with hedge fund managers or the Koch Brothers or the Romneys. We have no concept of that level of wealth. A four car garage with an elevator in one of our many houses, just for the hell of it? Might as well ask us what it’s like to live on the moon as ask us to relate to that kind of wealth. And, as Atkins points out, with transportation and communications being what it is, we don’t exactly rub shoulders with these people; or, when we are, we don’t know it. Their jobs are esoteric and many among us may feel that maybe it’s orders of magnitude harder than ordinary people jobs.
And it’s this separateness, I think, that makes it easy to pit the recently middle class against the diminishing middle class in order to distract them from what’s going on with the upper class. “There are no classes in the United States,” says Rick Santorum. “We are a nation of haves and soon to haves,” says Mitch Daniels. “The greatest trick the Devil ever pulled was convincing the world he didn’t exist,” says Verbal Kint.
The very wealthy have learned a trick or two since the days of Jay Gould who allowed himself to be quoted as saying, “I can hire one half of the working class to kill the other half.” Instead, they provoke agitation in the economically insecure against the barely secure. It’s astounding that in the richest country in the history of the world we should come to regard health care and worker pensions as unsustainable extravagance instead of things we ought to aspire to provide to everyone willing to work hard and play by the rules.
One would think that if working for the government was so awesome, I would get more applicants when I advertise openings.
I just filled 2 openings and am working to fill a third. In another online community, there were half a dozen people lamenting long term unemployment for themselves or people close to them. I shared my openings with this community and had ZERO interest.
Admittedly, one is not going to get super-rich from these jobs, but they are nice entry level white-collar jobs (most of the people looking for work were within 3 years of college graduation) and they are jobs with very applicable real world experience. It has a private sector equivalent and the skills are easily transferable.
“It’s astounding that in the richest country in the history of the world we should come to regard health care and worker pensions as unsustainable extravagance instead of things we ought to aspire to provide to everyone willing to work hard and play by the rules. ”
What folks don’t seem to grasp is that the US can very much become like Greece or Spain where businesses flee, or are limited to what they can do. If the limits or taxation are high enough, why even work if the government is just going to take it away and give to someone else? Why study hard, go into higher education debt, why you can just be a load and get free healthcare and a government mandated pension from someone who is still dumb enough to actually run and own a business in this country?
You talk about healthcare and the insurance companies are always the evil companies. OK, get rid of them. So now the hundreds or thousands of Hoosiers employed at Anthem/Wellpoint are out of job, but at least they have healthcare!! Oh wait, that may need to get cut as tens of thousands of jobs won’t exist in that field, so that is a lot of less taxable income. Next we can start at hospitals and doctors…federalize the entire system, no one makes more than the President. Why does a hospital CEO need to make over $200K/year in Indiana? Why does a school of medicine dean need to make over $150K/year in Indiana?
As far as pensions, the system is a joke anymore. Go back to a one pension for all, the same exact payout. I see nothing wrong with telling people if they want more in life to work harder and advance in their field. If you want more than your basic police patrol officer pension, get rank. I find it odd that the rich 1% of government employees (judges, prosecutors) somehow need better pensions than everyone else. They are already making very high wages, can’t they just save more for their retirement if they want more.
Indiana’s pensions are too bad, but they are all going to get cut because of the silliness we see in Illinois, California, etc..
Where to start.
The US current effective tax rate is only 14.8 of GDP, the lowest rate since the military demobilization of 1950. It is unsopporateble to claim that the US could have its industries stripped because of a confiscatory tax rate.
I would like to meet some of these uber intelligent deadbeats that can’t wait to earn 600 of the government dole and be “rewarded” for their indolence. It is interesting that only the benighted from the industrious far right that claim to work hard, live a life of individual responsibility and keep their kids out of the commie loving girl scouts that now these nickel and hour evil genuise and could perhaps drive me to their subsidized houses.
No, Carlito, I think his race to the bottom idea is grand, I’ve heard Thailand is beautiful and now I get to watch conservatives and the Chamber of Commerce replicate their economic system too! I sure I’m tapped to work at one of tourist resorts, so I can see how the 5% live
One point that seems to get missed is that these abstract businesses need us too. Where are they going to get their money without access to our population as a market?
