Did Class Envy Bring Down the American Public Sector?.....

For eons we’ve heard the cries from liberals that “Wall Street greed caused Main Street need.”

The Left, led by its AFL/CIO, SEIU, along with its other Public Sector Union allies assailed Wall Street’s “Money Machine” at every opportunity and many honest, hard-working employees went along with it, as the “fixed economic pie” (“there’s only so much money to go around”) argument resonated with many of them.

Wittingly or, more likely not, those folks were pressing for the eradication of the same “Money machine” that supplied the revenues that funded a very bloated public sector and the very generous entitlements (defined benefits pensions, paid health-care, etc.) that often came with those jobs.

For years automation on Wall Street (online trading replaced thousands of big-buck stock trading jobs) was slowly, but steadily eroding many once high-paying, highly-taxed Wall Street jobs.

When the mortgage meltdown and the subsequent global credit crisis it spurred , caused by government’s micro-managing the banking industry (legislating and litigating what Andy Cuomo, then head of HUD, called “affirmative action in lending” in the form of subprime lending), occurred in 2008, it triggered “the end of Wall Street as we knew it.”

That’s a done deal.

Today, Wall Street is forever changed.

The stock market will go on. Sound investors will still reap huge profits (and rightly so) and new companies will continue to emerge and grow or fail as they will, but Wall Street’s high-income generating “Money machine,” which was responsible for so much of the revenues that we all depended upon (New York sent far more TO Washington than it ever got back thanks to that “Wall Street Money machine”) is gone for good.

It isn’t coming back...and neither are all those revenues that once supported all those public sector jobs.

Wall Street, GM, Ford and most of America’s private sector has already contracted greatly. It’s bloodletting and job-shedding is mostly done, but the public sector’s is only just beginning!

For better or worse, and for many people it’s going to get much, MUCH worse. Our public sectors (federal, state and local) are going to contract. Pension and other benefits like pensionable overtime, retirement after 20 years are going to be eradicated.

These benefits packages DID attract many higher skilled, more motivated people into the public sector, but with sharply reduced revenues they can no longer be afforded.

The irony is that after years of bashing “fat cats” and Wall Street’s “Money machine,” the Left has finally gotten what it’s wanted, but it’s come with some very serious “unintended consequences” – one being the ongoing decimation of America’s once bloated public sector.

Just as we witnessed "the end of Wall Street as we knew it," we will almost certainly also witness "the end of America's vaunted public service sector, as we knew it."


Cynical Politics

The Left is banking on this Public Sector bloodletting fracturing the Tea party and (hopefully, from their vantage) bringing many Independents back to their side in time for 2012.


Unfortunately, neither the facts, nor the logistics on this issue are in their favor. Numerous Democratic Governors (from Cuomo to Brown) are looking to pare down their own public sectors and a recent Rsmussen Poll shows that over 60% of Americans believe that public sector employees should pay as much of a portion of their pension and health-care benefits as private sector employees do. 

Moreover a full fifty percent (50%) of voters favor reducing their home state’s government payroll by one percent a year for 10 years either by reducing the number of state employees or by cutting the pay of state workers, while only twenty-eight percent (28%) oppose a cut of this nature. Another 23% aren’t sure about it.

The "end of Wall Street as we knew it" has made the "end of America's vaunted (and often bloated) public sector as we knew it," all but inevitable. BOTH Democratic and Republican Governors are slashing state payrolls, AND the public seems very much in support of that.

Apparently Even Unions DON'T "Buy Union" - Michigan Carpenters Union Outsources Protesters

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In one of those "sweet ironies" of life, a Michigan Carpenter's Union has hired NON-UNION protesters to walk their picket line! I guess the Union members were just too expensive.....

Defending Andy Kessler

Andy Kessler, a former Hedge Fund manager with a new book called "Eat People And Other Unapologetic Rules for Game-Changing Entrepreneurs," has a piece in today’s (Thursday, February 17^th, 2011) Wall Street Journal that does an excellent job of assessing today’s changing job market.

He begins by noting that we are in the midst of yet another “jobless recovery,” the 2^nd within this past decade. He opens by opining, “So where the heck are all the jobs? Eight-hundred billion in stimulus and $2 trillion in dollar-printing and all we got were a lousy 36,000 jobs last month.”

As he states that number isn’t enough to keep up with population growth.

While there are a number of factors (Sarbannes-Oxley crafted by the Bush administration after bringing so many Corporate crooks to justice back in the summer of 2001 has been an albatross around business’s neck – killing jobs in the process), Kessler focuses on what he sees as the primary cause – technology killing off more and more service jobs.

