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Category Archives: it’s the economy stupid

Rantasaurus – Part 1

**WARNING**
The following contains strong content that may be offensive to the reader. If you are faint of heart, have a weak stomache, or bend far to the left, turn back now. You have been appropriately cautioned. Enter at your own risk…

It’s taken me a few days to calm down enough to actually write about what’s on my mind. For the most part, I don’t have a defeatest attitude concerning the larger world with all its ills and ugliness, but sometimes it just gets to be too much. In these times, my natural cynicism goes to Def Con 9 or so.

Late last week was one of those times that took me to a level PISSED-OFFness that I didn’t know existed. I could actually feel my blood pressure rise.

It started with the seemingly impersonal happenings in Madison, WI concerning Public Workers’ Unions protests against having their collective bargaining power eliminated via state legislation. I’m not a Civil Servant and I don’t live in Wisconsin, so initially I saw the rucus as just more hot air coming from the bowed up chests of the political egomaniacs that reside in State (and National) politics.

However, once some of the detailed facts began to be reported (ad nauseum), it was evident that this situation is/was a microcosm of the larger problems facing our society today. After a 17-hour debate, Democrats who were on the obvious losing side of the argument skipped town to avoid a vote on a bill to reduce or eliminate the collective bargain ability of public employee unions. Nice. They couldn’t have their way through Democracy (majority rule), so they effectively QUIT. How hypocritical…they did the EXACT opposite of what their party is NAMED FOR. So, what this shows us is that when you are on the short end of a vote, simply run and their is no vote. Yeah, that’ll solve alot of problems.

Let me be clear, if it’s not already evident. I am NOT in support of Government Unions or Unions, in general, for that matter. I think that it’s patently unfair to have such dispartity between the private and the public sector in terms of labor structure. The danger of these unions has been obviously apparent in this latest “Great Recession”. While millions in the private sector have (AGAIN) taken cuts in pay structure, paid higher portions and overall medical costs and seen employers Retirement plans reduced, the public sector employees have continued to “bargain” for yet more benefits and more guarantees.

The math is EASY. You cannot spend what you don’t have, yet our consumption society continues to do just that. The U.S. is largely owned by China (who holds our bonds), due to the fact that our government is leveraged to the tune of over $14 TRILLION dollars. How can state and national governments continually be allowed to operate without a balanced budget? When people we know do this for an extended period of time, eventually the piper arrives for payment, right? Well, why should we think that this is not going to happen with our global governments? The real problem is the path we’ll have to travel BEFORE meeting the piper. $5.00 gas; $6.00 loaf of bread; $8.00 gallon of milk; $100 pair of Levi’s…is everyone prepared for that?

At some point, everyone has to do their part to fix this mess. Individually, we have to be responsible in our own finances. Much of this has already taken hold. Part of my job is to keep up with consumer attitudes towards finances and to understand the associated behavior and one of THE biggest trends that we’ve seen over the last three years is the massive shift of consumers from “spend” to “save”. As a whole, credit card balances have dramatically decreased and average Savings and Checking balances have risen. Everyday, people around the country have tightened their belts, put off unnecessary purchases, and tried to “live within their means”.

The federal government continues to try to “save” homeowners who couldn’t afford the home they bought a few years ago and can’t afford it now. Mortgage “workouts” are largely a failure as homeowners without wherewithal still can’t pay and ultimately end up in foreclosure…just six months down the road where more interest has been tacked on. These foreclosures produce a glut of inventory that is battered and fire-sale priced, adversely affecting other home values of people who have diligently paid their debt and taken care of their properties (ahem).

So, I AM PISSED. Pissed because I’ve worked hard, paid my taxes, paid all my bills on time, stretched to save for a “rainy day” and for retirement, and in the end I get screwed. We’ve often sacrificed what we “wanted” for what was prudent, yet it feels like we’re the only ones. Young people today think that they should own a house by age 25, have a job with 6 weeks (or more) vacation, a 30 hour work week, and a $100k plus annual salary. The current culture immerses this younger generation in entitlement and instant gratification. The character traits of hard work, dedication, and honesty are largely forsaken for the path of least resistance to get what they want, now.

In many ways, I see these public employees doing the same thing. Guaranteed higher salaries, platinum healthcare plans, FULL pay retirement after 20 years of service are ALL fully subsidized by the taxpayer, who are largely facing lower salaries, higher healthcare costs and cuts in their retirement (not to mention the on-going risk of 401k losses through a volatile stock market). While these public employees SAY they are willing to discuss cuts in benefits, the collective bargaining agreements allow them to re-address and effectively reverse anything put into place at any time — like when the political environment is more favorable. All they need to do is dedicate a larger portion of their union dues to Democratic candidates who become beholden to their bidding, and we’re right back where we started.

