Yves Smith thinks that the unions, in a tough spot, will have to regain the moral high ground by calling for shared sacrifice. If they have to give up some benefits, the people at the high end of the income scale will have to pay as well.

Unions already have the moral high ground. They have contracts. It’s bad enough they may have to agree to two-tier benefits for new employees which, as we’ve seen with UAW, severely weakens the union.

The tactic of pitting “private workers” against public workers is working for the GOP because people don’t yet really make the connection between the economic disaster and who was ultimately responsible. It’s easy to blame the victims when you own the media and can afford to 24/7 whine about Unions, teachers, pensions etc. First they came for the private sector unions and they pretty much have destroyed that movement and now predictably it’s the public sectors side. It’s all part of their plan to turn America into a neo-feudal society. The so called Middle class America of the mid. to late 20th century will soon just be a memory. The Oligarchs and the plutocrats they pay that run the State and the top levels of the major Int’l Corps. have decided that a Middle class isn’t necessary anymore. Order will be kept the old way by paying private armies to ruthlessly suppress any uprisings or revolts. Unions will be made as close to illegal as possible and the rule of law will be only for the poor. The wealthy will become more and more lawless as time goes by. The only rule they will respect is the “Golden rule” AKA “those with the Gold make the rules.

union? that just sounds wrong. like “soviet union.” and collective bargaining sounds straight Cuban. maybe they (the limited amount of public employees with some union representation because state legislatures have not made them illegal) should start changing the terminology to something more freedomy and entrepreneurial.

what a bait and switch. I guess several billions of dollars can get a target off anyone’s back (Wall St.) and on to the back of weaker targets like cops, nurses, teachers and the guys that fix the storm drains.

The War on Public Employess and Unions.

(really this is a WAR between Rich USA citizens and Poor USA citizens, guess which group sheds the most blood for the USA, and gets nothing in return)

the cost of this war is listed below

Fact 1
the United States is absolutely hemorrhaging manufacturing jobs. Back in 1970, 25 percent of all jobs in the United States were manufacturing jobs. Today, only 9 percent of the jobs in the United States are manufacturing jobs.

Fact 2
The decline of manufacturing in America has only accelerated over the past decade. The United States has lost a staggering 32 percent of its manufacturing jobs since the year 2000.

Fact 3
Deindustrialization is creating ghost towns in some areas of the United States. Even some of America’s biggest cities are now only a shadow of what they used to be. Since 1950, the population of Pittsburgh, Pennsylvania has declined by more than 50 percent. In Dayton, Ohio 18.9 percent of all houses now stand empty.

Fact 4
We have literally seen tens of thousands of American factories close down permanently over the past decade. Since 2001, over 42,000 U.S. factories have closed down for good.

Define Terrorist of the USA.

Rich USA citizens think it is profitable to themselves to kill the USA middle class. (if BIN LADEN was doing this, he would be under a FEDERAL PRISON some where)

The Fed’s latest move to rain two trillion dollars worth of free money down on the too-big-to-fail financials is just one more indication that the fat cats on Wall Street are being exempt from joining the working stiffs on Main Street in having austerity measures imposed upon them. Despite what trickle-down theorists will tell you, it’s a lie and will always be a lie that raining boatloads of free money down on Wall Street will eventually make its way down to Main Street. So it’s hard not to deny that imposing austerity on Main Street without also imposing austerity on Wall Street is just part of the plutocratic plan to transfer even more of our nation’s wealth up to the top.

I’m no financial expert by any stretch, but it seems to me that this most recent bull run on Wall Street has the distinct look and feel of being artificial. So it’s my prediction that once all of this free money from the Fed works its way through the markets, creating a rather broad-based bubble, it’s only a matter time before it hits the pavement and bursts. Assuming I’m right, the question we all should be asking is not if, but when will it burst?

No offense, but what do those facts have to do with Public Employees pensions?

A few problems with this:

1. Public employee unions may not be a problem in Alabama, but they’ve devastated the budgets in states like New York and California at the state and local levels.

2. Ironically, public employees are the most highly unionized sector of the work force – but they’re the workers that least need union protection. We really need stronger private sector unions. The collapse in private sector unionization while public employees remain as (or even more) unionized has created a disparity in average salary and benefits – in favor of public sector employees. That’s unprecedented.

3. Pensions have never been adequately funded in either the public or private sector. Having public sector unions refuse to negotiate on these issues, and able to do so because governments don’t face private competition, has certainly given the states less flexibility to face the latest budget crisis.

I do think it’s fair to blame the unions, insofar as they’ve let themselves get driven out of the private sector and have shifted more and more emphasis to public sector unionization. It’s easier to organize public employees, but then you have the spectacle of government workers doing better and better relative to private sector workers, and then they look like freeloaders.

The present value of state employee pension liabilities as of June 2009 based on current salary and service is $3.20 trillion.

That seems like a lot, but I can’t find a number for how many public employees that is owed to.

There is a problem with the accounting for pension liabilities – those administering pensions like to use rosy projections for return on their investments. The alternative is to ask for greater contributions from tax revenues (raise taxes) or cuts in benefits. There’s some element of pretending everything’s OK until it isn’t.

