For some reason, I found myself reading through Paul Krugman’s recent NY Times material. Perhaps it was a desire for a little mental vaunting, what with the direction the elections seem to be taking, and if so I should have come away quite satisfied as Mr. Krugman is in full Chicken Little mode. A GOP takeover of congress will be a disaster, and we should all be very afraid. Stupid people are allowing their emotions to run away with them and will destroy the world economy through getting all moralistic about debt. And of course, the reason why the entire world doesn’t see things Krugman’s way is because macroeconomics is too hard for them to understand.
Well, I’m certainly prepared to admit that Krugman’s expertise in macroeconomics is greater than my own — and I’ll even stretch and say that my understanding probably goes farther than that of the average bear. Continue reading
If you believe what you read on blogs or hear from certain politicians and pundits, a new kind of haves-vs.-have-nots class war is brewing across the land. Not between the rich and the poor, but between private and public sector workers, as related here.
Scandalous stories of public officials enjoying lavish or disproportionate pay and benefits at taxpayer expense, such as in Bell, Calif., and elsewhere , frequently make headlines and prompt calls for reductions in such compensation.
As with many other economic and taxation issues, the answer to the question posed in the title of this post usually depends on which side of the political spectrum you are on. Conservatives tend to answer “yes,” while liberals tend to answer “no” .
But which side is correct?
Before I delve into that question, I will first make some disclosures. I am a full-time employee of the state of Illinois, making $35,000 per year. I do not belong to a union, and due to the nature of my job and agency, probably never will. I have only received one raise the entire time I have been so employed (nearly 4 years) due to a promotion to a slightly higher job level. I do not expect to receive any raises for the foreseeable future; in fact a pay cut is a distinct possibility. Prior to that I worked 20 years in private sector employment in the newspaper field. In some instances the pay and benefits were comparable to, and even better than, my current job. In other instances they were not as good.
Now to the question: are public employees overpaid? That depends on who you ask and how one defines “overpaid”. The average pay of state and federal employees in general is higher than that of private sector workers in general. When broken down by education, profession, etc. the picture is not as cut and dried. For lower-skilled jobs requiring only a high school or vocational education — e.g. custodians, receptionists, guards — the public sector pays better, whereas for professional jobs requiring a college degree or higher (attorneys, doctors, CPAs, etc.), the private sector pays more — often a lot more. These articles from Kiplinger and from Governing.com explain the differences in greater detail.
Two of the biggest reasons for these disparities are that 1) public employment tends to have a greater percentage of jobs requiring a college education or beyond and 2) public sector jobs are more likely to be unionized.
Public employee unions are a favorite bete noire of fiscal conservative politicians and candidates at the moment, and much of the public seems to agree with them. The fact that public employees continue in many (though not all) states and localities to enjoy benefits most private employees no longer have, such as regular salary increases, defined benefit pension plans, and caps on health insurance premiums and co-pays, arouses resentment among ordinary citizens who are forced to pay for such benefits via taxation.
Although many officeholders and candidates talk a good game when it comes to reining in public employee benefits, in practice the most frequent targets of budget cutting measures such as layoffs, furlough days and pay cuts, are lower or mid-level non-union employees. They often end up being punished for the sins (real or perceived) of their higher placed or unionized colleagues, simply because they are the easiest targets — not protected by either union contracts or political/personal connections.
The biggest problems on a state and local level are pension deficits — the growing gaps between the amount of money in public pension funds and the amount of benefits those funds are expected to pay in the future. According to this report by the Pew Center on the States, pension shortfalls are fiscal time bombs that threaten to devour entire state and city budgets if nothing is done to defuse them before it is too late.
How did the situation get that bad? In most cases it was due to a variety of factors — yes, generous union contracts played a part, but so did repeated failure on the part of lawmakers to invest properly in public pension funds, demographic changes (aging of the Baby Boomers, people living longer), and investments tanking due to the recession. No one factor can be singled out, and the entire blame for the pension crisis cannot be laid at the feet of one person or group of people. But regardless of who is or was to blame, the problem has to be dealt with, not swept under the rug.
