How Public Employee Unions & Politicians unite against citizens [Darleen Click]
Reuters’ headline reads How a vicious circle of self-interest sank a California city, but as you slog through the debacle of the city of San Bernardino’s ugly descent into bankruptcy you notice the complete absence of one important participant
“It’s total political chaos,” said John Husing, a former San Bernardino resident and regional economist. “There is no solution. They’ll never fix anything.”
Yet on close examination, the city’s decades-long journey from prosperous, middle-class community to bankrupt, crime-ridden, foreclosure-blighted basket case is straightforward — and alarmingly similar to the path traveled by many municipalities around America’s largest state. San Bernardino succumbed to a vicious circle of self-interests among city workers, local politicians and state pension overseers.
Little by little, over many years, the salaries and retirement benefits of San Bernardino’s city workers — and especially its police and firemen — grew richer and richer, even as the city lost its major employers and gradually got poorer and poorer.
Unions poured money into city council elections, and the city council poured money into union pay and pensions. The California Public Employees’ Retirement System (Calpers), which manages pension plans for San Bernardino and many other cities, encouraged ever-sweeter benefits. Investment bankers sold clever bond deals to pay for them. Meanwhile, state law made it impossible to raise local property taxes and difficult to boost any other kind.
No single deal or decision involving benefits and wages over the years killed the city. But cumulatively, they built a pension-fueled financial time-bomb that finally exploded.
Note how the reporter’s line about how the difficulty in raising taxes is considered part of the problem. Not one quote from any person who actually pays the city’s bills is presented.
There really are two Americas … and it has nothing to do with “rich” and “poor.”
And no one should labor under the delusion that California is alone with these issues.
Tags: bankruptcy, california, public employee unions, san bernardino