Obama Administration

Earlier this week, Joseph Stiglitz wrote a column about the sluggish response to the economic crisis. “The response to the private sector failures and profligacy that had caused the crisis was to demand public sector austerity,” Stiglitz said. “The consequence will almost surely be a slower recovery and an even longer delay before unemployment falls to acceptable levels.”

Yeah, pretty much. And of course, since the real perps are “too big to be responsible,” scapegoats must be found.

For example, it quickly became conservative orthodoxy that the financial crisis was caused by lowlife deadbeats who irresponsibly took subprime mortgages they couldn’t pay back. And this was made possible by government “do-gooders” who promoted these loans. The real perps who cooked up mortgage selling schemes and who made out like, well, bandits, are not blamed.

One goal this skapegoating serves is getting government completely out of the mortgage market, of course, which would probably mean the end of the 30-year fixed rate mortgage. But first, the Powers That Be have to convince the public to clamor to get the government out of the mortgage market.

Unions have been scapegoated for all manner of financial ills lo these many years, and they are still being scapegoated, even though only 12.3 percent of American wage and salary workers belong to Unions.

And lately public employees have been in the scapegoat spotlight. Obviously, we’re all being set up to cut public employees’ salaries to help pay for the tax cuts for rich people.

Earlier this week, Michael Powell wrote in the New York Times,

Ever since Marie Corfield’s confrontation with Gov. Chris Christie this fall over the state’s education cuts became a YouTube classic, she has received a stream of vituperative e-mails and Facebook postings.

“People I don’t even know are calling me horrible names,” said Ms. Corfield, an art teacher who had pleaded the case of struggling teachers. “The mantra is that the problem is the unions, the unions, the unions.”

Paul Harris writes for The Guardian,

Across the US, politicians are railing against the terrible abuses of powerful union bosses, especially in state government. … What is perverse about this trend is just how vastly it misunderstands what went wrong with the American economy. No one is denying that this is a time for belt-tightening. Or that some unions have problems. Or that some union contracts look over-generous in austerity America. But the fundamental truth remains: powerful and reckless unions did not cause the Great Recession by rampant speculation. Nor did an out-of-control labour movement cause or burst the housing bubble. It was not union bosses who packaged up complex derivatives to sell in their millions and thus wrecked the economy and put millions out of work. Nor was it union bosses who awarded (and continue to award) themselves salaries worth hundreds of millions of dollars for doing nothing of social value. Neither was it the union movement that was bailed out by the taxpayer and then refused to change its habits.

All that was the work of the finance industry.

Yet, as America continues to search for solutions to its economic problems, it is the labour movement, and not the banking sector, that is getting it in the neck. This is despite the fact that many unions, especially in such cases as the bailout of Detroit’s automakers, have proved themselves highly flexible in sacrificing wages and long-held workers’ rights in order to preserve jobs. Meanwhile, the finance industry, where true and meaningful reform has failed to happen, still squeals as if President Obama were a raving socialist. Or, in the helpful and moderate words of Blackstone chief executive Stephen Schwarzman, “It’s like when Hitler invaded Poland in 1939.”

You see where this is going, right? Good-paying jobs are an evil thing. People who work for a paycheck had better learn to make do with less. Unions and public employees are just the first targets.

All kinds of lies about public employees are being mouthed by political leaders and repeated in media with complete impunity. For example, a big talking point from last summer was that there had been a huge increase in public employees — proof that Obama was growing a “big government.” But the increase was just the temp employees hired to conduct the census.

The recent stories about the New York sanitation workers who sabotaged snow removal is part of the problem. The source of the story was one Republican councilman, and I’m sure everyone in the country heard it.

Recent stories claiming that public employees make outrageously high salaries is based on bogus manipulation of statistics. Robert Reich wrote,

They say public employees earn far more than private-sector workers. That’s untrue when you take account of level of education. Matched by education, public sector workers actually earn less than their private-sector counterparts.