Private sector employees are quick to point out that while they have to support public employee benefits with their taxes, public employees are not forced to do the same for private employees — they can choose whether or not to do business with a private company.
I agree, and this is in my opinion an argument that should be taken most seriously. For that reason, public employees are by necessity accountable to the public and will always be subject to various restrictions and considerations that do not apply to private employees (e.g., their salaries being public information). This is not “unfair” or unequal, but simply part of the deal one signs up for when working for a government body.
Another claim often made by private employees is that government workers, by virtue of the pay, job security and benefits they enjoy, are artificially insulated from the realities their privately employed neighbors face — the constant threat of being fired or laid off, lack of retirement security, worry about medical bills, etc.
That might, perhaps, be true of top officials/administrators with strong political connections who make six-figure salaries, whose spouses have equally high-paying positions, and whose children or other family members are completely healthy. Otherwise, I am not so sure.
Many public employees, particularly non-union ones, are regularly threatened with layoffs or missed paychecks (most often at the end of a fiscal year). Given the poor financial standing of many public employee pension funds, combined with the fact that some public employees don’t get Social Security, I’d say many of them (including myself) who are 10 years or more away from retirement are just as worried about their retirement as you are.
Also, most public employees do not live in a bubble or a vacuum. Most used to work in the private sector at some time in their lives, and many are married to spouses who work in the “real world” or are currently unemployed or disabled. Their grown children, their parents, their siblings, and their friends and neighbors include private employees or unemployed persons looking for work. The only exceptions I can think of might be political “dynasty” families like the Kennedys or Daleys. Plus, public employees pay all the same taxes everyone else does — federal, state, sales, property, the whole works. If taxes go up, it cuts into their budgets too.
Just because someone has a government job doesn’t mean they have, or should have, no interest in whether private business succeeds. If factories close and move overseas, if private companies go bankrupt and abolish or raid pension funds, if high taxes drive up the cost of living, if college education becomes unaffordable without taking on ruinous levels of debt — it affects them and their families too. It is in everyone’s interest, no matter what kind of job they have, to have a fiscally sound and honest government, competent public employees, and a sustainable tax structure.
Also, do not forget that for every instance in which a public official received undeserved pay, pensions or perks at taxpayer expense one could probably cite an equally egregious case of a private business executive enjoying lavish pay and benefits at the expense of fired workers, closed factories/offices, or raided pension funds. Greed is greed no matter where it occurs, and no sector of the economy is exempt from the effects of original sin.
Finally, since this is a Catholic blog, we should approach this issue from a religious perspective as well. Christ Himself chose a public employee, Matthew the tax collector, to be one of His Apostles. He also told His followers to “render unto Caesar what is Caesar’s and unto God what is God’s.” So, apparently, He did not believe that working for the government was inherently evil, unproductive or exploitive.
Some more pointed advice was given by Christ’s precursor, John the Baptist, to the public servants of his day who came to see him (Luke 3:12-14):
“Even tax collectors came to be baptized and they said to him, “Teacher, what should we do?”
He answered them, “Stop collecting more than what is prescribed.”
Soldiers also asked him, “And what is it that we should do?” He told them, “Do not practice extortion, do not falsely accuse anyone, and be satisfied with your wages.”
John was referring to practices for which the public employees of the day were notorious — tax collectors often overcharged citizens and pocketed the “profit” they made, while Roman soldiers were known for shaking down citizens of the provinces they occupied for money, food, or other goods. Here John is telling them simply to do their duty, not demand any more of the public than the law requires, and be content with what they are paid. If today’s public officials and employees did the same, there would be a lot fewer problems.
As with most problems in a fallen world, there is no perfectly just way to balance the need for a professional, competent government workforce with that of a private sector free of unnecessary taxes and regulation. This does not mean, however, that we should not attempt to find as just a resolution as possible. However this will require people who are not to blame for the situation to help clean it up, and at considerable personal cost.
