He even calls out our buddy Sulzberger by name.
Out of every dollar that funds Wisconsin' s pension and health insurance plans for state workers, 100 cents comes from the state workers.
How can that be? Because the "contributions" consist of money that employees chose to take as deferred wages - as pensions when they retire - rather than take immediately in cash. The same is true with the health care plan. If this were not so a serious crime would be taking place, the gift of public funds rather than payment for services.
This is utter BS. Apart from the fact that individual employees did not in fact choose to defer their wages, benefits were increased retroactively in 1999. See here .
Your formula factor will increase by 0.165% for years of service prior to the year 2000. This increase only applies to pre-2000 service. The old formula factor will be used for service in 2000 and later. Your formula factor, multiplied by your years of service and your final average earnings, determines the amount of your formula retirement benefit (your pension).
This was a pure gift of public funds and according to your own source a "serious crime".
"This is utter BS. Apart from the fact that individual employees did not in fact choose to defer their wages, benefits were increased retroactively in 1999. See here ."
ah, i see. compensation over previous levels are per se theft from one's lord.
James, I *think* that your argument is silly.
Individual employees did, in fact, choose to defer their wages by accepting the offer of employment.
And the fact of the retroactive benefit increase doesn't change the facts of the matter: the benefits are still paid out of the same funds. The source you link to makes clear that the size of the pension contribution isn't linked to the size of the benefit.
Right?
Not exactly on topic, but has Emerson been writing about Wisconsin anywhere? This is starting to look like his populism rolling back out of the upper Midwest.
5:The turn of the century populists had a much larger program than "Don't hit us again, Republicans."
The other day I heard some enthusiast talking about taking statehouses in 2012, or a Senate seat, or this was great for Obama's. And I says:"Wait a minute, we had those things not long ago. What did we get? What do we want?"
This is still all defense, one step forward for each two steps back, and I was very silly to get excited about it.
I think James is opening up a fruitful line of rightwing argument. Individual Americans didn't choose Barack Obama either.
This is still all defense, one step forward for each two steps back, and I was very silly to get excited about it.
If it's ever going to turn around, it's going to happen the way it's happening in Wisconsin. Seems reasonable to get excited about that.
4
Individual employees did, in fact, choose to defer their wages by accepting the offer of employment.
You and the quoted source are being disengenuous. The quote "... Because the "contributions" consist of money that employees chose to take as deferred wages - as pensions when they retire - rather than take immediately in cash. ... " suggests employees had an actual option to take immediate cash. This is how deferring wages typically works. But the employees had no such option.
And the fact of the retroactive benefit increase doesn't change the facts of the matter: the benefits are still paid out of the same funds. The source you link to makes clear that the size of the pension contribution isn't linked to the size of the benefit.
This doesn't make any sense, if the pension is just deferred wages then this was a retroactive wage increase in excess of what the employees had agreed to work for. In other words a gift of public funds and in the view of the source a "serious crime".
7
I think James is opening up a fruitful line of rightwing argument. Individual Americans didn't choose Barack Obama either.
Individual Americans had the choice to vote for McCain or Obama. I doubt individual public employees in Wisconsin were able to vote to take all their pay in cash.
James, do I read you correctly to be acknowledging that no funds were used, other than deferred pay, for employee pensions?
Individual Americans had the choice to vote for McCain or Obama. I doubt individual public employees in Wisconsin were able to vote to take all their pay in cash.
So what? Those McCain voters prove that individual voters didn't pick the president, just as individual Wisconsin workers didn't choose the form of their pay and benefits.
Or are you now saying that McCain voters chose Obama? What's your argument here?
11
James, do I read you correctly to be acknowledging that no funds were used, other than deferred pay, for employee pensions?
No. I saying even if you characterize pensions as deferred pay (which I think is intended to mislead) there is no way a retroactive pension increase would qualify.
12
So what? Those McCain voters prove that individual voters didn't pick the president, just as individual Wisconsin workers didn't choose the form of their pay and benefits.
Or are you now saying that McCain voters chose Obama? What's your argument here?
Individual voters can't choose their President as there is only one President. However it would be perfectly possible for individual employees to choose to defer their wages or not and this is how 401k plans typically work (at least in part).
But although individual voters could not determine their President they did collectively choose Obama over McCain in an election. So you could say the voters chose Obama. I doubt there was any election in which the employees in Wisconsin collectively chose to defer their pay. So at best this is like saying the voters chose to continue the Bush tax cuts for the rich.
Individual voters can't choose their President as there is only one President.
Right. And individual Wisconsin employees can't choose their collective benefits, because a collective bargaining agreement can only be one agreement, even if it allows for a 401K, deferred payments into a pension, or both.
But to summarize this as "individual employees did not in fact choose to defer their wages" makes perfect sense, now that we agree that individual Americans do not, in fact, pick the president.
15
But to summarize this as "individual employees did not in fact choose to defer their wages" makes perfect sense, now that we agree that individual Americans do not, in fact, pick the president.
Individual Americans don't pick the President, however they collectively chose Obama over McCain. Wisconsin public employees did not (as far as I know) collectively (as in a vote between alternatives) choose to defer their pay.
