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Friday, February 25, 2011

Are public employees the right villain?

Here’s the scenario:

A group of greedy Wall Street people create a huge financial mess that plunges the world into a serious worldwide recession, the worst since the Great Depression of the 1930s – unemployment, underemployment, foreclosures, deficits, and dashed dreams

It’s now 3 years later. What group is most under fire in the press? Not finance guys – teachers and government workers.

It’s right to be angry at the mess we are in, and it’s certainly true that – like many institutions – there are things one might want to change about public employee unions.  But it’s easy to see this scapegoating of public employee unions as an attempt to divert attention from the real villains of the 21st century so far – the finance guys.

This is blatantly obvious in the case of the Koch family bankrolling many of the anti-public-employee campaigns. If you can find another enemy, people will forget your own culpability.

Even in the case of generous pensions, the fault isn’t the government workers but the employers (i.e. the governments) which gave these generous pensions out and then failed to fund them.  A pension is a form of deferred compensation, as this article makes clear:

http://blogs.forbes.com/rickungar/2011/02/25/the-wisconsin-lie-exposed-taxpayers-actually-contribute-nothing-to-public-employee-pensions/

So, when the compensation is deferred, it’s actually suppposed to be deferred.  In Illinois, at least, the state never put the money aside. As a result of the actions of a state legislature full of lawyers, it’s the pension funds for teachers, police, firemen and other government workers which are in jeopardy.

Can you blame them for taking money when it was being offered? Really, no more than you can expect a basketball player to play for $250,000 a year when some other team is offering $2,500,000.  A good rule of salary says “If they are offering you more money, you must be worth it.”  That’s certainly the way the finance guys played it.