For public employees, this means more work for less pay, more out of pocket expenses, and for some, no job at all. For the rest of us it could mean higher taxes, reduced services or some combination of the two. All these things will impact thousands, even millions, of good, hardworking people who are simply doing the best they can and had no part in creating the situation. It may not be perfectly fair, but life ain’t fair.
The American political scene since its inception has constantly been riddled with problems. The question of what the present-day problems are cyclically arises in political discourse. In the past two years in particular, it has become an almost universal observation that the political discourse is bitterly partisan in ways that we have never seen as a country.
Those in the punditry business have presented a number of hypotheses, some good, some bad, as to how or why all that we are witnessing is taking place. The content of such speculation is hardly unexpected: President Obama has made a number of strategic errors; the Republicans are just sheer obstructionists with no ideas or solutions to anything; partisanship in Washington is just too great on both sides of the aisle due to the Democratic supermajority; the overflow of ideological partisanship to 24-hour chattering cable-news stations is making the nation more partisan because each side chooses their news source, their associations, etc., in alignment with their own views, reinforcing their own habits of thoughts and therefore we collectively fail to challenge to substantively confront counterviews; disagreement over the Senate filibuster has caused a ruckus because it has either halted or changed the political dynamics of Democratic policy initiatives due to delay— is this a mechanism of checks-and-balances or an unreasonable threshold, in present time, requiring a supermajority for any important legislation?
There are many other explanations commonly put forth, but what is perhaps the most underlying problem of all, the truest explanation and biggest culprit of all, indeed, the biggest threat to democracy, goes unnoticed: the apathy, the ignorance, and the growing incoherence of the American public. This may be called, for the lack of better terms, the “populist problem.” Continue reading
Zogby researcher Zeljka Buturovic and I considered the 4,835 respondents’ (all American adults) answers to eight survey questions about basic economics. We also asked the respondents about their political leanings: progressive/very liberal; liberal; moderate; conservative; very conservative; and libertarian.
Rather than focusing on whether respondents answered a question correctly, we instead looked at whether they answered incorrectly. A response was counted as incorrect only if it was flatly unenlightened.
Consider one of the economic propositions in the December 2008 poll: “Restrictions on housing development make housing less affordable.” People were asked if they: 1) strongly agree; 2) somewhat agree; 3) somewhat disagree; 4) strongly disagree; 5) are not sure.
Basic economics acknowledges that whatever redeeming features a restriction may have, it increases the cost of production and exchange, making goods and services less affordable. There may be exceptions to the general case, but they would be atypical.
Therefore, we counted as incorrect responses of “somewhat disagree” and “strongly disagree.” This treatment gives leeway for those who think the question is ambiguous or half right and half wrong. They would likely answer “not sure,” which we do not count as incorrect.
In this case, percentage of conservatives answering incorrectly was 22.3%, very conservatives 17.6% and libertarians 15.7%. But the percentage of progressive/very liberals answering incorrectly was 67.6% and liberals 60.1%. The pattern was not an anomaly.
This study suggests an interesting reason why that may be the case:
The investigators used functional neuroimaging (fMRI) to study a sample of committed Democrats and Republicans during the three months prior to the U.S. Presidential election of 2004. The Democrats and Republicans were given a reasoning task in which they had to evaluate threatening information about their own candidate. During the task, the subjects underwent fMRI to see what parts of their brain were active. What the researchers found was striking.
“We did not see any increased activation of the parts of the brain normally engaged during reasoning,” says Drew Westen, director of clinical psychology at Emory who led the study. “What we saw instead was a network of emotion circuits lighting up, including circuits hypothesized to be involved in regulating emotion, and circuits known to be involved in resolving conflicts.” Westen and his colleagues will present their findings at the Annual Conference of the Society for Personality and Social Psychology Jan. 28.