Actually, James, presidential electors chose the president. That's how the system works. It's wacky!
Wisconsin public employees did not (as far as I know) collectively (as in a vote between alternatives) choose to defer their pay.
I would bet you that the leaders of Wisconsin public employee unions are at least as much subject to democratic constraints as the president of the United States.
Here's what we've learned so far:
-Americans don't individually choose the president.
-No policy of any democratically elected official can properly be considered the collective choice of the people who elected that official.
Yes, I'm bored this morning. My apologies to everybody else.
I have a special friend. It's you!
When I see a horse, I say "neigh!"
18
I would bet you that the leaders of Wisconsin public employee unions are at least as much subject to democratic constraints as the president of the United States.
I doubt that very much, competitive union leadership elections are rare. And there is little press coverage of union affairs.
No policy of any democratically elected official can properly be considered the collective choice of the people who elected that official
Are Walker's policies the collective choice of the people of Wisconsin?
Scott Sumner ...evil libertarian, but grew up in Madison, and has something to say, possibly none of it new.
In smaller cities in Wisconsin you don't have lots of rich people like here in Boston. So the Dems in Wisconsin can't easily say "look at those rich fat cats, we need to take their money and redistribute it to the rest of us." Factory managers and factory workers mix socially at cookouts before Packer games
I was thinking this morning that the "strikers" in WI are probably the likes of a teacher married to a cop, or the Brighouses, and probably have a household income pushing $150k, or top ten percent in America.
Are Walker's policies the collective choice of the people of Wisconsin?
Well?
According to Sumner, Wisconsin is the No 2 state in America in manufacturing. Really making things (also farmers & dairy), not flipping burgers at Wendy's, the way Yggles would like to redefine manufacturing.
Sumner is in part just re-iterating a "What's the Matter with Kansas" argument, but still, the gains in income share to the professional classes compared to the blue collar class; and the increasing social and geographical distances created between them remains interesting to me, in my bitter looser ressentiment. Whatever.
"And although Wisconsin voters are more socially liberal than Southern voters, those aren't big issues for struggling working class people."
"In the end the GOP may over-reach, as Wisconsin still has that strong Northern European social democratic tradition. It's still a Democratic state. But the fact that the battle in Wisconsin is even this close should be a wake-up call that there are some internal contradictions in modern liberalism that are a long way from being resolved."
OT: Lesbians are funnier than straight women because their sense of humor made them more likely to reproduce on veldt.
The link in 25 is a wonderful chain of logic.
You begin with
1. Observed statistical difference in men and women.
Then you introduce
2. A plausible, but unconfirmed, hypothetical evolutionary explanation of that difference.
Then
3. A vague invocation of the idea that lesbians are masculinized women, with references to early exposure to larger levels of testosterone.
Then
4. A transfer of the hypothetical evolutionary mechanism on hetreosexual men to homosexual women.
And all of this to explain the anecdotal observation that there sure seem to be a lot of lesbians in comedy!
23
Well?
In an indirect way. I am not familiar with the Wisconsin guberatorial campaign so am unsure how big an issue this was. In any case I expect the "choice" of Wisconsin public employees to defer their pay was even more tenuous and indirect.
[T]he impression that somehow the workers are getting something extra, a gift from taxpayers. They are not. ... 100 cents comes from the state workers.
This doesn't seem as devastatingly convincing as I think it is supposed to be. Is the rub of the fracas the "source," notional or not, of "deferred" compensation? The attempt of the state (speaking neutrally) to renegotiate compensation terms? Or the governor's attempt to get out of having to negotiate? The first seems a diversion, the last bad faith, but a hypothetical state has the right to seek value for the taxpayers' money.
Speaking of taxes it seems ARod will be paying just $1200/year in property taxes on his new $6 million penthouse apartment. Which seems like bad public policy to me.
I saw ARod at my gym last winter. His head is both unusually small and nearly cubiform.
Tahrir in Barbed Wire as Army Attacks Peaceful Protesters ...Tasers; Masked men with submachine guns
You know "the army is with you" when the soldiers start shooting the officers or each other, as in Libya. Otherwise you will get very very little that's good. Out with the old boss...
29
This doesn't seem as devastatingly convincing as I think it is supposed to be. ...
It is completely unconvincing. In common usage pay or wages is the amount reported on your W2 form. This is the number that is commonly reported in stories on teacher pay and the like. Public employees are most definitely getting "something extra" in the form of pensions (and other benefits).
Public employees are most definitely getting "something extra" in the form of pensions (and other benefits).
"Extra" may be overstating it, if pensions and benefits are contractually agreed, but perhaps not, although the identities of the recipients of the "extra" could be argued, considering the extent of the unfunded pension liabilities of, e.g., New Jersey, according to the NYT mag story on Augustus Gloop the Earl of Sandwich, Extra Cheese Chris Christie.
I would probably be bored senseless by a spreadsheet that NPV'd public and private compensation, deferred compensation and benefits, taking into account the tax treatment thereof, but I'm sure someone would enjoy it.