Public employee unions are not the problem in states like New York and California.

Elected officials in these state have done a lot of MORONIC stuff.

Public Unions and Private Sector Unions have a common enemy BIG MONEY interest, that has basically destroyed common sense democracy across the USA.

States who tried to use the sales tax as their main revenue generator should suffer, this was a stupid idea to begin with.

Guess what happens when consumption slows down? you got it State Budget Crisis.

Big Money Interest on Wall Street killed Property Taxes, Home Prices are still falling. (so property tax revenues are in the toilet also)

Public Unions members don’t sit on the board of Wall Street Banks or make laws.

No profile, no diary, no friends, no groups. At first I thought you were a troll, but I honestly don’t think so.

I think you’re one of Barry’s “saavy businessmen”.

It’s easier to organize public employees, but then you have the spectacle of government workers doing better and better relative to private sector workers, and then they look like freeloaders.

It’s always easier to organize when no one’s job will be lost in retaliation. The public sector obeys the labor laws. The private sector? Not so much when it comes to organizing.

It’s funny how American private sector workers refuse to claim improved work conditions and pay for themselves. They’d rather see union workers lose their contracts than have equal contracts. Sad really.

Shorter you: It’s the PTB & MOTU who are the problem, not the workers.

Who could argue with that.

BTW, peep who argue you don’t need public sector unions don’t know anything about industrial org economics. A govt is a monopolist from the POV of the worker, i.e. there is no other alternative for the workers in the same ‘industry,’ depending of course on what your govt job is.

The only alternative for workers who are employed by a monopolist is to counter it by forming a monopsony, i.e. monopoly on the supply of labor, towit, a union.

Monopoly-monopsony does not result in a robust economic outcome like real atomistic competition would (as if that exists anywhere, but that’s another story), but it’s much more balanced than having the monopoly on only one side of the S-D balance.

The present value of state employee pension liabilities as of June 2009 based on current salary and service is $3.20 trillion.

Had the money been invested and not raided by theft on Wall St., wouldn’t the pension issue be a non-issue?

The counselors of battered women have to teach these women to understand the victim / victimizer relationship. Most women have a really hard time believing that they are playing their part. That part basically consists of one thing, and that thing being , they tolerate the abuse.

Abusive people are shunned and avoided by people that do not allow themselves to be the whipping boy and door mat of cruel abuse and exploitation. When a cruel abusive person meets someone that will allow them to abuse them, they find the relationship they long for. You cannot change an abuser by asking them to stop. They believe completely in the right and justification to behave the way they do. It is their right and their calling.

What America is experiencing is the same thing. Like an abusive man who beats a woman and spends her resources freely, nothing will stop him. Nothing will stop him until the woman is broke, injured to the point of police intervention, or dead. Many women will continue to this point, simply unable to comprehend the reality of sociopathy. America is demonstrating the same inability to deal with their part of the continual victimization.

We are lulled into believing that what we are experiencing is normal behavior. It is not. We are being victimized, robbed, and exploited by a deviant class of exploiters. All of it normalized by a flickering brainwashing idiot box where attractive people act like everything that is happening is normal and good. It is the nature of people to agree with the consensus, but we are having a false and pretended consensus projected on to us. An invented charade created to seduce us into accepting the unacceptable and believing that other people see everything as fine and wonderful.

The abusive and robbing elite will not stop until we are broke, injured to a crippled degree, or dead. People need to stand up and call for these crimes to be held accountable. Today crime is nothing. It is acceptable and the richer you are the more acceptable any crime you would like to partake in is fine. The people are submissive to it.

Yeah. I want to see those judges in Michigan share the pain with their pensions in the state retirement system.

And those cops too. Notice its mostly females they are hitting- the teachers and secretaries in state departments…. and these are white guy politicians in suits who have raided state coffers right after the white suited bankers and wall street schemers. Bastards. Contracts are protected for some and not others? Even in bankruptcy. What crooks. Who recognizes America now, anyone? Let those fascist corporations with their staggeringly undemocratic values fend for themselves. Not a dime. And get the hell out of the immoral war business too.

Pissed. Really pissed at all of the lies and stealing. Don’t talk crap to hardworking people about sharing.

Unions should have been out on the street when Clinton pulled NAFTA and the Telecommunications Act. Now you have supposed Democrats doing deals with Republicans like Granholm in Michigan and now Coumo… Obama …. can we get any lower or give up any more to crooks?

Unions need to STRIKE now while they still can. MEA in Michigan- get some guts.

If Christie and others in similar positions are required to uphold the Law and the Law says they must put money in the pension funds, then isn’t he a lawbreaker who should lose his job and perhaps his freedom? Isn’t impeachment required?

While it’s true the bankers and their bought politicians may have created this crisis it isn’t as if they directly went to the state governors and told them not to put money into the pensions. And, it’s not such a direct connection you can say they stole this or that.

So, government has to work out a plan to save the states and somehow spread the cost across society. But, now we have a new House run by Republicans who will not raise taxes. What can be done?

