Questions About Bailouts & The Threat of Socialism
What’s wrong with bailing out US automakers on the condition that the industry commit itself to immediate Chapter 11 reorganization? It seems to me that in doing so the principal sources of the industry’s insolvency, i.e. overpaid union workers, princely benefits plans nad defective management, can be cut down to manageable size. Result: the industry will finally become more competitive with Toyota, among other auto makers, and American jobs can be protected. Am I being simplistic or is this just plan ‘ole commonsense? And especially in these trying times, can or should the unions and managers in Detroit have their frosted cake and eat it too?
Also, at a time when national solvency itself is at risk, why are President-elect Obama and his congressional minions pushing passage of the Jubilee Act (S.2166) and the Global Poverty Act (S.2433), all in an effort to help implement the UN Milennium Development Goal.
The Jubilee Act forgives $75 billion in debts owed to the USA with little convincing proof that recipient countries will not again irresponsibly slip into onerous debt.
And with the idealistic goal of reducing by 1/2 the proportion of people worldwide who live on less than $1/day, the Global Poverty Act dramatically increases US foreign aid by $845 over a 13-year period. This is over and above the $65 billion/yr in foreign aid the USA already spends. Can we afford this profligacy? Or is this old humanitarian worker just being cheap and uncaring?
Ultimately, can a vibrant and essentially self-correcting free market operating within the realm of natural economic laws sustain itself without the infusion of legislative mandates and gargantuan financial stimulants? And can these untested governmental interventions, aka “fixes”, unintentionally (or otherwise) imperil the efficacy of a free market? In the federal government’s haste to fix the economy’s financial problems, will our free market economy irreversibly morph into Socialism?
Not an economics major, I’m just not sufficiently knowledgeable to adequately answer these questions myself. Anyone out there have any instructive comments?
32 Responses to “Questions About Bailouts & The Threat of Socialism”
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Oh those horrible union-workers with their high paying jobs! They are the ones to blame for everything that’s wrong with the auto-industry…
really?
GM CEO Rick Woagoner’s total compesation rose 64% in 2007 http://www.reuters.com/article/companyNews/idUSN2533674620080425
– Alan Mulally, Ford president and chief executive officer, earned $2,000,000 in salary and received incentive bonus awards of $7 million. Total 2007 compensation was $21,670,674, which includes salary, bonuses, the Company-recognized expense for stock options and other stock-based awards, as well as all other compensation.
– Don Leclair, Ford executive vice president and chief financial officer, earned $1,005,633 in salary and received incentive bonus awards of $3 million. His 2007 compensation totaled $11,703,127.
– Mark Fields, Ford executive vice president and president, The Americas, earned $1,255,634 in salary and received incentive bonus awards of $2,850,000. His 2007 compensation totaled $8,389,898.
– Lewis Booth, Ford executive vice president, Ford of Europe and Premier Automotive Group, earned $868,133 in salary and received incentive bonus awards of $2,250,000. His 2007 compensation totaled $10,264,463.
– Mike Bannister, Ford executive vice president and CEO, Ford Motor Credit Company earned $708,700 in salary and received incentive bonus awards of $2,150,000. His 2007 compensation totaled $8,677,747.
- CEO Tom LaSorda received a $15.7-million bonus for the successful sale of Chrysler to Cerberus Capital Management. LaSorda received a total compensation package from Daimler last year worth about $20.7 million at current exchange rates.
But it’s all the workers fault ~ you admit you’re not an economics major why not throw mathmetician in as well? Well we already know your stance on unions per you anti-EFCA post so I guess it doesn’t matter.
Parma,
As anticiipated ,your hard-left, take-no-prisoners commentary always falls somewhere between utterly baffling and hopelessly amusing. But, most certainly, never enlightening nor balanced. Thank you for not disappointing us all again.
Well I suppose someone needs to balance out your hard-right commentary that is completely baffling.
As always you right-wingers spend all your time blaming the employees and their union contracts talk about lack of balanced “enlightened” commentary. You still haven’t come to grips with the fact that your way has failed us.
I was simply pointing to the massive amounts of money that CEO’s and execs receive while heading up companies experiencing downturns - but that cannot possibly have anything to do with it.
I would say it is you who isn’t balanced. And you should thank me because quite frankly it appears that I am the only one who comments on your posts.
Re-read my post. I blame everyone–not just unions. Don’t be so stubbornly narrow-minded. In all your responses to my posts you invariably read only that which you want to read and then proceed to go ballistic. It’s no longer even mildly amusing and in no way informative. In short, your responses are a waste of our valuable reading time.
Thus, regarding your inane statement that I should be thankful to you since you appear to be the only one who comments on my posts, PLEASE PLEASE PLEASE don’t do me any more favors. As the last line in my post fervently and honestly asked: “Anyone out there have any “instructive” comments?” And yet again your testy and far less than “instructive” responses intrude on the scene. So, please, AGAIN, don’t–PLEASE DON’T–waste my time. Just don’t do me–or any other readers of my posts–any more favors. Your so-called input is of little value to me or anyone else.
