How Government Unions are Hypocrites that Betray the Public

September 1, 2016 By Ed Ring 3 Comments

UnionGovernment unions are not unions in any traditional sense of the word. They elect the bosses they “negotiate” with. They are paid through compulsory taxes rather than via a company that has to earn a profit in the competitive market. And they operate the machinery of government which allows them extraordinary latitude to intimidate any business interests who may challenge their agenda.

Among the informed, these assertions are beyond serious debate. Even supporters of government unions acknowledge them – just not on the record. But to inform the public, it is probably too abstract to question the legitimacy of government unions because they “elect their own bosses,” “use taxpayers money instead of earned profits” or “control the bureaucracy.” Perhaps instead it is better to explain how union control of government harms people in their everyday lives.

To that end, here is a partial list of how the actions of government unions contradict their rhetoric, and betray the public they are supposed to serve:

(1) Demonizing “Profits.” From the classroom teacher to the professionally prepared press release, the rhetoric of government unions promotes the idea that “corporate profits” are unjust. The academic focus from primary school through public universities is invariably swayed, thanks to government unions, to challenge the capitalist system. Yet without profits there are no tax revenues. Governments survive financially because corporations make profits. Government unions support legislation that has made California the toughest state in the U.S. to do business. The impact: Brainwashed youth, and fewer successful companies offering fewer good jobs.

(2)  Demonizing “Millionaires and Billionaires.” Government union rhetoric frequently resorts to accusing anyone who wants to expose their destructive hypocrisy as funded by “millionaires and billionaires,” as if that should automatically nullify their arguments. These unions have carefully nurtured a public hostility and resentment towards individual wealth. The problem, however, is that almost anyone who retires after a full career in public service is a millionaire – often many times over. The average full career pension for California’s state and local government workers is over $70,000 per year. The ordinary private sector worker would have to save at least $1.5 million to generate a $70,000 annuity for the rest of their life – with no guarantees. The impact: Higher taxes and reduced services to support government worker pensions that make them all millionaires, leaving the rest of us behind to pay for it.

(3) Defending “Working Families.” That is one of the mantras of the government unions. Fighting for the “working families.” But how does this work in reality? California is one of the hardest states to practice a profession or trade. Certifications and licenses require prohibitive amounts of time and money, excluding the most deserving, aspiring citizens. Workman’s Compensation insurance rates are among the highest in the U.S., making it much harder for small companies to compete and grow their businesses. Crippling regulations. Absurdly time consuming and expensive permitting processes. The impact: Reduced upward mobility, far less opportunities for low income entrepreneurs.

(4) Always “For the Children.” The level of hypocrisy here almost defies description. Government unions have imposed their agenda on education, turning public schools into propaganda mills, indoctrinating students to believe their success or failure in life is primarily determined by whether or not they have “privilege,” and whether or not the state provides sufficient benefits, instead of teaching them the skills they will need to succeed in life on their own. Government unions have defeated any meaningful attempts to hold teachers accountable, or allow principals and superintendents to effectively manage. What they have done to California’s rising generation of students can be accurately characterized as child abuse. The impact: A generation of Californians who are unprepared to assume the responsibilities of adulthood.

(5) Respect for “Contracts.” The selective moral outrage mustered by government unions when it comes to “contracts” is exemplified by their response to pension reformers who want to lower the pension benefit formulas – just for work to be performed in the future. Because back in 1999, these same unions lobbied successfully to raise pension benefit formulas not just from then on, but back to the day each active government worker began their career. According to the same body of California contract law, they claim these retroactive benefit increases were justified, yet they fight – and win – in court whenever anyone tries to decrease these same benefits only from now on. The impact: Taxpayers are condemned to bail out these financially unsustainable pensions.