Once partisans had come to completely biased conclusions — essentially finding ways to ignore information that could not be rationally discounted — not only did circuits that mediate negative emotions like sadness and disgust turn off, but subjects got a blast of activation in circuits involved in reward — similar to what addicts receive when they get their fix, Westen explains.
One hears, at times, frustration expressed that too many Catholics think only in terms of “personal morality” or “personal piety” and that insufficient attention is paid to social or political sin. Certainly, the results of an average Catholic’s examination of conscience might seem paltry on the stage of political activism. How can people worry about paltry wrongs such as, “I lied,” “I took the Lord’s name in vain,” or “I indulged in lustful thoughts,” when there are third world workers being cheated out of their just wages, the environment being destroyed, racism being perpetuated, nuclear weapons being built and imperialist wars being fought? Isn’t it time that we stopped obsessing over these small issues of lying and swearing and sex in order to concentrate on the massive, societal evils that afflict our country and our planet?
This line of thinking strikes me as, in the end, an approach no less dangerous than that of the Pharisee who was so notoriously contrasted with the publican. Why? Because while there are unquestionably social evils that afflict us at a wider level (though there is certainly room for debate as to the precise nature and cause of social evils, I don’t think there’s any question that such things do exist) morality must, in the end, be examined at the level of individual actions. And for us, that means our actions. Societies do not perform sins, people do. While it may make sense to talk about some pervasive evil such as racism as being a “social sin”, racism does not in fact consists of “society” being racist but rather of a number of individual people within a society behaving in a racist fashion. If workers are being treated badly or paid unjust wages, it is not because society does this, but because a certain number of individual people choose to commit those acts.
There seems an odd attraction towards Chinese-style authoritarianism among certain more technocratic/elitist segments of the left-leaning political elite. On the one hand we have we have people like Thomas Friedman arguing that Chinese one-party-autocracy is more efficient in passing the sort of regulations (“green” energy and nationalized health care) that he cares most about. On the other, we have Harold Meyerson’s claim that China is doing a better job of providing clean political process and economic recovery than the US, and that if Republicans don’t get in line behind Obama’s agenda the rest of the world will resolve to follow China’s autocratic example rather than American-style democracy.
As it so happened, I was in Washington DC on that National Mall as congress was voting on the mess which is our “health care reform” bill. I hadn’t been to our capitol city before, and it was a simply beautiful afternoon — one on which it was hard to believe that our elected representatives were bringing us one large step closer to a major budgetary crisis point, and Representative Stupak was busy selling out the principles everyone had imagined to be as solid as the Rock of Gibraltar for a rather paltry executive order which may (or may not) come after the fact. (Call me a cynic, but I could well imagine the EO never coming. Though in a sense, why not issue it: It would have no effect and could be repealed at any time. Still, there would be a great deal of justice and truth in Obama using the old Microsoft line, “Your mistake was in trusting us.”)
Still, though sun, green grass, and stone monuments are fresh in my mind, and the largest looming problems in my mind revolve around children wailing that they need a bathroom right now while traveling on the metro (let’s just say that didn’t end well) I don’t want to seem as if I’m discounting the importance of what we’ve just seen. And there seem to be some fairly clear conclusions we can draw:
1) Stupak had no desire to be to abortion what Joe Lieberman chose to be to foreign policy. Lieberman was hounded out of his party and continues to hold office only because of people who disagree with him on nearly every other issue admired his principled stands on Iraq, Israel, etc. If Stupak had brought down the Health Care Reform bill in defense of the unborn, he would have received similar treatment from his own party to what Lieberman has received, and he clearly didn’t want to be that person. Instead, having talking himself into a corner he really didn’t want to be in, he seized upon a fig leaf when it was offered and did what he’d clearly wanted to do all along:
The Washington Post has a new poll out which will please both political parties, since the American people in the main agree with both of them. A majority of people want Congress to scrap the current Health Care Reform bills, and a majority also think Obama has done a bad job of handling the health care issue. Yet a majority also want Health Care Reform passed this year and blame Republicans for lack of progress.