And please don’t count on my any longer extending to you the undeserved courtesy of responding to your scurrilous and simple-minded responses in the future. It just won’t happen. You can bank on it.
P.S. For youir own good, talk to a reputable therapist. It may be well-worth the effort. You might actually learn how to be a happier person and how not to take yourself so serioiusly. Good luck and good-bye.
changling, here, have some cheese.
jdelaney3, according to the liberals, the answer is for government to force private industry to make everything better by doing it the way the liberals want.
I’m not sure, but I think there’s a word for that.
Don’t be so hard on the changling, he/she’s only following the guidelines of the good book…
Rules for Radicals.
Why Mr. James Delaney knowing who you are as I do I am quite surprised that my responses have gotten you so riled up and I am sorry that you remain incapable of hearing out another point of view. Once I thought when you took a trip to a local “gay friendly” (you know the one whose pastor was once a Jesuit) church to push your CFC refugee program, you might be a more open minded person - I appear to be wrong.
BTW you didn’t blame everyone, I re-read your post and you targetting specifically the unions and president-elect Obama and congressional Dems (I assume). You mention “defective management” but never do you mentioned what the defect is - this is exactly why I posted CEO and Exec pay which is completely relevant to the issue and your post.
You call me a typical liberal (I admit I probably am) but you sir are the epitomy of right-wing - you blame everything on social programs and unions and taxes, you raile against them and label them socialism - you sir are the typical ultra conservative.
Reading your posts let alone commenting on them is indeed a waste - just like reading your letters to the editor in the D&C - I will not waste my time either
Changing
You would have more credibility if you actually read all the post before commenting
jDelaney did say
>>and defective management, can be cut down to manageable size
I agree with Mitt Romney let it go chapter 7. Reorganize with new management and a new union contract. This will get rid of the evil (I am not being sarcastic either) management. These guys ran GM into the ground and flew in on a private jet (which GM owns 7) to beg. Airlines have come out of chapter 7 after reorganizing, GM can as well.
If they are going to get a bail out, you are right management needs to go. But only after a ridiculous crippling union contract goes as well.
ChangingParma
If you are going to attack JDelaney personally because you know him why don’t you divulge who you are?
JDelaney has a lot of guts and he is a true believer in what he says, because he tells us who he is. More than I can say for you and I.
Once again, bloggers like changingparma prove why the D&C needed to get control of their own blogs. He unfortunately cannot control himself and must sling aggressive and nasty personal attacks against those he disagress with.
CP, if you run your own blog the same way you comment to posters here, you are the very reason blogs get a bad name.
Jdelaney3 encouraged instructive comments, something he apparently is incapable of providing.
Feel free to keep your hack-n-slash blog commentary over at your own lower tier site. Come back and play with the big blog kids when you’re ready.
Jdelaney3, to you, repoman and all the others who have joined us to provide the public more than just the usual overt liberal media bias, we welcome and appreciate your contributions. We hope you never become discouraged by the personal attacks of changingparma and his kind whose goal, according to Rules for Radicals, is to shut down dissenting opinion and free thought that differs from their own.
Thank you and keep up the good work!
Changing,
The difference between over-compensating executives (which definitely happens) and over-compensating “the employees” is significant.
Let’s assume that all of those executives you mentioned are over-compensated by $100 million. The amount of over-compensation to the employees and retirees is closer to $10 billion. Therefore, it is a matter of degree. The labor costs incurred by these contracts is much more significant on the bottom line of these companies than the executive compensation.
When the auto companies are paying $30/hour for a job that really should be paying $10-15 / hour (i.e., working on an assembly line), that’s $15/hour X 5,000 employees = $75,000 / hour of excessive pay, which in turn equals $3 million a week of over-compensation, which equals $150 million a year.
Now, add in excessive health care benefits and excessive pension benefits, and the Auto industry is paying billions in overhead a year that the market simply cannot bear. I.e., for a car to be profitable it has to be priced much higher than competitor’s cars who have rational compensation packages.
In other words, the union has priced the manufacturers out of competition, which inevitably prices the union members out of jobs.
Now, that is their business - they foolishly (both management and union) agreed to these idiotic contracts. But, now these idiots (management and union) want me to pay for their stupidity and take my hard earned money to pay them. That is socialism, pure and simple.
Let these auto makers either declare bankruptcy and get their business in order (including renegotiating reasonable labor contracts) or let them go out of business all together.
But, I don’t want the union members crying and asking for handouts anymore than I want management crying for handouts. (And, for what it is worth, I am also completely against the financial markets bailout as socialism - let the people who took risks to make money suffer the results, including people who bought houses they could not afford).
So, we can be against both executive over-compensation and employee over-compensation, but the reality is that employee over-comensation usually has a much more negative effect on a company’s bottom line than executive over-comp.