And it’s no wonder we can’t afford anything anymore. Pretty much all of our gains in productivity over the past thirty years has been appropriated by the wealthiest 1%.
That’s called justice. Without them creating the jobs for us to toil in, we wouldn’t have become more productive.
Very interesting point. The right wing pits members of wage-earning strata against each other, implicitly invoking the call to eqality of outcome that they publically pretend to despise. But when using it to gut the power of labor or government employees, they demonize those who correctly call out the logs in their eyes.
The comnents by Santorum and the Bush Budget Bitch fall below the level of laughable. If the Bush Budget Bitch wished to create “soon-to-haves he could adequately fund public education and replace the regressive Indiana taxation system with a progressive system.
This post struck me as a phrase salad compiled from every previous post on the subject.
But I do agree with one thing- regardless of what we do, we probably work as hard at is as anyone else. Certainly, we work as hard at Job A as we would at Job B. So, what is it that leads us to take jobs that pay less? Why don’t we all guide ourselves towards high paying jobs, like lawyering (sorry, it is all relative) instead of low paying service jobs, and the like?
“Phrase salad” — that’s an interesting red flag for me, coming from you. That I was unsuccessful in conveying semantic meaning to you is a good sign that we apparently have very different mental frames in this area, and I should be cognizant of that when I write in this area.
Anyway, why don’t we all guide ourselves to high paying jobs? Lack of information, humans don’t act in a perfectly rational way, and to some extent lack of opportunity. I don’t recall seeing the “hedge fund manager” entry in my high school career manual along with an average salary. And, in any event, the entry at age 20 would have looked a lot different than the entry at age 40. For that matter, my needs at age 20 were a lot different than at age 40.
And, you know, Clarence Darrow was a more compelling figure to me at age 15 than was Gordon Gecko.
Some very valuable, even essential, services are not categorized in “high paying” jobs, yet we could not live comfortably or safely without someone doing them. Many of these are in areas of service and on a higher level are termed the “helping professions” (nursing, social work, teaching, therapies of various types, communications). None of them command high salaries. My guess is that in many cases people choose this work because they like and find meaning in helping people. But, yes, we could all become (hold nose here) hedge fund managers and make a ton of money. What a wonderful would it would be.
Having pension fury is patriotic. Having 401k envy is immoral. It is disgusting that government employees should have a career of secure jobs and a retirement of security, despite having had to contribute very little to their future income. It is further disgusting that a government employee gets to live a retirement of comfort on the backs of those who have had careers of insecure and spotty employment in jobs that offer no retirement plans of their own.
By contrast, an employee who funds his own retirement is entitled to the unfettered rewards of his economy.
It’s well past time to cancel all public pensions and put government employees of 403b plans.
I don’t terribly disagree with you, but if you are going to phase out pensions, do so in a reasonable manner and convert the old pension contributions to salary and buyout the future retirement promises in present day dollars deposited as the seed money for the 403b..
I do put a chunk of my salary in to a 457 and contribute to my pension, but my salary has been depressed by the historical bargaining that gave up wages in exchange for the government putting money away for a guaranteed pension.
They transitioned our health insurance from high employer contribution to high employee contribution (which is fine by me as it also brought about better insurance options) but they didn’t convert any of the savings in to salary to help offset the changes.
All I ask is that we don’t do it again in a retirement vehicle transition.
How do you contain so much bitterness and resentmentment at people that made correct economic decisions.
I guess I am a member of this “right wing” discussed above. My only concern with pensions is that they disturb movement in free markets, and an employee will frequently be “locked in” to a job they do not like simply because they are trying to ensure they receive a full retirement benefit. Obviously, employees that do not like their job is a bad thing. This has nothing to do with class welfare. And generally, people in the private sector make slightly less than those in the public sector, despite working more hours. That’s okay, I guess. But it doesn’t strike me as “class warfare” when the people are generally utilizing the same tax brackets.
Depends on the job, but I would quibble with the “most” qualifier.
In my group (about 20 people), there is not one person that would make less in the private sector.
Our legal group is the same way.