I think that unions’ focus on worker safety and protections, particularly in the age of sweatshops and gender inequality, were and are important. Negotiating FAIR wages is also a benefit of union strength. However, multi-millionaire union bosses are WORSE than multi-millionaire CEOs. They are, in effect, riding the backs of the working man for their personal gain. Additionally, I firmly believe that NO union dues should EVER be used for supporting political candidates or lobbying specific issues. Government unions have a blatant conflict of interest in this regard. How can you fix schools when the behemoth teachers’ unions keep a stronghold on legislators who purposely avoid teacher accountability tied to merit and in effect, are creating an inferior school system because of it? I don’t know about you, but in my job, if I do a great job, I get more pay than if I do an ok job. Good teachers aren’t afraid of accountability — BECAUSE they are good!

When I first started out in the working world, I was 17. I got a much coveted job at a local bank — starting at the bottom. Because I wasn’t going to college (my stupid choice), I was extremely fortunate to land a job that had great benefits and relatively good job security. People I knew had worked there for 10, 20, 30 years. So, at 17, I figured I had hit the jackpot. I would put in my 30 years of service, get my pension and retire to a bayou somewhere. At that time, the bank fully subsidized all health insurance premiums and the coverage covered just about everything. Deductibles were somewhere south of $200. Each year at Christmas, employees received up to three MONTHS’ pay depending on length of employment as a Christmas bonus. There were lavish Christmas parties where thousands of dollars and prizes were given away to employees. Each morning, pastries were provided in every break-room on every floor (there were 12), where refrigerators held free soft drinks, milk and juice for employees to enjoy on their guaranteed break time (2 at 10 minutes each) or mandated lunch hour.

At 17, I had excellent pay, paid health insurance, a pension plan, AND those mighty Christmas bonuses. By 18, the bank had started a new fangled thing called a 401k plan, where they matched 100% of what I put in. Not up to a certain percent, but a full 100%. I was set.

Then, the recession took hold. To survive, the bank had to address expenses. So, soon, the pastries disappeared, a coke machine replaced the refrigerator full of free beverages, the Christmas bonuses were folded into a one-time “raise” for employees and done away with, and we started to have to PAY part of our health insurance. No more big Christmas parties — our department received a nominal amount for each employee for us to have a small get-together. And the pension plan was discontinued. Those of us who had been hired with the benefit, kept it, but it was frozen at that point (I think that mine was worth $318) and distributed to the employee’s 401k. While everyone was very disappointed, no-one complained much because everyone needed their job. Plus, every other company was in the same boat and doing the same thing. Bottom line is that the boom days were gone and austerity followed.

I bore you with my worklife infancy to illustrate that yes, providing such great benefits was very motivating and created a very secure workforce. But, in the end, it couldn’t be sustained without bankrupting the company. We all had to make sacrifices just to survive.

And, here we are again. The private sector continues to cut benefits to a minimal amount, yet public employees are receiving benefits considered obscene by most of us in the private sector. Guaranteed monthly salaries for life, total paid health care (not available to the general public), along with other paid benefits simply can’t be sustained by municipalities and taxpayers, given the large number of public workers getting ready to retire.

Unfortunately, that bank has been bought three times and is now part of Chase, one of the largest banks in the world. Bank consolidation has been driven by gaining efficiencies through lower costs, i.e., shrinking the overall employee workforce and their associated expenses. Along with that, benefits are a fraction of what they used to be, but what’s the alternative? All that has produced a very indifferent work force whose average tenure is less than 3 years. The turnover provides huge costs in recruiting and training, as well as lost opportunity cost in not having qualified, trained employees ready to produce and in effect, lowers the standard of service to customers who are increasingly disappointed with their bank. (Don’t believe the Ally commercials.)

Bottom line is that the problem needs to be solved. Government needs to govern, not run to the next state. Not everything will go your way when the people are largely opposed to benefits through bullying for a section of the population that creates a disparity of inequality. Remember, the American psyche hinges on “FAIR”, so things have to get more in line. I’m sorry that the gravy train ends for public employees, just as I was when my own gravy train ended nearly 30 years ago. I truly appreciate teachers, policemen, firemen and mail carriers, but, if we are all to survive and create a general “better world”, then everyone’s got to give some to get some. It’s simply your turn.

So ends Part 1 of my Rantasaurus. I mean not to offend, but simply to rant. And, I can do that…because it’s MY blog.

…Part 2 to come and it’s a doozy.

 

No Bad News

blue-skies

Nothing but blue skies do I see….

With the change to daylight savings time, I am hereby changing my focus.  No bad news.  Not going to check the 401k, not going to read the scary newspaper, and not going to bitch about the current state of affairs.  I’m considering it part of my penance for Lent that can serve as a “twofer”, and possibly save my sanity, as well.

  No Bad News, Patty Griffin

 
 

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