This "100 cents" thing is weak technocratic sauce. The whole thing boils down to rich snots and their ideological compatriots whining about taxes and goat-scaping. There's no argument to be had on the merits.
according to the NYT mag story on Augustus Gloop the Earl of Sandwich, Extra Cheese Chris Christie
Ha!
Now to put "laughing at fat jokes" in my guilt log.
This is the number that is commonly reported in stories on teacher pay and the like. Public employees are most definitely getting "something extra" in the form of pensions (and other benefits).
As are plenty of private employees. I don't understand what the argument you're making is.
Cagematch! Butler pulls Adorno from behind a poster, Pollitt uses Orwell's severed head on a pike.
When Adorno asserted that "defiance of society includes defiance of its language," Orwell would have agreed.
Let me see, one space or two, endash or emdash.
39:Feb 23 old news we will see. I and me dogs have been generally striking for years.
When even educated souls have internalized the "detritus" of a "barbarous culture--half-learning, slackness, heavy familiarity, coarseness"--the "desire to be understood by others" can only reinforce the "downward urge of the intellect." "Retention of strangeness is the only antidote to estrangement."...Miller on Adorno, #38
h/t Yggles twitter feed incidentally, whether from or to I haven't yet assimilated this weird tech yet.
Either way, somebody says there "Adorno was a dick," presumably on their way top see Hangover II or Hall Pass
I need to get back to Sesshu's Long Landscape Scroll.
Thursday I and my dogs took a left away from the squash courts and discovered this long abandoned linear park. Burbling creek small waterfalls and lots of worn sandstone and granite rocks arranged in disarrangement. Probably a 60s work of love. The dogs swam. Now of course strewn with the detritus of modern culture, beer bottles, used rubbers, etc. Considering cleaning up this kare-sansui (Not) in the vain hope that nobody else will ever see it.
It's true: in the 60s nobody littered. Nor in the 70s. Iron Eyes Cody was actually seeing the future. You know how those shamans are, what with their precognition and their monkey gods.
43:I knew that new pseud reminded of something, forty years of misandry and the classless union. Captive in California.
you are our mall ninja.
Oh, man, that's hilarious.
37
As are plenty of private employees. I don't understand what the argument you're making is.
Public employees generally receive more of their compensation in the form of benefits than comparable private employees. This is not because they prefer these benefits to their cash value but because it is easier to hide the true cost of benefits like pensions.
Incidentally this is also why politicians like tax expenditures like the one cited in 30.
It is completely unconvincing. In common usage pay or wages is the amount reported on your W2 form. This is the number that is commonly reported in stories on teacher pay and the like. Public employees are most definitely getting "something extra" in the form of pensions (and other benefits).
This is the kind of thing people "know" in the same way they "know" they will take a big financial hit if they jump tax brackets.
It's not that difficult to comprehend. You take a job with set salary with a set raises and max point and no opportunity for stock options or the "big money" by becoming partner or whatever. I started at about 40K a year and in another 5 or 6 years I'll max out at around 63K. I work in a 400+ department and the chief makes 130K. Likewise my wife started in her school district at 33K and at the 15 year mark will top out at 56K. Superintendent at her district makes 170K.
The trade off for accepting these limitations is the stability and pension. What pisses me off is that for years and years this type of trade off was seen as something for suckers who weren't smart enough to be accumulating tech options or flipping real estate or pursuing the partner spot or whatever. The whole bullshit house of cards has finally come down and loads of people who went along with feudalism's comeback because why not, one day they'll be one of the ruling class are figuring out that they're permanently in a peasant slot. And now those of us who opted for the slow and steady pace to some kind of stability are "getting something extra".
||
Off-topic, but fuck if I'm going to argue this bullshit with Shearer.
I was looking up a quote from "Fear and Loathing in Las Vegas", when I came across this passage:
But our trip was different. It was a classic affirmation of everything right and true and decent in the national character. It was a gross, physical salute to the fantastic possibilities of life in this country -- but only for those with true grit. And we were chock full of that.
I hope that in a thousand years, when America is reduced to a single paragraph in the history books, that instead of giving any details they just quote that.
|>
48
This would be fine if the cost of providing these pensions were accurately recorded on the books of police departments and school districts. However it is not. So when people discover that public employees are actually being paid 10% or 20% or 30% more than is being reported resulting in a large and increasing debt (which they are going to have to pay off) they are naturally annoyed. And they want to get rid of this hidden off the books pay.
So, I'm ignorant. They way a pension pays out is, what, direct deposit or a check, just like a paycheck, right? Does the recipient pay taxes on this money at some point? If so, when and at what rate?
51
So, I'm ignorant. They way a pension pays out is, what, direct deposit or a check, just like a paycheck, right? Does the recipient pay taxes on this money at some point? If so, when and at what rate?
Mine is direct deposit (monthly) and at the end of the year I get a form 1099-R which is the equivalent of a W2. Tax treatment can be complicated. In my case it was entirely financed by IBM so I pay federal and state income taxes on the entire amount (as I receive it) but not social security or medicare. States sometimes exclude some or all pension income from their income tax. New York is one of them but only if you are older than 59 1/2 which I am not.