Even for the jobs where that is the case, we need to refer back to Doug’s point of why we are turning 2 groups of middle class people against each other while the elites laugh all the way to the bank.
What “most” qualifier?
Are you including benefits like pensions in your calculation? I can’t speak to your anecdotal evidence without more information, but I know many starting attorneys in private practice that make much less than the local public defender and prosecutor counterparts make, and also do not receive loan forgiveness, which is a big perk of public work.
I don’t think we are turning 2 middle class groups against each other. The rich are vilified for making money. Employees with public pensions are not attacked with anywhere close to the same strength.
Nah, they’re vilified for acquiring the money they didn’t make!
But on the second point, I wonder how you’d go about measuring such a thing. My perception has been the reverse. Seems like maybe there has been more talk about hating on the rich lately than in years past, but I haven’t noticed much in the way of action to alter the dynamics of wealth distribution. Public employee unions, on the other hand, have had some real world setbacks.
I am a bit surprised you are trying to say that with (presumably) a straight face. Have you listened to an Obama speech in the past 5 years? It seems like every time he talks about taxes, he talks about raising rates on the rich. And next year, taxes on capital gains for the rich are scheduled to increase by approximately 50%. That’s some pretty significant wealth distribution for you.
There has been a lot of talk; but little in the way of action. But, as for this 50% increase, how much more will unearned income be taxed compared to wage-based income? Are we talking about raising the rate from 15% to 20% versus an ordinary income tax rate of about 33%?
Since Reagan raised the capital gains tax to 28% in 1986, I think the rates have been steadily reduced. And, it bears mentioning, that the scheduled increase is the result of the Bush-era reduction being scheduled for only 10 years so as to help disguise the true cost of the tax cut.
What percent of public employees have lost a pension? I bet it is less than the 100% of the rich that are currently scheduled to receive a tax increase next year. Obama has already said that he will not give in and allow the capital gains tax to remain at 15% after this year. By the way, your citation of 20% fails to include the capital gains tax included as part of Obamacare.
Speaking of Obamacare, that 10 year thing is a nice budget ploy, eh?
Wealth redistribution is not a one-way route. Tax policy over the last 10 years has seen to that. And Paul Ryan’s budget plan continues the wealth redistribution — upward.
That is not correct. Paul Ryan’s budget plan discontinues wealth redistribution from the United States deficit to segments of the population, with the largest group being the elderly, which is the wealthiest segment of the population.
And for the record, government redistribution of wealth is a one way route (at least in any industrialized country that recognizes the rule of law). You can truthfully argue that the government does not force the rich to subsidize the poor as much as they used to, but you cannot truthfully argue that the government takes from the poor and gives to the rich.
It’s the particulars of the property laws selected by the government that are the tools by which wealth is typically redistributed upward.
As they should be. The wealthy are parasites, and have their position only because they had the muscle to force themselves a spot at the negotiating table when the spoils of social exploitation were divvied up.
No one is entitled to a greater share of social wealth than anyone else.
5% on carried interest….still well below the amount of taxation experienced by actual, you know, workers on a group of people who have seen their share of the national INCREASE since 2008 and in a time of massive budget deficits, seems like a) unfair and b) wealth redistribution to you.
I submit Paul, you will never go hungry. People willing to tell the comfortable that they deserve to be comfortable are always welcomed by them. You can get some crumbs from the dinner table too!
I have no idea what either of your paragraphs are trying to state.
That does not surprise me, Paul. Your understanding of these issues seems quite limited.
“It is difficult to get a man to understand something when his salary depends upon his not understanding it.”
– Upton Sinclair
It must be noted, Paul, you would have done well in the last Gilded Age too
You appear to have made quite a few assumptions. Good luck with those.
The rich are not “vilified for making money.” They’re vilified for looting it, and they’re vilified for believing someone their poop stinks less than the rest of us. Note that the Koch Brothers and Mitt Romney share this in common — they were born into fabulous wealth. People didn’t “vilify” Steve Jobs for making money, even though he pulled some stuff financially that the Koch Brothers would get pummeled for, because he made his money making something of value that people wanted, and people understood he worked to get what he got.
He didn’t “make money”; he expropriated from his workers their rightful share of social wealth.