And, for what it is worth, this is even more true in all levels of public employment. A garbage truck drive in NYC is making around $80 grand a year with free health care and other great benefits - including a rich state pension plan. that’s ridiculous and helps explain why gov’t is so damn expensive. Of course, Public employee unions run New York state, so we will only ever see this get worse.
Many thanks, IP, Ex and Tiberius. Began to think I might be alone. I will continue to strive to be honest, accurate and balanced in my posts. I may not always be 100% succesful, but isn’t because I didn’t try.
(Didn’t know CP was a blogger, and, of course, I have no idea who s/he is. Not really necessary for me to know either. I think we already know enough.)
Thanks again! Much appreciated.
jDelaney
you are definitley not alone. I think what has happened is we are all blogged out from the election and need a little break. Right before the election I used to come here 3-4 times a day as well as other blogs, had not been on in days. After a slight sabatical from blogging we will all pick up again.
Thanks for picking up the slack. We agree with you and are glad you post.
I think all of you would do well to read the comments I have made on this blog - not once have I participated in “personal attacks” as InsidePolitics says I have against Mr. Delaney.
Actually it has been the other way around ~ with Stampede nasty comments directed at me becoming so bad that an admin e-mailed me to apologize and encouraged me to return. I have issued the same offer at my blog.
Delaney slapped me with a personal attack in his comment above…
“P.S. For youir own good, talk to a reputable therapist. It may be well-worth the effort. You might actually learn how to be a happier person and how not to take yourself so serioiusly. Good luck and good-bye.”
But that you don’t see - my comment about once thinking he was open-minded wasn’t an attack it was an observation from what I see in his posts and comments. He may believe what he preaches, there are many of us right and left who do, but that does not make one off limits to critic. There are many good writers on this blog who take time to present their ideas in ways that are not tired and old hat I do not think JDelaney is one of them. His posts are overboard (I’ll take down my flag if Obama wins he once said) and his ideas are very hardline rightwing. If he is too sensitive to have someone on the other side come here and comment and maybe even get under his skin (like I did apparently) then maybe he should stick to writing a journal, where he thoughts are not presented for public comment.
And Delaney “I will continue to strive to be honest, accurate and balanced in my posts” C’mon be real here you accuse me every step of the way of not being balanced and yet you punch your keyboard like Rush yells into his mic. Be honest you’re not balanced and if you can’t handle that critique then don’t apply the unbalanced label to others.
I come here mostly for debate - I find little of it, instead what is given in return is the attck-like comments above while at the same time commentors accuse me of attacking because I presented another point of view that Delaney can’t handle.
Too bad Jim, too bad that you have repsonded as you have.
And I will gladly reveal who I am when everysingle person - commentor and blogger on this site does.
to Monkey Toe (apparently the only debator on this post)
” I.e., for a car to be profitable it has to be priced much higher than competitor’s cars who have rational compensation packages.”
So you’re saying that GM and Ford and Chrysler are higher priced than Toyota, Nissan, Honda? I think you’re mistaken here.
Also For a decade the United Auto Workers leadership championed concessions as a means of prodding the companies to provide job security. But by the end of the 1980s, approximately 60 plants had closed and about 400,000 jobs had been lost. Concessions by the union workers in pay or pension have never worked why would they work now?
The workers granted those concessions to “keep the companies competative” but it didn’t happen did it? So you answer of giving bakc wages and pensions is a proven false start. And those darn retirees…did you know that the last contract was the first since 1979 that retirees got cost of living increases? They must not be sucking to much life out of those companies.
As far as the State pension system - you do realize that State, County and municiple employees pay into that system for their retirement - depending on where a person works they pay for at least 10 years, so those pensions are not the problem with the cost of government in NYS
Changingparma -
I misspoke - the cars are not necessarily priced higher, there is much less profit margin b/c of the abusive union costs. In other words, if Honda gets $15,000 and G.M. gets $15,000 for a car - Honda might make a $5,000 profit, whereas G.M. might make a $700 profit.
I don’t care what COLA they got, if you are paying retirees $40,000 a year for life, and you have 100s of thousands of retirees, that is not sustainable for any company. Add health insurance for retirees to that, and it is catastrophic for any company. That is simply common sense. Money does not grow on trees. The retirment packages were first agreed to when people believed that a) retirees wouldn’t live so long and b) that G.M., etc. would always be dominant and profitable. Once something like that gets into a union contract, it is impossible to get rid of. And, union’s always agitate for more.
So, add to those fixed and outrageous costs the costs of higher wages paid to the workers there - and it is no surprise that these companies are in trouble. Of course, there is also bad management, competition, etc.
I don’t care if the union workers are too stupid to take cuts and they all lose their jobs b/c the companies go out of business. That is between them and the company. But don’t ask me to pay their outrageous wages and other compensation. (either for management or the workers). If they price themselves out of jobs, tough luck. Maybe the rest of america will wake up to how abusive unions have become.