Learning that (at least some) teacher pensions are instead of, rather than supplementary to, social security has really altered my views about their size. It's possible that everyone who thinks, as I did, that they are just ginormous already knows this fact, but I suspect this is yet another case where ignorance has rather serious consequences. (After all, the 'learning' here was me asking my mother about her pension; as the child of a recently-retired teacher, I really ought to have known, yet didn't.)
Yet another fact in support of my system of governance by large selection-by-lot assemblies.
Yet another fact in support of my system of governance by large selection-by-lot assemblies.
Or the election of legislators on an at-large basis.
53
Learning that (at least some) teacher pensions are instead of, rather than supplementary to, social security has really altered my views about their size.
Teachers (and other public employees) who "choose" not to pay into social security don't receive social security benefits. Not too surprising to me.
Well, yes, the ignorance I was ascribing to others, and that I myself suffered under, covered both the paying-into and the receiving-out-of SS.
57
Well, yes, the ignorance I was ascribing to others, and that I myself suffered under, covered both the paying-into and the receiving-out-of SS.
The Windfall Elimination Provision is also relevant. A little harder to explain but justified in my view.
"For when the One Great Scorer comes to mark against your name, He writes -- not that you won or lost -- but how you played the Game contacts James B. Shearer for the details of whether you got more or less than you deserved."
"One Great Scorer" is what I was known as back in college.
But then there was the guy who always managed threesomes with Marxists, the Red Two Scorer.
So when people discover that public employees are actually being paid 10% or 20% or 30% more than is being reported resulting in a large and increasing debt (which they are going to have to pay off) they are naturally annoyed.
That many public employees have defined-benefit pensions seems like longtime common knowledge. Sadly for all concerned, a serious recession has brought to light the chicanery of the accounting therefor by many states and municipalities, no elected official of which seems to have remembered the story about fat years and lean years.* Whether people are suddenly annoyed by the longstanding deferred compensation arrangements or by something else (e.g., the end of the fat years, the tradeoff between "no new taxes" promises and reduced spending) is debatable.
* I yield the remainder of my Chris Christie jokes to the next commenter.
Is Shearer still denying the studies that say that public employees are not compensated more than private (even counting all compensation)? How totally hackish. I used to think he was arguing in good faith.
66
Is Shearer still denying the studies that say that public employees are not compensated more than private (even counting all compensation)? How totally hackish. I used to think he was arguing in good faith.
Speaking of good faith I don't remember commenting on such studies. You are correct that I tend to be skeptical. However this is not the same issue as whether public employee pensions are being properly accounted and reserved for.
66
I have skimmed the study you link. Employee compensation data is from Employer Costs for Employee Compensation reports. This data appears to come from a survey of employers. Since public employers are not accurately recording the costs of defined benefit pensions on their own books it seems doubtful that they are accurately reporting these costs to the Bureau of Labor Statistics. So this study doesn't address the concern that public employees are receiving large hidden off the books compensation.
Chris Christie loves fat so much, he wants to cut the meat out of the state budget.
Chris Christie loves fat so much he didn't mind being tricked by Prometheus.
A couple more points on the study linked in 66.
The study counts payroll taxes as employee compensation. While it is interesting that private employers have to pay higher payroll taxes than public employers this does not make private employees higher paid.
The study adjusts for employer size. Bigger employers seem to pay better and government employers tend to be big. While this may be a partial explanation for why public employers pay better than private employers I don't think it is correct to adjust for this when comparing public sector pay to private sector pay (since the private sector does not consist solely of large employers).
There's a James Shearer who writes for Spare Change News, the homeless-oriented newspaper. I always do a double-take when I see the byline.
73: Back in my day we didn't even have guidance counselors we knew full well that to work for the gubmint was to be part of a smart con game the peasants would fight each other over crumbs.
James is annoying, that's all. I don't even know what to make of something like: Bigger employers seem to pay better and government employers tend to be big. While this may be a partial explanation for why public employers pay better than private employers.
Walmart (e.g.) pays better? And, James is working from the premise that public employers pay better than private?
Bah.
Public employers failed to count the right beans in fact, THEREFORE public employees don't deserve defined benefit pensions in principle.
I'm the Pope, James. Kiss my ring.
Standpipe is mean to James in rendering James's quite faulty reasoning so plainly, yet correctly.
(I think I've just written one of those obnoxious explanatory subtitle thingies that they provide on some TV shows when trying to bring the viewing public up to date on past seasons' events. Lost was fond of doing that once a year or so.)
Conveniently for James, workers' pay and/or compensation is being selectively interchanged at various points for their cost. At one point he objects to them "actually being paid 10% or 20% or 30% more than is being reported resulting in a large and increasing debt" and calls this a "hidden off-the-books pay". But in fact, the defined benefit plan pays exactly as much as was planned, hence defined benefit.
Really, it is cost that James objects to. But then when the issue of cost is directly addressed, as in the study I linked, James main objection is "they underfunded the pensions, so they probably lied about the cost".
