JFTDC, the Vigaro hit the Mixmaster (politically correct terminology for shit hit the fan) this week with the submission of the Pew Center report on public sector pensions. The Huffington Post has a good report if anything good can be said of it. http://www.huffingtonpost.com/2010/02/19/state-pensions-plans-face_n_468638.html
As I read portions of the report, my heart sank. Here was a conservative but relatively nonpartisan bunch of researchers who were crying wolf with authority. That alone may spell even more trouble than we can imagine. I immediately sent out the following dispatch to a select group of labor folks hoping to finally get the attention of some who have been living in denial.
“We will have great difficulty attacking the facts. The conclusions are different. The first thing that must be changed is the use of the word "reform." Reform implies something that needs changing because it is bad. Healthcare reform is an example. This subtle nuance is poison to the status quo. To the extent that public employee unions intend to participate in the changes that WILL be made, we need to get involved very quickly. It is too late to get involved early.”
In the hours that followed, we received a fair number of responses and none were rosy. I had an extended conversation on strategy with my good friend and commiserator IAFF 12th DVP Larry Osborne. While we frequently believe that we have the answers to some if not all of the problems of the world, we had to agree that this issue will not go away and will not be solved quickly, easily or cheaply.
While discussing prior efforts to get the members interested in protecting their pensions, we lamented that the IAFF membership demurred from voting to pay for in-depth research and efforts to combat the attacks on pensions. My comment contained an archaic legal concept known as: “What a dumbass fuckupus that was.” (We lawyers know a lot of archaic Latin terms.)
The financial future of all public employees is at risk. Yes, there are problems within the current defined benefit pension system that will have to be addressed for sustainability to occur. Any changes will be financially painful for the employees. If the employees participate, they will still feel violated. If they do not, they will be raped by those who care not for their welfare.
In the weeks and months that follow, Caveat Lectores will provide further comment on how to participate in a process that hopefully will not destroy the future of public employees. For today, I want to identify some of those who are participating in the process. I will avoid devoting bandwidth to family, friends and social issues. All are stakeholders but some will benefit while others will suffer.
The sufferers list first:
1. Current Retirees who look on aghast but painfully unconcerned because they think they are safe. So long as they get their next pension check, they largely say something like, “…sorry about your luck. I am glad I got out when I did.” This is fanciful denial. If government decides to reduce pension and health care benefits, it is difficult but can be accomplished. Get your heads out of your collective asses.
2. Soon-To-Be Retirees who think they can get out before an Apocalyptic Tsunami sweeps the D/B plans out to the sea. (See above) The future pension Apocalypse is now. For those who forgot that Apocalypse is more than a movie about the Viet Nam war, there is the millennial tale of the Battle of Armageddon concerning good (Messiah) and evil (The Beast) eventfully resulting in the end of the world. Guess who will play the part of the Beast. There are people in government who actually believe in the literal version of this and are looking forward to the Rapture. If they are correct, you will not need the money. (If you feel comfortable in this belief, I need money to make up for the pension I gave up when I left the fire service. Just make the check out to Mr. Cash.)
3. Mid Career Employees who should be nearly hysterical and demanding protection from their unions, politicians and employers because they cannot count on being elevated to a level where they can pretend they are safe. ( See above) Anything less than outrage and despair is a symptom of psychotic delusional denial. This is the largest group and will be raped first.
4. Newby Employees who do not recognize the consequences of what is about to happen because they do not believe they will age; therefore, they just watch from the sidelines as they and others get raped out of their futures. Some will even encourage some of the “reforms” because they cannot fathom why they should pay for something for which they do not receive an immediate benefit. I guess they plan on an early death. Wow.
5. Future Employees who have no direct input in the matter and could be the early victims with two tiered retirement systems. They will indirectly support what will eventually make public employment the dumping ground for incompetents who cannot find work elsewhere.
Make no mistake, not everyone will suffer if you lose your pension. There are different levels of beneficiaries who will receive short-term and long-term rewards. These include, but are not limited to, the following:
1. Tax Payers who will receive some minimal gains in the short-term. This may cause long-term problems, but the voting tax payers are not known for long term good judgment. If that were so, we would not be in the financial mess we are today. You will have a very difficult time convincing the average person who sometimes makes less than you do and has no pension that paying taxes so you can have better benefits is a good idea. Remember that one out of eight citizens does not even have a job. It is time to get real.
2. Right Wing Conservatives who want government to cease to exist except to serve their interests. Anything that frees up money to spend on things other than services and social causes is what they crave. “Starve the Beast” is the unspoken motto of the Tea Baggers and the right “Wing Nuts.” If nobody wants to work for government except those who cannot find work elsewhere, it will vindicate their hopes and dreams of a society free of government. My message to any public employee who supports someone who seeks to destroy him is…wake the fuck up dumb ass.
3. The Investment and Financial Businesses who have a lot to gain with the break up of D/B plans. All the money that is now invested and mostly managed properly will become available for consumption by individual brokers and “investment” counselors who derive commissions while they churn your money right out of existence. No, Caveat Lectores does not suggest all in the money and wealth businesses are frauds, cheats and charlatans. However, would we be in the financial mess we find ourselves today but for the banking, mortgage and investment industry that made billions while creating the bubble that burst then expected us to pay?
4. Do Not Forget the Lawyers (like me) who will prosper because of the litigation that comes from all this. The legal system will not stop this debacle unless the bad guys do something illegal. However, that fact alone will not stop people, who were asleep at the wheel, from trying to litigate their way out of doom when they find they ran off the road. We will also get work from drafting the legislation that rapes the employees and from advising on how to redraft the pension contracts. Please cheat me out of that kind of work by doing what it takes to minimize the destruction that is about to occur. I would rather earn less and feel good about helping people instead of holding their hands while they get raped.
Given the opportunity, a lot of people just like me would like to help public employees counteract what could become the downfall of public employment. This is going to take hard work from some thoughtful people using level headed judgment. But first, there must be widespread recognition of the true nature of the problem. Caveat Lectores does not see that quite yet.
And Oh yes, Have a nice day?
Caveat Lectores by Jeff Carnes
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Lectores Labor Consulting 813-240-8165