Look, unions were great for workers in the first 50 years of their existence in this country. but, once they got reasonable new laws and regulations passed, their necessity is gone. Now, they want ever more “bennies” and ever less “work” for members (i.e., the ONLY reason for their existence is to protect workers from being fired, ensure the least amount of actual work, and the most bennies). It’s the law of diminishing returns, and in this case, it’s beyond diminishing returns and into negative returns.
As are as NY State - state workers pay 3% of their salaries for the first 10 years of employment. Hardly enough to even remotely cover the lifetime pension of the 50% of final average salary. Even the most devout union person can see this is true economically. Add to that the union exists solely to protect bad employees from being fired and making sure workers do the least amount of work for the most money, and abra cadabra, business fail. And then the union members cry and want more unemployment, or the gov”t to save their jobs.
think about it. If you invested 3% of your salary for 10 years (when you are making, say $40k), That would equal about $12,000. That “investment” would never accumulate enough to pay you $30k a year (your final average salary being about $60,000) between when you are 60 and 90 when you die.
So to claim that such systems are solvent or smart is pretty ridiculous. they are upside down ponzi schemes, worse even than social security.
Changingparma,
I’m not necessarily against pension plans - but they should be rational and self-sustaining. In other words, more like a 401k and less like the NY State system.
And, to be clear - the only thing I really care about is not spending taxpayer money to sustain any private business. Again, I was against the bailout of the financial companies and am against the bailout of auto companies and would be against the bailout of any company.
And, I am against any gov’t $$ GIVEN to any private company for any reason.
Wow, monkeytoe, you sure know your stuff. Very enlightening! Thanks!
The web is just so cool because you can look up almost anything (thanks Al Gore - I jest of course)
On your car/profit analogy…
From “China Matters” (http://chinamatters.blogspot.com/2008/11/gm-toyota-japan-and-national-health.html)… when comparing the “homeland” operations of GM and Toyota…
“The interesting little secret about Toyota is that, like GM, its home base operations are not especially profitable, even with the health care subsidy.
Japan is an expensive place to have a factory. When bonuses are factored in, Toyota and GM workers both make yearly incomes in the $60,000 range.
Even with massive exports of Japan-built cars, the Japanese operations account for about 1/3 of global profits while posting 50% of worldwide sales.
In the first quarter of FY 2006, Toyota’s home operations brought in about US$1 billion of its total profits of $3.23 billion.” ….
According to that post the big $$$ is in overseas sales for both companies. GM made $2 Billion in Latin America matching what Toyota made in the U.S. now I cannot say that I know the profit margin on news cars when comparing U.S. to domestic as you seem to know, but as a person who sold cars in the mid-nineties part time I know that a new GM vehicle had approx. $1500.00 or more in profit built in (not couting hold backs etc…) a friend who still works in the industry confirmed that figure for me tonight when I emailed him to ask.
I am also fairly certain that Honda’s don’t have $5,000 or even close amount of profit built in - so what then is the difference? Unions? Probably not considering that Toyota pays its worker pretty much the same on average - maybe it’s the National Health Care that the Japanese have access to - Toyota only pays benefits for 2 years after retirement after which the National insurance plan picks them up - so maybe the answer lies not in cutting workers but in providing a National system of health insurance ( I’m sure Delaney will call me a socialist now…)
Alright so moving on to your vast knowledge of the NYS retirement system (I say vast because it Delaney seems impressed)
You said
“think about it. If you invested 3% of your salary for 10 years (when you are making, say $40k), That would equal about $12,000. That “investment” would never accumulate enough to pay you $30k a year (your final average salary being about $60,000) between when you are 60 and 90 when you die.”
You are correct…if I alone contributed that much it wouldn’t equal out to what they would pay me in the end…so you must ask yourself then why is the system so stable (even after a huge 5 month loss this year of around 20%) it is stable because of the sheer number of people participating and putting $$$ into the same pot - this is the difference between the NYS Pension and a 401k - everyones money is going into the same investments - so take 621,917 total employees in the NYSLRS X 3% of all their salaries + the 8.5% employers (government so yes tax payers) put in X 2.5% on average in annual earnings and there you have it - a solvent, stable, growing investment pool that currently pays out to a number that is about 1/2 of its total employees participating.
BTW the average pay out was a little more than 16K to ERS members and 95% of the employees are in the ERS category -
I understand fully the “go it alone” attitude of most conservatives which is why replacing pensions with 401K style programs is so popular among them - but attacking healthy pension system like NY’s isn’t the answer - In order to achieve an outcome even close to the pension system a person would need to contribute about $200.00 a pay period (bi-weekly) and earn 7% annually on average for 20 years to get about $9,000 yearly (between ages 60-90) from a 401K (403b, 457). Pooling monies together seems to work better, people take the risk together and get the pay off together, nothing wrong with that.