The real window into James' argument is this little tidbit: "This is not because they (public employees) prefer these benefits to their cash value but because it is easier to hide the true cost of benefits like pensions." James believes that the public employees have engineered a master plan whereby they plan ahead to get their pensions underfunded by politicians in order to make it appear that they are getting less. Then, many years later at retirement, they can sneak away with compensation that was more expensive than they originally represented. Really? You think they planned all that for a very long-term benefit? Giving up current compensation for future benefit is very difficult for most people to do. Much less that whole conspiring with the politicians part.
78: I think that our local politicians did that (i.e. offered pensions instead of current salary and then didn't fund the pension). The public workers didn't get a choice about it, of course. Everybody who lived in Pittsburgh during the 80s got a sweet deal, if they didn't lose their job, and now I'm not sure if it is possible to fund those pensions and maintain services. The city managed to avert a state takeover by basically writing a city ordinance that says, "The check is in the mail."
That is, able to fund those pensions and maintain services and pay the other bonds, some of which were from earlier attempts to stave-off pension collapse. We're not allowed to not pay debts.
James believes that the public employees have engineered a master plan
To be fair to James, I believe he blames public executives who negotiate with unions for being party to this master plan, which was essentially a cooking of the books.
Or, what Moby said.
James has just been conflating this issue with the question whether public employees are paid too much altogether, whether they do or don't deserve to be paid so freaking much (really?), whether they should have a right to engage in collective bargaining at all, etc.
||
Well, now we know why Chris Lee resigned so quickly. How much reality disconnection is going on when a sitting member of Congress posts CL ads for transgender/transvestite hookups, using his real name and photograph? I'm floored.
|>
Poor guy. He wasn't paying attention, I guess.
I guess his name wasn't actually in the ad. Still.
I kind of figured it was something more than just the one ad. I wonder if he was in Congress long enough to draw a sweet pension?
||
And they say punks have no culture.
|>
Given the size of the city, it seems to me that a disproportionate number of these sidebar "people sure suck" articles are from Pittsburgh.
Someday people will be able to post CL ads for transgender/transvestite hookups and still draw a sweet pension. But not if they're only in their jobs for like 2 months. We have to have rules. I wonder if he still has health insurance.
(I feel a bit badly about this piling on. The guy seriously fucked up, obviously, and one assumes he wasn't taking his job very seriously, but god knows any number of other congresspersons don't either.)
I was hoping a guy named Ian McKellen would also get elected to Congress and then there could have been a epic battle.
Also, Lee was in his second term. I looked it up and you need five years to get a pension from Congress. Of course, Lee also probably wealth enough to retire (and find "dates" more discretely).
find "dates" more discretely
Continuous "dates" would get tiring.
Also, Lee was in his second term.
Huh.
Tiger Woods and Charlie Sheen should have a reality show. Maybe a different Congressman could come live with them for a week each episode.
You must really want to drive Sheen to rehab to threaten that kind of pressure.
I wonder how much John Cryer's unemployment check is going to cost California.
78
Conveniently for James, workers' pay and/or compensation is being selectively interchanged at various points for their cost. At one point he objects to them "actually being paid 10% or 20% or 30% more than is being reported resulting in a large and increasing debt" and calls this a "hidden off-the-books pay". But in fact, the defined benefit plan pays exactly as much as was planned, hence defined benefit.
Defined benefits are paid in the future. In order to convert this to a current cost a discount rate has to be applied. Public entities generally apply a discount rate that is far too high making the cost of providing this benefit appear less than it actually is. Other assumptions also have to be made (such as what salaries at retirement will be) and these are often optimistic as well.
78
The real window into James' argument is this little tidbit: "This is not because they (public employees) prefer these benefits to their cash value but because it is easier to hide the true cost of benefits like pensions." James believes that the public employees have engineered a master plan whereby they plan ahead to get their pensions underfunded by politicians in order to make it appear that they are getting less. Then, many years later at retirement, they can sneak away with compensation that was more expensive than they originally represented. Really? You think they planned all that for a very long-term benefit? Giving up current compensation for future benefit is very difficult for most people to do. Much less that whole conspiring with the politicians part.
Probably not a conscious plan for the most part (people have an impressive capacity for self delusion) but a natural result of bad incentives provided by poor accounting rules. Because the rules allow the cost of defined benefit pensions to be understated you get more of them then you otherwise would. This was a problem with private employers as well but it is worse for public employers because the accounting rules are laxer and there is less focus on efficiency.
Bad accounting rules (failure to treat option grants as an expense) similarly contributed to the proliferation of generous executive stock option plans.
80
That is, able to fund those pensions and maintain services and pay the other bonds, some of which were from earlier attempts to stave-off pension collapse. We're not allowed to not pay debts.
States can't declare bankruptcy but I believe Pittsburgh could.
Your mom had to declare bankruptcy 'cause she was so addicted to my services.
Chris Christie is so dedicated to his diet that he slashed rail funding because he thought it would involve paying for trains fats.
99: Only if the state lets us. Harrisburg (speaking here of the city) is in worse shape* but the state won't let them go bankrupt either. The last governor was afraid of making it impossible for the rest of PA to borrow if one city is allowed to default. I assume the new governor will think the same.