I agree that pensions tend to lock in employees. I think our current employment-based health insurance system does as well.
As Paddy suggests, I guess the question of fairness comes down to the effect on overall compensation when you transition from pension to a 401(k) plan or from employer-supplied health insurance to individually purchased. These transitions involve a greater component of risk shifted from employer to employee; and I suppose the overall compensation should account for that.
That’s leaving aside, for the moment, a more philosophical question about: a) whether employees generally will make rational decisions for themselves, properly accounting for their future needs and taking increased present compensation to invest for those future needs; and b) if not, whether that’s anything the government ought to care about.
Well, perhaps it is more difficult for a company owner to loot a bunch of 401ks? Not so difficult to loot a pension plan…doing so made Carl Icahn part of the 1%.
Re resentment: I think you make some good points, Doug, and they explain why my working-class, (formerly) drug-addicted, prison-boyfriend, multiple-marriage Wisconsin relatives, who the Koch Brothers would shoot if they ever stepped on their lawn, voted so enthusiastically for Scott Walker. They don’t see billionaires in small-town Wisconsin. But they do see teachers, police, fire, government workers who have a level of security they don’t have, and what’s worse is it’s on their dime. Note that Paul Ryan is elected out of the industrially decimated Janesville area. Anyway, a lot of folks have had their cushy (or not-so-cushy) private pensions and health care crushed, so misery loves company.
I also wonder if that’s part of the resentment toward schools, too. Not just teachers, but that in many areas, if the schools do their jobs well, the kids are prepared for a life far, far away from the town in which they were educated. Why pay for people who are only going to leave?
I think your relatives may have voted for Walked because the government unions are bankrupting the country.
Public school teachers in Indiana rank 4th in the nation, based on the ratio between their wages and state average wages.
And as someone mentioned, there’s no reason the US wouldn’t become Greece if we continue down the path that the government-employee-unions and the Democratic party are taking us. The average retired San Fran firefighter gets $95,000 a year. Not only is this nuts, it’s unfair.
I think government employees should get a decent wage and a 403b contribution in lieu of a pension.
I also think corporate welfare should end, starting with sports facilities built with tax dollars.
btw you can’t be so wrapped up in the Koch brothers and not wealthy Democrats like Soros and Buffett. There’s whores on both sides of the aisle.
Government unions are such a small portion of the economy that they could in no way “bankrupt” the country. And a statement that this country could go the way of Greece is ludicrous. The country’s economy is relatively strong, flexible with a small tax burden.
I never comsidered Indiana teachers well paid, but if they are, it is a result of the low rate of private wages in the state.
According to the Tax Foundation, the averave retired government pension in 2007 was $21,801.
Finally, it is a false equivalency to equate Soros and Buffet with the Koch Brothers. Buffett recognizes the need for tax reform and recognizes that his effective tax rate is higher than his secretary’s. And they are not spending half a billion dollares to corrput the political system so they can maintain a tax structure that dispoportionately benefits them
That’s not fair….the kochs also spend that money to buy regulations and legislation to allow them to continue to injure their employees, harm the environment, and deny climate change. An unfair tax system is only part of their interests.
It must be nice ot have your simplistic view of the world where the Koch’s buy “regulations.” How exactly do the Koch’s go about buying regulation from the Obama administration? Does it take credit cards?
Yes, Paul, only Federal regulations are for sale. No state regulation is for sale at all. All of the things I just cited occur at the State level.
Your historical understanding of governmental regulations and legislative rent-seeking is way more simplistic than my cynicism.
Paul C is the only person this side of Anthony Kennedy who does not understand how campaign contributors get favorable treatment from government, unless it is the evil Obama administration. They alone are for sale.
Which states regulations are for sale? Are Indiana’s? Here in Indiana, they really typically aren’t referred to as regulations, as it is officially titled the “Indiana Admin Code.” Is there Koch brother code sections hidden somewhere in the IAC? Did they give secret amounts to my local House Rep and State Senator to get these code sections? Please provide a citation.
Your quick reversion to ad hominen attacks says much more about you than it does me.