Also…Monkeytoe - not that it matters but you are truly the first person who I’ve seen actually use the comment section for debate with someone who has an opposing view - the other commentors (as is evidenced above) seem to be only interested in ridiculing, name calling, and otherwise belitting commentors like me - even the post writer has very little to add in the comments sections accept for scorn. And all the while I am accused of personal attacks…
Changing Parma
That was long winded tripe from a bloge called the chinamatters.blogspot.com?? If the internet is so cool and serves your purpose you think you would at least be able to find something in the NY Times or Wall Street Journal to support your assertion! That site is a free google blog. They couldn’t even buy a domain name and pay for a years hosting.
Here is some of the content from your anonymous cool internet source:
A link to “The Peking Duck”
Betancourt Update–Beer and Helicopters
Can’t Stop Thinking About Bo Diddley
The post you site does’t even have one coment on it? With unsourced trash like this I agree it’s the work of Al Gore. One thing for sure it’s as long winded as you, maybe that’s what fooled you into thinking it is accurate.
Here you go Changing Parma
Some real facts about Japanese health care. Not quite the Obama/Clinton plan. From a real source that you should trust, NPR not the pekingduck.blogspot.com.
http://www.npr.org/templates/story/story.php?storyId=89626309
There is some interesting info in this article. Do you think we can get an american plan like this? I rather doubt it. I can’t see any American doctor who spent $250,000 to get educated working for minimum wage. Hospitals are not government owned they are private business scraping for every dollar. The way the Japanese do it is by screwing the medical profession nd businesses.
Here is a side story about Japanese labor. Another NPR story, this one about Robots taking over in the work force I am sure the UAW will love robots.
Changing Parma
Once again either you do not read and come to conclusion from things no one said or are just plain spinning. I did not ask you to reveal who you really are. We both have a freedom to say what we want because of our annonymity.
What I said wa that JDelaney is a true believer in what he says because he has the guts to reveal who he is. Ever notice how his posts get large amounts of comments? It’s because he is clear in what he believes and there is no ambiguity. Please note that I said he is a better person than you and I because of it. I did include myself.
You make just as many personal attacks as anyone else. You are just more Obama like about it. You say things and use words that can be taken in multiple ways. That way you can appease people who agree with you and deny people who disagree with you.
ChangingParma,
We’ll have to agree to disagree on the economics of the auto industry, union wages, etc. Just as you can go to liberal sites to find a working of the statistics to support your argument I could go to a more conservative site for the same. As someone once said, there are lies, damn lies, and statistics. Economics is nothing more than intepreting and analysing statistics, which is why a liberal who becomes an economist will always find support for liberal theories in economic data and a conseravtiave who becomes an economist will always find support for conservative theories in the data.
I will only say that common sense tends to support the argument I made. When a company is supporting thousands of retired members (i.e., people who are not producing for the company) it is going to hurt that company’s ability to make a profit (which, I believe, is a company’s reason for existence). I don’t think anyone can argue against that common sense position. Same holds true for current employee wages, etc. And, I am not arguing necessarily american based vs. plants in Japan as you are. The same holds true for American based american plants versus foreign owned plants based in america. those plants do not have the crushing retiree pension burden the american plants do and thus have a much, much, much greater per car profit margin. Again, that is common sense not spinning the data.
I guess I’m left with one question - do you support giving our tax $$ to the auto industry to prop up the industry? If so, how is that different than socialism? Why not simply have the gov’t take over every industry if this is such a good idea (and remember, I was totally against the financial industry bailout and any other private industry bailout).
As to the NYS retirement system, I know quite a bit about the system. You are correct that as long as there are more people currently working than are retired, the system will work. Hence why I called it a ponzi scheme, much like social security.
Unfortunately, demographics are not on your side on this one. Within the next 20 years there will be far more retirees than current employees, thus the system will not be able to sustain itself and will be looking to the general revenue to make pension payments.
Moreover, your original argument in favor the NYS retirement system was that it worked b/c it was “investing” the money you put in and sustaining itself. You have now radically changed to a more socialistic “pooling money” argument - so I am assuming you are ceding my point that the state retirement system does not actually make enough money on investment to pay the pensions?
Again, as long as the # of workers is far greater than the number of retirees, the pooling idea can work. That is coming to a quick end and the system is going to collapse. I go back to my original argument, if you are only putting in 3% for 10 years (which is what it is), then no matter how invested, that money will never grow to 40 or 50% of a person’s final average salary. Thus, if there are not 5 or 6 workers for every retiree, than the system cannot pay current costs and must look to taxes to cover the bill. Again, common sense not economics spin. The NYS retirement system is basically the social security system but paying out much, much higher benefits. How you can claim such a system will continue to be solvent indefinitely is strange.