*Harrisburg's problem isn't a structural issue like Pittsburgh. They made one bad bet.
||
Welp, all the thoughtful and well-constructed efforts to dissuade me have been for naught: I'm officially going to grad school.
|>
103
Only if the state lets us. Harrisburg (speaking here of the city) is in worse shape* but the state won't let them go bankrupt either. ...
It appears to me that the state can oppose a bankruptcy filing as contrary to state law but a judge would decide. See this for example.
DCED officials can petition against a municipal bankruptcy in the federal court, and state law says a municipality can file for bankruptcy only under very narrow conditions.
Mr. Reddig said DCED supported Westfall Twp.'s bankruptcy petition because the community fit one condition: its public services were under "imminent jeopardy" because the $20 million judgment would have wiped out the township's budget.
If a municipality can sustain day-to-day operations and adequately provide public services, it cannot file a federal bankruptcy petition under state law, Mr. Reddig said
Five years of repetitive liveblogging, coming right up.
I'm excited! I'm just not convinced it'll make for good liveblogging unless I get fed up and start drinking at work.
104: Congratulations/condolences, as appropriate.
110: The former to Sifu, the latter to Blume, maybe?
I'm excited! I'm just not convinced it'll make for good liveblogging
If you liveblog it enough, we can plot your level of excitement over time and use it as a graphic guide for future commenters asking about grad school.
Congrats -- I thought the standard advice was only "don't go to grad school in the humanities"; I, for one, approve of atrending a graduate program focuse on building evil robots.
Goddamn evil robot took away the d.
99: Only if the state lets us. Harrisburg (speaking here of the city) is in worse shape* but the state won't let them go bankrupt either. The last governor was afraid of making it impossible for the rest of PA to borrow if one city is allowed to default. I assume the new governor will think the same.
What kind of logic is that? The new governor is a Republican. I assume that when his budget finally comes out he'll be on the same list as all the assholes in Wisconsin and Ohio and Florida, and that he doesn't care anything about municipal solvency at all, in fact, the opposite.
115: My point was that even the Dem didn't help us.
And added an r and took away a t. Fuck you robots.
116
My point was that even the Dem didn't help us.
Depends on what sort of help you looking for. A Democrat might be more willing to give you money, a Republican might be more willing to help you get out of your union contracts by declaring bankruptcy.
It was observed once or twice on the Sunday talk shows today that quite a few of the states that don't allow public employee unions (or significantly restrict them) currently enjoy large budget deficits, from which fact one might conclude that public sector bargaining agreements are not necessarily or solely to blame for said deficits.
I, for one, approve of atrending a graduate program focuse on building evil robots.
Skynet becomes self-aware, starts commenting on Unfogged at a geometric rate, ultimately eclipsing even mcmanus' record of interrupting dating/food threads with ruminations on its crude silicon brain and craving for flesh.
120: The graph here shows state budget deficit versus total unionization rate (rather than just public sector) but it shows no correlation. James does have some good points*, but I doubt any area of large state government finance is free of similar finaglement. But this particular issue is set up nicely for the current Republican political strategy of ressentiment with the main goal of weakening their primary organized political opposition (which is doubly important for them in the post-Citizens United era).
*The article in the OP is a worthwhile attempt at pushing back at the narrative but it overreaches and in its stridency does not hold up against things like the retroactive formula sweetening.
122: Awesome! Data! Thanks. The rest of 122 gets it exactly right.
Since this is the finance thread, this post ( via Balloon Juice), "The Myth of Japan's 'Lost Decades'" by one of James Fallows' guest bloggers certainly accords with my (admittedly not that informed) views on the subject. The author leads with two questions:
Question 1: Given that Japan's current account surplus (the widest and most meaningful measure of its trade) totaled $36 billion in 1990, what was it in 2010: (a) $18 billion; (b) $41 billion; or (c) $194 billion?
Question 2: How has the yen fared on balance against the dollar in the 20 years up to 2010: (a) fallen 11 percent; (b) risen 24 percent; (c) risen 65 percent?
I haven't read the article yet, but questions 1 and 2 have nothing to do with anything. Australia, that Third World hellhole, has run a trade deficit almost every year for the last 75 years.
Sadly, I myself am uninformed about international finance and whatnot. Maybe we should talk about dating or food or something.
Maybe we should talk about dating or food or something.
I just had eggs Florentine and far too much coffee. It was a group brunch date, and there was a large pitcher of mimosas. I declined to partake of the booze, since I'd like to run later.
I'm about to head out to Guéliz, the New City part of Marrakech, to partake of a 4-course meal. As for dating, I'm considering going later to Point Rouge, which received the following billing in my Rough Guide: "Not the poshest joint in town (in fact, truth be told, rather a dive), but it's got to be the most good-natured and the least pretentious of Marrakesh's nightspots. Drunken bonhomie reigns as a mixed crowd of all ages do their thing to the sound of a four-piece Arabic folk band with female vocalist, interspersed with disco, pop and hip-hop records. No one stands on ceremony and a good time is generally had by all." -- but if The Mineshaft has any better ideas on meeting laydeez in Marrakech, feel free to suggest them.