I think your right!

“we have to pay well to get the best people.” Wouldn’t that apply to public workers in every sector, too?

It would if you gave a shit about those folks’ clienteles. HE needs the best because rich guys are not to be inconvenienced. YOU don’t get the best, else you might come to the conclusion that government has a valid role.

When they decide not to prosecute and enforce laws… like Obama not going after Wall St. or the AG in Michigan not going after the millions lost to Enron (and pension losses)..their “discretion” protects the crooks. Obama in effect gave immunity to all of the corrupt Bush people- he hired and then did not go after them in the courts… SICK stuff-more it is protecting a whole class of crooks, not just party.

”It is difficult to get a man to understand something when his salary depends on his not understanding it.” Upton Sinclair The Jungle

Is your question rhetorical?

Christine Todd Whitman has been out of office as governor of NJ for 15 years. From Naked Capitalism, a quote from an article Bob Herbert wrote in 1995:

Now many of the gains made over a quarter of a century are in danger of slipping away because the current Governor, Christine Todd Whitman, has chosen to finance her political ambitions with a popular buy-now, pay-later economic policy that will place a financial stranglehold on future generations of New Jerseyans….

This is best illustrated by Mrs. Whitman’s decision to withhold billions of dollars that should be going into the public employee pension funds over the next few years, and using the bulk of that money to balance the state budget. Then, with an audacity that dazzles her supporters and even draws grudging admiration from opponents, Mrs. Whitman smiles and characterizes the withheld funds as savings.

“Of course, they are not “savings” — not in any sense of the word. The pension obligations at some point will come due and future generations will have to meet them.

Not only will the money have to be made up, but future taxpayers will be deprived of the income that the money — if properly invested now — would be expected to generate…The changes that she has made have been drastic. According to the New Jersey Education Association, which has filed suit against the state, the employer contributions to the pension system this year will be as much as 96 percent below the amounts contributed in the early 1990’s.”

Will she be prosecuted?

What about Jeb Bush, who is now contemplating a run for president? Bush chaired the state pension investment fund and lost billions when his friends at Lehman Brothers and Enron bit the dust and he was a hired as a consultant to Lehman after his governorship ended. From Forbes and the NYT

Will JEB! be prosecuted?

Then there’s George Pataki, former Republican governor of NY. From the Observer.

The prediction from Yahoo! Finance on the states most likely to fail first is like calling roll at the Republican Governor’s Association. All 11 were under Republican control for much of the last 3 decades. Yet somehow I’m sure that teachers, cops, social workers, and garbage collectors will continue to be blamed for this mess.

Wanna buy a bridge to Brooklyn? The horse left the barn many Republican administrations ago. And I’m sure there’s more than one Democrat governor who is lucky that the current administration looks forward and not back.

Everything will be like health care. For example, first they will get rid of all government child care programs. Then you will see more day cares run by giant corporations like the Little Red School house day cares that are all over the country and run and owned by a multinational corporation. Then these people will pass laws that all children must be in these programs. Then they will charge exorbitant premiums and jack up the prices of everything having to do with these programs.

Mark my word the elite plan to run every conceivable thing like health care. What’s next? Grocery Insurance where you have premiums and have plans and eat what they tell you to and what they approve by companies that they choose. You watch. that’s exactly where this is all going,,

“So, government has to work out a plan to save the states and somehow spread the cost across society.”

How do you figure that?

Many of the employers and owners in the private sector are on a “race to the bottom” for wages in this country. Do you agree with the Obama administration that the public sector should join this race to the bottom for wages? The public sector union members appear to be the only ones trying to prevent a complete collapse of wages (which is probably why a “war” is being declared on them in the media).

The GOP never intended to allow any of these pensions etc. to ever happen. They negotiated in “bad faith” knowing that some day in the future these contracts would be worthless. Now SSI, Medicare etc. are all to receive the same treatment. The so called SSI tax holiday Obama traded away in Dec. to allow the top 2% to get their tax breaks was characterized as give away to the average person when in fact it was a not so clever way to de-fund SSI. Obama is playing out a carefully scripted role of good cop to the GOP’s bad cop role. The end game is the same, a gradual destruction of the so called “welfare state” as the right has dismissively called it these last 80 yrs.

And construction of the most monstrous corporate welfare state the world has ever seen!

In the case of state and local government workers, their salaries are largely based on tax collection from the private sector.

The deindustrialization and related loss of manufacturing jobs badly hurts their standard revenue stream. Also, I wonder how many local governments have had their faces ripped off by wallstreet’s AAA rated derivitive products.

One way or another, we’re going to need the Federal government to fix this.

I saw a video today called “Mobile Prison Guard Tower”. I, like the narrator of the video didn’t really know what to make of it. I thought, why in the hell would we need towers like the one shown at Walmart. However, after reading your post I think you are right.

The controllers are getting in gear to peasantize America and everybody knows the ground zero for that is Walmart.

Mobile Prison Guard Tower.
http://www.youtube.com/watch?v=tVQRMrlQ95U