I’m never sure why liberals are so against letting people be responsible for their own well-being. History has taught us again and again that is the best system for the most prosperity and happiness, versus socialistic systems which have a decent spurt at start up and then fail miserably, defining the average down and making everyone just as poor and miserable as everyone else. Granted, we can’t get rid of some of the socialistic stuff, there will always be a need for some entitlement programs (unemployment, some welfare, disability, etc.), but expanding those programs will eventually do more harm than good. The equality that is promised is the equality of lowest common denominator, not of the most prosperous.
ChangingParma,
I do agree that to some extent other countries’ subsidizing their businesses by paying for health care hurts American competitiveness by imposing costs on business in america that business elsewhere doesn’t have. But, that does not explain the auto industry. After all, they have plants in america and are paying those same costs. And, american companies have plants in other countries taking advantage of other countries’ health care systems. Thus, that is something of a red herring.
The real burden on the american auto industree is retiree pensions and current per hour wages, combined with terrible CBA rules for disciplinning / transferring, etc. which makes managing labor efficiently almost impossible.
But, as I’ve said before, those contracts are between the companies and the union members. If they agree to those things, and the companies go out of business, that is too damn bad. Don’t ask me to bail them out (either management or employees). Their lack of foresight should not be put at my doorstep.
The one area where I believe unions should not be allowed to exist is for public employees. Public employees are all paid more than they should be (i.e., more than the market would bear), get more benefits than most other workers, and are almost impossible to discipline or fire. Add to that unions, and it becomes crazy. Teachers being some of the worst offenders. But, as an example, look at firefighters. City of Rochester FFs are being paid around $55,000 / year before overtime, with great benefits, and yet in most places, people are willing to do this job for free (i.e., volunteer fire departments) and the City must turn away ff candidates. Thus, the City could easily get a well qualified ff workforce for much, much less compensation.
I’m not saying I don’t appreciate what firefighters do, but it is ridiculous to pay people so much when the City does not need to (the same is true for just about every civil service job - why are garbagemen paid $40,000/ year or more).
And, municipalities have no choice but to give in to union demands most of the time b/c PERB is so drastically union biased and b/c the unions control the state senate, assembly and governor’s mansion and get crazy statutes passed on a regular basis.
Boy, what an education. Thanks, Monkeytoe. Superbly done.
Monkey Toe ~ I must say I appreciate your willingness to have a discussion, it’s more than I can say for most of the commentors on this site - I am also glad that Delaney is getting an education as he has pointed out a couple of times here, I hope that what he is learning is how to engage the other side w/o using insult and casting the person as being a socialist etc…
As you said I guess we are going to simply disagree about the economics of the auto industry - it all comes down to who a person thinks we should be looking out for. You cite (as do most conservatives) retiree pensions and hourly pay, benefits and union contracts of current workers as the major problem - and I cite the overpaid execs and poor management as a prime source of the financial woes. You can list figures on how much the pensions cost the companies and I in turn can list the the total compesation for the top 5 execs at GM which for 2007 came to $49,146,125.00
(www.companypay.com/executive/compensation/general-motors-corp.asp?yr=2008)
As to your question…
“I guess I’m left with one question - do you support giving our tax $$ to the auto industry to prop up the industry? If so, how is that different than socialism?”
When I commented on this post it was to present the CEO and Exec pay that these companies dole out during downturns because I felt as I have on many of Delaneys posts that his take a one sided approach and is hardly ever even handed, fair or balanced (though he seems to think he is). I never actually said anything about my support or non-support of the idea of passing yet another bail out plan in Congress for the auto-industry. I will however say now that when I read the news about the auto flying to DC in private company jets in order to ask Congress for $$ I was apalled. Quite frankly I was appalled by the financial bail out as well - not because it smacks of socialism as so many on this site are incorrectly labeling it - but rather because regular working class families are giving up so much and losing so much right now that to see billions in tax dollars given out to irresponsible corporate mogels is an insult to the very people who are struggling day in and out to put gas in the car, food on the table and shelter over their heads. If anyone needed a bail out it was the American people not the corporations.
As to the 2nd part of your question how are the bail out plans different from socialism? Quite simple, socialism = ownership of all industry by the people who produce. Not government ownership (as in Russia or China or any other State capitalist country that claims to be socialist). In Marxisms vision (a vision btw that I do not hold myself though Delaney likes to say I do) the workers take control of industry and the economy through democratically run councils at the shop level. Workers elects their supervisors and leaders (elections that can be withdrawn by majority vote) and they run their respective companies through “central planning” at the local level first and at the national level through some sort of industrial congress. Now I am not saying this would work, but what I am saying is that the U.S. government buying into these companies that it is bailing out may be a bad idea but it does not equal socialism by definition.
As for pooling our money and do liberals have a problem allowing people to be independent - I think this is probably the strangest part of your comment - it is obvious why people pool their money into a pension system, because they get more for less - a 401k offers neither the high return or security that the NYS pension offers - I already pointed out the amount of money that would be needed for one person to save in order to get under 10k a year in retirement even at a 7% return.