(6)  Fighting “Big Money in Politics.” The problem with this ersatz fight by government unions is simple: In state and local elections in California, nobody spends as much money as government unions. Just government unions, just in California, collect and spend over $1.0 billion per year in dues. About one-third of that, nearly $700 million every election cycle, is spend explicitly on politics and lobbying. An equal share probably goes to public education campaigns designed to promote the government union agenda. There is no special interest anywhere with the means, much less the desire, to challenge these unions. They are active in every political contest, no matter how small or how big, with access to as much cash as they need. The impact: Unions are the “big money in politics,” and their interests trump the public interest.

(7) Fighting “Big Business.” By now it should be clear enough – “big business” has no interest in challenging government unions. They collude instead, in a partnership where the government unions – who control legislation that will either favor or thwart business interests – are the dominant partner. And why shouldn’t big business partner with government unions? When oppressive regulations drive innovative competitors out of business, the monopolistic established corporations have the financial resources to comply. Why not let excessive government regulations destroy the competition? The impact: Less innovation, fewer new jobs, higher prices to consumers.

(8) Fighting “Wall Street.” This is the most ridiculous claim of all by government unions. Because when government unions successfully negotiate pay, benefit and hiring decisions that cause government deficits, Wall Street firms make billions underwriting new bond issues. And when government unions negotiate pension benefit enhancements, the union controlled pension funds invest even more money with Wall Street firms including hedge funds and private equity funds. Government is Wall Street’s biggest customer. The Wall Street influenced policies that have destroyed the ability of ordinary Americans to save for retirement or buy an affordable home have been a boon to the super rich and the pension funds. The impact: The government union alliance with Wall Street is a major factor in the hollowing out of America’s middle class.

The fact that most Californians still don’t understand the difference between government unions and private sector unions should come as no surprise. Government unions have spent literally billions of dollars over the past decades, hiring the best professional public relations talent in the world, to convince Californians they are on their side. But they’re not. Quite the contrary. Their hypocrisy is only matched by their corrosive impact on our economy, our freedom, and our democracy.

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Ed Ring is the president of the California Policy Center.

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Pensions Funds Turning America Into a Debtors Prison

March 10, 2016 By Ed Ring Leave a Comment

“The creation of the mortgage bond market, a decade earlier, had extended Wall Street into a place it had never before been: the debts of ordinary Americans.”

–  Jared Vennett (played by Ryan Gosling), The Big Short (2011)

Wall_Street_Sign_(1-9)Along with another superbly authentic movie “Margin Call” (2011), “The Big Short” provides a vivid look into the rigged, Darwinian, ruthlessly exploitative circus popularly known as “Wall Street.” For decades, ever since the great depression, this industry slumbered along, sedately providing financial services to Americans. As always, it also was a venue for legalized gambling, but the number of players were limited, the winnings were relatively meager, and the opportunities for corrupt manipulations had not yet been multiplied by new trading technologies. Back then, the seedier aspects of Wall Street were overshadowed by the many vital services the industry provided. All of that changed starting around 1980.

In 1985, the financial sector earned less than 16 percent of domestic corporate profits. Today, it’s over 40 percent. These profits are made on the backs of American consumers who pay usurious rates for student loans and credit card debt, yet cannot earn more than a 1 or 2 percent on their savings accounts. America’s financial sector is grotesquely overbuilt, it has become a predatory force in the lives of most Americans, and the legitimate services as intermediaries that they actually provide – especially given the gains in information technology over the past 30 years – could easily be delivered for a fraction of the costs. Who benefits?

The Big Short offers insights that will hopefully resonate with viewers, because when the protagonists in the film prepared to capitalize on their belief the housing bubble was about to collapse, they identified all the culprits. It wasn’t just the sellers who prepared mortgage debt securities who were to blame. It was the buyers as well. And the biggest buyers of all were the pension funds, because of their insatiable desire for high returns.

America’s housing bubble may have collapsed, but the pension funds are still with us, bigger than ever, still insatiably seeing high returns. And where do these predators go for their high returns? Along with their high risk investments in hedge funds and private equity – where we have minimal transparency – they invest in housing, once again inflated to unaffordable levels thanks to over-regulation and low interest rates, they invest in public utilities, who collect guaranteed fixed profits on overpriced services thanks again to over-regulation, they invest internationally, and they invest in domestic stocks.