The Republican trick is to compare apples with oranges — the average wage of public employees with the average wage of all private-sector employees. But only 23 percent of private-sector employees have college degrees; 48 percent of government workers do. Teachers, social workers, public lawyers who bring companies to justice, government accountants who try to make sure money is spent as it should be – all need at least four years of college.

Compare apples to apples and and you’d see that over the last fifteen years the pay of public sector workers has dropped relative to private-sector employees with the same level of education. Public sector workers now earn 11 percent less than comparable workers in the private sector, and local workers 12 percent less. (Even if you include health and retirement benefits, government employees still earn less than their private-sector counterparts with similar educations.)

The talking points are also going after public employee pensions, claiming they are crippling the nation financially. But most of these pensions are mostly funded from pension funds public employees pay into through their careers. Pensions already are quickly becoming as extinct as dodos in the private sector.

The American public is being manipulated into accepting less — less money, less security, less upward mobility. And they’re being distracted away from the real thieves, the real bandits draining us dry.

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  1. Bonnie  •  Jan 7, 2011 @2:14 am

    Well said, Maha.

  2. c u n d gulag  •  Jan 7, 2011 @8:52 am

    On the one hand, I’d say we deserve it. We are an ignorant people who follow phony leaders, and don’t know where own own interests lie. I’m certainly not speaking of all of us. Just enough.
    On the other hand, we’ve had some truly aweful leadership over the last 40+ years. And not just politically. But in industry, finance, education, and certainly media.
    As a nation, and in a relatively short period of time, we’ve gone from “E Pluribus Unum,” to “What’s in it for me.” That didn’t come from the bottom up, that trickled down.
    Well, what’s in it for most of us is a crap sandwich – and that’s if we’re lucky and they decide to give us, or feel that we’ve earned, our ‘daily bread.’ The crap is free.
    And as I said earlier, I’d like to say we deserve it, but when all you see, hear and read for almost 30 years is right wing propaganda, it’s hard to blame the recipients. Does the poor beaten dog who flinches and cowers in the corner everytime it’s master looks at it wrong, deserve any blame for not biting back earlier? I don’t know. In some respect, at this point the poor dumb beast doesn’t know any better.
    And that’s what I think the American people are right now, poor dumb beast’s who’ll take the beating, hoping against hope that somehow or other it’ll stop. Or, we’re like a 2nd dog in the household, looking at the master beat the crap out of the other one, and say, “Well, at least today, it’s that poor dumb bastard, and not me.” Divide, and conquer.
    About 35 years ago, Catfish Hunter, a great pitcher, after a long string of victories, lost a game. And when the press asked him what happened, he said, “Well, the sun don’t shine on the same dog’s ass EVERY day…”
    Catfish was wrong. Today it does shine on the same dog’s asses every day. The lead dogs on the sled. And while the sun shines on them, the rest of us are left to follow the assholes, beg for scrap’s, and then have to deal with their shit.
    The 18th Century French had the right idea.

  3. PurpleGirl  •  Jan 7, 2011 @11:15 am

    c u n d gulag: Have a blessed Christmas, a great family gathering and an allover good day.

  4. A Canadian Reader  •  Jan 7, 2011 @11:29 am

    The Harris article is a must keep. I’ve sent it out to my family already (although they need no convincing). His arguments are short, sweet and to the point. What a deft popping of the right-wing bubble!

  5. Felicity  •  Jan 7, 2011 @2:59 pm

    The old ‘austerity’ movement is back? There was one in the ’80’s. That little boondoggle to benefit the rich included levying steep federal taxes on goods so that fewer foreign goods would be bought, the object being to decrease the trade deficit. That was the sop. The real meat of the proposed measure was “in order to encourage savings,” the investor classes would be given a reduction in the taxes on their capital.

    (And, of course, the term ‘austerity’ so freely bandied about during the ’80’s was the same decade that saw (including the Bush II decade) $2.5 trillion sucked out of the federal budget.)

    One criminal way or another, the power brokers and their toadies in government will pass the pain which they created on to the people so they can suffer from it.