Yes the NYS pension works similar to Social Security and yes if the retirees ever out number the workers than we would be in trouble. However you didn’t cite any related articles or information that validates your claim that the current rate of reitrees out paces the employees as quickly as you claim it does. But let’s say this is the case, as with Social Security there are some simple fixes that have or can be offered to offset any disparity this causes.
First, currently as you say participants pay 3% of their salaries into the system & they do this for only 10 years after 20 years they can retire for a lower portion of the pension than if they remained for 30. So what could be done to continue the solvency of the pension is either raise the percentage say 2 points and make the contribution 5% or extend the amount of years a worker must contribute to 15 or 20 - employees would still pay less into the system based on the return than they would in a 401k (or 457 as is available to gov. workers) and fund growth would continue (assuming average positive returns annually of course) to outpace those collecting. Just like S.S. where we could simply raise the current income cap for S.S. taxation to say $125,000.00 or $150,000.00 - the object in my opinion should always to be to help ensure that the many people who make up the middle and lower classes (people with less to invest) have more security in retirement than less. Let’s also not forget that the average payout of the CRF in 2007 was only $16,000.00 - http://www.osc.state.ny.us/pension/snapshot.htm
As to the pay of gov. employees while you are correct that firefighters make a better salary than most - you are otherwise incorrect about the average salary of gov. workers in other sectors of public employment. In Monroe County for example at the Dept of Human Services the largest dept. in our local government the average salary for an examiner is about 35k, for a case-worker it’s about 38k (of course these salaries rise as you go up the ladder to senior and supervisor) these two positions alone make up a major portion of the over 1,000 employees who work for the county.
But as with any employer you cannot focus just on the workers salaries which seems to be what conservatives do best, but rather you must also assess administrative salaries - the RSCD pays its super - about $250k - GCSD $203k and so on - the school districts remain the worst offenders as the city only pays Duffy about $124k While Maggie Brooks makes about $120k. - so again let’s take a look a reducing admin. costs and salaries before going after the majority of people who work for gov.
It’s just that we represent two differing philosophies - conservatives want to always go after the working person first while neglecting to criticize and/or offering to renegotiate exec or admin pay and liberals do just the opposite. Somewhere we’ll be forced to meet in the middle to solve our economic and financial woes.
“these two positions alone make up a major portion of the over 1,000 employees who work for the county”
Should read the over 1,000 employees who work for the County DHS ~
Changing Parma,
Glad you got that clarification in, now it all makes sense and I agree with you (sarcasm)
What a bag of hot air that was. You wrote it long enough to be fidel castros speech writer. He could go on for hours.
Hey everybody seeing as changingparma likes to publish personal info on Jdelaney lets all try to figure out who he is.
Start with his facebook page. It has at least two of the people that we have guessed who he is. One being Joe Rittler. There is a long list of other people on it who deny being socialists as well.
CP
Tiberius is right. You are probably the only one who will read all your claptrap. They are comments not posts. You have your own blog plesae bloviate there.
It is interesting that you never hear conservatives or capitalists trying to explain how what they believe is really not conservatism or capitalism. Yet a socialist/liberal feels the need to convince you that what they believe is really not socialism at all and they are just progressive not liberal.
Be proud to be a socialist/liberal, you just got one elected president.
Changing parma,
Your answer regarding pensions and “pooling” money demonstrates you have very little understading of economics or basic math. And, I guess that comes across as pretty mean, but let me explain.
If I have $10 and invest it at 10%, at the end of one year I’ll have $11 (not using compounding).
If 100 people pool $10 each into an investment (= $1,000) for one year at 10%, they will have $1,100 at the end of the year. Each person would thus receive $11, just as if the person invested the money on his/her own.
thus, your constant refrain that pooling money someone increases the amount of return makes me not bother to read anything else you say, as it is so far from reality as to lose credibility on the rest of your arguments.
Your argument is that b/c NY state workers “pool” their money, somehow it increases the return on investment. That is simply not so in any mathamatical system. It increases the overall size of the investment, but does not increase the amount each individual puts in or the amount of return on each individual’s investment - and when you divide the total amount invested by the # of people investing, you are left with each individual’s investment.
It is instead exacly as I described it. As long as there are more workers currently than retirees, the system is solvent. Once that reverses, which it will do in the next 10-20 years, the system does not have enough money coming in to pay for expenses.
The 3% of someone’s salary for the first 10 years they work (the lowest 10 years of salary), simply never grows enough to actually cover the pension for 30 or 40 years after the person retires at 50% of their final average salary.
There is no economist, liberal or conservative, that will tell you differently. That is just a simple fact. The system is basically kept afloat by getting people in and out of the system before they vest - so they lose the money they put in. there simply are not enough of these people, nor is the 3% of their salary for the first 5 years they are employed enough to cover what the shortage will be.