In every case, the interests of these powerful pension funds, Wall Street’s biggest players, is to rack up another year of high returns. And to do this they need corporate profits, financial sector profits, rising home prices, rising utility rates – they need asset inflation fueled by debt accumulation. This is economically unsustainable, because as America is slowly turned into a debtors prison, eventually there will be nobody left to pay the interest.

The National Conference On Public Employee Retirement Systems, “The Voice for Public Pensions,” is arguably at the apex of the unsustainability lobby. This powerful trade association is ran by public sector union executives from across the nation. Their president is also the treasurer of the American Federation of Teachers. Their first vice president is a 30-year member of the Chicago Fire Fighters Union, IAFF Local 2. Their second vice president was union president of Fraternal Order of Police Queen City Lodge #69. And so it goes, officers of government unions populate their executive board officers and their executive board. Government unions run this organization.

The unsustainable pension benefit enhancements and unsustainable modifications to investment guidelines that were sold to politicians and the public weren’t pushed by government unions all by themselves. Their partners in the financial community recognized and implemented what has to be one of the biggest scams in American history, the ability to pour taxpayers money into high-risk pension funds for government workers, collecting fees every step of the way, combined with the ability to raise taxes to bail out these funds whenever their returns didn’t meet expectations. And to make sure elected officials played ball, they had the government unions provide the political muscle. Compared to this setup, Bernard Madoff was a piker.

The National Conference On Public Employee Retirement Systems has thoughtfully created a list of “foundations, think tanks, and other nonprofit entities [that] engage in ideologically, politically, or donor driven activities to undermine public pensions.” The California Policy Center and UnionWatch are both on that list. But because our organization does not advocate eliminating the defined benefit, we actually only fulfill one of their criteria for this list, “advocates or advances the claim that public defined benefit plans are unsustainable.”

Yes. We do. Most indubitably. That the unsustainability lobby has recognized our work is a distinct honor.

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Ed Ring is the president of the California Policy Center.

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The Alliance Between Wall Street and Public Unions

December 5, 2015 By Ed Ring 1 Comment

“It’s [private equity investments] generating real returns for our members, which is exactly what it’s supposed to do,” said Joe DeAnda, a CalPERS spokesman. “It’s real value that we don’t feel there’s another way to achieve.”
–  “Are private equity investments worth the risk?,” Los Angeles Times, November 14, 2015

Wall_Street_Sign_(1-9)The alliance between government unions and America’s overbuilt financial sector is one of the most unreported stories of our time. It is a story saturated in greed, drowning in delusion, smothered and marginalized by an avalanche of taxpayer funded propaganda. If this story were known and appreciated by the people most victimized by its effects, it would fundamentally shift the political landscape of the nation. The most obvious example of this alliance are the government worker pension systems, Wall Street’s biggest players, controlled by union operatives.

The problem with public sector defined benefit pensions can be boiled down to two cold facts: They are too generous, and they rely on rate-of-return assumptions that are too optimistic. The first is the result of greed, the second of delusion. To indulge these vices requires corruption, and it is a rot that joins public sector unions with the most questionable elements of that Wall Street machine they so readily demonize.

In an attempt to earn in excess of 7.0 percent per year, government pension systems have increasingly turned to hedge funds, whose charter, essentially, is to earn over-market returns. To do this, they do all the things that public sector unions are supposedly opposed to – opaque private equity deals, currency speculation, high-frequency trading – all those manipulative tools used by the super-wealthy, super empowered Wall Street players to siphon billions out of the economy. Except now they’re using tax dollars, channeled to them via government pension systems. And if it goes south? Taxpayers pay for the bailout.

Which brings us to sheer abuse of power. Hypocrisy aside – and how much more hypocritical can it be for union leaders to rhetorically demonize “profits,” yet ignore the fact that only profits can permit pension funds to appreciate at rates of 7.0% per year or more – it is raw power, sheer financial and legal might, that enables pension systems, with unions cheering them on every step of the way, to sue city after faltering city to ensure their “contracts” are inviolable, that relentlessly escalating pension contributions keep pouring in, even if it means raising taxes via court order, then selling the parks, selling the libraries, closing government offices and “furloughing” public servants, and giving raw deals to their new hires.

