Busting Teachers to Bailout Bankers?
[No affiliation with "fraudEconomy dot com," see note at bottom.]
Folks, financial fraud caused global real estate bubbles to inflate and burst, which caused worldwide economic collapse, which caused massive unemployment and real estate value collapse, which caused state revenues to collapse, which caused state budget crisis – not teacher pensions or teachers unions.
Dean Banker of the Economic Policy Institute – who correctly predicted the housing bubble and resulting financial devastation years in advance – shows in this analysis (h/t Paul Krugman’s blog) that on average state government pensions would be in reasonable shape, if not for a Wall Street fraud-induced losses of over $1 trillion in value in 2007-2008.
The EPI also put together an exhaustive comparison of private and government workers total compensation(pdf here), which finds, of course, that government workers’ total pay, pension and benefits is less than that of private sector workers at equivalent education levels. But you already knew that, unless you live inside the Fox News echo chamber, have never met a teacher or walked inside a DOT office and don’t believe your lying eyes.
Rachel Maddow has done some excellent reporting on the real motivation behind Republican assaults on government worker pensions and unions. She concludes: it’s not about the money, it’s about the GOP breaking public sector unions, because unions provide the only consistent funding source for Democratic candidates against a flood of corporate and billionaire money going to the GOP.
No doubt some government pensions have been underfunded and otherwise mismanaged. And the promise of union votes may encourage some governors and legislators to be a little over-generous when negotiating pay and benefits. It’s worth noting that the Wisconsin public employee pension is in good shape (99.8% funded, compared to South Carolina’s non-union public pension only 70% funded) and Wisconsin’s state budget was nearly in balance, before Republican Governor Scott Walker and the Republican-controlled Wisconsin legislature decided to give $140 billion in tax breaks to their corporate friends, including the billionaire Koch brothers. If you cut taxes on corporations, but don’t cut spending on corporate services, such as policing of commercial property, court systems to protect property rights, road systems to transport goods, public education to educate workers, and all the many other services that government provide to private enterprise, somebody’s got to make up the difference. Republicans have decided that workers should take the hit for their corporate/billionaire giveaways.
It’s beyond perverse that conservatives are arguing that a $56,000 or even $75,000 annual pay package for a highly educated and experienced senior-level teacher is too generous, when the same conservatives railed against restricting multi-million dollar bonuses to Bailout Baby Bankers. $75K is below entry level on Wall Street, below starting pay for a fresh-out-of-law-school attorney at a big law firm. The financial geniuses on Wall Street, who crashed the world economy, are still borrowing free money from the Fed and giving themselves multi-million dollar bonuses, and Republicans want to bust on teachers? Are you fucking kidding me?
The states are in crisis as the end result of massive financial fraud. Fraudulent mortgages, fraudulent credit scores, fraudulent appraisals, fraudulent securitizations, fraudulent investment ratings, fraudulent assurances by Wall Street executives that all was well, and willful complicit ignorance or criminal incompetence by regulators [Tim Geithner].
Still think public employee pay and benefits are too lavish? Tell you what, when Angelo Mozilo of CountryWide, Lloyd Blankfein of Goldman Sachs, Dick Fuld of Lehman Bros., Alan Schwartz of Bear Stearns, and Hang Greenberg of AIG are all living in refigerator boxes in Central Park or sharing a prison cell with Bubba, then we can talk about “out-of-control” teacher pay.
[Author's Note: The term "FRAUDconomy" is in no way related to the sketchy-looking website/organization "FraudEconomy dot com." Jim Magruder and PolicyGrinder.com have no affiliation with that site, which turned up as the closest match in an exhaustive 2 minute Google search for the term "fraudconomy." Did I just coin a word?]