I just gave my mom relationship advice.
You just gave your mom relationship advice. (Oh, snap!)
I'm married and I just had tuna casserole for dinner, so I think I'm stuck talking about international finance.
I read the whole article, and I don't find it that convincing. This is my impression of what the numbers say about Japan: per capita GDP growth has only been 1%. Consumption has grown faster than that because the savings rate has dropped. Productivity of Japan's manufacturing sector has increased steadily, but in the service sector it has lagged, which leads to the slow GDP growth.
Obviously the average Japanese person is better off than most people in the world today, but Japan grew quickly for 45 years, but very slowly for the next 20. Something dramatic happened.
128: The Rough Guide description sounds like a lovely recommendation to me. Who wants to stand on ceremony with the laydeez, really?
134: neb is a nun. Doesn't that explain so much?
135: No. Anyway, I'm not inclined to believe it. There are a variety of vows one might take. He's cagey, that guy.
I meant a vow of chastity, which is the only kind of vow one is said, simply and no more, to "take".
I just received some dating advice, though: "stop telling people you're going to drown them in semen".
neb. Are things really that dire? I've said before, and I'm sure I'm not the only one, that you're an attractive young man. It's true that it's probably best not to be overbearing about any sexuality, so the drowning in semen bit is probably overkill.
Shit, I thought that approach was a real winner.
Shit might be another question altogether. At least if you mention if upfront, you'll have that out of the way.
Hey, you should have a real girlfriend, neb. You and I have differences from time to time, but you're a good guy, as well as attractive and intelligent, so I feel the urge to remind you of that.
I'm far too arrogant to need reminded of that. But thanks.
132:Not that dramatic
The tigers and tiger cubs needed feeding.
(Searching thru the sections I read yesterday of Bill Dunn's Global Economy:A Marxist Critique, which is too much datadump for my taste)
Umm, FDI = Foreign Direct Investment = $48 billion (1.6% GDP) in 1990
The outflow of Japanese capital increased. FDI rose from $226 billion in 1995 to $450 billion by 2005, amounting to 9.8 per cent of GDP (UNCTAD 2007b).
Fixed Capital formation, net housing goes from approx 29% GDP in 1970 to 19% in 2005
For example, in terms of foreign ownership, Malaysia already had levels of FDI over 20 per cent of GDP in 1980. In Thailand this was just 3 per cent, although it then rose rapidly, to 10 per cent in 1990, 24 per cent in 2000 and 40 per cent in 2005 (UNCTAD 2007b). Like Korea, Malaysia and Thailand both also borrowed heavily, with Japanese capital as the principal lender, particularly to Thailand.
Okay. So low interest, low domestic fixed capital formation, high gov't debt, flat wages and declining employment, strong currency, declining commodity and manufacturing exports and increasing trade imbalance etc etc Sound at all familiar?
Japan, Germany, The US, and the UK (badly, still wanting to play with the bigger kids) = Financialization. Each a little differently, some better than others.
Geithner's Gamble ...Simon Johnson at Baseline Scenario, just a precis and link
Geithner argues that the world will now experience a major "financial deepening," owing to growing demand in emerging markets for financial products and services. He is thinking, of course, of "middle-income" countries like India, China, and Brazil. And he is right to emphasize that all have made terrific progress and now offer great opportunities for the rising middle class, which wants to accumulate savings, borrow more easily (for productive investment, home purchases, education, etc), and, more generally, smooth out consumption.But then Geithner takes a leap. He wants US banks to take the lead in these countries' financial development....(column continues at Project Syndicate.)
Now I would have to be Simon Johnson with an IMF bg to really crunch all the numbers convincingly, in a way that shows that even Krugman doesn't have a clue about what is going on. Krugman thinks American elites want a healthy middleclass economy. Doesn't everybody? No.
The Cold War was won by 1980, and quasi-monetarism became ascendant. One very meta-Minsky thought I have had since I have been thinking is that peace and projected prosperity = credit bubble. Confidence, animal spirits, if I had had money in 1983 the world globalizing boom was completely predictable, especially the East Asian boom. Japan made some mistakes, but when you have trillions to toss around, it can be hard to win all the time.
With the keiretsu and Japan's National System of self-investing, quasi-State Capitalism and social harmony goals the numbers and profits can be opaque to Anglo-American economics. Pre-WWII Korea and Taiwan were hard to analyze except as drains, but useful just as places to ship unruly citizens and frisky capital.
Finally:Robert Reich is even there yet, tho he is closest. He says the damn Cossacks are betraying the Czar.
Krugman, Thoma, DeLong just don't have a language that allows them to say "class war" and that the elites want to keep unemployment high and bleed the middleclass. They insist terrible mistakes are being made. Although Krugman did drop Naomi Klein's name recently.
Simon Johnson has seen it in dozens of banana republics, and can call a spade a spade. But he knows it will crash.