The alliance between Wall Street and public sector unions isn’t restricted to the over $4.0 trillion in government pension assets that they’ve wagered in a volatile investment market with taxpayers on the hook to guarantee perpetual winnings. The alliance extends to bond underwriters, who join with government unions to sell overpriced, often unnecessary projects to taxpayers, collecting billions in fees. It even extends to auctions of government permits to emit CO2, which when fully implemented will guarantee Wall Street firms a cut on virtually every energy transaction in America, while quietly pouring a huge portion of the proceeds into funding public sector jobs – redefined to meet “mitigation” criteria: code inspectors enforcing energy retrofits, entire cities who zone ultra-high density which presumably lowers transportation related emissions, bus drivers and other mass transit workers, police and fire agencies who confront higher crime rates and more wildfires during hot weather. And, of course, the bullet train.

Whether it’s financially unsustainable government pension systems, who are the biggest players on Wall Street, or financing overpriced public construction projects of dubious value, or imposing billions in hidden taxes on energy users to supposedly save the planet, public sector unions receive formidable political, legal and financial support from their partners in the financial sector, corrupt, crony capitalists who indeed give capitalism a bad name.

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Ed Ring is the executive director of the California Public Policy Center.

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Pension Reformers are not “The Enemy” of Public Safety

May 19, 2015 By Ed Ring 1 Comment

“You will find that powerful financial and investment institutions are the ones promoting the attacks on your pensions. Firms like Berkshire-Hathaway and the Koch brothers are backing political candidates and causes all over the country in the hopes of making this issue relevant and in the mainstream media. Why? Because if they can crack your pension and turn it into a 401(k), they will make billions. Your pension is the golden egg that they are dying to get their hands upon. By the way, it was those same financial geniuses that brought about the Great Recession in the first place. After nearly collapsing the entire financial system of western civilization, they successfully managed to deflect the blame off of themselves and onto government employee pay/benefits.” – Jim Foster, Vice President, Long Beach Police Officers Association, posted on PubSec Alliance website

These comments form the conclusion to a piece published by Foster entitled “What does ‘unfunded liability’ mean?,” published on PubSecAlliance.com, an online “community of law enforcement associations and unions.” If you review the “supporters” page, you can see that the website’s “founding members,” “affiliated organizations,” and “other groups whose membership is pending” are all law enforcement unions.

public employee union pensionIn Foster’s discussion of what constitutes an unfunded pension liability, he compares the liability to a mortgage, correctly pointing out that like a mortgage, an unfunded pension liability can be paid down over many years. But Foster fails to take into account the fact that a mortgage can be negotiated at a fixed rate of interest, whereas a pension liability will grow whenever the rates earned by the pension system’s investments fall short of expectations. When the average taxpayer signs a 30 year fixed mortgage, they don’t expect to suddenly find out their payments have doubled, or tripled, or gone up by an order of magnitude. But that’s exactly what’s happened with pensions.

Apart from ignoring this crucial difference between mortgages and unfunded pension liabilities, Foster’s piece makes no mention of the other reason unfunded pension liabilities have grown to alarming levels, the retroactive enhancements to the pension benefit formula – enhancements gifted to public employees and imposed on taxpayers starting in 1999. These enhancements were made at precisely the same time as the market was delivering unsustainable gains engineered by, as Foster puts it, the “same financial geniuses that brought about the Great Recession in the first place,” and “nearly collapsing the entire financial system of western civilization.”

This is a huge failure of logic. Foster is suggesting that the Wall Street crowd is to blame for the unfunded liabilities of pensions, but ignoring the fact that these unfunded liabilities are caused by (1) accepting the impossible promises made by Wall Street investment firms during the stock market bubbles and using that to justify financially unsustainable (and retroactive) benefit formula enhancements, and (2) basing the entire funding analysis for pension systems on rates of return that can only be achieved by relying on stock market bubbles – i.e., doomed to crash.