  6. Dan  •  Jan 7, 2011 @3:19 pm

    Can we just start calling them liars, yet?

  7. wmd  •  Jan 7, 2011 @3:31 pm

    There are some problems with public employee pensions – they are predicated on a return on investment of the withheld funds that hasn’t been there.

    The administrators of these funds haven’t been good stewards of the employee’s contributions. And because the yields were low in 2001-2004 pension investments chased risky yield in things like Mortgage Based Securities, etc that the banksters sold as AAA safe investments that did bring in the 8% the funds actuaries said were needed to fully fund future benefits.

    Increased contributions or decreased benefits (or increased yield? yea right) will be necessary. Given the hatred of tax increases any contribution increases will mean less take home pay now. Or less retirement pay later via benefit decreases.

  8. maha  •  Jan 7, 2011 @3:50 pm

    here are some problems with public employee pensions

    Yes, but the point is that public employee pensions are not, in fact, the primary reason that states are broke. They aren’t even the secondary or tertiary reason; they are a relatively minor blip. Yet public employee pensions are close to the top of the Republican “stuff to axe” list.

  9. PurpleGirl  •  Jan 7, 2011 @4:50 pm

    In New Jersey, I believe, one major problem with public service pensions is that the state hasn’t been making their contributions to the fund for years. Of course the fund has a deficit… several governors haven’t kept up the state’s end of the bargain.

  10. Pat  •  Jan 7, 2011 @4:54 pm

    Even the Obama administration has telegraphed the conventional wisdom of the slow recovery. Regarding what to make of this I seem to have only two choices — they are ignorant or they knowingly refrain from taking actions to hasten the recovery.

  11. c u n d gulag  •  Jan 7, 2011 @6:29 pm

    Thanks for your kind wishes. We had a very nice Christmas 🙂
    Unfortunately, we had to cut our visit short to my sisters due to another ‘rassa-frassa’ snowstorm! It really started to come down, and I figured, better safe than sorry.

  12. khughes1963  •  Jan 7, 2011 @8:54 pm

    There are times when I think those of us who read this blog are the only sane people left, and we are drowning in a tsunami of misguided and lying propaganda that will bring down our country as we have known it. Instead of standing together with all of us who have to work for a living, the demagogues and GOOpers have succeeding in dividing us. I fear it will end badly for many of us.

  13. JerseyJeffersonian  •  Jan 7, 2011 @9:07 pm


    Right you are, successive administrations here in NJ have been either seriously underfunding or completely not funding their end of the pension agreement. We public employees have been ponying up our portion, but not the state. I’m still about five years out from having a vested pension, but I am increasingly of the opinion that they’re gonna bone us before I get there, and they will try to change the plan in midstream. This apprehension, along with the fact that our contractual raises have been skipped for three years now, does nothing to keep me feeling well-disposed toward the state. My skills have gotten stronger, and my contributions to the institutional purposes have been thereby enhanced, but I’m falling further behind. Both the contributions from me and my employer (such as they are…) have been frozen, and my SSI contribution has been correspondingly the same for all of this time. This has consequences down the road.

    I’ve reached the dispiriting conclusion that the place in which we find ourselves as a nation has been a bi-partisan enterprise. The Ds are the quasi-liberal wing of the Money Party, so I look for no hope from that quarter. They’ve been fully complicit in the gutting of the middle class, merely playing a different role in the fiasco than the Rs. “Free Trade” not “Fair Trade”, fluffing the FIRE sector to prop up the Ponzi scheme in a vain effort to disguise the increasingly threadbare and hollowed-out nature of the economy – they’ve been right there pitching. The die has been cast, and the only remaining question is how bad it will get.

    Would that I had a more hopeful attitude; but frankly, I find that intellectually dishonest.

  14. Swami  •  Jan 8, 2011 @12:53 am

    I’m gonna tighten my belt and act more responsibly in the future.. I think that’s the least a 60 year old carpenter in the middle of Florida’s present boom construction economy should do. Maybe jobs are scarcer than hen’s teeth in these parts, but I won’t let that deter me from my civic duty of good citizenship and responsibility.