The system was created when people were only expected to live about 15 years after retirement at most. Now people are living 40 years after retirement. The system cannot sustain this. In about 10-20 years, there will be more than 1 retiree for every current state employee. And, the system does not have enough money, and cannot grow the money fast enough, to cover this.
Or, why do you think the Legislature constantly tries to reduce the amount of state retirees pensions? It used to be 75% of final average salary. Then 50%. Now its at 40%, and I would not be surprised to see them lower it again. If your logic were correct, there would be no reason to ever reduce the pension benefit.
Your argument about pooling, again, is ridiculous. Pooling does not increase return. A 3% return is a 3% return whether its’ my 10$ or my $10 added to another 10 guys $10. That is simple math. the return does not go up. Each 10$ increases only by 3%, whether it is pooled or not pooled.
As to your auto industry arguments, none of your arguments are remotely persuasive.
I have pointed out whey the Executive salaries don’t amount to a hill of beans when compared to the enormity of the $$ being spent on pensions, etc. That again is a simple fact.
I’ve said I don’t support the big executive salaries, but as a practical matter, those salaries are not the costs doing the auto makers in. that again, is simple arithmatic.
The unions are destroying themselves and I’m against giving them my money.
And, how do you figure that when the gov’t is giving money to an industry, it is not socialism? Yes, yes, as of now we can parse it out and pretend it’s not b/c the gov’t doesn’t yet “own” the companies. Taht is a pretty thin argument though if the gov’t is the only thing keeping a noncompetitive company in business.
Moreover, do you think that money will come with no strings attached? The gov’t is going to come to have a lot of control over the industries they bail out, to the point where it will not be apparent that the gov’t does not own the companies. This is the first step to nationalizing industries.
The gov’t should not be in the business of bailing out any industry or any person for their own bad decision. I’m against bailing out homeowners who overborrow; financial institutions who over-lend; companies who give away too much in union contracts, or any other subsidy to any other private business.
What I mean by allowing people to be responsible for themselves is exactly that - don’t bail out people who took out a mortgage for more then they could afford. It’s their own fault. And don’t talk about “predatory lenders”. If someone is too stupid to know they can’t afford something, I don’t want to hear about giving them money now. Personal responsibility. If the autoworkers have priced themselves out of jobs - tough S*** for them. If the auto companies can no longer compete b/c of decisions they’ve made - too bad.
Why aren’t people allowed to suffer the consequences of their own decision anymore? Why is it my job to send my money to them?
I support workers too. I support my own work and earning my own money and being allowed to keep that money, not have it taken away and redistributed to support someone else who is making way more than he/she should and has a better pension plan then me. I should not have to pay for that.
tiberius… at least monkey toe is intelligent to debate, apparently you simply rant and rave and throw insults..
vic - monkeytoes comments are as long as mine…and I am proud to be a liberal, but I am not a socialist, I believe in the ability of capitalism to create wealth but I also believe in the governments role as regulator so that the gap between rich and poor isn’t so obtuse that everyone who is at the low end of the spectrum gets left behind - it’s called morality, apparently I have it and you don’t.
monkeytoe I will only say two things - you’re incorrect about an individuals return on the pension - to come close to what a pensioner gets in the end and person would need to invest about 200 a month for 25 years with an average 7% return - I have said this three times now. Pooling the money and creating larger investments is exactly why an employee can make 35k invest about $80.00/mo for 10 years and get a pension of a little more than 16k after 20years. You’re simply wrong.
And second - and again for the 2nd time I never said I was for the bail out - READ - I have grown tired of the abuse at this blog…I have been on other conservative blogs (run by people who are smarter I guess) and have never experience the childishness and name-calling as I have here - I have run CP far longer than this blog has been up and I have many conservatives who come by and not only are they not insulted but they return and debate. I am sorry to the blog admin that this space on the web has become such a cess pool of people like Jdelaney, tiberius, vic, exdem who live only to belittle other commentors - maybe you should scrap this and start over
Parma
Yeah right anyone who disagrees with you is unintelligent and attacking you personally. You have all this self righteous attitude and then attack this site, jdelaney, ExDem, Vic and call this place a cesspools what do you think we are going to do say “Oh I understand you are right”. We now see the way because some anonymous commenter has made us see the light?
I have checked out your blog. Obviously Parma doesn’t have much going on and changing it should not be that difficult. Your last post on Nov, 20th (17 days ago) about the soccer complex had a real interesting comment from Tom. Let me quote what he said:
“They were not interested in listening as the balding-mean looking italian guy in the blue shirt ?”
Wow that was real thought provoking and a model of good blogging. I wish we had someone as intelligent as Tom making comments around here.
Look Parma, we think that what you believe is a slippery slope towards Socialism. This is a free country, its OK to be a Socialist if you want. Just don’t be surprised and angry when the things you say are perceived that way. We think Government regulation got us into this mess. Once you create the regulations they are difficult to back out of. The institution that need the regulations and observation is the government themselves. It will be a cold day in hell before you see that happening though.