You can’t blame “Wall Street” for the financial challenges facing pension funds, yet demand benefits based on financial assumptions that only those you taint as Wall Street charlatans are willing to promote.

Foster ignores the fact that the stock market bubbles (2000, 2008, and 2014) were inflated then reflated by lowering interest rates and accumulating debt to stimulate the economy. But interest rates cannot go any lower. When the market corrects, and pension funds start demanding even larger annual payments to fund pensions and OPEB that now average over $100,000 per year for California’s full-career public safety retirees, Foster and his ilk are going to have a lot of explaining to do.

There is a deeper, more ominous context to Foster’s remarks, however, which is the power that government unions, especially public safety unions, wield over politicians and over public perception. The navigation bar of the website that published his essay, PubSecAlliance, is but a mild reminder of the power police organizations now have over the political process. Items such as “Intel Report,” “Pay Wars,” “Tactics,” “Tales of Triumph,” and “The Enemy” are examples of resources on this website.

When reviewing PubSecAlliance’s reports on “enemies,” notwithstanding the frightening reality of police organizations keeping lists of political enemies, were any of the people and organizations listed selected despite the fact that they were staunch supporters of law enforcement? Because pension reformers and government union reformers are not “enemies” of law enforcement, or government employees, or government programs in general. There is no connection.

Here are a few points for Jim Foster to consider, along with his leadership colleagues at the Long Beach Police Officers Association, and police union members everywhere.

TEN POINTS FOR MEMBERS OF PUBLIC SAFETY UNIONS TO CONSIDER

(1)  Not all pension reformers want to abolish the defined benefit. Restoring the more sustainable pension benefit formulas in use prior to 1999, and adopting conservative rate-of-return assumptions would make the defined benefit financially sustainable and fair to taxpayers.

(2)  Over the long term, the real, inflation-adjusted return on investments cannot be realistically expected to exceed the rate of national and global economic growth. You are being sold a 7.0 percent (or more) annual rate of return because it is an excuse to keep your normal contribution artificially low, and mislead politicians into thinking pension systems are financially sound.

(3)  As noted, you can’t blame “Wall Street” for the financial challenges facing pension funds, yet demand benefits based on financial assumptions that only those you taint as Wall Street charlatans are willing to promote.

(4)  If public safety employers didn’t have to pay 50 percent or more of payroll into the pension funds – normal and unfunded contributions combined – there would be money to hire more public safety employees, improving their own safety and better protecting the public.

(5)  Public safety personnel are eyewitnesses every day to the destructive effects of failed social welfare programs that destroy families, ineffective public schools with unaccountable unionized teachers, and a flawed immigration policy that prioritizes the admission of millions of unskilled immigrants over those with valuable skills. They ought to stick their necks out on these political issues, instead of invariably fighting exclusively to increase their pay and benefits.

(6)  The solution to the financial challenges facing all workers, public and private, is to lower the cost of living through competitive development of land, energy, water and transportation assets. Just two examples: rolling back CEQA hindrances to build a desalination plant in Huntington Beach, or construct indirect potable water reuse assets in San Jose. Where are the police and firefighters on these critical issues? Creating inexpensive abundance through competition and development helps all workers, instead of just the anointed unionized government elite.

(7)  If pension funds were calibrated to accept 5.0 percent annual returns, instead of 7.0 percent or more, they could be invested in revenue producing infrastructure such as dams, desalination plants, sewage distillation and reuse, bridges, and port expansion, to name a few – all of which have the potential yield 5.0 percent per year to investors, but usually not 7.0 percent.

(8)  Government unions are partners with Wall Street and other crony capitalist interests. The idea that they are opposed to each other is one of the biggest frauds in American history. Government unions control local politicians, who award contracts, regulate and inspect businesses, float bond issues, and preserve financially unsustainable pension benefits. This is a gold mine to financial special interests, and to large corporate interests who know that the small businesses lack the resources to comply with excessive regulations or afford lobbyists.