  15. c u n d gulag  •  Jan 8, 2011 @9:29 am

    A carpenter, eh? So you’re good with your hands.
    And you wrote about a “boom.”
    A “boom” in Florida.
    You’d better be careful. Some people in authority might construe that to mean you’re about to go all Unabomber on the Sunshine State.
    (Not that there’s anything wrong with that…). *

    *For those authoritities monitoring the internet, I want to be clear that Swami is not the next Ted K., and that I’m not condoning blowing stuff up – it was a Seinfeld reference (usually attributed to gay people, but now kind of a universal thingy-majiggy). I’m hoping that you’re laughing, authorities. You are laughing, aren’t you?

  16. erinyes  •  Jan 8, 2011 @11:28 am

    The proposed high speed rail link between Orlando and Tampa would create a bunch of jobs for carpenters, ironworkers, pile drivers, etc; but it “appears” our new “governator” might squash it.
    I’m afraid he has the vision of an armadillo, we’ll soon see……..

    “you are laughing, aren’t you?”
    I don’t think those guys have much of a sense of humor.

  17. c u n d gulag  •  Jan 8, 2011 @3:34 pm

    “U.S. Rep. Gabrielle Giffords of Arizona was shot outside a grocery store in Tucson while holding a public event, Arizona Public Media reported Saturday.”
    She’s dead, as well as at many as 6 others. Her office was one of the ones vandalized in the health care debate.
    I’m sure the ‘Usual Suspects” of Glenn, Rush, and the rest of the Conservative “Amen Chorus,” will deny any complictyy. Those f*ck’s will probably try to blame the Liberal Fascists for the assissination – God know’s it couldn’t be ONE OF THEM! *

    *In all fairness, though they’ve got a suspect, we don’t know it was a lunatic Conservative follower. But I “doubt” a moderate Liberal who was pro health care and immigration reform, was shot by a Liberal. By “doubt,” I mean it ain’t possible.
    But, I’m sure the MSM will start their campaign of she said, he shot, and blame both ends of the spectrum.

    I”m about to be sick. The “games” have begun, the chickens are coming… Ah, fuck it, the lunatic’s are about to start their violent insanity. I hope the MSM calls them as THEY SEE IT!, and not as it’s framed.
    FUUUUUUUUUUCK! (Sorry, maha…).

  18. c u n d gulag  •  Jan 8, 2011 @3:41 pm

    Now I find out that she was one of the Blue Dog’s who was very strict on immigration. But, I just heard that from FOX, so who the Hell knows.
    This is why something like this needs to be covered by the MSM, but with any analysis left out until someone really knows something. Which I didn’t. And don’t. So, I’ll just STFU until the details are a lot more clear.

  19. goatherd  •  Jan 8, 2011 @4:28 pm

    I have friends in Florida who are state employees on the verge of retirement. The Flordia pension fund was heavily invested in Enron and lost big on the Bush brothers’ favorite corporation. Here in NC the pension fund is still in pretty good shape unless they’re hiding something. I am waiting for the narrative to begin that will allow them to pick our pockets. Let’s see, it should start pretty soon now that the baggers are in a lather.

    I wonder what at the “Captains of Industry” will do when the market starts to shrink or collapse. They never admit that an increase in demand is what we need to recover, but they have to understand that most businesses have excess capacity. Cutting pensions, and the safety net programs that can be countercyclical and act as economic stabilizers will contract the market. When the market shrinks they’ll be the “Corporals of Industry” and there will be fewer of them. A lot of the rest of us will just be roadkill. Then, I guess they’ll just convince us that another tax cut would turn the corner. Life will sure be grand in the “beacon on a hill”.

  20. erinyes  •  Jan 8, 2011 @4:34 pm
  21. erinyes  •  Jan 8, 2011 @6:20 pm

    Dear Sarah,
    You might want to choose your words more carefully.