Opponents argue that, “As a hedge Fund manager, Kessler doesn’t understand the value of those service jobs and the cost of job loss to people.”

That’s utter nonsense; (1) neither business nor government exists to create jobs for people and (2) service jobs are always going to vulnerable, whether it’s the guy shuffling product from one side of a store to another or the Radiologist charging high fees for reading scans that computers can break down in seconds.

In Andrew Kessler’s view the economy is broken down this way: “There are two types of workers in our economy: creators and servers. Creators are the ones driving productivity—writing code, designing chips, creating drugs, running search engines. Servers, on the other hand, service these creators (and other servers) by building homes, providing food, offering legal advice, and working at the Department of Motor Vehicles. Many servers will be replaced by machines, by computers and by changes in how business operates.”

In the “war over globalization” we’ve seen the initial backlash against the erosion of the service sector, but the charge that “globalization and technology are ‘stealing jobs’ and destroying our economy is a false one.”

With the global economy now permanently ensconced, once it is no longer practical to produce a specific product in one place (ie. the industrialized West) it will no longer be produced there, and will be produced in cheaper locales.

Same with technology - innovators aren’t looking to “kill off jobs,” they’re looking to provide their consumers (business and government) with more efficient (less worker-driven) means of conducting their business.

Ultimately the world needs and will reward more innovators and will life will be tougher and tougher for service-sector workers.

As Kessler concludes, “Like it or not, we are at the beginning of a decades-long trend. Beyond the demise of toll takers and stock traders, watch enrollment dwindle in law schools and medical schools. Watch the divergence in stock performance between companies that actually create and those that are in transition—just look at Apple, Netflix and Google over the last five years as compared to retailers and media.

“But be warned that this economy is incredibly dynamic, and there is no quick fix for job creation when so much technology-driven job destruction is taking place. Fortunately, history shows that labor-saving machines haven't decreased overall employment even when they have made certain jobs obsolete. Ultimately the economic growth created by new jobs always overwhelms the drag from jobs destroyed—if policy makers let it happen.”

Innovation is tied to productivity and productivity is intrinsically tied to economic growth. America’s shifting demographics (more Baby Boomers retiring and the number of women in the workforce leveling off) real GDP growth will be expected to drop from its historic average of 3.3% per year to 2.2%...to prevent that (and to prevent the next generation from seeing slower gains in their standard of living than their parents and grandparents did) productivity must be increased to 2.3% per year, a rate we haven’t achieved since the 1960s!

Yes, a LOT of existing service sector jobs are going to go away in order to create the new jobs of tomorrow. As is always the case, the most dynamic and flexible workers will probably transition the easiest, while the most rigid and intractable will have the hardest time adjusting to the new realities.

SEE Andy Kessler's WSJ article:  
http://online.wsj.com/article/SB10001424052748703439504576116340050218236.html?mod=WSJ_Opinion_LEADTop

NFL Collective Bargaining Agreement is an Omen for the Rest of Economy....

From the outside the NFL’s current CBA negotiations which seem headed toward a lockout on March 4^th, 2011 seems to be an argument between billionaire owners and millionaire players, but it’s far more than that.

These negotiations offer a window into the “new economy,” and the consolidating of power among the haves and downsizing of wages for workers across the board – from the highest to the lowest end of the spectrum.

The owners have decided that despite the fact that the NFL has only seen revenues increase over the “Great Recession,” the owners need a greater piece of the pie, to “keep the players in their place.”

But this is NOT merely about “Union-busting owners versus greedy, over-paid players,” far from it. What it’s about is the consolidation of power by the “owner class,” and the shrinkage of what they almost universally see as “excesses,” that is “excessive compensation,” paid to workers that’s seen as unsustainable going forward.

The primary dispute centers around the amount of money that the owners want to take as “credit” from the revenue pool. In the previous agreement, the owners took $1 billion (“off the top”) from the pool of approximately $9 billion, but now the owners are looking to increase that to $2.4 billion, claiming “the economic realities of the era” require that shift.

This would effectively cut the players' share of the revenue by 18 percent, and that doesn’t sit well with the players.

And even though many players DO understand how the increased funding of the owners might well lead to an increased annual revenue thanks to new and improved stadiums, there are no assurances of that AND the owners have refused to open their books to the players.

Beyond that is concern, on the part of the owners, that some player behavior is and has been counter-productive to growing the sport, already America’s #1 Revenue-producing sport.

The owners argue that today’s players are being paid like they’re CEOs and executives at major corporations. CEOs don’t moonlight as reality TV stars. High-profile executives get canned for sexual harassment and multiple accusations of sexual assault. Good executives work year-round.