(9)  Government unions elect their bosses, they wield the coercive power of the state, they favor expanded government and expanded compensation for government employees which is an intrinsic conflict of interest, and they protect incompetent (or worse) government employees. They should be abolished. Voluntary associations without collective bargaining rights would still have plenty of political influence.

(10)  Expectations of security have risen, the value of life has risen, the complexity of law enforcement challenges has risen, and the premium law enforcement officers should receive as a result has also risen. But unaffordable pensions, along with the consequent excessive payments of overtime, have priced public safety compensation well beyond what qualified people are willing to accept. Saying this does not make us “The Enemy.”

Ed Ring is the executive director of the California Policy Center.

Filed Under: Top Stories Tagged With: , , , , ,

Pension Reformers are not “The Enemy” of Public Safety

April 30, 2015 By Ed Ring 1 Comment

“You will find that powerful financial and investment institutions are the ones promoting the attacks on your pensions. Firms like Berkshire-Hathaway and the Koch brothers are backing political candidates and causes all over the country in the hopes of making this issue relevant and in the mainstream media. Why? Because if they can crack your pension and turn it into a 401(k), they will make billions. Your pension is the golden egg that they are dying to get their hands upon. By the way, it was those same financial geniuses that brought about the Great Recession in the first place. After nearly collapsing the entire financial system of western civilization, they successfully managed to deflect the blame off of themselves and onto government employee pay/benefits.”

– Jim Foster, Vice President, Long Beach Police Officers Association, posted on PubSec Alliance website

These comments form the conclusion to a piece published by Foster entitled “What does “unfunded liability” mean?” published on PubSecAlliance.com, an online “community of law enforcement associations and unions.” If you review the “supporters” page, you can see that the website’s “founding members,” “affiliated organizations” and “other groups whose membership is pending” are all law enforcement unions.

In Foster’s discussion of what constitutes an unfunded pension liability, he compares the liability to a mortgage, correctly pointing out that like a mortgage, an unfunded pension liability can be paid down over many years. But Foster fails to take into account the fact that a mortgage can be negotiated at a fixed rate of interest, whereas a pension liability will grow whenever the rates earned by the pension system’s investments fall short of expectations. When the average taxpayer signs a 30 year fixed mortgage, they don’t expect to suddenly find out their payments have doubled, or tripled, or gone up by an order of magnitude. But that’s exactly what’s happened with pensions.

Apart from ignoring this crucial difference between mortgages and unfunded pension liabilities, Foster’s piece makes no mention of the other reason unfunded pension liabilities have grown to alarming levels, the retroactive enhancements to the pension benefit formula – enhancements gifted to public employees and imposed on taxpayers starting in 1999. These enhancements were made at precisely the same time as the market was delivering unsustainable gains engineered by, as Foster puts it, the “same financial geniuses that brought about the Great Recession in the first place,” and “nearly collapsing the entire financial system of western civilization.”

This is a huge failure of logic. Foster is suggesting that the Wall Street crowd is to blame for the unfunded liabilities of pensions, but ignoring the fact that these unfunded liabilities are caused by (1) accepting the impossible promises made by Wall Street investment firms during the stock market bubbles and using that to justify financially unsustainable (and retroactive) benefit formula enhancements, and (2) basing the entire funding analysis for pension systems on rates of return that can only be achieved by relying on stock market bubbles – i.e., doomed to crash.

You can’t blame “Wall Street” for the financial challenges facing pension funds, yet demand benefits based on financial assumptions that only those you taint as Wall Street charlatans are willing to promote.

Foster ignores the fact that the stock market bubbles (2000, 2008 and 2014) were inflated then reflated by lowering interest rates and accumulating debt to stimulate the economy. But interest rates cannot go any lower. When the market corrects, and pension funds start demanding even larger annual payments to fund pensions and OPEB that now average over $100,000 per year for California’s full-career public safety retirees, Foster and his ilk are going to have a lot of explaining to do.