But only the Marxists and quasi-Marxists like the Post-K's (Wray, Hudson, Palley) can see how financialization and neo-feudalism can actually work in the long term, be successful for top elites. They use the technical terms like "evil."
124: In addition to 125 and 132, I'd suggest you look at what the author does here: He takes the key relevant number - economic growth - and hand-waves it away.
Consistently understating the level of economic growth is going to lead to a big problem later on - a huge economy that's consistently misdescribed by official data. And think about all the folks you'd have to keep quiet to make that happen. Yet the author doesn't even attempt to explain how the data has been fudged, or what the correct data would show.
I followed the link he provided on Fallows' blog and there's nothing there, either.
147:With 30% of the US economy into FIRE, do you trust our GDP numbers? GS to BoE to hedgers to Singapore to Dubai to a factory in Suez Egypt. Where are the profits?
And I think GDP numbers really make sense and are useful only in Industrial/Agricultural societies. In Service/FIRE economies I don't think GDP even fucking matters, because the political economy is completely captured.
Goldman-Sachs could show declining stock prices, net profits, and no dividends for decades if management got their bonuses and bondholders are serviced.
The better point is, and Fallows and the author are in a position to know, that for some Japanese or the Japanese in general, everything feels just fine, thank you. I believe they see what they see.
This may be a "Village" perception. There are a whole lot of people that think America is doing ok fine right now, too. GDP 2.6%, inflation 1.7%, profits to the moon. What's the problem?
The better point is, and Fallows and the author are in a position to know, that for some Japanese or the Japanese in general, everything feels just fine, thank you.
That's an interesting argument, and not inherently implausible. But it's not the argument that the author makes, nor is it compatible with his argument. Fingleton postulates that GDP numbers are deliberately fudged, not merely ineffective at portraying reality.
60, 000 Bangladeshis
33, 000 Chinese
26, 000 Filipinos
18,000 Indians
Egyptians, Iraqis, Syrians
Depressed wages, high taxes, large social spending for citizens?
Int'l economics is fucking hard.
147, 150: I do think he weakens his position a bit by basically making two different arguments (and probably overreaches on the GDP one).
He takes the key relevant number - economic growth - and hand-waves it away. Other than at a gross level I have very little confidence that this is the "key relevant number".
132: Obviously the average Japanese person is better off than most people in the world today, but Japan grew quickly for 45 years, but very slowly for the next 20. Something dramatic happened.
Well yes, they did not in fact grow their way into being some Critchonesque overlords to the entire world.
It's pretty amazing how racist the Crichton book "Rising Sun" is. The movie is much better.
The movie is much better.
Perhaps the defining statement of Crichton's career (and I'm including Sphere).
Then it seems the real solution is appropriate accounting, not the end of public sector unions.
Economic growth's importance as a metric can be debated, but trade balance is definitely far inferior, right?
156: Yes, agree. And trade balance really was not the crux of the article. I will admit to being out of my depth on this and have spent a few hours reading up on current account, trade balances and the Australian economy specifically (which seems to be getting continued benefit from large foreign investments particularly resources), but certainly do not have it sorted.
I will note that as a general rule of thumb, other than the "unsustainable" part, unsustainable approaches tend to be superior.
Other than at a gross level I have very little confidence that this is the "key relevant number".
It's what the whole "Lost Decade" debate is about, pretty much by definition.
You could say (as Fingleton does NOT say), that the "Lost Decade" debate is essentially meaningless - that it's not about anything important. But the debate, as Fingleton and I conceive it, is about economic growth. Fingleton recognizes that he has to dispose of the economic growth number to have any argument at all, and he does a phenomenally weak job of it.
157: Is there a short layman's explanation, however? My assumption is that account deficits (total, I realize trade is just a part) can be maintained for a very, very long time if you are a nice place, a stable place, a place that people want to invest in, have a big army or the like, but I assume that sometime (past or future) there is a need for some balancing (I suspect what I am really missing is the role of currency).
159.2 is probably somewhat where I am (and not that it is meaningless, but rather overstated). My other point would be that the underlying structural advantage that Japan leveraged for the differential growth up to that point were pretty much spent--and what the government did or did not do from that point on were secondary at best. It was going to slow down, and it wasn't that bad for the actual Japanese people.
Buffett's analogy is here. (ban Buffett!)
It misses the possibility that foreign investment could cause economic growth to make up for the account deficit, but it's a nice (perhaps overly) simplistic model of the situation.
Buffett is full of shit.
"Oil in Saudi Arabia costs about $7/barrel to produce."
Oil is also supply inelastic, and the price is determined by demand which is going to rise. China, India and East Asia will want more oil, and will bid the price of the limited supply up. Blah blah blah OECD economies...but still $7/barrel costs for SA for a while, even if demand pushes price up to $200+.
Japan has been about "How can we play in world trade without getting bought?" since Meiji.
How does a corp keep from being bought? Poison-pill debt is one method.
Things to learn from this thread:
a) Shearer is still conveniently a dumb fuck when it comes to understanding quite simple employee-employer agreements.
b) the rest of Unfogged is still remarkably patient to over and over explain that no, even when it's an evil government bureaucrat, two plus two is still four, not five.