As Jason Whitlock of Fox Sports notes, “They don’t want to share half of their revenue with people they don’t believe have the necessary character to collectively act in a way that allows them to economically grow the game at a rapid pace. If the players want half the revenue, the owners want to believe the players have a sincere interest in being equal partners in the growth of the game.”

While the players would want some form of self-policing, the owners see an 8 percent to 10 percent shared-revenue cut for players across the board as better insurance than trying to predict who might be the next Brett Favre, Albert Haynesworth, Ben Roethlisberger or Chad Ochocinco.

In fact, there are only a couple of things both sides can agree on, better benefits for retirees and a rookie pay scale so that proven players can get better salaries in their middling years when they are in their prime and their bodies haven't worn down yet.

Ironically enough, and in the spirit of our all being “our own worst enemies” is that Carolina Panthers Owner, Jerry Richardson (the ONLY former player among the NFL owners) is the biggest hawk among the owners.

Richardson is adamant about the owners taking this opportunity to press the players and take control of their league. And just as the vast majority of fans are on the side of the owners, the voters have rewarded the biggest cutters (Governors like Chris Christie, R-NJ and Andrew Cuomo, D-NY) with huge approval numbers.

Which is why that very same dynamic is now in play in the public sector  - the private sector long ago commenced with its own blood-letting. Today, major cities are laying off teachers, cops, firefighters wholesale and looking to scuttle the defined benefits pensions for future and even existing public employees.

Corporations and Municipalities are divesting themselves of healthcare costs and as much of their “future costs” (worker’s defined benefits pensions) as they can) in order to become more streamlined and competitive in the existing global economy.

As painful as this downsizing is, it’s also inevitable.

Bet on the NFL owners...and the public sector managers.

Now THIS is Some Funny Stuff - Johnny Mac Trick Shot Quarterback

Johnny (Mac) McEntee, some funny and pretty amazing trick shots;

Sen. Schumer on the Three Branches of Government

Yikes!

I guess it's to be expected...after all, Joe Biden apparently believes that FDR took to the TV airwaves when the stock market crashed in 1929....Sarah Palin believes that the "Space race" not the "Arms race" bankrupted the former Soviet Union and now Charles Schumer (D-NY) believes there are "3 branches of government, we have a House, we have a Senate and we have a President".

So, not only has the legislative branch now expanded t become 2/3s of the the branches of the U.S. government, the Judicial branch is no longer an actual branch of the U.S. government....at least according to one Senator.

Ayaan Hirsi Ali - Radical Islam and the American Left

This is a GREAT video of an interview with Ayaan Hirsi Ali, linking radical Islam to the American far-Left.

With Friends like Sarah Palin....

Yikes! I know this is my second posting bashing a "Conservative"...not a great track record for a self-proclaimed "Workingclass Conservative", but when so-called "Conservatives" cozy up to tyrants (like Haiti's Baby Doc Duvalier) and the reigning "Sweetheart of Conservatism" out-gaffes Joe Biden...I just can't ignore that.

And I know there's that vaunted and all too real double standard - when a liberal gaffe-meister like Joe Biden drones on about how, "When the stock market crashed, one of the first things that FDR did was to get on TV and reassure the American people..."http://factcheck.org/2008/09/biden-fdr-and-the-invention-of-television/) and to be fair, Jon Stewart did skewer that as well (http://www.thedailyshow.com/watch/wed-september-24-2008/joe-versus-the-volcano) - but Sarah Palin's most recent "Sputnik Moment" gaffe goes waaaay beyond the pale that any such blanket can cover. (SEE:

In an explosion of what can be best called idiocy, she completely (deliberately or not...and frighteningly, it DID NOT appear to be deliberate) misconstrues the meaning implied by Barack Obama with "America's Sputnik moment" (an obvious call to greatness in meeting a challenge) AND goes further (apparently inadvertently) maligning Ronald Reagan by erroneously asserting that it was the "massive debt" from the former USSR's "Space race" (of the 1950s and 1960s) that bankrupted that nation, instead of the "Arms race" of the 1980s....which, in fact, DID bankrupt the then USSR.

That famous "Billy Madison" refrain came to mind, hearing Sarah Palin's "Sputnik Moment rant"; "At no time during your rambling, incoherent diatribe did you come close to a single actual fact...we are all now dumber for having listened to this. We award you no points and may God have mercy on your soul".

Jon Stewart's "To Russia With Gov" can be seen here; http://www.thedailyshow.com/watch/mon-january-31-2011/from-russia-with-gov?xrs=rss_recentvids