There is a deeper, more ominous context to Foster’s remarks, however, which is the power that government unions, especially public safety unions, wield over politicians and over public perception. The navigation bar of the website that published his essay, PubSecAlliance, is but a mild reminder of the power police organizations now have over the political process. Items such as “Intel Report,” “Pay Wars,” “Tactics,” “Tales of Triumph” and “The Enemy” are examples of resources on this website.

When reviewing PubSecAlliance’s reports on “enemies,” notwithstanding the frightening reality of police organizations keeping lists of political enemies, were any of the people and organizations listed selected despite the fact that they were staunch supporters of law enforcement? Because pension reformers and government union reformers are not “enemies” of law enforcement, or government employees, or government programs in general. There is no connection.

Here are a few points for Jim Foster to consider, along with his leadership colleagues at the Long Beach Police Officers Association, and police union members everywhere.

TEN POINTS FOR MEMBERS OF PUBLIC SAFETY UNIONS TO CONSIDER

(1)  Not all pension reformers want to abolish the defined benefit. Restoring the more sustainable pension benefit formulas in use prior to 1999, and adopting conservative rate-of-return assumptions would make the defined benefit financially sustainable and fair to taxpayers.

(2)  Over the long term, the real, inflation-adjusted return on investments cannot be realistically expected to exceed the rate of national and global economic growth. You are being sold a 7 percent (or more) annual rate of return because it is an excuse to keep your normal contribution artificially low, and mislead politicians into thinking pension systems are financially sound.

(3)  As noted, you can’t blame “Wall Street” for the financial challenges facing pension funds, yet demand benefits based on financial assumptions that only those you taint as Wall Street charlatans are willing to promote.

(4)  If public safety employers didn’t have to pay 50 percent or more of payroll into the pension funds – normal and unfunded contributions combined – there would be money to hire more public safety employees, improving their own safety and better protecting the public.

(5)  Public safety personnel are eyewitnesses every day to the destructive effects of failed social welfare programs that destroy families, ineffective public schools with unaccountable unionized teachers, and a flawed immigration policy that prioritizes the admission of millions of unskilled immigrants over those with valuable skills. They ought to stick their necks out on these political issues, instead of invariably fighting exclusively to increase their pay and benefits.

(6)  The solution to the financial challenges facing all workers, public and private, is to lower the cost of living through competitive development of land, energy, water and transportation assets. Just two examples: rolling back CEQA hindrances to build a desalination plant in Huntington Beach, or construct indirect potable water reuse assets in San Jose. Where are the police and firefighters on these critical issues? Creating inexpensive abundance through competition and development helps all workers, instead of just the anointed unionized government elite.

(7)  If pension funds were calibrated to accept 5 percent annual returns, instead of 7 percent or more, they could be invested in revenue producing infrastructure such as dams, desalination plants, sewage distillation and reuse, bridges and port expansion, to name a few – all of which have the potential yield 5 percent per year to investors, but usually not 7 percent.

(8)  Government unions are partners with Wall Street and other crony capitalist interests. The idea that they are opposed to each other is one of the biggest frauds in American history. Government unions control local politicians, who award contracts, regulate and inspect businesses, float bond issues, and preserve financially unsustainable pension benefits. This is a gold mine to financial special interests, and to large corporate interests who know that the small businesses lack the resources to comply with excessive regulations or afford lobbyists.

(9)  Government unions elect their bosses, they wield the coercive power of the state, they favor expanded government and expanded compensation for government employees which is an intrinsic conflict of interest, and they protect incompetent (or worse) government employees. They should be abolished. Voluntary associations without collective bargaining rights would still have plenty of political influence.

(10)  Expectations of security have risen, the value of life has risen, the complexity of law enforcement challenges has risen, and the premium law enforcement officers should receive as a result has also risen. But unaffordable pensions, along with the consequent excessive payments of overtime, have priced public safety compensation well beyond what qualified people are willing to accept. Saying this does not make us “The Enemy.”

*   *   *

Ed Ring is the executive director of the California Policy Center.

Filed Under: Top Stories Tagged With: , , , , ,