Uh, Paul, I’m sorry you think so little of an associate justice of the Supreme Court that a comparison to him qualifies as ad hominem. Ah, victimhood, the last refugee of a conservative
Still waiting on a list of those regulations Tim. Let me know. I am very anxious to see them.
Not simplitic. Terse and incisive.
Government unions won’t bankrupt the country, they will bankrupt local and state governments. Of course then you will get calls for unequal and immoral bailouts to these governments. The fact is, how does one justify $100K/year pension for police, teachers, and firefighters? The biggest problem in this country is that folks honestly believe they have a “right” to so much. I don’t have a problem with government providing some things to people: Basic food, housing vouchers, limited money to pay for heat, safety and security. Outside that, people should be left on their own. Unfortunately, many Americans believe they have a right to this and that, to live a certain lifestyle throughout their life.
One issue with this idea is that people think they have a right to drop tens of thousands on second homes, vacations, jet skis, RVs, $150/month cable TV packages, the newest and most costly electronic gadgets, etc.. Then after thirty years of working and dumping money into all of the above, they scream holy hell if their retirement income won’t provide for the exact same lifestyle. If told they should have saved their money, they stomp their feet and get mad. It is the “me, myself, and I” attitude of many Americans. Live for the now, demand others bail you out in the future.
Public pensions are borderline fraud. In states with the problem pensions (Illinois, California), the unions got their members to donate and vote for certain people to get elected political power. Then, these are the same bought and paid for politicians doing the negotiating. Human beings who are smart enough for politics aren’t going to bite the hand that feeds them. The liberals hear complain about politicians taking money from war profiteers, yet say nothing over union funded politicians throwing the bulk of the area taxpayers under the bus when it comes to these ridiculous contracts.
Pensions of $20K-$30K/year likely wouldn’t be too bad, but when you have thousands getting $90-$100K/year, after only 20 years of “work” in some cases, with a lifespan that means collecting that pension for another 20-30 years (depending on retirement age), that model is unsustainable.
States should have one reasonable pension. The payout should be the same for everyone: The police patrol officer and the police Captain. The firefighter that rides in the truck and the Battalion Commander. The legal secretary and the judge. The deputy prosecutor and the prosecutor. Basically, everyone goes into the job knowing their pension will pay x, say $20K given Indiana cost of living. Everyone should then be paying social security. That is one pyramid scheme that everyone should have to participate in. This idea that some municipal employees should be exempt is ridiculous. Then, if people want more money in retirement, they need to save, and advance their careers if possible.
“Government unions are such a small portion of the economy that they could in no way “bankrupt” the country.”
True, but there are a bunch of states and municipalities that are having a hard time staying insolvent. You’ll note that most of these states which are having a hard time are in pro-union Democratic states.
“And a statement that this country could go the way of Greece is ludicrous. The country’s economy is relatively strong, flexible with a small tax burden.”
Most economists disagree, and recognize that the national debt as a portion of GDP is scheduled to pass the point where no return is feasible within the next decade.
G
Ever wonder why is it is “class warfare” to pit the rich against the middle, but perfectly fair to pit the middle class against the poor or lower middle class?
What is truly amazing to me is that Mitt Romney and his friends tell me how he is a superman (because of his birth), but he hasn’t had a job in over a decade but “made” more money last year than all the people I know will make in their lifetime, despite the fact they actually have jobs.
Mitt hasn’t “produced” or ‘created” anything since, basically, he left the Governor’s Mansion. He is the idle rich. He is Jay Gatsby, only with a different obsession
Most economists reconginze that with out revenue increases, interest payments on the deficit will at some point approach level where draconion spending cuts and huge revenue increases will be required.
The current formula with federal tax revenues at about 18% and government expenditures at about 22% is what is unsustaniable.
So we agree that your original assertion was was incorrect, and that this country can certainly go the way of Greece if our budget isn’t balanced in the near future? I believe they currently have the same choice we will face if our yearly deficits are not addressed, yes?
No, I do not agree your assertion is correct. In do not buy into such doomsaying.
This country has the ability to address its deficit. I am not sure Greece can develop the political will to do so.
Or, if Germany can.
Our debt is nowhere even remotely similar to Greece’s
You’re totally right on this one. Our public debt is much higher than Germany’s.