Solid majorities think that the current HCR bills are too complex and too expensive, but majorities also approve of the main components: require employers to provide insurance, require people without insurance to buy it, subsidize people who can’t afford insurance, and require insurance companies to give everyone insurance regardless of their medical histories or problems. So basically, people would love the bill as is, so long as it didn’t cost anything and wasn’t complex.
And in the results most likely to give legislators pause: People say they’re looking for new candidates of incumbents in the next congressional election by a 56 to 36 majority. 71% of people disapprove of how congress is doing its job. And of the 62% of the population that has private insurance (15% have MediCare, 3% have Medicaid and 17% have no insurance) 74% trust their insurance companies to do a “good” or “great” job of processing their claims fairly.
If people like the idea of health care reform, but don’t want it to cost anything or be complex, while distrusting congress and trusting their insurance companies, it sounds to me like nothing is likely to happen on the health care front this year.
President Obama on Friday attended a dinner at a retreat for House Republicans in Baltimore, MA. The President delivered a speech calling for bipartisanship and following this, there was a Q&A session that played out more as back-and-forth mostly civil, though sometimes heated, arguing. This went on for over an hour!
This was quite interesting considering the almost scripted and narrative (thanks to the mainstream media) nature of American politics. Lucky for the American people, it was televised.
From NPR’s “Watching Washington” Blog:
The Supreme Court Scrambles Politics — Again
Many people will hear about Thursday’s landmark Supreme Court decision freeing corporations to mount political campaigns and say the court has blown up politics as we know it.
By bringing corporations (and by extension, labor unions) back into the electioneering fray, the court has restarted a spending war Congress had tried to restrain over the past generation — most recently with the Bipartisan Campaign Reform Act of 2002, best known for its co-sponsoring senators, John McCain (R-AZ) and Russell Feingold (D-WI).
So long as they do not give to candidates directly, corporations can spend whatever they wish to support or oppose candidates for president or Congress. They are free to exercise their rights of free speech under the First Amendment. Just like citizens. Their rights cannot be suppressed on the basis of their “corporate identity,” wrote Justice Anthony Kennedy.
The ramifications for this year’s congressional elections and the 2012 presidential contest are sure to be profound. What does it mean, for example, for an investment bank such as Goldman Sachs, which had the cash to pay $16 billion in compensation to its employees for 2009, when a major issue before Congress this year is a tax on those bonuses? (Read the whole column here).
Rep. Alan Grayson (D-FL) has launched an online petition against the decision. The text reads:
Unlimited corporate spending on campaigns means the government is up for sale and that the law itself will be bought and sold. It would be political bribery on the largest scale imaginable.
This issue transcends partisan political arguments. We cannot have a government that is bought and paid for by huge multinational corporations. You must stop this.
From The Courthouse News Service:
WASHINGTON (CN) – The Supreme Court today killed a central part of the McCain-Feingold campaign finance law and ruled that corporations may spend as much as they wish to support or oppose candidates for president and Congress. The 5-4 vote left intact limits on corporate gifts to individual candidates (read the whole story here).
Also see here for the story on the Court’s ruling on campaign finance reform from RealClearPolitics.
“Ken Pittman: Right, if you are a Catholic, and believe what the Pope teaches that any form of birth control is a sin. ah you don’t want to do that.
Martha Coakley: No we have a separation of church and state Ken, lets be clear.
Ken Pittman: In the emergency room you still have your religious freedom.
Martha Coakley: (…stammering) The law says that people are allowed to have that. You can have religious freedom but you probably shouldn’t work in the emergency room.”
A charming sentiment from Martha Coakley running for the Senate seat in Massachusetts. For this gem, I award Ms. Coakley the second American Catholic Know-Nothing Award. If I were living in Massachusetts, I would be out next Tuesday to cast my vote against this bigot.